Annual Report 2011/12 - Sanas

SANAS | Annual Report 2011/12 1

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SANAS | Annual Report 2011/12

SANAS | Annual Report 2011/12 3

ACRONYMS
AFRAC
African Accreditation Cooperation
NDT
National Department of Tourism
B-BBEE
Broad-based black economic empowerment
NLA
National Laboratory Association
BRC
British Retail Consortium
NNR
National Nuclear Regulator
BSE
Bovine spongiform encephalopathy (Mad Cow Disease)
OECD
Organisation for Economic Cooperation and Development
CEM
Customer Experience Measure
PDI
Previously disadvantaged individuals
CEO
Chief Executive Officer
PFMA
Public Finance Management Act
CFO
Chief Financial Officer
QMS
Quality Management System
COMESA
Common Market for Eastern and Southern Africa
SABS
South African Bureau of Standards
EA
Eastern African Community
SADC
Southern African Development Community
EAC
European Accreditation Cooperation
SADCA
Southern African Development Community
EMS
Environmental Management System
Cooperation in Accreditation
ETQA
Education and Training Quality Assurance
SADCAS
Southern African Development Community
GFSI
Global Food Safety Initiative
Cooperation in Accreditation Services
GCP
Good Clinical Practice
SANAS
South African National Accreditation System
GCPV
Good Clinical Practice Veterinary
SANS
South African National Standard
GLP
Good Laboratory Practice
SETA
Sector Education and Training Authority
GRAP
Generally Recognised Accounting Practices
TBT
Technical barriers to trade
IAF
International Accreditation Forum
the dti
The Department of Trade and Industry
ICT
Information and Communication Technology
ILAC
International Laboratory Accreditation Cooperation
IPAP
Industrial Policy Action Plan
SANAS | Annual Report 2011/12
ISO
MAD
MLRA
MAURITAS
MTEF
International Standards Organisation
Mutual Acceptance of Data
Multilateral Recognition Arrangement
Mauritius Accreditation Service
Medium-term Expenditure Framework
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Table Of Contents
Acronyms 4
Foreword by the Minister of Trade and Industry 6
Submission of the Annual Report by the Accounting Authority to the Executive Authority 7
Introduction by the Accounting Authority 9
Overview by the Accounting Officer 10
Part 1: General Information 14
Vision 15
Mission 15
Values 15
Organisational Structure 15
Legislative Mandate 16
Core Functions 16
Strategic Objectives 17
Strategic Overview 17
Part 2: Programme Information 24
2.1 Strategic objectives 25
2.2 Description of programmes 25
2.3 Purpose of programmes 25
Programme 1: Administration 25
Programme 2: Corporate Services 26
Programme 3: Strategy and Development 27
Programme 4: Accreditation Provision 30
2.4 Performance Against The Annual Performance Plan 30
Part 3: Report of the Audit, Risk and IT Governance Committee 36
Part 4: Annual Financial Statements 40
Part 5: Human Resource Management Oversight Report 72
SANAS | Annual Report 2011/12 5

FOREWORD BY THE MINISTER OF TRADE AND
INDUSTRY
It gives me great pleasure to present the 2011/12 Annual Report of the South African National
Accreditation System (SANAS).
The Industrial Policy Action Plan (IPAP) of the Department of Trade and Industry (the dti) acknowledges
the important work of the country’s technical infrastructure institutions. SANAS is one of these key
institutions. It is South Africa’s sole conformity assessment accreditation body and exercises its
mandate in terms of the Accreditation for Conformity Assessment, Calibration and Good Laboratory
Practice Act, Act No. 19 of 2006 (the Accreditation Act).
In 2011/12, SANAS continued to promote accreditation as a means of facilitating trade of South
African goods and services and supporting industrial development, thus enhancing South Africa’s
economic performance, while contributing to the protection of health, safety and the environment.
SANAS also supports the initiatives of Government by locking in access to increasingly demanding
international markets, while locking out unsafe and poor quality goods. In this regard, it promoted
the services of SANAS-accredited organisations, which test, certify or inspect locally manufactured
goods and services. These activities increased during the period under review, which enhanced the
organisation’s role of providing the conformity assessment services that are required in the priority
sectors identified in the IPAP.
The year under review has seen SANAS playing an important role in supporting Government in its policy objectives related to energy efficiency, nuclear, local content and
skills development. SANAS also played an important role in providing accreditation services to the Department of Tourism and the Department of Labour, thereby assisting
these departments to fulfil their obligation to protect the health and safety of the public and the environment.
In the regional context, SANAS continued to play a leading role in supporting the creation of the required internationally recognised accreditation infrastructure for the
Southern African Development Community (SADC). At an international level, a strong internationally recognised accreditation system is a critical part of a successful
technical infrastructure system. In this regard, SANAS successfully underwent its four-yearly international on-site peer evaluation.
SANAS | Annual Report 2011/12
Dr Rob Davies
Minister of Trade and Industry
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SUBMISSION OF THE ANNUAL REPORT
BY THE ACCOUNTING AUTHORITY TO THE EXECUTIVE AUTHORITY
It is with great pleasure that I, Prags Govender, as Chairman of SANAS and on
behalf of the SANAS Board of Directors, and as the Accounting Authority of SANAS,
submit the performance and progress of the entity for the financial year 2011/12 in terms of the
Public Finance Management Act, Act No. 1 of 1999 (PFMA).
SANAS | Annual Report 2011/12 7

INTRODUCTION BY THE ACCOUNTING AUTHORITY
This annual report highlights the achievements of the South African National Accreditation System (SANAS)
during the 2011/12 financial year, as well as the challenges experienced in fulfilling its mandate in terms of the
Accreditation for Conformity Assessment, Calibration and Good Laboratory Practice Act, Act No. 19 of 2006
(the Accreditation Act). In 2011/12, SANAS continued to promote accreditation as a means of facilitating trade
of South African goods and services and supporting industrial development, thus enhancing South Africa’s
economic performance, as well as contributing to the protection of health, safety and the environment.
As a public entity, SANAS is one of the country’s key technical infrastructure institutions. As such, it plays an
important role in locking in access to increasingly demanding international markets, while locking out unsafe
and poor quality goods.
National Priorities
I am glad to report that the organisation has once again made significant strides in attaining the objectives
set by its Board of Directors for 2011/12. SANAS accredited a total of 1 368 organisations, which represents
a 4% growth in its customer base from 2010/11. This means that the capacity to test, certify or inspect locally
manufactured goods and services increased during the period under review. This enhanced the organisation’s
role of providing the conformity assessment services that are required in the priority sectors identified in
Government’s Industrial Policy Action Plan 2 (IPAP2).
Since the approval of IPAP2 by Cabinet in February 2011, SANAS has played an important role in supporting Government in its policy objectives related to energy
efficiency, nuclear, local content and skills development. SANAS also played an important role in the accreditation services provided to support the Department of Tourism
and the Department of Labour in fulfilling their obligations to protect the health and safety of the public and the environment.
International And Regional Relations
SANAS | Annual Report 2011/12
In the regional context, SANAS continued to play a leading role in supporting the creation of the required internationally recognised accreditation infrastructure for the
Southern African Development Community (SADC). SANAS, in collaboration with the Southern African Development Community Cooperation in Accreditation Services
(SADCAS), provides accreditation services to SADC conformity assessment bodies in the SADC member states that do not have access to a national accreditation body.
In the process, SANAS played an important role in Africa to exclude products that are unsafe and of a poor quality from South African markets and to open up trade both
within the region and internationally.
SANAS reaffirmed its commitment to ensure that the quality and safety of locally produced goods and services meet international standards by actively engaging in
the activities of the International Laboratory Accreditation Cooperation (ILAC) and the International Accreditation Forum (IAF). During the period under review, SANAS
continued its engagement with the ILAC and the IAF by way of the Multilateral Recognition Arrangement (MLRA). During the year under review, SANAS successfully
underwent its four-yearly international on-site peer evaluation.
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New Executive Appointments
In 2011, the Board of Directors appointed a new Senior Manager: Research and
Development and a new Company Secretary, filling the two vacant positions.
It thereby ensured SANAS’s compliance with the principles of good corporate
governance.
Service Delivery
I am pleased to report that during the period under review, SANAS has continued
to be a well-run organisation. This is supported by the reports of the Audit
and Risk Committee, the Human Resource and Remuneration Committee, the
independent internal auditors, as well as the peer evaluation team that conducted
the international peer evaluation.
A special thanks to Dr Rob Davies, Minister of Trade and Industry, Ms Thandi Vivian
Tobias-Pokolo and Ms Elizabeth Thabethe, Deputy Ministers of Trade and Industry,
Mr Lionel October, Director-General in the Department of Trade and Industry, as
well as all the staff of the Department who contributed to the activities and success
of SANAS during the period under review.
I would also like to extend my sincere thanks and appreciation to all the SANAS
assessors, as well as the members of the Specialist Technical Committee, the
Approval Committee and the Advisory Forum for their continued support and
valued input in the accreditation process.
Although SANAS performed well during the period under review, it had to do
so under very challenging circumstances. Nine of the planned targets for the
financial year were fully achieved. The planned targets that were not achieved
were mostly as a result of insufficient office space. Attempts to relocate to larger
premises posed a challenge due to the current long-term lease. SANAS is,
however, optimistic that this matter will be resolved soon. SANAS operates at
75% of the approved staff complement.
Prags Govender
Chairperson: SANAS Board of Directors
During the next financial year, SANAS will continue to focus on maintaining its
existing customer base and expanding its activities in the regulatory and voluntary
domain in support of Government’s strategic imperatives.
Acknowledgements
The commitment of SANAS’s employees, including management, during the
period under review continued to contribute to the organisation’s success. I would
like to express my sincere thanks and appreciation to all these individuals. To my
fellow Board members, whom I had the privilege to lead during this financial year,
a special word of thanks for your devotion and dedication to the organisation.
A special thanks and welcome is also due to Vernon Seymour and Phakamisa
Zonke, the two new non-executive directors who joined the Board of Directors in
November 2011.
SANAS | Annual Report 2011/12 9

OVERVIEW BY THE ACCOUNTING OFFICER
The period under review was characterised by the organisation’s continued performance towards achieving its
mandate under the Accreditation for Conformity Assessment, Calibration and Good Laboratory Practice, Act No.
19 of 2006 (the Accreditation Act), which is focused on facilitating international trade and enhancing South Africa’s
economic performance, as well as on the strategic objectives of the Industrial Policy Action Plan 2 (IPAP2) to promote
long-term industrialisation and industrial diversification.
The conclusion of the Audit and Risk Committee in its evaluation of the company’s performance during the period
under review was that SANAS’s systems of internal control was effective, efficient and transparent, and in accordance
with the provisions of the Public Finance Management Act, Act No. 1 of 1999 (PFMA) and the requirements of the King
Code of Governance Principles (King III). No matters were reported that indicate any material deficiencies.
Our activities during the period under review were focused on the achievement of the six strategic objectives that were
identified for the Medium-term Expenditure Framework (MTEF) period 2011/12 to 2013/14. These are to contribute to
Government’s strategic objectives, improve SANAS’s external relationships and processes, raise awareness of SANAS
and accreditation, increase SANAS’s productivity, transform the SANAS assessor pool, and improve the quality of
SANAS’s product.
Key Achievements
During the period under review, we made significant progress in those focus areas that are aimed at improving our productivity, external relations and the quality of our
services, and supporting Government’s strategic objectives These included skills and capacity development, service delivery, advocacy, new programme development,
and international and regional relations.
Skills And Capacity Development
We continued to concentrate on identifying and retaining scarce and critical skills that could contribute to meeting our mandate. The availability of skilled persons,
especially in the high-level technical and specialised scopes (such as nuclear) remains a challenge, however. Skills development training included the presentation
of short courses, in-house training and the provision of bursaries. Staff training conducted during the period under review included a lead assessors’ development
programme, as well as the provision of training in business writing skills for managers, financial management, presentation skills and public speaking, chairing business
meetings, customer satisfaction excellence, self-management, time management and fraud management.
SANAS | Annual Report 2011/12
Through our participation and involvement in the Southern African Development Community Cooperation in Accreditation (SADCA), SANAS continued to provide
appropriate training and development for Southern African Development Community (SADC) member state delegates and leadership in the implementation of the
regional accreditation infrastructure.
In collaboration with SADCA, we are in the process of training individuals in the SADC region and the rest of Africa to create a pool of expertise that can be made available
to accreditation bodies in SADC.
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Service Delivery
During 2011/12, we experienced a 3,7% increase in our customer satisfaction level from 69,7% in 2010 to 73,4% in 2011. Some key projects are currently underway
to address some of the areas that were highlighted by customers as being in need of improvement.
During the period under review, we prioritised and invested in strengthening the organisation’s information technology architecture and resource capacity. The project
is progressing well, with the first delivery due in the second quarter of the next financial year.
A challenge that continues to hamper our service delivery is the limited office space. This challenge prevents the appointment of the additional approved capacity that
is required to fulfil our mandate. However, SANAS and the Department of Trade and Industry are currently working together to resolve this challenge.
Of the 19 planned targets, nine were 100% achieved during the year under review. However, management progressed at an average rate of 58% on the targets not
fully achieved. Reasons for not achieving the objectives are disclosed in the performance reporting section.
ADVOCACY
We continued our advocacy role to ensure that the SADC accreditation infrastructure comes to fruition with an increase in the number of accreditation applications
under the Technical Support Programme of the Southern African Development Community Accreditation Services (SADCAS). To date, SANAS and SADCAS have
accredited seven conformity assessment bodies, with over 30 applications in various stages of progress.
In support of establishing an African technical infrastructure aimed at coordinating accreditation activities in Africa, which will facilitate the continent’s effective
participation in global trade, SANAS was formally appointed to host the African Accreditation Cooperation (AFRAC) Secretariat for a period of three years. We used
this appointment to play a leadership role in Africa as we continue to be one of the most experienced accreditation bodies on the continent.
During the period under review, we continued to expand our social responsibility towards South African communities. In this regard, we adopted the Dunduzela Day
and Night Care Centre, which supports orphans between the ages of one and twenty years. We also provided support with the upgrade of the facility to meet the
centre’s basic needs. As part of another social responsibility initiative, we donated refurbished computers to the Ngangomhlaba Junior Secondary School.
New Programme Development
The previous financial year saw a marked increase in the demand from Government for accreditation services to support its strategic objectives. Within this context,
we continued with the implementation of accreditation systems for the projects assigned to us in terms of IPAP2. These included finalising an accreditation system
for measurement and verification agencies for energy efficiency. We also assisted Proudly South Africa by supporting the development of a standard for the
measurement and verification of local content under the auspices of the South African Bureau of Standards (SABS). We engaged with various stakeholders, including
the National Nuclear Regulator (NNR), the Department of Labour and the Department of Trade and Industry, on the way forward regarding the development of an
accreditation system for nuclear pressure vessels. This process is ongoing.
The Department of Tourism and the Department of Labour appointed SANAS to provide them with accreditation services related specifically to the protection of health,
safety and the environment. A system was established for the accreditation of responsible tourism certification bodies for the Department of Tourism. An accreditation
programme for the in-service inspection of pressure equipment was developed in support of the new pressure equipment regulations promulgated under the
Occupational Health and Safety Act, Act No. 85 of 1993, by the Department of Labour.
SANAS | Annual Report 2011/12 11

International And Regional Relations
SANAS has been a signatory to the Multilateral Recognition Arrangement (MLRA) of the International Laboratory Accreditation Cooperation (ILAC) and the International
Accreditation Forum (IAF) since 2000 and was re-evaluated by these two international bodies in accordance with the international requirements for MLRA signatories.
The confirmation of SANAS as a signatory to the MLRA means that South African goods and services will continue to be accepted in 61 economies across the world,
represented by 73 accreditation bodies that are also signatories to the MLRA. The first stage of the evaluation comprised an on-site peer evaluation, followed by a review
by all signatories. The second stage comprised final approval by the ILAC and IAF Accreditation Council. The first stage is in progress with the on-site peer evaluation
completed in August 2011. The recommendation of the peer evaluation team, which consisted of representatives from the USA, China, Germany, Sweden and Canada,
was positive. The remainder of the first and second stages is expected to be finalised in October 2012.
Acknowledgements
In conclusion, I would like to express my gratitude to the SANAS Chairperson and the Board of Directors, the SANAS team, assessors, committee chairpersons,
committee members, accredited facilities, the Department of Trade and Industry and all stakeholders for their continued support and feedback. We are looking forward
to an exciting and successful 2012/13.
Ron Josias
Chief Executive Officer
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SANAS | Annual Report 2011/12

BOARD OF DIRECTORS
Prags Govender
Chairperson, Board of Directors
Ron Josias
SANAS Chief Executive Officer
Christi Warren
SANAS Chief Financial Officer
Lunga Saki
Jacob Malatse
Nomkhosi Magwaza
Jennifer Rathebe
Berenice Lue Marais
Tervern Jaftha
Vernon Seymour
Linda Makuleni Phakamisa Zonke
Elsabe Steyn
Dawood Petersen
Company Secretary (January
2012 to current)
Nivashnee Naraindath
Company Secretary
(2010 to July 2011)
SANAS | Annual Report 2011/12 13

PART 1:
GENERAL INFORMATION
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SANAS | Annual Report 2011/12

PART 1: GENERAL INFORMATION
Vision
To pioneer and lead the future of accreditation in Africa and deliver services with a spirit of excellence.
Mission
To create an impartial and transparent mechanism for organisations to independently demonstrate their competence, facilitate the beneficial exchange of goods,
services and knowledge, and provide a service that is recognised as equitable to best international practice, while reflecting the demographics of South Africa in all
that we do.
Values
Integrity
To be consistent in our actions, principles and outcomes and to act with honesty without compromising the truth.
Excellence
Giving the best service that is of a world class.
Partnership
Collaborating within and outside SANAS to give the best and to advance South Africa’s interests.
Pioneering
To come up with new creative ways in accreditation that have the potential to change Africa.
Organisational Structure
SANAS | Annual Report 2011/12 15

Legislative Mandate
Enabling Act
Accreditation for Conformity
Assessment, Calibration and
Good Laboratory Practice Act,
Act No. 19 of 2006
Mandate
SANAS is the sole national accreditation body to provide an internationally recognised and effective accreditation and
monitoring system for the Republic of South Africa by doing the following:
a) Accredit or monitor, for good laboratory practice compliance purposes, organisations falling within its scope of activity
b) Promote accreditation as a means of facilitating international trade and enhancing South Africa’s economic performance
and transformation
c) Promote the competence and equivalence of accredited bodies
d) Promote the competence and equivalence of good laboratory practice-compliant facilities
Core Functions
SANAS | Annual Report 2011/12
In order to achieve its mandate, the Act empowers SANAS to perform the following functions:
• Promote the organisation as the sole national accreditation body in its scope of activity
• Encourage and promote the accreditation of calibration, testing and verification laboratories, certification bodies, inspection bodies, rating agencies and any
other type of body that may be added to its scope of activity
• Promote the recognition of accredited bodies by users of conformity assessment
• Liaise with regional and international standard bodies and with technical regulatory and metrology organisations in respect of any matter related to accreditation
• Liaise with national regulators in respect of any matter related to accreditation
• Promote the use of accredited bodies to facilitate trade
• Advise national, regional and international organisations on the conditions for accreditation and on other issues related to accreditation
• Establish and maintain a register of all accredited organisations in South Africa
• Initiate, negotiate, conclude and maintain multilateral recognition arrangements
• Support Government in activities on multilateral recognition arrangements
• Obtain and maintain membership of national or international organisations that may assist SANAS to achieve its objects and actively participate in such
organisations
• Participate in formulating international and regional guidelines and standards to facilitate the accreditation process
• Formulate and implement national guidelines and standards to facilitate the accreditation process
• Promote recognition and protect the use of the SANAS logo nationally and internationally
• Promote and protect regional and international arrangement logos, such as those of the International Laboratory Accreditation Cooperation (ILAC) and the
International Accreditation Forum (IAF)
• Establish appropriate technical committees
• Investigate methods of facilitating trade through accreditation
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Strategic Objectives
To give effect to its core functions and to ensure that SANAS remains a well-functioning
accreditation infrastructure that is able to effectively execute its mandate and meet the
increasingly high expectations of industry and Government, SANAS developed the
following strategic objectives:
Accreditation is a third-party confirmation that the organisation is
competent to perform certain tasks. It provides a means of determining the
competence of conformity assessment and calibration service providers
to perform specific types of calibration, testing, measurement, certification
and inspection against a published schedule of activity that is essential for
the acceptance of South African goods and services in the global market.
SANAS is the only national accreditation body for the Republic of South
Africa. The Industrial Policy Action Plan 2 (IPAP 2) identified SANAS as
one of the country’s key technical infrastructure institutions. As such, it
plays a significant role to support South African firms that have to compete
in global markets.
Accreditation plays a strategic role in the South African economy in
the following key areas by facilitating trade of South African goods and
services, as well as regional and international trade aimed at enhancing
South Africa’s economic performance:
• Supporting South Africa’s industrial development objectives
• Supporting public policy objectives in terms of health, safety and
environmental protection, and compliance with the principles of
broad-based black economic empowerment (B-BBEE)
These key areas support the following strategic objectives that have
been identified for the current Medium-term Expenditure Framework
(MTEF):
Strategic Overview
As the economic crisis continues, countries are again considering protectionist measures
to safeguard their industries. These measures normally manifest themselves through
increased technical barriers to trade (TBT) implemented through differing standards and
conformity assessment procedures. South African firms are thus increasingly faced with
demanding standards and conformity assessment requirements related to trade, safety,
health and environmental protection. This requires access to accredited conformity
assessment services, which are used by firms to prove compliance with the requirements
when trading their goods and services.
• Contribute to Government’s strategic objectives
• Improve SANAS’s external relationships and processes
• Raise awareness of SANAS and accreditation
• Increase SANAS’s productivity
• Transform SANAS’s assessor pool
• Improve the quality of SANAS’s product
SANAS | Annual Report 2011/12 17

Contribute To Government’s Strategic
Objectives
In order to fulfil its mandate of promoting accreditation as a means of facilitating trade
of South African goods and services and supporting industrial development, thus
enhancing South Africa’s economic performance, SANAS needs to demonstrate its
competence to its international counterparts in order to gain the support necessary
to promote equivalence of confidence in the results produced by the South African
conformity assessment bodies. This need led to engagement with networks of
mutual, bilateral and multilateral recognition arrangements, such as the Multilateral
Recognition Arrangement (MLRA) of the International Laboratory Accreditation
Cooperation (ILAC) and the International Accreditation Forum (IAF).
The ILAC and the IAF are responsible for harmonising the international criteria
applied to laboratory, inspection and certification body accreditation. The MLRAs
that are in operation by these organisations recognise members that have attained
this level of membership as equivalent. These arrangements are therefore actively
promoted as a tool for government, industry and commerce to identify competent
sources of testing, inspection and certification in order to facilitate appropriate market
access. Through these arrangements, the testing certificates, and inspection and
certification reports that are issued by SANAS-accredited conformity assessment
bodies are recognised in 61 different economies in the world that are signatories to
the MLRA.
Improving Sanas’s External Relationships And
Processes
(OECD). As an equal partner in the Mutual Acceptance of Data (MAD) agreement
of the OECD’s GLP panel, SANAS participates in the various working groups of
the panel. This is a vital part of maintaining this acceptance agreement. As such,
SANAS actively participates in high-level meetings, as well as audits of this body
due to the potential influence that it can exert on work destined for adoption by
the United Nations. During the year under review, SANAS’s Senior Manager, Ms
Christinah Leballo, was nominated to provide an e-learning lecture on acceding to
the OECD for non-OECD member economies.
Supporting Industrial Development
Objectives
The Industrial Policy Action Plan 2, approved by Cabinet in February 2011, calls for
SANAS to play a more strategic industrial role in the achievement of Government’s
strategic objectives. As the only national body for South Africa responsible for
carrying out accreditation in respect of conformity assessment, it is responsible
for the accreditation fields and international and/or national standards shown in the
following table.
Accreditation fields
Laboratories (calibration and testing) ISO/IEC 17025
Medical laboratories
Verification laboratories
Accreditation standard used
ISO/IEC 17025 and/or ISO 15189
(the international standard specifically
for medical laboratories)
SANS 10378 (the national standard)
SANAS | Annual Report 2011/12
SANAS has been a signatory to the MLRA since 2000. A requirement for signatory
accreditation bodies is that they are evaluated every four years to confirm their
signatory status. In order to maintain its status, SANAS was therefore evaluated by
the ILAC and the IAF during the period under review. The successful results of this
evaluation will mean that South African goods and services are accepted in all the
countries that are signatories to this arrangement. The first stage of the evaluation
comprised an on-site peer evaluation, followed by a review by all signatories and
final approval. The recommendation of the peer evaluation team, which consisted of
representatives from the USA, China, Germany, Sweden and Canada, was positive.
The remainder of the first and the second stages is expected to be finalised in
October 2012.
SANAS is also the official Good Laboratory Practice (GLP) monitoring authority for
South Africa on behalf of the Department of Trade and Industry. Its main duty is to
inspect test facilities and conduct audits to ascertain their degree of compliance
with the principles of the Organisation for Economic Cooperation and Development
Proficiency testing schemes ISO/IEC 17043
Certified reference material ISO Guide 34
Certification
Quality Management System (QMS) ISO/IEC 17021
Environmental Management System (EMS) ISO/IEC 17021
Product certification systems
Note: These include sector-specific industry
schemes whose requirements are maintained
by the industries themselves. Eurepgap,
British Retail Consortium (BRC) and the Global
Food Safety Initiative (GFSI) are all examples
of these.
ISO/IEC Guide 65
Personnel certification systems ISO/IEC 17024
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Accreditation fields
Inspection bodies
Accreditation standard used
ISO/IEC 17020 and relevant national
standard
Good Clinical Practice Veterinary (GCPV)
ISO/IEC 17025
(compliance monitoring of veterinary
laboratories conducting animal clinical
trials)
Good Laboratory Practice (GLP)
Broad-based black economic empowerment
(B-BBEE) accreditation of verification
agencies
According to the OECD’s Principles
of GLP for facilities conducting nonclinical
environmental health and
safety studies
SANAS R47 and the B-BBEE Codes
of Good Practice
Delegates at the 2nd AFRAC General Assembly
Support To Ipap2 And Other Government Support-Assigned Projects
The past year has seen a marked increase in the demand for accreditation services to support Government’s strategic objectives. Within this context, SANAS continued
to develop and implement systems for the accreditation of various conformity assessment scopes that are required to service the priority sectors identified in IPAP2, as
well as those projects assigned to the Department of Trade and Industry in IPAP2.
SANAS has played an important role in supporting Government in its policy objectives related to energy efficiency, nuclear, local content and skills development. During
the period under review, SANAS also provided the Department of Tourism and the Department of Labour with accreditation services related specifically to the protection
of health, safety and the environment.
Government department
IPAP-assigned accreditation system projects
Energy efficiency measurement and verification
Department of Trade and
Industry
National Department of
Tourism
Department of Labour
Local content
Nuclear component inspection and certification
Other accreditation system projects
Responsible tourism
In-service inspection pressure equipment
Risk-based inspection and certification
Construction personnel management systems
Netcare Limited, Alberton accredited for Inspection, QA Diagnostic X-ray
Equipment
SANAS | Annual Report 2011/12 19

Overview Of Current Accreditation Programmes
Supporting Ipap Priority Sectors
The SANAS-accredited conformity assessment bodies that provided conformity
assessment services, such as testing, calibration, certification, inspection and verification,
to the IPAP priority sectors increased by 4% during the period under review.
SANAS has the following accreditation facilities, which are located
throughout the country:
Accreditation Fields
Calibration Laboratory Scopes And Proficiency
Testing Schemes
These laboratories provide metrological traceability in South Africa as
stipulated in the Measurements Units and Measurement Standards Act,
Act No. 18 of 2006. SANAS-accredited laboratories form an integral
part of the metrological chain whenever physical measurements are
performed for trade, safety or scientific purposes, for law enforcement
purposes or to ensure that South African manufacturers remain globally
competitive.
The calibration programme provides a service to all of the IPAP priority
sectors.
As a key requirement for proof of accuracy, proficiency testing is
essential for the demonstration of competency. This programme is still
small and is currently under intense scrutiny at an international level. The
level of potential private scheme providers remains small.
SANAS | Annual Report 2011/12
Calibration
Certified Reference Material
Proficiency Testing Scheme
Certification
Medical
Legal Metrology
Inspection
Testing
Blood Transfusion Services
Veterinary
Good Laboratory Practice
Good Clinical Practice
Forensic
Pharmaceutical
B-BBEE
Testing Laboratory Scopes
Testing laboratories play an important role in economies by providing
objective evidence that a product or service offering conforms to certain
customer requirements or specifications. The testing programme also
provides an accreditation service in the Government priority sectors.
The growth in the number of accredited testing laboratories has been
relatively high and provides testing services to all IPAP priority sectors.
Medical Testing Laboratory Scopes
The credibility of medical pathology laboratories is paramount to the
health and safety of the patients who rely on the testing services provided
by these laboratories. Laboratory tests are an integral part of the workup
of any patient and constitute up to 80% of a physician’s diagnosis and
treatment choice. As medical doctors base their diagnosis on the results
issued by medical laboratories, it is important that these results should
be accurate and reliable.
20

Accreditation Fields
Accreditation Fields
Veterinary Laboratory And Good Clinical
Practice (Gcp) - Compliant Facilities And Scopes
It is important for South Africa to have a strong and competent veterinary
laboratory industry for the diagnosis of diseases, especially emerging
diseases such as bovine spongiform encephalopathy (BSE) (mad cow
disease) and testing the safety of meat and other animal products.
Good Laboratory Practice (Glp)-Compliant
Facilities And Scopes
SANAS is the official GLP monitoring authority. Its main duty is to inspect test
facilities and conduct study audits to ascertain their degree of compliance
to the OECD principles of GLP. These principles were primarily developed
to promote the quality and validity of test data used to determine the safety
of chemicals and chemical products. Quality test data forms the basis
for mutual acceptance of data among countries. The application of these
principles should help avoid the creation of barriers to trade and further
improve the protection of human health and the environment.
Forensic Laboratory Scopes
Forensic laboratories are crucial to our criminal justice system as they
provide very useful information that aids in the investigation and prosecution
of crime through the scientific examination of physical evidence.
Blood Transfusion
The primary goal of a blood transfusion facility is the transfusion of safe units of
blood. Accreditation plays a vital role in ensuring that the personnel involved
in all the activities (donor registration, blood collection, testing, processing
and storage) involved in a blood transfusion service are competent and that
national and/or international standards are being adhered to.
Pharmaceutical Laboratory Scopes
The South African pharmaceutical industry is regarded as the largest in
Africa, constituting about 33% of all the pharmaceutical sales in Africa. The
pharmaceutical industry is regarded as one of the best areas for business
investment. Furthermore, it plays a vital role in fighting numerous diseases
that are ravaging our country, such as tuberculosis and HIV/AIDS.
Inspection Body Scopes
Inspection mainly operates within the regulatory domain where regulators
and citizens need to be confident that inspection bodies, especially
those inspecting health and safety requirements in accordance with the
Occupational Health and Safety Act, are competent to do so. This also
applies to bodies that are required to ensure the protection of consumers,
such as the National Regulator for Compulsory Specification.
Legal Metrology Verification Laboratory Scopes
Verification laboratories fall under the domain of legal (trade) metrology, the
sole purpose of which is to protect consumers from unfair trade practices.
These laboratories perform verifications on volume, mass and length
measuring instruments in accordance with the requirements of the Trade
Metrology Act, Act No. 77 of 1973, and other related technical regulations
to ensure reliable results.
Certification Body Scopes
Certification is the activity of conformity assessments where the focus is on
a system that forms the basic requirements to ensure that an organisation
has the necessary self-regulating procedures and controls on factors that
affect a product so that it is possible to give confidence to the customer
that the product falls within specified requirements. Accredited certification
bodies certify other organisations with regard to the compliance of
a management system with recognised standards, such as quality
management, environmental management and food safety management
system requirements.
B-BBEE Verification Agency Scopes
In 2005, SANAS initiated the broad-based black economic empowerment
(B-BBEE) verification accreditation programme, which supports
Government’s national objective to allow for the broader participation of
previously disadvantaged people in the mainstream economy.
During the period under review, the dti, as custodian of the B-BBEE Act and
codes, gazetted a proposal to change the codes that required a review of
the conformity assessment requirements, model and structure. Discussion
is currently underway with the dti to formalise the way forward regarding the
role SANAS will play in the near future with respect to B-BBEE.
SANAS | Annual Report 2011/12 21

Demographic distribution of accredited facilities
22
SANAS | Annual Report 2011/12

Rightsizing SANAS
In 2008, SANAS developed a rightsizing agenda, which would contribute to achieving
the organisation’s strategic objectives, with a special emphasis on increasing SANAS’s
productivity, improving SANAS’s external relationships and processes, and improving
the quality of SANAS’s product. The project recognised SANAS’s need to restructure,
automate and rightsize the organisation. The project, Project Breakthrough, has to date
seen the organisation restructure its internal operations and increase its staff complement
from 40 full-time employees in 2007 to 52 in 2011. It aims to achieve its target of 72 fulltime
employees by 2013/14, provided that SANAS acquires new office space.
Challenges
During the year under review, the realisation of SANAS’s project objectives
encountered a few challenges, which impacted on achieving all the
objectives set for 2011/12.
The main challenge that hampered the implementation of SANAS’s activities
during the period under review was the limited office space and the cession
of the associated 15-year lease agreement. However, SANAS and the dti
and Industry are currently working together to resolve this obstacle.
Skills Development
The availability of skilled persons, especially in the high-level technical and specialised
scopes, such as nuclear, remains a challenge. SANAS and the dti, together with the other
technical infrastructure institutions, developed a plan to ensure that this risk is controlled
going forward. Funding still needs to be secured for the roll-out of the plan. In addition,
SANAS and SADCA are identifying and training individuals in the SADC region and the rest
of Africa to create a pool of expertise that can be made available to accreditation bodies
in SADC. SANAS also finalised an external bursary scheme and internship programme.
South Africa’s involvement in the African Accreditation Cooperation (AFRAC) also positions
SANAS favourably in terms of tapping into the skilled resources that are available on the
continent. However, in the short to medium term, the availability of some skills might come
at a premium, as SANAS might have to turn to international expertise.
Delegates at the AFRAC Peer Evaluator training course
In an effort to address the shortage of critical skills and the transformation of the assessor
pool to allow for diversity, SANAS has undertaken a project in which individuals are
identified and trained. During the period under review, 10 individuals went through the
theoretical training.
SANAS | Annual Report 2011/12 23

PART 2:
PROGRAMME INFORMATION
24
SANAS | Annual Report 2011/12

PART 2: Programme INFORMATION
2.1 Strategic Objectives
Programme performance
Within the legislative and policy framework in which it functions, SANAS’s activities
are guided by the following strategic objectives:
The support units that fall under this programme include Policy Development,
Financial Management, Quality Management and Human Resource Management.
• Contribute to the Government’s strategic objectives
• Improve SANAS’s external relationships and processes
• Raise awareness of SANAS and accreditation
• Increase SANAS’s productivity
• Transform the SANAS assessor pool
• Improve the quality of SANAS’s product
2.2 Description Of Programmes
Policy Development
SANAS’s Board of Directors, as the Accounting Authority, is responsible for
providing strategic direction to SANAS in keeping with the Accreditation Act and
the Shareholders’ Compact, which was concluded with the Minister of Trade and
Industry, as the Executive Authority. Through its Chief Executive Officer (CEO),
as Accounting Officer, SANAS’s management is responsible for the day-to-day
implementation and control of the organisation’s Strategic Plan.
SANAS undertook the following programmes to guide its activities in support of
its mandate and the abovementioned strategic objectives during the period under
review:
Programme 1: Administration
Programme 2: Corporate Services
Programme 3: Strategy and Development
Programme 4: Accreditation Provision
2.3 Purpose Of Programmes
Programme 1: Administration
Purpose: Provide strategic support and policy development to SANAS, giving
managerial leadership to its work.
The primary objective of this programme is to ensure that effective leadership,
management, legal and administrative support continues the refinement of
organisational strategy and structure in compliance with the appropriate legislation
and international best practices.
The activities of this programme were aimed at achieving the following:
• Providing credible managerial financial analysis and financial control
• Mitigating and controlling SANAS’s risk exposure
• Retaining, developing and attracting appropriate skilled human resources
• Managing SANAS’s compliance to international accreditation requirements
During the period under review, SANAS continued to roll out Project Breakthrough,
which is aimed at optimising the accreditation process, aligning the organisational
structure and capacitating the structure with the required competencies, as
indicated in IPAP2. Project Breakthrough is pivotal in meeting the strategic objective
of rightsizing the organisation, which is related to improving SANAS’s external
relationships and processes, increasing productivity and improving the quality of
its products.
Financial Management
As a support unit, Financial Management continued to focus on ensuring compliance
with all relevant financial standards and regulations, particularly the PFMA and
Treasury Guidelines, as well as overseeing the supply chain management function.
A focus of this subprogramme during the period under review was to refine its
managerial financial accounting systems, advise the CEO on financial risk and risk
control, and perform the function of the Chief Financial Officer (CFO).
SANAS has largely succeeded in achieving compliance with the PFMA, with the
exception of the supply chain management position, which will be filled in the next
financial year. The responsibility for this function is currently vested in the CFO.
Quality Management
Quality Management ensures SANAS’s compliance with the national and
international requirements for operating and maintaining an internationally
recognised accreditation infrastructure. The focus during the period under review
was on managing and coordinating the international on-site peer evaluation that
was conducted in 2011. This on-site evaluation was successfully conducted by
a team of international expert evaluators. The final outcome will be confirmed in
October 2012.
SANAS | Annual Report 2011/12 25

As a signatory to the MLRA, SANAS is obliged to make a peer evaluator available
to assist the ILAC and IAF. During the period under review, four of SANAS’s staff
members received the theoretical training necessary to become peer evaluators.
One of SANAS’s staff members is scheduled to participate in an ILAC peer
evaluation in 2012.
During the period under review, Quality Management also provided the Executive
Committee with comprehensive reports on the organisation’s compliance and
customer satisfaction rate in terms of service delivery.
Programme 2: Corporate Services
Purpose: Oversee the provision of legal services, the Company Secretary,
Information and Communication Technology (ICT), marketing and communication
and facility management.
Programme performance
The support units that fall under this programme include Legal Services, the
Company Secretary, Information and Communication Technology , and Marketing
and Communication.
Legal Services
Peer Evaluators
Human Resource Management
Legal Services provides comprehensive legal services to SANAS as and when
required on contractual, litigious, operational and managerial legal matters. Legal
Services adopts a proactive approach and assists in ensuring that decisions are
made mindful of legal implications and, in doing so, to mitigate against risks that
may emanate from a decision. SANAS has adopted an approach, in accordance
with the provisions of the King Code of Governance Principles (King III), to resolve
disputes in an amicable manner in avoidance of protracted litigious matters. This
approach has yielded great success in dissolving potential litigious matters. The
decision to mediate disputes internally has been bolstered with the appointment of
a Company Secretary who is also an admitted attorney.
SANAS had no litigious matters during the period under review.
SANAS | Annual Report 2011/12
Human Resource Management is responsible for ensuring that SANAS has the
human resource capacity to deliver on its mandate. Its activities during the period
under review included the following:
• Reviewing and updating job descriptions
• Recruiting additional resources
• Developing an acting policy and revising the leave policy
• Reviewing the employee salary scales, progression and performance
evaluation system
A highlight for Human Resource Management was the implementation of the new
IT system that is capable of managing SANAS’s leave, as well as the centralisation
of employee information and the finalisation of the Human Resource Policy.
Legal Services was primarily involved in the following matters during the period
under review:
• Incidents of misuse of the SANAS accreditation symbol and false claims of
accreditation
• Reviewing SANAS’s accreditation agreement entered into with its
accredited facilities
• Providing guidance to the Board on the governing legislation, regulations
and policies affecting SANAS
• Providing guidance on misleading publications
• Providing secretarial services to the Board of Directors and its
subcommittees
• Drafting, amending and reviewing agreements, policies and procedures
• Providing legal advice to SANAS
26

Company Secretary
The Company Secretary, as the gatekeeper of corporate governance, is responsible
for assisting the Board of Directors to ensure adherence to sound corporate
governance principles. The Company Secretary has an arms’ length relationship
with the Board of Directors. The Company Secretary informs the Board of Directors
of any legislation, regulations and policies relevant to or affecting SANAS and
reports non-compliance with the relevant legislation, regulations and policies to the
Board of Directors.
During the year under review, the Company Secretary assisted with the presentation
of an induction programme for newly appointed members of the Board, provided
ongoing training to Board members on the implications of the King Code on
Corporate Principles (King III) and advised on SANAS’s compliance with King III.
The Company Secretary also provided the Board members with refresher training.
Information and Communication Technology
Information and Communication Technology (ICT) is responsible for the design,
implementation and maintenance of the ICT infrastructure. Its task is to ensure reliable
ICT infrastructure to SANAS through ongoing refinement of the support services
and outputs in compliance with legislation and best practices. Its role in supporting
SANAS’s strategic objectives hinges on the development and implementation of an
accreditation process IT system, and developing and implementing a web-based
client interface management system.
During the period under review, SANAS identified the software that will form the
basis for all SANAS’s ITC applications. In January 2012, SANAS appointed an IT
Project Manager on a fixed-term contract to implement the SANAS ITC infrastructure.
This subprogramme worked on developing a SANAS ICT accreditation architecture
structure, which is planned to be completed by the end of the MTEF period. The
organisation’s IT competence was also strengthened with the appointment of a
dedicated ITC project team.
Marketing and Communication
SANAS’s marketing and communication initiatives are used to raise awareness
and keep customers informed about the organisation and about accreditation. The
marketing and communication initiatives conducted during the period under review
were aimed at the following:
• Strengthening and broadening the recognition of SANAS as a public entity
among industry, Government and the public
• Improving all forms of SANAS’s communication with its customers,
Government, regulators, clients of customers and the general public
• Conveying the key message of integrity and reliability of the services
provided by SANAS, as well as that of trust and confidence in the services
provided by SANAS-accredited organisations
Marketing and communication activities included the following:
• The annual communications meetings were held with all stakeholders at a
venue in Gauteng on 8 June 2011. SANAS continues to host these meetings
annually to communicate the annual objectives, notifications, resolutions and
important matters concerning accreditation.
• On the 9 June 2011 SANAS celebrated World Accreditation Day. The theme
for the day was “Supporting the work of regulators”. SANAS had the pleasure
of hosting the Minister of Trade and industry, Dr Rob Davies, as the keynote
speaker. During this event, accredited facilities were invited to exhibit their
goods and services. Assessors were recognised for the important role they
play in contributing to the acceptance of South African goods and services
in various industries, and improving the country’s economic performance.
• Representatives from various organisations still in the process of acquiring
accreditation were invited to the New Applications Workshop in October
2011. This workshop takes place annually and SANAS representatives outline
the accreditation requirements and give guidance on what to consider when
developing systems in order to become an accredited organisation and how
to maintain accreditation once it has been granted.
• In order to promote SANAS’s goods and services, and increase and
maintain visibility in various industries, SANAS participated in the following
industry conferences and exhibitions: the Society of Medical Laboratory
Technologists of South Africa Congress 2011, the Southern African Institute
for Occupational Hygiene Conference 2011, the Occupational Safety and
Health (OSH) Expo Africa 2011, the Colloquium on Forensic Science 2011
and the Southern African Energy Efficiency Convention 2011.
• The Annual Assessor Conclaves were held in Gauteng on 16 February 2012
and in the Western Cape on 23 February 2012. SANAS conducts these
annual workshops with assessors to communicate assessment techniques,
assessment changes and improvements, notifications, resolutions and
important matters concerning accreditation processes.
Programme 3: Strategy and Development
Purpose: Provide effective leadership in developing new fields of accreditation, new
project development, knowledge transfer and driving Government’s subregional,
regional and international objectives pertaining to IPAP projects and to support
South Africa’s objective of effective regional integration by playing a leadership role
in accreditation development in SADC and on the African continent.
SANAS | Annual Report 2011/12 27

The role of this programme in supporting SANAS’s strategic objectives is guided
by the organisation’s contribution to the strategic objectives of Government. Its
activities during the period under review included the following:
• Providing sound leadership to achieve Government’s strategic
objectives
• Supporting SANAS’s national accreditation training needs
• Supporting the development of an accreditation infrastructure in SADC
and the African region
• Raising awareness of accreditation through the effective implementation
of SANAS’s integrated Marketing and Communication Strategy
In line with SANAS’s mandate of providing an internationally recognised accreditation
infrastructure and its objective of improving its external relationships, it continued its
involvement with SADCA. During the period under review, SANAS continued to play a
leadership role by providing SADCA with regional coordinator and secretariat services.
The SADCA Business Plan for the period 2012–2016 was finalised and will focus on
the operationalisation of SADCA with a view to enabling accreditation bodies such
as SADCAS, SANAS and the Mauritius Accreditation Service (MAURITAS) to reach a
globally accepted MLRA that will facilitate the acceptance of the validity of certificates
and/or reports issued by their laboratories, inspection bodies, certification bodies and
other related services. SANAS was elected as the Chairperson of the SADCA MLRA
Committee.
Programme Performance
The support units that fall under this programme include International
and Regional Developments, Knowledge Transfer and New Programme
Development.
International and Regional Developments
This subprogramme focuses on fulfilling SANAS’s international obligations, as
a signatory to the international MLRA by participating in and contributing to
the accreditation arrangements, maintaining good regional and international
relations and expanding these relations, as well as supporting South Africa’s
objective of effective regional integration by playing an effective leadership
role in the development of accreditation in SADC and on the African continent.
During the period under review, the subprogramme focused on promoting
accreditation as a means of facilitating international trade, enhancing
South Africa’s economic performance, and promoting the competence and
equivalence of accredited bodies and GLP-compliant facilities.
Seven accreditation certificates were issued under the SANAS/SADCAS twinning
arrangement to conformity assessment services in SADC. This arrangement will
continue until SADCAS obtains its international recognition through the SADCA MLRA.
This is anticipated to happen within the next four years.
In SANAS’s capacity as the Secretariat of AFRAC, the Secretariat arranged the second
AFRAC meeting in Mauritius in 2011. The chairpersons of the AFRAC MLRA Committee
and the AFRAC Technical Committee were elected at this meeting. These committees
will facilitate the participation of Africa as a continent in the activities of the IAF and
ILAC and enable the recognition of an AFRAC MLRA by IAF and ILAC. The aim is to
have an operational MLRA within the next five years.
Knowledge Transfer
SANAS’s training programmes have developed a solid reputation both nationally and
regionally, and it is a sought-after provider of training. In line with SANAS’s strategy
of maintenance and growth, this subprogramme increased its scope to include the
monitoring and mentoring of assessors to provide the core function with fully qualified
and continuously competent assessors.
SANAS | Annual Report 2011/12
28
In this regard, SANAS’s strategic partners include the Department of Trade
and Industry (the dti), the International Laboratory Accreditation Cooperation
(ILAC), the International Accreditation Forum (IAF), the European Accreditation
Cooperation (EAC), the Southern African Development Community Cooperation
in Accreditation (SADCA), the Organisation for Economic and Cooperation
and Development (OECD), as well as the regulators.
SANAS is a signatory to both the ILAC and the IAF, and it continues to
appropriately participate in the work of these bodies in areas that support
national and regionally identified objectives. This also gives the organisation the
opportunity to ensure that regional needs are considered by the international
community and that Africa is not disadvantaged by any unnecessary
requirements.
The accreditation of SANAS’s training provider services by the relevant sector
education and training authority (SETA) progressed slowly in the period under review
with the training of Education and Training Quality Assurance (ETQA) assessors and
moderators.
During the period under review, 90% of the training had to take place away from the
dti campus where SANAS’s offices are located due to the unavailability of training
venues. Training was offered that supports the accreditation activities of SANAS, such
as laboratory systems, internal auditing and other systems courses.

New Programme Development
This subprogramme focused on the development of new accreditation programmes.
During the period under review, SANAS finalised the following IPAP-assigned
projects:
Green And Energy-Saving Industries
Key intervention: Establish a system for the accreditation of measurement
and verification bodies for energy efficiency
Responsible Tourism
Key intervention: Establish a system for the accreditation of responsible
tourism certification bodies
Responsible tourism can be defined as a management strategy that embraces
planning, product development, operations and marketing. Responsible tourism
seeks to harness the power of travel to bring about positive economic, social,
cultural and environmental impacts. Simply put, responsible tourism is tourism
that creates better places for people to live and better places to visit.
The industrial and mining sectors are the heaviest users of energy, accounting
for more than two-thirds of our electricity usage.
Here lies the potential for the largest savings by replacing old technologies
with new, and by employing best energy management practices (Republic of
South Africa, 2009). Efforts to instil a culture of energy conservation and saving
led the Department of Energy to develop an incentive scheme – based on a
tax rebate – that would encourage industry to introduce and maintain energy
savings in their operations. SANAS was tasked to develop an accreditation
programme to allow for the accreditation of measurement and verification
bodies responsible for verifying the savings on which the tax rebate would
be calculated.
During the year under review, SANAS finalised a framework to accredit
measurement and verification bodies for energy efficiency. A number of
applications are in process. However, applications have been slow as a result
of waiting for the finalisation of the regulation on the allowance for energy
saving. The gazetting of the regulation is expected to be finalised in the first
quarter of 2012, after which an increase in the demand for accreditation from
measurement and verification bodies is expected. SANAS in now in a position
to handle the expected increase in demand for accreditation that will ensue
once the regulation is promulgated.
Republic of South Africa.2009. No.32342, Notice 908 of 2006, National Energy Efficiency Strategy.
The very notion of responsible tourism implies that tourism growth and development
can be “irresponsible”. Irresponsibility can take the form of excessive energy
or water consumption. Irresponsibility can be measured in terms of gender
inequality, lack of attention to HIV/AIDS in the workplace or failure to support the
local economy. Tourist enclaves that do not benefit local communities, offer poor
wages and working conditions, and show a lack of respect for culture, human
rights and the environment are all hallmarks of irresponsibility. Responsible
tourism is a central pillar of South Africa’s national tourism policy and strategy
(Department of Environmental Affairs, 2011).
SANAS was tasked with establishing a voluntary system for the accreditation of
certification bodies, and certifying tourism establishments that implement and
maintain a management strategy that embraces responsible planning, product
development, operations and marketing.
During the period under review, SANAS actively participated in the development
of the South African National Standard for Responsible Tourism, South African
National Standard (SANS) 1162: 2011, under the auspices of the South African
Bureau of Standards (SABS). The standard was published on 28 March 2011 and
launched on 12 September 2011.
SANAS and the National Department of Tourism (NDT) concluded a Memorandum
of Understanding, detailing each participant’s responsibilities and relationship
with respect to an accreditation infrastructure for responsible tourism. SANAS and
the NDT hosted a stakeholders’ meeting on 16 September 2011 as a first step in
creating an accreditation framework in this regard. Following a series of meetings
with the NDT and stakeholders, a working group was established, which met in
January 2012 to guide SANAS in drafting relevant criteria for accreditation in this
specific field. This programme will be rolled out in June 2012.
Bojanala Edition 3 (October/November/December 2011), Department of Environmental Affairs 2011.
SANAS | Annual Report 2011/12 29

In-Service Inspection Of Pressure Equipment
Key intervention: Establish a system for the accreditation of inservice
inspection bodies
Programme performance
During the period under review, this programme’s contribution to the economy, including
the health and safety sector, included accreditation in the following fields:
Pressure equipment, such as vessels, pressurised storage containers,
heat exchangers, steam generators, boilers, industrial piping, safety
devices and pressure accessories, are widely used in the process
industry (oil and gas, chemicals, pharmaceuticals, plastics and rubber,
and the food and beverage industry), high-temperature process
industry (glass, paper and board), for energy production and in the
supply of utilities, heating, air conditioning and transportation (in terms
of a directive of the European Union), as well as in the health industry
(such as in hospitals for the supply of oxygen, air and hot water). The
regular proactive inspection of pressure equipment during operation is
essential as failure to do so impacts on the economy and health safety,
as well as on environmental protection.
• Calibration laboratories and proficiency testing schemes
• Testing laboratories
• Medical laboratories
• GLP-compliant facilities
• Forensic laboratories
• Veterinary laboratories and GCP-compliant facilities
• Blood transfusion facilities
• Pharmaceutical facilities
• Inspection bodies
• Verification laboratories
• Certification bodies
• B-BBEE verification agencies
Following the promulgation of the new pressure equipment regulations
by the Minister of Labour under section 43 of the Occupational Health
and Safety Act, Act No. 85 of 1993, which governs the handling,
installation and maintenance of pressure equipment, a system for
the accreditation of in-service inspections became a requirement.
The revised Pressure Equipment Regulations (Regulation R 734 of
2009) was published on 15 July 2009 to replace the old Vessel Under
Pressure Regulations (Regulation R 1591 of 1999).
This programme is divided into two streams. The first steam is for blood transfusion
facilities, veterinary laboratories and GCP-compliant facilities, pharmaceutical facilities,
forensic laboratories and GLP-compliant facilities. The second steam is for mechanical
and physical facilities. Each stream is headed by a senior manager.
During the period under review, both streams showed a growth in the demand for
accreditation. The increase in the number of facilities for the year under review, in
comparison to the previous three financial years, is indicated in the figure below.
SANAS has accredited 26 facilities. This accreditation extended
the scope to include in-service activities, manufacturing inspection
activities, as well as five new facilities.
SANAS | Annual Report 2011/12
Programme 4: Accreditation Provision
Purpose: Provide, manage and maintain accreditation services to new and
existing clients in both the voluntary and regulatory domain.
The primary objective of this programme is to effectively manage the
accreditation of new and existing clients in terms of legislation and international
good practice, and to ensure a pool of accredited conformity assessment
services to the IPAP2 priority sectors.
30

2.4 Performance against the Annual Performance Plan
Outputs
Performance indicators/
measures
Annual
target
Annual achievement
Reason for variance/
comments
Programme 1: Administration
Unqualified audit
Number of significant
findings
0 0 No material findings were raised for 2010/11.
A positive report from the
independent auditors that
all identified risks have
effective internal controls
Percentage of category 1
and 2 risks as identified
in the SANAS Risk Plan
mitigated
100% 64%
(7 out of 11 high risks
mitigated)
The processes for mitigating the outstanding risks
are well underway and require more time due to the
investment and additional office space required.
SANAS has incorporated this into its new Risk Plan to
ensure adequate risk management.
All approved vacant
positions filled
Percentage of staff
complement
85%
(60)
65%
(52 staff)
The lack of office space is currently the biggest
bottleneck in achieving this objective.
Retain signatory status to
the ILAC, IAF and the East
African Community (EA)
MLRA agreements
Outputs
Programme 2: Corporate Services
Compliance with all the
relevant principles of King III
Positive recommendation by
peer evaluation team
Performance indicators/
measures
Percentage compliance to
the relevant requirements of
King III
Positive
recommendation
by peer evaluation
team
Annual
target
Positive recommendation
by peer evaluation team
Annual achievement
A positive recommendation to maintain signatory status
to the ILAC and IAF MLRA was made by the peer
evaluators.
The recommendations will now be tabled at the
relevant ILAC and IAF decision-making structures for
endorsement by October 2012.
Reason for variance/
comments
85% 82% The ICT Governance Policy has been drafted and will
be finalised by the end of the 2012/13 financial year.
SANAS is currently executing its ITC infrastructure in
accordance with the draft policy.
Accreditation processes
automated and fully
functional
2 500 m 2 affordable and
convenient office space
Reduction in time taken to
complete the assessment
process and related activities
Office space of 2 500 m 2
secured
Benchmark
ICT system,
set up software
platform and roll
out electronic
document
management
system
Preliminary electronic
document system
loaded
and in use
The automation of the accreditation processes started.
The aim is to have it fully functional by the end of
the 2012/13 financial year. The project manager
started managing the implementation of the identified
automation software.
2 500 m 2 0 SANAS is in negotiation with the lessor and the dti
to terminate the current lease that was signed for a
lease period of 15 years (9 years left). SANAS received
funding from the dti for relocation costs.
SANAS also reorganised its current office space to
optimise the space.
SANAS will go out on tender in July 2012 to procure
a second office that will be used as an interim
arrangement for the office space requirements.
SANAS | Annual Report 2011/12 31

Outputs
Performance indicators/
measures
Annual
target
Annual achievement
Reason for variance/
comments
Programme 3: research and development
IPAP2: Accreditation
system in place for the
accreditation of energy
efficiency verification
bodies
Percentage of accreditation
programme development
complete
100%
(Note 100% =
SANAS ready to
offer accreditation)
100% No variance.
IPAP2: Accreditation
system in place for local
content certification
IPAP2: Accreditation
system in place for the
accreditation of the nuclear
component inspection and
certification
Percentage of accreditation
programme development
complete
Percentage of accreditation
programme development
complete
80% 15% The IPAP required the development of an accreditation
system for local content certification to support
the Proudly South African Campaign. During the
development of the South African National Standard
(SANS) and after several meetings with stakeholders,
including the dti and National Treasury, it became
clear that the compliance monitoring resides in the
audit domain and not accreditation.
SANAS continued to assist with the developments in
this area by chairing the SABS Working Group that
was responsible for the development of the guidelines
to the standard that were finalised in March 2012.The
SANS will be updated by the end of 2012/13 and the
deletion of accreditation will then be effected.
50% 30% Government is in the process of finalising the
nuclear programme. Certain regulatory issues need
to be finalised in order for the development of the
accreditation programme to move forward.
Department of Labour:
Accreditation system in
place for the accreditation
of in-service inspections of
pressure equipment
Percentage of accreditation
programme development
complete
100%
(Note 100% =
SANAS ready to
offer accreditation)
100% No variance.
SANAS | Annual Report 2011/12
Department of Labour:
Accreditation system in
place for the accreditation
of risk-based inspection
bodies and certification
bodies
Department of Labour:
Accreditation system in
place for the certification
of construction personnel
management systems
National Department
Tourism: Accreditation
system in place for the
certification of responsible
tourism
Percentage of accreditation
programme development
complete
Percentage of accreditation
programme development
complete
Percentage of accreditation
programme development
complete
70% 70% No variance.
80% 20% The accreditation process is dependent on the
finalisation of the SANS by the SABS, which is currently
in progress. However, SANAS actively participated
in the SABS standards development process for the
construction personnel management systems.
80% 80% No variance.
32

Outputs
An effective SADCA
Secretariat and regional
coordination function
A functional intra-African
accreditation cooperation
Performance indicators/
measures
Percentage of input to
international requirements
Number of times
representing SADCA in
national, international and
regional fora
Percentage progress against
the approved project plan
Annual
target
Annual achievement
Reason for variance/
comments
80% 86% The target for 2012/13 is 90% with a view to maintain a
95% input by 2014/15.
6 9 SADCA was also represented at tripartite meetings of
the Common Market for Eastern and Southern Africa
(COMESA), SADC, EAC and AFRAC.
50% 50% No variance.
A pool of registered
previously disadvantaged
(PDI) assessors
Percentage of PDI assessors
trained and registered with
SANAS
Programme 4: Accreditation Provision
Industry customer
satisfaction norm exceeded
Percentage increase in
customer satisfaction rate
50% of assessor
pool
35%
(excluding white women)
66%
(including white women)
About 35% (62 of the 177 assessors) (excluding
white women) and 66% (including white women) are
previously disadvantaged. SANAS has met its PDI
target. However, it has decided to focus only on black
persons for now. Management has therefore identified
the need to approach employers of potential assessors
to have an agreement in place that will commence in
2012.
75 % 73.4% The average percentage measure has improved by
over 3% since March 2011.
The Customer Experience Measure (CEM) score
improved by 3.7 points. Areas of weaknesses were
highlighted and SANAS will adjust its corrective action
measures to ensure further improvement.
Guests at the World accreditation day celebration
SANAS | Annual Report 2011/12 33

SANAS STAFF
John Peart, Nyiko Valoyi, Bambi Horak and Mandla Sithole
Cleon Andrews, Esther Ndlovu, Madu Mndau and Linda Bam
Shadrack Phophi, Linda Grundlingh and Thabo Chesalokile
Leslie Chesango, Kenalebeng Obes and Sam Thema
Chris Gombe, Martin Goedeke and Kamogelo Tlale
Shiela Skosana, Mpho Mavhunga and Morongwa Moshaba
SANAS | Annual Report 2011/12
Christinah Leballo and Elize Lubbe
Nyiko Nkhwashu and Elwina Daniels
34

Yolanda Vinnicombe
Eben Smit
Emelda Udensi
Francina Swarahla
Irene Kali
Phinda Ndabula
Zelda Oosthuizen
Letoke Mahlase
Mabatho Malepe
Neville Tayler
Nombuso Ndlovu
Dees Dhanraj
Mpho Phaloane
Nonceba Sawa
Shirley Dolamo
Nonhlanhla Halimana
Sume Murray
Azra Ahmed
Puleng Ratlabala
Tshenolo Molamu
Bongeka Gwalisa
SANAS | Annual Report 2011/12 35

PART 3:
REPORT OF THE AUDIT,
RISK AND IT GOVERNANCE
COMMITTEE
36
SANAS | Annual Report 2011/12

PART 3: REPORT OF THE AUDIT AND RISK
COMMITTEE
The Audit and Risk Committee is pleased to present its report for the financial year-ended 31 March 2012. This committee
is an independent statutory committee appointed by the Board of Directors, which delegates duties and responsibilities
to it in accordance with Section 77 of the Public Finance Management Act, Act No. 1 of 1999 (PFMA).
In terms of Section 51(1)(a)(ii) of the PFMA, the Accounting Authority (the Board of Directors) must ensure that SANAS has
and maintains a system of internal audit under the control and direction of the Audit and Risk Committee.
The function of the Audit and Risk Committee is to assist the Board of Directors to discharge its duties relating to the
safeguarding of assets and liabilities, the operation of adequate systems of control, reviewing financial information and
preparing annual financial statements.
The Audit and Risk Committee’s terms of reference are formalised in a charter approved by the Board of Directors.
During the period under review, the Audit and Risk Committee conducted its affairs in accordance with the charter, and
discharged its responsibilities as required by the charter, the Companies Act, Act No. 71 of 2008 and the substantial
requirements of the King Code of Governance Principles (King III).
Audit and Risk Committee membership and attendance
The Audit and Risk Committee comprises three members, of which the chairperson is a non-executive director. In accordance with its charter, the Audit and Risk
Committee is required to meet at least four times during a financial year. During the year under review, the Audit and Risk Committee held five meetings.
Ms Nivashnee Naraindath, Company Secretary, resigned with effect from 31 July 2011. The incumbent Company Secretary, Mr Dawood Petersen, was appointed with
effect from 9 January 2012.
Audit and Risk Committee member Company Meeting attendance record
5 May 7 July 22 August 22 November
2011 1 2011 2 2011 3 2011
9 February
2012 4
Mr Lunga Saki
(Chairperson)
South African Supplier Development Agency √ √ √ √ √
Mr Jacob Malatse Department of Labour X X √ √ √
Mr Phakamisa Zonke Ubume Group √ √ X √ √
By invitation
Mr Ron Josias SANAS Chief Executive Officer √ √ √ √ √
Ms Christi Warren SANAS Chief Financial Officer √ √ √ √ √
Ms Nivashnee Naraindath Company Secretary √ √ - - -
Mr Dawood Petersen Company Secretary - - - - √
1. The meeting held on 5 May 2011 was attended by the internal auditors Ms F Sithole and Ms N Muzarewethu from Nkonki Inc, and the external auditors Mr S Makamure and Ms J Marais from SAB & T Inc.
2. The meeting held on 7 July 2011 was attended by the external auditors Mr S Makamure and Ms J Marais from SAB & T Inc.
3. The Secretariat for the meeting held on 22 August 2011 was Ms A Mohamed and the meeting was attended by the internal auditor Mr G Hechter from ORCA
4. The meeting held on 9 February 2012 was attended by the internal auditors Mr G Hechter and Mr M Sithole from ORCA, and a representative of the Auditor-General, Mr S Khan.
The internal auditors, external auditors, representatives of the Auditor-General, the SANAS Chief Executive Officer and the SANAS Chief Financial Officer attended the
above meetings by invitation.
SANAS | Annual Report 2011/12 37

SANAS | Annual Report 2011/12
Audit and Risk Committee responsibility
The Audit and Risk Committee has adopted appropriate terms of reference
in accordance with the requirements of Section 77 of the PFMA and Treasury
Regulation 27.1 and conducted its affairs in compliance with these terms of
reference. Furthermore, the Audit and Risk Committee ensured compliance
with the relevant provisions of the Shareholder Compact entered into between
SANAS and the Department of Trade and Industry.
The effectiveness of internal control
The system of internal control applied by SANAS over financial and risk
management is effective, efficient and transparent in accordance with the
provisions of the PFMA and King III. The internal audit function provides the
Audit and Risk Committee with the 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. From the various reports of the
internal auditors, the audit report on the annual financial statements and the
management report, it was noted that no matters were reported that indicate
any material deficiencies in the system of internal control or any deviations
there-from. Accordingly, the Audit and Risk Committee is assured that the
system of internal control is efficient and effective.
Monthly and quarterly reporting
The Audit and Risk Committee is satisfied that the monthly and quarterly
reports were timeously prepared and submitted to the Department of Trade
and Industry by the Chief Financial Officer of SANAS during the period under
review in compliance with clause 8 and 9 of the Shareholder Compact entered
into between SANAS and the Department of Trade and Industry. The content
and quality of the monthly and quarterly reports were also satisfactory.
Evaluation of financial statements
The Audit and Risk Committee has:
• reviewed and discussed the audited annual financial statements to be
included in the annual report with the external auditors, the Auditor-
General and the Chief Financial Officer;
• reviewed the external auditors’ management report and management’s
response thereto;
• reviewed changes in accounting policies and practices;
• reviewed SANAS’s compliance with legal and regulatory provisions;
and
• reviewed significant adjustments resulting from the audit.
The Audit and Risk Committee agrees with and accepts the external auditors’ report on
the annual financial statements, and is of the opinion that the audited annual financial
statements should be accepted and read together with the report of the external
auditors. The Audit and Risk Committee, subsequent to reviewing the audited annual
financial statements, recommended the audited annual financial statements to the
Board of Directors for consideration and approval.
External auditors
The Audit and Risk Committee approved the External Audit Plan as presented by
Kwinana and Associates (Gauteng) Incorporated on 10 May 2012. The Audit and Risk
Committee has met with the external auditors, independently, to ensure that there are
no unresolved issues.
Internal auditors
The Audit and Risk Committee approved the Internal Audit Plan as presented by
Outsourced Risk and Compliance Assessment on 22 August 2011. The Audit and Risk
Committee has met with the internal auditors, independently, to ensure that there are
no unresolved issues.
The Audit and Risk Committee is responsible for ensuring that the internal audit is
independent and has the necessary resources, standing and authority within SANAS
to enable it to discharge its responsibilities effectively. Furthermore, the Audit and
Risk Committee oversees cooperation between the internal and external auditors, and
serves as a link between the Board of Directors and these functions.
Information Technology governance
SANAS’s terms of reference have been amended to include and prioritise SANAS’s
Information Technology Governance Framework and policies, which were formulated,
and implemented. SANAS’s terms of reference dealing with SANAS’s Information
Technology governance details the decision-making rights and accountability
framework for Information Technology governance within SANAS.
Integrated and sustainability reporting
The Audit and Risk Committee has considered the sustainability information that forms
part of the SANAS Integrated Annual Report and has assessed its consistency with
operational and other information made available to the Audit and Risk Committee,
as well as its consistency with SANAS’s annual financial statements. The Audit and
Risk Committee is satisfied that the above is consistent with SANAS’s performance.
As such, the Audit and Risk Committee has recommended that SANAS’s Integrated
Annual Report be approved by the Board of Directors.
38

Governance of risk
Whilst the Board of Directors is ultimately responsible for the maintenance of an
effective risk management process, the Audit and Risk Committee assisted the
Board of Directors in assessing the adequacy of the risk management process.
Under the supervision of the Audit and Risk Committee, and the management of
SANAS assessed, reviewed and updated SANAS’s organisational Risk Management
Framework during the reporting period. The Risk Management Framework was
implemented in all streams and business units to ensure that risks are understood
and the controls necessary to mitigate these risks are in place.
Mr Lunga Saki
Chairperson, Audit and Risk Committee
SANAS | Annual Report 2011/12 39

PART 4:
ANNUAL FINANCIAL
STATEMENTS
SANAS | Annual Report 2011/12
Accounting Authority’s responsibilities and approval 44
Independent Auditors’ Report to Parliament on the
South African National Accreditation System 45 - 46
Accounting Authority’s Report 47
Statement of Financial Position at 31 March 2012 48
Statement of Financial Performance for the year-ended 31 March 2012 49
Statement of Changes in Net Assets 50
Cash Flow Statement 51
Accounting Policies 52 - 59
Notes to the Financial Statements 60 - 71
40

PART 4: ANNUAL FINANCIAL STATEMENTS
SANAS is a public entity, as envisaged by the PFMA under schedule 3A. SANAS’s
activities are governed in terms of the provisions of the Accreditation Act, the PFMA,
King III and other legislation applicable to the public sector in South Africa.
The Board of Directors confirms its commitment to the highest standards of
corporate governance and recognises that practices and procedures can always
be improved. Therefore, the Board of Directors will continually review SANAS’s own
norms and standards.
SANAS is and remains committed to the principles of openness, integrity and
accountability, and continually reviews its processes and practices to ensure
compliance with legal obligations and adherence to good corporate governance
as captured in King III and the PFMA, which is an integral part of the objectives of
SANAS.
The primary objective of any system of corporate governance is to ensure that the
Board and Management who manage the day-to-day operations of SANAS have
been entrusted to carry out their responsibilities faithfully and effectively, placing the
interest of the organisation ahead of their own. This process is facilitated through
the establishment of appropriate reporting and control structures within SANAS.
The Board of Directors, as the Accounting Authority, is accountable to the Executive
Authority and is ultimately responsible for the implementation of sound corporate
governance practices in accordance with the relevant provisions of King III. The
Board of Directors is committed to ensuring that SANAS adheres to the high
standards of corporate governance in the conduct of its activities. The Board of
Directors and its subcommittees will continue to place consideration and attention
to issues of governance, including transparency, disclosure, financial control and
accountability, during the next financial year and thereafter.
The Board of Directors is of the opinion that, save as specifically disclosed, SANAS
has complied, in all material respects, with the requirements of King III.
Newly appointed members of the Board of Directors’ including non-executive
directors, participated in an induction programme coordinated by the Chief
Executive Officer, with the assistance of the Company Secretary on the direction
of the Chairman. In addition to providing an orientation in respect of SANAS’s
activities, the Board of Directors was provided with information relating to the
relevant statutory and regulatory frameworks applicable to SANAS. The induction
programme also familiarised the newly appointed members of the Board of Directors
with the relevant policies guiding SANAS’s activities.
The induction programme included a session during which the previously appointed
members of the Board of Directors underwent revision training on the implications
of King III. The Company Secretary is responsible for ensuring that the members
of the Board of Directors are kept abreast of relevant legislative and regulatory
developments.
Financial statements
The Board of Directors and the management of SANAS confirm that they are
responsible for preparing the financial statements and other information presented
in the annual report in a manner that fairly presents the state of affairs and results of
the operations of SANAS. The annual financial statements have been prepared in
accordance with the South African Statements of Generally Recognised Accounting
Practice, including any relevant interpretations of such statements issued and
in accordance with the prescribed Generally Recognised Accounting Practices
(GRAP), as the prescribed framework by National Treasury. The Board of Directors
is satisfied that adequate accounting records have been maintained.
The external auditor, Kwinana and Associates (Gauteng) Incorporated, is responsible
for independently auditing and reporting on whether the financial statements are
fairly represented, in all respects, in conformity in accordance with the International
Standard on Auditing and reporting their findings thereon.
Going concern
The Board of Directors is satisfied that adequate resources exist to continue
business for the foreseeable future.
Internal control
SANAS maintains internal controls and systems designed to provide reasonable
assurances as to the integrity and reliability of the financial statements and to
adequately safeguard, verify and maintain accountability for its assets. Such
controls are based on established policies and procedures and are implemented
with an appropriate segregation of duties. The internal audit function operates
under the direction of the Audit and Risk Committee, which approves the scope of
the work to be performed. Significant findings are reported to the Audit and Risk
Committee.
Performance evaluation
The Board of Directors completed a comprehensive performance assessment
evaluation during September 2011. The outcomes of the performance evaluation
were finalised and presented to the Board of Directors. The Board of Directors was
comfortable with the overall outcome of the performance assessment evaluation
and noted the recommendations made based on the outcome of the performance
evaluation.
SANAS | Annual Report 2011/12 41

Risk management
The Board of Directors acknowledges that it is responsible for the total process of risk management, as well as forming its own opinion on the effectiveness of the process.
The Board of Directors has established an Audit and Risk Committee that operates under an appropriate charter and is chaired by an independent non-executive
member. The Audit and Risk Committee’s mandate is to assess the effectiveness of SANAS’s risk management process. The management of SANAS is accountable for
designing, implementing and monitoring the process of risk management and integrating it into the day-to-day activities of SANAS.
Governance structure
The composition of the Board of Directors is premised on a unitary board structure that provides solid interaction among members of the Board of Directors in the
decision-making process on strategy, performance, planning, allocation of resources, risk, ethics and communication with stakeholders. In terms of the Accreditation Act,
the Board should consist of not less than 10 members and not more than 15 members. Accordingly, the Board of Directors comprises 11 board members, all of whom
are appointed by the Minister of Trade and Industry as the Executive Authority for SANAS. There are 10 non-executive directors and one executive director (the Chief
Executive Officer). All non-executive directors are independent from a management function and have no conflict of interest with the business of SANAS.
Performance of the members of the Board of Directors is evaluated annually to ensure effectiveness of the Board of Directors and to identify any areas of improvement.
A self-evaluation was conducted during the financial year under review and a report compiled by the Company Secretary and submitted to the Executive Authority. The
performance of the Board of Directors was satisfactory.
Responsibilities of the Board of Directors
The Board of Directors provides strategic direction and is the legally accountable body for the daily operations of SANAS. The Board of Directors has adopted appropriate
formal terms of reference in the charter in line with the requirements of King III, the PFMA and the Shareholder’s Compact entered into between SANAS and the dti. The
Board of Directors has conducted its affairs in compliance with this charter and all other legal obligations. The Board of Directors formally delegates duties to management
through different structures, such as the responsibility and accountability for operations to the Executive Management Committee, as well as other structures such as
the Audit and Risk Committee and the Human Resources and Remuneration Committee. The subcommittees of the Board of Directors are appointed according to the
skills set required by such committees.
42
SANAS | Annual Report 2011/12
Assessors at the Annual Conclave

Meeting attendance
During the year under review, the Board of Directors held four scheduled meetings and one special meeting. In addition, a board induction and a risk workshop were also
held. The special meeting was held to consider and approve the audited annual financial statements and the annual report.
Board member
Company
Meeting attendance records
20 May 2011 22 July 2011 9 September 2011 2 December 2011 26 /27 March 2012 9 March 2012
Mr Prags Govender
(Chairperson)
Rand Water √ √ √ √ √ √
Mr Jacob Malatse Department of Labour √ √ √ × √ √
Dr Elsabe Steyn
Department of Trade and
Industry
√ √ √ √ - -
Ms Nomkhosi Magwaza Armscor √ √ × × √ √
Ms Jennifer Rathebe Trademark Southern Africa × × √ √ √ √
Mr Tervern Jaftha
Ms Berenice Lue Marais
Mr Lunga Saki
Dr Linda Makuleni
Small Enterprise Development
Agency
Council for Scientific and
Industrial Research
South African Supplier
Development Agency
South African Weather
Services
√ √ √ √ √ √
√ √ × √ √ √
√ √ × √ √ √
× √ × × × ×
Mr Phakamisa Zonke Ubume Group - - - - √ √
Mr Vernon Seymour Seymour Attorneys - - - - √ √
Mr Ron Josias
SANAS Chief Executive
√ √ √ √ √ √
Officer
Ms Christi Warren SANAS Chief Financial Officer √ √ √ √ √ √
Ms Nivashnee Naraindath Company Secretary √ √ - - - -
Mr Dawood Petersen Company Secretary - - - - √ √
* This was a special meeting arranged to approve the audited financial statements
SANAS | Annual Report 2011/12 43

ACCOUNTING AUTHORITY’S RESPONSIBILITIES AND
APPROVAL
The Accounting Authority is required by the Public Finance Management
Act (Act No.1 of 1999), to maintain adequate accounting records and is
responsible for the content and integrity of the financial statements and
related financial information included in this report. It is its responsibility to
ensure that the financial statements fairly present the state of affairs of the
South African National Accreditation System as at the end of the financial year
and the results of its operations and cash flows for the period then ended in
conformity with Generally Recognised Accounting Practice and South African
Statements of Generally Accepted Accounting Practice. The external auditors
are responsible for reporting on the fair presentation of the financial statements.
The financial statements have been prepared in accordance with South
African Statements of Generally Recognised Accounting Practice including
any interpretations, guidelines and directives issued by the Accounting
Standards Board.
The Accounting Authority has reviewed the entity’s cash flow forecast and, in the light
of this review and the current financial position, it is satisfied that the entity has or has
access to adequate resources to continue in operational existence for the foreseeable
future.
The external auditors are responsible for independently reviewing and reporting on
the entity’s financial statements. The financial statements have been examined by the
entity’s external auditors and their report is presented on pages 45 to 47.
The financial statements set out on pages 48 to 71, which have been prepared on the
going-concern basis, were approved by the Accounting Authority on 20 July 2012 and
were signed on its behalf by:
The Accounting Authority acknowledges that it is ultimately responsible for
the system of internal financial control established by the entity and places
considerable importance on maintaining a strong control environment. To
enable the Accounting Authority to meet these responsibilities, the Accounting
SANAS | Annual Report 2011/12
Authority sets standards for internal control aimed at reducing the risk of error
or loss in a cost-effective manner. The standards include the proper delegation
of responsibilities within a clearly defined framework, effective accounting
procedures and adequate segregation of duties to ensure an acceptable level
of risk. These controls are monitored throughout the entity and all employees
are required to maintain the highest ethical standards in ensuring that the
entity’s business is conducted in a manner that in all reasonable circumstances
is above reproach. The focus of risk management in the entity is on identifying,
assessing, managing and monitoring all known forms of risk across the entity.
While operating risk cannot be fully eliminated, the entity endeavours to
minimise it by ensuring that appropriate infrastructure, controls, systems and
ethical behaviour are applied and managed within predetermined procedures
and constraints.
The Accounting Authority is of the opinion, based on the information and
explanations given by management, that the system of internal control
provides reasonable assurance that the financial records may be relied on for
the preparation of the financial statements. However, any system of internal
financial control can provide only reasonable, and not absolute, assurance
against material misstatement or loss.
Mr P Govender
Chairperson
Mr R Josias
Chief Executive Officer
44

INDEPENDENT AUDITORS’ REPORT TO PARLIAMENT ON THE
SOUTH AFRICAN NATIONAL ACCREDITATION SYSTEM
Report on the financial statements
We have audited the financial statements of the South African National Accreditation
System set out on pages 48 to 71, which comprise the statement of financial position
as at 31 March 2012, the statement of financial performance, statement of changes
in net assets and the cash flow statement for the year then ended, and the notes,
comprising a summary of significant accounting policies and other explanatory
information.
Opinion
In our opinion, the financial statements present fairly, in all material respects, the
financial position of the South African National Accreditation System as at 31 March
2012, and its financial performance and cash flows for the year then ended in
accordance with the South African Statements of Generally Recognised Accounting
Practise and the requirements of the Public Finance Management Act of South
Africa.
Accounting authority’s responsibility for the financial statements
The Board of Directors, which constitutes the accounting authority, is responsible
for the preparation and fair presentation of these financial statements in accordance
with South African Statements of Generally Recognised Accounting Practice and
the requirements of the Public Finance Management Act of South Africa, and for
such internal control as the accounting authority determines is necessary to enable
the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
In accordance with the Public Audit Act of South Africa, and the General Notice
issued in terms thereof, we report the following findings relevant to performance
against predetermined objectives, compliance with laws and regulations and
internal control, but not for the purpose of expressing an opinion.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements, based on
our audit. We conducted our audit in accordance with the Public Audit Act of South
Africa, the General Notice issued in terms thereof and International Standards on
Auditing. Those standards require that we comply with ethical requirements, and
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
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.
An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our audit opinion.
Predetermined objectives
We performed procedures to obtain evidence about the usefulness and reliability
of the information in the annual performance report as set out on pages 31 to 33 of
the annual report.
The reported performance against predetermined objectives was evaluated against
the overall criteria of usefulness and reliability. The usefulness of information in
the annual performance report relates to whether it is presented in accordance
with the National Treasury’s annual reporting principles and whether the reported
performance is consistent with the planned objectives. The usefulness of information
further relates to whether indicators and targets are measurable (i.e. well defined,
verifiable, specific, measurable and time-bound) and relevant as required by the
National Treasury Framework for managing programme performance information.
The reliability of the information in respect of the selected objectives is assessed to
determine whether it adequately reflects the facts (i.e. whether it is valid, accurate
and complete).
There were no material findings on the annual performance report concerning the
usefulness and reliability of the information.
SANAS | Annual Report 2011/12 45

Additional matter
Although no material findings concerning the usefulness and reliability of the performance information were identified in the annual performance report, we draw attention
to the following matter below.
Achievement of planned targets
Of the total number of planned targets, only nine were achieved during the year under review. This represents 53% of the total planned targets not being achieved during
the year under review. Reasons for not achieving the objectives have been disclosed in the annual performance report.
Compliance with laws and regulations
We performed procedures to obtain evidence that the entity has complied with applicable laws and regulations regarding financial matters, financial management and
other related matters.
We did not identify any instances of material non-compliance with specific matters in key applicable laws and regulations.
Internal control
We considered internal control relevant to our audit of the financial statements, performance report and compliance with laws and regulations.
We did not identify any deficiencies in internal control which we considered sufficiently significant for inclusion in this report.
Kwinana and Associates (Gauteng) Incorporated
Per Tendai Mapenda
Chartered Accountant (SA)
Registered Auditor
Director
20 July 2012
SANAS | Annual Report 2011/12
Stand 92
Corner Dale and Pretorius Street
President Park
Midrand
46

ACCOUNTING AUTHORITY’S REPORT
1. GENERAL REVIEW
The South African National Accreditation System (SANAS) is a Schedule 3A Public
Entity as listed in the Public Finance Management Act No. 1 of 1999 (PFMA) as
amended.
SANAS is the sole government-recognised accreditation body for conformity
assessment in South Africa. SANAS promotes the competence, against a specific
schedule of activity, of its accredited facilities nationally, regionally and internationally.
It has successfully concluded several mutual recognition arrangements in this
regard.
SANAS is guided by the principles of Public Finance Management Act No. 1 of
1999, and promulgated by the Accreditation for Conformity Assessment, Calibration
and Good Laboratory Practice Act of 2006 (Act No. 1 19 of 2006) as of 1 May 2007.
The statutory duties, responsibilities and liabilities are imposed on the Accounting
Authority by the Public Finance Management Act No. 1 of 1999.
The activities of SANAS during the year under review are comprehensively covered
in the annual report.
2. ACCOUNTING AUTHORITY MEMBERS
The governing body of SANAS is the Accounting Authority
Mr P Govender (Chairperson)
Mr R Josias (CEO)
Mr J Malatse
Ms N Magwaza
Ms J Rathebe
Mr T Jaftha
Ms B Lue Marais
Mr L Saki
Dr L Makuleni
Mr P Zonke (appointed 18 November 2011)
Mr V Seymour (appointed 18 November 2011)
Ms E Steyn (resigned 31 October 2011)
Mr D Petersen (Company Secretary appointed 9 January 2012)
Ms N Naraindath (Company Secretary resigned 31 July 2011)
3. BUSINESS AND OPERATIONS
The entity’s business and operations and the results thereof are clearly reflected
in the annual report and the attached financial statements. No material fact or
circumstance has occurred between the accounting date and the date of this report.
4. FIXED ASSETS
There have been no major changes in the fixed assets during the period under
review or any changes in the policy relating to their use.
5. EVENTS SUBSEQUENT TO THE YEAR-END
The Board approved the payout of staff bonuses for the 2011/12 financial year on 20
July 2012. This has been captured under trade and other payables under Note 13.
No other material facts or circumstances arose between the accounting date and the
date of this report that require disclosure in or adjustment to the financial statements.
6. TAXATION
SANAS is exempt from paying normal South African income tax in terms of the
Income Tax Act as amended.
7. PUBLIC FINANCE MANAGEMENT ACT
The Board is the Accounting Authority in terms of the Public Finance Management
Act, Act No.1 of 1999 (PFMA), as amended of which SANAS is listed as a Schedule
3A public entity.
The PFMA focuses on financial management with related outputs and responsibilities.
SANAS has established an ongoing process of awareness and education. In this
regard, SANAS has already taken expert advice on the PFMA resulting in various
initiatives that are addressed in more detail later in the report.
With the continuing emphasis on PFMA-compliant systems, the Accounting Authority
is of the opinion that SANAS has complied, in all material respects, with the provisions
of the Public Finance Management Act No.1 of 1999 (PFMA), as amended, and other
applicable legislation during the period under review.
8. BUSINESS AND POSTAL ADDRESS
Business address Postal address Contact details
the dti campus
Private Bag X23
Telephone:
77 Meintjies Street Sunnyside
(012) 394 3760
Building G
0132
Fax number:
Ground Floor
(012) 394 0526
Sunnyside
Email: office@sanas.co.za
Bankers First National Bank – Hatfield Branch
Auditors Kwinana & Associates (Gauteng) Incorporated
SANAS | Annual Report 2011/12 47

STATEMENT OF FINANCIAL POSITION AT 31 MARCH 2012
ASSETS
Note 2012 2011
(R)
(R)
Current assets
Trade and other receivables
Other receivables from non-exchange transactions
Cash and cash equivalents
7
8
9
1 749 880
10 000 000
37 479 734
1 556 475
-
33 896 121
49 229 614 35 452 596
Non current assets
Property, plant and equipment
Intangible assets
4
5
2 000 242
-
1 952 222
3 184
2 000 242 1 955 406
Total assets 51 229 856 37 408 002
Liabilities
Current liabilities
Finance lease obligation
Trade and other payables
Income received in advance
Provisions
10
13
11
12
141 047
6 077 248
1 041 247
1 154 901
151 411
6 308 489
3 009 107
1 419 961
8 414 443 10 888 968
Non-current liabilities
Finance lease obligation
Operating lease liability
10
22
844 149
2 522 432
985 196
2 271 058
3 366 581 3 256 254
Total liabilities 11 781 024 14 145 222
Net assets 39 448 832 23 262 780
Reserves
Government grant reserve
Accumulated surplus
10 000 000
29 448 832
-
23 262 780
Total net assets 39 448 832 23 262 780
48
SANAS | Annual Report 2011/12

STATEMENT OF FINANCIAL PERFORMANCE FOR THE Year
endED 31 MARCH 2012
Revenue
Other income
Operating expenses
Operating surplus
Investment income
Finance costs
Note 2012 2011
15
16
17
18
19
(R)
52 044 934
3 491 551
(50 873 749)
4 662 736
1 702 504
(179 188)
(R)
46 370 319
3 747 659
(46 444 127)
3 673 851
1 699 637
(147 884)
Surplus for the year 6 186 052 5 225 604
SANAS | Annual Report 2011/12 49

STATEMENT OF CHANGES IN NET ASSETS
Balance at 1 April 2010
Surplus for the year
Government grant
reserve
-
-
Accumulated
surplus
18 037 176
5 225 604
Total net assets
18 037 176
5 225 604
Total changes - 5 225 604 5 225 604
Balance at 1 April 2011
Net surplus for the year
Transfer from the dti
-
-
10 000 000
23 262 780
6 186 052
-
23 262 780
6 186 052
10 000 000
Total changes 10 000 000 6 186 052 16 186 052
Balance at 31 March 2012 10 000 000 29 448 832 39 448 832
50
SANAS | Annual Report 2011/12

CASH FLOW STATEMENT
Cash flows from operating activities
Cash receipts
Funds received from the dti
Fee income
Investment income
Other receipts
18
20 623 000
31 421 934
1 702 504
3 491 551
2012 2011
(R)
(R)
18 239 000
28 131 319
1 699 637
3 747 659
57 238 989 51 817 615
Payments
Employee costs
Suppliers
Finance costs 19
(28 315 623)
(24 603 217)
(179 188)
(22 660 218)
(21 949 670)
(147 884)
(53 098 028) (44 757 772)
Net cash flows from operating activities 21 4 140 961 7 059 843
Cash flows from investing activities
Purchase of property, plant and equipment
Disposal of property, plant and equipment
Intangible assets acquired
4
4
5
(418 029)
12 092
-
(246 520)
-
(2 517)
Net cash flows from investing activities (405 937) (249 037)
Cash flows from financing activities
Finance lease payments (151 411) (162 538)
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
3 583 613
33 896 121
6 648 268
27 247 853
Cash and cash equivalents at the end of the year 9 37 479 734 33 896 121
SANAS | Annual Report 2011/12 51

ACCOUNTING POLICIES
SANAS | Annual Report 2011/12
1. Presentation of Financial Statements
The financial statements have been prepared in accordance with the
Standards of Generally Recognised Accounting Practice (GRAP), including
any interpretations, guidelines and directives issued by the Accounting
Standards Board.
These financial statements have been prepared on an accrual basis of
accounting and are in accordance with historical cost convention, unless
specified otherwise. They are presented in South African Rand.
1.1 Property, plant and equipment
The cost of an item of property, plant and equipment is recognised as an asset
when:
• it is probable that future economic benefits or service potential
associated with the item will flow to the entity; and
• the cost of the item can be measured reliably.
Costs include costs incurred initially to acquire or construct an item of property,
plant and equipment, and costs incurred subsequently to add to, replace part
of, or service it. If a replacement cost is recognised in the carrying amount of
an item of property, plant and equipment, the carrying amount of the replaced
part is derecognised.
The initial estimate of the costs of dismantling and removing the item and
restoring the site on which it is located is also included in the cost of property,
plant and equipment, where the entity is obligated to incur such expenditure,
and where the obligation arises as a result of acquiring the asset or using it for
purposes other than the production of inventories.
Property, plant and equipment is carried at cost less accumulated depreciation
and any impairment losses.
The useful lives of items of property, plant and equipment have been assessed
as follows:
Item
Average useful life
Furniture and fixtures
10 to 13 years
Office equipment
5 to 15 years
IT equipment
3 to 15 years
The residual value, and the useful life and depreciation method of each asset are
reviewed at the end of each reporting date. If the expectations differ from previous
estimates, the change is accounted for as a change in accounting estimate.
Each part of an item of property, plant and equipment with a cost that is significant in
relation to the total cost of the item is depreciated separately.
The depreciation charge for each period is recognised in surplus or deficit unless it is
included in the carrying amount of another asset.
Items of property, plant and equipment are derecognised when the asset is disposed
of or when there are no further economic benefits or service potential expected from
the use of the asset.
The gain or loss arising from the derecognition of an item of property, plant and
equipment is included in surplus or deficit when the item is derecognised. The gain
or loss arising from the derecognition of an item of property, plant and equipment
is determined as the difference between the net disposal proceeds, if any, and the
carrying amount of the item.
1.2 Intangible assets
An asset is identified as an intangible asset when it:
• is capable of being separated or divided from an entity and sold, transferred,
licensed, rented or exchanged, either individually or together with a related
contract, assets or liability; or
• arises from contractual rights or other legal rights, regardless whether those
rights are transferable or separate from the entity or from other rights and
obligations.
An intangible asset is recognised when:
• it is probable that the expected future economic benefits that are attributable
to the asset will flow to the entity; and
• the cost of the asset can be measured reliably.
Intangible asset are initially recognised at cost.
Intangible assets are carried at cost less any accumulated amortisation and any
impairment losses.
The amortisation period and the amortisation method for intangible assets are reviewed
every period end.
Internally generated brands, mastheads, publishing titles, customer lists and items
similar in substance are not recognised as intangible assets.
52

Amortisation is provided to write down the intangible assets, on a straight-line basis,
to their residual values as follows:
Item
Computer software
Useful life
2 years
1.3 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity
and a financial liability or a residual interest of another entity.
Credit risk is the risk that one party to a financial instrument will cause a financial
loss for the other party by failing to discharge an obligation.
Currency risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in foreign exchange rates.
Fair value is the amount for which an asset could be exchanged, or a liability settled,
between knowledgeable willing parties in an arm’s length transaction.
A financial asset is:
• cash;
• a residual interest of another entity; or
• a contractual right to:
»»
receive cash or another financial asset from another entity; or
»»
exchange financial assets or financial liabilities with another entity
under conditions that are potentially favourable to the entity.
Transaction costs are incremental costs that are directly attributable to the
acquisition, issue or disposal of a financial asset or financial liability. An incremental
cost is one that would not have been incurred if the entity had not acquired, issued
or disposed of the financial instrument.
Financial instruments at fair value comprise financial assets or financial liabilities
that are:
• derivatives;
• combined instruments that are designated at fair value; or
• instruments held for trading.
• A financial instrument is held for trading if:
»»
it is acquired or incurred principally for the purpose of selling or
repurchasing it in the near term;
»»
on initial recognition it is part of a portfolio of identified financial
instruments that are managed together and for which there is evidence
of a recent actual pattern of short-term profit taking;
»»
is a non-derivative financial assets, or financial liabilitiy with fixed
or determinable payments that is designated at fair value at initial
recognition; and
»»
it does not meet the definition of financial instruments at amortised cost
or financial instruments at cost.
Initial recognition
The entity recognises a financial asset or a financial liability in its statement of
financial position when the entity becomes a party to the contractual provisions of
the instrument.
A financial liability is any liability that is a contractual obligation to:
• deliver cash or another financial asset to another entity; or
• exchange financial assets or financial liabilities under conditions that are
potentially unfavourable to the entity.
Interest rate risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market interest rates.
Liquidity risk is the risk encountered by an entity in the event of difficulty in meeting
obligations associated with financial liabilities that are settled by delivering cash or
another financial asset.
Market risk is the risk that the fair value or future cash flows of a financial instrument
will fluctuate because of changes in market prices. Market risk comprises three
types of risk: currency risk, interest rate risk and other price risk.
Initial measurement of financial assets and financial liabilities
The entity measures a financial asset and financial liability initially at its fair value
plus transaction costs that are directly attributable to the acquisition or issue of the
financial asset or financial liability.
SANAS | Annual Report 2011/12 53

Derecognition
Financial assets
The entity only derecognises a financial asset when:
• the contractual rights to the cash flows from the financial asset expire,
are settled or waived;
• the entity transfers to another party substantially all of the risks and
rewards of ownership of the financial asset; or
• the entity, despite having retained some significant risks and rewards
of ownership of the financial asset, has transferred control of the asset
to another party and the other party has the practical ability to sell the
asset in its entirety to an unrelated third party, and is able to exercise that
ability unilaterally and without needing to impose additional restrictions
on the transfer. In this case, the entity:
»»
derecognises the asset; and
»»
recognises separately any rights and obligations created or
retained in the transfer.
Financial liabilities
The entity removes a financial liability (or a part of a financial liability) from its
statement of financial position when it is extinguished - i.e. when the obligation
specified in the contract is discharged, cancelled, expires or is waived.
Operating leases – lessee
Operating lease payments are recognised as an expense on a straight-line basis over
the lease term. The difference between the amounts recognised as an expense and
the contractual payments are recognised as an operating lease asset. This liability is
not discounted.
Any contingent rents are expensed in the period they are incurred.
1.5 Employee benefits
Employee benefits are all forms of consideration given by an entity in exchange for
service rendered by employees.
A qualifying insurance policy is an insurance policy issued by an insurer that is not a
related party (as defined in the Standard of GRAP on Related Party Disclosures) of the
reporting entity, if the proceeds of the policy can be used only to pay or fund employee
benefits under a defined benefit plan and are not available to the reporting entity’s own
creditors (even in liquidation) and cannot be paid to the reporting entity, unless either:
• the proceeds represent surplus assets that are not needed for the policy to meet
all the related employee benefit obligations; or
• the proceeds are returned to the reporting entity to reimburse them for employee
benefits already paid.
1.4 Leases
A lease is classified as a finance lease if it transfers substantially all the risks
and rewards incidental to ownership. A lease is classified as an operating
lease if it does not transfer substantially all the risks and rewards incidental to
ownership.
Termination benefits are employee benefits payable as a result of either:
• an entity’s decision to terminate an employee’s employment before the normal
retirement date; or
• an employee’s decision to accept voluntary redundancy in exchange for those
benefits.
SANAS | Annual Report 2011/12
Finance leases – lessee
Finance leases are recognised as assets and liabilities in the statement of
financial position at amounts equal to the fair value of the leased property or,
if lower, the present value of the minimum lease payments. The corresponding
liability to the lessor is included in the statement of financial position as a
finance lease obligation.
The discount rate used in calculating the present value of the minimum lease
payments is the interest rate implicit in the lease.
The lease payments are apportioned between the finance charge and
reduction of the outstanding liability. The finance charge is allocated to each
period during the lease term so as to produce a constant periodic rate of on
the remaining balance of the liability.
Other long-term employee benefits are employee benefits (other than post-employment
benefits and termination benefits) that are not due to be settled within 12 months after
the end of the period in which the employees render the related service.
Vested employee benefits are employee benefits that are not conditional on future
employment.
A constructive obligation is an obligation that derives from an entity’s actions where
by an established pattern of past practice, published policies or a sufficiently specific
current statement, the entity has indicated to other parties that it will accept certain
responsibilities and as a result, the entity has created a valid expectation on the part of
those other parties that it will discharge those responsibilities.
54

Short-term employee benefits
Short-term employee benefits are employee benefits (other than termination
benefits) that are due to be settled within 12 months after the end of the period in
which the employees render the related service.
Short-term employee benefits include items such as:
• wages, salaries and social security contributions;
• Short-term compensated absences (such as paid annual leave and paid sick
leave) where the compensation for the absences is due to be settled within
twelve months after the end of the reporting period in which the employees
render the related employee service;
• bonus, incentive and performance-related payments payable within twelve
months after the end of the reporting period in which the employees render
the related service; and
• non-monetary benefits (for example, medical care, and free or subsidised
goods or services, such as cellphones) for current employees.
1.6 Provisions and contingencies
Provisions are recognised when:
• the entity has a present obligation as a result of a past event;
• it is probable that an outflow of resources embodying economic benefits or
service potential will be required to settle the obligation; and
• a reliable estimate can be made of the obligation.
The amount of a provision is the best estimate of the expenditure expected to be
required to settle the present obligation at the reporting date.
Contingent assets and contingent liabilities are not recognised.
1.7 Revenue from exchange transactions
Revenue is the gross inflow of economic benefits or service potential during the
reporting period when those inflows result in an increase in net assets, other than
increases relating to contributions from owners.
When an employee has rendered service to the entity during a reporting period,
the entity recognises the undiscounted amount of Short-term employee benefits
expected to be paid in exchange for that service:
• as a liability (accrued expense), after deducting any amount already paid. If
the amount already paid exceeds the undiscounted amount of the benefits,
the entity recognises that excess as an asset (prepaid expense) to the extent
that the prepayment will lead to, for example, a reduction in future payments
or a cash refund; and
• as an expense, unless another Standard requires or permits the inclusion of
the benefits in the cost of an asset.
The expected cost of compensated absences is recognised as an expense as
the employees render services that increase their entitlement or, in the case of
non-accumulating absences, when the absence occurs. The entity measures
the expected cost of accumulating compensated absences as the additional
amount that the entity expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The entity recognises the expected cost of bonus, incentive and performancerelated
payments when the entity has a present legal or constructive obligation
to make such payments as a result of past events and a reliable estimate of the
obligation can be made. A present obligation exists when the entity has no realistic
alternative but to make the payments.
An exchange transaction is one in which the entity receives assets or services, or
has liabilities extinguished, and directly gives approximately equal value (primarily
in the form of goods, services or use of assets) to the other party in exchange.
Fair value is the amount for which an asset could be exchanged, or a liability settled,
between knowledgeable, willing parties in an arm’s length transaction.
1.8 Revenue from non-exchange transactions
Revenue comprises gross inflows of economic benefits or service potential received
and receivable by an entity, which represents an increase in net assets, other than
increases relating to contributions from owners.
Conditions on transferred assets are stipulations that specify that the future economic
benefits or service potential embodied in the asset is required to be consumed by
the recipient as specified or future economic benefits or service potential must be
returned to the transferor.
Control of an asset arises when the entity can use or otherwise benefit from the
asset in pursuit of its objectives and can exclude or otherwise regulate the access
of others to that benefit.
Exchange transactions are transactions in which one entity receives assets or
services, or has liabilities extinguished, and directly gives approximately equal
value (primarily in the form of cash, goods, services or use of assets) to another
entity in exchange.
SANAS | Annual Report 2011/12 55

SANAS | Annual Report 2011/12
Non-exchange transactions are transactions that are not exchange transactions.
In a non-exchange transaction, an entity either receives value from another
entity without directly giving approximately equal value in exchange, or gives
value to another entity without directly receiving approximately equal value in
exchange.
Restrictions on transferred assets are stipulations that limit or direct the
purposes for which a transferred asset may be used, but do not specify that
future economic benefits or service potential is required to be returned to the
transferor if not deployed as specified.
Stipulations on transferred assets are terms in laws or regulation, or a binding
arrangement, imposed upon the use of a transferred asset by entities external
to the reporting entity.
Transfers are inflows of future economic benefits or service potential from nonexchange
transactions, other than taxes.
Recognition
An inflow of resources from a non-exchange transaction recognised as an
asset is recognised as revenue, except to the extent that a liability is also
recognised in respect of the same inflow.
As the entity satisfies a present obligation recognised as a liability in respect
of an inflow of resources from a non-exchange transaction recognised as an
asset, it reduces the carrying amount of the liability recognised and recognises
an amount of revenue equal to that reduction.
Measurement
Revenue from a non-exchange transaction is measured at the amount of the
increase in net assets recognised by the entity.
When, as a result of a non-exchange transaction, the entity recognises
an asset, it also recognises revenue equivalent to the amount of the asset
measured at its fair value as at the date of acquisition, unless it is also required
to recognise a liability. Where a liability is required to be recognised it will be
measured as the best estimate of the amount required to settle the obligation
at the reporting date, and the amount of the increase in net assets, if any,
recognised as revenue. When a liability is subsequently reduced, because the
taxable event occurs or a condition is satisfied, the amount of the reduction in
the liability is recognised as revenue.
Transfers
Apart from Services in kind, which are not recognised, the entity recognises an asset in
respect of transfers when the transferred resources meet the definition of an asset and
satisfy the criteria for recognition as an asset.
The entity recognises an asset in respect of transfers when the transferred resources
meet the definition of an asset and satisfy the criteria for recognition as an asset.
Gifts and donations, including goods in kind
Gifts and donations, including goods in kind, are recognised as assets and revenue
when it is probable that the future economic benefits or service potential will flow to the
entity and the fair value of the assets can be measured reliably.
1.9 Funds received from the dti
Funds received from the dti are recognised as revenue when:
• it is probable that the economic benefits or service potential associated with the
transaction will flow to the entity;
• the amount of the revenue can be measured reliably; and
• to the extent that there has been compliance with any restrictions associated
with the grant.
1.10 Unauthorised expenditure
Unauthorised expenditure means:
• overspending of a vote or a main division within a vote; or
• expenditure not in accordance with the purpose of a vote or, in the case of a
main division, not in accordance with the purpose of the main division.
All expenditure relating to unauthorised expenditure is recognised as an expense in
the statement of financial performance in the year that the expenditure was incurred.
The expenditure is classified in accordance with the nature of the expense, and ,where
recovered, it is subsequently accounted for as revenue in the statement of financial
performance.
1.11 Fruitless and wasteful expenditure
Fruitless expenditure means expenditure that was made in vain and would have been
avoided had reasonable care been exercised.
All expenditure relating to fruitless and wasteful expenditure is recognised as an
expense in the statement of financial performance in the year that the expenditure was
incurred. The expenditure is classified in accordance with the nature of the expense,
and where recovered, it is subsequently accounted for as revenue in the statement of
financial performance.
56

1.12 Irregular expenditure
Irregular expenditure, as defined in section 1 of the PFMA, is expenditure other than
unauthorised expenditure, incurred in contravention of or that is not in accordance
with a requirement of any applicable legislation, including:
(a) this Act; or
(b) the State Tender Board Act, 1968 (Act No. 86 of 1968), or any regulations
made in terms of the Act; or
(c) any provincial legislation providing for procurement procedures in that
provincial government.
National Treasury Practice Note No. 4 of 2008/2009, which was issued in terms of
sections 76(1) to 76(4) of the PFMA, requires the following (effective from 1 April
2008):
• Irregular expenditure that was incurred and identified during the current financial
year and which was condoned before year-end and/or before finalisation of
the financial statements must also be recorded appropriately in the irregular
expenditure register. In such an instance, no further action is also required, with
the exception of updating the note to the financial statements.
• Irregular expenditure that was incurred and identified during the current
financial year and for which condonement is being awaited at year-end must be
recorded in the irregular expenditure register. No further action is required with,
the exception of updating the note to the financial statements.
• Where irregular expenditure was incurred in the previous financial year and is
only condoned in the following financial year, the register and the disclosure
note to the financial statements must be updated with the amount condoned.
• Irregular expenditure that was incurred and identified during the current
financial year and which was not condoned by National Treasury or the relevant
authority must be recorded appropriately in the irregular expenditure register.
If liability for the irregular expenditure can be attributed to a person, a debt
account must be created if such a person is liable in law. Immediate steps
must thereafter be taken to recover the amount from the person concerned.
If recovery is not possible, the accounting officer or accounting authority may
write off the amount as debt impairment and disclose such in the relevant note
to the financial statements. The irregular expenditure register must also be
updated accordingly. If the irregular expenditure has not been condoned and
no person is liable in law, the expenditure related thereto must remain against
the relevant programme/expenditure item, be disclosed as such in the note to
the financial statements and updated accordingly in the irregular expenditure
register.
1.13 Budget information
The entity is typically subject to budgetary limits in the form of appropriations or
budget authorisations (or equivalent), which are given effect through authorising
legislation, appropriation or similar.
The financial statements and the budget are on the same basis of accounting,
therefore a comparison with the budgeted amounts for the reporting period has
been included in the financial statements.
1.14 Related parties
A related party transaction is a transfer of resources or obligations between related
parties, regardless of whether a price is charged. Parties are considered to be
related if one party has the ability to control the other party or exercise significant
influence over the other party in making financial and operating decisions or if the
related party entity and another entity are subject to common control.
Related parties include:
a) Entities that directly, or indirectly through one or more intermediaries, control, or
are controlled by the entity
b) Associates (see International Public Sector Accounting Standard (IPSAS) 7,
“Accounting for Investments in Associates”)
c) Individuals owning, directly or indirectly, an interest in the reporting entity that
gives them significant influence over the entity, and close members of the family
of any such individual
d) Key management personnel, and close members of the family of key
management personnel
e) Entities in which a substantial ownership interest is held, directly or indirectly, by
any person described in (c) or (d), or over which such a person is able to exercise
significant influence.
The following are deemed not to be related parties:
a) (i) Providers of finance in the course of their business in that regard
(ii) Trade unions
(b) In the course of their normal dealings with an entity by virtue only of those
dealings (although they may circumscribe the freedom of action of the entity or
participate in its decision-making process)
(c) An entity with which the relationship is solely that of an agency.
2. Changes in accounting policy
The financial statements have been prepared in accordance with South African
Statements of Generally Recognised Accounting Practice on a basis consistent with
the prior year .
SANAS | Annual Report 2011/12 57

3. New standards and interpretations
3.1 Standards and interpretations effective and adopted in the
current year
In the current year, the entity has adopted the following standards and
interpretations that are effective for the current financial year and that are
relevant to its operations:
Investing cash flows:
• Only expenditures incurred on a recognised asset qualify to be classified as
investing activities in the Cash Flow Statement.
Acquisitions and disposals of controlled entities and other operating units:
• Guidance relating to acquisitions and disposals of entities, particularly those on
another basis of accounting, has been deleted.
GRAP 1 (as revised 2010): Presentation of Financial Statements
The effective date of the amendment is for years beginning on or after 1 April 2011.
The revision resulted in various terminology and definition changes.
The entity adopted the amendment for the first time in the 2012 financial statements.
Additional commentary has been added, describing the purpose of financial
statements in the public sector.
Commentary has been added to explain that where legislation requires a
departure from a particular Standard of GRAP and that departure is material,
entities cannot claim compliance with the Standards of GRAP.
The impact of the amendment is not material.
GRAP 3 (as revised 2010): Accounting Policies, Changes in Accounting Estimates
and Errors
The revision resulted in various terminology and definition changes.
Additional disclosure requirements have been added regarding the following
areas: assets and liabilities included in disposal groups classified as held for
sale, biological assets, deferred tax assets (liabilities), tax expense, post-tax
surplus or deficit and the use of transitions provision in the accounting policy.
All amendments were applied retrospectively.
Paragraphs added to Changes in accounting policies:
• A change from one basis of accounting to another basis of accounting is a
change in accounting policy.
• A change in the accounting treatment, recognition or measurement of a
transaction, event or condition within a basis of accounting is regarded as a
change in accounting policy.
SANAS | Annual Report 2011/12
The effective date of the amendment is for years beginning on or after 1 April
2011.
The entity adopted the amendment for the first time in the 2012 financial
statements.
The impact of the amendment is not material.
GRAP 2 (as revised 2010): Cash Flow Statements
The revision resulted in various terminology and definition changes.
Operating cash flows:
• Where an entity is in the business of renting and subsequently selling
the same assets, these cash flows should be regarded as operating
rather than investing cash flows.
Selection of accounting policies:
• The reference to the Accounting Practices Committee (APC) of SAICA has been
deleted from paragraph 11 on the basis that it is not a standard setter and that
entities would consider information from a wide range of sources in formulating
an accounting policy and not just the pronouncements of the APC.
• Commentary on the selection of benchmark and alternative accounting policies
has been deleted.
The effective date of the amendment is for years beginning on or after 1 April 2011.
The entity adopted the amendment for the first time in the 2012 financial statements.
The impact of the amendment is not material.
58

GRAP 17 (as revised 2010): Property, Plant and Equipment
Notes to the Financial Statements
The revision resulted in various terminology and definition changes.
3.2 Standards and Interpretations early adopted
Depreciable amount and depreciation period
An additional paragraph has been added to clarify that reviewing the useful life
of an asset on an annual basis does not require the entity to amend the previous
estimate unless expectations differ from the previous estimate.
Derecognition:
• The requirement to not classify gains from the disposal of property, plant and
equipment as revenue, has been removed.
• Paragraph 79 has been added in line with the IASB Improvements Project to
clarify that where assets are held for rental to others in the ordinary course
of operations and the entity subsequently sells the assets, the Standard of
GRAP on Non-current assets held for sale and Discontinued Operations
does not apply. Rather, these assets are to be transferred and treated in
accordance with the Standard of GRAP on Inventories.
Disclosures:
• The required disclosures in paragraph 90 have been amended to encourage
disclosures. Added to the list of encouraged disclosures is the fair value
disclosure of assets where the cost model is used.
• The requirement to disclose the cost basis for revaluated assets was
removed.
Amendments to be applied as follow:
• Paragraphs 5, 23 and 24 were amended and paragraph 79 was added by
the Improvements to GRAP issued in 1 April 2011. An entity shall apply those
amendments prospectively for annual periods beginning on or after 1 April
2011. If an entity elects to apply these amendments earlier, it shall disclose
this fact.
• Any other amendments to the Standards of GRAP shall be applied
retrospectively.
The effective date of the amendment is for years beginning on or after 1 April 2011.
The entity adopted the amendment for the first time in the 2012 financial statements.
The impact of the amendment is not material.
The entity had chosen to adopt the following standards and interpretation early in
the 2010/11 and 2011/12 financial statements:
Standard/Interpretation:
Effective date:
• GRAP 23: Revenue from Nonexchange
Transactions
Years beginning on or after
1 April 2012
• GRAP 24: Presentation of Budget
Information in the Financial
Statements
1 April 2012
• GRAP 25: Employee Benefits 1 April 2012
• GRAP 104: Financial Instruments 1 April 2012
3.3 Standards and interpretations issued, but not yet effective
The entity has not applied the following standards and interpretations, which have
been published and are mandatory for the entity’s accounting periods beginning on
or after 1 April 2012 or later periods:
Standard/ Interpretation:
Effective date:
• GRAP 21: Impairment of Assets
Years beginning on or after
1 April 2012
• GRAP 26: Impairment of Cash
Generating Assets
1 April 2012
SANAS | Annual Report 2011/12 59

NOTES TO THE FINANCIAL STATEMENTS
4. Property, plant and equipment
Furniture and fixtures
Office equipment
IT equipment
2012 2011
(R)
Cost/valuation Accumulated depreciation Carrying value Cost/valuation Accumulated depreciation Carrying value
183 925
2 393 898
1 169 672
(103 399)
(1 021 124)
(622 730)
80 526
1 372 774
546 942
192 827
2 406 943
1 308 545
(R)
(102 372)
(933 366)
(920 355)
90 455
1 473 577
388 190
Total 3 747 495 (1 747 253) 2 000 242 3 908 315 (1 956 093) 1 952 222
Reconciliation of property, plant and equipment – 2012
Furniture and fixtures
Office equipment
IT equipment
Reconciliation of property, plant and equipment – 2011
Furniture and fixtures
Office equipment
IT equipment
Opening balance Additions Disposals Depreciation Total
90 455
1 473 577
388 190
-
88 665
329 364
(8)
(15 792)
(11 342)
(9 921)
(173 676)
(159 270)
80 526
1 372 774
546 942
1 952 222 418 029 (27 142) (342 867) 2 000 242
Opening balance Additions Disposals Depreciation Total
51 116
1 629 861
465 870
50 822
16 435
179 263
(962)
(198)
(17 644)
(10 521)
(172 521)
(239 299)
90 455
1 473 577
388 190
2 146 847 246 520 (18 804) (422 341) 1 952 222
Assets subject to finance lease (net carrying amount)
Office equipment 1 246 475 1 382 455
5. Intangible assets
2012 2011
(R)
(R)
Cost/valuation Accumulated depreciation Carrying value Cost/valuation Accumulated depreciation Carrying value
Computer software - - - 7 493 (4 309) 3 184
SANAS | Annual Report 2011/12
Reconciliation of intangible assets – 2012
Opening balance Disposals Amortisation Total
Computer software 3 184 (1) (3 183) -
Reconciliation of intangible assets – 2011
Computer software
Accreditation System
2012 2011
(R)
(R)
Opening balance Disposals Amortisation Depreciation Total
4 415
2 517 (3)
(3 745)
-
4
(4)
-
4 419 2 517 (7) (3 745) 3 184
60

6. Financial assets by category
The accounting policies for financial instruments have been applied to the line items below:
2012
Trade and other receivables (excludes prepayments)
Cash and cash equivalents (excludes cash on hand)
Loans and Receivables
Total
1 686 689
1 686 689
37 440 179
37 440 179
39 126 868 39 126 868
2011
Trade and other receivables (excludes prepayments)
Cash and cash equivalents (excludes cash on hand)
Loans and receivables
Total
1 534 682
1 534 682
33 890 123
33 890 123
35 424 805 35 424 805
7. Trade and other receivables
Trade debtors
Less: Provision for bad debts
Prepayments
Interest accrued
Unallocated receipts
1 717 229
(126 322)
63 191
95 782
-
1 717 792
(131 781)
21 793
-
(51 329)
1 749 880 1 556 475
Credit quality of trade and other receivables
The credit quality of trade and other receivables that are not past due or impaired can be assessed by reference to historical information about counterparty default rates:
None of the financial assets that are fully performing were renegotiated in the last year.
Fair value of other receivables from non-exchange transactions
Carrying value of trade and other receivables reflects the approximate fair value at 31 March 2012.
Other receivables from non-exchange transactions past due but not impaired
Trade and other receivables which are less than two months or less past due are not considered to be impaired as services are only rendered after receipt of payment
or payment commitment. At 31 March 2012, R1 926 711 (2011: R1 019 704) was past due, but not impaired.
SANAS | Annual Report 2011/12 61

The ageing of amounts past due, but not impaired is as follows:
1 month past due
2 months past due
2012
(R)
557 333
1 369 378
2011
(R)
32 699
987 005
As of 31 March 2012, trade and other receivables of R126 322 (2011: R131 781) were impaired and provided for.
Reconciliation of provision for impairment of trade and other receivables
Opening balance
Provision for impairment
Amounts written off as uncollectible
Unused amounts reversed
131 781
126 322
(113 643)
(18 138)
127 638
131 781
(106 994)
(20 644)
126 322 131 781
The creation and release of provision for impaired receivables have been included in operating expenses in the Statement of Financial Performance (note 17). Amounts
charged to the allowance account are generally written off when there is no expectation of recovering additional cash.
8. Other receivables from non-exchange transactions
Government Grant 10 000 000 -
the dti allocated additional funding to SANAS via National Treasury approval for office rental, furniture & fittings, and other installation requirements that will be incurred
during the 2012/13 financial year once SANAS has obtained a new offices.
9. Cash and cash equivalents
SANAS | Annual Report 2011/12
Cash and cash equivalents consist of:
Cash on hand
Current account
Short-term deposits
Call account
38 655
1 692 838
25 195 095
10 553 146
5 998
2 747 692
23 949 541
7 192 890
37 479 734 33 896 121
The Short-term deposits, which were invested for one month, matured on various dates prior to the financial year-end and were all reinvested together with the
accumulated interest. Cash on hand includes the Rand value of foreign exchange ordered for international trips.
62

10. Finance lease obligation
2012
(R)
2011
(R)
Minimum lease payments due
- within one year
- in second to fifth year inclusive
- later than five years
Less: future finance charges
352 088
2 134 965
1 741 706
4 228 759
(3 243 563)
330 599
2 004 662
2 224 096
4 559 357
(3 422 750)
Present value of minimum lease payments 985 196 1 136 607
Present value of minimum lease payments due
- within one year
- in second to fifth year inclusive
- later than five years
141 047
572 965
271 184
151 411
615 069
370 127
985 196 1 136 607
- Non-current liabilities
- Current liabilities
844 149
141 047
985 196
151 411
985 196 1 136 607
It is entity policy to lease certain office equipment under finance leases.
The initial lease term was 15 years and the average effective borrowing rate was 14% (2011: 14%).
Interest rates are fixed at the contract date. The lease payments escalate at 6.5% per annum and no arrangements have been entered into for contingent rent.
The entity’s obligations under finance leases are secured by the lessor’s charge over the leased assets. Refer to note 4.
11. Income received in advance
Income received in advance on debtor accounts are disclosed as income received in advance.
Income received in advance 1 041 247 3 009 107
SANAS | Annual Report 2011/12 63

2012
(R)
2011
(R)
12. Provisions
Reconciliation of provisions – 2012
Leave pay provisions
Assurance of technical competence
Travel costs
Reconciliation of provisions – 2011
Leave pay provisions
Assurance of technical competence
Opening balance Additions Utilised during the year Reversed during the year Total
1 401 486
18 475
-
-
-
88 075
(233 646)
(18 475)
-
(101 014)
-
-
1 066 826
-
88 075
1 419 961 88 075 (252 121) (101 014) 1 154 901
Opening balance Additions Utilised during the year Total
946 188
153 469
529 609
-
(74 311)
(134 994)
1 401 486
18 475
1 099 657 529 609 (209 305) 1 419 961
A provision is recognised for leave pay due to employees based on the actual leave days due multiplied by the daily remuneration rate. A provision for travel costs is
recognised for services rendererd but not yet charged to SANAS.
13. Trade and other payables
Trade payables
Accrued bonus
3 977 020
2 100 228
3 929 357
2 379 132
6 077 248 6 308 489
Trade payables are non interest bearing and are normally settled on 30 days terms. The carrying value of trade and other payables reflects the approximate fair value at
31 March 2012.
14. Financial liabilities by category
The accounting policies for financial instruments have been applied to the line items below:
SANAS | Annual Report 2011/12
2012
Trade and other payables
Finance lease obligation
2011
Trade and other payables
Finance lease obligation
Financial liabilities at amortised cost
Total
6 077 248
6 077 248
985 196
985 196
7 062 444 7 062 444
Financial liabilities at amortised cost
Total
6 308 489
6 308 489
1 136 607
1 136 607
7 445 096 7 445 096
64

2012
(R)
2011
(R)
15. Revenue
Funds received from the dti
Finance lease obligation
20 623 000
31 421 934
18 239 000
28 131 319
52 044 934 46 370 319
16. Other income
Bad debt recovered
Unallocated receipts held more than one year
Courses and project fees
32 920
8 031
3 450 600
17 395
78 978
3 651 286
3 491 551 3 747 659
17. Operating Surplus
Operating surplus for the year is stated after accounting for the following:
Operating lease charges
Premise
• Contractual amounts
Equipment
• Photocopy machine
1 759 937
64 339
1 732 953
64 452
1 824 276 1 797 405
Deficit on write-off of property, plant and equipment
Impairment on trade and other receivables
Amortisation on intangible assets
Depreciation on property, plant and equipment
Employee costs
Auditor’s remuneration
Accounting Authority expenses
18. Investment income
(15 051)
126 322
3 183
342 867
25 531 677
86 793
192 300
(18 895)
131 781
3 745
422 341
23 632 628
80 161
225 949
Interest income
Interest received on fixed deposits 1 702 504 1 699 637
SANAS | Annual Report 2011/12 65

19. Finance costs
Interest received on fixed deposits 179 188 147 884
20. Taxation
No provision has been made for 2012 tax as the entity is exempt under Section 10(1)(cA)(i) of the Income Tax Act.
2012
(R)
2011
(R)
21. Cash generated from operations
Surplus
Adjustments for:
Depreciation and amortisation
Deficit on write off of assets
Movements in operating lease assets and accruals
Movements in provisions
Changes in working capital:
Trade and other receivables
Trade and other payables
Income received in advance
6 186 052
346 050
15 051
251 374
(265 060)
(193 405)
(231 241)
(1 967 860)
5 225 604
426 003
18 895
332 650
320 304
(565 095)
1 472 251
(170 769)
4 140 961 7 059 843
22. Commitments
Authorised capital expenditure
Not yet contracted for and authorised by members
• Property, plant and equipment 50 000 000 -
These committed funds relate to property and the entity is currently under discussions with the dti and National Treasury in order to source the funding.
SANAS | Annual Report 2011/12
Operating leases – as lessee (expense)
Minimum lease payments due
‐ within one year
‐ in second to fifth year inclusive
‐ later than five years
1 418 231
8 599 764
7 015 692
1 331 672
8 074 896
8 958 791
17 033 687 18 365 359
Operating lease payments represent rentals payable by the entity for certain of its office property. The lease was negotiated for a term of 15 years with an escalation of
6.5% per annum. No contingent rent is payable.
66

23. Related parties
Relationships
Members of key management
Executive Authority
Accounting Authority
SANAS MOU signatory
Related party transactions
Funds received from related parties
the dti
‐ Mr R Josias (CEO)
‐ Ms MC Leballo (Senior Manager)
‐ Mr M Phaloane (Senior Manager)
‐ Mr E Steyn (Senior Manager appointed 1 November 2011)
‐ Ms CR Warren (CFO)
‐ Ms N Naraindath (Senior Manager resigned 31 July 2011)
‐ The Department of Trade and Industry (the dti)
‐ Mr P Govender (Chairperson)
‐ Mr R Josias (CEO)
‐ Mr J Malatse
‐ Ms N Magwaza
‐ Ms J Rathebe
‐ Mr T Jaftha
‐ Ms B Lue Marais
‐ Mr L Saki
‐ Dr L Makuleni
‐ Mr P Zonke (appointed 18 November 2011)
‐ Mr V Seymour (appointed 18 November 2011)
‐ Ms E Steyn (resigned 31 October 2011)
‐ Mr D Petersen (Company Secretary appointed 9 January 2012)
‐ Ms N Naraindath (Company Secretary resigned 31 July 2011)
‐ National Laboratory Association (NLA)
2012
(R)
20 623 000
2011
(R)
18 239 000
Operational costs paid to related parties
Telephone – the dti
Postage – the dti
Internet usage – the dti
140 329
30 293
30 711
152 651
24 306
26 393
Funds paid to related parties
Transfer payment – National Laboratory Association 430 382 406 404
SANAS receives funds from the dti. It also utilises the above‐mentioned operational services of the dti due to the technical infrastructure of the dti campus.
Through an MOU signed by SANAS and the NLA, SANAS transfers funds to the NLA from the funds received from the dti.
SANAS | Annual Report 2011/12 67

24. Accounting Authority’s emoluments
Executive
2012
Fees for
Services
Salary
Bonus and
performance
payments
Travel
allowance
Provident Fund
contributions
Other
benefits
Acting
allowance
Total
Mr R Josias (CEO)
Mr M Phaloane (Senior Manager)
Ms MC Leballo (Senior Manager)
Ms N Naraindath (Senior Manager resigned 31 July 2011)
Ms CR Warren (CFO)
Ms E Steyn (Senior Manager appointed 1 November 2011)
‐
-
-
-
-
-
1 216 177
764 815
758 815
269 571
744 707
347 357
165 545
110 179
115 013
-
109 906
47 961
40 152
54 000
60 000
-
-
-
92 830
61 095
61 095
20 218
57 804
26 052
37 656
22 302
-
7 612
15 652
12 927
‐
-
-
-
-
-
1 552 360
1 012 391
994 923
297 401
928 069
434 297
2011
- 4 101 442 548 604 154 152 319 094 96 149 - 5 219 441
Mr R Josias (Acting CEO/CEO)
Mr R Josias (Acting CEO) ‐ 2010 bonus paid in 2011
Mr M Phaloane (Senior Manager)
Ms MC Leballo (Senior Manager)
Ms N Naraindath (Senior Manager appointed 1 June 2010)
Ms CR Warren (CFO appointed 1 January 2011)
‐
-
-
-
-
-
1 063 506
-
713 299
707 299
638 176
181 169
159 467
125 000
115 487
116 560
84 124
23 827
40 152
-
54 000
60 000
-
-
85 429
-
56 752
56 752
47 392
13 588
37 279
-
21 108
-
24 256
3 799
16 551
-
-
-
-
-
1 402 384
125 000
960 646
940 611
793 948
222 383
- 3 303 449 624 465 154 152 259 913 86 442 16 551 4 444 972
68
SANAS | Annual Report 2011/12

Accounting Authority
2012 (R) (R)
Mr P Govender*
Mr J Malatse*
Ms N Magwaza*
Ms J Rathebe
Mr T Jaftha*
Ms B Lue Marais*
Mr L Saki*
Dr L Makuleni*
Mr P Zonke
Mr V Seymour
Ms E Steyn*
-
-
-
25 960
-
-
-
-
36 344
20 768
-
-
‐
-
-
-
-
-
-
-
-
-
‐
‐
-
-
-
-
-
-
-
-
-
-
‐
-
-
-
-
-
-
-
-
-
-
‐
-
-
-
-
-
-
-
-
-
‐
-
‐
-
-
-
-
-
-
-
-
-
‐
-
-
-
-
-
-
-
-
-
-
-
-
25 960
-
-
-
-
36 344
20 768
-
83 072 - - - - - - 83 072
2011
Mr P Govender
Mr J Malatse*
Ms N Magwaza*
Ms J Rathebe
Mr T Jaftha*
Ms B Lue Marais*
Mr L Saki*
Dr L Makuleni*
Ms E Steyn
40 279
-
-
29 676
-
-
-
-
-
‐
‐
-
-
-
-
-
-
-
‐
‐
-
-
-
-
-
-
-
‐
‐
-
-
-
-
-
-
-
‐
‐
-
-
-
-
-
-
-
‐
‐
-
-
-
-
-
-
-
‐
‐
-
-
-
-
-
-
-
40 279
-
-
29 676
-
-
-
-
-
69 955 - - - - - - 69 955
* The non‐executive directors are not remunerated in their personal capacity.
SANAS | Annual Report 2011/12 69

25. Risk management
The entity’s activities expose it to a variety of financial risks: market risk (including fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and
liquidity risk.
The entity’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the entity’s
financial performance. The Accounting Authority provides written principles for overall risk management, as well as written policies covering specific areas, such as
interest rate risk, credit risk and investment of excess liquidity.
Liquidity risk
The entity’s risk to liquidity is a result of the funds available to cover future commitments. The entity manages liquidity risk through an ongoing review of future commitments
and credit facilities.
At 31 March 2012 Less than 1 year Between 1 and 2 years Between 2 and 5 years Over 5 years
Trade and other payables
Finance lease obligation
6 077 248
352 088
-
-
-
2 134 965
-
1 741 706
At 31 March 2011 Less than 1 year Between 1 and 2 years Between 2 and 5 years Over 5 years
Trade and other payables
Finance lease obligation
6 308 489
330 599
-
-
-
2 004 662
-
2 224 096
Interest rate risk
Deposits attract interest at rates that vary with prime. The entity’s policy is to manage interest rate risk so that fluctuations in variable rates do not have a material impact
on surplus or deficit.
Finance lease liability attracts interest at a fixed rate.
Credit risk
Credit risk consists mainly of cash deposits, cash equivalents and trade debtors. The entity only deposits cash with major banks with high-quality credit standing and
limits exposure to any one counter‐party.
Trade receivables comprise a widespread customer base. Management evaluated credit risk relating to customers on an ongoing basis.
SANAS | Annual Report 2011/12
`
Financial instrument
Cash and cash equivalents
Trade and other receivables
2012
(R)
37,441,079
1,686,689
2011
(R)
33,890,123
1,534,682
70

26. Statement of comparative and actual information
2012
Original
budget
Budget
adjustments
Final
budget
Actual
outcome
Variance
Actual outcome as
percentage of final
budget
Actual
outcome as
percentage of
original budget
Financial performance
the dti Grant
Investment revenue
Other own revenue
20 623 000
1 780 000
39 838 882
-
-
20 623 000
1 780 000
39 838 882
20 623 000
1 702 504
34 913 485
-
77 496
4 925 397
100%
96%
88%
100%
96%
88%
Total revenue 62 241 882 - 62 241 882 57 238 989 5 002 893 92% 92%
Employee costs
Debt impairment
Depreciation and asset impairment
Finance charges
Other expenditure
(27 727 285)
(110 000)
(705 203)
(184 417)
(31 514 977)
-
-
-
-
-
(27 727 285)
(110 000)
(705 203)
(184 417)
(31 514 977)
(25 531 677)
(108 184)
(346 050)
(179 188)
(24 887 838)
(2 195 608)
(1 816)
(359 153)
(5 229)
(6 627 139)
92%
98%
49%
97%
79%
92%
98%
49%
97%
79%
Total expenditure (60 241 882) - (60 241 882) (51 052 937) (9 188 945) 85% 85%
Surplus/(deficit) for the year 2 000 000 - 2 000 000 6 186 052 (4 186 052) 309% 309%
Cash flows
Net cash from (used) operating
Net cash from (used) investing
Net cash from (used) financing
Net increase/(decrease) in cash and
cash equivalents
Cash and cash equivalents at the
beginning of the year
Original
budget
(943 285)
(960 000)
(151 411)
Budget
adjustments
-
-
-
Final
budget
(943 285)
(960 000)
(151 411)
Actual
outcome
4 140 961
(405 937)
(151 411)
Variance
(5 084 246)
(554 063)
-
Actual outcome
as percentage
of final budget
(439)%
42%
100%
Actual outcome
as percentage
of original
budget
(439)%
42%
100%
(2 054 696) - (2 054 696) 3 583 613 (5 638 309) (174)% (174)%
33 896 121 - 33 896 121 33 896 121 - 100% 100%
Cash and cash equivalents at year-end 31 841 425 - 31 841 425 37 479 734 (5 638 309) 118% 118%
SANAS | Annual Report 2011/12 71

PART 5:
HUMAN RESOURCE
MANAGEMENT OVERSIGHT
REPORT
72
SANAS | Annual Report 2011/12

PART 5: HUMAN RESOURCE MANAGEMENT
OVERSIGHT REPORT
The members of the Board of Directors receive a fixed level of remuneration for their
services, based on their attendance of meetings of the Board and its subcommittees.
However, nine of the members of the Board of Directors are employed by an organ
of state and, in accordance with the provisions of the Accreditation Act, are not
entitled to remuneration other than a refund for out-of-pocket expenses incurred to
attend a meeting. Two members of the Board are not employed by an organ of state
and received a stipend for attending meetings.
Human Resources and Remuneration Committee
The Human Resources and Remuneration Committee is tasked with providing the
Board of Directors with recommendations on policy matters relating to the following:
Remuneration Policy
SANAS aims to attract, retain and motivate employees of the highest calibre, while at
the same time aligning its remuneration packages with market-related remuneration
based on best practice and benchmarking with similar organisations. SANAS’s
approach to remuneration is all-inclusive, balanced and mindful of the following
elements:
• A guaranteed remuneration package
• Eligibility to a discretionary performance bonus
• Individual growth and development
• A stimulating and professional work environment
• The recruitment of senior staff, including the Chief Executive Officer
• Recruitment, benefits, incentives and bonus arrangements to employees
• Succession and retention planning for senior staff members, including the
Chief Executive Officer
• Areas of scarce and critical skills
• Meeting equity targets
During the year under review, the Human Resources and Remuneration Committee
held four meetings.
The Human Resources and Remuneration Committee confirms that it has
conducted its affairs in accordance with its terms of reference and discharged all
its responsibilities as set out therein and delegated to it by the Board of Directors.
The roles and responsibilities of the Human Resources and Remuneration Committee
include the following:
Key developments
During the year under review, the Human Resources and Remuneration Committee
completed the following activities:
• Considered the Human Resources Strategy and recommended it to the
Board of Directors for approval
• Considered the implications of Project Breakthrough, which is geared towards
rightsizing the organisation
• Oversaw the recruitment of the Senior Manager: Research and Development
• Oversaw the appointment of the new Company Secretary
• Considered the performance agreements of all employees
• Considered the payment of performance bonuses to all employees
• Considered the payment of accumulated annual leave
• Considered the Remunerations Proposal Report and recommended it to the
Board of Directors for approval
• Annually review the remuneration terms and conditions and make
recommendations to the Board of Directors
• Consider any changes to the employee benefit structures and make
recommendations to the Board of Directors
• Consider the remuneration, incentive and benefits arrangement of the Chief
Executive Officer, including pension rights and any compensation payments
and make recommendations to the Board of Directors
• Consider cost of living increases, performance bonus awards, changes to
employees’ terms and conditions and any other related activities and make
recommendations to the Board of Directors
• Review the Human Resources Strategy and human resources policies and
make recommendations to the Board of Directors
• Promote and foster a culture of excellence throughout SANAS
• Ensure compliance with applicable laws and codes
SANAS | Annual Report 2011/12 73

Human Resources and Remuneration Committee membership and attendance
The Human Resources and Remuneration Committee currently comprises four non-executive directors.
Mr Seymour was appointed with effect from 27 March 2012. The Chief Executive Officer and the Human Resources Manager attended the meetings of the Human
Resources and Remuneration Committee as invitees.
Human Resources and
Remuneration Committee member
Company
Meeting attendance record
21 April 2011 15 July 2011 14 October 2011 27 March 2012
Ms Jennifer Rathebe (Chairperson) Trademark Southern Africa √ √ x √
Mr Tervern Jaftha Small Enterprise Development Agency √ √ √ √
Ms Nomkhosi Magwaza Armscor √ √ √ x
Mr Vernon Seymour Seymour Attorneys inc. - - - √
Mr Ron Josias SANAS Chief Executive Officer - - - √
Ms Christi Warren SANAS Chief Financial Officer - - - √
Ms Nivashnee Naraindath SANAS Company Secretary √ √ - -
Ms Puleng Ratlabala SANAS Human Resources Manager √ √ √ √
Mr Dawood Petersen SANAS Company Secretary - - - √
Expenditure
Personnel costs
The total salary cost for the 2011/12 financial year amounted to R26 290 487.
Employment and vacancies
SANAS | Annual Report 2011/12
The following table summarises the number of positions on the establishment, the number of employees and the vacancies as at 31 March 2012.
Number of positions Number of positions
filled by March 2012
Total vacant positions on
structure
72 52 20
Job evaluation
Job evaluation was done for all positions on the SANAS structure.
74

Employment changes
The following table provides information on changes in employment during the period under review.
Employment change rates by salary band for 2011/12
Salary bands
Number of employees
Appointments and transfers
into SANAS
Terminations and transfers
out of SANAS
Turnover rate
Top Management Service 1 0 0 0
Senior Management Service Band (Level E) 4 1 1 25%
Highly skilled middle management (Level D) 13 5 4 29%
Highly skilled (Level C) 25 2 3 12%
Skilled (Level B) 7 1 0 0
Lower skilled (Level A) 2 0 0 0
Total 52 9 8 15%
Reasons why staff are leaving the organisation
Termination type Number Percentage of total employment
Death 0 0
Resignation 8 15%
Dismissal 0 0
Total 8 15%
Employment Equity
Total number of employees in each occupational level as at 31 March 2012
Male
Female
Occupational level
Total
African Coloured Indian White African Coloured Indian White
Top Management 0 1 0 0 0 0 0 0 1
Senior Management 1 0 0 0 1 0 0 2 4
Professionally qualified and experienced specialists and mid-management 4 1 0 2 3 1 0 2 1
Skilled technical and academically qualified workers, junior management,
supervisors, foremen and superintendents
6 0 1 2 10 2 1 3 25
Semi-skilled and discretionary decision-making 1 0 0 0 6 0 0 0 7
Unskilled and defined decision-making 0 0 0 0 2 0 0 0 2
Total 12 2 1 4 22 3 1 7 52
SANAS | Annual Report 2011/12 75

Recruitment for the period 2011/12
Occupational level
Male
Female
African Coloured Indian White African Coloured Indian White
Total
Top Management 0 0 0 0 0 0 0 0 0
Senior Management 0 0 0 0 0 0 0 1 1
Professionally qualified and experienced specialists and mid-management 3 1 0 0 0 0 0 1 5
Skilled technical and academically qualified workers, junior management,
supervisors, foremen
2 0 0 0 0 0 0 0 2
Semi-skilled and discretionary decision-making 0 0 0 0 1 0 0 0 1
Unskilled and defined decision-making 0 0 0 0 0 0 0 0 0
Total 5 1 0 0 1 0 0 2 9
Terminations for the period 2011/12
Occupational level
Male Female
African Coloured Indian White African Coloured Indian White
Total
Top Management 0 0 0 0 0 0 0 0 0
Senior Management 0 0 0 0 0 0 1 0 1
Professionally qualified and experienced specialists and mid-management 3 0 0 0 1 0 0 0 4
Skilled technical and academically qualified workers, junior management,
supervisors, foremen
0 0 0 0 2 0 0 1 3
Semi-skilled and discretionary decision-making 0 0 0 0 0 0 0 0 0
Unskilled and defined decision-making 0 0 0 0 0 0 0 0 0
Total 3 0 0 0 3 0 1 1 8
SANAS | Annual Report 2011/12
Performance rewards
An amount of R2 100 228 is budgeted towards the payment of performance rewards for the 2011/12 financial year.
Foreign workers
The tables below summarise the employment of foreign nationals in SANAS in terms of occupational level.
76

Foreign workers by occupational level
Occupational level Number Percentage of total employment
Top Management 0 0
Senior Management 0 0
Professionally qualified and experienced specialists and mid-management 1 1.9%
Skilled technical and academically qualified workers, junior management, supervisors, foremen 2 3.8%
Semi-skilled and discretionary decision-making 0 0
Unskilled and defined decision-making 0 0
Total 3 5.76%
Leave utilisation
The following table provides an indication of the use of sick leave and disability leave during the period under review. In both cases, the estimated cost of the leave is
also provided.
Sick leave
Occupational level Total days taken Average days per employee
Top Management 0 0
Senior Management 8 2
Professionally qualified and experienced specialists and mid-management 30 2.1
Skilled technical and academically qualified workers, junior management, supervisors, foremen 128 5.1
Semi-skilled and discretionary decision-making 58 8.2
Unskilled and defined decision-making 31 15.5
Total 255 4.8
Annual leave
Occupational level Total days taken Average days per employee
Top Management 26 26
Senior Management 81 27
Professionally qualified and experienced specialists and mid-management 269 19.2
Skilled technical and academically qualified workers, junior management, supervisors, foremen 607 24
Semi-skilled and discretionary decision-making 146 21
Unskilled and defined decision-making 58 29
Total 1187 22.39
SANAS | Annual Report 2011/12 77

HIV/AIDS and Health Promotion Programmes
SANAS has a designated a member of the Senior Management Service and the Employment Equity Committee who is responsible for equity issues and health promotion
programmes. SANAS’s policies are non-discriminatory and do not unfairly discriminate against employees on the basis of their HIV status.
Labour Relations
Labour relations matters that arise in SANAS are settled as amicably and as promptly as possible. The following table summarises the outcome of disciplinary hearings
conducted in the organisation for the period under review.
Misconduct and disciplinary hearings 2011/12
Outcomes of disciplinary hearings Number Percentage of total employment
Correctional counselling 1 1.8%
Verbal warning 1 1.8%
Written warning 1 1.8%
Final written warning 0 0
Suspended without pay 0 0
Fine 0 0
Demotion 0 0
Dismissal 0 0
Not guilty 0 0
Case withdrawn 0 0
Total 3 5.4%
78
SANAS | Annual Report 2011/12

Skills Development
This section highlights the efforts of SANAS with regard to skills development.
Training
SANAS encourages the personal growth and development of its employees. The Human Resources division supports the objective of skills development. Training and
development initiatives support the development of all the organisation’s employees.
As part of SANAS’s commitment to nurture high-quality staff, it emphasises its training and development interventions through various development programmes. These
include short courses, in-house training and bursaries.
Training provided included courses in Presentation Skills and Public Speaking, Financial Management, Business Writing Skills, Chairing Business Meetings, Selfmanagement,
Time Management, Customer Satisfaction Excellence, Public Relations for Office Professionals, Executive Secretary Programme and Fraud Management
Training.
Training
Staff attendance
Presentation Skills and Public Speaking 10
Financial Management 6
Business Writing Skills 27
Chairing Business Meetings 7
PR for Office Professionals 2
Executive Secretary Programme 1
Customer Satisfaction Excellence 10
Fraud Management 49
Self-Management 6
Time Management 6
Injury on duty
One injury on duty incidence was reported for the period under review.
Utilisation of consultants
During the period under review, SANAS contracted a few consulting organisations for the provision of various services. These included payroll administration by
First National Bank (FNB), the services of competency assessments by Work Dynamics and remuneration consulting services by Global Remuneration Solutions.
SANAS | Annual Report 2011/12 79

Contact details
SANAS | Annual Report 2011/12
Switchboard telephone: +27 (0) 12 394 3760
General fax number: +27 (0) 12 394 0526
Website: www.sanas.co.za
Physical address:
the dti Campus
77 Meintjies Street
Sunnyside
Pretoria
0002
Postal address:
Private Bag X23
Sunnyside
Pretoria
0132
RP: 244/2012
ISBN: 978-0-621-41150-8
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