The highlight this year in respect of the financial reporting of the NEF was to be able to again report on the basis of an unqualified audit opinion for the year ending 31 March 2009.

This was achieved despite moving into an even more complex accounting environment with extreme difficulties experienced in the area of debating fair values of investments and impairments of loans within our R1 billion portfolio.

As a consequence of the diligent work of the NEF’s finance team, our accounting disclosures and policies now compare favourably to local and international best practice for commercial investment banks and funds.

The Net Asset Value of the NEF has increased from R2.1 billion in 2005/06, to R4.6 billion currently. This has largely been a factor of appreciation in fair value of the Asset Management portfolio as well as the capitalisation of the NEF by the dti. Expenditure has increased in line with Net Asset Value but remains at an average of 2% of the Net Asset Value, which is an acceptable level for a development finance institution.

The current capitalisation size of the NEF allows it to move forward and make a meaningful contribution to its mandate as demonstrated recently with its investment approvals now exceeding R1.4 billion.

At a finance level, over and above the need for ongoing full regulatory compliance and unqualified audit opinion, the need for the stabilisation and full resourcing of the finance department was identified as an imperative.

The finance strategy was developed in conjunction with the Strategy and Planning department to introduce a high level of scenario planning for the NEF in order to project the financial sustainability of the NEF and the level of capital required to achieve this sustainability.

The surplus for the year is R104 million for 2009 versus R952 million in 2008. The 2008 surplus includes R800 million in Asonge proceeds. Impairments and write-offs account for 24% of the originated loan portfolio.