2021 Annual Report by Cape Peninsula University of Technology

about cput The Cape Peninsula University of Technology (CPUT) is a vibrant, multi-campus institution with more than 30,000 students across its six faculties. The only University of Technology in the Western Cape, CPUT strives to position itself strategically to offer sound academic programmes and relevant research opportunities that are responsive to the needs of the Western Cape, our country, and the world. With research at the core of our education business, CPUT is buoyed by the support of our committed researchers and quality academic staff, and local and international research partners. CPUT is geared to relevant, proactive research that will benefit all of society well beyond the Fifth Industrial Revolution. The Institution’s new Strategic Plan, Vision 2030 is premised on the idea that “Smartness” must be imbedded into every operational aspect of our work. At CPUT, our mission is to transform our students, “through world-class researchers who inspire knowledge production and innovation that is cutting edge”. Through the innovative system of work integrated learning, our students have the added advantage of simultaneously learning and working in their chosen field. CPUT graduates are holistic individuals who are equipped to enter the world of work, confident in the skills, knowledge and values they take with them on their future journeys. Throughout the COVID-19 pandemic, CPUT has shown courage in the face of the unknown, embracing the changes that accompanied this unprecedented time, and confronting challenges head-on. With the pandemic likely to be with us for the foreseeable future, we remain as committed to staying the course; fostering innovation, bridging the digital divide, and creating a better equipped humanity – and ultimately to achieving our goal of being “One Smart CPUT”. Having embarked on this transformative era, we have set in motion our vision of being, “Africa’s leading Smart University of Technology, globally renowned for innovation, with graduates that shape a better world for humanity”.

general information Registered address Cape Peninsula University of Technology PO Box 1906 Bellville, 7535 Tel. +27 (0)21 959 6911

Cliffe Dekker Hofmeyr Inc. 11 Buitengracht Street Cape Town, 8001 Tel. +27 (0)21 405 6066 Fax. +27 (0)21 405 6149

Physical address Cape Peninsula University of Technology Administration Building, Symphony Way Bellville South, 7530

Duvenage De Villiers Attorneys 107 Main Road Wellington, 7655 Tel. +27 (0)21 873 3140

Website address www.cput.ac.za

Fairbridges Wertheim Becker 16th Floor, South Tower Heerengracht Street Cape Town, 8001 Tel. +27 (0)21 405 7300

Bankers ABSA

Auditors External auditors Ernst & Young Incorporated Waterway House, No. 3 Dock Road V&A Waterfront Cape Town, 8000 Tel. +27 (0)21 443 0200 Internal auditors NEXIA SAB&T Chartered Accountants Incorporated PO Box 12544 N1 City, Goodwood, 7463 SAB&T House C/o Birmingham & Canterbury Roads, N1 City Goodwood, 7460 Tel. +27 (0)21 596 5400

Attorneys Adriaans Incorporated 16th Floor, 2 Long Street Cape Town, 8001 Tel. +27 (0)21 801 5240 Bradley Conradie The Gatehouse G04, Century Way Cape Town, 7441 Tel. +27 (0)21 418 2196 Bisset Boehmke McBlain 4th Floor, 45 Buitengracht Street Cape Town, 8001 Tel. +27 (0)21 441 9800

general information

Gunstons Block F, The Terraces Steenberg Office Park Tokai, 7945 Tel. +27 (0)21 702 7763 John McRobert Attorneys Study Villa, 32 Study Street Flamingo Vlei Table View, 7441 Tel. +27 (0)21 556 6206 Minde Shapiro Smith Tyger Valley Office Park Building No. 2 C/o Willie van Schoor & Old Oak Roads Tyger Valley, 7536 Tel. +27 (0)21 918 9037 Norton Rose Fulbright 10th Floor, Norton Rose House 8 Riebeeck Street Cape Town, 8001 Tel. +27 (0)21 405 1308 Riley Attorneys 212 Rosmead Avenue Wynberg, 8001 Tel. +27 (0)21 797 7116 Walkers 15th Floor Plein Park Plein Street Cape Town, 8001 Tel. +27 (0)21 464 1400

table of contents Report of the Chairperson of Council........................................................................................................................................2 Meetings of Council.................................................................................................................................................................4 2021 Members of Council........................................................................................................................................................8 Vice-Chancellor’s Report on Management and Administration................................................................................................ 10 Performance Assessment Report........................................................................................................................................... 12 Report on Corporate Governance.......................................................................................................................................... 19 Council Statement on Sustainability.......................................................................................................................................28 Report of the Audit and Risk Oversight Committee.................................................................................................................32 Report on Internal Administrative/Operational Structures and Financial Controls.....................................................................34 Enterprise Risk Management.................................................................................................................................................36 Report of the Institutional Forum............................................................................................................................................39 Senate Report.......................................................................................................................................................................40 Transformation Report...........................................................................................................................................................46

Annual Financial Review.........................................................................................................................................................52 Financial Statements..............................................................................................................................................................54 Statement of Responsibility for the Financial Statements.........................................................................................................55 Approval of the Financial Statements................................................................................................................................55 Report of the Independent Auditors..................................................................................................................................56 Statement of Financial Position.........................................................................................................................................60 Statement of Comprehensive Income...............................................................................................................................61 Statement of Changes in Funds........................................................................................................................................63 Statement of Cash Flows..................................................................................................................................................64 Notes to the Financial Statements..........................................................................................................................................65

Abbreviations.........................................................................................................................................................................98

table of contents | 1

report of the chairperson of council

2 | report of the chairperson of council

It is a pleasure to deliver this Annual Report as Chairperson of the Cape Peninsula University of Technology (CPUT) Council. I was pleased by how far we have come as an institution, despite the global pandemic, in ensuring thousands of students were able to meet their academic goals and graduate on course, and on time. As a university of technology, CPUT was particularly agile in adapting to the new reality of life within a pandemic. I was impressed by the creativity and adjustment by academic, administrative, and non-academic staff, and the student cohort to navigate this challenging period. I also commend the ViceChancellor, Prof Chris Nhlapo and his Executive Management Team for never sacrificing on good governance. This good governance extends to the university Council, whose members serve without financial reward, often through challenging circumstances. I am grateful for their commitment, diligence and perseverance, and, like them, I have a shared interest in seeing CPUT flourish. Under my stewardship, Council will remain compliant to the laws and policies that govern the Institution at all times. This will happen by ensuring the following: • The University complies with governance prescripts; • The various committees of Council follow their mandates in a clear and consistent way, without personal interest; and • Impeccable record keeping will ensure that all decisions are mandated and within our authority. Council members have a range of skills, backgrounds and talents, and this diversity is necessary to ensure that CPUT remains inclusive, efficient, accountable, ethical, and a university of choice. As the guardians of over R10 billion in assets, it is imperative that we maintain these resources appropriately. As we set our minds toward the following decade, we will be guided by the newly refreshed Vision, Mission and Core Values of CPUT. Vision CPUT is Africa’s leading Smart University of Technology, globally renowned for innovation, with graduates that shape a better world for humanity. Mission CPUT transforms its students, through world-class researchers who inspire knowledge production and innovation that is cutting edge. Core Values – CPUT agrees to Oneness and Smartness by: • Embracing a culture of ethics and integrity; • Seeking kindness and showing compassion to all staff, students and stakeholders of CPUT; • Embracing restoration and addressing any issues of discrimination;

As the largest university in the Western Cape, producing the most industry ready graduates, it is important that our Strategic Plan called Vision 2030 be imbedded in all that we do. It is premised on the idea that Smartness must be imbedded into every operational aspect of our work, e.g.: Smart Teaching, Smart Staff, Smart Students, Smart Buildings, and most importantly, Smart Ideas. All encompassed, it speaks to a One Smart CPUT. This Smart journey includes realigning CPUT products and processes, and embracing emerging industries. Our unique University of Technology-ness already sees us take a leading role in South Africa’s Science and Technology development. CPUT has a contribution to make to South Africa, and our institutional strategies already promote this. Higher Education will always be a dynamic space, and each academic year will inevitably bring a fresh set of challenges that require our attention. Notwithstanding these obstacles, it is clear that Executive Management, supported by Council, have been agile but prudent when dealing with concerns. With the variety of stakeholders on Council, including students and organised labour, we can never lose touch of the core issues facing the Institution. My objective as the Chair of Council remains the following: • To continue to tackle issues with vigour to avoid them developing into larger, more complex problems. This includes student housing, financial aid and staff attrition; • To see that CPUT continues to meet its enrolment and graduation targets; • To ensure that allocated grants and funding are being used for their intended purposes, and to the best interests of the staff and student body; • That staff and student concerns are ventilated using the suitable available channels, and that the appropriate people are held accountable when lapses in these become evident; • That a sensible financial strategy is in place to guarantee that CPUT meets its financial obligations, and that institutional reserves grow to meet future planning; and • That academic freedom is fostered, and that CPUT builds communication pathways for staff to feel included and acknowledged. Considering all of the above, I have no doubt that CPUT can, and will, achieve more. Ultimately, we are merely the guardians of a university which must outlive us all and continue to service the people of South Africa. Council will play its role, and I believe that the variety of stakeholders who all have the best interests of CPUT at heart will also rise to the occasion and do what they can to achieve the Smartness that we aspire to.

• Embracing unity and diversity; • Showing passion and always searching for better ways of doing things; • Taking accountability and accepting responsibility; and • Being technologically astute.

Chairperson of Council Adv. ZL Mapoma

report of the chairperson of council | 3

meetings of council Acronyms AROC

Audit and Risk Oversight Committee

Council

CStratPlan Council Strategic Planning Workshop

4 | meetings of council

Exco

Executive Committee

FinCom

Finance Committee

GEC

Governance and Ethics Committee

HRCC

Human Resources Committee of Council

InvCom

Investment Committee

ITGov

IT Governance

JFAC

Joint Finance and Audit Committee

JPPSSC

Joint Physical Planning and Student Services Committee

PPCC

Physical Planning Committee of Council

RemCo

Remuneration Committee

Senate

spExco

Special Executive Committee

spHRCC

Special Human Resources Committee of Council

spIF

Special Institutional Forum

spS

Special Senate

spSSC

Special Student Services Committee of Council

SSC

Student Services Committee of Council

SSCSA

Search and Selection Committee for Senior Appointments

Committees

Jan

Feb

Mar

Council

Sp Council

Apr

May

Jun 19

Aug

Sep

Oct

Council Strategic Planning Workshop

Dec

3 26

Audit and Risk Oversight

Audit and Risk Oversight Workshop

Executive Committee of Council

Finance

Sp Governance and Ethics Committee

15 17

Human Resources Committee of Council

Investment Sub-committee

Investment Sub-committee (Workshop)

1 6

IT Governance

Physical Planning

1 19

Sp Physical Planning Remuneration

Search and Selection Committee for Senior Appointments

Student Services Council

Nov 27

Council Chair and Deputy meet with CPUT Unions

Governance and Ethics Committee

Jul

5 29

Sp Student Services Council

Senate

17 2

Joint Council and Senate Honorary Degree Award Hotel School Management Board

Meetings deferred until further notice 11

Institutional Forum

Sp Institutional Forum

Quality Assurance and Risk Management

20 18

14 4

Convocation Convocation Executive

meetings of council | 5

Codana, N

Dhevcharran, N

Dilotsothle, K

Dondashe, N

Easthorpe, RA

Faku, S

Ganyile, N

Groenewald, L

Special Council (spC)

Governance and Ethics Committee (GEC)

Special Governance and Ethics Committee (spGEC)

Audit and Risk Oversight Committee (AROC)

Executive Committee of Council (Exco)

Busetti, C

Council (C)

Bredenkamp, R

Balkaran, R

Benjamin-Swales, R

Ah-sing, F

2021 list of council members including meeting attendance

3 4

Financial Committee (FinCom)

Human Resources Committee of Council (HRCC)

Investment Sub-committee

Investment Sub-committee (Workshop)

3 2

IT Governance (ITGov)

IT Governance (Workshop) Joint Finance and Audit Committee (JFAC)

Physical Planning Committee of Council (PPCC)

Special Physical Planning Committee of Council (spPPCC)

Remuneration Committee (RemCo)

Search and Selection Committee for Senior Appointments Student Services Council (SSC)

Special Student Services Council (spSSC)

Senate (S)

Hotel School Management Board

Quality Assurance and Risk

Convocation Executive

6 | meetings of council

2 1

2 4

Institutional Forum (IF) Special Institutional Forum (spIF)

Hadebe, B Helsby, C Kioko, J Kunene, T Lebethe, R Mapoma, Z Matiwane, S Maseko, JM Msomi, V

Ngxiza, S Nhlapo, C

Nkwana, S Nyangiwe, A

Phaho, D Platzky, L Qegu, N

Son, G Sosibo, L

4 4 4 2 2 4 4 3 4 4 4 4 4 4 4 4 2 2 3

3 3 3 3 2 2 3 3 2 3 3 3 3 3 3 3 3 2 3 3

3 4

2 4

3 4

4 4

2 2

1 3

4 4 2 3 4 4 3

4 4

1 1

1 2

3 3

1 1

2 3 4 3 3 1

2 3 3 2 2 1

3 2 1

2 2 2

Yach, D

Tshitangano, T

Roberts, S

Patel, K

Nicholls, R

Ngwenya, N

Gumbi, D

3 1

meetings of council | 7

2021 members of council

8 | 2021 members of council

Chairperson Adv. Z Mapoma

Executive Management Chairperson with effect from 29 August 2020

Deputy Chairperson Dr L Platzky

Prof NC Nhlapo

Vice-Chancellor

Prof R Balkaran

Deputy Vice-Chancellor: Teaching and Learning

Dr D Phaho

Deputy Vice-Chancellor: Research, Technology Innovation and Partnerships

Deputy Chairperson with effect from 28 November 2020

Ministerial Appointees

Senate Representatives

Adv. Z Mapoma

With effect from 12 March 2018

Prof J Kioko

Mr S Ngxiza

Term ended 31 August 2018 Renewed with effect from 5 September 2018

Term ended 31 August 2018 With effect from 1 September 2018

Prof L Sosibo

With effect from 1 September 2018 Resigned with effect from 21 June 2021

Mr R Easthorpe

With effect from 5 September 2018

Ms N Qegu

With effect from 25 February 2019

Ms R Lebethe

With effect from 24 July 2019

Convocation Representatives Mr S Matiwane

With effect from 7 September 2019

Mr A Nyangiwe

With effect from 7 September 2019

Council Appointees Mr B Hadebe

With effect from 1 September 2018

Ms N Dhevcharran

Term ended 31 August 2018 Renewed with effect from 1 September 2018

Mr D Gumbi

With effect from 1 September 2018

Ms L Groenewald

With effect from 1 September 2018

Ms N Dondashe

With effect from 1 September 2018

Prof JM Maseko

With effect from 23 November 2018 Resigned with effect from 14 October 2021

Ms K Dilotsotlhe

With effect from 29 August 2020

Mr S Faku

With effect from 20 March 2021

Dr G Son

With effect from 1 September 2018 Resigned with effect from 21 June 2021

City of Cape Town Appointee Councillor F Ah-Sing With effect from 1 September 2018

Donor Representative Adv. D Yach

Academic Employee Representatives Ms C Helsby

With effect from 1 September 2018

Dr V Msomi

With effect from 1 September 2018

Non-Academic Employee Representatives Mr S Nkwana

With effect from 1 September 2018

Mr T Kunene

With effect from 1 September 2018 Resigned with effect from 19 July 2021

SRC Representatives Mr N Codana

With effect from 20 June 2020

Ms N Ganyile

With effect from 1 January 2020

Executive Management in Attendance Mr SS Mokoena

Registrar & Secretary of Council

Mr P Du Plessis

Executive Director: Finance

Ms P Coopoo

Dean of Students

Prof H Hay-Swemmer Executive Director: Office of the Vice-Chancellor Prof G Mayende

Deputy Vice-Chancellor: Operations

With effect from 1 September 2018

Provincial Government Appointee Dr L Platzky

With effect from 1 September 2018 Deputy Chairperson of Council with effect from 28 November 2020

Chairperson of Council Adv. ZL Mapoma

Registrar Mr SS Mokoena

2021 members of council | 9

vice-chancellor’s report on management and administration

10 | vice-chancellor’s report on management and administration

It gives me great joy to reflect on the year 2021. As ViceChancellors, we all thought 2020 was extraordinary, only to realise that 2021 would bring different and further challenges to the fore. As a sector and as the Cape Peninsula University of Technology (CPUT), we can all be proud of what we have achieved. There were so many complexities to deal with: online graduation ceremonies; online staff long-service awards, meetings, classes; sustaining long-standing stakeholder engagements and relationships. It once again showed me how wonderful human beings are, even in the face of adversity. They are resilient, adaptable, creative, problem solving orientated, and have the ability to reinvent, recreate and reimagine. During the last two years, I could not forget the words of Charles Dickens in his book, A Tale of Two Cities: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, were all going direct the other way – in short, the period was so far like the present period, that some of its noisiest authorities insisted on its being received, for good or for evil, in the superlative degree of comparison only.” The COVID period can be thought of as being one with various tales. I am proud to say that CPUT used it as a time for deep introspection. We scrutinised our practices, our relationships, our strengths and our weaknesses. What we realised was that when at our most vulnerable, human interactions, caring, showing empathy, and sharing sorrows and loss do matter.

As an innovative university, we used this time to reflect on how efficient our administrative processes are, and where we can and should do better; how we can have meaningful and regular engagements with all our stakeholders – with students certainly being a very important component. I am gratified to say that we have started a culture where students and Management engage timeously, collectively trying to find answers to what matters most. I applaud CPUT’s Student Leadership for playing a critical role in stabilising our campuses, enhancing our brand, and taking pride in the qualifications they obtain. As always, I cannot pass up an opportunity to emphasise the importance of an ethical university administration, with all its various functions and practices. Our Combined Assurance Model is highly valued by the CPUT Council; and Internal Audit, Enterprise Risk Management and Compliance are key drivers in ensuring that CPUT will not fall prey to procurement malpractices, nepotism, or any other form of corruption. Each internal report is verified, and forms part of the Executive Members’ Key Performance Areas. I want to believe that CPUT has turned a corner in becoming a stable university, with good practices, relevant qualifications, and research that has impact and improves the lives of many poor families. That will be our focus in the years to come: being humane, having impact, and striving to be One Smart CPUT.

Vice-Chancellor Prof NC Nhlapo

vice-chancellor’s report on management and administration | 11

performance assessment report This report reflects on the performance of the Cape Peninsula University of Technology (CPUT) in relation to the targets set in its Annual Performance Plan (APP) for 2021, as submitted to the Department of Higher Education and Training (DHET) in December 2020. DHET’s Implementation Manual for Reporting by Public Higher Education Institutions notes that the university’s performance assessment report should refer to the “key performance indicators and targets as stated in the Annual Performance Plan” (Government Gazette, No. 37726, 9 June 2014). Most of the targets in the Annual Performance Plan are also to be found in the University’s Student Enrolment Plan for 2020–2025, as submitted in 2019. The Mid-term Review of the Enrolment Plan was submitted for approval in February 2022, and will result in some of the targets changing for the remainder of the Enrolment Plan from 2023 to 2025. The 2021 actual numbers in the following tables are derived from the second Higher Education Management Information System (HEMIS) submission, and partly audited data as of March 2022. The final HEMIS submission to DHET is the official record of the University’s data. The layout of the following tables is influenced by templates provided by DHET, following a workshop on key performance indicators (KPIs) in 2015. The tables provide 2021 targets and actuals, with comparative data for 2019 and 2020.

12 | performance assessment report

Performance Assessment on Access Key Performance Indicator

Target 2019

Actual 2019

Target 2020

Actual 2020

Target 2021

Actual 2021

Notes

35,738

33,941

35,498

32,386

37,027

32,429

9,249

6,753

7,003

6,795

7,252

7,068

A. Access Headcount Totals First-Time Entering Undergraduates (UG)

First-Time Entering Occasional (OC)

Foundation First-Time Entering UG

1,023

1,015

761

1,027

783

1,264

Headcount Enrolments Total UG

33,388

31,542

33,211

30,135

33,372

30,428

2,257

2,268

2,201

2,131

3,562

1,904

131

117

Headcount Enrolments Total Postgraduate (PG) Headcount Enrolments Total OC

Enrolments by Major Field of Study

35,738

33,941

35,498

32,386

37,027

32,429

Science, Engineering, Technology

17,301

15,456

16,259

14,645

16,693

14,670

Business/Management

11,386

11,030

11,584

10,302

12,429

10,220

A5 Education

3,195

4,656

4,761

4,784

4,963

4,939

Other Humanities

3,856

2,798

2,894

2,652

2,942

2,599

424

466

321

442

367

385

% Female Students

56,0%

55,7%

55,1%

55,9%

54,7%

56,9%

% African Students

58,0%

67,8%

65,0%

69,9%

64,8%

72,2%

% Coloured Students

29,0%

24,6%

26,0%

23,5%

26,1%

22,1%

% Indian Students

1,0%

0,8%

0,9%

0,7%

0,9%

0,6%

% White Students

12,0%

6,7%

8,1%

5,8%

8,2%

4,9%

Distance Education Enrolments

Demographic Profile

% Other

0,1%

performance assessment report | 13

Analysis and notes for A1–A6: Access category The table above shows that the actual headcount enrolment numbers at CPUT have plateaued between 33,941 and 32,429 in the past three years (2019–2021). In the same period of analysis, the Institution has experienced a shortfall in overall headcount enrolment of 5% and 12% respectively. The cumulative impact of this phenomenon on subsidy is yet to be realised; however, it is conceivable that it may affect the Institution negatively. While a combination of factors led to the shortfall in headcount enrolments, it is worth noting that First-time Entering Undergraduates numbers were the lowest contributors to the shortfall. This means that the challenge is not about widening access and providing opportunities to school-leavers, but rather with the returning students. This challenge is not unique to CPUT, and while the underlying factors impacting student retention are widely known, it cannot be ignored that the advent of COVID-19 has added additional barriers to student retention, such as access to technologies that could be used for learning online. The analysis of data presented in the table above will focus on the performance assessment on access for the 2021 academic year against the planned targets in the Enrolment Plan 2020–2025. The targets in the APP normally make provision for the overall widening of access, with sub-categories of headcount, enrolments by major field of study, as well as that of demographic profiles. However, some trends also include unplanned targets, such as the enrolment of occasional students, which do not have specific targets set during the planning phase. The following provides a synopsis of the overall analysis of access by sub-categories: A1

The overall headcount enrolment was expected to grow by 4% between 2020 (35,498) and 2021 (37,027). This was a bold target, considering the unexpected challenges that resulted in the University not meeting its overall enrolment targets in the past three academic years. These challenges included, but were not limited to, the Higher Education Qualifications Sub-framework (HEQSF) alignment process, student funding, and the advent of COVID-19. Similar to the 2020 annual performance plan report, there was a notable decline in the achievement of the overall headcount enrolment targets, from 91,2% in 2020 to 87,6% in 2021. There was an overall shortfall of 12,4% in relation to the set target. As alluded to in the previous report, all the stakeholders concerned have collaborated in the current academic year to address this prevailing challenge, and the impact of their combined effort is already visible. The First-Time Entering Undergraduates students’ sub-category showed an achievement of 97,46% against the set target, indicating an improvement from the 2020 academic year. The shortfall was only 2,54%. This is commendable, considering the prevailing circumstances, as aforementioned. A much deeper analysis of data in this category of students showed that CPUT does not have a problem attracting applicants and converting them into enrolments, but needs to strengthen its efforts for student retention. On the Foundation First-Time Entering Undergraduates, data showed that there was an over-achievement of the set target. The University has met its target for this category of students in the past two academic years. Considering that these programmes are intended to provide access to underprepared students and students who do not meet the requirements for university because they come from disadvantaged schools, this can be considered a great achievement for CPUT. Our increase in numbers for this category can be attributed to COVID-19, as learners showed potential, but required additional support. Analysis of the Headcount Enrolments Total Undergraduates category showed an achievement of 91,1% actual headcount against the set target. In the very same category, the headcount enrolments for the total PG showed an achievement of 53,4%. The main contributing factor for the latter was a 61,8% increase in the target, and the unavailability of qualifications, many of which were still in the approval and accreditation stages. The last sub-category of the headcount enrolments of the occasional showed an achievement of 97, compared to the previous year’s total of 117, even though this category does not form part of the planning phase. In general, this category portrayed an overall positive trend in headcount enrolments. Enrolments by Major Field of Study: Consonant with the overall enrolment achievement, the enrolment trends observed in this category of access showed an overall performance achievement of 87,6%. However, Education showed an achievement of close to 100% (99,5%), while there was an overachievement of 5% in distance education enrolments. The Science, Engineering, Technology (SET) sub-category showed an overall enrolment achievement of 87,8% against the set target, with a shortfall of 12,2%. The Business/Management sub-category showed an overall enrolment achievement of 82,2%, a slight decline compared to previous years. It is also worth noting that this major field of study had a significantly higher target compared to the other major fields of study. The Education sub-category, within this enrolment by major field of study, showed a total enrolment of 99,5%. The University did not experience shortfalls in this major field of study for both undergraduate and postgraduate enrolments in recent years. The Other Humanities sub-category showed an overall enrolment achievement of 88,3%. This was a slight decline of 3,3% compared to the previous year.

The final category for access is that of the demographic profile of enrolled students. This category showed different enrolment trends. Data showed a steady increase of African students from 67,8% in 2019 to 72,2% in 2021; while the percentage of Coloured students declined slightly to 22,1%; Indian students constituted 0,6%; and White students constituted 4,9% of the overall students enrolled. The enrolment of Female students increased by 1% from 55,9% in 2020 to 56,9% in 2021, exceeding the set target by a 2% margin.

14 | performance assessment report

Performance Assessment on Success Key Performance Indicator Graduates UG UG Degree Credit Success Rate

Target 2019 8,862

Actual 2019 8,007

Target 2020 7,604

Actual 2020 7,274

Target 2021 7,801

Actual 2021

Notes

7,584

82,0%

80,1%

78,7%

82,6%

78,8%

78,9%

616

485

643

319

1,354

351

PG Degree Credit Success Rate

52,0%

77,5%

55,7%

62,4%

68,0%

72,9%

Overall Degree Credit Success Rate

82,0%

80,0%

77,9%

82,0%

78,0%

78,7%

Graduates PG

Success Rate by Field of Study Science, Engineering, Technology

80,0%

77,8%

75,2%

80,6%

75,4%

76,7%

Business/Management

77,0%

76,6%

75,6%

79,4%

75,8%

76,0% B6

Education

94,0%

93,7%

89,0%

91,9%

89,0%

89,9%

Other Humanities

83,0%

82,2%

81,6%

82,8%

81,7%

80,1%

1,285

1,255

1,477

1,080

1,517

1,135

444

358

689

325

661

353

Human Health

775

665

585

591

579

642

Teacher Education

805

898

909

784

905

774

Undergraduate Output by Scarce Skills Engineering Life and Physical Sciences Animal Science

performance assessment report | 15

Analysis and notes for B1–B7: Success category The table above indicates that the actual performance on success has been stable over three years (2019–2021). The notable areas of low achievement continued to be within the postgraduate output and undergraduate output by scarce skills sub-categories. Even though some targets were over-achieved, given the nature of the targets set in this category, higher achievements in the success indicators are commendable. The sub-categories of this indicator are broken down as follows: B1

The success rate for the Graduates UG showed an overall achievement of 97,22%, which was slightly lower than the set target by about 2,8%. However, while the previous report depicted a gradual decline in this indicator, the 2021 data showed an improvement. This is a clear indication that the University is committed to improving throughput rates across all the faculties. In the UG Degree Credit Success Rate indicator, the University has met its target of 78,8%. One of the main limiting factors for high throughput rates and high graduation rates is the high failure rate in some of the subjects which are essential building blocks in a programme of study leading to a qualification. The Institution closely monitored the high-risk modules and bottleneck modules for improved student success. This resulted in the improvement of all success indicators, such as Graduates UG above. Graduates PG showed an overall achievement in this category of 25,9% against the set target. There was a total of 351 successful postgraduates against the set target of 1,354. The HEQSF alignment process for postgraduate qualifications at NQF Level 8 was longer than anticipated. The main reason for this was that all these qualifications had to be developed anew. The process for approval and accreditation of these programmes was even longer, which resulted in the Institution not having enough qualifications to accommodate the projected numbers. However, considering the actual students enrolled and graduating, this indicator is on a positive trend. The PG Degree Credit Success Rate category showed an overall performance of 72,9% against the set target of 68%. This indicator showed an improvement from the 2020 academic year. In the Overall Degree Credit Success Rate category, the overall performance was slightly above the set target of 78%. The interventions in place for improving student success appear to be having a positive impact, and the Institution will ensure that this trend is maintained for future targets. The category Success Rate by Field of Study reports an overall average achievement of 80,7% against the performance of the combined sub-categories, with the average target of 80,5%. This is commendable for this category. However, the breakdown of this category comprises the following sub-categories: • The Science, Engineering, Technology sub-category showed an achievement of 76,7% against the 75,4% target. This was 1,3% above the set target. • The Business/Management sub-category showed an achievement of 76,0% against 75,8%. This was 0,2% above the set target. • The Education sub-category showed an achievement of 89,9% against the set target of 89%. • Lastly, the Other Humanities sub-category showed an average achievement of 80,1% against the set target of 81,7%. This was 1,6% below the set target.

The Undergraduate Output by Scarce Skills category comprises the sub-categories Engineering; Life and Physical Sciences; Animal Sciences; Human Health; and Teacher Education. On average, these sub-categories showed an overall average performance of 70,31%, with an overall average shortfall of 29,69%. The overall achievement for Engineering was 74,8% against the set target; Life and Physical Sciences achieved an overall average of 53,3% against the set target; Animal Sciences showed an overall achievement of 26,9%; Human Health showed an average achievement of 110,8% (above the set target by 10,8%); whilst Teacher Education, one of the priority areas for the university of technology, had an achievement of 85,6%.

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Performance Assessment on Efficiency Key Performance Indicator

Target 2019

Actual 2019

Target 2020

Actual 2020

Target 2021

Actual 2021

865

776

843

767

867

779

1,105

1,046

1,101

1,003

1,132

1,028

% Staff with Doctoral Degrees

41%

30,8%

31,7%

31,1%

33,8%

31,5%

% Staff with Master’s Degrees

34%

47,4%

43,4%

48,8%

41,8%

48,9%

Number of nGAP Staff

Ratio of FTE Students to FTE I/R Staff

24.3

24.7

24.5

25.0

23.5

Notes

Instruction/Research Professional Staff Headcount of Permanent I/R Staff FTE Instruction/ Research Staff

Analysis and notes for C1–C6: Efficiency category This category is divided into four sub-categories, namely Headcount of Permanent I/R Staff; percentage of Staff with Doctoral Degrees; Number of New Generation of Academics Programme (nGAP) Staff; as well as the Ratio of FTE Students to FTE I/R Staff Efficiency category analyses of performance for the Instruction/Research Professional Staff. The table above indicates that the actual performance on Efficiency of the Instruction/Research Professional Staff was stable; however, some areas require improvement. The overall achievement for both the Instruction/Research Professional Staff and the FTE Instruction/Research Staff was 90,4% in 2021. The Percentage of Staff with Doctoral Degrees category plateaued at 31%, while the Percentage of Staff with Master’s Degrees increased by 7,1%. The analysis per sub-category is as follows: C1

The achievement for the Headcount of Permanent I/R Staff was 89,9% in 2021, and this sub-category of efficiency showed a shortfall of 10,1% against the set target.

The sub-category of FTE Instruction/Research Staff showed an overall achievement of 90,8% against the set target. The shortfall was only 9,2%; this shows that the University is consistent in its efforts to achieve the set targets.

The Percentage Staff with Doctoral Degrees sub-category showed an overall achievement of 31,5% for 2021. The shortfall for this sub-category is 2,3%. It is quite clear that the measures that the Institution has put in place to ensure growth in this sub-category are yielding positive results. It is worth noting that the fluctuations in this indicator are mainly due to unanticipated staff movement, i.e., resignations, attrition, unfilled vacancies, etc.

The Percentage Staff with Master’s Degrees sub-category showed an overall over-achievement of more than 7,1%.

The Number of nGAP Staff sub-category showed an overall achievement of 76% against the set target. More staff should be encouraged to take advantage of competing for nGAP funding and ensure the completion of their studies through this grant.

The Ratio of FTE Students to FTE I/R Staff was 23.5 compared to a target of 25.0.

performance assessment report | 17

Performance Assessment on Research Key Performance Indicator

Target 2019

Actual 2019

Target 2020

Actual 2020

Target 2021

Actual 2021

Notes

Instruction/Research Professional Staff Publication Units

325

273

359

228

401

353

Publication Units per Permanent I/R Staff

0.38

0.35

0.43

0.30

0.46

0.45

Master’s Graduates

140

197

164

166

177

203

Doctoral Graduates (Unweighted)

D3 26

Analysis and notes for D1–D2: Research category The research output category is divided into four main sub-categories, namely, Publication Units; Publication Units per Permanent I/R Staff; Master’s Graduates; as well as Doctoral Graduates (Unweighted). D1

The Publication Units sub-category showed an overall achievement of 88% against the set target. This was a significant improvement from 70% in the previous academic year.

The publication per-capita output also improved by a 0,15% margin, from 0.30 to 0.45.

For the period under review, the Master’s Graduates sub-category figure was significantly above the set target. Furthermore, the unweighted Doctoral Graduates category showed growth of 12% against the set target.

Chairperson of Council Adv. ZL Mapoma

Vice-Chancellor Prof NC Nhlapo

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report on corporate governance

1. Introduction The Council of the Cape Peninsula University of Technology (CPUT) is responsible for the governance of the University, and provides strategic leadership to the University, based on the University’s long-term plans as expressed in its Strategic Plan and objectives, which role is separate from the operational leadership role performed by the Management of CPUT.

2. Statement on governance The Higher Education Act, 1997 (Act No. 101 of 1997) (the Act), which regulates higher education, inter alia, provides for the establishment of higher education institutions and various institutional governance structures, which include Council; Senate; the Vice-Chancellor; SRC; IF; and such other structures and offices as may be determined by the institutional statute (Section 26(2) of the Act). The CPUT Statute (the Statute), amplifies the responsibilities imposed by the Act, and provides, inter alia, that “the Council governs the University subject to the Act and the Statute and has general control of its affairs and functions”. The Council monitors the University’s overall mission and strategy. It oversees the governance of the Institution, and protects the Institution’s long-term sustainability and reputation. The Council is furthermore guided by governance principles, protocols and practices provided for in the King IV Corporate Governance principles, and as such, is committed to the principles of ethical and effective leadership, sustainable development, effective control, and stakeholder inclusivity and responsiveness, as advocated in the King IV Report. The Senior Management, under the leadership of the ViceChancellor, oversees the daily activities of the University, and reports and accounts to the Council on the University operations. There is a clear separation of roles between the Chairperson of Council and the Vice-Chancellor, which is expressly indicated in the Act, Statute, as well as the Council Charter, and the Code of Conduct for Council and Members of the Council. The strength of the current Council has been its diversity of membership in respect of backgrounds, culture, gender, expertise, skills, and competencies. Council appointed members to various Council committees based on their area of expertise and competencies relative to the Terms of Reference of a particular committee of Council, which ensured that CPUT has the requisite expertise to run a complex institution efficiently. Council has furthermore, through the Governance and Ethics Committee, appointed a number of external people with the necessary skills and competencies to serve on relevant committees without being Members of Council. The principles of stakeholder inclusivity are provided through the internal membership, which comprises both staff and students of the University, thereby ensuring that the needs, expectations and perspectives of all the stakeholders are considered in decisionmaking processes, at the governance level.

report on corporate governance | 19

3. Council and committees of Council The Council is guided and directed by the Act, applicable national legislation, the Statute, the University Strategic Plan (Vision 2030), and the Annual Performance Plan in its governance function. The Chairperson of Council guides and assists the Council to focus on its mission and strategic objectives through four (4) quarterly ordinary Council meetings, supplemented by at least two (2) Council Strategic Planning Sessions each year. The first Strategic Planning Session is normally scheduled in June of each year when the mid-term performance review and the budget, linked to the strategic objectives for the following year, are considered. The purpose of the end of the year Strategic Planning Session is to consider the final performance assessment and approval of the Performance Plan for the following year. In these Strategic Planning Sessions, the core business of the University, that is, teaching, learning and community engagement, is placed at the forefront of the Council agenda. As promulgated in Section 27(6) of the Act, 60% of members of Council are neither employees nor students of the University. Therefore, the majority (60%) of Council members are external, and the remaining members comprise executive managers and internal constituencies, as contemplated in the Act, read with the Statute. Although the Council includes a number of diverse representatives who are elected, designated or appointed from various external and internal structures, it operates as a unitary structure, and is therefore not a constituency-based structure. The composition of the Council reflects the responsibilities vested in the Council and the duty it has to discharge and perform as representative body of the interests of the University’s stakeholders and relevant external stakeholders. In accordance with the relevant provision of the Statute, Council is authorised to establish committees to assist it in the execution of its duties, powers and functions. The Council furthermore delegates to each of the committees established, such authority as is required to enable such committees to fulfil their respective functions, and appoints Council members with the requisite skills and expertise to these committees. The Council ordinarily meets four (4) times a year, and receives quarterly reports, recommendations and advice on various issues from the following standing committees of Council: • • • • • • • • •

Executive Committee of Council; Governance and Ethics Committee; Audit and Risk Oversight Committee; Finance Committee; Human Resources Committee; Physical Planning Committee; Student Services Committee; IT Governance Committee; Remuneration Committee.

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Each of these Council committees is chaired by an external member of Council. In constituting the committees, the Council ensured that the majority of members who serve on these committees as members are neither employees nor students of the University. All committees are fully constituted in accordance with their respective Terms of Reference. The aforesaid Terms of Reference documents are reviewed annually and submitted to Council for approval. The list of Council and Council committee meetings, including the composition of each committee, length of service of each member, as well as their respective attendance at those meetings, is attached on pages 5–9 of the Report. During the year under review, Council met nine (9) times, as follows: •

Four (4) Council regular meetings, as prescribed in the Act and Statute;

•

Three (3) Special Council meetings, convened in accordance with the applicable provisions of the Statute; and

•

Two (2) Strategic Planning Sessions.

Due to the declaration of a national state of disaster and the various alert levels regulated in the Disaster Management Regulations, Council, and Council Committee meetings were conducted by way of virtual meetings. All the Council meetings and strategic planning sessions were quorate and held on time. The attendance rate of Council and Council Committee members showed the commitment and pledge to the University business and their stewardship. Besides receiving a stipend that covers incidental expenses, Council members are not paid for this extraordinary commitment. The following are some of the strategic matters that were considered by the Council during the period contemplated in the Annual Report 2021: a.

The appointment of various senior managers to fill those positions which became vacant as a result of the retirement or resignation of the former senior managers in those positions;

The consideration and approval of the responses prepared by the Council Task Team concerning the comments and input received from the Department of Higher Education and Training relating to the revised Institutional Statute submitted for approval to the office of the Minister responsible for higher education;

The COVID-19 pandemic, the implications thereof within the higher education environment, and the effect thereof, specifically within CPUT and its operations, staff and students, the gradual resumption of operations following a presidential easing of lockdown regulations, the CPUT Workplace Readiness Plan, and the reports from the COVID-19 Compliance Office and Command Centre;

The continued affirmation of the important role played by CPUT’s Institutional Forum in its capacity as an advisory structure to Council;

The Combined Assurance Framework, with specific focus on Institutional Compliance, Risk Enterprise Management, and Internal Audit;

Engagement with the Parliament: Portfolio Committee on Higher Education and Training;

Continuation of the term of office of the existing Transitional Student Representative Council (SRC), SRC Constitution review, and envisaged SRC elections;

Council engagement with internal stakeholders;

The revised CPUT Budget 2021;

Annual Performance Plan 2021; and

Annual Financial Statements.

Council received a request from the office of the Minister of Higher Education, Science and Technology, to conduct through the Executive Committee of Council (EXCO) a selfassessment using the governance scorecard designed to serve as a self-assessment methodology of Council members of public universities. The relevant letter with the outcome of the Self-assessment Report was submitted to the Minister of Higher Education, Science and Technology. The information below provides an outline of the roles and responsibilities of each of the Committees of Council, as well as the matters dealt with and discharged by such committee during the year under review: 3.1 The Executive Committee of Council (EXCO) The Executive Committee of Council consists of the Chairperson of Council, Deputy Chairperson of Council, Chairpersons of all Committees of Council, and the Vice-Chancellor. The mandate of the Committee is to: a.

Conduct such matters, generally deemed to be of an urgent nature, as is necessary between meetings of Council, and to conduct such specific matters, with such authority, as is delegated to it by the Council;

Consider and make recommendations on any aspect of standing resolutions of the Council and of the Statute and Regulations of the University (existing and new), and on such other matters referred to it by the Council or the Vice-Chancellor;

Review and set agendas (Annual Work Plan) for Council meetings and for annual Council Planning Sessions, in consultation with Executive Management;

Propose the Council Annual Business Plan, including setting annual objectives and targets, in consultation with Executive Management, for submission to Council for approval;

Identify priority issues consistent with the Business Plan and Council resolutions;

Receive and review, on a quarterly basis, the progress against agreed institutional objectives and targets;

Review with Executive Management, any corporate legal action (other than normal operational legal action), any significant litigation, claim or contingency, which could have a material effect on the going concern of the University, and bring such matters to the immediate attention of the Council;

Plan and develop the Vice-Chancellor’s annual contract, based on the mutually agreed goals approved by the Council in the Vice-Chancellor’s annual objectives and the expectations set out in the Vice-Chancellor’s job description; and

Review the performance of the Vice-Chancellor on behalf of the Council. The final results of the evaluation shall be documented by the Chair, and acknowledged by the ViceChancellor and the Council.

During the year under review, EXCO, inter alia, considered and recommended to Council the following: a.

The various Council Committee reports received during the year under review, relating to the matters dealt with by those Council committees during the year under review;

The revised Terms of Reference documents and annual work plans for the various Council committees;

The recommendations received from the Governance and Ethics Committee concerning the appointment of Council members and Council Committee members;

Council Self-assessment Report: DHET Governance Indicator Scorecard for Council self-assessment and action plan; and

The progress reports from the Vice-Chancellor relating to the COVID-19 pandemic and the Disaster Management Regulations; the impact thereof on CPUT’s operations, staff and students; the plans for the gradual resumption of university operations in accordance with the requirements contemplated under the various alert or lockdown level of the Regulations; and the CPUT Workplace Readiness Plan that provides for the Occupational Health and Safety requirements.

3.2 Physical Planning Committee The main responsibility of the Committee is to consider recommendations from Management on the institutional Infrastructural Development Plan and the development of a Campus Master Plan, as well as the following: a.

Policy and procedure formulation;

Accommodation planning;

Project planning;

Service level statements;

Property Investment Strategy; and

Funding proposals for infrastructure development.

report on corporate governance | 21

The Committee, during the year under review, inter alia, considered and made recommendations for approval, or referred matters for noting to Council, on the following:

3.4.1 Internal audit

Risk and Protection Report;

Report on compliance protocols relating to COVID-19 regulations within CPUT;

Be responsible for the oversight of the appointment, performance assessment and/or dismissal of the Internal Audit Director;

Property Report; and

Review and approve the annual Internal Audit Plan and Audit Charter;

Progress with various Properties Infrastructure Projects, including consolidation projects; security projects; maintenance backlog projects; restorations projects; and student housing projects.

Receive feedback on the outcomes of internal audits that have been performed;

Be informed on the risk management and corporate governance practices as assessed by Internal Audit;

Ensure that the internal audit service is subject to an independent quality assurance review every five years, and complies with the Institute of Internal Auditors’ International Professional Practices’ Framework;

Ensure that there is a formal process of follow-up of significant findings, and that Internal Audit reports on nonimplementation of agreed Management actions or delays in implementing remedial actions;

3.3 Finance Committee (FINCOM)

The Committee is responsible for overseeing of internal audit, and in particular, the Committee must:

The main responsibilities include advice on, coordination and monitoring of: a.

The financial and business affairs of the University; and

The financial systems and procedures in order to ensure that the University does business as an academic institution of excellence.

FINCOM is also responsible for the approval of certain funding requests contained in the budget approved by Council, and approval of all finance related matters, including any decision with major financial implications related to the budget.

Review and resolve significant differences between Management and Internal Audit;

Obtain assurance on the independence of the internal audit service;

The Committee, during the period of review, considered and made recommendations to Council for approval or noting of the following:

Review the internal audit service budget on an annual basis; and

Recommend the appointment of internal and external auditors to Council.

Revised Budget 2021;

Rental escalation adjustment – Leased student accommodation;

Residence lease renewal;

Update reports from the Investment Sub-committee of FINCOM; and

3.4.2 External audit The Committee is responsible for recommending the appointment of the External Auditor, and to oversee the external audit process, and in this regard, the Committee must: a.

Oversee the External Auditor appointment process by Management, as aligned with the practical implementation of the Public Audit Act;

Reports with recommendations from the Supply Chain Management Committee.

Approve the terms of engagement and remuneration for the external audit engagement;

The Committee further ensured that acceptable accounting systems were adhered to through the design and use of appropriate policies.

Monitor and report on the independence of the External Auditor in the annual financial statements;

Define a policy for non-audit services provided by the External Auditor;

3.4 Audit and Risk Oversight Committee (AROC)

Approve the contracts for non-audit services to be rendered by the External Auditor;

Ensure that there is a process for the Audit Committee to be informed of any Reportable Irregularities (as identified in the Auditing Profession Act, 2005) identified and reported by the External Auditor; and

Review the quality and effectiveness of the external audit process.

The Audit and Risk Oversight Committee (AROC) is chaired by an independent member of Council who is neither an employee nor a student of the University. The Committee has a minimum of three (3) external Council members with the requisite skills, experience and qualifications to serve on the Audit and Risk Oversight Committee of Council. The Committee has the following specific responsibilities:

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3.4.3 Risk management oversight and internal controls

3.4.5 Fraud and litigation

The Committee is an integral component of the risk management process, and specifically the Committee must:

The Committee, as part of its oversight function, receives reports during its in-committee sessions held every quarter, on matters relating to whistle-blow investigation outcomes on whistle-blow incidents reported through the CPUT external whistle-blow service provider; matters of fraud; and the results of forensic investigations into cases of fraud. It will also consider Management’s actions in dealing with these cases of fraud, and receives assurance from Management with regard to the compliance with relevant legislation regarding the incidents of fraud and actions to recover monies and assets.

Oversee the development and annual review of a policy and plan for risk management to recommend for approval to Council;

Monitor implementation of the policy and plan for risk management taking place by means of risk management systems and processes;

Make recommendations to Council concerning the levels of tolerance and appetite, and monitor that those risks are managed within the levels of tolerance and appetite as approved by Council;

Oversee the Risk Management Plan;

Ensure that risk management assessments are performed on a continuous basis;

Ensure that frameworks and methodologies are implemented to increase the possibility of anticipating unpredictable risks;

Ensure that Management considers and implements appropriate risk responses;

Ensure that continuous risk monitoring by Management takes place;

Liaise closely with the Internal Auditors and Management to exchange information relevant to risk;

Express the Committee’s formal opinion to Council on the effectiveness of the system and process of risk management;

Review reporting concerning risk management that is to be included in the Annual Report for it being timely, comprehensive and relevant;

Oversee financial reporting risks, internal financial controls, and fraud risks as these relate to financial reporting and general IT risks; and

m. Ensure that a combined assurance model is applied to provide a coordinated approach to all assurance activities, to address all the significant risks facing CPUT, and to monitor the relationship between the various internal and external assurance providers. 3.4.4 IT governance The Committee must ensure that IT risks are adequately addressed and receive appropriate assurance on controls, and must consider the impact of IT in relation to financial reporting and on significant operational activities. The risks that CPUT faces by virtue of its use of IT, as well as the associated controls used to mitigate those risks, should be assessed and clearly placed in an organisational-wide risk management framework. This framework should be periodically reviewed, and a discipline of continuous auditing must be considered to provide assurance on these controls to afford greater coverage and efficiency.

The Committee will also receive feedback on CPUT’s fraud risk profile. Management will also provide feedback on areas of litigation that pose a risk to CPUT in terms of financial impact and/or reputational consequences. 3.4.6 Compliance with laws and regulations Management will provide AROC with regular updates on CPUT’s compliance with laws and regulations. Independent assurance will be provided by the Internal and External Auditors based on their annual audit coverage plans. Its monitoring responsibility is mainly executed through the work of Internal and External Auditors made up of practitioners from independent and accredited auditing companies. The Internal and External Auditors have unrestricted access to the Committee, and attend all the meetings of the Committee, which are held at least four times a year. The Vice-Chancellor attends all meetings as an observer. Executive members of Management, as well as the Director: Internal Audit also attend all the meetings of the Committee in order to respond to pertinent questions on their respective areas of responsibility in respect of audit findings and risk matters. The Office of the AuditorGeneral has a representative who also attends the Committee meetings on a regular basis. During the year under review, the Committee considered the reports of Internal Auditors, as per the approved Annual Internal Audit Plan, and submitted firm recommendations to Council on the effectiveness of the University’s internal control and procedures for identification, assessment and reporting of risks. The Committee considered matters for recommendation for approval or noting to Council, such as the following: a.

Internal Audit Strategy;

Combined Assurance Framework;

Enterprise Risk Management Strategy and Framework;

Internal Audit Plan 2021;

Annual Financial Statements 2020;

Going Concern Assumption Report;

Risk Management Policy; and

External Audit Plan.

report on corporate governance | 23

3.5 Human Resources Committee

iv.

The Human Resources Committee of Council monitors and evaluates the implementation of the HR Strategy, policies, practices and systems that guide institutional employment practices in line with national labour relations laws.

Review and monitor the practices used to evaluate senior management members; and

Annually review and approve VC’s performance appraisal results of all senior management members, and recommend remedial action, where necessary, to Council.

The mandate of the Committee is to consider recommendations and reports from the Executive Management Team, and to submit items for approval or items for noting to Council on the following: a.

Human Capital (HC) Strategy and organisational structure i.

Review and monitor the development and implementation of the Human Capital Strategy;

ii.

Ensure that the Human Capital Strategy is in line with the vision, mission and core values of the University; and

iii.

Review and monitor the development of an appropriate organisational structure to implement the HC strategic objectives.

Human Capital administration i.

Consider and monitor the appointments/ resignations/ dismissals/ retirements trends on a regular basis;

ii.

Monitor the development and implementation of overall performance management, rewards and recognitions policies, procedures and practices;

iii.

Provide mandate for annual general increase negotiations, based on the institutional budget and parameters set by Council;

iv.

Provide oversight on medical aid scheme and contributions; Review and monitor retirement funds, group life and contributions;

Human Capital policies, procedures and practices i.

Review and monitor the development and implementation of Human Capital policies and procedures; and

ii.

Ensure that the HC policies and procedures are regularly reviewed to keep abreast of the developments in the human resources environment.

vi. Consider recommendation on changes to post levels and salary ranges; vii. Funding proposals;

Talent management at senior management level

viii. Equity profile and transformation;

Review and monitor the organisational structure at senior management level;

ix. Staff learning and development;

ii.

Consider policies, procedures and principles for selection and retention of Senior Management;

xi. Labour relations.

iii.

Review and monitor the development and implementation of succession plans for Senior Management;

iv.

Review recruitment, retention and termination policies and procedures for Senior Management

Review the Vice-Chancellor’s recommendations on confirmation of probations, acting appointments, retention, transfers and termination of service of Senior Management and

vi.

Review and recommend to Council any material terms of employment, severance or settlement arrangement, and any changes to contractual agreements and provision for members of Senior Management

Leadership development

Safety and health; and

Delegated authority and accountability The Committee has delegated powers, authority, duties and functions as contained in these Terms of Reference, or as specifically delegated by the Council. The following functions are delegated to the Committee by Council: i.

Salary increases for general staff (Grades 5–18) based on the mandate and parameters set by Council;

ii.

Deviation from the Policy on Retention of Scare/Critical Skills;

iii.

Job evaluation results for senior management positions;

iv.

Senior management appointments of less or equal to 1 year;

Freezing/unfreezing of senior management positions;

Oversee and monitor the development of induction, orientation and training programmes for Senior Management;

ii.

Oversee and monitor continuous leadership and professional development for Senior Management

vii. Review and approval of senior management job profiles; and

iii.

Recommend policies and practices for performance evaluation of Senior Management;

viii. Review the appointment of human resources service providers/ consultants.

24 | report on corporate governance

vi. VC’s Performance Plan (goals, objectives and performance targets);

The Committee considered and recommended for approval or for noting to Council the following: a.

Establishment of Senior Director: Human Capital position;

Progress report on performance leadership and engagement training;

Besides the above, the Committee has a critical and proactive oversight and monitoring role to ensure that the Institution’s ethics is managed effectively. 3.7 Remuneration Committee The Remuneration Committee was established by Council to:

Progress reports on the development and review of various policies within the Human Capital Department;

Oversee the setting and administering of remuneration at senior management levels in the University;

Job Evaluation Implementation Plan;

Employment Equity Report;

HR Administration Report;

Oversee the establishment and implementation of a Remuneration Policy that will promote the achievement of institutional strategic objectives and encourage individual performance at senior management levels;

Employment Relations and Disciplinary Cases Report;

Learning and Development Report;

Wellness Report; and

Make recommendations to the Council on all senior management remuneration levels and annual increments, in accordance with institutional affordability;

HRCC Contingency Plan relating to COVID-19 pandemic in higher education environment.

Review the outcomes of the implementation of the Remuneration Policy for whether the set objectives are being achieved;

Ensure the development and implementation of a performance management system for Senior Management, and ensure that the principles of this system are applied annually;

Consider the results of the evaluation of the performance of the Vice-Chancellor and other Senior Managers in determining remuneration;

Make recommendations to Council on the payment of honoraria and other incidental expenses to external members of Council;

Oversee the preparation and recommending to the Council of the Remuneration Report, to be included in the Annual Report, for whether it: –

3.6 Governance and Ethics Committee The Governance and Ethics Committee of Council discharged its responsibility, in line with its mandate, by recommending to Council the adoption of the King IV Report on Corporate Governance as best practice and guiding document on implementation of the relevant governance principles. The Committee played a key role in ensuring that ethical leadership was appropriately exercised, particularly as Council and Senior Management set the tone from the top. Besides its normal functions, the Committee considered a number of issues that were referred, and made recommendations for approval or referred matters for noting to Council, including the following: a.

The filling of vacancies on Council and Council committees, and reallocation of members to various committees based on their skills and expertise;

•

is accurate, complete and transparent;

Recommendations on various training initiatives for Council;

•

Evaluating confidentiality measures relating to Council and Council committee documents;

provides a clear explanation of how the Remuneration Policy has been implemented, including use of appropriate benchmarks; and

Revised Whistle-Blow Policy;

•

Vetting and verification of Council members’ qualifications;

provides full disclosure of each individual Executive Manager’s and external Council member’s remuneration.

Progress reports on governance matters, including whistleblow incident report, recommendations on constituting of various ad hoc Council committees and Council task teams.

Oversee the annual review of the Remuneration Policy.

During the year under review, the Committee recommended and reported to Council on the Remuneration and Benefits Strategy.

The Committee monitored the attendance of meetings of Council and Council committees, and made recommendations to Council on corrective measures to be taken where concerns were identified. The Committee further monitored the workload of committee members, and advised Council on means of achieving a practicable and feasible, even workload for all Council members.

report on corporate governance | 25

3.8 Student Services Committee The Council established the Student Services Committee to be chaired by one of the external members of Council to: a.

Advise on policy in respect of student services within the University;

Ensure provision of non-academic services to students that create an environment conducive to student success; and

Promote a safe, conducive and academically stimulating life and learning environment that encourages personal development and student satisfaction.

The Committee is comprised of Council, Management and Student Representatives Council (SRC) members, and meets four times a year. The Committee considered, recommended for approval or for noting, matters to Council, including the following: a.

Report from Student Affairs, including report on student governance, and student residences;

Report from Central SRC;

Project plan for the review of the SRC Constitution; and

SRC elections.

3.9 IT Governance Committee The Council established the IT Governance Committee of Council to be chaired by one of the external members of Council: a.

To support the Council in the governance of the University by ensuring that the strategic assets of IT and its related risks and constraints are well governed and controlled to ensure that IT supports the strategic objectives of the organisation;

To consider the leadership and organisational structures and processes, ensuring that the IT sustains and extends the University’s strategies and objectives; and

To assist Council in their governance role by ensuring that the University has implemented an effective IT governance framework to enable the organisation to deliver value from IT, whilst optimising cost and managing risk.

During the year under review, the Committee considered and made recommendations for approval or for noting to Council on the following: a.

CTS V2030 Strategy;

CTS Information Strategy;

Electronic Communication Policy (revised); and

Records and Management Policy (revised).

4. Statement of conflict management Council has not mandated any specific committee to deal with conflict management and resolution within the University. Council previously decided to source external independent mediators or arbitrators, through a Council approved process, whenever there was a need to resolve any dispute or manage conflict that threatens the governance, management and operations of the University, as well as to manage and resolve disputes arising within the University in a constructive, transparent, fair and effective way for all involved. All matters referred to the Council for consideration must firstly have gone through the internal due processes and channels, and should be group-specific matters, that is, not individual cases. The decision or resolutions of the Committee would be final and would be tabled at Council for information in a summary form.

5. Code of Conduct for Council and Members of Council The Code of Conduct for Council and Members of Council guides Council in its workings, as well as the conduct of individual Council members as they carry out their duties. The purpose of the Code is not intended to inhibit the actions of a member of Council, but to ensure that where there is a conflict between any such actions and the best interests of the University, the interests of the University will take precedence. It furthermore provides a member of Council with a set of principles as to what is regarded as appropriate conduct by a Council member in performing his/her functions and duties. This Code should be seen as a means of ensuring self-regulation by a member of Council, and as an instrument for taking action with regard to inappropriate conduct on the part of a member of Council. In exercising their powers and performing their functions, Council members must at all times: a.

Serve the interests of the University and its staff, students and the public at large with the highest degree of integrity, objectivity, equity, fairness and ethics, as befitting persons appointed to such office;

Enhance the public image of the University, as well as interpret the community to the University; and

Support the Vice-Chancellor in his or her fulfillment of objectives and policies of the Council.

The following are some of the fundamental principles covered in the Code:

26 | report on corporate governance

5.1 The principle of democratic governance A member of Council must act in a manner that is respectful of, and in accordance with, the principle of democratic governance. Council should also create an environment that encourages the participation of all members of Council. 5.2 The principle of accountability Members of Council are directly accountable to each other as Council, for performance of their functions and duties; and indirectly, through Council, to the staff and students of the University and to the public at large. Council is accountable and responsible for the performance and affairs of the University. 5.3 The principle of transparency Council accepts that it is accountable to those it serves. It is important for them to inform stakeholders of its decisions timeously. A member of Council is expected to perform his/her functions and duties in a manner that reflects the highest ethical conduct, and that encompasses integrity, honesty and openness. Decisions made should be objective and without influences. 5.4 The principle of respect for the rights of others A member of Council must respect the rights of others.

A duty to refrain from misusing information.

A duty not to act in a manner that creates a conflict between duty and personal interest.

A member of Council who acquires special knowledge or information by virtue of a confidential or fiduciary relationship with another is not free to exploit that knowledge or information for his/her own personal benefit. The broader principle is inherent in the nature of the fiduciary relationship that prohibits a member of Council from extracting secret profits from his/her position of trust.

5.9 The principle of independence and integrity A member of Council undertakes at all times to apply his/her mind to the matters before him/her in an open and independent manner, with integrity and without undue influence, fear or favour. 5.10 The principle of confidentiality A member undertakes to honour, at all times, the trust and confidence bestowed upon him/her. He/she undertakes not to disclose, inappropriately and without authority, deliberations or decisions of Council, in a manner that will be detrimental to the University.

5.5 The principle of objectivity A member of Council must perform his/her functions and duties fairly, and not allow prejudice, bias, or the influence of others to override his/her objectivity. Any actual or potential conflict of interest must be disclosed, but must also be seen to be avoided.

As per previous Council decision, it is the responsibility of the Chairperson of Council and the Vice-Chancellor to communicate to the University community, matters of Council, including decisions taken after each meeting.

5.6 The principle of cooperative governance Council commits itself to the notion of cooperative governance, which is defined as “a social contract in which diverse parties agree to suspend particular interests in the interests of reconstruction and development”. Council must work with other university structures, and in doing so, accepts the spirit of academic freedom.

5.11 The principle of respect for the privacy of the personal affairs of members of Council Council respects the privacy of the personal affairs of a member of Council. Notwithstanding this, a member of Council should at all times conduct him/herself in a manner that will not be prejudicial to the best interests of the University.

5.7 The principle of collective responsibility A member of Council is collectively responsible for resolutions of Council, and must abide by such resolutions. A member representing Council in another university structure must represent resolutions of Council in that structure in the best possible manner.

6. Conflict of interest: Policy, principles and rules application to Council members

5.8 The principle of fiduciary responsibility A member is appointed to Council to serve both the interests of the University and the public. On acceptance of the office, a member of Council becomes a trustee for the benefit of the University and the public they serve, which gives rise to an obligation on his/her part to fulfill his/her responsibilities solely with the purpose of promoting the best interests of the University and the public.

Council approved a Conflict-of-Interest Policy that applies to all Council and Council committee members, which regulates the declaration of conflict of interest by Council members, concerning potential and real conflicts of interest, in the conduct of University affairs.

Fiduciary duties of a member of Council entail, inter alia, the following: a.

The duty to act: i.

in the best interests of the University by exercising reasonable care, skill and diligence in the conduct of his/her responsibilities and;

ii.

legally, honestly and within his/her powers.

Chairperson of Council Adv. ZL Mapoma

Registrar Mr SS Mokoena

report on corporate governance | 27

council statement on sustainability The 2021 academic year has once again presented a number of challenges, as academics and students continue to deal with the ever-changing impact of the COVID-19 pandemic. Access remained limited, to a large degree, as students were encouraged to pursue their courses remotely.

28 | council statement on sustainability

Whilst CPUT successfully navigated the storm created by the COVID-19 pandemic from 2020, this was not completely without the need to re-organise operations to ensure that the Institution remained viable and operational in the eyes of all stakeholders. The continued sustainability of CPUT is dependent on both national and institutional political, economic, social and technological factors. Whilst these factors have had a major bearing on the Institution’s financial sustainability, they have also influenced the way that CPUT addresses its future plans and Vision 2030 (V2030).

just for those areas where the income is generated. This needs to be coupled with all stakeholders accepting responsibility for the funding of institutions if we want them to continue to exist and thrive into the future. This will also be impacted by the relevance of what is offered by institutions as the world economy adapts to the ever-changing needs of governments, business, and people, under the new normal created by the pandemic. Our courses will need to be continuously assessed with respect to their relevance to a future workforce and our broader communities.

Student tuition fee increases continue to be guided by the Minister of Higher Education and Training, and as such, has determined a sector-wide increase of 4,23% for 2022. Due to the under enrolment experienced in 2021, the block grant subsidy for CPUT was reduced by R86m. This is a sizeable reduction, and the Institution has had to implement further cost saving measures that do not damage the fabric of the Institution, whilst at the same time preserving its financial sustainability. Measures have also been put in place to ensure that the Institution can achieve the goals set out in V2030. Focused measures have been implemented to address the enrolment numbers at faculty level, and the retention of students at all levels of study.

The cost of administrative staff remains above 50% of the salary cost, and this needs to be controlled to become less than 45% of the salary cost. The employment of academic personnel has been focused on during 2020, and will continue to be prioritised as part of this process.

The cost drivers of Higher Education have not changed with the onset of the pandemic, and as such, have produced new demands – namely for data and online connectivity. In addition to the above, the Institution will still be faced with the costs that are directly influenced by international cost drivers and foreign currency exchange rate. A new challenge was the continued viability of the provision of both leased and owned residences, as students failed to occupy their allocated rooms after accepting, or “unilaterally cancelling” their room allocations at different stages in the year. This was all due to the continued uncertainty posed by the various waves of COVID infection, and the need to study remotely. The cost of doing business in the Western Cape still remains high, and this is not expected to decrease in the near future, due to the ever-increasing associated costs. Opportunities to convert to alternative power generation sources have to be engaged with as a matter of urgency, and this will require a significant investment in the future. Whilst the cost containment initiative implemented in late 2017 has made progress in some areas, this still needs to be rigorously applied throughout the Institution if its financial sustainability is to be maintained. Financial sustainability, and the success of it, are the responsibility of all of the members of CPUT. V2030 has to be kept on track, and as such, needs to be viewed as a marathon and not a race. Hard choices will have to be made, and resources will need to be carefully applied. The Department of Higher Education and Training (DHET) is still engaged in the development of a three-year tuition fee model, but in the interim, this has resulted in the annual tuition fee increase being capped at inflation. New initiatives are required in order to address the funding sources used by the Higher Education sector, and to achieve this, CPUT will need to grow its thirdstream income for the benefit of the overall institution, and not

The demand for access to CPUT by prospective students remains strong. This has been evident during the past five years, and is supported by the number of applications received from firstyear and first-choice applicants. These applications have been fluctuating between 33,000 and 70,000 during the past five years. Applications alone do not mean anything until they are converted to enrolments though, and the focus of sustainability has to be the number of students doing the full FTE’s. The total number of students enrolled during the 2021 academic year was 32,416, which is a slight increase from the 32,383 enrolments in 2020. The overall pass rate (i.e., the degree credit success rate), for the last four years has been 78,9% in 2018; 80% in 2019; 82% in 2020; and 78,4% in 2021.

HEQSF-alignment process and new qualifications Although Higher Education Qualifications Sub-framework (HEQSF)-aligned qualifications have been initiated with effect from 2014, a number of National Qualifications’ Framework (NQF) Level 8 postgraduate diplomas have not been approved yet, and are set to commence in 2022. Delays associated with the outside structures of the University viz, Council on Higher Education (CHE) and South African Qualifications Authority (SAQA), have protracted this process. In total, the University approved 65 new HEQSF-aligned qualifications. These were submitted externally to DHET for Programme Qualification Mix (PQM) approval, to CHE for accreditation, and SAQA for registration. The tables below outline the status of the qualifications per faculty, as follows: •

Table A, qualifications that are accredited, but pending SAQA registration;

•

Table B, accredited qualifications with ‘prior to commencement’ conditions; and

•

Table C, qualifications pending CHE accreditation.

Twenty-six out of 65 qualifications are fully accredited and registered, and 24 qualifications are pending SAQA registration (Table A). The other four qualifications are accredited with ‘prior to commencement’ conditions (Table B), and other 11 qualifications are still at different stages of accreditation processes at CHE (Table C).

council statement on sustainability | 29

Table A: CHE accredited qualifications, but pending SAQA registration Faculty and Qualification Name

SAQA Meeting Date

Enrolment Targets

Advanced Diploma in Landscape Architecture*

3 February 2022

Master of Environmental Management*

3 February 2022

Postgraduate Diploma in Agriculture*

3 February 2022

Doctor of Conservation Science*

3 February 2022

Doctor of Philosophy in Environmental Management*

3 February 2022

21 April 2022

3 February 2022

Postgraduate Diploma in Business and Information Administration

21 April 2022

Postgraduate Diploma in Hospitality, Tourism and Event Management

21 April 2022

3 February 2022

Postgraduate Diploma in Public Administration

21 April 2022

Postgraduate Diploma in Management Accounting

21 April 2022

Diploma in Banking

21 April 2022

183

Postgraduate Diploma in Project Management

21 April 2022

Postgraduate Diploma in Sport and Leisure Management

21 April 2022

Bachelor of Engineering Technology Honours in Chemical Engineering

21 April 2022

Bachelor of Engineering Technology Honours in Computer Engineering

21 April 2022

100

21 April 2022

3 February 2022

Master of Communication and Media

21 April 2022

Postgraduate Diploma in Architectural Technology

21 April 2022

Postgraduate Diploma in Interior Design

21 April 2022

June 2022

Applied Sciences

Doctor of Agriculture Business & Management Sciences Postgraduate Diploma in Business Administration Postgraduate Diploma in Applied Taxation*

Postgraduate Diploma in Internal Auditing*

Engineering & the Built Environment

Education Advanced Diploma in Adult and Community Education and Training Teaching Informatics & Design Postgraduate Diploma in Design*

Master of Design * Qualifications presented at the SAQA meeting on 3 February 2022.

30 | council statement on sustainability

Table B: New qualifications accredited with ‘prior to commencement’ (PTC) conditions Qualification Name

HEQC Ref No.

Status

Bachelor of Business Informatics

H/H01/E150CAN

Accredited with PTC conditions

Postgraduate Diploma in Biotechnology

H/H01/E166CAN

Accredited with PTC conditions

Postgraduate Diploma in Construction

H/H01/E159CAN

Accredited with PTC conditions

Postgraduate Diploma in Oncology and Palliative Nursing

H/H01/E184CAN

Accredited with PTC conditions

Table C: New qualifications pending CHE accreditation No. Qualification Name

HEQC Ref No.

Status

Postgraduate Diploma in Analytical Chemistry 19/05/2021

H/H01/E146CAN

Evaluation Phase

Postgraduate Diploma in Mechanical Engineering 26/08/2021

H/H01/E170CAN

Evaluation Phase

Postgraduate Diploma in Nursing Education

H/H01/E183CAN

Evaluation Phase

Postgraduate Diploma in Conservation Science

H/H01/E163CAN

Evaluation Phase

Master of Information Technology (a representation was submitted in December 2021)

H/H01/E180CAN

Evaluation Phase

Doctor of Business Informatics**

H/H01/E186CAN

Evaluation Phase

Doctor of Business and Management Sciences**

H/H01/E188CAN

Evaluation Phase

Master of Business and Management Sciences**

H/H01/E187CAN

Evaluation Phase

Diploma in Cost and Management Accounting**

H/H01/E189CAN

Evaluation Phase

Diploma in Early Childhood Care and Education**

H/H01/E190CAN

Screening Phase

Doctor of Philosophy in Media and Communication**

H/H01/E191CAN

Screening Phase

** Qualifications submitted to CHE for accreditation between September and December 2021.

We have once again seen how the Institution’s finances have been impacted through the pandemic; the under enrollment of students; and the cost of education. Interventions to address the under enrollment of students were introduced in 2022, but the benefits of an improving subsidy will only be seen in two years’ time. Our planning needs to be regularly revisited, challenged, and revised; and our plans need to be insightful. There cannot be any holy grails if we want to retain our status and remain relevant in the future for generations to come. We need to be able to embrace change for the benefit of all.

Chairperson of Council Adv. ZL Mapoma

council statement on sustainability | 31

The Committee fulfils its role in line with the approved Terms of Reference, and may call on the Chairpersons of the other committees of Council, the Vice-Chancellor, Deputy Vice-Chancellor, and any of the Executive Directors, Officers, Secretariat or other assurance providers to provide information, subject to a Council approved process.

Audit and Risk Oversight Committee member

30-07-2021

08-10-2021

11-02-2022

Date of Meetings

04-06-2021

The Committee does not assume the functions of Management, which remain the responsibility of the Vice-Chancellor, Deputy Vice-Chancellors, Executive Directors, and other members of Senior Management.

Meetings are held at least four (4) times a year, and are attended by the External and Internal Auditors and relevant members of the Executive Management of CPUT. During 2021, the Committee held quarterly meetings that were all quorate, and carried out its oversight duties as set out in the Terms of Reference.

30-04-2021 (Special Meeting)

The Cape Peninsula University of Technology’s (CPUT) Audit and Risk Oversight Committee (AROC) of Council has a specific mandate, and its terms of reference specify that members of the Committee must be independent of the University. As such, members of the AROC must be independent of Management, and should not be involved in any business or other relationships that may have a material bearing on the exercise of their independent judgement as members of the Committee.

At the end of 2021, the Committee had four (4) members, three (3) external Council members and one (1) external member, all of whom are independent of the University. There was one vacancy in 2021, following a resignation effective from 31 March 2020. The members of the AROC have a variety of skills, ranging from business, auditing, legal, governance, information technology (IT), risk management, and financial services. The term of office of independent external committee members appointed by Council is four (4) years.

12-02-2021

report of the audit and risk oversight committee

1. Composition and attendance

K Patel (Mr) *

N Dhevcharran (Ms) *

ICH

R Bredenkamp (Mr) **

ICH

L Platzky (Dr) *

* ** ICH PR A

Member of Council External member Interim Chair Present Apology

Table 1: AROC meeting attendance, 2021

2. Summary of main activities The Audit and Risk Oversight Committee complied with key aspects of its mandate in 2021. In executing its duties, the Committee attended to the following key matters: 2.1 Internal audit The Committee is responsible for overseeing Internal Audit, and during the year under review, the Committee performed the following: • Reviewed and approved the annual Internal Audit Plan and budget; • Reviewed and approved the CPUT Combined Assurance Framework; • Reviewed and approved the Internal Audit Strategy, which is aligned with CPUT’s Vision 2030;

32 | report of the audit and risk oversight committee

• Obtained feedback on the outcomes of internal audits completed in 2021; • Obtained feedback on the risk management and corporate governance practices, as assessed by Internal Audit; • Ensured that there is a process of follow-up on significant findings, and that Internal Audit reports on the progress of implementing agreed Management actions; and • Appointed the audit firm (BDO Advisory) to undertake the internal audits under the directorship of the Director Internal Audit, effective 1 January 2022. 2.2 External audit The Committee is responsible for recommending the appointment of the External Auditor, and to oversee the external audit process. In this regard, the Committee: • Monitors the appointment of the External Auditors to ensure the external audit function is fulfilled at CPUT; • Approved the terms of engagement and remuneration of the external audit engagement; • Monitored and reported on the independence of the External Auditors in the annual financial statements; • Reviewed the contracts for non-audit services to be rendered by the External Auditors; and • Followed up on any possible reportable irregularities identified and reported by the External Auditors. 2.3 Risk management and internal controls The Committee is an integral component of the risk management process. During the year under review, the Committee: • Ensured that continuous risk monitoring by Management takes place; • Ensured that appropriate risk responses are implemented; • Liaised with the Internal Auditors and Management to exchange information relevant to risk; • Ensured the effectiveness of the system and process of risk management is formally communicated to Council; • Reviewed and approved the CPUT Risk Management Policy and Framework; • Reviewed and approved the Enterprise Risk Management Strategy, which is aligned with CPUT’s Vision 2030; • Reviewed reporting concerning risk management that is to be included in the Annual Report for it being timely, comprehensive and relevant; and • Provided oversight over the financial reporting risks, internal financial controls, and fraud risks, as these relate to financial reporting and general IT risks.

2.5 Information technology (IT) governance The Committee ensured that IT risks are adequately addressed, and received appropriate assurance on controls; and considered the impact of IT in relation to financial reporting and on significant operational activities. The Committee has increased its scrutiny of the University’s IT systems and related IT risks. During 2021, the Director: Computer and Telecommunications Services (CTS) presented quarterly reports to the Committee, which focused on: • Progress in addressing external and internal audit findings; • IT strategic and operational risks, including cyber security risk; and • IT resilience and disaster recovery. 2.6 Fraud and litigation The Committee received reports on matters of fraud, and the results of forensic investigations into cases of fraud. It considered Management’s actions in dealing with these cases of fraud, and received assurance from Management regarding their compliance with relevant legislation regarding the incidents of fraud, and actions to recover monies and assets. Management provided feedback on areas of litigation that posed a risk to CPUT in terms of financial impact and/or reputational consequences. 2.7 Compliance with laws and regulations Various laws and regulations are applicable to CPUT. Management regularly reported to AROC on CPUT’s compliance with laws and regulations. Independent assurance was provided by the Internal and External Auditors based on their annual audit coverage plans.

3. Conclusion Arising from each AROC meeting is a Chairperson’s Report to Council, indicating matters requiring Council attention for noting, approval or action. AROC complied with its Terms of Reference, and is satisfied that CPUT has continued to maintain and manage internal control systems effectively, in a manner that ensures the achievement of institutional objectives and operational goals. This was obtained by means of a risk management process, combined assurance approach, as well as the identification of corrective actions and enhancements to internal processes and controls. The Committee reviewed and recommended the following reports in this Annual Report to Council for approval: • Report on Internal Administrative/Operational Structures and Financial Controls; and

2.4 Combined assurance

• Report on Assessment of Risk Exposure and Risk Management.

The Committee ensured that a combined assurance model was applied to provide a coordinated approach to all assurance activities to address all the significant risks that CPUT is facing, and monitored the relationship between the various internal and external assurance providers. The combined assurance model is articulated in a documented framework approved by the Committee and Council in 2021.

The Audit and Risk Oversight Committee therefore recommends the 2021 Annual Report to Council for approval.

Interim Chair of Audit and Risk Oversight Committee (AROC) Ms N Dhevcharran

report of the audit and risk oversight committee | 33

report on internal administrative/operational structures and financial controls Systems of internal control and processes

Computer and telecommunications services

The Cape Peninsula University of Technology (CPUT) maintains a system of internal control to provide reasonable assurance regarding the achievement of its objectives. The system of internal control is designed to ensure effective and efficient operations, the reliability of financial reporting, and overall compliance with relevant laws and regulations, to prevent loss of resources and assets, and also to reduce legal liability.

The University applies modern technology solutions, such as virtualisation, storage redundancy, and managed backup applications in its data centres. These solutions are developed and implemented in accordance with defined and documented standards to achieve efficiency, effectiveness, reliability and security. In utilising technology to transact with staff, students and third parties, procedures are designed to minimise the risk of fraud and error. During 2021, CPUT continued to upgrade its IT infrastructure and software suite to meet the demands of multimodal learning and a remote workforce. Simultaneously, IT security was strengthened to mitigate the increased cyber security risk introduced by remote working. In response, a significant portion of the 2021 Internal Audit Plan was assigned to IT governance, information security, and IT resilience. The Information Technology Governance Committee of Council provides oversight of the IT control environment, including the implementation of the IT Strategy.

The internal control system is designed to provide reasonable assurance to the University and the Council regarding an operational environment that promotes the safeguarding of the University’s assets, and the preparation and communication of reliable financial and other relevant information. Internal control objectives include measures to ensure completeness, accuracy and proper authorisation in relation to documented organisational structures setting out the segregation of responsibilities, as well as established policies and procedures, including a code of ethics. It is the responsibility of Management to establish and maintain effective internal control systems. As part of fulfilling that responsibility, Management understands and supports the role of Internal Audit. As such, Management is responsible for ensuring that audit report findings and recommendations are addressed in an appropriate manner. There are inherent limitations to the effectiveness of any system of internal control, including the possibility of human error, and the circumvention of controls. Accordingly, even an effective internal control system can only provide reasonable assurance with respect to the reporting of financial information and the safeguarding of assets. Smart systems, including automated internal control systems, are considered to be a key enabler of CPUT’s Vision 2030.

Internal audit Internal Audit monitored the adequacy and effectiveness of internal control systems through the approved 2021 Internal Audit Plan. The Internal Audit Plan is developed annually, following a risk-based approach. The Plan is approved by the Audit and Risk Oversight Committee (AROC), and is amended in response to emerging risks. Internal Audit’s findings and recommendations are reported to Management and the Council via the AROC. Follow-up reviews are performed continuously to verify the implementation of agreed Management action plans in response to previously reported Internal Audit findings. Progress is reported to Executive Management to ensure that actions are implemented timeously.

34 | report on internal administrative/operational structures and financial controls

2 4

3 6 3 6

Academic Integrity Cyber Security Finance Governance, Risk and Compliance Organisational Resilience Smart Workforce Student Centredness Other

The areas of responsibility for these role players are generally described as: • Accountability by Council to stakeholders for oversight; • Actions (including managing risk) by Management to achieve CPUT’s objectives; and • Assurance and advice by an independent internal audit function to provide insight, confidence, and encouragement for continuous improvement.

Figure 1: Internal Audit Reports 2021 Internal Audit completed 37 assurance reviews in 2021, depicted in Figure 1. The Audit Plan was developed considering primary and secondary themes. The most significant themes for 2021 included Academic Integrity, Cyber Security, and Finance, comprising more than 50% of the Audit Plan.

Combined assurance CPUT adopted a combined assurance model to provide a coordinated approach to all assurance activities of the University. The model is designed to address the significant risks that CPUT faces, and to monitor the relationship between internal and external assurance providers. Combined assurance is the process of internal and external assurance providers working together and combining activities to reach the goal of integrating and aligning assurance processes so that Executive Management and governance bodies (Council and AROC) obtain a holistic view of the effectiveness of the University’s governance processes, risks and controls, to enable them to set priorities and take action. CPUT has adopted a principles-based approach to combined assurance, which is designed to provide flexibility. As such, Council, Executive Management, and assurance providers are not slotted into rigid lines or roles.

Statement of assessment of internal controls Reports to the AROC by both Internal and External Auditors indicate that there are some areas of control that are deemed to be inadequate or ineffective. These matters were reported to Management for action, and are monitored by Executive Management and AROC.

Statement by Audit and Risk Oversight Committee The Audit and Risk Oversight Committee reviewed the Report on Internal Administrative/Operational Structures and Financial Controls in the year under review at its meeting on 13 May 2022, which was quorate. The documentation for approval by the Committee was also circulated with the meeting agenda in advance, with due notice.

Interim Chair of Audit and Risk Oversight Committee (AROC) Ms N Dhevcharran

Director: Internal Audit Ms H Van Dyk

report on internal administrative/operational structures and financial controls | 35

enterprise risk management 1. Risk governance initiatives conducted during 2021 The University conducted the following initiatives to continuously improve on its risk governance arrangements: 1.1 The Institutional Risk Management Policy The Council approved its Risk Management Policy on 28 August 2021. The Policy provides direction relating to all Enterprise Risk Management (ERM) activities and initiatives, in alignment with the Vision 2030 Strategic Plan. 1.2 A refreshed ERM Framework and Methodology The updated guidance provides a detailed approach on the implementation of the Institutional Risk Management Policy, including roles and responsibilities, risk appetite and tolerance, and risk assessments, as part of the ERM process, among other imperatives. The refreshed Framework was approved by Council on 20 March 2021. 1.3 ERM Strategy and Implementation Plan The Strategy and Plan 2021 provides specific short-, mediumand long-term initiatives planned from an ERM perspective. The Audit and Risk Oversight Committee (AROC) and the Information Technology Governance Committee (ITGC) monitor progress on the implementation thereof. 1.4 Development of an in-house ERM Maturity Model The University’s Senior Management contributed to the development of an in-house ERM Maturity Assessment Framework which, after consideration by AROC, will assist in risk diagnostics and gap analysis initiatives to improve the risk intelligence capabilities of the Institution. 1.5 Integration of strategic planning and ERM The University made efforts to further embed risk into strategic planning initiatives by including risk information into strategic plans across all areas of the Institution.

2. Risk assessment developments The University initiated the implementation of leading practice tools, techniques, and concepts to augment its risk review initiatives. The tools included control self-assessment (CSA), ethics risk assessment, financial ratio analysis (as part of balance risk management), and scenario and sensitivity analysis (of financial statements for financial sustainability). The bowtie methodology and use of heat maps continued to add further vigour to risk reviews across the Institution. Another essential emphasis was made on fact- or evidence-based risk management, to improve objectivity on the risk efforts universitywide, from a combined assurance view.

36 | enterprise risk management

2.1 Institutional risk assessment 2021 The risk heat map below provides the summarised output from the institutional risk workshop conducted on 17 November 2021. The University monitors its key Institutional Risks through a systematic, disciplined, and formal process on a quarterly basis. A Combined Assurance Framework was approved by Council on 20 March 2021, which provides for collaborative and integrated efforts from various assurance providers across the University. 2 8

Catastrophic

Major

Moderate

6 11

1 8 13 3

3 4 5 10 12 Above Risk Tolerance

Minor

Insignificant

Below Risk Tolerance

Rare

Unlikely

Possible

Likely

Almost Certain

Figure 2: CPUT’s risk heat map

No. Title

Inherent Risk Rating

Residual Risk

Risk Tolerance

Financial Health and Sustainability

25.00

16.00

Enrolment Plan and Targets

20.00

16.00

Fraud and Corruption

25.00

16.00

Institutional Cyber Security

25.00

16.00

Maintenance and Development of the Estate

25.00

16.00

Providing an effective, end-to-end university-wide security and protection, fleet management, health and safety service, may be compromised

20.00

16.00

Student Experience

20.00

16.00

Business Continuity Management

20.00

15.00

Academic Programme Management and Recurriculation Process

20.00

12.00

Alignment of ICT systems and infrastructure with CPUT's future-focused teaching and learning requirements for V2030

25.00

12.00

Compliance with Laws and Regulations

20.00

12.00

Strategic Human Capital Management

25.00

12.00

IT Disaster Recovery

20.00

9.00

Stakeholder Relations

16.00

9.00

Research Productivity

12.00

6.00

enterprise risk management | 37

3. Risk awareness

6. Risk Champions Forum (RCF)

The ERM function conducted seven risk awareness sessions focusing on risk champions, university operational staff, middle, and senior management. The recorded sessions were archived for future use and reference.

The RCF’s Terms of Reference were approved on 20 March 2021. A total of two meetings were held during 2021. The Forum seeks to advance and further share good risk working practices, and leverage on an integrated approach to address cross cutting, transversal and complex risks within the Institution.

4. Risk technology The University is licensed for the BarnOwl integrated ERM, Internal Audit and Compliance software platform to augment its governance, risk and compliance initiatives. The ERM function conducted training on the ERM module to Risk Champions, and Management Committee members. This training remains as part of ongoing risk initiatives.

5. Dynamic risk reporting and monitoring

7. Conclusion The University manages its volatile risk profile underpinned by the Council approved risk appetite and tolerance limits, in line with the King IV, Report on Good Governance for South Africa (2016). The University further aligns to King IV, and maintains that governance, strategy, risk, quality, compliance, assurance, institutional performance, and sustainability are inextricably intertwined, and therefore, inseparable.

The ERM function provided the required quarterly reports to the following Committees: •

Audit and Risk Oversight Committee (AROC) of Council;

•

Information Technology Governance Committee (ITGC) of Council;

•

Quality Assurance and Risk Management Committee (QARM), a Joint Committee of Senate and Council; and

•

The Executive and Management Committees (as and when required or necessary).

38 | enterprise risk management

Interim Chair of Audit and Risk Oversight Committee (AROC) Ms N Dhevcharran

Enterprise Risk Manager Mr R Chibvongodze

report of the institutional forum The prolonged COVID-19 pandemic undoubtedly contributed to a tumultuous period within the global spectrum, and immensely impacted on the operations of the Institutional Forum (IF). One of the major challenges encountered by the IF was that it could not formulate its annual plan and engage with the university community on issues impacting them directly. Institutional Forums are governed by legislation and policy frameworks. This necessitates IF members to understand how these relevant legislative policies are fundamental to strengthening the IF’s role. Therefore, members must understand the essential aspect of the IF that necessitates the need for transformation.

Meeting dates As per university protocol, all face-to-face meetings were prohibited, and subsequently, all IF meetings, including special meetings, were conducted online via MS Teams. It was inspiring that the IF managed to have a quorum for all meetings, which inevitably assisted the IF in conducting its business objectives and providing advice to Council whenever required. • 16 February 2021 – This meeting never materialised, as IF members were occupied with various operational requirements, such as registration, one of the most critical periods for CPUT. • 5 May 2021 – This was officially the first meeting of the IF for the year. • 22 June 2021 – The CPUT Council delegated the Chairperson and Deputy Chairperson of Council to engage internal stakeholders to determine the underlying challenges that exist, and build and consolidate relationships. • 18 August 2021 – During this meeting, the election of the Chairperson and Deputy Chairperson of the Institutional Forum was conducted. The Office of the Registrar prioritised this matter, as it was postponed during 2020, and the IF undertook to execute this mandate. Mr Alvino Moses was elected as the Chairperson, and Mr Sonwabile Fisa as the Deputy Chairperson. • 14 October 2021 – The primary focus of this meeting was the presentation by Mr Chief Mabizela on the effectiveness of IFs.

Recommendations to Council Dean of Applied Sciences – 28 May 2021: Special IF meeting to recommend the preferred candidate Dean of Education – 23 August 2021: Special IF meeting to recommend the selected candidate Senior Director, Human Capital (advertisement of position) – 30 June 2021: Special IF meeting to review the advertisement

Conclusion The engagement between the Chairperson and Deputy Chairperson of Council with the IF was warmly embraced, and was positive and rewarding. The Chairperson was unequivocal that CPUT needs to be one of the best institutions in the country, and emphasised the importance of growing your own timber. The IF supports the sentiments expressed by the Chairperson of Council, that Vision 2030 is seen as a catalyst to enable CPUT to be amongst the best in terms of technological innovation. Furthermore, the presentation by Mr Chief Mabizela was very insightful and comprehensive, as he shared his wisdom and wealth of knowledge about the pertinent role of IFs within the higher education sphere. Engagements of this nature potentially strengthen the role of the IF, and supplement development and capacity building to ensure that the IF delivers on its mandate. Transformation remains a contentious issue, often seeming like an albatross around the neck of higher education institutions. The Green Paper on Higher Education Transformation of 1996 highlights the issue of technological improvements in addressing transformation, and as an institution, CPUT has made significant strides in this regard. Transformation is a lengthy and arduous process that is compounded by resistance, and requires inclusive engagement and dialogue.

Chairperson, Institutional Forum Mr A Moses

report of the institutional forum | 39

senate report

1. Senate composition and sub-committees (Please note that the 10 20 Statute of CPUT was revised and approved early in 2022.) 1.1 Senate comprised: • Vice-Chancellor as Chairperson;

Preamble

• Registrar as Secretary;

The Senate of the Cape Peninsula University of Technology (CPUT) convened quarterly meetings during 2021, primarily to consider the following:

• Executive Directors;

• Senate Sub-committee reports; • Senate Executive Committee reports; • Submissions from the Faculty Boards; • Reports on success rates and throughput rates; • Policy proposals relating to the academic project;

• Deputy Vice-Chancellors; • Senior Directors; • Directors of academic, administrative and student support services; • Representatives of the academic faculties (Deans, Associate Deans, Heads of Department, and Faculty Managers were in attendance); • Professors and Associate Professors; • Directors of academic support units;

• HEQSF-aligned qualifications for approval;

• Representatives of the academic employees;

• Admission and readmission criteria; and

• Representatives of the non-academic employees;

• Research, Technology Innovation, Strategic Partnership and Innovation matters.

• Representatives of the CPUT Council;

The Executive of Senate (Senex) met on a monthly basis to deal with matters that required urgent attention, such as appointments of academic staff, applications for recognition of prior learning, applications for exemption and recognition of subjects, approval of examiners and moderators, requests for mark alterations, requests for changes to the academic structure and quality assurance self-evaluation, and programme accreditation reports. In addition to the scheduled meetings, special Senex meetings were held as a result of the volatile nature of the COVID-19 pandemic. The minutes of the Senate Executive meetings were ratified at the quarterly meetings of Senate.

• Representatives of the Student Representatives Council; and • Chairperson of the Institutional Forum. 1.2 Senate committees The following committees of Senate met at least once per quarter throughout the year, and tabled reports at each Senate meeting: • Senate Academic Planning Committee (APC); • Senate Library (SLIB); • Senate Research and Innovation Committee (SRIC); • Senate Teaching and Learning Committee (STLC); • Senate Higher Degrees Committee (HDC); • Senate Language Committee (SLC); • Senate Research Ethics Committee (SREC); • Senate Student Administration Committee (SAC); and • Senate Executive Committee (SENEX). In addition, reports were received from the Quality Assurance and Risk Management (QARM) Committee; the Honorary Doctoral Awards Committee (HDAC); and the Hotel School Board, which served as Joint Committees of Senate and Council. Reports and recommendations were also received from each of the Faculty Boards. The Information Literacy Committee served as a sub-committee of the Teaching and Learning Committee. The Centre for Personal and Professional Development, and the Centre for Community Engagement and Work Integrated Learning tabled reports at Senate Teaching and Learning Committee meetings.

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2. Changes to the academic structure 2.1 Department of Higher Education and Training (DHET) Programme and Qualification Mix (PQM) clearance 2.1.1 DHET funding The Department of Higher Education and Training funds all PQM cleared, accredited and SAQA registered qualifications. The table below shows a total of forty-one (41) funded programmes, ready for implementation. The new CPUT qualifications are registered on the SAQA database.

CHE accredited and SAQA registered qualifications Faculty

Qualification name Bachelor of Food Science and Technology Postgraduate Diploma in Marine Science Postgraduate Diploma in Consumer Science in Food and Nutrition Advanced Diploma in Landscape Architecture Master of Marine Sciences

Applied Sciences (11 qualifications)

Postgraduate Diploma in Agriculture Postgraduate Diploma in Horticulture Postgraduate Diploma in Environmental Management Doctor of Agriculture Doctor of Conservation Science Doctor of Philosophy in Environmental Management Advanced Diploma in Accountancy Advanced Diploma in Internal Auditing Advanced Diploma in Sport and Leisure Management Diploma in Banking Postgraduate Diploma in Applied Taxation Postgraduate Diploma in Human Resource Management

Business and Management Sciences (14 qualifications)

Postgraduate Diploma in Marketing Postgraduate Diploma in Business Process Management Postgraduate Diploma in Entrepreneurship Management Postgraduate Diploma in Retail Business Management Postgraduate Diploma in Supply Chain Management Postgraduate Diploma in Internal Auditing Postgraduate Diploma in Project Management Postgraduate Diploma in Sport and Leisure Management

senate report | 41

CHE accredited and SAQA registered qualifications Faculty

Qualification name Master of Engineering in Engineering Management Bachelor of Engineering Technology Honours in Civil Engineering

Engineering and the Built Environment (6 qualifications)

Bachelor of Engineering Technology Honours in Computer Engineering Bachelor of Engineering Technology Honours in Electrical Engineering Postgraduate Diploma in Clothing and Textile Technology Postgraduate Diploma in Engineering Management Postgraduate Diploma in Information and Communication Technology Postgraduate Diploma in Media Leadership and Innovation

Informatics and Design (6 qualifications)

Postgraduate Diploma in Architectural Technology Postgraduate Diploma in Design Postgraduate Diploma in Interior Design Master of Communication and Media Postgraduate Diploma in Health Services Management

Health and Wellness Sciences (4 qualifications)

Diploma in Dental Technology Postgraduate Diploma in Occupational Health Nursing Postgraduate Diploma in Primary Care Nursing

2.2 CHE accreditation All PQM cleared qualifications are submitted to CHE for accreditation. In 2020, a total of 45 (forty-five) were submitted to CHE for accreditation. Qualifications submitted to CHE for consideration and accreditation No.

Name of qualification

Doctor of Business Informatics

Doctor of Business and Management Sciences

Master of Business and Management Sciences

Diploma in Cost and Management Accounting

Diploma in Early Childhood Care and Education

Doctor of Philosophy in Media and Communication

2.3 SAQA registration Once the programmes are approved for PQM and accredited by CHE, CHE notifies the institutions, and submits all accredited qualifications to SAQA for registration. In 2021, a total of ten (10) accredited qualifications were sent to SAQA for registration. The table below shows new CPUT qualifications pending SAQA registration.

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New qualifications pending SAQA registration Faculty Applied Sciences

Qualification name Master of Environmental Management Postgraduate Diploma in Business Administration Postgraduate Diploma in Business and Information Administration

Business and Management Sciences

Postgraduate Diploma in Hospitality, Tourism and Event Management Postgraduate Diploma in Public Administration Postgraduate Diploma in Management Accounting

Engineering and the Built Environment Education Informatics and Design

Bachelor of Engineering Technology Honours in Chemical Engineering Postgraduate Diploma in Construction Advanced Diploma in Adult and Community Education and Training Teaching Master of Design

3. Significant developments in Teaching and Learning 3.1.1 Learning and Teaching Policy, and Learning and Teaching Strategy The CPUT Learning, Teaching and Assessment (LTA) Policy was finalised and approved by Council in November 2021. Aligned to Vision 2030, the LTA Policy and the Institutional Learning and Teaching Strategy were developed to contribute toward “building One Smart CPUT” to foster a sense of belonging and connectedness among staff and students. The Learning and Teaching Strategy provides a sound basis for LTA Policy implementation, and serves as a guide to faculties, academic and support centres/units in the attainment of CPUT’s strategic imperatives of Vision 2030. 3.1.2 Post-pandemic planning At the start of the pandemic, many higher education institutions were caught off-guard, forcing a rapid transition to emergency remote teaching. Reflecting on the lessons learnt over the past 18 months allowed for data-informed decisions when planning for the reopening and return to campus in Smart ways. A workshop was held with critical stakeholders on 30 September 2021, to think through and consider guidelines for implementation at an institutional, faculty, departmental, centre and unit level. Five critical themes were considered on the day, which included the following:

The themes helped to frame the thinking about strategies that will take CPUT forward once lockdown ends. Guided by the principles and values of Vision 2030, planning for a return to campus continues to build on the notion of One Smart CPUT, with the focus on “Oneness” and “Smartness”. A post-lockdown toolkit/guide has been developed to assist in decision-making and planning for Lockdown Level Zero and beyond. While the guide was not intended to be prescriptive, comprehensive approaches have been included for planning purposes. 3.1.3 Teaching Excellence Awards The Deputy Vice-Chancellor: Teaching and Learning’s Teaching Excellence Awards (TEA) resumed in 2021. TEA recognises excellence in teaching at departmental, faculty and institutional level. Through a rigorous peer review process, eligible teaching staff submitted portfolios of evidence documenting the contributions and impact made in teaching and learning. A total of 30 awards were conferred in 2021; 28 at departmental and faculty level, and two at institutional level. 3.1.4 Teaching Advancement at University (DHET UCDG TAU) awardees CPUT submitted four nominations for consideration for the 2022– 2023 DHET UCDG Teaching Advancement at University (TAU) Cohort 4. Nominees were required to submit a motivation and proposal for an institutional teaching and learning project. The selection process is peer reviewed and nationally competitive. Three CPUT candidates were selected to participate in the programme from the following faculties; Business and Management Sciences (Dr Cynthi Dube); Applied Sciences (Dr Ignatius Ticha); and Education (Dr Candice Livingston).

The university as a social space;

Technical considerations: Rethinking approaches to delivering the curriculum;

Philosophies and pedagogies for learning, teaching, research, WIL and community engagement;

3.1.5 University Capacity Development Programme (UCDP)

Educational technology – Learning design and data analytics; and

Reconsidering infrastructure in the “new normal”.

The 2021–2023 UCDG Cycle 1 concludes on 31 March 2022. Preparation is underway for the annual audit. An extension was received from DHET for the project to conclude in March 2022,

University Capacity Development Grant (UCDG)

senate report | 43

with final reporting due at the end of May 2022. CPUT has engaged project leads and activity leaders to ensure that the DHET MiS Portal is updated with progress reporting. Siyaphumelela Network 2.0 Student Success Siyaphumelela Network 2.0 is an ongoing project, focused on developing a framework for student success through the use of data analytics to enhance the student experience. Two institutional projects initiated in 2021 considered application and registration data to “get to know” students and how best to develop datainformed interventions. The results of the research projects were presented at various forums, such as the HoD Forum and the Deans and Directors’ Forum. As part of a collaborative initiative, students registered at the Department of Mathematics and Physics were included as partners to unpack the application and registration data. The insights gained from the data analytics will be used to make data-informed decisions about future student interventions. New Generations Academic Programme (nGap) A call for Phase 8 submissions was sent out on 15 December 2021. CPUT made a submission for five nGap positions to be considered for approval. Exiting of Phase 1 lecturers The Phase 1 lecturers have exited the programme. Therefore, the University now takes full responsibility for the salaries of the lecturers. DHET has advised those who have not fulfilled all of the nGAP requirements to submit reports to this effect. Also, those who have fulfilled the requirements of the programme are expected to submit a report detailing their experience, and offer recommendations. New Emerging Scholars Programme (NESP) Phase 1 CPUT has two participants in the inaugural phase, from Agricultural Extension and Dental Technology. Department Agricultural Extension Dental Technology

Status 2nd year MA Currently doing internship with the dental department

DHET has sent communication regarding the new Phase 2. The three positions (Electronic Communication and Satellite Technology, Emergency Medical Care, and Nautical Science) that did not attract suitable candidates have been carried over to Phase 2. Therefore, CPUT has five NESP positions to fill. DHET and the managing partner, Rhodes, will place a national advertisement, and institutions will be advised when the advertisement is out.

DUT and CPUT have signed a Memorandum of Understanding to foster cooperation in the establishment of these provincial/ regional Articulation Hubs. CPUT has agreed to play the role of the Articulation Hub in the Western Cape, as contemplated in the UPSET Project. Extended Curriculum Programme (ECP) ECP was invited to address first-time entering ECP and mainstream students at the following student orientation events, namely: Department of Nursing (virtual); Department of Biomedical Sciences (virtual); and the Department of Applied Design (inperson). In an effort to build an ECP Community of Practice, Fundani ECP hosted a webinar on 11 February, entitled “Sharing practices for enhancing student support in ECPs”. As part of the DHET Foundation alignment exercise, CPUT was granted temporary concession for the 27 outstanding ECPs identified in 2021. Subsequently, an institutional ECP working group has been constituted upon receipt of formal external reviewer feedback. ECP is in the process of developing electronic marketing material in conjunction with the Marketing and Communication Department (MCD) to prepare an institutional ECP brochure. Fundani ECP is also coordinating faculty ECP brochures, which will be designed by MCD. These electronic materials will provide prospective students and parents with information related to ECPs as an alternative pathway into formal degrees and diplomas. ECP and the Language Unit co-hosted a webinar planned for 24 February to showcase multilingual practices to enhance learning and teaching. The event is in line with International Mother Tongue month. ECP hosted a webinar on 10 March to showcase practical ways to move beyond Emergency Remote Teaching to meaningful, wellplanned online learning experiences. 3.2 Student Development and Support The Institutional First Year Experience (FYE) team had a tight yearlong schedule of providing FYE support to all first-year students at CPUT. The CPUT 101 module, an auxiliary programme, adopted a blended approach. FYE orientation videos across a range of topics were developed to supplement the workshops. All of the topics covered in CPUT 101 are facilitated through Blackboard. First-year students continued to be supported through the provision of academic literacy workshops throughout 2021. 3.3 Recognition of Prior Learning (RPL) Work has started on the RPL tracking system on ITS. All manual applications dating back to 2018 are in the process of being uploaded to the RPL tracking system. Currently, two application systems are being utilised; an Office 365 and ITS system, to avoid the losing of applications. The RPL applications will be opened in February 2022 for the 2023 academic year. RPL candidates continue to be engaged with on a regular basis with regards to application status.

DHET UCDP Sub Project University-led Collaborative Project: Unfurling Post School Project (UPSET)

3.4 Language Development at CPUT

CPUT was invited to collaborate with Durban University of Technology (DUT) in the UPSET Project. The aim of the project is to promote and enhance Technical and Vocational Education and Training articulation to higher education, and to work through the establishment of nine provincial/regional Articulation Hubs.

Academic writing workshops were offered to new postgraduate students and new academics. This was offered in collaboration with the Research Directorate. The basic writing workshop is for those who are new to academia or those who are writing for academic purposes for the first time.

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As part of this year’s International Mother Language Day (IMLD) commemoration, the Language Unit partnered with external partners (Iziko Museums of South Africa, Pansalb, Western Cape Government, the National Library of South Africa, among others). The commemoration was a three-day event, with each day’s programme focusing on a particular sector: • Day 1: 18 February focused on language in education, and hosted a panel discussion consisting of high school learners, a lecturer from CPUT, a student from Stellenbosch University, a teacher from Sinenjongo High School, and a representative from DeafSA. • Day 2: 19 February was a virtual discussion around film and the use of indigenous languages. • Day 3: 21 February was also a virtual discussion on the visibility of indigenous languages in several sectors, such as education, publishing, the financial literacy space, etc. The Online Multilingual Glossaries (OMG) project and translation is continuing. The Language Unit continues to support academic and non-academic departments with editing and translation of documents. 3.5 Faculty matters Faculties reflected on the 2021 academic performance, considering the continued impact that the pandemic has exerted on student participation. In the Faculty of Applied Sciences, academic performance in Semester 2 showed an average pass rate of 78,9%. For the same period in 2020, the rate was 80,8%, representing a slight drop in performance. Data on completion in minimum time is available for cohorts who would have completed in 2020. The data for 2021 completions is not yet available, as graduations have not yet taken place. The data shows that the percentage of students completing their qualifications in minimum time is in the region 33%–34%. The academic performance in the Faculty of Education varied across departments. Foundation Phase Studies saw a decrease in pass rates from 91,72% to 89,10%. Many students accepted day jobs, resulting in requests for after hours’ assessment tests. The Diploma Grade R Teaching saw a decrease in pass rates from 91,40% to 88,94%. Several students depend on the use of computers at the schools where they teach. They often depend on the school’s network connectivity to do their academic work. Overall, the average pass rate in 2021 was, in general, slightly lower than in the previous years. However, no subjects are in dire need of intervention. First-year students seemed to have suffered most, having had to adjust to both higher education, and an online learning environment. The pass rates in the Faculty of Business and Management Sciences for all subjects and programmes per department in 2021, when compared with previous years (2018–2020) showed that in some instances the pass rates exceeded other years, and for other departments, there was a marginal difference below 2020. Twelve departments had a pass rate of 75%+. Six departments reflected pass rates of 66%+. Student success rates in 2021 revealed a comparative similarity to the previous years, 2018–2020, although the 2021 rates were lower than

previous years for most departments by a percentage point or two. Departmental discussion will be followed now that all medical assessments have been concluded, and a more accurate update of success and pass rates are available. In the Faculty of Engineering and the Built Environment, the pass rates for 2021 are not yet final. At the time of submission, the Faculty was still busy closing out marks for reassessments; deferred assessments and final-year subjects, which students require to graduate. The preliminary results for undergraduate students showed a slight decline in 2021 pass rates in comparison to 2020. The pass rate at undergraduate level for 2021 was 71%, while 2020 was at 76%, and 2019 at 70,1%. The overall pass rate for the Faculty of Informatics and Design was 82,3% (2019), 78,5% (2020) and 79,2% (2021). There was a decline in terms of pass rates when comparing 2019 and 2020, and a slight improvement in 2021. The overall throughput rate in the Faculty, in terms of minimum time to complete qualifications, has been declining in the last few years. The impact of the COVID-19 pandemic in 2020 and 2021 is reflected in the number of inactive students (dropouts) still on the system who cannot be deregistered; students who deregister after the census date; student applications indicating a wide range of programme choices, implying lack of clarity in terms of study field and/or career direction; and students who struggle with the transition from secondary to tertiary education. Student Success has been identified as a critical project in the faculty, and several intervention activities are envisioned, also informed by the Subject Review processes. The above to feed into the improvement of first academic success and improve progression to second year. In the Faculty of Health and Wellness Sciences, the 3rd Annual Faculty Review was held for Deans and Directors from 8–9 December 2021, and the FHWS’s performance was reported on by the Dean. The overall progress for the year 2021 was good. Pass rates averaged well over 80% for the Faculty, and subjects such as Immunology and General Anatomy and Physiology (which are traditionally high-risk subjects) were no longer at risk at the end of the academic year. A few challenges were experienced in relation to outstanding clinical components for subjects in three departments, namely, EMS, BioMed and Nursing. Some of the clinical subjects were not closed out at the end of 2021, and were completed in January 2022. Academic Year 2022 continues to show the benefit of the lessons learnt throughout the pandemic. As a University, we have developed a responsiveness in learning and teaching, while remaining cognizant of the challenges faced by staff and students. As we continue to learn and grow from the experiences of the past two years, Vision 2030 and the dimensions of Oneness and Smartness will guide our interactions, plans and implementation of the academic project.

Vice-Chancellor Prof NC Nhlapo

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transformation report 1. Introduction Transformation is one of the cross-cutting pillars of CPUT’s One Smart Vision 2030 Strategy, and is also anchored in the two strategic dimensions of the Vision 2030 Strategy, which comprise: • “Oneness” that focuses on CPUT’s human-centricity through its Smart people and the entire Smart CPUT community that value and embrace unity, diversity, inclusivity, and social change. This helps CPUT to value co-thinking, co-learning, co-creating/ design, healthy and open dialogues in a unified and cohesive manner; and • “Smartness” that focuses on technological developments and innovations as considered by the current and future industrial revolutions. This supports the notion that CPUT, as a university of technology, embraces technology in the broadest and most positive sense to advance a better humanity, better socio-economic circumstances, better health conditions, education, safety, food security, and general living conditions in CPUT’s region, South Africa, Africa, and globally (CPUT’s One Smart Vision 2030 Strategy). 1.1 Transformation reporting approach across the University Transformation reporting is integrated into the seven focus areas of the Vision 2030 Strategy, where faculties, departments, units, departments, divisions, centres and institutional structures integrate their core mandates into the seven focus areas, namely: • Smart ITC environment and ITC workforce; • Smart teaching and learning and learning environments; • Smart RTIP that is relevant and excellent in its knowledge production; • Smart human capital and talent; • Smart internationalisation; • Smart engagement and strong links with quintuple helix partners; and • Smart student engagement and learning experiences. 1.2 Key pillars of transformation The key pillars of transformation include the following: • Students and staff access, support and success that embraces diversity, equity, inclusivity and belonging; • Institutional responses to all forms of discrimination, abuse, harassment and gender-based violence; • Diverse and inclusive places and spaces that enhance belonging (visual redress or inclusive learning spaces); • Transformation or renewal of the scholarship of teaching, curriculum, research, innovation and community engagement (inclusive of learning and teaching environment); • Africanisation or owning our African identity; and decolonisation agenda; and • Responsiveness to the societal needs at local, national regional, and global level (Cape Vision 2040, NDP, Agenda 2063 and Agenda 2030).

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2. Overall transformation accountability and coordination In accordance with the White Paper 3 on Transformation in Higher Education (DHET: 1997/2016); Employment Equity Act, (Act No. 55 of 1998); Policy for the Realisation of Social Inclusion in Post School and Training (P-SET) (2016); Policy Framework on Disability in P-SET (2018); Policy Framework for addressing Gender Based Violence (GBV) in P-SET (2020); Language Policy Framework for Public Higher Education (2021); as well as regional, national, continental and global contexts; the following management committees play critical roles. At institutional level, the following institutional committees support transformation: • Institutional Gender-based Violence Committee (IGBV) chaired by Prof Chris Nhlapo (Vice-Chancellor); • Institutional Transformation Forum (ITF) chaired by Prof Paul Green; and

2.3 Institutional Employment Equity Forum (EEF) At institutional level, the Employment Equity Forum is comprised of representatives from all components of the University, namely faculties, departments, units, centres, division and structures, and is chaired by a member of the Management Committee (ManCom). These transformation representatives are delegated by Deans, Executives and Directors, and organised labour. The EEF provides spaces for learning, sharing of lessons and practices. It meets quarterly to coordinate and discuss the employment equity reports. At faculty level, employment equity is coordinated by the Deans through the Faculty Transformation Forum (FTF) that reports to the Faculty Board Meetings on a quarterly basis. The Faculty Transformation Forum coordinates reports across departments in faculties on a quarterly basis. Transformation is also the standing agenda item in Faculty Board Meetings. All reports are signed off by Deans of respective faculties.

• Institutional Employment Equity Forum (EEF) chaired by Prof Paul Green.

3. Summary of key transformation achievements

2.1 Institutional Transformation Committee (ITF)

The key achievements in 2021 can be summarised as follows:

At institutional level, transformation is coordinated by the Institutional Transformation Forum (ITF), a management committee that reports to Management on a quarterly basis.

3.1 Food Security and Sanitary Dignity Programme to enhance learning and success

The ITF is comprised of representatives from all components of the University, namely faculties, departments, units, centres, division and structures, and is chaired by a member of the Management Committee (ManCom). These transformation representatives are delegated by Deans, Executives and Directors, organised labour, SRC and governance structures. The ITF provides spaces for learning, sharing of lessons, practices and research agendas. It meets quarterly to coordinate and discuss transformation reports. At faculty level, transformation is coordinated by the Deans through the Faculty Transformation Forum (FTF) that reports to the Faculty Board Meetings on a quarterly basis. The FTF coordinates reports across departments in faculties on a quarterly basis. Transformation is also the standing agenda item in Faculty Board Meetings. All reports are signed off by Deans of respective faculties. 2.2 Institutional Gender-based Violence Committee (IGBVC) In 2021, the Executive Management established an Institutional Gender-based Violence Committee in line with the Policy Framework for addressing GBV in Post School Education and Training (P-SET). The main purpose of the establishment of the IGBVC was to localise the National Strategic Plan on GBV and Femicide (NSP-GBVF) in order to ensure accountability and to respond to specific trends and patterns of GBV at CPUT in order to ensure evidence-based intervention approaches and systems. The IGBVC is comprised of members from the following: • Vice-Chancellor (VC) as the Chairperson of IGBVC; • Executive Management (EM) as leaders of different GBV Pillars; and • Deans, Executives and SRC Leadership as technical leaders of various GBV Pillars.

The Institutional Transformation Forum (ITF) acknowledged and supported the need for a food security and sanitary dignity programme as a social justice response to support the students’ journey to learning and success. The project was initiated in response to the request of the Central SRC due to the number of cases of students in distress; and COVID-19 exacerbated the need. The ITF conceptualised the Food Security and Sanitary Dignity Programme based on the following: • Food security and sanitary dignity are inequality matters and determinants of a lack of access to basic needs. They affect one’s wellbeing, and mental ability to make proper decisions. • Research shows that the consequences of food security for students can be very serious. Being hungry can impair academic performance, or even lead to students dropping out. It can also cause mental health problems, such as anxiety, depression and even thoughts of suicide. Hunger reduces the ability to concentrate on studying, to write fluently, or to perform well in exams (Veldtman, 2013). • Regarding sanitary dignity, research shows that menstruation is a natural and essential part of the reproductive cycle of any woman, but too often, menstruation is shrouded in mystery, leading to exclusion, neglect and discrimination. However, women have a right to safe, legal reproductive health services (Campbell et. al. 2012). • Furthermore, on average, a student from poor socio-economic backgrounds will miss classes almost four to five days in each month, depending on the duration of her menstrual cycle. This equates to forty (40) days or 20% of class attendance time (Campbell et. al. 2011). • Currently, CPUT has no holistic, integrated food security and sanitary dignity initiatives, however, some individual lecturers, departments and faculties provide food security initiatives for their students on an ad hoc basis.

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3.2 Proposal to institutionalise Food Security and Sanitary Dignity Programme The following proposals were recommended: Location Option 1 Dedicated office: Student Affairs

Beneficiaries Residence and non-residence students

Option 2 Dedicated stand-alone: Institutional (central coordination point)

Data for students in need

Broadened approach

Student Registration/ Admission NSFAS Office

Include other basic needs, e.g. toiletries

SRC Offices on various campuses Mentors, Retention Officers, Peer Helpers – (Collate data and submit to SRC Offices)

Clothing Faculties to create WIL for students, e.g. Food Technology

Principles

Social justice, human rights and dignity

Coordination

SRC, faculties, departments and units (e.g. integrated sub-committee to advise)

Accountability

Management Programme (e.g. unit to account to Management)

4. Vice-Chancellor’s Institutional Transformation Seminar Series The VC’s Institutional Transformation Seminar Series started on 5 August 2021. Its objectives were aimed at integrating the Transformation Barometer of Higher Education to the Vision 2030 Strategy. The first transformation webinar was on “Unpacking Transformation in Higher Education” under the theme: “Rethinking and Repositioning transformation within the Cape Peninsula University of Technology (CPUT)’s One Smart Vision 2030 Strategy”. The main purpose of the transformation series included the following: • To mainstream transformation in teaching, learning, curriculum, research, innovation and community engagement in order to enhance a transformative student-centred environment; • To share lessons, practices and research agendas on transformation-related themes; • To rethink and redesign education processes to meet the diverse needs of students and staff within the rapidly changing technological world and social justice; and • To reshape institutional cultures in order to find solutions to complex problems facing our local communities, our country (NDP), our continent/Africa (Agenda 2063), and our world (Agenda 2030/ Sustainable Development Goals). The second transformation webinar was held on 26 August 2021, and aimed at enhancing “Oneness” and “Smartness” through “Generation Equality” under the theme: “Gender equality is NOT ONLY a women’s issue; it is everyone’s issue and a human rights issue”. The key objectives of the webinar were to: • Share and discuss partnerships on gender-based violence (GBV), gender research and other initiatives; • Unpack stakeholders’ roles on gender equality and women’s empowerment; and • Encourage gender responsiveness in administration, support and academic programmes for a safe and inclusive student-centred environment. The third transformation webinar, held on 18 October 2021, explored the theme “Understanding the transformation dynamics facing the higher education landscape in South Africa”. The key goal of the webinar was to seek practical solutions to the transformation challenges facing students at institutions of higher learning. The seminar series is an ongoing student engagement initiative. 4.1 Gender-based Violence (GBV) Training Roll Out Plan CPUT, in partnership with the Sexual Offences Unit of the National Prosecuting Authority (NPA) of the Western Cape, is rolling out training for staff and students to ensure that the university community is fully capacitated on GBV. In 2021, the following teams received training: • Executive Management (EM); 27 May 2021 • Institutional GBV Committee (IGBVC); 20 August 2021 • Campus Security; 19–21 October, 7–9 November to December 2021 The training will be continued in 2022.

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4.2 Gender equality through the engagement of men in fighting GBV on campus CPUT launched the Amajita Programme that targets young male students in an effort to eradicate GBV on campus. Since 2018, through partnership with UN Women, the Amajita Programme was integrated into HEFORSHE to create an integrated programme for students and staff. New cohorts of students received training in 2021, and will receive mentoring in 2022. A number of activities and dialogues, aimed at raising awareness on gender diversity and inclusivity, were also conducted.

4.3.2. Approaches to the 16 Days of Activism Campaign The Campaign was aligned to some National Strategic PlanGVB Pillars as follows: GBV Pillar 1: Accountability, Coordination and Leadership The accountability of the University leadership to mark the Executive Management’s commitment in ending genderbased violence was done by means of a video clip of the ViceChancellor, Prof Chris Nhlapo, which circulated to all student groupings during the 16 Days of Activism period. GBV Pillar 2: Prevention and Rebuilding Social Cohesion

4.3 The 16 Days of Activism for No Violence Against Women: “Towards a Safe and Inclusive Smart CPUT” 2021 marked 22 years since South Africa embarked on the 16 Days of Activism for No Violence against Women Campaign. The Campaign takes place at a time when the country and the world are experiencing a global COVID-19 pandemic caused by the novel coronavirus SARS-CoV-2. South Africa has seen horrific gender-based violence and femicide (GBVF) during the national lockdown period. Statistics South Africa (Stats SA) in its report titled “Crime against Women in South Africa” (Stats SA, 2018) details data and trends on the brutality of violence against women and children. It provides insight into society’s perceptions and beliefs regarding GBV. Attitudes and behaviour are among the key factors that drive crime, and particularly violence against women. GBVF has been described as the second pandemic facing the country, in addition to the COVID-19 pandemic. The country has been subjected to horrendous incidents of GBVF, and continues to experience high levels of GBVF. Women continue to live in a constant state of fear. The 2019/2020 crime statistics indicated an increase in reported rape and sexual assault cases compared to 2018/2019. This situation is further exacerbated by the gendered impacts of COVID-19 on the triple challenges of poverty, inequality and unemployment. CPUT collaborated with the SNAKENATION organisation and the Central SRC (CSRC) to host the 2021 edition of 16 Days of Activism for No Violence Against Women, under the theme: “Economic Justice for a Non-Violent and Non-Sexist South Africa”.

In line with Pillar 2, the programme integrated various student groupings such as men, LGBTQIA+, and persons with disabilities, in order to enhance multiple lenses to GBV. This also included a variety of stakeholders, including technology companies such as RMI, Team MZI, The Hustlers KDD APP For All, KDD Mavesa Enterprises. GBV Pillar 3: Efficient and Sensitive Criminal Justice System This engagement with the South African Police Service (SAPS)-related tech companies was to ensure the credibility of these companies, and that SAPS is in service and key when partaking in these GBV emergency responses and solutions. GBV Pillar 5: Building Women’s Economic Power In line with economic empowerment, the CSRC established a ‘Women in Technology’ Society. The initiative was aimed at promoting women in technology by up-skilling women with tech tools and helping them to start tech businesses; thereby growing the pipeline of women in society entering the technology industry. The Phase 2 programme of “Towards a Safe and Inclusive Smart CPUT” will continue in 2022.

5. Conclusion This is a summarised version of CPUT’s Institutional Transformation Report for 2021. The full version of the Report is available upon request.

4.3.1. Key GBV Hackathon tasks assigned to students Students were asked to explore ways of making campuses and communities safer, investigate how best to respond to threats, and produce tech ideas that could save lives – using both technology for creating technology solutions, and creating content to drive awareness. CPUT students were given 24 hours to build solutions to fight GBV, and the top five solutions were given five days to turn their ideas into businesses.

Chairperson of Council Adv. ZL Mapoma

Vice-Chancellor Prof NC Nhlapo

transformation report | 49

50 |

table of contents Annual Financial Review.........................................................................................................................................................52 Financial Statements..............................................................................................................................................................54 Statement of Responsibility for the Financial Statements.........................................................................................................55 Approval of the Financial Statements......................................................................................................................................55 Report of the Independent Auditors........................................................................................................................................56 Statement of Financial Position...............................................................................................................................................60 Statement of Comprehensive Income.....................................................................................................................................61 Statement of Changes in Funds..............................................................................................................................................63 Statement of Cash Flows.......................................................................................................................................................64 Notes to the Financial Statements..........................................................................................................................................65 1. Basis of preparation and accounting policies.................................................................................................................65 2. Property, plant and equipment......................................................................................................................................72 3. Financial assets measured at fair value through profit and loss (FVTPL)..........................................................................73 4. Inventory...................................................................................................................................................................... 74 5. Accounts receivable and prepayments.......................................................................................................................... 74 6. Student fees receivable................................................................................................................................................. 75 7. Cash and cash equivalents............................................................................................................................................ 76 8. Interest-bearing borrowings.......................................................................................................................................... 76 9. Finance costs...............................................................................................................................................................77 10. Other employee benefits.............................................................................................................................................78 11. Accounts payable and accrued liabilities......................................................................................................................84 12. State appropriations – Subsidies and grants................................................................................................................84 13. Revenue from contracts with customers......................................................................................................................85 14. Interest income and dividends.....................................................................................................................................85 15. Other operating expenses...........................................................................................................................................86 16. Personnel costs..........................................................................................................................................................86 17. Deferred income..........................................................................................................................................................87 18. Financial risk management objectives and policies......................................................................................................88 19. Contingent assets, liabilities and financial guarantees..................................................................................................93 20. Commitment.............................................................................................................................................................. 93 21. Remuneration of key Management..............................................................................................................................94 22. Related party transactions..........................................................................................................................................96 23. COVID-19 impact........................................................................................................................................................96 24. Going concern............................................................................................................................................................97 25. Comparative figures....................................................................................................................................................97

table of contents | 51

annual financial review The University’s financial reporting and preparation of financial statements is done in accordance with International Financial Reporting Standards (IFRS), as well as the Department of Higher Education and Training (DHET) reporting requirements for Higher Education Institutions. The core income stream of the University, namely subsidies and tuition fees, has continued to increase in 2021 as a result of: • An increase in the subsidy factor applied by DHET, resulting in an increase of 3,7%; and • An increase of 12,4% applied to gross tuition fees due to the mix of programmes. The level of student debt for unfunded students continues to grow. The pattern of payments from unfunded students has not improved in 2021, and other options need to be considered in 2022 to encourage payment. This has resulted in an increase in the provision for bad debts of R41m, based on the three-year cycle. The University has been fortunate that the quality and frequency of payments for NSFAS funded students has continued to improve the financial sustainability of the University when compared to prior years. In 2021, the University completed two major projects, namely the Navarre Residence Extension in Wellington, and the Bulk Water Upgrade in Bellville. Backlog maintenance has continued to be addressed as a priority, and a large number of other projects have been completed across the various campuses. Student accommodation in Wellington has been increased by 212 beds with the completion of the Navarre Residence Extension. The overall leased residential offering has been marginally decreased with the removal of a block in New Market Junction, Woodstock. A number of existing leases were renewed at a favourable escalation rate in terms of the parameters set by CPUT. Management continues to set budget directives annually for the next budget year, which are based on achieving the Vision 2030 priority projects, and the CPUT Strategy. It has thus been possible to achieve our plans due to the improved certainty of the University’s cash flow, despite the challenges of reduced funding resulting from the economic impact faced by the country as a whole.

52 | annual financial review

Key highlights • The investments held by the University have performed well in 2021, and this resulted in the growth of 15% from R1,444bn to R1,667bn. • The work of the Investment Sub-Committee has continued to be very effective, which has resulted in the desired investment outcomes being achieved. • Strict cost management processes have continued to be maintained in respect of staffing appointments and the renewal of staff contracts. This is an area that will have to be closely monitored in 2022. • All contractual expenditure was met for the year. • The cash flow management processes followed by the University have ensured that it remains financially stable and that there was no need to disinvest reserves to support the ongoing operations. The University’s Management wishes to thank Council’s Finance, and Audit & Risk Oversight Committees for their continued guidance and commitment in steering the Institution. A special word of thanks is also extended to the staff of the Finance Department for their selfless efforts and continued commitment in serving CPUT. A selected list of financial ratios and extracts from the financials for the past years follows below: 2021

2020

2019

2018

2017

Current ratio

1.94:1

1.47:1

1.62:1

2.74:1

1.54:1

Quick ratio

1.92:1

1.45:1

1.63:1

2.72:1

1.52:1

Cash ratio

1.25:1

0.95:1

1.02:1

1.78:1

0.56:1

Student debt turnover ratio

1.10:1

1.17:1

1.29:1

1.51:1

(R16,72)

(R31,34)

R6,20

R10,19

(R0,78)

Salaries as % of recurring income

57,0%

55,5%

56,4%

57,4%

56,0%

Other current operating expenses as % of recurring income

22,4%

18,2%

23,3%

29,7%

41,2%

State subsidies as % of recurring income

54,0%

55,3%

56,5%

54,6%

48,1%

Tuition and other fee income as % of recurring income

41,5%

38,8%

37,2%

36,4%

41,9%

0,2%

0,5%

0,2%

0,3%

Sustainability ratio (Council controlled reserves only) (Council-controlled reserves/ annual recurrent expenditure on Councilcontrolled expenditure)

1,06

0,87

0,93

1,02

0,72

Sustainability ratio (Total CPUT reserves) Total CPUT reserves/ annual recurrent expenditure

0,82

0,74

0,78

0,82

0,74

Net gain/(loss) on residences (million)

Private gifts & donations as % of recurring income

Executive Director: Finance Mr PC Du Plessis

Chairperson: Finance Committee Mr R Easthorpe

annual financial review | 53

financial statements FOR THE YEAR ENDED 31 DECEMBER 2021

54 | financial statements

STATEMENT OF RESPONSIBILITY FOR THE FINANCIAL STATEMENTS The Council is accountable for the integrity and fair presentation of the annual financial statements of the Cape Peninsula University of Technology.

The annual financial statements, presented on pages 60 to 97 of this Annual Report, have been prepared in accordance with International Financial Reporting Standards (IFRS) and the requirements of the Minister of Higher Education and Training as prescribed by the Higher Education Act, 1997 (Act No.101 of 1997, as amended), and include amounts based on judgements and estimates made by Management. The Council is also responsible for the University’s system of internal financial control. These are designed to provide reasonable, but not absolute, assurance as to the reliability of the annual financial statements. The Council also prepared other information as required to be included in this Annual Report, and is responsible for both its accuracy and consistency with the financial statements. The “going concern” basis has been adopted in preparing the financial statements. Nothing has come to the attention of Council to indicate that any material breakdown in the functioning of the system, procedures and controls has occurred during the year under review. The Council also has no reason to believe that the Cape Peninsula University of Technology is not a “going concern” in the foreseeable future, based on forecasts and available cash resources. The viability of the Cape Peninsula University of Technology is supported by the content of the financial statements. The financial statements have been audited by the independent accounting firm, Ernst & Young Inc., which was given unrestricted access to all financial records and related data, including minutes of meetings of the Council and all its committees. The Council believes that all representations made to the independent auditors during their audit were valid and appropriate.

APPROVAL OF THE FINANCIAL STATEMENTS The annual financial statements on pages 60 to 97 were approved by the Council of the Cape Peninsula University of Technology on 25 June 2022, and are signed on its behalf by:

Chairperson of Council Adv. ZL Mapoma

Vice-Chancellor Prof NC Nhlapo

Executive Director: Finance Mr PC Du Plessis

statement of responsibility for the financial statements |55

STATEMENT OF FINANCIAL POSITION as at 31 December 2021

Note

2021

2020

ASSETS Non-current assets

4 839 121 421

4 387 476 778

Property, plant and equipment

3 171 888 803

2 942 935 078

Financial assets measured at fair value

1 667 232 618

1 444 541 700

1 237 494 123

964 174 451

Current assets Inventory

13 802 206

11 194 745

Accounts receivable and prepayments

37 192 870

39 006 321

Student fees receivable

390 448 319

291 720 057

Cash and cash equivalents

796 050 728

622 253 328

6 076 615 544

5 351 651 229

Accumulated funds

2 413 931 880

2 133 571 520

Council controlled unrestricted funds

2 195 965 040

1 861 396 140

217 966 840

272 175 380

3 025 289 909

2 563 993 232

TOTAL ASSETS

FUNDS AND LIABILITIES

Specifically restricted funds

Non-current liabilities Interest-bearing borrowings

8.1

1 078 001 839

858 053 146

Employee accumulative leave liability

10.1

23 321 001

26 071 000

Post-retirement medical aid obligation

10.2

696 521 850

599 605 039

Pension fund obligation

10.3

15 866 543

19 566 308

Government grants – Deferred income

17.2

1 211 578 676

1 060 697 739

637 393 755

654 086 477

Current liabilities Current portion of interest-bearing borrowings

8.1

196 706 621

229 576 933

Employee annual leave liability

10.1

31 166 680

38 110 258

Employee accumulative leave liability

10.1

9 322 000

9 366 000

388 948 894

342 404 815

Accounts payable and accrued liabilities

Contract liability

13.2

23 378 908

Government grants – Deferred income

17.2

11 249 560

11 249 563

6 076 615 544

5 351 651 229

TOTAL FUNDS AND LIABILITIES

60 | statement of financial position

STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2021 2021

2020

Council Controlled Unrestricted R

Specifically Funded Activities Restricted R

SUB-TOTAL R

TOTAL INCOME

2 486 829 770

322 070 091

2 808 899 861

RECURRENT REVENUE

2 290 710 334

319 600 929

1 472 278 536

Note

State appropriations – Subsidies and grants

Student Accommodation Restricted R

TOTAL R

478 153 180

3 287 053 041

2 973 077 868

2 610 311 263

473 586 254

3 083 897 517

2 922 923 767

191 688 825

1 663 967 361

1 614 974 851

744 825 616

69 206 081

814 031 697

464 651 155

1 278 682 852

1 135 395 394

Gross tuition and residence fees

783 911 963

69 206 081

853 118 044

469 389 766

1 322 507 810

1 188 636 942

Less: Bursaries and rebates awarded

(39 086 347)

(4 738 611)

(43 824 958)

(53 241 548)

Tuition and residence fees

Income from contracts:

13.1

13.2

for research for other activities Rendering of services

13.1

Private gifts and donations Sub-total

9 011 592

5 545 485

9 011 592

4 730 094

815 391

9 262 056

39 097 020

48 359 076

8 935 099

57 294 175

69 120 653

6 754 713

15 956 969

2 226 366 208

315 758 231

2 542 124 439

473 586 254

3 015 710 693

2 840 993 352

Interest based on effective interest rate model

21 241 998

3 842 698

25 084 696

29 200 698

Interest income and dividends

43 102 128

52 729 717

196 119 436

2 469 162

198 588 598

4 566 926

203 155 524

50 154 101

52 182

(84 809)

(32 627)

(20 720)

(53 347)

5 066 655

188 248 477

36 514 560

7 818 777

2 553 971

10 372 748

4 587 646

14 960 394

8 572 886

2 078 644 768

376 278 631

2 454 923 399

494 868 844

2 949 792 243

2 879 191 829

NON-RECURRENT INCOME (Loss)/Gain on scrapping/disposal of property, plant & equipment Movement in investment market value

Other non-recurrent income TOTAL EXPENDITURE

RECURRENT EXPENDITURE Personnel

Academic professional Other personnel

2 078 644 768

376 278 631

2 454 923 399

494 868 844

2 949 792 243

2 879 191 829

1 550 375 771

185 217 779

1 735 593 550

22 219 851

1 757 813 401

1 649 533 760

747 418 401

95 925 113

843 343 514

808 817 056

802 957 370

89 292 666

892 250 036

22 219 851

914 469 887

840 716 704

Expected credit loss

5-6

41 057 338

235 540 069

Other operating expenses

415 494 937

156 765 495

572 260 432

118 050 394

690 310 826

560 876 771

Depreciation

71 716 722

24 718 571

96 435 293

253 448 390

349 883 683

311 655 142

2 078 644 768

366 701 845

2 445 346 613

393 718 635

2 839 065 248

2 757 605 742

9 576 786

101 150 209

110 726 995

121 586 087

NET SURPLUS FOR THE YEAR

408 185 002

(54 208 540)

353 976 462

(16 715 664)

337 260 798

93 886 039

OTHER COMPREHENSIVE INCOME

(56 900 438)

(22 085 848)

Sub-total Finance costs

NON-RECURRENT EXPENDITURE

Items which will never be reclassified to surplus/(loss): Remeasurements of the pension fund obligation

10.3

4 007 751

11 548 355

Remeasurements of the post-retirement medical aid obligation

10.2

(60 908 189)

(33 634 203)

351 284 564

(54 208 540)

297 076 024

(16 715 664)

280 360 360

71 800 191

TOTAL COMPREHENSIVE SURPLUS/(LOSS)

statement of comprehensive income | 61

STATEMENT OF COMPREHENSIVE INCOME for the year ended 31 December 2021 2020

Note TOTAL INCOME

Council Controlled Unrestricted R

Specifically Funded Activities Restricted R

Student Accommodation Restricted R

SUB-TOTAL R

TOTAL R

2 242 903 125

295 299 962

2 538 203 087

434 874 781

2 973 077 868

2 196 062 517

295 196 206

2 491 258 723

431 665 044

2 922 923 767

1 428 819 070

186 155 781

1 614 974 851

655 061 058

60 610 708

715 671 766

419 723 628

1 135 395 394

Gross tuition and residence fees

704 668 682

60 610 708

765 279 390

423 357 552

1 188 636 942

Less: Bursaries and rebates awarded

(49 607 624)

(3 633 924)

(53 241 548)

5 545 485

4 730 094

RECURRENT REVENUE State appropriations – Subsidies and grants Tuition and residence fees

Income from contracts:

12 13.1

13.2

for research for other activities Rendering of services

13.1

Private gifts and donations Sub-total

815 391

34 126 480

23 052 757

57 179 237

11 941 416

69 120 653

15 956 969

2 118 006 608

291 321 700

2 409 328 308

431 665 044

2 840 993 352

Interest based on effective interest rate model

26 338 764

2 861 934

29 200 698

Interest income and dividends

51 717 145

1 012 572

52 729 717

46 840 608

103 756

46 944 364

3 209 737

50 154 101

1 911 289

(54 371)

1 856 918

3 209 737

5 066 655

36 514 560

8 414 759

158 127

8 572 886

2 164 380 725

265 368 895

2 429 749 620

449 442 209

2 879 191 829

NON-RECURRENT INCOME Gain/(Loss) on scrapping/disposal of property, plant & equipment Movement in investments market value

Other non-recurrent income TOTAL EXPENDITURE RECURRENT EXPENDITURE

2 164 380 725

265 368 895

2 429 749 620

449 442 209

2 879 191 829

1 454 905 392

171 697 366

1 626 602 758

22 931 002

1 649 533 760

Academic professional

711 624 754

94 711 752

806 336 506

2 480 550

808 817 056

Other personnel

743 280 638

76 985 614

820 266 252

20 450 452

840 716 704

Personnel

Expected credit loss

5-6

235 540 069

Other operating expenses

377 205 208

71 842 671

449 047 879

111 828 892

560 876 771

Depreciation

Sub-total Finance costs

NON-RECURRENT EXPENDITURE NET SURPLUS FOR THE YEAR OTHER COMPREHENSIVE INCOME

70 568 081

21 828 858

92 396 939

219 258 203

311 655 142

2 138 218 750

265 368 895

2 403 587 645

354 018 097

2 757 605 742

26 161 975

95 424 112

121 586 087

78 522 400

29 931 067

108 453 467

(14 567 428)

93 886 039

(22 085 848)

Items which will never be reclassified to surplus/(loss): Remeasurements of the pension fund obligation

10.3

11 548 355

Remeasurements of the post-retirement medical aid obligation

10.2

(33 634 203)

56 436 552

29 931 067

86 367 619

(14 567 428)

71 800 191

TOTAL COMPREHENSIVE SURPLUS/ (LOSS)

62 | statement of comprehensive income

STATEMENT OF CHANGES IN FUNDS for the year ended 31 December 2021 Council Controlled Unrestricted Funds R Balance at 31 December 2019

1 819 527 016

Specifically Restricted Funds R

Student Accommodation Funds R

242 244 313

1 490 595 161

TOTAL R 2 061 771 329

1 752 179 160

Total comprehensive income

56 436 552

29 931 067

(14 567 428)

71 800 191

Net surplus for the year

78 522 400

29 931 067

(14 567 428)

93 886 039

Remeasurements of the pension fund obligation

11 548 355

Remeasurements of the post-retirement medical aid obligation

(33 634 203)

Transfers – Credits/(debits)

(14 567 428)

14 567 428

272 175 380

2 133 571 520

Balance at 31 December 2020

1 861 396 140

Total comprehensive income

351 284 564

(54 208 540)

(16 715 664)

280 360 360

Net surplus for the year

408 185 002

(54 208 540)

(16 715 664)

337 260 798

Remeasurements of the pension fund obligation

4 007 751

Remeasurements of the post-retirement medical aid obligation

(60 908 189)

16 715 664

217 966 840

2 413 931 880

Transfers – Credits/(debits) Balance at 31 December 2021

(16 715 664) 2 195 965 040

statement of changes in funds | 63

STATEMENT OF CASH FLOWS for the year ended 31 December 2021 Note

2021 R

2020 R

Cash flow from operating activities Cash receipts from Government

1 621 977 545

1 441 758 728

Cash receipts from students and other customers

1 246 064 714

1 186 031 561

(2 413 450 995)

(2 219 723 530)

454 591 264

408 066 759

Cash paid to employees and suppliers Cash generated in operations Dividends received

16 888 302

8 677 870

Interest income

51 298 522

59 118 602

(101 150 209)

(121 586 087)

421 627 879

354 277 144

Finance costs Net cash flows from operating activities

Cash flow from investing activities Purchase of property, plant and equipment

(135 354 050)

(160 379 119)

Purchase of investments

(534 664 795)

(151 975 471)

Proceeds from disposals of investments

Cash flows from investing activities

493 198 389

120 149 000

(176 820 456)

(192 205 590)

Cash from financing activities Repayment of loans

8.2

(19 778 716)

(27 307 305)

Payment of principal on lease liabilities

8.2

(234 525 260)

(189 694 042)

Infrastructure and other grants received

Cash flows from financing activities

183 293 953

174 528 474

(71 010 023)

(42 472 873)

Increase/(decrease) in cash and cash equivalents

173 797 400

119 598 681

Cash and cash equivalents at beginning of year

622 253 328

502 654 647

796 050 728

622 253 328

337 260 798

93 886 039

Cash and cash equivalents at end of year

Reconciliation of net surplus to cash utilised in operations: Net surplus/(deficit) Adjusted for: Depreciation on property, plant and equipment

349 883 683

311 655 142

Government grants released to income

(41 989 805)

(28 465 579)

Contract income released to income

(23 378 908)

Loss/(Gain) on sale of property, plant and equipment

53 347

(5 066 656)

Interest income

(51 298 522)

(59 118 602)

Dividends received

(16 888 302)

(22 811 813)

Finance costs

110 726 995

121 586 087

Movement in investments market value

(188 248 477)

(36 514 560)

93 217 045

15 308 258

569 337 854

390 458 318

Movement in post-retirement employee obligations

10.2 10.3

Movement in working capital Increase/(Decrease) in employee leave liability

10.1

(9 737 577)

21 115 864

Accounts receivables, student fees and prepayments

5-6

(55 857 473)

(34 753 088)

(Increase)/Decrease in inventories

(2 607 461)

(3 589 735)

Accounts payable, accrued liabilities and student deposits

(46 544 079)

34 835 400

454 591 264

408 066 759

Cash generated from operations

64 | statement of cash flows

notes to the financial statements FOR THE YEAR ENDED 31 DECEMBER 2021 1. Basis of preparation and accounting policies 1.1 General information and basis of preparation The University is autonomous and is a legal persona with full juristic capacity by its incorporation as a university (originally by an Act of the Union Parliament of 1916 when Parliament incorporated the South African College, and now in terms of the Higher Education Act, 1997 (the Act) and the Institutional Statute of the University published under that Act). This legislation places the governance of the University in the hands of a Council, provides for the Council’s composition and powers, and provides for the role and powers of the Senate and the role and functions of the Institutional Forum. Higher Education Act, 1997 “Higher education institution” means any institution that provides higher education on a full-time, part-time or distance basis and which is: (a) Merged, established or deemed to be established as a public higher education institution under this Act;

the manner required by the Minister of Higher Education and Training in terms of S41 of the Higher Education Act 101, of 1997 (as amended). Basis of preparation The accounting policies set out below are consistent with those applied in the previous year, except as stated below. The financial statements have been prepared on a going concern and historical cost basis, except where stated otherwise (refer to accounting policies). The financial statements are presented in rands, and all amounts rounded to the nearest rand. Accounting Policy applicable on and after 1 January 2021 There were several amendments to IFRS that became effective for periods beginning on or after 1 January 2021, however, they did not have a material impact on the University. IFRS amendments and International Financial Reporting Interpretations Committee (IFRIC) interpretations issued but not yet effective As at 31 December 2021, there are no such amendments and interpretations that would have a material impact on the University. IFRS update of standards and interpretations in issue at 31 December 2021 Changes in accounting estimates (IAS 8) The amended standard clarifies that the effects on an accounting estimate of a change in an input or a change in a measurement technique are changes in accounting estimates if they do not result from the correction of prior period errors. The previous definition of a change in accounting estimate specified that changes in accounting estimates may result from new information or new developments. Therefore, such changes are not corrections of errors. This aspect of the definition was retained by the Board. The above has no bearing on CPUT in the current financial period, as there were no instances of prior period errors or changes in accounting estimates.

(b) Declared as a public higher education institution under this Act; or

Classification of liabilities as current or non-current – Amendments to IAS 1

Effective for annual periods beginning on or after 1 January 2023.

The Cape Peninsula University of Technology (CPUT) was established on 1 January 2005 with the merger of the former Peninsula and Cape Technikons, and is domiciled in South Africa. The University’s registered office is at the Administration Building, Symphony Way, Bellville South, 7530. The financial statements of the University for the year ended 31 December 2021 were authorised for issue in accordance with a resolution of Council on 25 June 2022. The principal activities of the University relate to teaching, research, and the providing of residential accommodation to students.

In January 2020, the Board issued amendments to paragraphs 69–76 of IAS 1 Presentation of Financial Statements to specify the requirements for classifying liabilities as current or non-current. The amendments clarify: • What is meant by a right to defer settlement; • That a right to defer must exist at the end of the reporting period; • That classification is unaffected by the likelihood that an entity will exercise its deferral right; and

Statement of compliance

• That only if an embedded derivative in a convertible liability is itself an equity instrument, would the terms of a liability not impact its classification.

The financial statements of the Cape Peninsula University of Technology have been prepared in accordance with, and comply with, International Financial Reporting Standards (IFRS), and in

The above will be taken into account for future periods in assessing the current and non-current split in presentation of the financials.

notes to the financial statements | 65

Property, plant and equipment: Proceeds before intended use – Amendments to IAS 16 Effective for annual periods beginning on or after 1 January 2022. Key requirements The amendment prohibits entities from deducting from the cost of an item of property, plant and equipment (PP&E), any proceeds of the sale of items produced while bringing that asset to the location and condition necessary for it to be capable of operating in the manner intended by Management. Instead, an entity recognises the proceeds from selling such items, and the costs of producing those items, in profit or loss. The University has noted the amendment, and will consider it going forward. There are, however, no transactions which the amendment will have bearing on currently. 1.2 Significant accounting judgements and estimates Judgements In the process of applying the University’s accounting policies, Management has made certain judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements as discussed below. Management assesses the University’s assets and liabilities, based on the criteria at the reporting date, to reach the appropriate conclusions in this regard. Estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities, as well as the release of income with respect to these assets, within the next financial year, are set out below. Student fees receivable Management estimates the amounts that it expects to recover from outstanding balances based upon the age profile of the debts outstanding, payment trends experienced in both the current and prior years, the levels of student registration and payments received from outstanding students post year-end, as well as events potentially impacting the recoverability of fees receivable. A provision for impairment is raised based on these estimates. The carrying value of student fees receivable at 31 December 2021 was R390 448 319 (2020: R291 720 057). Refer to Note 6. Depreciation At each reporting date, Management reviews the assets within property, plant and equipment to assess whether the useful lives and residual values applied to each asset category are appropriate. With the exception of motor vehicles, residual values have generally been assumed to be nil, as it is the University’s intention to fully consume assets through use. In determining the expected useful lives of individual assets, Management has considered the University’s historical patterns of usage, as well as future expected usage. The estimates for the expected useful lives of buildings have been based upon the nature and use of the buildings concerned, and the type of construction and materials used in construction. The carrying value of property, plant and equipment at 31 December 2021 was R3 171 888 803 (2020: R2 942 935 078). Refer to Note 2 for further details.

66 | notes to the financial statements

Post-retirement medical aid benefit obligation The University’s future obligation in respect of post-retirement medical aid contributions is actuarially valued based on the projected unit credit method. For the purpose of the valuation at 31 December 2021, key assumptions were made in respect of the discount rate, expected inflation on medical aid contributions, actual return on plan assets, expected age of retirements, and mortality rates. More details on these assumptions are provided in Note 10.2. The carrying value of the post-retirement medical aid obligations at 31 December 2021 is a liability of R696 521 850 (2020: R599 605 039). Pension fund obligation The University provides for its obligations relating to conditional benefits in respect of certain employees who are members of the National Tertiary Retirement Fund. The University’s future obligation in respect of this pension fund obligation is actuarially valued based on the projected unit credit method. For the purpose of the valuation at 31 December 2021, key assumptions were made in respect of the discount rate, expected salary and pension fund increases, expected return on plan assets, expected age of retirements, and mortality rates. More details on these assumptions are provided in Note 10.3. The carrying value of the obligation at 31 December 2021 was R15 866 543 (2020: R19 566 308). Lease liabilities The University’s leases have renewal clauses, and the University generally takes up renewal options, and thus all options have been taken into account in determining the lease term. The model of working with lessors is something that the University will continue to use into the future. 1.3 Segment information Segmentation provided in the Statement of Comprehensive Income of these financial statements is in terms of the guidelines prescribed by the Department of Higher Education and Training (DHET), and is not required in terms of IFRS 8. A segment is a recognised component of the University that is engaged in providing products or services that are subject to risks and returns different from those of other segments. The operating businesses are managed separately, but fall under the oversight of the Cape Peninsula University of Technology executive leadership. Council controlled The Council controlled segment predominantly represents the teaching component of the Cape Peninsula University of Technology. Decision making rights relating to income earned in this segment rests with Council. Specifically funded activities restricted The specifically funded activities restricted consist mainly of research activity and bursary donations. Here, decision making rights over income earned and related expenses rest with researchers. Council retains an oversight role in regard to ensuring that expenditure is in accordance with the mandate received from funders.

Student and staff housing Student and staff housing relate to the provision of accommodation to students. The availability of this accommodation is a strategic initiative aimed at ensuring that students adopt the CPUT as their preferred place of study. Statement of changes in funds The total comprehensive income generated in the Statement of Comprehensive Income segments is further allocated into additional funds within the Statement of Changes in Funds. Council controlled funds are allocated between unrestricted funds and designated funds, whereby the Council sets aside specific funds for designated purposes. Transfers between these funds are an internal allocation by the University, and have no effect on income and expenses. 1.3.1 Accumulated funds Council controlled unrestricted funds reserve This reserve predominantly represents the cumulative net surplus of the teaching component of the CPUT. The net (loss)/surplus for the year for the student and staff accommodation is included here. Specifically restricted funds reserve This reserve comprises the cumulative net surplus of specifically funded activities. 1.4 Foreign currency translation The financial statements are presented in rands, which is the University’s functional and presentation currency. Transactions in foreign currencies are initially recorded in the exchange currency rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the reporting date. All differences are taken to net surplus or loss in the year in which they arise. Non-monetary items carried at cost are translated using the exchange rate at the date of the transaction, whilst assets carried at fair value are translated at the exchange rate when the fair value was determined. When a gain or loss on a non-monetary item is recognised directly in other comprehensive income, any exchange component of that gain or loss shall be recognised directly in other comprehensive income. Conversely, when a gain or loss on a non-monetary item is recognised directly in net surplus or loss, any exchange component of that gain or loss shall be recognised directly in net surplus or loss. 1.5 Revenue recognition Revenue is measured at the fair value of the consideration received, or receivable, excluding discounts, rebates and VAT. Revenue is recognised to the extent that it is probable that the economic benefits will flow to the University, and the revenue can be reliably measured. The following specific recognition criteria must be met before revenue is recognised: State appropriations – subsidies and grants State subsidies and grants for general purposes are recognised in surplus or loss as revenue in the financial year in which they become receivable. Subsidies and grants for specific research purposes

are recognised in surplus or loss as revenue in the financial period in which they become receivable to the University, in accordance with the relevant conditions of such grants and agreements. Such subsidies and grants are presented separately as revenue in surplus or loss. Subsidies and grants relating to specific expenses incurred by the University are not offset from the related expenses, but are presented separately as revenue in surplus or loss. Government grants relating to assets When a grant relates to an asset, under IAS 20, the fair value is credited to a deferred income account, and is released to income over the expected useful life of the relevant asset on a systematic basis. Interest income Revenue is recognised as interest accrues (using the effective interest method, that is the rate that discounts estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset). Dividends Dividends are recognised when the right to receive payment is established. Private gifts and donations Private gifts and donations, whether of cash or assets, are recognised as revenue in the period they are received or receivable only when the University obtains control of these funds, the right to receive it, or it is probable that the economic benefits comprising these funds will flow to the University and the amount of the private gifts and donations can be measured reliably. Private gifts and grants with restrictions or conditions attached are recognised as income if the restrictions and conditions are under the entity’s preview, and it is probable that these restrictions and conditions would be met. Alternatively, these funds are recognised as deferred income until the above criteria are fulfilled, or when the restrictions or conditions expire. Income is recognised at the fair value of the private gifts and donations received or receivable. Private gifts and donations in the form of services are measured at the fair value of the services received or the fair value of the asset enhancement resulting from the services. Fair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants at the measurement date. IFRS 15 revenue from contract with customers IFRS 15 establishes a comprehensive framework for determining whether, how much, and when revenue is recognised. Revenue from contracts with customers is recognised when control of the goods or services is transferred to the customer at an amount that reflects the consideration to which the University expects to be entitled in exchange for those goods or services. Tuition and residence fees Tuition and residence fees charged are applicable to one academic and financial year, and are recognised in that year. The University has assessed that the students simultaneously receive and consume the benefits provided within the year; as such, revenue is recognised over time.

notes to the financial statements | 67

Scholarships, bursaries and other financial aid provided by the University to students for tuition and residence fees are recognised as a reduction of fees. The University has to fulfil is performance obligation by way of providing lecturers, study material, online videos or consultations for students, as well as assessments and examinations. Income from research contracts Income from contracts for research activity is recognised over the duration of the associated research activity, as determined with reference to the stage of completion. Stage of completion is determined on a cost or time-apportionment basis. Revenue from contracts for other activities is recognised when such activities occur. Income from research contracts is recognised in accordance with IFRS 15. It is based on the principle that revenue is recognised when control of goods or services transfers to a customer. A contract liability is recognised if a payment is received or payment is due from a customer before the University has transferred the related goods or services. Contract liabilities are then only recognised as revenue once the University has performed under the contract. Rendering of services Various academic departments render a range of services to industry. Revenue from rendering of these services is recognised by reference to the stage of completion, determined on a cost or time-apportionment basis, as appropriate for the services involved. 1.6 Retirement benefits Defined contribution retirement plan Employer contributions to the CPUT Retirement Fund (previously known as the Cape Technikon Retirement Fund) are recognised as expenses as the related service is provided. Defined contribution and defined benefit retirement plan Employer contributions to the National Tertiary Retirement Fund (NTRF) are recognised as expenses as the related service is provided. The NTRF is a defined contribution fund, and members were transferred from the AIFPF (previous State Pension Fund) with conditional benefits which materialise once these conditions are met. In terms of the conditional retirement benefits, members’ benefits are equal to the actual value at date of retirement, provided that they are 60 years or older, and the employer is obliged to ensure that the conditional retirement benefit is effected, as referred in those members’ conditions of employment and the contract between the Fund and the respective participating employers to fund any shortfall (difference between the Member Share account and actuarial value of the benefit) at retirement. The costs incurred in respect of these pension fund obligations are charged as an expense, as the employee renders the service. The present value of the pension fund obligation is actuarially determined annually using the projected unit credit method in accordance with IAS 19 Employee Benefits. The liability is recognised at the reporting date.

68 | notes to the financial statements

When the calculation results in a potential asset, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan, or reductions in future contributions to the plan. To calculate the present value of the economic benefits, consideration is given to any applicable minimum funding requirements. Remeasurements of the net defined benefit liability, which comprises actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are immediately recognised in Other Comprehensive Income (OCI). The Institution determines the net interest expense/(income) on the net defined benefit liability/(asset) for the period by applying the discount rate used to measure the conditional benefit obligation at the beginning of the annual period to the then net conditional benefit liability/(asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in surplus or loss. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in surplus or loss. The Institution recognises gains or losses on the settlement of a conditional benefit plan when the settlement occurs. Post-retirement medical aid obligations The University has an obligation to provide certain post-retirement medical aid benefits to its eligible employees and pensioners. The University is required to provide a defined amount of the medical aid contribution due. One of the University’s plans is funded with a plan asset. Other staff members elected to take out individual retirement annuities that will be used to fund their medical aid obligation upon retirement. The Institution provides these staff members with a monthly allowance to enable them to fund these individual retirement annuities. The costs of providing post-retirement medical aid benefits are determined using the projected unit credit method. When the calculation results in a potential asset, the recognised asset is limited to the present value of economic benefits available, in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of the economic benefits, consideration is given to any applicable minimum funding requirements. The net obligation is calculated separately for each plan by estimating the amount of the future benefit that the employees have earned in the current and prior periods, discounting that amount, and deducting the fair value of any plan assets. Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest), and the effect of the asset ceiling (if any, excluding interest), are immediately recognised in OCI. The Institution determines the net interest expense/(income) on the net defined benefit liability/(asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then net defined benefit liability/(asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in surplus or loss.

When the benefits of a plan are changed, or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in surplus or loss. The Institution recognises gains or losses on the settlement of a defined benefit plan when the settlement occurs. 1.7 Borrowing costs Borrowing costs are accrued based on the effective interest rate. Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of that asset. All other borrowing costs are recognised as an expense. 1.8 Research costs Research costs are expensed as incurred, and are included in other operating expenses. 1.9 Property, plant and equipment Property, plant and equipment (PP&E) is initially recognised when it is probable that future economic benefits will flow to the University and the cost of the item can be measured reliably. PP&E is initially measured at cost. The cost of an asset comprises the purchase price and any costs directly attributable to bringing the asset to the location and condition necessary for it to operate as intended by Management.

Depreciation commences when an asset is available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the manner intended by Management. Depreciation ceases at the earlier date that the asset is either classified as held for sale, or the asset is derecognised. An item of PP&E is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in surplus or loss in the year the asset is derecognised. 1.10 Impairment of non-financial assets The University assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, the University makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s fair value, less costs to sell and its value in use. Value in use is the present value of future cash flows expected to be derived from an asset or cash generating unit. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired, and is written down to its recoverable amount, and impairment losses recognised in surplus or loss.

Subsequently, PP&E is measured at cost less accumulated depreciation, and net of any accumulated impairment losses. Subsequent costs are included in the asset’s carrying amount, or are recognised as a separate asset, as appropriate, only when it is probable that future economic benefits will flow to the University and the cost of the item can be measured reliably. Maintenance and repairs, which do not meet these criteria, are recognised in surplus or loss, as incurred. Donated items of PP&E are initially recognised at fair value of the asset received. Land is not depreciated, as it is deemed to have an indefinite life.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in net surplus.

PP&E is depreciated on a straight-line basis estimated to write each asset down to its estimated residual value over the estimated useful lives of the assets, which range as follows:

After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

Useful life Land

Indefinite

Buildings

5 to 200 years

Leasehold improvements

Lease period

Motor vehicles

5 to 12 years

Furniture and equipment

1 to 15 years

Computer equipment

3 to 12 years

Right-of-use assets

Lease period

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. If significant parts of an item of PP&E have different useful lives, then they are accounted for as separate items of PP&E

1.11 Financial assets Classification and measurement The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the University’s business model for managing them. The University’s business model is to hold investments for capital appreciation, and therefore it manages its investment portfolio on a fair value basis. The University initially measures financial assets at fair value, plus, in the case of a financial asset not at fair value, through profit or loss (FVTPL) transaction costs. Trade receivables that do not contain a significant financing component, or for which the University has applied the practical expedient, are measured at the transaction price determined under IFRS 15. For a financial asset to be classified and measured at amortised cost or fair value through other comprehensive income (FVOCI), it needs to give rise to cash flows that are ‘solely payments of

notes to the financial statements | 69

principal and interest’ (SPPI) on the principal amount outstanding. This assessment is referred to as the SPPI test, and is performed at an instrument level.

The Expected Credit Loss model takes the following details into account:

The University’s model for managing financial assets refers to how it manages its financial assets to generate cash flows. The model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

(ii) If self-funded, is there a payment plan currently in place to settle the outstanding debt?

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date. Financial assets at FVTPL Financial assets at FVTPL include financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets with cash flows that are not SPPI are classified and measured at FVTPL, irrespective of the business model. Financial assets at FVTPL are carried in the Statement of Financial Position at fair value, with net changes in fair value recognised in the income statement. The University’s investment portfolio, which includes quoted and unquoted equity instruments and debt instruments, was previously classified as available for sale. The University’s business model is to measure and assess performance of its investments on fair value basis, and therefore has classified it as investments at fair value through profit or loss.

(i) Is the student funded by a bursor, or self-funded?

(iii) Has the student defaulted on the payment arrangement, i.e., missed a monthly payment? If points (ii) and (iii) apply, the student is considered to be of a higher credit risk, and the full outstanding balance as at year-end has been impaired. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The University’s financial assets at amortised cost includes trade receivables and student fees receivable. Financial liabilities Initial recognition and measurement All financial liabilities are initially recognised at fair value, and then subsequently measured at amortised costs, in the case of trade and other payables, loans and borrowings, net of directly attributive transaction costs. Financial liabilities at amortised cost (loans and borrowings and trade payables)

Financial assets at amortised cost (debt instruments)

This is the category most relevant to the University. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, as well as through EIR amortisation process.

The University measures financial assets at amortised costs if both of the following conditions are met:

Trade and other payables are subsequently measured at fair value through profit and loss.

• The financial asset is held with the objective to hold the financial assets to collect contractual cash flows; and

Amortised cost is calculated by taking into account any discount or premium on acquisition, and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs on the Statement of Profit and Loss.

• The contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Student receivables, trade receivables and loans are held to collect contractual cash flows, and are expected to give rise to cash flows representing solely payments of principal and interest. The University analysed the contractual cash flow characteristics of those instruments, and concluded that they meet the criteria for amortised cost measurement under IFRS 9. Financial assets at amortised cost are subsequently measured using the effective interest rate (EIR) method and are subject to impairment. The University recognised an expected credit loss (ECL) on all financial assets measured at amortised cost. The University has applied the simplified approach when calculating the ECL for trade and other receivables and student fees receivable. Changes in economic factors are taken into account when determining an ECL. The University makes use of a provision matrix to determine the expected credit losses on all receivables. The provision matrix is based on historic credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions, and assessment of both the current and forecast direction of the conditions at the reporting date, including the time value of money, where appropriate.

70 | notes to the financial statements

Derecognition A financial liability is derecognised when the obligation under the liability is cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in respect to carrying amounts is recognised in the Statement of Profit and Loss. Financial assets and financial liabilities are offset and the net amount is reported in the consolidated Statement of Financial Position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. In 2021, the University offset a trade payable with a trade receivable to the value of RNil (2020: RNil).

1.12 Inventories Inventories are measured at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale. Cost is determined on the weighted average method. The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. 1.13 Leases The University assesses at contract inception whether a contract is, or contains, a lease; that is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The University as a lessee The University applies a single recognition and measurement approach for all leases, except for short-term leases and leases with low-value assets. The University recognises lease liabilities to make lease payments, and right-of-use assets representing the right to use the underlying assets. i) Right-of-use asset The University recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for and remeasurement of lease liabilities. The cost of the right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date, less any lease incentives received. Right-of-use assets are included in property, plant and equipment in the Statement of Financial Position. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease period and the useful life of the asset, as follows: Furniture and equipment

3 to 4 years

Motor vehicles

3 to 4 years

Land and buildings

3 to 6 years

If ownership of the lease asset transfers to the University at the end of the lease term, or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use asset is subject to impairment. ii) Lease liabilities At the commencement date of the lease, the University recognises lease liabilities measured at the present value of the lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments), less any lease incentives receivables, variable lease payments that depend on an index or rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the University, and payments of penalties for terminating a lease, if the lease term reflects the University exercising the option to terminate.

Variable lease payments that do not depend on an index or rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs. When calculating the present value of lease payments, the University uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease in not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion on interest, and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there are any modifications, a change in lease term, a change in lease payments, or change in the assessment of an option to purchase the underlying asset. The University’s lease liabilities are included in the interestbearing loans and borrowings. iii) Short-term leases and low-value assets The University applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date, and do not contain a purchase option). It also applies the lease low-value assets recognition exemption to leases of office equipment that are considered to be low-value. Lease payments on short-term lease and low-value assets are recognised as an expense on a straight-line basis over the lease term. 1.14 Other employee related liabilities Short-term employee benefits University staff members, in the case of death, qualify for different categories of benefits, depending on whether they were a member of the Pension or Provident Fund. Other long-term employee benefits Certain staff members of the two heritage institutions (Cape and Peninsula Technikons) qualify for certain post-retirement medical aid benefits (refer to Note 10.2) and pension fund benefits (refer to Note 10.3). In some cases, the Institution will contribute either 50%, 66,67%, or 100% of the medical aid contributions to an approved scheme upon retirement, whilst in the case of other qualifying members, the University pays a monthly allowance to those staff members to enable them to purchase a retirement annuity which they could utilise upon retirement towards their medical aid contributions. The cost pertaining to these benefits is expensed during the period. With regards to staff members of the NTRF who qualify for defined benefits upon retirement, the University pays the shortfall as calculated by the actuaries, into the members’ fund during the year of retirement. The related cost is expensed during that period. Post-employment benefits Qualifying staff members who were employed at the University prior to 1 January 2005, accrued leave at a rate of 12 days per annum up to 31 December 2016. The accumulative leave was limited to 120 days. Upon termination of employment, the unutilised portion of this accumulative leave is paid to the staff member at the rate of pay prevailing on 31 December 2016.

notes to the financial statements | 71

2. Property, plant and equipment Land and buildings

Right-of-use assets

Leasehold improvements

Furniture and equipment

Computer equipment

Motor vehicles

Total

2 069 240 436

1 318 224 428

24 328 393

277 112 351

185 499 084

16 611 199

3 891 015 891

97 361 754

443 677 159

268 530

10 484 040

26 443 562

796 164

579 031 209

(59 250 088)

(16 852 178)

(1 787 748)

(77 890 014)

2 166 602 190

1 761 901 587

24 596 923

228 346 303

195 090 468

15 619 615

4 392 157 086

2021 Cost Cost 1 January 2021 Additions Disposals/Scrapping Cost 31 December 2021

2 069 240 436

1318 224 428

24 328 394

277 112 351

185 499 084

16 611 199

3 891 015 891

267 713 745

363 539 499

13 750 641

172 978 043

123 500 440

6 598 445

948 080 813

Depreciation charge

28 154 651

267 574 350

415 752

20 852 283

31 009 778

1 876 869

349 883 683

Disposals/Scrapping

(59 172 839)

(16 736 847)

(1 786 527)

(77 696 213)

295 868 396

631 113 849

14 166 393

134 657 487

137 773 371

6 688 787

1 220 268 283

1 870 733 794

1 130 787 738

10 430 530

93 688 816

57 317 097

8 930 828

3 171 888 803

1 965 770 446

630 794 043

24 328 393

277 037 625

167 964 792

18 851 779

3 084 747 078

107 177 116

765 381 463

16 747 955

36 403 915

50 133

925 760 582

(3 707 126)

(77 951 078)

(16 673 229)

(18 869 623)

(2 290 713)

(119 491 769)

2 069 240 436

1 318 224 428

24 328 393

277 112 351

185 499 084

16 611 199

3 891 015 891

243 617 965

134 629 042

13 286 254

173 606 797

115 937 428

9 003 595

690 081 081

Depreciation charge

27 886 449

239 104 015

464 387

15 999 118

26 364 080

1 837 093

311 655 142

Disposals/Scrapping

(3 790 669)

(10 193 558)

(16 627 872)

(18 801 068)

(4 242 243)

(53 655 410)

267 713 745

363 539 499

13 750 641

172 978 043

123 500 440

6 598 445

948 080 813

1 801 526 691

954 684 929

10 577 752

104 134 308

61 998 644

10 012 754

2 942 935 078

Accumulated depreciation Balance 1 January 2021

Balance 31 December 2021

Carrying value 31 December 2021

2020 Cost Cost 1 January 2020 Additions Disposals/Scrapping Cost 31 December 2020

Accumulated depreciation Balance 1 January 2020

Balance 31 December 2020

Carrying value 31 December 2020

A register of land and buildings is available for inspection at the business address. The University is not permitted to dispose of, or otherwise alienate, its land and buildings without the pre-approval of the Minister of Higher Education and Training. The balance for land and buildings includes R184 177 578 (2020: R184 177 578) in respect of land. There were no additions to the land balances in the current year. The Cape Suites building has been pledged as security for the First National mortgage bond of R54 084 878 (2020: R73 737 442). Included in the above line items are right-of-use assets recognised at cost and depreciated over the term of the lease.

72 | notes to the financial statements

Land and buildings

Furniture and equipment

Motor vehicles

Total

Cost As at 1 January 2021 Additions

1 258 710 484

36 079 726

23 434 218

1 318 224 428

443 677 159

Termination/modifications

as at 31 December 2021

1 702 387 643

36 079 726

23 434 218

1 761 901 587

As at 1 January 2021

(325 947 359)

(24 483 344)

(13 108 796)

(363 539 499)

Depreciation

(249 459 484)

(11 596 382)

(6 518 484)

(267 574 350)

Termination/modifications

as at 31 December 2021

(575 406 843)

(36 079 726)

(19 627 280)

(631 113 849)

Carrying value 31 December 2021

1 126 980 800

3 806 938

1 130 787 737

571 280 099

36 079 726

23 434 218

630 794 043

Additions

765 381 463

Termination/modifications

(77 951 078)

as at 31 December 2020

1 258 710 484

36 079 726

23 434 218

1 318 224 428

As at 1 January 2020

(115 639 882)

(12 434 762)

(6 554 398)

(134 629 042)

Depreciation

(220 501 035)

(12 048 582)

(6 554 398)

(239 104 015)

Depreciation

10 193 558

(325 947 359)

(24 483 344)

(13 108 796)

(363 539 499)

932 763 125

11 596 382

10 325 422

954 684 929

Accumulated depreciation

Cost As at 1 January 2020

Accumulated depreciation

as at 31 December 2020 Carrying value 31 December 2020

3. Financial assets measured at fair value through profit and loss (FVTPL) Opening balance

2021 R

2020 R

1 444 541 700

1 362 066 726

Additions

534 664 795

166 109 414

Disposals

(500 222 354)

(120 149 000)

Movement in investment market value Closing balance

188 248 477

36 514 560

1 667 232 618

1 444 541 700

Investments comprise of the following: Equities – Local

200 341 917

177 499 412

Equities – Foreign

64 973 234

69 195 621

Unit trusts – Local

1 040 309 945

851 361 646

56 385 735

63 907 448

Unit trusts – Foreign Interest-bearing bonds – Foreign

4 029 743

3 792 370

Interest-bearing bonds – Local

135 551 439

126 700 608

Money market deposits – Local

165 445 653

151 949 255

194 952

135 340

1 667 232 618

1 444 541 700

Money market deposits – Foreign Financial assets measured at fair value

Investments comprised investments in equities, interest-bearing bonds, unit trust, and money market deposits, which are all listed on recognised markets. Consequently, the only investment with fixed maturity dates are the interest-bearing bonds disclosed in Note 18. There are no significant terms and conditions attached to the investments.

notes to the financial statements | 73

4. Inventory Consumables Jewellery Food and beverage Student laptops

2021 R

2020 R

10 517 474

7 887 887

479 718

27 764

49 890

2 777 250

13 802 206

11 194 745

No inventory was written off in the current year (2020: Nil).

5. Accounts receivable and prepayments 2021 R Prepayments

2020 R 2 416 633

679 084

VAT receivable Other receivables Trade receivables Less: Provision for doubtful debts – Trade receivables

3 850 023

18 079 236

25 628 270

25 528 278

29 097 059

(10 943 751)

(18 135 641)

37 192 870

39 006 321

Accounts receivables are non-interest bearing, and are generally on 30-day terms. Other receivables consist of interest accrued on short-term deposits and other non-trade receivables. Age analysis of trade and other receivables The age analysis below is based on the balances per Note 5 above, but excluding prepayments and VAT receivable. The age analysis is based on the date of invoice or the date the receivable was raised in the accounts, depending on the nature of the transaction, such as claims from Government. The impairment is based on an expected credit loss model, and takes into account all debtors that had a balance at year-end. Debtors to the value of R10 943 751 (2020: R18 135 641) were considered high credit risk and were fully impaired. Current R

30 Days R

2021

3 542 530

1 146 054

2020

1 649 787

2 715 684

60 Days R

90 Days + R

Total R

933 835

37 985 095

43 607 514

1 406 019

48 953 839

54 725 329

Movements in the provision for impairment of trade receivables were as follows: Collectively impaired At 31 December 2019

(25 979 980)

Utilised

5 461 015

Additional provision

2 383 324

At 31 December 2020

(18 135 641)

Utilised

2 042 353

Provision released

5 149 537

At 31 December 2021

(10 943 751)

Current R

30 Days R

60 Days R

90 Days + R

Total R

2021 Expected credit loss rate Estimated total gross carrying amount at default Expected credit loss

74 | notes to the financial statements

6,55%

30,25%

58,62%

48,99%

42,87%

3 542 530

418 143

196 147

21 371 458

25 528 278

232 149

126 493

114 984

10 470 125

10 943 751

Current R

30 Days R

60 Days R

90 Days + R

Total R

2020 Expected credit loss rate Estimated total gross carrying amount at default Expected credit loss

3,47%

0,61%

43,14%

71,18%

62,33%

662 837

2 715 684

749 392

24 969 146

29 097 059

22 991

16 701

323 312

17 772 637

18 135 641

6. Student fees receivable 2021 R

2020 R

Student debtors

1 187 720 329

1 135 721 474

Less: Provision for doubtful student debts

(797 272 010)

(844 001 417)

390 448 319

291 720 057

Annual fees are payable in monthly instalments from February to November at a rate of 10% of the fees. Semester fees are payable in monthly instalments at a rate of 20% of the fees from February to June for the first semester, and from July to November for second semester students, respectively. When calculating the student debt provision, the University considers all forward-looking information available at the reporting date in respect of student debtors to be R797 272 010 (2020: R884 001 417). The remaining student balance R390 448 319 (2020: R291 720 057) relates to student fees from currently registered students and externally funded students, which are considered a low credit risk and have not been impaired. Age analysis of student fees receivable The table below provides the age analysis of student fees receivable (before provisions) as at 31 December 2021. Due to the nature of its operations, the University only tracks outstanding fees on an academic year basis. All outstanding balances are past due. Less than 1 year R

Between 1–3 years R

More than 3 years R

Total R

2021

394 917 216

395 377 779

397 425 334

1 187 720 329

2020

420 155 527

418 653 751

296 912 196

1 135 721 474

Movements in the provision for impairment of student fees receivable were as follows: Collectively impaired At 31 December 2019

(671 996 310)

Provision utilised

65 918 286

Additional provision

(237 923 393)

At 31 December 2020

(844 001 417)

Provision utilised

92 936 282

Additional provision

(46 206 875)

At 31 December 2021

(797 272 010) Less than 1 year R

Between 1–3 years R

More than 3 years R

Total R

2021 63.38%

76,60%

61,43%

67,13%

Estimated total gross carrying amount at default

Expected credit loss rate

394 917 216

395 377 779

397 425 334

1 187 720 329

Expected credit loss

250 279 923

302 863 705

244 128 382

797 272 010

Less than 1 year R

Between 1–3 years R

More than 3 years R

Total R

2020 Expected credit loss rate

38,13%

94,50%

97,05%

74,31%

Estimated total gross carrying amount at default

420 155 527

418 653 751

296 912 196

1 135 721 474

Expected credit loss

160 223 410

395 629 278

288 148 729

844 001 417

notes to the financial statements | 75

7. Cash and cash equivalents 2021 R

2020 R

Cash at bank and on hand

396 050 728

72 253 328

Short-term bank deposits

400 000 000

550 000 000

796 050 728

622 253 328

Cash at bank earns interest at floating rates based on daily bank deposit rates, whilst short-term deposits earn interest at a fixed rate. The fair value of cash and cash equivalents is R796 050 728 (2020: R622 253 328). The University held R400 000 000 (2020: R550 000 000) on short-term bank deposits at year-end. These deposits are at market related fixed rates which mature within 3 months. They are classified as cash equivalents, as they are considered readily accessible prior to maturity. The interest rate of all short-term deposits held throughout the period was between 3,93%–5,025% (2020: 3,030%–7,713%).

8. Interest-bearing borrowings 8.1 Interest-bearing borrowings 2021 R Current State loans Lease liability Financial institution loans

Non-current State loans Lease liability Financial institution loans

2020 R

196 706 621

229 576 933

109 499

126 151

180 046 210

214 258 292

16 550 912

15 192 490

1 078 001 839

858 053 146

42 827

152 327

1 040 425 045

799 355 866

37 533 967

58 544 953

1 274 708 460

1 087 630 079

State loans These loans all have fixed interest rates ranging from 9,00%–13,22% (2020: 9.00% -13.22%) and varying repayment terms. They are unsecured and subsidised to the extent of 85% for both interest and capital repayments, which are included in the University’s annual subsidy allocation. Lease liabilities The University leases a number of buildings for student accommodation, with lease periods ranging between 2–7 years. The leases are treated as a lease liability, and the liability is valued based on the present value of future lease payments, which have been discounted using an incremental borrowing interest rate between 5,8%–8,9% (2020: 8%-8,6%). The University leases buses for the transportation of students, as well as office equipment with lease periods of 3–4 years. The leases are treated as a lease liability, and the liability is valued based on the present value of future lease payments, which have been discounted using an incremental borrowing interest rate of 7,5%. The lease liability increased by R441 382 357 (2020: R765 381 463) in the current year. Per IFRS 16, the interest on the additional lease liability will accrue on the balance at an incremental interest rate varying between 7,5%–8,9% over the life of each lease. As at 31 December 2021, the lease liability is R1 220 471 255 (2020: R1 013 614 158), and the interest charged in respect of the liability in 2021 is R97 474 838 (2020: R93 159 388). The leased premises shall be used as student accommodation, provided that such use does not contravene any town planning conditions applicable in respect of the property, and for no other purpose without the prior consent from the landlord, which consent

76 | notes to the financial statements

shall not be unreasonably withheld or delayed. Financial institutions loans First National Bank A commercial property finance loan of R150 000 000 in respect of Cape Suites was registered at the Deeds Office on 28 October 2014, and as at 31 December 2021, the balance outstanding on the facility was R54 084 879 (2020: R73 737 443). The mortgage bond is for a 10-year period, and semi-annual payments of R11 648 320 (2020: R11 273 487) are due on 1 May and 1 November each year. The bond bears interest at prime rate less 1,50%, compounded monthly. The Cape Suites residence is pledged as security against this mortgage bond. 2021 R

2020 R

Not later than 1 year

273 741 266

292 852 347

Later than 1 year and not later than 5 years

900 092 288

755 067 769

After 5 years

403 053 824

234 116 136

1 576 887 378

1 282 036 252

Future finance charges on lease liability

(356 416 123)

(268 422 094)

Present value of lease liabilities

1 220 471 255

1 013 614 158

Not later than 1 year

180 036 884

214 258 292

Later than 1 year and not later than 5 years

694 681 843

584 259 072

After 5 years

345 752 528

215 096 794

1 220 471 255

1 013 614 158

The present value of lease liabilities is analysed as follows:

8.2 Changes in liabilities arising from financing activities 1 January 2021 State loans Lease liability

New loan

Terminations

Finance charges

Cash flow – Principle

Cash flow – Finance charges

31 December 2021

278 478

31 292

(126 152)

(31 292)

152 326

1 013 614 158

441 382 357

97 474 838

(234 525 260)

(97 474 838)

1 220 471 255

73 737 443

3 644 079

(19 652 564)

(3 644 079)

54 084 879

1 087 630 079

441 382 357

101 150 209

(254 303 976)

(101 150 209)

1 274 708 460

Cash flow – Principle

Cash flow – Finance charges

31 December 2020

Financial institution loans

1 January 2020 State loans

New loan

Terminations

Finance charges

622 383

56 982

(343 905)

(56 982)

278 478

Lease liability

508 810 449

765 381 463

(70 883 712)

93 159 388

(189 694 042)

(93 159 388)

1 013 614 158

Financial institution loans

100 700 843

5 033 672

(26 963 400)

(5 033 672)

73 737 443

610 133 675

765 381 463

(70 883 712)

98 250 042

(217 001 347)

(98 250 042)

1 087 630 079

9. Finance costs 2021 R State loans Lease liability

2020 R

31 292

56 982

97 474 838

93 159 388

Financial institution loans

3 644 079

5 033 672

Interest on grant funding

9 576 786

23 336 045

110 726 995

121 586 087

Total finance costs

notes to the financial statements | 77

10. Other employee benefits 10.1 Employee leave liability 2021 R

2020 R

Accumulated leave Accumulated leave accrual – Balance at beginning of year

35 437 000

35 429 891

Provision utilised

(6 861 085)

(4 532 605)

Unwinding of discounting Accumulated leave accrual – Balance at end of year Current balance Non-current balance

4 067 086

4 539 714

32 643 001

35 437 000

9 322 000

9 366 000

23 321 001

26 071 000

32 643 001

35 437 000

38 110 258

17 001 503

Annual leave Annual leave accrual – Balance at beginning of year Accrual realised

(38 110 258)

(17 001 503)

Accrual raised

31 166 680

38 110 258

Annual leave accrual – Balance at end of year

31 166 680

38 110 258

Current balance

31 166 680

38 110 258

Non-current balance

Employee leave liability

31 166 680

38 110 258

63 809 681

73 547 258

Accumulated leave A provision is made for the estimated liability for accumulative leave as a result of services rendered by employees up to 31 December 2016. As the University is expecting to pay out the liability over more than one financial year, the long-term portion has been classified as non-current. Annual leave Employees are allowed to utilise the balance of the annual leave entitlement that has accrued to them at the date of the Statement of Financial Position at 31 December 2021 for 6 months after the reporting date. This benefit only vests with the employee in the year in which they accrue. A liability has been recognised and provides for the additional amount that the University is expected to pay as a result of the unused entitlement that has accumulated as at 31 December 2021. The University has made the assumption that all staff will utilise the entitlement within the 6 months, and thus recognises this as a current liability. 10.2 Post-retirement medical aid obligation The University operates defined benefit medical aid schemes for the benefit of permanent employees. Prior to the formation of the merged institution, both former technikons had separate contractual obligations to provide post-retirement medical benefits to qualifying employees. The obligation in respect of the former Peninsula Technikon is funded by a plan asset, whereas the obligation in respect of the former Cape Technikon is unfunded. Both obligations are actuarially valued and accounted for separately, as the University does not have the legal right to offset the plan assets in respect of the former Peninsula Technikon scheme against the liabilities that arise on the former Cape Technikon scheme. An explanation of each individual scheme and a reconciliation of the movement in the obligation in the scheme is set out separately below. Former Peninsula Technikon Scheme In terms of employment contracts, post-retirement medical benefits are provided to certain employees who commenced employment at the former Peninsula Technikon prior to 1 January 1999 by subsidising the medical aid contributions of retired employees. The University’s future obligation in respect of these post-retirement medical aid contributions is actuarially valued annually by independent, professional qualified actuaries using the projected unit credit method. The last valuation was performed as at 31 December 2021, and the principal actuarial assumptions used in the valuation were as follows:

78 | notes to the financial statements

2021

2020

Discount rate

10,13%

9,45%

Return on plan assets

10,13%

9,45%

Medical inflation

7,18%

5,83%

Retirement age

63 yrs

% married on retirement

0,9

Mortality – Active (rated down 3 years for females)

SA 85-90

Mortality – Pension (rated down 2 years)

PA (90-1)

With effect 1 May 2003, a group annuity policy was created, which meets the definition of a plan asset in terms of IAS 19. The fair value of the plan asset at 31 December 2021 of R62 555 150 (2020: R66 994 962) has therefore been set off against the funding obligation. Movement in net post-retirement medical obligation Post-retirement medical obligation 2021

2020

R Balance at 1 January 2021

Net post-retirement medical obligation

Fair value of plan assets 2021

2020

2021

2020

205 270 000

204 537 462

(66 994 962)

(74 895 167)

138 275 038

129 642 295

395 000

428 928

395 000

428 928

18 845 000

18 653 950

(5 916 000)

(7 025 167)

12 929 000

11 628 783

19 240 000

19 082 878

(5 916 000)

(7 025 167)

13 324 000

12 057 711

15 193 000

(13 662 000)

15 193 000

(13 662 000)

2 689 000

1 750 465

(3 083 878)

1 750 465

(394 878)

(2 706 000)

5 580 644

(2 706 000)

5 580 644

487 000

Included in profit and loss Current service costs Interest expense/(income)

Included in other comprehensive income (OCI) Remeasurements loss/(gain): Actuarial loss/(gain) arising from: Basis changes: Increase in net discount rate Medical inflation higher than assumed Changes to membership profile different from assumed Application of post-employment mortality improvement Subsidy increase higher/(lower) than expected Actual benefits vested, (lower) than expected Change in assumptions

3 441 000

(1 849 000)

3 441 000

(1 849 000)

(1 440 543)

(1 124 875)

(1 440 543)

(1 124 875)

9 027 037

14 487 457

(7 879 231)

1 750 465

5 943 159

16 237 922

(1 936 072)

(10 544 457)

(10 471 109)

8 605 347

8 982 213

(1 939 110)

(1 488 896)

(10 544 457)

(10 471 109)

8 605 347

8 982 213

(1 939 110)

(1 488 896)

228 453 000

205 270 000

(62 555 150)

(66 994 962)

165 897 850

138 275 038

165 897 850

138 275 038

Other Benefits paid

Balance at 31 December 2021 Represented by: Net post-retirement medical obligation: Former Peninsula Technikon

Plan assets Assets are held in a level annuity and SIM Absolute fund that is held with Sanlam, which have been set aside to fund the University’s post-employment health care liability. This policy pays a level annuity until the death of the member and their spouse (if applicable). This annuity is increased annually, depending on the performance of a growth portfolio and the option that the member is on. Increases are not guaranteed. The plan assets therefore meet the definition of a qualifying insurance policy as per the accounting statement, and its fair value is deemed to be the present value of the contribution members’ liability, on the IAS 19 basis. The growth of the portfolio is R5 916 000 (2020: R7 025 167) as at the valuation date.

notes to the financial statements | 79

2021 R Total assets

2020 R

(62 555 150)

(66 994 962)

(62 555 150)

(66 994 962)

Sensitivity analysis Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the obligation by the amounts shown below. 1% increase

Valuation basis

1% decrease

1% increase and decrease in the assumed rate of health care cost inflation on the liability

254 769 000

228 453 000

206 110 000

1% increase and decrease in the discount rate

205 915 000

228 453 000

255 414 000

1% increase and decrease in the assumed rate of health care cost inflation on employer's service and interest cost

21 524 000

19 240 000

17 303 000

1% increase and decrease in the assumed discount rate on employer's service and interest cost

19 099 000

19 240 000

19 330 000

One year age reduction in post-retirement mortality on employer's service and interest cost

20 008 000

19 240 000

One year age reduction in the assumed rates of post-retirement mortality

229 949 000

228 453 000

An absolute reduction of 10% in the continuation rates at retirement

224 475 000

228 453 000

1% increase and decrease in the assumed rate of health care cost inflation on the liability

228 369 000

205 270 000

185 602 000

1% increase and decrease in the discount rate

2021

2020

185 524 000

205 270 000

228 807 000

1% increase and decrease in the assumed rate of health care cost inflation on employer's service and interest cost

21 426 000

19 082 878

17 102 600

1% increase and decrease in the assumed discount rate on employer's service and interest cost

18 879 200

19 082 878

19 240 100

One year age reduction in post-retirement mortality on employer's service and interest cost

19 886 200

19 082 878

One year age reduction in the assumed rates of post-retirement mortality

206 876 000

205 270 000

An absolute reduction of 10% in the continuation rates at retirement

201 483 000

205 270 000

Therefore, a 1% increase in the health care cost inflation assumption would result in a 12% (2020: 11%) increase in the accrued liability. Similarly, a 1% decrease in the health care cost inflation assumption would result in a 10% (2020: 10%) decrease in the accrued liability. Contributions to the plan for 2022 are expected to amount to R12 744 000 (2021: R11 985 000). Former Cape Technikon Scheme The former Cape Technikon operated a post-retirement medical benefit scheme for retired and certain employees who joined the institution prior to 1 January 2003. The University’s future obligation in respect of these post-retirement medical aid contributions is actuarially valued annually by independent, professional qualified actuaries using the projected unit credit method. The last valuation was performed as at 31 December 2021, and the principal actuarial assumptions used in the valuations were as follows: 2021 Discount rate

2020

10,26%

9,81%

Medical inflation

7,20%

6,13%

Retirement age

63 yrs

0,9

% married on retirement Mortality – Active (rated down 3 years for females)

SA 85-90

Mortality – Pension (rated down 2 years)

PA (90-1)

80 | notes to the financial statements

Movement in net post-retirement medical obligation Post-retirement medical obligation

Net post-retirement medical obligation

Fair value of plan assets

2021

2020

2021

2020

2021

2020

466 903 184

461 330 001

466 903 184

3 777 000

3 871 552

3 777 000

3 871 552

44 206 000

43 867 896

44 206 000

43 867 896

47 983 000

47 739 448

47 983 000

47 739 448

38 413 000

(36 301 000)

38 413 000

(36 301 000)

6 303 000

(2 612 000)

6 303 000

(2 612 000)

Changes to membership profile different from assumed

(1 483 000)

(3 300 507)

(1 483 000)

(3 300 507)

Application of post-employment mortality improvement

3 678 000

Decrease in assumed average retirement age

6 555 000

1 437 267

282 376

1 437 267

282 376

44 670 267

(31 698 131)

44 670 267

(31 698 131)

(23 359 268)

(21 614 500)

(23 359 268)

(21 614 500)

(23 359 268)

(21 614 500)

(23 359 268)

(21 614 500)

530 624 000

461 330 001

530 624 000

461 330 001

Represented by: Net post-retirement medical obligation: Former Peninsula Technikon

530 624 000

461 330 001

Total university post-retirement medical aid obligation

696 521 850

599 605 039

Balance at 1 January 2021

461 330 001 439 427 873

Profit and loss Current service costs Interest expense

Included in other comprehensive income (OCI) Remeasurements gain: Actuarial loss/(gain) arising from: Basis changes: Increase in net discount rate Medical inflation higher than assumed

Changes to membership profile different from assumed

Other Benefits paid

Balance at 31 December 2021

Valuation basis R

1% decrease R

2021 1% increase and decrease in the assumed rate of health care cost inflation on the liability

601 420 000

530 624 000

471 732 000

1% increase and decrease in the discount rate

471 576 000

530 624 000

602 685 000

1% increase and decrease in the assumed rate of health care cost inflation on employer's service and interest cost

54 581 000

47 983 000

42 318 000

1% increase and decrease in the assumed discount rate on employer's service and interest cost

46 372 000

47 983 000

49 746 000

One year decrease in post-retirement mortality on employer’s service and interest costs

49 967 000

47 983 000

One year age reduction in the assumed rates of post-retirement mortality

553 277 000

530 624 000

One year decrease in the assumed average retirement age

536 441 000

530 624 000

An absolute reduction of 10% in the continuation rates at retirement

512 554 000

530 624 000

notes to the financial statements | 81

1% increase R

Valuation basis R

1% decrease R

2020 1% increase and decrease in the assumed rate of health care cost inflation on the liability

521 873 000

461 330 001

410 904 000

1% increase and decrease in the discount rate

410 989 000

461 330 001

522 624 000

1% increase and decrease in the assumed rate of health care cost inflation on employer's service and interest cost

54 918 100

47 739 448

41 841 500

1% increase and decrease in the assumed discount rate on employer's service and interest cost

45 906 500

47 739 448

49 755 100

One year decrease in post-retirement mortality on employer’s service and interest cost

47 908 100

47 739 448

One year age reduction in the assumed rates of post-retirement mortality

442 668 000

461 330 001

One year decrease in the assumed average retirement age

466 859 000

461 330 001

An absolute reduction of 10% in the continuation rates at retirement

444 999 000

461 330 001

Therefore, a 1% increase in the health care cost inflation assumption would result in a 13% (2020: 13%) increase in the accrued liability. Similarly, a 1% decrease in the health care cost inflation assumption would result in an 11% (2020: 11%) decrease in the accrued liability. Contributions to the plan for 2022 are expected to amount to R24 241 000 (2021: R21 992 000). 10.3 Pension fund obligation 10.3.1 Pension fund – Defined contribution Staff of the former Peninsula Technikon belong to the National Tertiary Retirement Fund (NTRF). This is a defined contribution scheme, with certain conditional benefits. (See Note 10.3.2). Staff of the former Cape Technikon belong to the Cape Peninsula University of Technology Retirement Fund (previously known as the Cape Technikon Retirement Fund). This is a defined contribution scheme. 10.3.2 Pension fund obligation The NTRF is essentially a defined contribution fund with conditional benefits to employees transferred from the AIPF (State Pension Fund) and who have not since surrendered this benefit through an official buy out. At retirement age (60 years or older), the employee has a choice to retire with the fund balance or the actuarial value of the fund according to AIPF formula. During 2003, the Peninsula Technikon agreed with employees to fund any shortfall on the benefit on a pay-as-you-go basis. The actuarially calculated shortfall at 31 December 2021 amounted to R15 866 543 (2020: R19 566 308). Actuarial assumptions The following were the principal actuarial assumptions at the reporting date:

2021

2020

Discount rate per annum

7,03%

7,72%

Salary increase per annum

3,28%

4,54%

Actual rate of return on assets

5,50%

7,72%

Pensions increase per annum

1,95%

SA 56-62

PA 90-1

Mortality tables – Active staff (rated down 1 year males; 4 years females) Mortality tables – Pensioners (rated down 2 years)

82 | notes to the financial statements

Movement in net pension fund conditional liability Pension fund conditional obligation

Net pension fund conditional obligation

Fair value of plan assets

2021

2020

2021

2020

2021

2020

7 317 610

19 566 308

7 317 610

396 229

135 624

396 229

135 624

1 045 009

564 719

1 045 009

564 719

1 441 238

700 343

1 441 238

700 343

(4 037 722)

12 570 732

(4 037 722)

12 570 732

Change in demographic assumptions

215 186

(1 237 250)

215 186

(1 237 250)

Investment returns on member shares

(1 960 216)

(1 905 850)

(1 960 216)

(1 905 850)

1 622 890

(168 993)

1 622 890

(168 993)

152 111

2 289 716

152 111

2 289 716

(4 007 751)

11 548 355

(4 007 751)

11 548 355

(1 133 252)

15 866 543

19 566 308

15 866 543

19 566 308

15 866 543

19 566 308

Balance at 1 January 2021

19 566 308 439 427 873

Profit and loss Current service costs Interest expense

439 427 873

Other comprehensive income (OCI) Remeasurements loss/(gain): Actuarial loss/(gain) arising from: Change in economic assumptions

Other miscellaneous items Salary increases

Other Contributions paid by the employer Benefits paid

Balance at 31 December 2021 Represented by: Net pension fund conditional liability

Valuation basis R

1% decrease R

2021 1% increase and decrease in the discount rate

5 754 000

15 866 543

29 182 000

1% increase and decrease in the inflation rate

17 430 000

15 866 543

14 395 000

Pension increase rate (70% CPI)

27 288 000

15 866 543

7 016 000

Expected retirement age (NRA 65)

11 084 000

15 866 543

1% increase and decrease in the discount rate

9 907 135

19 566 308

31 468 391

1% increase and decrease in the inflation rate

21 451 744

19 566 308

17 793 702

Pension increase rate (70% CPI)

29 142 947

19 566 308

11 512 170

Expected retirement age (NRA 65)

13 246 171

19 566 308

2020

notes to the financial statements | 83

11. Accounts payable and accrued liabilities 2021 R Trade payables and accrued expenses

2020 R

205 986 060

195 123 984

Student creditors and deposits

94 596 001

59 581 380

Other payables

11 197 504

7 000 866

Nominated bursaries

77 169 329

80 698 585

388 948 894

342 404 815

Trade and other payables and accrued expenses are non-interest bearing, and are normally settled on 30-day terms.

12. State appropriations – Subsidies and grants 2021 R Subsidy for general purpose

2020 R

1 487 261 001

1 434 056 801

9 349 300

9 169 300

180 000

Foundation programme grant

45 640 000

46 526 000

Clinical training programme grants

15 692 487

7 183 610

Research development grants

53 430 767

78 060 822

133 827

340 754

University Capacity Development Grant

23 983 623

19 035 894

National Research Fund

19 866 994

14 712 929

National skills levy

2 443 135

1 907 794

Provincial radiography subsidy

6 166 227

3 800 947

1 663 967 361

1 614 974 851

DHET infrastructure grant released to income DHET infrastructure grant recognised DHET capital grant recognised

Subsidy for interest and redemption on state guaranteed loans

Total

Included in the above are the below Government grants released to income. See Note 17.2

University Capacity Development Grant Clinical training programme grants Foundation programme grant Research development grants

84 | notes to the financial statements

32 640 505

19 116 279

3 941 193

15 692 487

7 183 610

2 807 330

16 948 018

5 184 146

13. Revenue from contracts with customers 13.1 Revenue from contracts with customers 2021 R Tuition and residence fees Gross tuition and residence fees Less: Bursaries and rebates awarded

1 278 682 852

1 135 395 394

1 322 507 810

1 212 015 850

(43 824 958)

(53 241 548)

(23 378 908)

57 294 175

69 120 653

1 335 977 027

1 204 516 047

Less: Tuition fees deferred due to extended academic year Rendering of services Total revenue from contracts

2020 R

For the current year, there is no income from commercial research contracts that conclude post financial year-end. 13.2 Contract income liability The University received contract income of R9 011 592 (2020: R5 545 485) for various research projects. No amounts regarding research projects have been deferred, as all the performance obligations stated in the contract have been satisfied at the reporting date. As the University has an obligation in terms of the contract to satisfy these performance obligations on a specific date no later than 12 months after the reporting date, the liability is considered to be current. The University has a contractual obligation to provide the students with tertiary education, for which they are being charged tuition fees. These obligations were met at year-end, and RNil (2020: R23 378 908) of the tuition was deferred to the 2021 financial year.

2021 R Contract income from customers subject IFRS 15 Contract amount recognised in current financial year Contract income deferred

2020 R

23 378 908

(23 378 908)

23 378 908

14. Interest income and dividends 2021 R

2020 R

Bank interest

25 084 696

29 200 698

Interest

26 213 826

29 917 904

Dividends

16 888 302

22 811 813

Total

68 186 824

81 930 415

notes to the financial statements | 85

15. Other operating expenses 2021 R

2020 R

690 310 826

560 876 771

Repairs and maintenance – Land and buildings

50 853 055

43 748 928

Repairs and maintenance – Moveable assets

13 952 215

14 100 292

133 739 934

76 706 247

Software licenses and consumables

10 751 892

14 911 693

General services

60 754 315

30 075 464

Fixed property rentals (Short-term rentals)

32 449 864

35 530 723

1 717 428

6 685 817

Unnominated bursaries and rebates awarded

60 447 631

51 060 121

Auditors' remuneration

10 449 092

8 778 660

External audit fees

5 903 211

5 723 182

Internal audit fees

4 545 881

3 055 478

Total other operating expenses

The following items are included in other operating expenses:

Water, electricity and sewerage

Equipment rentals

16. Personnel costs Academic professional

Other personnel

Total

Year ended 31 December 2021 Wages and salaries Movement in pension fund obligation Movement in accumulated leave pay provision Movement in annual leave pay provision Retirement fund – Defined contribution Movement in post-retirement medical aid obligation Total personnel costs

708 250 958

835 110 379

1 543 361 337

735 031

706 207

1 441 238

(1 816 099)

(977 900)

(2 793 999)

(29 857)

(6 913 721)

(6 943 578)

104 936 911

56 504 492

161 441 403

31 266 570

30 040 430

61 307 000

843 343 514

914 469 887

1 757 813 401

675 117 001

734 725 022

1 409 842 023

357 175

343 168

700 343

4 621

2 488

7 109

90 768

21 017 988

21 108 756

102 750 940

55 327 430

158 078 370

30 496 551

29 300 608

59 797 159

808 817 056

840 716 704

1 649 533 760

Year ended 31 December 2020 Wages and salaries Movement in pension fund obligation Movement in accumulated leave pay provision Movement in annual leave pay provision Retirement fund – Defined contribution Movement in post-retirement medical aid obligation Total personnel costs

86 | notes to the financial statements

Average number of persons employed during the year 2021

2020

Permanent employees

2 836

2 828

Contract employees

3 562

3 300

Total

6 398

6 128

17. Deferred income 17.1 Government grants relating to assets According to IAS 20, Government grants relating to assets will be recognised as income over the period necessary to match them with the related costs which they are intended to compensate, on a systematic basis. The deferred revenue will be recognised as income on a systematic and rational basis over the useful life of the assets. Included in the deferred income below is also the infrastructure and efficiency grant. The deferred revenue will be recognised as the maintenance expenditure is incurred. Upon receipt of an earmarked grant from DHET, the University is instructed to hold the funds in an interest-bearing account. Should the University wish to utilise the interest earned on the unspent funds, it has to get permission from DHET, and the interest can only be used on the specific project for which permission is granted. The University will defer the interest until such time that permission is granted to use it.

2021 R Opening balance – Deferred income Amount raised – Infrastructure grant received Released to income Interest earned on unspent funds Closing balance – Grant relating to assets

2020 R

1 011 360 676

884 373 931

149 871 000

113 000 000

(9 349 300)

7 585 591

23 336 045

1 159 467 967

1 011 360 676

17.2 Government grants – Other This relates to Government grants other than infrastructure, and according to IAS 20, Government grants relating to projects will be recognised as income over the period necessary to match them with the related costs which they are intended to compensate, on a systematic basis. These funds are released over two financial reporting periods. The deferred revenue will be recognised as income on a systematic and rational basis over the period of the project.

2021 R

2020 R

Opening balance

60 586 626

42 822 837

Amount raised – Grant received

33 422 953

36 880 068

Released to income

(32 640 505)

(19 116 279)

Released to income

1 991 195

Closing balance – Government grants – Other

63 360 269

60 586 626

Current balance

11 249 560

11 249 563

1 211 578 676

1 060 697 739

1 222 828 236

1 071 947 302

Non-current balance

notes to the financial statements | 87

18. Financial risk management objectives and policies The University’s principal financial instruments comprise investments, accounts receivable, student fees receivable, cash and short-term deposits, interest-bearing borrowings, accounts payable, and accrued liabilities. The University manages a substantial portfolio of investments with a long-term view to growing the portfolio in order to provide financial stability and support for new initiatives of the University. The main purpose of the interest-bearing loans and borrowings is to raise finance for the University’s capital building projects. The University has various other financial assets and liabilities, such as accounts and student fees receivable and accounts payable, which arise directly from its operations. The main risks arising from the University’s financial instruments are market risk, credit risk and liquidity risk. Council, through its Finance Committee, reviews, and agrees on policies for managing each of these risks, and they are summarised below. Market risk 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: price, currency and interest rate risks. The University’s exposure to market risk relates primarily to its investments and loans. The University’s investments are managed by selected portfolio managers who operate under defined mandates, which are designed to limit the exposure of the University. The investment decisions made and performances of these managers are closely monitored by the Finance Committee. This Committee comprises members of the University’s Council and executive management members with specific expertise relating to investments. Interest rate risk The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The University’s interest-bearing borrowings are a combination of fixed and floating rates of interest. The University has a number of receivables where interest rates charged are linked to the prime rate. The University did not charge any interest on student fees receivable for the current year (2020: RNil). The University holds a substantial amount of interest-bearing investments and interest earning bank deposits. Interest risks relating to the University’s investments are managed by selected portfolio managers. The following table demonstrates the sensitivity of the University’s financial assets and liabilities that are subject to interest rate risk to a reasonable change in market values, with all other variables constant. The effect of these are considered on a net basis.

Impact of interest rate changes on net surplus and accumulated funds Interest rate change (BP) +200 BP

+100 BP

-100 BP

-200 BP

(3 465 672)

(1 732 836)

1 732 836

3 456 672

(3 650 414)

(1 825 207)

1 825 207

3 650 414

At 31 December 2021 Net financial assets

At 31 December 2020 Net financial assets

*The net financial assets have been adjusted to include the money market and interest-bearing bonds Price risk The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices (other than those arising from interest rate and currency risks). The University is exposed to price risk in respect of its investment portfolio. The University manages this risk through investing in a wide variety of assets. The following table demonstrates the sensitivity of the University’s financial assets that are subject to price risk to a reasonable change in market values, with all other variables constant.

88 | notes to the financial statements

Impact of market variances on net surplus and accumulated funds Market variance +10%

+5%

-5%

-10%

20 034 192

10 017 096

(10 017 096)

(20 034 192)

Equities – Foreign

6 497 323

3 248 662

(3 248 662)

(6 497 323)

Unit trusts – Local

104 030 995

52 015 497

(52 015 497)

(104 030 995)

5 638 574

2 819 287

(2 819 287)

(5 638 574)

402 974

201 487

(201 487)

(402 974)

13 555 144

6 777 572

(6 777 572)

(13 555 144)

17 749 941

8 874 971

(8 874 971)

(17 749 941)

Equities – Foreign

6 919 562

3 459 781

(3 459 781)

(6 919 562)

Unit trusts – Local

85 136 165

42 568 082

(42 568 082)

(85 136 165)

6 390 745

3 195 372

(3 195 372)

(6 390 745)

379 237

189 619

(189 619)

(379 237)

12 670 061

6 335 030

(6 335 030)

(12 670 061)

At 31 December 2021 Equities – Local

Unit trusts – Foreign Interest-bearing bonds – Foreign Interest-bearing bonds – Local At 31 December 2020 Equities – Local

Unit trusts – Foreign Interest-bearing bonds – Foreign Interest-bearing bonds – Local

Foreign currency risk The University is exposed to foreign currency risk to the extent that it has accounts receivable and payable balances denominated in foreign currencies. The amount of such balances is negligible at year-end. Credit risk The risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The University trades only with recognised, credit worthy third parties. In addition, receivable balances are monitored on an ongoing basis, with the result that the University’s exposure to bad debts, with the exception of student fee receivables, is not significant, and there is no significant concentration of credit risk at year-end. The maximum exposure is the carrying amount reflected in Notes 5, 6 and 7 (excluding prepayments and VAT receivable). In respect of trade and other receivables, the debtors would be considered to be a higher risk if they have defaulted, i.e., not made payment within 30 days of invoice issued, and show any economical signs of not being able to settle the debt. Trade debtor to the value of R10 943 751 (2020: R18 135 641) was fully impaired. With regards to student debtors, both tuition and residence fees are charged at the beginning of the academic year that coincides with the financial year, students have to settle their tuition fees within that specific financial year. Any outstanding debt as at year-end has been accessed using the Expected Credit Loss model (ECL), taking the following details into account: (i) Is the student funded by a bursor, or self-funded? (ii) If self-funded, is there a payment plan currently in place to settle the outstanding debt? (iii) Has the student defaulted on the payment arrangement, i.e., missed a monthly payment? If points (ii) and (iii) apply, the student is considered to be of a higher credit risk, and the full outstanding balance as at year-end has been impaired. Student debtors to the value of R797 272 010 (2020: R844 001 417) were fully impaired. Student debtors that have not had any movement in the 3 preceding years will be written off. Similarly, trade and other receivables that have not had any movement in the 12 months prior to year-end will also be written off. All credit risk associated with student receivables is adequately provided for. The outstanding fees balance at year-end is as follows:

notes to the financial statements | 89

Number of students 2021

Outstanding balance at 31 December 2021

Number of students 2020

Outstanding balance at 31 December 2020

Up to R10 000

45 589

56 176 447

45 397

67 479 747

R10 001 to R30 000

14 270

280 784 242

15 784

305 540 472

R30 001 to R50 000

6 985

270 389 545

6 800

263 118 577

>R50 000

8 494

580 370 095

7 017

499 582 678

75 338

1 187 720 329

74 998

1 135 721 474

Range of balances

Provision for impairment of student debtors illustrated as a percentage of gross student debtors with balances outstanding at year-end.

2021

2020

Gross student debtors

1 187 720 329

1 135 721 474

Provision for doubtful debts

(797 272 010)

(844 001 417)

390 448 319

291 720 057

67,13%

74,31%

Net student debtors Provision as a % of gross student debtors

With respect to credit risk arising from the other financial assets of the University, which comprise cash and cash equivalents, and investment assets measured at FVTPL, the University’s exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments. The University only places cash and cash deposits with major financial institutions with good credit ratings. The University considers financial assets which are neither past due nor impaired to be fully recoverable. Fair values Set out below is a comparison by category of carrying amounts and fair values of all of the University’s financial instruments. Carrying value amounts

Fair value amounts

Carrying value amounts

2021

Fair value amounts 2020

1 667 232 618

1 444 541 700

32 663 763

36 589 688

Student fees receivable

390 448 319

291 720 057

Cash and cash equivalents

796 050 728

622 253 328

1 274 708 460

1 275 078 107

1 087 630 079

1 087 873 573

152 326

521 973

278 478

521 973

1 274 556 134

1 087 351 601

1 087 351 600

388 948 894

342 404 815

Financial assets Financial assets measured at FVTPL Accounts receivable (excluding prepayments, VAT receivable)

Financial liabilities Interest-bearing borrowings: Fixed rate borrowings Floating rate borrowings Accounts payable and accrued liabilities

The fair value of interest-bearing borrowings has been calculated by discounting the expected future cash flows at prevailing market interest rates. It should be noted that the fair value of fixed rate borrowings is impacted by the fact that these loans are subsidised by the State. (Refer to Note 8). The fair value of short-term financial assets and liabilities approximates their carrying values. The fair value of investments is based on quoted bid-market prices at the Statement of Financial Position date. The table below reflects the fair values of financial instruments, including their levels in the fair value hierarchy. It does not include fair value information for financial instruments not measured at fair value if the carrying amount is a reasonable approximation of the fair value.

90 | notes to the financial statements

Level 1

Level 2

Level 3

Total

As at 31 December 2021 Financial assets Equities – Local

200 341 917

Equities – Foreign

64 973 234

Unit trusts – Local

1 040 309 945

Unit trusts – Foreign

56 385 735

Interest-bearing bonds – Local

98 869 791

36 681 648

135 551 439

Interest-bearing bonds – Foreign

4 029 743

Money market deposits – Local

165 445 653

Money market deposits – Foreign

194 952

1 460 880 622

206 351 996

1 667 232 618

177 499 412

Equities – Foreign

69 195 621

Unit trusts – Local

851 361 646

Unit trusts – Foreign

63 907 448

Interest-bearing bonds – Local

96 644 714

30 055 894

126 700 608

Interest-bearing bonds – Foreign

3 792 370

Money market deposits – Local

151 949 255

Money market deposits – Foreign

135 340

1 258 608 841

185 932 859

1 444 541 700

Total As at 31 December 2020 Financial assets Equities – Local

Total

The University uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: • Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities. • Level 2: Consists of money market investments held with financial institutions. The fair value of these deposits is determined using a discounted cash flow valuation methodology based on market rates, reflecting time, value of money and counter-party risk. The fair value of the quoted notes and bonds are based on price quotations at the reporting date. • Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs). Liquidity risk The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The timing and nature of the University’s cash inflows and outflows are such that liquidity problems are unlikely to arise. The cashflow position is monitored by Management daily, and the University has access to funds through either its holding of short-term bank deposits or the investments portfolio, in the event that any unforeseen events occur. Capital management The Institution’s policy is to sustain a healthy accumulated fund balance in order to maintain donor, creditor and public confidence, as well as sustain future development of the Institution. Specifically restricted funds are managed within the rules as agreed with the relevant funders. Management monitors the return on accumulated funds. There are no externally imposed requirements for the management of the accumulated funds. The Institution monitors accumulated funds using a ratio of adjusted net debt to accumulated funds. For this purpose, net debt is defined as total liabilities, comprising interest-bearing loans, borrowings and obligations under finance leases, less cash and cash equivalents. The Institution’s objective is to keep the ratio below 2.00. The Institution’s adjusted net debt to accumulated funds ratio at 31 December was as follows:

notes to the financial statements | 91

2021 R

2020 R

Total liabilities

3 662 683 664

3 218 079 709

Less: Cash and cash equivalents

(796 050 728)

(622 253 328)

Net debt

2 866 632 936

2 595 826 382

Accumulated funds

2 413 931 880

2 133 571 520

1,19

1,22

Net debt to accumulated funds ratio

The following table sets out the maturity profile of the University’s financial liabilities based on contractual undiscounted payments:

On demand

Less than 3 months

3–12 months

1– 5 years

More than 5 years

Total

Year ended 31 December 2021 Financial liabilities Interest-bearing borrowings

55 848 188

234 552 133

937 808 169

403 053 823

1 631 262 313

Trade payables and accrued expenses

205 986 060

Other payables and accrued liabilities

182 962 834

Total

182 962 834

261 834 248

234 552 133

937 808 169

403 053 823

2 020 211 207

Interest-bearing borrowings

60 820 599

246 790 751

813 122 613

234 116 136

1 354 850 099

Trade payables and accrued expenses

195 123 984

Other payables and accrued liabilities

140 279 966

7 000 866

147 280 832

Total

140 279 966

262 945 451

246 790 751

813 122 613

234 116 136

1 697 254 915

Year ended 31 December 2020 Financial liabilities

The following table sets out the maturity profile of the University’s financial instruments which are exposed to interest rate risk with the following categories:

On demand

Less than 3 months

3–12 months

1– 5 years

More than 5 years

Total

Year ended 31 December 2021 Cash, cash equivalents and interest-bearing bonds

561 691 332

400 000 000

2 247 482

31 754 847

101 549 308

1 097 242 969

Total

561 691 332

400 000 000

2 247 482

31 754 847

101 549 308

1 097 242 969

Cash, cash equivalents and interest-bearing bonds

234 895 086

550 000 000

606 235

24 171 049

101 923 406

911 595 776

Total

234 895 086

550 000 000

606 235

24 171 049

101 923 406

911 595 776

Year ended 31 December 2020

92 | notes to the financial statements

19. Contingent assets, liabilities and financial guarantees Claim for damages relating to security system agreement CPUT instituted a claim for damages in the High Court in the amount of R12 374 672 plus interest and legal costs, with further claims in the alternative. The claim resulted from electronic security services not fully installed, or not installed to the required standard; fully maintained; or not maintained to the required standard.

20. Commitments 20.1 Capital commitments Capital commitments, as listed below, relates to amounts formally designated for the acquisition, construction and improvement of building projects.

2021 R Amounts allocated for capital expenditure at reporting date, but not contracted Expenditure contracted for at year-end, but not yet incurred

2020 R

294 874 706

308 759 202

60 978 882

110 693 878

355 853 588

419 453 080

It is intended that the University will fund these commitments from internal resources, investments, loans and infrastructure grants. 20.2 Lease commitments The expenses reflected in the surplus or loss in respect of leases are as follows:

2021 R Equipment Property

2020 R

1 717 428

6 685 817

32 449 864

35 530 723

34 167 292

42 216 540

notes to the financial statements | 93

21. Remuneration of key management personnel The following disclosure, as required by the Minister of Higher Education and Training, relates to compensation paid to members of the University’s Executive Management Team. Remuneration is based on cost of employment to the University. Compensation paid for other services performed within the University is reflected separately.

Gross remuneration Basic cost of employment

Bonuses

Total primary services

Total remuneration

Other

Office held

Nhlapo NC

Vice-Chancellor

3 965 055

218 197

4 183 252

Balkaran R

Deputy Vice-Chancellor: Teaching and Learning

2 522 260

150 420

2 672 680

Mokoena SS

Registrar

2 103 708

124 920

2 228 628

Du Plessis P

Executive Director: Finance

2 073 213

123 428

2 196 641

Phaho D

DVC: Research, Technology Innovation and Partnerships

2 519 161

161 164

2 680 325

Mayende GP

DVC: Operations

2 551 182

128 931

2 680 113

Hay-Swemmer HR

Executive Director: Office of the Vice-Chancellor

2 087 846

133 841

2 221 687

Thornhill C (Note 1)

Acting Dean: Education

1 382 731

55 925

1 438 656

Coopoo P

Dean of Students

1 860 397

109 591

1 969 988

Cronjè J (Note 2)

Dean: Informatics and Design

1 822 288

116 755

1 939 043

Ngqondi TG (Note 3)

Dean: Informatics and Design

1 474 225

81 728

1 555 953

Green P

Dean: Business and Management Sciences

1 828 994

101 187

1 930 181

Sheldon MS

Dean: Engineering and the Built Environment

1 829 839

108 971

1 938 810

Sosibo ZC (Note 4)

Acting Dean: Education

1 322 796

69 203

1 391 999

MatshaErasmus TE (Note 5)

Dean: Health and Wellness Sciences

1 829 942

108 971

1 938 913

Corns J

Senior Director: CTS

1 535 648

91 460

1 627 108

Kioko J (Note 6)

Dean: Applied Sciences

1 720 822

108 971

1 829 793

34 430 107

1 993 663

36 423 770

94 | notes to the financial statements

2021

Name

Total 2021

Post- retirement medical aid

Gross remuneration Basic cost of employment

Bonuses

1 Name

Office held

Post- retirement medical aid

Total primary services

Total remuneration

Other

Nhlapo NC

Vice-Chancellor

3 850 568

218 197

Balkaran R

Deputy Vice-Chancellor: Teaching and Learning

2 453 815

150 420

Mokoena SS

Registrar

1 985 598

114 338

Du Plessis P

Executive Director: Finance

2 012 877

Sheldon MS

Dean: Engineering and the Built Environment

Phaho D Thornhill C

2020

R -

4 068 765

2 604 235

2 099 936

123 428

2 136 305

1 953 796

108 971

2 062 767

DVC: Research,Technology Innovation and Partnerships

2 198 459

134 744

2 333 203

Acting Dean: Education

1 103 524

54 349

1 157 873

Coopoo P

Dean of Students

1 806 904

109 591

1 916 495

Hay-Swemmer HR

Executive Director: Office of the Vice-Chancellor

2 034 932

133 841

2 168 773

Cronjè J

Dean: Informatics and Design

1 768 836

116 755

1 885 591

Mda TV

Dean: Education

831 368

3 855

835 223

Green P

Dean: Business and Management Sciences

1 787 599

101 187

1 888 786

Mayende GP

DVC: Operations

2 399 455

118 187

2 517 642

Moll CM

Acting Dean: Engineering and the Built Environment

1 336 227

55 338

1 391 565

Engel-Hills P

Acting Dean: Health and Wellness Sciences

1 911 093

55 739

1 966 832

Corns J

Senior Director: CTS

1 421 267

91 460

1 512 727

Kioko J

Acting Dean: Applied Sciences

1 570 970

80 772

1 651 742

32 427 288

1 771 172

34 198 460

Total 2020

2 517 642

34 198 460

All of the above remuneration amounts are in respect of short-term employee benefits in terms of IAS 24, except for: 1. Included in Basic Cost of Employment is an amount of R4 426 672 (2020: R3 745 762) in respect of the employer’s contribution to retirement funds and group life schemes. 2. These amounts are in respect of post-retirement medical aid. • • • • • •

Note 1: Dr Thornhill was the acting Dean: Education until 31 July 2021 Note 2: Prof Cronjé was the acting Dean: Informatics and Design until 30 March 2021 Note 3: Prof Ngqondi was appointed as Dean: Informatics and Design from 1 April 2021 Note 4: Prof Sosibo was the acting Dean: Education from 1 August 2021 until 31 December 2021 Note 5: Prof Matsha-Erasmus was appointed as Dean: Health and Wellness Sciences from 1 January 2021 Note 6: Prof Kioko was appointed as Dean: Applied Sciences from 1 August 2021

The lump sum payments in excess of R249 999 were paid in 2021: RNil (2020: RNil).

notes to the financial statements | 95

Remuneration of Council members Reimbursement for travelling expenses and stipends of R722 250 (2020: R630 250) were paid to external Council members for attendance at meetings of Council and its sub-committees. External Council members receive a stipend of R1,500; Chairperson of sub-committees R1,750; and the Chairperson of Council R2,000 per meeting.

Committee

Number of members

Chair of Council

Chairs of committees

Members of Council

The following table represents the disclosure required in terms of IAS 24 in respect of compensation of key management personnel:

Short-term employee benefits Post-employee pension and medical benefits Total compensation paid to key management personnel

2021 R

2020 R

31 997 098

30 452 698

4 426 672

3 745 762

36 423 770

34 198 460

22. Related party transactions The related party relationships of the Cape Peninsula University of Technology in terms of IAS 24 are as follows: • Key management personnel, which comprises members of both Council and the University Executive Management Team. (Refer to Note 21). • The Department of Higher Education and Training (DHET). (Refer to Notes 12 and 17). Due to the nature of the University’s operations and the composition of its Council (being drawn from public and private sector organisations), it is likely that transactions will take place with organisations in which a member of Council may have an interest, and these are conducted in accordance with the University’s procurement procedures. During the current year, the University did not purchase any goods and services from companies in which a Council member or member of Senior Management has a major interest. The following are significant related party balances and transactions, as listed below:

DHET Loans owing to Various subsidies and grants received

2021 R

2020 R

(152 326)

(278 478)

1 663 967 361

1 614 974 851

There are various terms and conditions in respect of subsidies and grants, and these are available upon request.

23. COVID-19 impact The long-term impact of the COVID-19 pandemic has not had a major impact on the operations of the University and its financial sustainability. The University is dependent on the National Government for the subsidy, and this has had to be reviewed to meet the demands created by the pandemic, but the University has still been fully funded. Our operations have continued unabated, and all contractual obligations have been met. It is our intention to maintain the operating principles developed during the pandemic period into the foreseeable future.

96 | notes to the financial statements

Leases/ Right-of-use assets In March 2021, the Board amended the conditions of the practical expedient in IFRS 16 that provides relief to lessees from applying the IFRS 16 guidance on lease modifications to rent concessions arising as a direct consequence of the COVID-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a COVID-19 related rent concession from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the COVID-19 related rent concession the same way it would account for the change under IFRS 16, if the change were not a lease modification. Following the amendment, the practical expedient now applies to rent concessions for which any reduction in lease payments affects only payments originally due on or before 30 June 2022, provided the other conditions for applying the practical expedient are met. The University has made use of the practical expedient. The University received concessions for 15 of the 26 leased residences, to the value of R4 587 646 (2020: R Nil).

24. Going concern The University has adequate financial resources to continue in operation for the foreseeable future, and accordingly, the financial statements have been prepared on a going concern basis. This basis presumes that funds will be available to finance future operations, and that the realisation of assets and settlement of liabilities, contingent obligation and commitments will occur in the ordinary course of business.

25. Comparative figures Comparative figures have been reclassified within the notes to the financial statements relating to the average number of staff for the year. Where appropriate, comparative figures are restated with full disclosure of the respective changes.

notes to the financial statements | 97

abbreviations 4IR/ 5IR AGM AL APP APS AROC BTech CDU CE CHE CHEC CIET CPPD CPUT CTS DHET DVC ECP EE ERM EXCO F’SATI FET FinCom FTE FYE GBV GEC HC HE HEMIS HEQSF HOD HRCC IASB ICT IF IFRS InvCom IP IT ITF ITGov JFAC KPI LGBTIQA+ LMS ManCom MCD MOA nGAP NRF NSFAS NTRF

Fourth/ Fifth Industrial Revolution Annual General Meeting Academic literacy Annual Performance Plan Average Point Score Audit and Risk Oversight Committee (of Council) Bachelor of Technology Degree Curriculum Development Unit Community Engagement Council on Higher Education Cape Higher Education Consortium Centre for Innovative Educational Technology Centre for Professional and Personal Development Cape Peninsula University of Technology Computer and Telecommunications Services Department of Higher Education and Training Deputy Vice-Chancellor Extended Curriculum Programme Employment Equity Enterprise Risk Management Executive Committee French South African Institute of Technology Further Education and Training Finance Committee Full-time equivalency First Year Experience Gender-based violence Governance and Ethics Human Capital Higher Education Higher Education Management Information System Higher Education Qualifications Sub-framework Head of Department Human Resources International Accounting Standards Board Information and Communication Technology Institutional Forum International Financial Reporting Standards Investment Committee Intellectual Property Information technology Institutional Transformation Forum IT Governance Joint Finance and Audit Committee Key performance indicator Lesbian, gay, bisexual, transgender, intersex, queer, asexual, plus Learner Management System Executive & Management Committee Marketing and Communication Department Memorandum of Agreement New Generation of Academics Programme National Research Foundation National Student Financial Aid Scheme National Tertiary Retirement Fund

98 | abbreviations

OER ORCID PG PQM QARM RDG RemCo RIM RITAL RO RPL RTI RTIP SANSI SAQA SARChI SARETEC SETA SL SLU SRC SSC SSCSA STEMI SU T&L TDG TDP TRL TTO TVET UCDG UCDP UCT UG UP USAf USDP UWC VC WIL ZAR

Open Educational Resources Open Researcher and Contributor ID Postgraduate Programme and Qualification Mix Quality Assurance and Risk Management Research Development Grant Remuneration Committee Robben Island Museum Research and Innovation into Teaching and Learning Retention Officer Recognition of Prior Learning Research, Technology and Innovation Research, Technology Innovation and Partnerships South African National System of Innovation South African Qualifications Authority South African Research Chair Initiative South African Renewable Energy Technology Centre Sector Education and Training Authority Service-learning Student Learning Unit Student Representatives Council Student Services Council Search and Selection Committee for Senior Appointments Science, Technology, Engineering, Mathematics, and Innovation Stellenbosch University Teaching and learning Teaching Development Grant Teaching Development Programme Technology Readiness Level Technology Transfer Office Technical and Vocational Education and Training University Capacity Development Grant University Capacity Development Programme University of Cape Town Undergraduate University of Pretoria Universities South Africa University Staff Doctoral Programme University of the Western Cape Vice-Chancellor Work Integrated Learning South African Rand

The Council and Management of the Cape Peninsula University of Technology are guided by the Strategic Plan 2030 Vision, Mission, and Core Values:

Vision CPUT is Africa’s leading Smart University of Technology, globally renowned for innovation, with graduates that shape a better world for humanity.

Mission CPUT transforms its students, through world-class researchers who inspire knowledge production and innovation that is cutting edge.

Core Values CPUT agrees to Oneness and Smartness by: • Embracing a culture of ethics and integrity; • S eeking kindness and showing compassion to all staff, students and stakeholders of CPUT; • Embracing restoration and addressing any issues of discrimination; • Embracing unity and diversity; • S howing passion and always searching for better ways of doing things; • Taking accountability and accepting responsibility; and • Being technologically astute.

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2021 Annual Report

Articles inside

Abbreviations

Report of the Audit and Risk Oversight Committee

Vice-Chancellor’s Report on Management and Administration

Annual Financial Review

Report on Corporate Governance

Report of the Chairperson of Council

Report of the Institutional Forum

Report on Internal Administrative/Operational Structures and Financial Controls

2021 Members of Council