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PROFIT MARGINS RISE AND ITHALA GETS ITS THIRD CLEAN AUDIT

Published: Wednesday, December 14, 2016

Community DevelopmentCurrent AffairsEconomyFinancial Services Government

Ithala Development Finance Corporation (IDFC) - a catalyst for SMME development in KwaZulu-Natal and deliverer of hope for historically disadvantaged communities - is on a growth trajectory following the release of its annual financial results.

    Ithala Development Finance Corporation (IDFC) - a catalyst for SMME development in KwaZulu-Natal and deliverer of hope for historically disadvantaged communities - is on a growth trajectory following the release of its annual financial results.

    For the 2015/16 year in review, the corporation recorded a profit of R229,9 million and met and exceeded all its developmental targets. The group as a whole recorded a profit of R225,1 million.

    Notably, IDFC received a clean audit for the third successive year. Whilst Ithala has received an unqualified audit opinion for many years for fair presentation of financial statements, a clean audit opinion from the Auditor General signifies that in addition to the financial statements being free of material misstatements, there are no material findings on both the usefulness and reliability of the annual performance information as well as no non-compliance with key legislation.

    The clean audit report reinforces Ithala’s commitment to streamlining and strengthening its governance structures and, therefore, operations are geared towards financial sustainability as well as developmental effectiveness. .

    Ithala Group Chief Executive, Yvonne Zwane, said testament to IDFC’s continued commitment to promoting financial inclusion is the organisation’s decision to restructure loans for drought-stricken farmers funded by Ithala.

    She said the performance of IDFC’s loan book had improved significantly as a result of the business turn-around initiatives that have been implemented.

    The reduction of IDFC’s non-performing loans from 21 percent to 16,3 percent within a year points to the organisation’s ability to effectively manage its business affairs.

    “Despite an unfavourable economic climate, Ithala has vigorously pursued its mission to empower SMMEs and co-operatives through on-lending and other business development services,” said Zwane.

    “The harsh economic times have demanded greater collaboration with our clients in order to create and package solutions which better fit the prevailing conditions.

    IDFC is one of the largest property portfolio holders in KZN, with over one million square meters of industrial and commercial space.

    As part of the renewal strategy to refurbish existing properties and act as a catalyst for the development of new infrastructure, two large properties were constructed.

    Home to Ithala Corporate Services Centre is Ithala Trade Centre (ITC) on Durban’s Point Waterfront.

    The R130 million development will contribute significantly to the urban rejuvenation process within the precinct and also serve as a small business development hub.

    ITC hosts other entities of the Department of Economic Development, Tourism and Environmental Affairs, and also serves as a small business development hub.

    Ithala Paramount Park in Mount Edgecombe, north of Durban, is a R60 million investment. Both properties are strategically located in the growing nodes of business investment in the eThekwini Metro.

    Ithala undertook a project to reconfigure its large property in Eston, South-East of Pietermaritzburg, in order to support localised warehousing for local traders.

    The warehouse facility is set in a rural environment and creates an opportunity for local traders to acquire stock cheaply and sell it at competitive prices to end-users.

    Farhana Amod, Ithala’s Group Chief Financial Officer said: “As Ithala forges ahead with phase three of its strategic road map of ‘broadening the business portfolio’, delivery of Ithala’s dual mandate of developmental effectiveness and financial sustainability has once again been ensured.

    “Ithala will continue on its repositioning strategy trajectory. Although the corporation has made a huge turnaround in both its income generating units, the focus remains on increasing revenue year-on-year, whilst containing costs.”

     

    For more information on Ithala visit www.ithala.co.za