Kuvee Kangueehi
3 October 2008
Windhoek — New Era Publications Corporation recorded a profit of N$824 109 for the financial year ended March 2007.
The Chief Executive Officer (CEO) of New Era, Sylvester Black, revealed this yesterday at a public hearing of the Parliamentary Standing Committee on Public Accounts. He was commenting on the Auditor General's Report for the financial years en-ded March 31, 2006 and March 31, 2007.
Although the financial reports indicate that the company is in a healthy financial state, its subsidiary Namzim appears to be draining the coffers of the company and financial records indicate that Namzim has an outstanding loan of N$ 6,2 million from New Era.
It was also stated in the Auditor General's Report that it is uncertain whether the loan can be recovered but the CEO explained to the standing committee that the 'loan' in a strict sense is not a loan but capitalisation of Namzim by the Namibian Government, which is channelled through New Era.
He noted that the money is reflected as loans to Namzim until such time as it can be capitalised and share certificates can be issued to New Era.
He added that the creation of Namzim and its paper Southern Times was as a result of an agreement between the Namibian and Zimbabwe governments.
Black said he does not foresee Namzim making a profit in the near future, noting that although the joint venture is supposed to be a 50-50 shareholding, the Namibian Government appears to be pumping more money into the project.
Congress of Democrats (CoD) MP, Elna Dienda, wanted to know from the company why it does not have offices in some of the regions if its mandate is to provide information to the entire country.
Black informed the standing committee that due to financial constraints, the newspapers cannot open more regional bureaux but noted that the newspaper regularly visits these regions while it subscribes to the Namibia Press Agency (Nampa), which has offices in most of these regions.
New Era currently has two regional offices in Oshakati and Walvis Bay and correspondents in Katima Mulilo and Opuwo as well as indigenous language writers.
Dienda also wanted to know why the newspaper has employed foreign nationals in the management of the newsroom and what is being done to ensure that Namibians take over.
Black noted that skilled Namibians in the field of journalism are limited. Therefore, the company has been forced to hire some foreign nationals but there are Namibian understudies that are being trained to take over.
DTA MP and chairperson of the standing committee, Johan De Waal, also expressed concern about New Era's high salary bill, which was about N$8 million for 2007, saying since the income of the company from normal operations is N$12 million per month, the high salary bill is unhealthy. The DTA MP said in a healthy situation, a salary bill should not exceed 33 percent of the total income.
Black, however, noted that the high salary bill is not because of high salary increases. The company employs more journalists and sales and marketing staff since the paper became a daily and this is an investment in the company, which will accelerate its growth.
The standing committee was also pleased that the financial manager has dealt with the issue of VAT and the Directorate of Inland Revenue has waived all penalties and the outstanding amount has been provided for in the balance sheet of the corporation.
However, the standing committee was concerned with the PAYE and said it is a criminal offence for New Era to deduct tax from employees and not to pay it to the Receiver of Revenue. De Waal said the situation should be rectified.
De Waal wanted to know why New Era does not borrow money from commercial banks to pay its debt at the Receiver of Revenue and noted that management was running the business wrongly by using the receiver of revenue as their bank. However, the Financial Manager of New Era, Jeremy Cloete, explained that the company would not get loans from commercial banks because its only collateral, which is the office building (Daniel Tjongarero House), is not yet registered in its name.
Cloete further noted that the debt at the receiver of revenue accumulated during the period 2002 to 2005, while the company was under a different management.
Black remarked that failure to submit returns and pay PAYE to the receiver of revenue in the past was due to incompetence as New Era at the time had more than N$10 million in its accounts with commercial banks. He added that it is now an undue burden for the company to pay old debts from current cash flows.
De Waal complimented New Era for the fact that its audited accounts for the year ended March 2008 have already been finalised and submitted to Parliament. Those accounts reflect a profit of N$818006 for the year.
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