NATIONAL RESPONSIBLE GAMBLING PROGRAMME: 0800 006 …ecgb.org.za/wp-content/uploads/2016/04/ECGBB... · Ethembeni Old Age Home 20,000 Food parcels Mdantsane Nceduluntu Support Group

ANNUAL REPORT

20102011

ANNUAL REPORT

20102011

ECG&BB Building

Quenera Office Park | Quenera Drive | Beacon Bay | East London

P.O. Box 15355 | Beacon Bay | East London | 5205

Tel. +27 (0)43 702 8300 | Fax. +27 (0)43 748 2218

www.ecgbb.co.za

NATIONAL RESPONSIBLE GAMBLING PROGRAMME: 0800 006 008

PR121/2011 | ISBN: 978-0-621-40090-8

Title of Publication: Eastern Cape Gambling & Betting Board,

Annual Report 2010|2011

MEC’s Hon Mandla Makupula (Education) and Hon Pemmy Majodina (Social Development) and ECGBB CFO Trevor Harper at the launch of Sunduza JSS Computer Laboratory sponsored by the ECGBB.

Sunduza JSS pupils touching ECGBB sponsored computers for the first time in their lives.

3

Contents

1. Board of direCtors and ManageMent 51.1 Board of Directors 5

1.2 Management 5

2. Vision and Mission 72.1 Vision 7

2.2 Mission 7

2.3 Objectives & Functions of the Board 7

3. aCCounting authority’s responsiBilities and approVal 9

4. Chairperson’s report 114.1 Overview of Strategic Direction 11

4.2 Performance Delivery 11

4.3 Community Development Projects 12

4.4 Marketing Activities 12

4.5 Organisational Alignment and Balanced Score Card 13

4.6 Litigation 14

4.7 Corporate Governance 15

4.8 Related-Party Transactions 16

4.9 International/Continental Travel 16

4.10 Attendance Register for Board and Committee Meetings 16

4.11 Organisational Review 17

4.12 Attracting Investments 17

4.13 Employment 18

4.14 Irregular Expenditure 18

4.15 Responsible Gambling 19

4.16 Operational Performance 19

4.17 Expenditure Relating to Soccer World Cup 19

5. gaMing perforManCe 215.1 Revenue and Tax Statistics 21

5.2 Distribution of Gambling and Betting Takings 21

6. audit CoMMittee report 23

7. the auditor general’s report 25

8. operational perforManCe 298.1 Introduction 29

8.2 Definitions 29

8.3 Performance Against Operational Plan 29

8.4 Performance Report – Annexure 1 37

9. hr oVersight statistiCs 399.1 ECGBB Organogram 53

10. audited finanCial stateMents 5510.1 Statement of Financial Position 55

10.2 Statement of Financial Performance 56

10.3 Statement of Changes in Net Assets 57

10.4 Cash Flow Statement 58

10.5 Accounting Policies 58

10.6 Notes to the Annual Financial Statements 60

Sunduza JSS pupils touching ECGBB sponsored computers for the first time in their lives.

Thumbs Up! CEO Mabutho Zwane and ECGBB staff.

5Board of directors & senior management

1. Board of direCtors and ManageMent

1.1 Board of directors

1.2 ManageMent

7Vision & Mission

2. Vision and Mission

2.1 Vision

eastern cape: the Best, Most efficient, empowering gaming regulator!

2.2 Mission

In support of the Best Gaming Destination, our

mission is to ensure that the EC Gaming Industry is

conducted honestly and competitively with maximum

contribution to society.

We are therefore committed to protecting the public

interest through regulation, licensing and appropriate

enforcement.

We will achieve this through providing excellent

service to our stakeholders and through facilitating

socio-economic benefits to communities within

which we operate.

2.3 oBJectiVes & fUnctions of tHe Board

The Board oversees all gambling and betting activities

in the province and matters incidental thereto, as

contemplated in the Act and advises the responsible

Member of the Executive Council of the Province for

Economic Development, Environmental Affairs &

Tourism on gambling matters and to exercise certain

further powers contemplated in the Act.

The functions of the Board include, among others: ~ Licensing of the gaming industry. ~ Ensuring compliance with the Act by all licensees. ~ Collection of gambling taxes on behalf of the

province. ~ Combating illegal gambling. ~Undertaking licensing investigations. ~ Issuing and revocation of licences.

~Determining licence conditions.

It is the responsibility of the Board to ensure that an

accountable and credible legal gaming industry exists

in the province and that internationally recognised

standards in the industry are complied with.

9Accounting Authorities responsibilities & ApprovAl 9Accounting Authorities responsibilities & ApprovAl

3. aCCounting authority’s responsiBilities and approVal

The directors are required by the Public Finance

Management Act (Act 1 of 1999), to maintain

adequate accounting records and are responsible

for the content and integrity of the annual financial

statements and related financial information included

in this report. It is the responsibility of the directors to

ensure the annual financial statements fairly represent

the state of affairs of the entity at the end of the financial

year and the results of its operations and cash flows

for that period. The external auditors are engaged to

express an independent opinion on the annual financial

statements and were given unrestricted access to all

financial records and related data.

The annual financial statements have been

prepared in accordance with standards of Generally

Recognised Accounting Practice (GRAP), including

any interpretations, guidelines and directives issued

by the Accounting Standards Board.

The annual financial statements are based on

appropriate accounting policies consistently applied

and supported by reasonable and prudent judgments

and estimates.

The directors acknowledge that they are ultimately

responsible for the system of internal financial

control established by the entity and place

considerable importance on maintaining a strong

control environment. To enable the directors to meet

these responsibilities, the accounting authority sets

standards for internal control aimed at reducing the

risk of error or deficit in a cost effective manner.

The standards include the proper delegation of

responsibilities within a clearly defined framework,

effective accounting procedures and adequate

segregation of duties to ensure an acceptable level

of risk. These controls are monitored throughout the

entity and all employees are required to maintain

the highest ethical standards in ensuring the

entity’s business is conducted in a manner that in

all reasonable circumstances is above reproach.

The focus of risk management in the entity is on

identifying, assessing, managing and monitoring

all known forms of risk across the entity. While

operating risk cannot be fully eliminated, the

entity endeavours to minimise it by ensuring that

appropriate infrastructure, controls, systems and

ethical behaviour are applied and managed within

predetermined procedures and constraints.

The directors are of the opinion, based on the

information and explanations given by management,

that the system of internal control provides reasonable

assurance that the financial records may be relied on

for the preparation of the annual financial statements.

However, any system of internal financial control can

provide only reasonable, and not absolute, assurance

against material misstatement or deficit.

The directors have reviewed the entity’s cash flow

forecast for the year to 31 March 2012 and, in the

light of this review and the current financial position,

they are satisfied that the entity has or has access

to adequate resources to continue in operational

existence for the foreseeable future.

Although the accounting authority is primarily

responsible for the financial affairs of the entity, they

are supported by the entity’s external auditors.

The external auditors are responsible for

independently reviewing and reporting on the entity’s

annual financial statements. The annual financial

statements have been examined by the entity’s

external auditors and their report is presented on

pages 25 to 27.

The annual financial statements set out on pages

55 to 76, which have been prepared on the going

concern basis, were approved by the accounting

authority on 31 May 2011 and were signed on its

behalf by

r M ZWane adV a MaYosi

chief executive officer chairperson

11Chairperson's report

4. Chairperson’s report

4.1 oVerVieW of strategic direction

The Eastern Cape Gambling and Betting Board’s

Board of Directors approved a revision of its Mission,

arising from the Board’s commitment of running an

efficient organisation that ensures the Eastern Cape

gambling industry is conducted competitively. In turn,

the Board wants to position the ECGBB, not only as

an efficient regulator, but also one that empowers

the operators and communities within which the

licensees operate. A full report on this exercise is

presented in paragraph 5.

The ECGBB currently has 8 Operating Divisions.

However, part of the strategic review necessitated

a thorough work organisation review to support the

new strategy. It is anticipated this will change the

ECGBB’s structure in future to reflect fewer Operating

Divisions. Furthermore, the Board launched a new

logo in line with its stated strategic goals. The Board

also has undertaken to fund community development

projects to contribute to socio-economic development

in the province. The Board is assisting in the building

or renovations of schools, crèches, sport (athletics

and boxing) promotions, funding of orphanages, old

age homes and feeding schemes.

4.2 PerforMance deLiVerY

4.2.1 Global economic recession

Like most industries, the economic recession in the

past two years has affected the gaming industry

negatively. For two years the revenue collected has

been around R90-million and the gross gaming

revenue stabilising around the R1-billion mark.

4.2.2 industry performance

The gambling industry continues to create jobs, promote

tourism and facilitates and contributes to significant

infrastructural development and investments. In the

financial year 2010/11, the industry employed 3 882

people and contributed to local economic development

through concessions to local companies. There were

more than four million visitors to the casinos, making

them key facilitators of tourism.

4.2.3 review of ecGbb act

The Board is currently reviewing our enabling

legislation to ensure that it creates an efficient

environment for the collection of revenue and all

matters incidental to its mandate.

4.2.4 orGanisational environment

The ECGBB has undertaken a comprehensive

process of organisational development, aligning the

organisation to the new strategy. This will result

in a new structure and completion of a Balanced

Scorecard that will be easy to use as a tool to measure

the attainment of our strategic goals.

The organisation identified a weakness in its planning,

monitoring and evaluation and has created a position

in its structure that will strengthen this weakness –

strategic services. The re-focusing of the organisation

has resource implications – more staff will need to be

hired to achieve its strategic goals – from the current

27 to 41 staff members.

The environment in which ECGBB operates is largely

subservient to the gaming environment that prevails

in the country and world-wide, and that can be

summarised as follows: ~ A highly litigious environment that emanates from

the high stakes in this lucrative business with good

returns. ~ Consequent contestations that tend to lead to drawn

out cases. ~ A highly and strictly regulated industry.

12 EASTERN CAPE GAMBLING AND BETTING BOARD ANNUAL REPORT 2010|2011

~ Technology driven, necessitating constant sharing

of latest developments, practices and attending

international gaming regulators’ conferences.

~Global economic recession. ~ Land claim issues that tend to delay projects – eg

casino development projects.

~ Economic and structural constraints that hamper

the broadening of ownership to new entrants or

potential entrants.

4.3 coMMUnitY deVeLoPMent ProJects

The Eastern Cape Gambling and Betting Board (ECGBB) funded a number of community projects during the financial year under review. These were:

BeneficiarY VaLUe (r) descriPtion area

Sunduza Junior Secondary 100,000 Computers and computers lab SterkspruitEthembeni Old Age Home 20,000 Food parcels MdantsaneNceduluntu Support Group 20,000 Food parcels and toys ReestonAbonwabisi Community Home 20,000 Food parcels and toys ZiphunzanaNqadu Great Place 162,000 Mobile gym WillowvaleSinempendulo Offender Rehabilitation Programme 90,000 Sponsorship Port Elizabeth

The projects were varied in nature, covering different needs of specific communities. The projects covered early childhood development support, old age home support and education.

4.4 MarKeting actiVities

The ECGBB restructured its Research and Communication

Unit to focus on marketing. This has resulted in an

improved footprint and presence in the public eye. The

Board launched its new corporate image and strategy in

East London on 23 November 2010.

As a marketing strategy the Board identified boxing

as a critical sport that could be used as a platform

to disseminate its responsible gambling messages,

brand development as well as supporting the sport

in its quest to become professional. The Board also

supported Mr Amos Zingo, a runner for Real Gijimas,

who participated in the Comrades Marathon and was

a bronze medallist.


4.5 organisationaL aLignMent and BaLance score card

4.5.1 bacKGround

The ECGBB Board approved the 5-year Strategic

and Performance Plan on the 11 September 2009.

During the review process the Vision was amended

to read “eastern caPe: tHe Best gaMing

destination!”

In support of this, the mission developed and

approved was: ~ To ensure that the Eastern Cape gaming industry

is conducted honestly and competitively with

maximum contribution to society; is free from

corruption and inspires public trust and confidence. ~ To protect the public interest through regulation,

licensing and appropriate enforcement in the

gaming industry. ~ To maintain and regulate a successful gaming industry

which creates jobs, generates revenue and extends

socio-economic benefits to communities in the province. ~ To ensure that the Eastern Cape gaming industry

provides and maintains world – class facilities and

services to customers.

During the strategic review process it was also

agreed that an exercise would be conducted to

align the structure to the strategy and implement

the Balanced Scorecard as part of an Integrated

Performance Management System.

An essential part of the score carding process was to

translate the strategy into something meaningful to all

stakeholders which could be actioned, measured and

reviewed at all levels. During this process it became

evident that the Vision and Mission needed to be

amended so that the strategy of the ECGBB could be

translated to all levels and implemented effectively.

The reason for this thinking can be gleaned from the

motivation below.

4.5.2 motivation

The ECGBB Act stipulates that the core business of

the ECGBB is to regulate the industry as depicted in

the Mission above, however the Vision tells a different

story. The way it is currently worded suggests that

the core business of the ECGBB is to attract potential

gaming tourists to the Eastern Cape. The decision to

visit the Eastern Cape for the best gaming experience

will not be made based on the fact that the ECGBB is

an efficient regulator, but rather by the unforgettable

gaming experience the gaming operators offer their

customers and whether they fulfil this expectation

which will ensure repeat visits.

The ECGBB has a very limited role to play in how the

gaming operators run their organisations which in

turn make them attractive to potential tourists – this

is the sole responsibility of the gaming operators with

legislative support from the ECGBB. the ecgBB

cannot be held accountable for a future they cannot

influence. This would make the stakeholders in the

organisation demotivated and make for a difficult

organisation to lead.

The role of the ECGBB is to rather provide services

within a legislative framework as captured in the

above Mission. The current Vision is therefore more

applicable to licensees in the Eastern Cape who are

the accountable parties to attract potential tourists to

their casinos rather than the ECGBB. It was resolved

that the Vision be amended to capture where the

ECGBB sees itself in the future, a future they can be

held accountable for, a future they can impact – a

future all stakeholders can lead and follow.

It was therefore proposed that the current Vision be

amended to read: eastern cape: the Best, Most

efficient, empowering gaming regulator!

The efficiency talks to the fact that the ECGBB wants

to be seen to be running an efficient organisation

which ensures that the EC gaming industry is in turn

conducted competitively.

The empowering component talks to the fact that the

ECGBB wishes to position itself in the market not only

as an efficient regulator but also one which empowers

the operators but more importantly the communities

within which licensees operate in the Eastern Cape.

This is an important leg of the strategy which is currently

under discussion in terms of the implementation of an

SED entity and critical in terms of the new image the

ECGBB wants to promote and brand.


The Mission has also been slightly amended to

capture the essence of the ECGBB and more

importantly why the ECGBB exists in a shorter more

concise paragraph.

It was therefore resolved that the current Mission

be amended to read: in support of the Best gaming

destination, our mission is to ensure that the ec gaming

industry is conducted honestly and competitively with

maximum contribution to society.

We are therefore committed to protecting the public

interest through regulation, licensing and appropriate

enforcement.

We will achieve this through providing excellent

service to our stakeholders and through facilitating

socio-economic benefits to communities within which

we operate.

The current Vision is therefore more applicable

to licensees in the Eastern Cape who are the

accountable parties to attract potential tourists to

their casinos rather than the ECGBB. Therefore the

proposed amendment to the Vision captures where

the ECGBB sees itself in the future where it is held

accountable, a future it can impact and where all

stakeholders can lead and follow.

It must be noted that the amended Mission captures

most of what was in the previous Mission, but is more

concise and focuses on three main features namely: ~Why the ECGBB exists. ~ The ECGBB core business. ~How the ECGBB intends to deliver on its Vision.

Finally, all three of the above tell a story and provide

a logical business case for the ECGBB stakeholders

to both live, lead and deliver against.

4.5.3 balanced score card proGess to date1. Vision amended.2. Mission amended.3. Strategic Scorecard completed.4. 7 Operational Scorecard completed.5. Performance centre workshops completed.6. IPA’s developed.

4.5.4 orGanisational desiGn

The Organisational Design work was done

simultaneously as the Balanced Score Card process.

The following has been developed: ~ Job descriptions. ~ Service level model. ~ Functional structure.

4.6 Litigation

The gaming environment is litigious because of the high stakes in the business. A few of our licensees took us to court. The table below give a summary of the litigations:

Litigations sUMMarY of tHe case statUs

ECGBB VS ELONWABENI RESORTS (PTY) LTD Losing bidder (Elonwabeni) for Zone 4 casino licensing launched a high court application against the Board challenging the awarding of the licence to the competitor (preferred bidder) and the court ruled in the applicant’s favour.

Board is appealing the court judgment to the Supreme Court of Appeal.

ECGBB VS VUKANI GAMING CORPORATION EASTERN CAPE (PTY) LTD

Vukani Gaming Corporation Eastern Cape (Pty) Ltd launched an urgent court application at the High Court of Grahamstown demanding a takeover of LPM sites that were licensed under the liquidated Route Operator (Luck–At–It Eastern Cape (Pty) Ltd).

The court ruled in favour of Vukani.


Litigations sUMMarY of tHe case statUs

ECGBB VS MBIZANA DEVELOPMENT TRUST The Board launched a court application against the Mbizana Development Trust trustees that they be removed as trustees for lack of proper management.

The Court ruled in favour of the Board.

LUCK–AT–IT EASTERN CAPE (PTY) LTD VS ECGBB A claim for R 1,182,953 including corporate social investment commitments – outstanding levies/ taxes and lost taxes as a consequence of Luck-At-It being liquidated – has been lodged with the liquidators, Progressive Administration (Cape) (Pty) Ltd.

Court awarded in favour of the Board.

4.7 corPorate goVernance

4.7.1 the board of directors

The Honourable MEC for Economic Development,

Environmental Affairs & Tourism appointed a new

Board of Directors who commenced their duties on 1

April 2011. The new Board members are: ~ Adv N Mayosi (Chairperson) ~Mr O Mtati (Deputy Chairperson) ~Ms Y Makhasi ~Mr P Voges ~Mr Z Nomafu ~Mr M Vena ~Mr V Tshangana ~Ms P Nqakula ~Mr RM Zwane (CEO, ex officio)

The Board is established as a public entity in terms

of the Gambling and Betting Act, 1997 (Act No. 5

of 1997)(Eastern Cape) and is listed as a provincial

public entity in Schedule 3C of the Public Finance

Management Act, 1999 (Act No. 1 of 1999). The

Board members act as the accounting authority

in terms of the PFMA. The accounting authority is

responsible for determining strategic direction and

policy, and for the monitoring of operational performance

and management. The Board meets regularly.

The Board subscribes to good corporate governance

and to this end all the board members as well as senior

management are members of the Institute of Directors

and underwent training to familiarise themselves with

the latest King report on corporate governance.

The Board was fully constituted during the year under

review. The Board members are:1. A legal practitioner of at least five years’

standing.2. A chartered accountant of at least five years’

standing.3. An individual who has knowledge of and

involvement in the tourism industry.

4. A person who has knowledge of and experience in the field of welfare or community or socio-economic development.

5. One member to represent the Department of Safety & Security in the Provincial Government.

6. One member to represent the Department of Economic Development, Environmental Affairs & Tourism in the Provincial Government.

7. One member to represent the Department of Finance in the Provincial Government.

8. A person to represent the community in general. 9. The Chief Executive Officer, who is not entitled to

vote.

4.7.2 board committees

During the year under review, the Board instituted

various committees to effectively discharge its duties.

The governance structure of the Board is shown in

the figure below:


corporate governance committees of the Board

4.8 reLated-PartY transactions

Related party transactions occurred during the financial year under review (see detail on page 70).

4.9 internationaL/continentaL traVeL

conference dates natUre of conference/triP attendees

07 – 12 June 2010 Asia Global Gaming Expo (G2E) SL Majombozi, A Ntsonkota

September 2010 Australian Expo M Vanda, D Mzonke

14 – 17 September 2010 8th European Conference on Gambling Studies & Policy Issues: Vienna, Austria RM Zwane, K Canca, CTS Cossie, A Bomvu

9 – 13 October 2010 International Association of Gaming Regulators (IAGR) Conference: Washington DC SL Majombozi, RM Zwane, P White

25 – 27 January 2011 ICE Totally Gaming Conference: London SL Majombozi, M Vanda, B Mnqokoyi

Compliance &LicensingCommittee

FinanceCommittee

LegislativeReview

Committee

ECG&BBBoard ofDirectors

HR &Remuneration

Committee

SpecialProjects

Committee

Audit &Risk

Committee


4.10 attendance register for Board and coMMittee Meetings 2010/2011 financiaL Year

naMe

Board Meetings (11)aUdit and risK coMMittee Meetings (5)

finance coMMittee Meetings (2)

LegisLation reVieW coMMitteeMeetings (4)

coMPLiance and Licencing coMMittee Meetings (2)

reMUneration coMMittee Meetings (4) otHer

c a c a c a c a c a c a

S L Majombozi Chair 11 Invited 3 Invited – Invited 2 Invited 1 Invited 3 4K Canca Member 10 Member 2 Member 4 Member 4 4A Ntsonkota Member 8 Chair 4 4N Tom Member 5 Chair 2 Chair 2 2N Mtakati Member 5 Member 1 Member 1 3CTS Cossie Member 5 Chair 4 Member 2 3P White Member 9 Chair 5 4A Mabizela Member 10 Member 2 2S Whitfield Member 4R Hill Member 5 1

Key: c = capacity | a = attendance | other = special Board Meetings

4.11 organisationaL reVieW

In the year under review, all senior management

positions were filled. This includes the critical

position of the Chief Financial Officer and Manager:

Compliance and Licensing.

The ECGBB has taken the opportunity afforded

by the need to re-align the organisation with the

requirements of the strategy and socio-economic

realities of the province, to undertake a radical

review of the structure. This has resulted in a more

streamlined structure and supporting job descriptions

which will be more responsive to the needs of the

Gaming Industry and Strategic Intent of the 2010/11

– 2114/15 Strategic Plan. A detailed organogram is

contained on page 53 of the annual report.

In addition, this process has resulted in the translation

of the ECGBB Strategy into an Integrated Performance

System with meaningful Strategic and Operational

Scorecards at all levels of the organisation, Individual

Performance Agreements and Development Plans.

This coupled with the new structure will allow the

organisation to be more responsive to the needs of

the gaming industry in the Eastern Cape as well as

the complex socio-economic needs of the province.

This will be actioned through carefully designed

sets of measures which will hold all stakeholders

accountable for specific deliverables including license

holders in terms of meeting their corporate social

and environmental responsibility commitments, as

required in the casino license conditions.


4.12 attracting inVestMents

The Board secured close to R1,4-billion re-

investment through the casino re-licensing process

in the following casino zones of the province:

Zone 1 – R1-billion re-investment in the Boardwalk

Casino in Port Elizabeth

Zone 2 – R400-million re-investment in the re-

licensing of Hemingways Casino.

Zone 5 – R340-million re-investment in the re-

licensing of Wild Coast Sun Casino.

4.13 eMPLoYMent

The gaming industry has created much needed employment opportunities in the province, as depicted below:

contributions to direct jobs – eastern cape

fY2007 fY2008 fY2009 fY2010

ECGBB 26 28 25 27Casinos 4,961 4,041 3709 2914Limited Payout Machines 242 169 176 720Hourseracing industry 278 329 268 221TOTAL 5,507 4,567 4178 3882

In the year under review and in 2011/2012 the re-investments in Zone 1, Zone 2 and Zone 5 will create more than 5 000 new jobs during the construction phase combined, as well as more than 500 permanent jobs.

4.14 irregULar eXPenditUre

As descibed in note 32 and 33 of the financial

statements, the Board incured irregular expenditure

of R 1 657 835. The Auditor General regards the

expenditure exceeding the budget as irregular. The

board is of the oppinion that this is not irregular as it

was approved by the board by approving the monthly

management accounts. These monthly management

accounts were however not signed by the Board. The

internal Auditors concur with the Board that this is

not irregular expenditure. The Audit fees were part of

this over expendiure by R 691 884. The other major

over expenditure was incurrred in Risk management

and Bussiness Development costs.


4.15 resPonsiBLe gaMBLing

The gambling industry, including gambling

regulators, in South Africa established and funded

the National Responsible Gambling Programme

(NRGP) to promote responsible gambling. The NRGP

conducts responsible gambling campaigns and

public education about gambling.

The NRGP conducted TV, radio and print media

public awareness campaigns on gambling with

specific emphasis during the festive season.

In further pursuit of responsible gambling, the

Board received and processed 324 self exclusion

applications. To ensure compliance with requirements

of the legislation, all advertising by licence holders

in the province is vetted by the Board. All adverts

are required to carry slogans relating to responsible

gambling and must contain the contact details of the

National Responsible Gambling Programme.

4.16 oPerationaL PerforMance

The Board received R23-million annual grant funding

from the Department Economic Development,

Environmental Affairs & Tourism (DEDEAT). Gambling

and betting taxes, fees and interest collected during

the financial year under review totalled R90.1-

million (2009/10: R89,7-million). The recession had

a negative impact in revenue collection resulting in

revenue levels equivalent to the previous financial

year. The financial performance of the Board is fully

disclosed in the accompanying annual financial

statements. The total Gross Gaming Revenues (GGR)

generated in the financial year under review was

R1.1-billion. Full details are contained in the annual

financial statements.

The Board has reported a deficit of R4,3-million

which was funded through the Board’s own cash

reserves. A detailed analysis on the causes of a

deficit is presented in paragraph 4.14 above.

4.17 eXPenditUre reLating to soccer WorLd cUP The Board did not incur expenditure as a result of the soccer World Cup for clothing, tickets, accommodation or transport.

adv n MayosicHairPerson

21GaminG Performance

5. gaMing perforManCe

5.1 reVenUe and taX statistics

2010-2011 Financial Year vs 2009-2010

5.2 distriBUtion of gaMBLing and Betting taKings: 2010/2011 financiaL Year

2010|’11

Gross Gaming RevenueCASINOS

R 000’000

0

100

200

300

400

500

600

700

800

900

1000

2009|’10 2010|’11

Gambling Taxes

R 000’000

0

20

40

60

80

100

2009|’10 2010|’11

Gross Gaming RevenueRACING

R 000’000

0

15

30

45

60

75

90

105

120

135

150

2009|’10 2010|’11

Gambling Taxes

R 000’000

0

3

6

9

12

15

2009|’10 2010|’11

Gross Gaming Revenue

R 000’000

0

15

30

45

60

75

90

105

120

135

150

2009|’10 2010|’11

Gambling Taxes

R 000’000

0

3

6

9

12

15

2009|’10

LPM INDUSTRY

2010|’11

Gross Gaming RevenueTOTAL INDUSTRY

R 000’000

0

100

200

300

400

500

600

700

800

900

1000

1100

2009|’10 2010|’11

Gambling Taxes

R 000’000

0

20

40

60

80

100

2009|’10

952.1 916.4

115.7 118.0

101.9 103.6

1169.6 1137.9

10.2 10.4

90.2 87.4

73.8 70.6

6.3 6.5

Return to Public VAT Casino Revenue Gambling Taxes

DISTRIBUTION OF TAKINGSFROM GAMING MACHINES

DISTRIBUTION OF TAKINGSFROM GAMING TABLES

DISTRIBUTION OF TAKINGSFROM THE RACING INDUSTRY

DISTRIBUTION OF TAKINGSFROM THE LPM INDUSTRY

94.45%

4.45%0.42%

0.68% 2.31%

2.37%

5.37%

1.09%1.34%

1.82%

81.18%

14.69%

56.30%

35.96%8.50%

89.07%

23Audit Committee RepoRt

6. audit CoMMittee report

We are pleased to present our report for the financial

year ended 31 March 2011.

audit committee Members and attendance

The audit committee consists of the members listed

hereunder and should meet at least four times a year

as per its approved terms of reference. During the

current year 5 meetings were held.

naMe of MeMBer nUMBer of Meetings attended

P White (Chairperson) 5

S Whitfield 4

R Hill 5

The Board of Directors appointed a new committee

who commenced their duties effective 1 April 2011.

The new audit committee consists of: ~ L Smith (Chairperson) ~H Marsberg ~ P White ~ Z Nomafu (Director and Audit Committee member)

The new audit committee is considered to have the

correct experience, qualifications and skills to carry

out their responsibilities effectively.

audit committee responsibility

We report that we have adopted appropriate formal

terms of reference in our charter in line with the

requirements of Section 38(1)(a) of the Public

Finance Management Act, No. 1 of 1999 and

Treasury Regulation 3.1. We further report that we

conducted our affairs in compliance with this charter.

the effectiveness of internal control

The system of internal control was not entirely

effective for the year under review. During the year

several deficiencies in the system of internal control

were reported by the internal auditors.

evaluation of financial statements

We have: ~ Reviewed and discussed the annual financial

statements which have been recommended to the

Accounting Authority to be submitted to the Auditor

General for audit purposes at 31 May 2011. ~ Reviewed the Auditor-General South Africa’s manage-

ment report and management’s response thereto. ~ Reviewed the entity’s compliance with legal and

regulatory provisions. ~ Reviewed the performance information to be

approved by the Accounting Authority. ~ Reviewed significant adjustments resulting from the audit.

internal audit

The Internal Audit function was outsourced to a service

provider from 1st April 2010. A risk assessment

was performed and an internal audit plan prepared.

The internal audit has met their plan for the year as

adjusted where necessary with the approval of the audit

committee. Due to insufficient time lapsing between

the internal audit reports and the date of this report, the

audit committee has not been able to assess whether

the risks identified by the risk assessment and internal

audit reports have been adequately addressed. We are

satisfied that the internal audit function is operating

effectively. However, we express our concern that a

review of the predetermined objectives of the Board

had not been carried out prior to the compilation of the

annual financial statements.

auditor-general south africa

We concur with and accept the Auditor-General South

Africa’s report on the annual financial statements, and

are of the opinion that the audited annual financial

statements should be accepted read together with the

report of the Auditor-General South Africa.

The audit committee is however concerned with the

irregular expenditure highlighted in paragraph 10 of

said report and this matter will be investigated in the

year ending 31 March 2012.

Furthermore, the Committee is concerned with the

outcome of the audit of pre-determined objectives

and have requested that this matter be audited by

internal audit during the first and second quarters as

well as third and forth quarters for the year ending

31 March 2012.

Loren smith

chairperson of the audit committee (current)

31 May 2011

25Auditor GenerAl's report

7. the auditor general’s report

rePort of tHe aUditor generaL to tHe

eastern caPe ProVinciaL LegisLatUre on

tHe eastern caPe gaMBLing and Betting

Board for tHe Year ended 31 MarcH 2011

a. rePort on tHe financiaL stateMents

introduction1. I have audited the accompanying financial statements

of the Eastern Cape Gambling and Betting Board,

which comprise the statement of financial position

as at 31 March 2010, the statement of financial

performance, statement of changes in net assets and

statement of cash flows for the year then ended, a

summary of significant accounting policies and other

explanatory information, as set out on pages 55 to 76.

accounting authority’s responsibility

for the financial statements2. The accounting authority is responsible for the preparation

and fair presentation of these financial statements in

accordance with South African Standards of Generally

Recognised Accounting Practice (SA Standards of GRAP) and

in the manner required by the Public Finance Management

Act of South Africa (PFMA). This responsibility includes:

designing, implementing and maintaining internal control

relevant to the preparation and fair presentation of financial

statements that are free from material misstatement,

whether due to fraud or error; selecting and applying

appropriate accounting policies; and making accounting

estimates that are reasonable in the circumstances.

auditor-general’s responsibility3. As required by section 188 of the Constitution of

the Republic of South Africa, 1996 (Act No. 108

of 1996) and section 4 of the Public Audit Act of

South Africa, 2004 (Act No. 25 of 2004) (PAA),

my responsibility is to express an opinion on these

financial statements based on my audit,

4. I conducted my audit in accordance with International

Standards on Auditing and General Notice 1111 of

2010 issued in Government Gazette 33872 of 15

December 2010. Those standards require that I comply

with ethical requirements and plan and perform the

audit to obtain reasonable assurance about whether the

financial statements are free from material misstatement.

5. An audit involves performing procedures to obtain

audit evidence about the amounts and disclosures

in the financial statements. The procedures selected

depend on the auditor’s judgement, including the

assessment of the risks of material misstatement

of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor

considers internal control relevant to the entity’s

preparation and fair presentation of the financial

statements in order to design audit procedures that

are appropriate in the circumstances, but not for the

purpose of expressing an opinion on the effectiveness

of the entity’s internal control. An audit also includes

evaluating the appropriateness of accounting policies

used and the reasonableness of accounting estimates

made by management, as well as evaluating the

overall presentation of the financial statements.

6. I believe that the audit evidence I have obtained is

sufficient and appropriate to provide a basis for my

audit opinion.

opinion7. In my opinion, the financial statements present fairly, in

all material respects, the financial position of the Eastern

Cape Gambling and Betting Board as at 31 March 2011

and its financial performance and cash flows for the year

then ended, in accordance with SA Standards of CRAP

and in the manner required by the PFMA.

emphasis of matters8. I draw attention to the matters below. My opinion is

not modified in respect of these matters:

restatement of corresponding figures9. As disclosed in note 26 to the annual financial

statements certain comparative figures for 31 March

2010 have been reclassified to separately disclose these

amounts in the statement of financial performance.

irregular expenditure10. As disclosed in note 31 to the annual financial

statements the current year approved budget was

overspent by R1 657 835. This has been disclosed

as irregular expenditure. At year end, this expenditure

was still under investigation.


Material overspending of the budget11. I draw attention to note 33 to the annual financial

statements detailing the under and overspending

of the budget for the current year resulting in a

net overspending of R1 657 835 which has been

disclosed as irregular expenditure.

B. rePort on otHer LegaL and regULatorY reQUireMents

12. In accordance with the PAA and in terms of General

notice1111 of 2010, issued in Government

Gazette33872 of 15 December 2010, I include below

my findings on the annual performance report as set

out on pages 29 to 37 and material non-compliance

with laws and regulations applicable to the Eastern

Cape Gambling and Betting Board.

Predetermined objectives

Usefulness of information13. The following criteria are relevant to the finding below:

~ Consistency: Objectives, indicators and targets are

consistent between planning and reporting documents ~ Relevance: A clear and logical link exists between

the objectives, outcomes, outputs, indicators and

performance targets ~Measurability: Indicators are well-defined and/

or verifiable, and targets are specific, and/or

measurable and/or time-bound.

Audit findings:

Planned and reported targets are not measurable14. For the selected objectives, 91% of the planned and

reported targets were not: ~ Specific in clearly identifying the nature and

required level of performance; ~Measurable in identifying the required performance; ~ Time-bound in specifying the time period or

deadline for delivery.

15. There was no logical link between the objectives,

indicators and targets for 62% of the objectives tested.

reliability of information16. The following criteria are relevant to the finding below:

Validity: Actual reported performance has occurred

and pertains to the entity ~ Accuracy; Amounts, numbers, and other data

relating to reported actual performance have been

recorded and reported appropriately ~ Completeness: All actual results and events that

should have been recorded have been included in

the annual performance report

Audit finding:

reasons for major variances between planned

and actual reported targets were not supported by

sufficient appropriate evidence17. Sufficient appropriate evidence to support the reasons

for 82% of the major variances between the planned

and the actual reported targets could not be obtained.

compliance with laws and regulations

Procurement of goods and services18. Certain invitations for competitive bidding were not

advertised for a minimum period of 21 days as per the

requirements of TR 16A6.3(c). Adequate responses to

the advertisement were however received for the bid.

19. Sufficient appropriate audit evidence could not

be obtained that awards were made to suppliers

who provided written proof from the South African

Revenue Service that their tax matters are in order

as per the requirements of Preferential Procurement

Regulations 16 and TR 16A9.1(d).

20. Awards were made to bidders who did not submit an

SBD 4 declaring whether the bidder or any person

connect with the bidder is employed by the state or if

the bidder is a legal person, whether the bidder has

a relationship with persons/ a person involved in the

evaluation and/or adjudication of the bids as per the

requirements of Practice Note 7 of 2009/10.

expenditure management21. The Accounting Authority did not ensure that the

expenditure for the year is in accordance with the

approved budget as required by to section 53(4) of

the PFMA.

strategic planning and performance management22. The accounting authority did not ensure that the

public entity has and maintains an effective, efficient

and transparent system of internal control regarding

performance management, which described and

represented how the entity’s processes of performance

planning, monitoring, measurement, review and

reporting as conducted, organised and managed as

required by section 51(1)(a)(i) of the PFMA.

27Auditor GenerAl's report

internal controls and internal audit23. In terms of Treasury Regulation 27,2,1, a risk management

strategy, which must include a fraud prevention plan,

must be used to direct internal audits effort and priority.

Management did not comply with this regulation as the

fraud prevention plan had not been updated or approved

for implementation. In addition, there was no risk

management policy in place during the year.

annual financial statements,

performance and annual reports24. The accounting authority submitted financial

statements for auditing that were not prepared in

all material aspects in accordance with generally

accepted accounting practice as required by section

55(1) ((a) and) (b) of the PFMA, The material

misstatements identified by the AGSA with regards to

current assets, liabilities, expenditure and disclosure

items were subsequently corrected.

c. internaL controL

25. In accordance with the PAA and in terms of General

notice 1111 of 2010, issued in Government Gazette

33872 of 15 December 2010, I considered internal

control relevant to my audit, but not for the purpose of

expressing an opinion on the effectiveness of internal

control. The matters reported below are limited to the

significant deficiencies that resulted in the correction

of material misstatements in the financial statements,

the findings on the annual performance report and

the findings on compliance with laws and regulations

included in this report.

Leadership26. Management did not take adequate steps to ensure

that controls were in place for the correct and

accurate reporting on performance information.

27. Internal controls over the preparation of the financial

statements are not adequate and management

occasionally overrides SCM and compliance policy.

28. Reports on performance information are not adequately

reviewed and insufficient evidence exists regarding

the actual performance and variances identified.

In addition, there is no suitably qualified person

dedicated to ensuring that performance objectives are

adequately met and correctly reported on.

29. The executive authority did not adequately monitor

the expenditure incurred against the approved budget

during the year. This resulted in irregular expenditure

disclosed in the notes to the financial statements.

financial and performance management30. Performance information was not correctly and

accurately reported on and the information provided

was not relevant or useful.

31. Processes and systems implemented by management

over financial reporting were not adequately monitored

and reviewed during the year as a result the financial

statement submitted for audit contained material

misstatements that were corrected during the audit.

governance32. No fraud prevention plan or risk assessment/

management policy existed during the year, In addition

the risks to reporting on predetermined objectives

were not identified and responded to timeously.

d. otHer rePorts

investigations33. During the year, an investigation into the appointment

of the CEO was finalised. This investigation took

place as a result of suspected misconduct into

the CEO’s appointment at the request of the MEC

of the Department of Economic Development,

Environmental Affairs & Tourism.

governance review34. During the year, a governance review was performed

on all board members and employees as well as their

entities at the request of the MEC of the Department

of Economic Development, Environmental Affairs &

Tourism.

east London

29 July 2011

29OperatiOnal perfOrmance

8. operational perforManCe

8.1 introdUction

This Performance Report has been prepared through the endeavours of management and staff representatives as delegated by the Board. It remains at all times a dynamic and working document that will form the basis of our operations.

8.2 definitions

Board Eastern Cape Gambling and Betting Board rfP Request For Proposal

ceo Chief Executive Officer saacreg South African Advisory Council for Responsible Gambling

LPM Limited Payout Machine section 40 applications Acquisition of financial interest as defined in the Act

Mec Member of the Council site a Three to five machines

other licence Bookmakers,manufacturers and Totalizator site B Twenty to forty machines

other registrations Certificate of suitability Wan Wide Area Network

PfMa Public Finance Management Act Loc Letter of Certification

8.3 PerforMance against oPerationaL PLan

MeasUraBLe oBJectiVe PerforMance indicator / MeasUre targetacHieVeMent/ actUaL oUtPUt

cHaLLenges / reasons for non-PerforMance

PLans to address cHaLLenges & non-PerforMance

Provide effective and efficient strategic leadership and direction to the organisation.

~ Appropriate mechanisms developed to ensure: y Internal controls and audit procedures y Independent external auditors y Oversight and management of risk y Oversight of financial statements y Determination of appropriate senior management remuneration arrangements

y Procedures for appointing Board members

~ All new systems established and operational

95% complete Implementation & rollout of BSC commenced late October 2010.

Service Providers appointed for BSC & OD.

~ Controls and audit arrangements established

100% complete None None

~ Appropriate strategic leadership arrangements established


~ Board and senior management communication with ECGBB improved strategic preparations initiated for the next three years APP






Provide oversight and all–inclusive general administration

~ Financial policies, guidelines and procedures developed and implemented

~ Supply Chain Management (SCM) Policies, guidelines and procedures developed and implemented

~ Policies, guidelines and procedures in place and operational

95% complete Critical senior management positions filled late (October 2010)

All managers & other critical junior staff positions will be filled and thereby policies, guidelines & procedures will be fully operational.

~ Revised SCM procedures in place and operational

95% complete Contributory factor was capacity impedements – however, SCM procudures revewed by management, but only pending relevant Board subcommittee and thereafter full Board approval.

Capacity impedements will be addressed and plans are in place to ensure timeous review.

Formulate, manage and implement ECGBB strategic planning procedures

~ Strategic planning procedures established in terms of PFMA and Treasury specifications

~ All strategic planning systems reviewed and adjusted based on experience


~ Motivations for strategic and performance planning adjustments prepared, where relevant


~ Revised documents completed, where necessary


Formulate, manage and monitor SLAs entered into by the ECGBB with various external interests and agencies.

~ All SLAs prepared in accordance with Board-approved specifications

~ All SLAs subjected to rigorous monitoring and evaluation procedures

~ SLAs categorised for review and oversight 100% complete None None

~ SLAs adjusted based on M&E procedures undertaken


Sound internal financial management established

~ Accurate budgeting, sound cashflow management and the preparation of management accounts in place

~ Annual financial statements prepared in accordance with relevant standards and legislation

~ Unqualified audit reports

~ Systems reviewed to determine possible improvements


~ Proper internal financial management systems in place


~ Unqualified audit opinion received 100% complete None None

~ Adequate systems devised to ensure sustained financial management


SCM procurement systems established

~ Appropriate procurement systems and practices designed and implemented

~ PFMA-compliant SCM systems in place 100% complete None None

~ Review systems to determine possible improvements


Maintain and review adequate and effective internal control and risk management systems.

Internal controls and risk management reviewed and updatedFraud prevention plan in placeInternal audit services in place

Internal control and risk management systems reviewed and adjusted where necessary

100% complete (systems reviewed and improved)

None None





Legal support systems established

~ Legal service needs identified and documented

~ Legal support register revised and updated

90% complete (systems reviewed and improved).

Capacity related impedements

Plans to address capacity impedements have been put in place and Legal Services Manager position advertised.

State of the art Information and Communications Technology (ICT) systems established

~ Comprehensive ICT systems established ~ Electronic Document Management System (EDMS) designed

~ ICT systems reviewed and updated 100% complete None None

~ EDMS installation completed 40% complete Project ongoing EDMS will be fully developed by the year 2011/12.

Ensure that all gambling fees and taxes are collected efficiently.

~ Gambling fee collection mechanisms in place and fully operational

~ Gambling tax collection mechanisms in place and fully operational

~ Collection mechanisms for gambling fees and taxes reviewed and adjusted where required


Participate in on–going investigations into options for increasing income from gaming.

~ Co-operative investigations established with relevant ECGBB divisions

~ Potential for increased gaming-related income identified

~ lnternal co-operative procedures established for implementing initiatives to increase gaming revenue


Effective regulatory and advisory frameworks to ensure that gaming licences are properly allocated

~ Appropriate licence regulatory systems in place

~ Advisory procedures in place ~ Licence allocation procedures reviewed and updated

~ All systems reviewed, updated and strengthened


License and regulate casinos, horseracing, route and site and bingo operations.

~ Licensing procedures established for: y Casinos y Horseracing y Route and Site Operations y Bingo operations

~ Regulatory procedures established for: y Casinos y Horseracing y Route and Site operations y Bingo operations

~ Status of licences confirmed: y Boardwalk Casino (Zone 1) y Hemingways Casino (Zone 2) y Queens Casino (Zone 3) y Wild Coast Sun Casino (Zone 5) y Zone 4 Mthatha Casino licence awarded

100% complete100% complete100% complete100% complete0% complete

NoneNoneNoneNonePending the Supreme Court of Appeal

NoneNoneNoneNoneThe Board has appealed against the high court decision in the Supreme Court of Appeal

~ Route and Site operator: y Vukani Gambling EC






~ Phumelela Gaming & Leisure Ltd y Fairview Racecourse y Arlington Racecourse y Totalisator Licence


~ Gaming equipment manufacturers and suppliers


~ Advance notice provided to Board regarding licence renewal dates and procedures

100% complete

Ensure that licence conditions are complied with

~ Detailed record of all licence conditions compiled and updated regularly

~ Key measurement indicators established to verify licence condition compliance

~ Compliance register compiled for each licence category

80% complete Capacity problem due to the casino re–licensing process for Zones 1 & 2.

Plans are in place to enhance capacity capacity to address the problem

~ Conditions reviewed with licencees to include SED project (in association with the EC PGT)

80% complete Capacity problem due to the casino re–licensing process for Zones 1 & 2. But SED & EC PGT project not yet in place.

Plans are in place to enhance capacity to address the problem

~ On-going compliance with licence conditions secured

80% complete Capacity problem due to the casino re–licensing process for Zones 1 & 2

Plans are in place to enhance capacity capacity to address the problem

Investigate and regulate objectively and fairly.

~ Appropriate probity requirements established for all inspection personnel

~ Inspection reports subjected to random review and verification

~ Revised investigation and regulatory procedures in place and operational

90% complete Review of legislation is underway

Process is pending the going through all legal stages but it is well monitired.

Develop and maintain accurate records concerning gaming personnel registered as key persons in terms of Ch.12 s.68 of the ECGBB Act

~ All Key Persons defined for registration: y Managers. y Supervisors. y Pit bosses. y In-house inspectors. y Surveillance personnel.

~ Other categories. ~ Certificates of registration issued to all Key Persons in terms of s.115 of the ECGBB Regulations.

~ Monitoring procedures established ~ Registration renewal procedures established

~ Key Persons Register updated 95% complete GIMS implemented during the period under review. It has minor discrepancies that are being attended to.

Dedicated personnel to attend to the GIMS discrepancies

~ Key Persons definitions reviewed and adjusted where required

95% complete GIMS implemented. Minor discrepancies are being attended to


~ New Certificates of Registration issued where required



~ Certificates of Registration renewed where appropriate







Institutionalise the ECGBB Shareholder’s Compact

~ ECGBB-DEDEAT Shareholder’s Compact concluded and signed off

~ Train all Board members and senior management on the Shareholder‘s Compact

~ Provision made for the Compact to be reviewed annually

~ Prepare Compact document for wider distribution to indicate the partnership relationship with DEDEAT


~ Compact marketed as facilitating rather than coercive


Provide timeous, quality legal services to divisions and the Board

~ % Customer Satisfaction Index ~ 76% 0% complete Capacity related impedements. Legal Services Manager position vacant

Plans to address capacity impedements has been put in place and Legal Services Manager position advertised.

Provide timeous, quality legal services to Provincial Gaming Trust

~ % compliance with Service Level Agreement

~ 76% 0% complete Provincial Gaming Trust not ysset in place

Report for PGT has been submitted to the Board for approval

Compliance with contracts between the ECGBB and DEDEAT, licensees and Provincial Gaming Trust

~ Compliance Audit reported to Board on a quarterly basis

~ 80% 100% complete None None

Reduce costs of litigation ~ % Reduction in litigation costs ~ 10% reduction 0% complete Litigations were unavoidable

Once legal manager is appointed it will reduce litigation costs

Ensure that all Board members and Trustees are adequately trained to carry out their legal mandates

~ % of Board members trained ~ 100% compliance with skills training plan


Review human resources policies to ensure sound human resource practices.

~ HR policies and practices comply with established best practice systems

~ HR manuals and resource documents prepared to ensure standardised implementation

~ Strategic initiatives developed and implemented to ensure appropriate filling of organogram posts

70% complete Implementation & rollout of BSC commenced late October 2010

Plan for Implementation & rollout of BSC commenced

~ Focus on leadership qualities 100% complete None None

Develop and implement staff training and development programmes

~ Comprehensive Personnel Development Plan compiled and in place

~ Detailed training requirements specified for all categories of personnel

~ Personnel Development Plan approved by Board

100% PDP plans development

None None

~ Personnel Development Plan implementation strategies developed

80% training plan for all levels

~ Systems established for quarterly reviews 80% HR policies developed and reviewed





Develop and maintain Integrated Performance Management Systems (IPMS).

~ IPMS defined and installed ~ Management IPMS linked to strategic plan goals and objectives

~ IPMS procedures adopted by all divisions as a basis for management assessment

100% Alignment of IPA’s to Organisational and Divisional strategy

None None

~ IPMS aligned to the BSC system 100% Approval of Balance Scorecard and organisational design plans

None None

~ IPMS-specific training provided 90% complete Pending completion of BSC process

Pending completion of BSC process

~ Quarterly performance review programme established


~ Ongoing implementation 100% complete None None

Strategic planning systems established

~ Basic templates for all key documents established: y Five-Year Strategic and Performance Plan

y Three-Year MTEF-related Annual Performance Plan (APP)

y One-Year Operational Plan (budget) y Relevant data sources identified, established and updated regularly

~ Review the ECGBB Strategic Plan based on 2009/10 experience

100% None None

~ Revise and update where necessary 100% complete None None

~ Formulate a new APP for the next MTEF period


~ Formulate a One-Year Operational plan (budget) for the next year (2011/12)


~ Submit all documents to the Board for approval by the due date(s)


Establish relevant socio–economic data requirements

~ Comprehensive and accessible data base established

~ Board approvals secured 100% complete None None

~ Skilled data base team assembled 100% complete None None

~ Relevant and cost-effective IT hardware and software acquired and installed


~ Data storage and retrieval procedures established

90% complete Document management system is ongoing

Establish ECGBB role and responsibilities regarding the PGDP

~ PGDP components relevant to the ECGBB identified and defined

~ Develop and maintain close working relationships with PGDP management

0% Capacity problem as Strategic Services Manager position not filled yet.

Strategic Services Manager position will be filled: relationships with PGDP will be enhanced

~ Ensure alignment of PGT interests with PGDP principles and goals

0% PGT not approved by the Board

Report for PGT has been submitted to the Board for approval

~ Develop a proactive, participatory PGDP role for the ECGBB

0% Capacity problem as Strategic Services Manager position not filled yet.

Strategic Services Manager position will be filled: relationships with PGDP will be enhanced





Establish ECGBB role and responsibilities regarding municipal IDPs

~ IDP components relevant to the ECGBB identified and defined

~ Extend and widen the interest base of ECGBB relationships with all municipalities

0% complete Capacity problem as Strategic Services Manager position not filled

Strategic Services Manager position will be filled: relationships with municipalities for planning purposes will be enhanced

~ Ensure that ECGBB skills and data sources are made available to municipalities for planning purposes


Strategic Services Manager position will be filled and thereby skills and data sources are made available to municipalities for planning purposes.

~ Assist municipalities, wherever possible, in the formulation and revision of IDPs and GDSs


Develop appropriate systems for maintaining intranet and website facilities

~ Reliable ECGBB intranet system established and operational

~ Reliable and accurate ECGBB website established and operational

~ Comprehensive system upgrade plan formulated to address existing and new needs


~ Board approval secured for systems and costs


~ Procedures and mechanisms planned to ensure improved internal access to systems and data [intranet] and to external data and information [Web]


Ensure that IT policies and practices are updated regularly

~ Comprehensive Master Systems Plan (MSP) developed and regularly updated

~ Revised and updated MSP completed 0% complete Not done yet but internal IT audit conducted and recommendations are being implemented

Plan has been put in place to attend to MPS

~ Hardware and software implications approved by Board


~ Implementation systems established 100% complete None None

~ Monitoring and maintenance procedures established


Develop and implement a Balanced Scorecard System (BSC) system

~ Nature and intent of the BSC system defined and promoted among all personnel

~ Regular internal BSC system workshops arranged to ensure maximum staff participation and commitment

~ BSC application implemented 100% complete None None

~ BSC output report prepared for management

80% complete BSC process not complete yet

BSC process will be completed

~ Annual BSC output report prepared for Board

~ BSC application implemented

~ BSC output report prepared for management





Identify relevant customer services

~ Appropriate Service Delivery Plan developed

~ Finalised Service Delivery Plan approved by Board

0% complete Marketing & advertising consultant appointed late (October 2010)

OD implementation developed and approved

~ Quality customer oriented service delivered to the public, licensees and other stakeholders


~ Adequately trained and resourced staff structure available to deliver quality services

80% complete Awaited BSC & OD for re–alignment of positions to the strategy

Complete BSC & OD for re–alignment of positions to the strategy

Establish an appropriate marketing–oriented personnel component

~ Internal ECGBB Marketing Unit established

~ Marketing oriented personnel component established


~ ECGBB promotional initiatives planned and implemented

50% Complete Marketing & Advertising consultant appointed October 2010


~ Prepare and print ECGBB annual report 100% complete None None

Develop relevant advisory services for stakeholders

~ Relevant advisory services established through stakeholder engagement

~ Advisory service procedures and practices established

~ Advisory Services Directory adjusted based on experience

0% complete Marketing & Adv. Consult. apptd. 10/2010


~ Revised advisory service made available 0% Complete Marketing & Adv. Consult. apptd. 10/2010


~ Outcomes reviewed 0% Marketing & Adv. Consult. apptd. 10/2010


Develop marketing strategies to improve the external image of the ECGBB

~ Clear improvement in ECGBB external image

~ Initiate comprehensive implementation of the image marketing Plan

0% Complete Marketing & Adv. Consult. apptd. 10/2010


~ Measure changes through Focus-Group market research

0% Complete Marketing & Adv. Consult. apptd. 10/2010


~ Report outcomes to Board 0% Complete Marketing & Adv. Consult. apptd. 10/2010


~ Extend marketing process 0% Complete Marketing & Adv. Consult. apptd. 10/2010


Establish an effective and professional internal research competency.

~ Key marketing-related research functions internalised

~ ECGBB market research function established


~ Review all previous ECGBB market research commissioned



~ Undertake implementation where feasible



~ Plan own market research procedures 0% complete Marketing & Adv. Consult. apptd. 10/2010



8.4 PerforMance rePort – anneXUre 1

8.4.1 taX and fee collections – five year review of the boardProVinciaL reVenUe 2006/07 2007/08 2008/2009 2009/2010 2010/2011 totaL

r 000’000 r 000’000 r 000’000 r 000’000 r 000’000 r 000’000

Casino 65 346 71 556 70 516 70 595 73 768 351 781

Bookmakers Taxes 1 689 2 296 2 339 2 370 2 272 10 966

Totalisator Taxes 4 040 4 116 4 147 4 079 3 995 20 377

LPM 7 175 9 300 10 840 10 356 10 187 47 858

Fees 1 752 1 801 1 378 1 630 1 965 8 526

oWn reVenUe

Exclusivity Fee – – – – 42 738 42 738

Application Fee 1 301 2 319 2 086 221 997 6 924

Administration Fee 1 935 543 2 351 1 946 2 233 9 008

totaL reVenUe 83 238 91 931 93 657 91 197 138 155 493 178

grant fUnding

Voted 19 246 20 233 20 690 22 017 23 338 105 524

Less: Repaid – – – – – –

nett Utilised 19 246 20 233 20 690 22 017 23 338 105 524

On behalf of the Board we wish to express our

sincere gratitude to the Provincial Government for

the support afforded to us during the course of the

financial year and to management and staff for their

performance in achieving the goals of the Board.

r M ZWane

chief executive officer

39HR OveRsigHt statistics

9. hr oVersight statistiCs for the period april 2010 to MarCh 2011

table 1.1: Main service for service delivery improvement and standards

Main serVices actUaL cUstoMersPotentiaL

cUstoMersstandard of

serVice

actUaL acHieVeMent

against standards

Gambling Regulation Casino, Horse Racing Industry and Route Operators High High

table 2.1: Personnel costs by Programme

PrograMMe totaL eXPenditUrePersonneL

eXPenditUretraining

eXPenditUreProfessionaL &

sPeciaL serVices

PersonneL costs as % of totaL eXPenditUre

aVerage PersonneL costs

Per eMPLoYee eMPLoYMent

Eastern Cape Gambling & Betting Board 35 762 037 14 119 747 716 964 3 400 792 39 522 954 27

table 2.2: Personnel costs by salary Band

saLarY BandsPersonneL

eXPenditUre% of totaL

PersonneL costs

aVerage PersonneL cost

Per eMPLoYeetotaL PersonneL

eXPenditUrenUMBer of eMPLoYees

Lower skilled (Band B1–B2) 336 802 2 168 401 2

Skilled (Band B3–B5) 1 442 844 10 240 474 6

Highly skilled production (Band C1–C5) 5 479 157 39 421 474 13

Highly skilled supervision (Band D1–D3) 3 392 978 24 1 130 993 3

Senior management (Band D4–E1) 3 467 966 25 1 155 989 3

totaL 14 119 747 100 3 117 331 0 27

table 2.3: salaries, overtime, Home owners allowance & Medical aid by Programme

PrograMMe saLaries

saLaries as % of PersonneL

costs oVertiMe

oVertiMe as % of PersonneL

costs Hoa

Hoa as % of PersonneL

costs MedicaL ass.

MedicaL ass. as % of

PersonneL costs

totaL PersonneL

coat

Eastern Cape Gambling & Betting Board 7 746 788 55 0 0 609 652 4 8 356 440

totaL 7 746 788 55 0 0 609 652 4 8 356 440


table 2.4: salaries, overtime, Home owners allowance & Medical aid by salary Band

saLarY Bands saLaries

saLaries as % of PersonneL

costs oVertiMe

oVertiMe as % of PersonneL

costs Hoa

Hoa as % of PersonneL

costs MedicaL ass.

MedicaL ass. as % of

PersonneL costs

totaL PersonneL

cost

Lower skilled (Band B1–B2) 167 235 1 0 0 18 396 0.13 185 631

Skilled (Band B3–B5) 567 541 4 0 0 78 649 0.56 646 190

Highly skilled production (Band C1–C5) 4 349 683 31 0 0 356 419 2.52 4 706 102

Highly skilled supervision (Band D1–D3) 1 023 465 7 0 0 156 188 1.11 1 179 653

Senior management (Band D4–E1) 1 638 864 12 0 0 – 0 1 638 864

totaL 7 746 788 55 0 0 0 0 609 652 4.32 8 356 440

table 3.1: employment and Vacancies by Programme at end of period

PrograMMe nUMBer of PostsnUMBer of Posts

fiLLed VacancY rate

nUMBer of Posts fiLLed

additionaL to tHe estaBLisHMent

Eastern Cape Gambling & Betting Board 34 27 20.6 0

totaL 34 27 20.6 0

table 3.2: employment and Vacancies by salary Band at end of period

saLarY Band nUMBer of PostsnUMBer of Posts

fiLLed VacancY rate

nUMBer of Posts fiLLed

additionaL to tHe estaBLisHMent

Lower skilled (Band B1–B2) 2 2 0 0

Skilled (Band B3–B5) 6 6 0 0

Highly skilled production (Band C1–C5) 19 13 31.6 0

Highly skilled supervision (Band D1–D3) 4 3 25 0

Senior management (Band D4–E1) 3 3 0 0

totaL 34 27 20.6 0


table 4.1: Job evaluation

saLarY Band nUMBer of PostsnUMBer of JoBs

eVaLUated% of Posts eVaLUated

nUMBer of Posts UPgraded

% of UPgraded Posts eVaLUated

nUMBer of Posts doWngraded

% of doWngraded Posts eVaLUated

Lower skilled (Band B1–B2) 2 0 0 0 0 0 0

Skilled (Band B3–B5) 6 0 0 0 0 0 0

Highly skilled production (Band C1–C5) 19 0 0 0 0 0 0

Highly skilled supervision (Band D1–D3) 4 0 0 0 0 0 0

Senior management (Band D4–D5) 2 0 0 0 0 0 0

Senior management Services (Band E1–E2) 1 0 0 0 0 0 0

totaL 34 0 0 0 0 0 0

table 4.2: Profile of employees whose positions were upgraded following upgrading of their posts

Beneficiaries african asian coLoUred WHite totaL

Female 0 0 0 0 0

Male 0 0 0 0 0

totaL 0 0 0 0 0

Employees with Disabilities 0 0 0 0 0

table 4.3: employees whose salary level exceed the grade determined by Job evaluation [i.t.o. Psr 1.V.c.3]

occUPationnUMBer of eMPLoYees

JoB eVaLUation LeVeL

reMUneration LeVeL

reason for deViation

no of eMPLoYees in dePt

Manager: Legal Services 0

System Analyst 0

totaL 0

% of TOTAL Employment 0

table 4.4: Profile of employees whose salary level exceeded the grade determined by Job evaluation [i.t.o. Psr 1.V.c.3]

Beneficiaries african asian coLoUred WHite totaL

Female 0 0 0 0 0

Male 0 0 0 0 0

totaL 0 0 0 0 0

Employees with Disabilities 0


table 5.1: annual turnover rates by salary Band

saLarY Band

eMPLoYMent at Beginning of

Period aPPointMents terMinations tUrnoVer rate

Lower skilled (Band B1–B2) 2 0 0 0

Skilled (Band B3–B5) 6 0 0 0

Highly skilled production (Band C1–C5) 13 0 1 7.7

Highly skilled supervision (Band D1–D3) 3 0 1 33.3

Senior management – Service Band D4–D5– Permanent 2 2 0 0

Senior management – Service Band E1–E2 – Permanent 1 0 0 0

totaL 27 2 2 7.4

table 5.2: annual turnover rates by critical occupation

occUPation


Period aPPointMents terMinations tUrnoVer rate

NO CRITICAL POSTS IDENTIFIED

table 5.3: reasons why staff are leaving the Board

terMination tYPe nUMBer% of totaL

resignations% of totaL

eMPLoYMent totaL totaL eMPLoYMent

Death, Permanent 0 0 0 27 27

Resignation, Permanent 2 7.4 7.4 27 27

Dismissal–operational changes, Permanent 0 0 0 27 27

Discharge due to ill health, Permanent 0 0 0 27 27

Dismissal–misconduct, Permanent 0 0 0 27 27

Retirement, Permanent 0 0 0 27 27

totaL 2 7.4 7.4 27 27

Resignations as % of Employment 7.40%

table 5.4: Promotions by critical occupation

occUPation


Period

ProMotions to anotHer saLarY

LeVeL

saLarY LeVeL ProMotions as a %

of eMPLoYMent

Progressions to anotHer notcH WitHin saLarY

LeVeL

notcH Progressions as a % of eMPLoYMent

NO CRITICAL POSTS IDENTIFIED


table 5.5: Promotions by salary Band

saLarY Band


Period

ProMotions to anotHer saLarY

LeVeL

saLarY LeVeL ProMotions as a %

of eMPLoYMent

Progressions to anotHer notcH WitHin saLarY

LeVeL

notcH Progressions as a % of eMPLoYMent

Lower skilled (Band B1–B2) 2 0 0 0 0

Skilled (Band B3–B5) 6 0 0 0 0

Highly skilled production (Band C1–C5) 13 0 0 0 0

Highly skilled supervision (Band D1–D3) 3 0 0 0 0

Senior management (Band D4–E1) 3 1 3.7 0 0

totaL 27 1 3.7 0 0

table 6.1: total number of employees (incl. employees with disabilities) per occupational category (sasco)

occUPationaL categorYMaLe,

africanMaLe,

coLoUredMaLe, indian

MaLe, totaL

BLacKsMaLe, WHite

feMaLe, african

feMaLe, coLoUred

feMaLe, indian

feMaLe, totaL

BLacKsfeMaLe, WHite totaL

Senior officials & managers, Permanent 5 1 0 6 0 0 0 0 0 0 6

Professionals, Permanent 3 0 0 3 4 7 0 0 7 0 14

Clerks, Permanent 0 0 0 0 0 4 0 1 5 0 5

Service & sales workers, Permanent 0 0 0 0 0 0 0 0 0 0 0

Craft & related trade workers, Permanent 0 0 0 0 0 0 0 0 0 0 0

Plant & machine operators & assemblers, Permanent 1 0 0 1 0 0 0 0 0 0 1

Elementary occupations, Permanent 1 0 0 1 0 0 0 0 0 0 1

totaL 10 1 0 11 4 11 0 1 12 0 27

Employees with Disabilities 0 0 0 0 0 0 0 0 0 0 0

table 6.2: total number of employees (incl. employees with disabilities) per occupational Bands

occUPationaL BandsMaLe,

africanMaLe,


MaLe, totaL

BLacKsMaLe, WHite

feMaLe, african

feMaLe, coLoUred

feMaLe, indian

feMaLe, totaL


Top Management, Permanent 1 1 0 2 0 0 0 0 0 0 2

Senior Management, Permanent 4 0 0 4 0 0 0 0 0 0 4

Professionally qualified and experienced specialists and mid–management, Permanent

3 0 0 3 4 7 0 0 7 0 14



africanMaLe,


MaLe, totaL

BLacKsMaLe, WHite

feMaLe, african

feMaLe, coLoUred

feMaLe, indian

feMaLe, totaL


Skilled technical and academically qualified workers, junior management, supervisors, foremen, Permanent

1 0 0 1 0 4 0 1 4 0 6

Semi–skilled & discretionary decision making, Permanent 0 0 0 0 0 0 0 0 0 0 0

Unskilled & defined decision making, Permanent 1 0 0 1 0 0 0 0 0 0 1

totaL 10 1 0 11 4 11 0 1 11 0 27

table 6.3:recruitment


africanMaLe,


MaLe, totaL

BLacKsMaLe, WHite

feMaLe, african

feMaLe, coLoUred

feMaLe, indian

feMaLe, totaL




0 0 0 0 0 0 0 0 0 0 0


0 0 0 0 0 0 0 0 0 0 0

totaL 0 1 0 0 0 0 0 0 0 0 1

table 6.4: Promotions


africanMaLe,


MaLe, totaL

BLacKsMaLe, WHite

feMaLe, african

feMaLe, coLoUred

feMaLe, indian

feMaLe, totaL


Senior Management, Managers, Permanent 1 0 0 0 0 0 0 0 0 0 1

Skilled technical and academically qualified workers 0 0 0 0 0 0 0 0 0 0 0

Professionally qualified and experienced specialists 0 0 0 0 0 0 0 0 0 0 0

totaL 1 0 0 0 0 0 0 0 0 0 1

table 6.5: terminations


africanMaLe,


MaLe, totaL

BLacKsMaLe, WHite

feMaLe, african

feMaLe, coLoUred

feMaLe, indian

feMaLe, totaL




1 0 0 1 0 0 0 0 0 0 1


0 0 0 0 1 0 0 0 0 0 1



africanMaLe,


MaLe, totaL

BLacKsMaLe, WHite

feMaLe, african

feMaLe, coLoUred

feMaLe, indian

feMaLe, totaL


Semi–skilled & discretionary decision making, Permanent 0 0 0 0 0 0 0 0 0 0 0

Unskilled & defined decision making, Permanent 0 0 0 0 0 0 0 0 0 0 0

totaL 1 0 0 1 1 0 0 0 0 0 2

table 6.6: disciplinary action

disciPLinarY actionMaLe,

africanMaLe,


MaLe, totaL

BLacKsMaLe, WHite

feMaLe, african

feMaLe, coLoUred

feMaLe, indian

feMaLe, totaL


totaL 0 0 0 0 0 0 0 0 0 0 0

table 6.7: skills development

occUPationaL categoriesMaLe,

africanMaLe,


MaLe, totaL

BLacKsMaLe, WHite

feMaLe, african

feMaLe, coLoUred

feMaLe, indian

feMaLe, totaL


Legislators, Senior Officials and Managers 0 0 0 0 0 0 0 0 0 0 0

Professionals 0 0 0 0 0 0 0 0 0 0 0

Technicians and Associate Professionals 0 0 0 0 0 0 0 0 0 0 0

Clerks 0 0 0 0 0 0 0 0 0 0 0

Service and Sales Workers 0 0 0 0 0 0 0 0 0 0 0

totaL 0 0 0 0 0 0 0 0 0 0 0

Employees with disabilities 0 0 0 0 0 0 0 0 0 0 0

table 7.1: Performance rewards by race, gender & disabilitynUMBer of

Beneficiaries totaL eMPLoYMent% of totaL

eMPLoYMent costaVerage cost Per

BeneficiarY

African, Female 10 10 100 616 273 61 627

African, Male 11 11 100 1 135 022 103 183

White, Male 4 4 100 295 329 73 832

White, Female 0 0 0 0 0

Indian, Female 1 1 100 49 804 49 804

Employee with a disability 0 0 0 0 0

totaL 26 26 100 2 096 431 288 446


table 7.2: Performance rewards by salary Band for Personnel below senior Management service

saLarY BandnUMBer of



BeneficiarY

Lower skilled (Band B1–B2) 2 2 100 58 815 29 407

Skilled (Band B3–B5) 6 6 100 262 865 43 810

Highly skilled production (Band C1–C5) 13 13 100 1 532 607 117 870

Highly skilled supervision (Band D1–D3) 2 2 100 105 905 52 952

totaL 23 23 100 1 960 192 244 040

table 7.3: Performance rewards by critical occupation

criticaL occUPationsnUMBer of

Beneficiaries totaL eMPLoYMentPercentage of

totaL eMPLoYMent cost aVerage cost Per

BeneficiarY

NO CRITICAL OCCUPATIONS IDENTIFIED

table 7.4: Performance related rewards (cash Bonus) by salary Band for senior management service

sMs BandnUMBer of



BeneficiarY % of sMs Wage BiLLPersonneL cost

sMs

Level – D4 0 0 0 – – 0 0

Level – D5 2 2 100 2 742 384 1 371 192 0 0

Level – E1 1 1 100 1 742 174 1 742 174 0 0

totaL 3 3 100 4 484 558 3 113 366 0 0

table 8.1: foreign Workers by salary Band

saLarY Band

eMPLoYMent at Beginning

Period % of totaLeMPLoYMent at end of Period % of totaL

cHange in eMPLoYMent % of totaL

totaL eMPLoYMent at Beginning of

Period

totaL eMPLoYMent at end of Period

totaL cHange in eMPLoYMent

Lower skilled (Level 1–2)

NO FOREIGN WORKERS EMPLOYED

Skilled (Level 3–5)

Highly skilled production (Level 6–8)

Highly skilled supervision (Level 9–12)

Senior management (Level 13–16)

totaL


table 8.2: foreign Workers by Major occupation

MaJor occUPation

eMPLoYMent at Beginning

Period % of totaLeMPLoYMent at end of Period % of totaL

cHange in eMPLoYMent % of totaL

totaL eMPLoYMent at Beginning of

Period

totaL eMPLoYMent at end of Period

totaL cHange in eMPLoYMent

NO FOREIGN WORKERS EMPLOYED

table 9.1: sick Leave for Jan2010 to dec 2010

saLarY Band totaL daYs

%daYs WitH MedicaL

certificate

nUMBer of eMPLoYees Using sicK

LeaVe

% of totaL eMPLoYees Using sicK

LeaVeaVerage daYs Per eMPLoYee

estiMated cost (r’000)

totaL nUMBer of eMPLoYees

Using sicK LeaVe

totaL nUMBer of daYs WitH

MedicaL certification

Lower skilled (Band B1–B2) 2 0 1 50 2 2 2 0

Skilled (Band B3–B5) 32 10.6 3 9.4 10.7 28 5 11

Highly skilled production (Band C1–C5) 69 23 6 8.7 11.5 322 12 23

Highly skilled supervision (Band D1–D3) 5 1.66 2 40 2.5 110 2 2

Senior management (Band D4–E1) 0 0 0 0 0 0 0 0

table 9.2: disability Leave for Jan2010 to dec 2010

saLarY Band totaL daYs

%daYs WitH MedicaL

certificate

nUMBer of eMPLoYees

Using disaBiLitY

LeaVe

% of totaL eMPLoYees

Using disaBiLitY

LeaVeaVerage daYs Per eMPLoYee

estiMated cost (r’000)

totaL nUMBer of eMPLoYees

Using disaBiLitY

LeaVe

totaL nUMBer of daYs WitH

MedicaL certification

N/A 0 0 0 0 0 0 0 0

totaL 0 0 0 0 0 0 0 0

table 9.3: annual Leave for Jan 2010 to dec 2010

saLarY Band totaL daYs taKenaVerage Per

eMPLoYee eMPLoYMent

Lower skilled (Band B1–B2) 35 17.5 2

Skilled (Band B3–B5) 89 14.83 6

Highly skilled production (Band C1–C5) 305 20.33 13

Highly skilled supervision (Band D1–D3) 45 11.25 3

Senior management (Band D4–E1) 0 0 3

totaL 474 63.91 27


table 9.4: capped Leave for Jan 2010 to dec 2010

totaL daYs of caPPed LeaVe

taKen

aVerage nUMBer of daYs taKen Per

eMPLoYee

aVerage caPPed LeaVe Per

eMPLoYee as at 31 deceMBer 2003

nUMBer of eMPLoYees

totaL nUMBer of caPPed LeaVe aVaiLaBLe at 31 deceMBer 2003

nUMBer of eMPLoYees as at 31

deceMBer 2003

Lower skilled (Levels B1 – B2) 0 0

Skilled (Levels B3 – B5) 0 0

Highly skilled production (Levels C1 – C5) NO CAPPED LEAVE TO BOARD EMPLOYEES 0 0

Highly skilled supervision (Levels D1 – D3) 0 0

Senior management (Levels D4 – E1) 0 0

totaL 0 0

table 9.5: Leave Payouts

reason totaL aMoUnt nUMBer of eMPLoYees

aVerage PaYMent Per eMPLoYee

Capped leave payouts on termination of service for 2010/11 NO CAPPED LEAVE

Current leave payout on termination of service for 2010/11 2 66 577

totaL

table 10.1: steps taken to reduce the risk of occupational exposure

Units/categories of eMPLoYees identified to Be at HigH risK of contracting HiV & reLated diseases (if anY) KeY stePs taKen to redUce tHe risK

N / A

table 10.2: details of Health Promotion & HiV/aids Programmes [tick Yes/no and provide required information]

QUestion Yes no detaiLs, if anY

1. Has the department designated a member of the SMS to implement the provisions contained in Part VI E of Chapter 1 of the Public Service Regulations, 2001? If so, provide her/his name and position.

√ M Tokota – H R Manager

2. Does the department have a dedicated unit or have you designated specific staff members to promote health and well being of your employees? If so, indicate the number of employees who are involved in this task and the annual budget that is available for this purpose.

√ M Mame, S Renga, W Smit, H D’Alton

3. Has the department introduced an Employee Assistance or Health Promotion Programme for your employees? If so, indicate the key elements/services of the programme.

4. Has the department established (a) committee(s) as contemplated in Part VI E.5 (e) of Chapter 1 of the Public Service Regulations, 2001? If so, please provide the names of the members of the committee and the stakeholder(s) that they represent.

√ M Mame, S Renga, W Smit, H D’Alton

5. Has the department reviewed the employment policies and practices of your department to ensure that these do not unfairly discriminate against employees on the basis of their HIV status? If so, list the employment policies/practices so reviewed.

√ H R Manual, Recruitment


table 11.1: collective agreements

sUBJect Matter date

N / A

table 11.2: Misconduct & disciplinary Hearings finalized

oUtcoMes of disciPLinarY Hearings nUMBer % of totaL totaL

totaL 0 0 0

table 11.3: type of Misconduct addressed & disciplinary Hearings

tYPe of MiscondUct nUMBer % of totaL

MISCONDUCT 0 0

totaL 0 0

table 11.4: grievances Lodged

nUMBer of grieVances addressed nUMBer % of totaL

Resolved

NO GRIEVANCESNot resolved

totaL

table 11.5: disputes Lodged

nUMBer of disPUtes addressed nUMBer % of totaL

Upheld

N / ADismissed

totaL


table 11.6: strike actionsstriKe actions

TOTAL number of person working days lost

NONETOTAL cost(R'000) of working days lost

Amount (R'000) recovered as a result of no work no pay

table 11.7: Precautionary suspensions

PrecaUtionarY sUsPensions

Number of people suspended 0

Number of people whose suspension exceeded 30 days 0

Average number of days suspended 0

Cost (R'000) of suspensions 0

table 12.1:training needs identified

occUPationaL categories gender eMPLoYMent LearnersHiPs

sKiLLs PrograMMes & otHer sHort

coUrsesotHer forMs of

training totaL

Legislators, senior officials and managers Female 0 0 0 0 0

Male 4 0 6 6 12

Professionals Female 5 0 10 0 10

Male 8 0 13 1 14

Technicians and associate professionals Female 0 0 1 0 1

Male 1 0 1 0 1

Clerks Female 7 0 9 0 9

Male 2 0 3 0 3

totaL 27 0 43 7 50

table 12.2: training Provided




training totaL

Legislators, senior officials and managers Female 0 0 0 0 0

Male 4 0 21 1 22

Professionals Female 4 0 1 0 1

Male 9 0 3 1 4





training totaL

Technicians and associate professionals Female 0 0 0 0 0

Male 1 0 0 0 0

Clerks Female 7 0 6 23 29

Male 2 0 2 0 2

totaL 27 0 33 25 58

table 13.1: injury on duty

natUre of inJUrY on dUtY nUMBer % of totaL

Required basic medical attention only

NO IOD CASES

Temporary TOTAL Disablement

Permanent Disablement

Fatal

TOTAL

table 14.1: report on consultant appointments using appropriated funds

ProJect titLe

totaL nUMBer of consULtants tHat

WorKed on tHe ProJect

dUration: WorK daYs

contract VaLUe in rand

PWC – Internal Audit 1 390 868

Softline VIP 1 67 524

STBB Consulting 1 574 584

Lumoko Strat 1 1 046 007

Kettle Consulting 1 249 375

Maseng Viljoen 1 47 652

Balanced Scorecard & OD 1 178 524

Quantity Surveyors 2 1 021 215

totaL number of projects 9 0 3 575 749


table 14.2 - analysis of consultant appointments using appropriated funds, i.t.o. Hdis

ProJect titLe

Percentage oWnersHiP BY Hdi

groUPs

Percentage ManageMent BY

Hdi groUPs

nUMBer of consULtants

froM Hdi groUPs tHat WorK on tHe

ProJect

PWC – Internal Audit 100 100 2

totaL 2

table 14.3: report on consultant appointments using donor funds

ProJect titLe

totaL nUMBer of consULtants tHat

WorKed on tHe ProJect

dUration: WorK daYs

donor and contract VaLUe in

rand

NO CONSULTANTS USED

totaL nUMBer of ProJectstotaL indiVidUaL

consULtantstotaL dUration:

WorK daYstotaL contract VaLUe in rand

NO CONSULTANTS USED

table 14.4: analysis of consultant appointments using donor funds, i.t.o. Hdis

ProJect titLe

Percentage oWnersHiP BY Hdi

groUPs

Percentage ManageMent BY

Hdi groUPs

nUMBer of consULtants

froM Hdi groUPs tHat WorK on tHe

ProJect

NO CONSULTANTS USED


9.1 ecgBB organograM

ACCOUNTSADMINISTRATOR

REVENUEADMINISTRATOR

ASSISTANTACCOUNTANT

ACCOUNTANT

PERSONALASSISTANT

to the CFO

GENERALASSISTANT

(v)

GENERALASSISTANT

(v)

GENERALASSISTANT

(v)

DRIVER

RECEPTIONIST

HUMANRESOURCESMANAGER

CHIEFFINANCIAL

OFFICER

SYSTEMSANALYST

INFORMATIONTECHNOLOGYMANAGER (v)

AUDITOR

AUDITOR

AUDITOR

PERSONALASSISTANTto the C&LM (v)

PERSONALASSISTANT

to the CEO

OFFICEMANAGER

(v)

LICENSINGOFFICER

CURRENTLYOCCUPIED

LEGEND:LICENSINGOFFICER

INVESTIGATOR

COMPLIANCE &LICENSINGMANAGER

CHIEFEXECUTIVE

OFFICER

INSPECTOR

INSPECTOR

INSPECTOR

INSPECTOR

INSPECTOR

INTERNALAUDIT SERVICES

Outsourced

MARKETINGSPECIALIST

STRATEGICSERVICES

MANAGER (v)

SED COORDINATOR (v)

PERSONALASSISTANTto the SSM (v)

SNR AUDITORAudit & Compliance

(v)

PROCUREMENTOFFICER

(v)

HRADMINISTRATOR

(v)

SNR INVESTIGATORInvestigations &

Licensing (v)

INVESTIGATOR(v)

AUDITOR(v)

INVESTIGATOR(v)

INVESTIGATOR(v)

SNR INSPECTORLaw Enforcement &Gaming Control (v)

LEGAL SERVICESMANAGER

(v)

CURRENTVACANCY

55Audited FinAnciAl StAtementS

10. audited finanCial stateMents for the year ended 31 MarCh 2011

10.1 stateMent of financiaL Position

figUres in rand note(s) 2011 2010

assets

Current Assets

Trade and other receivables from exchange transactions 3 1 401 323 1 545 178

Receivable on collection for distribution from non–exchange transactions 4 6 921 310 6 822 755

Prepayments 5 287 579 407 985

Cash and cash equivalents 6 52 547 277 11 375 940

61 157 489 20 151 858

Non–Current Assets

Property, plant and equipment 7 7 127 261 7 535 482

total assets 68 284 750 27 687 340

Liabilities

Current Liabilities

Trade and other payables from exchange transactions 8 7 135 668 7 520 313

Collections for distributions from non–exchange transactions 9 52 321 195 7 008 875

59 456 863 14 529 188

total Liabilities 59 456 863 14 529 188

net assets 8 827 887 13 158 152

net assets

Accumulated surplus 8 827 887 13 158 152

8 827 887 13 158 152

total net assets 8 827 887 13 158 152


10.2 stateMent of financiaL PerforMance


Revenue

Revenue from Exchange Transactions 10 7 552 286 5 452 151

Revenue from non–Exchange Transactions 10 23 338 000 22 017 000

total revenue 30 890 286 27 469 151

Expenditure

Employee costs 11 (14 119 747) (13 777 537)

Depreciation and amortisation 7 (763 150) (751 347)

Impairment loss/ Reversal of impairments 3 (156 000) (422 273)

Other Operating Expenses 12 (1 899 067) (1 734 564)

Administrative expenditure 13 (14 638 095) (17 867 702)

Statutory audit fees 14 (1 692 806) (967 202)

Gifts, sponsorships and donations paid 15 (390 769) (1 001 780)

Marketing cost 16 (2 102 403) (920 800)

total expenditure (35 762 037) (37 443 205)

(Loss) gain on disposal of property, plant and equipment (26 608) 74 435

Finance income 19 568 095 1 275 409

deficit for the year (4 330 264) (8 624 210)


10.3 stateMent of cHanges in net assets

figUres in rand accUMULated sUrPLUs totaL net assets

Opening balance as previously reported 21 525 959 21 525 959

Adjustments

Change in accounting policy (note 23) 34 809 34 809

Prior year adjustments 203 141 203 141

Balance at 01 april 2009 as restated 21 763 909 21 763 909

Changes in net assets

Deficit for the year (8 605 757) (8 605 757)

total changes (8 605 757) (8 605 757)

Opening balance as previously reported 13 176 604 13 176 604

Adjustments

Change in accounting policy (note 23) (18 453) (18 453)

Balance at 01 april 2010 as restated 13 158 151 13 158 151

Changes in net assets

Deficit for the year (4 330 264) (4 330 264)

total changes (4 330 264) (4 330 264)

Balance at 31 March 2011 8 827 887 8 827 887


10.4 casH fLoW stateMent


Cash flows from operating activities Receipts

Receipts from customers 7 816 547 5 088 705

Grants 23 338 000 22 017 000

Gambling fees and taxes 134 826 119 89 905 862

165 980 666 117 011 567

Payments

Payment to Suppliers and Employees (35 228 334) (40 726 355)

Gambling fees and taxes (89 768 354) (89 587 239)

(124 996 688) (130 313 594)

net cash flows from operating activities 21 40 983 978 (13 302 027)

cash flows from investing activities

Purchase of property, plant and equipment 7 (396 494) (617 578)

Proceeds from sale of property, plant and equipment 7 15 758 111 146

Interest Income 568 095 1 275 409

net cash flows from investing activities 187 359 768 977

net increase/(decrease) in cash and cash equivalents 41 171 337 (12 533 050)

Cash and cash equivalents at the beginning of the year 11 375 940 23 908 990

cash and cash equivalents at the end of the year 6 52 547 277 11 375 940


10.5 accoUnting PoLicies

1. Basis of PreParations

The annual financial statements have been prepared

in accordance with the effective Standards of

Generally Recognised Accounting Practice (GRAP)

for the Accrual Basis of Accounting including any

interpretations, guidelines and directives issued by the

Accounting Standards Board.

The financial statements have been prepared on a

going concern basis and the accounting policies have

been applied consistently throughout the period.

Whilst GRAP 24 on Presentation of Budget

Information in Financial Statements is not effective,

in order to enhance the usefulness of the financial

statements, Paragraph 11 - 15 of GRAP 1 has been

implemented by inclusion of a note on Reconciliation

of budget surplus/deficit with the surplus/deficit in the

statement of financial performance in the financial

statements until the implementation of GRAP 24

becomes effective.

Accounting Standards which have been approved

and are effective:

graP 1 Presentation of Financial Statements graP 19 Provisions, Contingent Liabilities and Contingent Assets

graP 2 Cash flow Statements graP 102 Intangible Assets

graP 3 Accounting Policies, Changes in Accounting Estimates and Errors directive 5 Determining the GRAP reporting framework

graP 9 Revenue from Exchange Transactions igraP 1 Applying the Probability Test on Initial Recognition of Exchange Revenue was formulated to conform with GRAP23

graP 12 Inventories iPsas 20 Related parties disclosure

graP 13 Leases ifrs 7 Financial instruments: Disclosures

graP 14 Events After the Reporting date ias19 (ac116) Employee benefits

graP 16 Investment Property ias32 (ac125) Financial instruments: Presentation

graP 17 Property, Plant and Equipment ias39 (ac133) Financial instruments: Recognition and measurements

A summary of the significant accounting policies, which

have been consistently applied, are disclosed below.

For the 2010/11 reporting period, the following

Standards of GRAP have been issued but are not

yet effective. The effective date for all the below

standards are from 01 April 2011:

no. titLe of standard iMPact on graP rePorting fraMeWorK

GRAP 18 Segment Reporting No segment reporting required for the 2010/11 reporting periodNo effect on the Board for the next financial year.

GRAP 21 Impairment of Non–cash–generating Full compliance to GRAP 21 not required. Entities may useAssets GRAP 21 to formulate an accounting policy for the impairment of non–cash–generating assets. The accounting policy is in line with GRAP21 therefore no effect on the next financial year.

GRAP 23 Revenue from Non–Exchange Transactions (Taxes and Transfers) Full compliance to GRAP 23 not required. Accounting policy was formulated to conform with GRAP 23.

GRAP 24 Presentation of Budget Information Full compliance to GRAP 24 not required. Disclosure was made for budget against actual in the financial statements.

GRAP 25 Employee Benefits Full compliance with GRAP 25 not required. The accounting policy of the Board was followed.


no. titLe of standard iMPact on graP rePorting fraMeWorK

GRAP 26 Impairment of Cash–generating assets Full compliance to GRAP 26 not required. Entities may use GRAP 26 to formulate an accounting policy for the impairment cash–generating assets. Accounting policy were compiled to conform with GRAP26. No effect on comings year.

GRAP 103 Heritage Assets Entities may use GRAP 103 to formulate an accounting policy for heritage assets. The Board does not have any heritage assets, therefore no effect on the coming year.

GRAP 104 Financial Instruments Full compliance with GRAP 104 not required.

1.1. significant judgments and

sources of estimation uncertainty

In preparing the annual financial statements,

management is required to make estimates and

assumptions that affect the amounts represented in the

annual financial statements and related disclosures.

Use of available information and the application of

judgement is inherent in the formation of estimates.

Actual results in the future could differ from these

estimates which may be material to the annual financial

statements. Significant judgements include:

Provisions

Provisions were raised and management

determined an estimate based on the information

available. Additional disclosure of these estimates

of provisions are included in provisions.

allowance for doubtful debts

On debtors an impairment loss is recognised in

surplus and deficit when there is objective evidence

that it is impaired. The impairment is measured as

the difference between the debtors carrying amount

and the objective evidence.

residual value on Property, plant and equipment

Property, plant and equipment: Motor vehicles -

management has estimated that the residual value for

motor vehicles is 25% of the original cost price. No

other assets carry any residual value.

1.2. Property, plant and equipment

Property, plant and equipment are stated at historical

cost less accumulated depreciation. Depreciation is

calculated on the straight-line method to write off

the cost of assets to their residual values over their

anticipated useful lives as follows:

The useful lives of items of property, plant and

equipment have been assessed as follows:

item average useful life

Buildings 50 years

Fixtures and fittings 10 years

Motor vehicles 5 years

Furniture and equipment 4 - 10 years

Computer equipment 3 - 4 years

Other

– Cell phone 2 years

– Library books 3 years

Land is not depreciated as it is deemed to have an

indefinite life.

The useful life as well as residual values are reviewed

annually.

Gains or losses arising on the disposal of property,

plant and equipment are determined as the difference

between the sales proceeds and the carrying amount

of the assets and are recognised in the statement of

financial performance as realised.

Property, plant and equipment are reviewed for

impairment losses whenever events indicate that

the carrying amount may not be recoverable. An

impairment loss is recognised in respect of the

amount by which the carrying amount of the asset

exceed its recoverable amount, which is the higher

of an asset's net selling price and value in use. An

impairment loss or reversal of an impairment loss is

recognised as an expense/income in the statement of

financial performance as incurred.


1.3. financial instruments

financial assets

Financial assets are recognised when the board has a

right or other access to economic benefits.

Receivables and cash are recognised as financial

assets when the entity is party to a contract and as a

consequence, has a right to receive cash.

financial liabilities

Financial liabilities are recognised when there is a

contractual obligation to transfer benefits.

impairment of financial assets

The Entity assesses at each reporting date whether

there is any objective evidence that a financial asset or

a group of financial assets is impaired. A financial asset

or a group of financial assets is deemed to be impaired

if, and only if, there is objective evidence of impairment

as a result of one or more events that has occurred

after the initial recognition of the asset (an incurred

'loss event') and that loss event has an impact on the

estimated future cash flows of the financial asset or the

group of financial assets that can be reliably estimated.

Evidence of impairment may include indications that

the debtors or a group of debtors is experiencing

significant financial difficulty, default or delinquency

in interest or principal payments, the probability

that they will enter bankruptcy or other financial re-

organization and where observable data indicate that

there is a measurable decrease in the estimated future

cash flows, such as changes in arrears or economic

conditions that correlate with defaults.

trade and other receivables

Trade and other receivables are initially measured at

transaction costs and thereafter are re-measured at

fair value using objective evidence for assessment

of impairment.

trade and other payables

Trade payables are recognised as financial liabilities

when the entity is party to a contract and as a

consequence, has a right to pay cash. Payables are

initially measured at transaction cost and carried at

fair value of the consideration to be paid in future

for goods or services that have been received or

supplied and invoiced or formally contracted for with

the supplier and are derecognized when the liability

is extinguished.

cash and cash equivalents

Cash and cash equivalents are carried at cost. For

purposes of the cash flow statement, cash and cash

equivalents comprise cash in hand and deposits held

on call with the bank.

1.4. inventories

Inventories are fully expensed in the year any

purchases were made.

1.5. retirement benefits

The policy of the Board is to provide retirement

benefits through an established fund governed by the

Pension Fund Act. The provident fund is a defined

contribution fund which does not require an actuarial

valuation. Contributions to the provident fund are

charged to the Statement of Financial Performance

in the year to which they relate. The Board has no

obligations to fund post-retirement medical benefits.

1.6. Provisions and contingencies

Provisions are recognised when: ~ the entity has a present obligation as a result of a

past event; ~ it is probable that an outflow of resources

embodying economic benefits or service potential

will be required to settle the obligation; and ~ a reliable estimate can be made of the obligation.

The amount of a provision is the best estimate of

the expenditure expected to be required to settle the

present obligation at the reporting date.

Provisions are reviewed at each reporting date

and adjusted to reflect the current best estimate.

Provisions are reversed if it is no longer probable

that an outflow of resources embodying economic

benefits or service potential will be required, to settle

the obligation.

Leave provision

The employees of the Board are entitled to 22

working days per annum as leave gratuity. The policy

adopted by the Board is that all its employees should

take leave during the year, failing which they will

forfeit their leave days on the 30th of June each

year. The leave days are recognised as they accrue to

employees. The liability is based on the total amount

of leave days due to each employee at year end


multiplied by each employee's respective daily rate of

remuneration which is calculated from the respective

employee's gross annual remuneration package.

13th cheque

The employees of the Board can structure their salary

package to have a bonus portion (13th cheque) which

is paid on the 15th of January each year. The bonus is

recognised as it accrues to employees who have elected

to structure their salary packages to have a bonus portion.

contingent assets and contingent liabilities

Contingent assets and contingent liabilities are not

recognised. Contingencies are disclosed in note 22.

1.7. revenue

Revenue comprises principally of:

revenue from exchange transactions: ~ Fees charged for services rendered (i.e. Annual

admin fees); ~ Recoveries of expenses incurred in the production of

revenue; ~ Sundry income

revenue from non-exchange transactions (taxes

and transfers) ~ Grant funding received from Provincial Government

revenue from exchange transaction is recognised

on accrual basis using the following methods to

determine stage of completion: ~ Fees charged for services rendered are recognised

when they become due in terms of the Eastern Cape

Gambling and Betting Act No 5 of 1997. ~ Recoveries of expenses incurred in the production

of revenue are accrued on completion of service

rendered.

Revenue from Exchange Transaction is measured at

fair value on the date it accrues.

revenue from non exchange transaction:

Revenue relating to operational expenditure is

recognised in the period in which the transfer

agreement becomes binding and is measured at fair

value as at the date of recognition.

gambling taxes and fees to the fiscus

The gambling taxes and part of the fees collected

are paid over to the Provincial Revenue Fund at the

end of each month as prescribed by the Gambling

and Betting Act. These gambling taxes and fees are

not recognised as revenue as they are collected on

behalf of the state, however an asset and liability is

recognised when taxes and fees become receivable

from licensee and payable to the state. Receivable and

payables for collection and distribution to the state are

initially measured at cost and carried at fair value.

1.8. accruals

Performance bonus

Accrual for performance bonus is raised at year end

and paid in the following financial year.

1.9. operating leases

Leases where the lessor retains the risk and reward

of ownership of the underlying asset are classified

as operating leases. Payments made under operating

leases are charged to the statement of financial

performance on a straight line basis over the period

of the lease.

1.10. comparatives

Where necessary, comparative figures have been

reclassified to conform to changes in presentation in

the current year.

1.11. fruitless and wasteful expenditure

Fruitless expenditure means expenditure which was

made in vain and would have been avoided had

reasonable care been exercised.

All expenditure relating to fruitless and wasteful

expenditure is recognised as an expense in the

statement of financial performance in the year that the

expenditure was incurred. The expenditure is classified

in accordance with the nature of the expense, and

where recovered, it is subsequently accounted for as

revenue in the statement of financial performance.

1.12. irregular expenditure

Where irregular expenditure was incurred in the

previous financial year and is only condoned in

the following financial year, the register and the

disclosure note to the financial statements must be

updated with the amount condoned.

Irregular expenditure that was incurred and identified

during the current financial year and which was not


condoned by the National Treasury or the relevant

authority must be recorded appropriately in the

irregular expenditure register. If liability for the

irregular expenditure can be attributed to a person, a

debt account must be created if such a person is liable

in law. Immediate steps must thereafter be taken to

recover the amount from the person concerned. If

recovery is not possible, the accounting officer or

accounting authority may write off the amount as debt

impairment and disclose such in the relevant note to

the financial statements. The irregular expenditure

register must also be updated accordingly. If the

irregular expenditure has not been condoned and

no person is liable in law, the expenditure related

thereto must remain against the relevant expenditure

item, be disclosed as such in the note to the financial

statements and updated accordingly in the irregular

expenditure register.

10.6 notes to tHe annUaL financiaL stateMents

2. inVentories

figUres in rand 2011 2010

Stationery – 14 659

Crockery – 3 794

Change in accounting policy – (18 453)

– –

During the financial year, the Board change its policy to expense stationery and crockery in the year it was purchased.

3. trade and otHer receiVaBLes froM eXcHange transactions


Trade debtors 381 590 576 578

Staff loans – 3 600

Deposits 16 897 16 897

Sundry debtors 1 002 836 948 103

1 401 323 1 545 178

Fair value of trade and other receivables

Trade receivables – Age analysis

120 days – 384 417

90 days 37 575 174 049

60 days 118 103 124

30 days 95 656 17 988

Current 130 256 –

total 381 590 576 578



Trade and other receivables impaired

The amount of the impairment was R (156 000) as of 31 March 2011 (2010: R734 146).

Reconciliation of provision for impairment of trade and other receivables

Opening balance 734 146 311 873

Provision for impairment 156 000 422 273

Utilisation of impairment (734 146) –

156 000 734 146

4. receiVaBLe on coLLection for distriBUtion froM non-eXcHange transactions


Government taxes and levies from non–exchange transactions 6 921 310 6 822 755

5. PrePaYMents


Other prepaid expenditure 233 227 353 331

Insurance expenditure 34 284 34 412

Business licenses 20 068 20 242

287 579 407 985

6. casH and casH eQUiVaLents


Cash and cash equivalents consist of:

Bank balances 52 545 277 11 373 940

Cash on hand 2 000 2 000

52 547 277 11 375 940


7. ProPertY, PLant and eQUiPMent

figUres in rand cost/VaLUation

accUMULated dePreciation and

accUMULated iMPairMent carrYing VaLUe cost/VaLUation

accUMULated dePreciation and

accUMULated iMPairMent carrYing VaLUe

Land 1 070 750 – 1 070 750 1 070 750 – 1 070 750

Buildings 5 232 974 (773 790) 4 459 184 5 232 974 (666 823) 4 566 151

Fixtures and fittings 181 765 (107 527) 74 238 182 882 (88 436) 94 446

Motor vehicles 1 185 967 (505 338) 680 629 1 185 967 (345 242) 840 725

Furniture and equipment 1 110 995 (759 632) 351 363 1 272 008 (784 114) 487 894

Computer equipment 1 102 167 (727 646) 374 521 1 250 858 (923 651) 327 207

Library books 215 814 (178 980) 36 834 215 814 (109 768) 106 046

Cell phones 165 946 (86 204) 79 742 152 643 (110 380) 42 263

total 10 266 378 (3 139 117) 7 127 261 10 563 896 (3 028 414) 7 535 482

reconciliation of property, plant and equipment - 2011

figUres in rand oPening BaLance additions disPosaLs dePreciationdePreciation adJUstMent totaL

Land 1 070 750 – – – – 1 070 750

Buildings 4 556 151 – – (106 967) – 4 459 184

Fixtures and fittings 94 446 – – (20 208) – 74 238

Motor vehicles 840 725 – – (160 096) – 680 629

Furniture and equipment 487 894 14 794 (26 511) (124 814) – 351 363

Computer equipment 327 207 284 674 (8 814) (228 546) – 374 521

Library books 106 046 – – (69 212) – 36 834

Cell phones 42 263 97 026 (66) (53 307) (6 174) 79 742

total 7 535 482 396 494 (35 391) (763 150) (6 174) 7 127 261

reconciliation of property, plant and equipment - 2010

figUres in rand oPening BaLance additions disPosaLs Prior Period errors dePreciation totaL

Land 1 070 750 – – – – 1 070 750

Buildings 4 594 313 78 364 – – (106 526) 4 566 151

Fixtures and fittings 106 541 5 291 – – (17 386) 94 446

Motor vehicles 819 162 272000 (28 786) (58 786) (162 865) 840 725

Furniture and equipment 575 889 42 876 (5 484) – (125 387) 487 894


figUres in rand oPening BaLance additions disPosaLs Prior Period errors dePreciation totaL

Computer equipment 391 364 153 870 (1 000) – (217 027) 327 207

Library books 143 383 31 876 – – (69 213) 106 046

Cell phones 64 549 33 301 (2 644) – (52 943) 42 263

total 7 765 951 617 578 (37 914) (58 786) (751 347) 7 535 482

Land and buildings, comprise a sub-division of Erf 2863, Beacon Bay measuring 2371 m2, purchased 2002, together with an office building.

8. trade and otHer PaYaBLes froM eXcHange transactions


Trade payables 4 047 394 3 849 222

Accruals 3 088 274 3 671 091

7 135 668 7 520 313

9. coLLections for distriBUtions froM non-eXcHange transactions


Taxes and levies 9 583 445 7 008 875

Exclusivity fee 42 737 750 –

52 321 195 7 008 875

Exclusivity fee collected from Zone 1 and paid to the Provincial Revenue Fund on 26 May 2011.

10. reVenUe


Revenue from Exchange transactions:

The amounts included in revenue arising from exchanges of goods or services are as follows:

Fees 3 229 574 2 259 602

Recoveries 4 301 481 3 178 035

Sundry income 21 231 13 790

Allowances for credit losses – 724

7 552 286 5 452 151



Revenue from Non–Exchange transactions:

The amount included in revenue arising from non–exchange transactions is as follows:

Government Funding – Operations 23 338 000 22 017 000

11. eMPLoYee costs


Basic salary 8 954 962 8 113 708

Performance awards 2 189 622 2 140 980

Medical aid – company contributions 638 795 598 783

Unemployment Insurance Fund 41 298 41 869

Insurance 54 193 (5 511)

Casual labour – 128 553

Reversal of leave (137 238) –

Leave payments 113 815 253 358

Pension 884 099 889 944

Other non pensionable allowances 1 096 500 1 405 100

Other salary related costs 283 701 210 753

14 119 747 13 777 537

senior Management remuneration:

remuneration of chief executive officer

Salary 1 109 090 896 996

Allowances 120 000 120 000

Fund Contributions 175 584 145 285

Bonus 337 500 240 419

1 742 174 1 402 700



The Chief Executive officer was appointed 01/12/2009.

remuneration of chief finance officer *

Salary 840 513 876 000

Allowances 144 000 120 000

Fund Contribution 60 917 95 249

Bonus 194 992 201 555

1 240 422 1 292 804

The Chief Financial officer was appointed 01/10/2010.

* Included in the remuneration of the Chief Financial Officer is an amount of R424 998 paid to Mr. D Mzonke who was the Acting Chief Financial Officer for a period of six months before the appointment of the permanent Chief Financial Officer.compliance & Licensing Manager

Salary 894 930 775 468

Allowance 219 000 120 000

Fund Contribution 108 271 86 880

Bonus 279 761 224 320

1 501 962 1 206 668

The Compliance and Licensing Manager was appointed 01/01/2011.

total senior Management remuneration 4 484 558 3 902 172

12. otHer oPerating eXPenses


Other operating expenses are made up of the following line items:

Sundry expenses 105 179 69 706

Fuel & oil 70 554 63 904

Security services 269 473 100 992

Software annual license fees 6 057 152 975

Photocopier usage 28 533 85 742

License fees – software packages 43 553 62 422

Canteen & catering 168 910 219 147

Losses on disposal of assets (667) 1 001

Insurance premiums 153 908 147 438

Maintenance and repairs: Property and buildings 13 051 11 733



Maintenance and repairs: Machinery and equipment 90 551 21 737

Maintenance and repairs: Other – 19 181

Bi lateral Relations 106 890 –

Stores / consumables – 28 801

Municipal services 243 388 228 659

Courier and delivery charges 17 740 12 524

Communication costs 396 778 435 162

Rentals in respect of operating leases – Plant, machinery and equipment 71 880 73 440

Staff wellness and team building 49 547 –

Year–end function 63 742 –

1 899 067 1 734 564

13. adMinistratiVe eXPenses


Evaluation and hearing 1 899 822 1 818 148

Inspection and investigation 407 049 346 521

Travelling and subsistence 1 424 489 1 381 975

Consultation fees 3 553 720 2 161 367

Board of Directors' fees 2 360 484 4 937 335

Legal fees 2 440 064 3 408 910

Stationary and printing 198 368 88 467

Bad debts – 57 000

Bank charges 39 689 59 541

Training and staff development 2 314 410 3 608 438

14 638 095 17 867 702

14. statUtorY aUdit fees


Statutory Audits 1 692 806 967 202


15. gifts, sPonsorsHiPs and donations


Gifts 54 425 1 780

Sponsorships 264 594 –

Donations 71 750 1 000 000

390 769 1 001 780

As part of its corporate social responsibility, the Board has donated computers to Sunduza Primary School in Sterkspruit. and the costs incurred related to the setting up of the computer laboratory. Furthermore, the Board engaged a construction company for the construction of a boxing ring in Idutywa.

16. MarKeting cost


The costs for research and public education include the following:

Promotional advertising – 500

Research and public education 1 568 786 429 622

Films and photography – 1 252

Advertising Subscription and Publications 533 617 489 426

2 102 403 920 800

17. oPerating Lease coMMitMents


Minimum lease payments due

– within one year 56 149 56 149

– in second to third year inclusive 112 295 140 374

Present value of minimum lease payments 168 444 196 523

The Board reached an agreement with the lessor for the cancellation of the lease in respect of the old photocopying machines which was for a period of 60 months, and entered into a new lease for a period of 36 months. The information disclosed in comparative figures is in respect of the old photocopying machines. This is due to the fact that the lease agreement in respect of the new photocopying machines was signed after year-end.

The ECG&BB entered into an operational lease agreement with the following terms:- Four photocopy machines for a period of 36 months with the minimum monthly charge of R4 679. - The machines will be returned to the hirer at the end of the period.- The lessor is required to provide a maintenance for the equipment during the period of the agreement.


18. training and deVeLoPMent costs


overseas travel

Travel and Accommodation 1 548 982 1 989 772

Car Hire 16 053 12 487

Other (registration daily allowances) 32 412 1 056 866

Local travel

Travel and Accommodation 280 839 294 923

Car Hire 41 223 27 810

Other (registration daily allowances) 394 902 226 580

2 314 411 3 608 438

Included in the training costs is travel and accommodation that relates to overseas conferences attended by the Board members and Senior management during the year under review. The costs for this line item has always been budgeted under training as well as under research and development and reported as such in the annual financial statements.

19. finance incoMe


interest revenue

Bank 568 095 1 275 409

20. taXation

The income of the Board is exempt from taxation in terms of section 10(1) (cA) of the Income Tax Act no 58 of 1962.

21. casH generated froM (Used in) oPerations


Deficit (4 330 264) (8 605 757)

adjustments for:

Depreciation 763 150 751 347

Gain (loss) on sale of assets and liabilities 26 808 (74 435)

Interest income (568 095) (1 275 409)

Allowance for losses 156 000 478 547

Loss on disposal of assets (1 001) 1 001



changes in working capital:

Trade and other receivables from exchange transactions 9 705 (1 351 923)

Trade and other payables from exchange transactions 44 927 675 (3 225 398)

40 983 978 (13 302 027)

22. contingencies

The contingent liability is composed of possible legal costs relating to litigation.

The case refers to the unsuccessful Zone 4 (Mthatha) casino license applicant who is contesting the final decision of the Board issuing the license to the competing applicant. The entity’s lawyers estimated the legal costs to be R1,5 million.

23. reLated Parties

relationshipsAdministrator of Mbizana Development Trust

Trustee of Amatola Trust

Members of key management

RM Zwane (Chief Executive Officer)

SL Majombozi (Chairperson)

RM Zwane (Chief Executive Offocer)

JT Harper (Chief Financial Officer)

BL Jaxa (Compliance and Licensing Manager)

The Chief Executive Officer was appointed by the High Court as the administrator of the Mbizana Development Trust on 19th of August 2009. The former Chairperson was appointed a trustee of Amatola Trust. This resulted in the trusts being related parties to the Eastern Cape Gambling Board due to significant roles the Chief Executive Officer and the former Chairperson assumed in the operations of the trusts.

There were no transactions between the Eastern Cape Gambling & Betting Board and those members of the key management personnel and companies in which key management personnel have an interest in during the year under review.


Salaries for Key Management Personnel are disclosed in note 11.

During the year under review, the following related party transactions occurred:

Related party transactions included in exchange transactions

additional amounts paid on behalf of:

Amatola Trust – 1 773

Mbizana Development Trust 298 761 –


reimbursement amounts paid by:

Amatola Trust 252 357 –

Mbizana Development Trust – 250 000

outstanding amounts at year end

Amatola Trust 18 977 18 976

Mbizana Development Trust 932 542 633 781

The costs were incurred by the entity while the trusts were experiencing operational challenges and in instances where there were amounts outstanding at year end, these were included in receivable and in some instances were paid post year end by the trusts.

24. Board MeMBers’ eMoLUMents

figUres in rand fees eXPense aLLoWances sUB coMMittees otHer totaL

2011

For services as directors 477 000 68 809 – 1 814 675 2 360 484

2010

For services as directors 381 500 164 128 149 000 4 242 706 4 937 334

A new Board of Directors was appointed 01/04/2011. Detailed Board members emoluments:

Board MeMBers fees eXPense aLLoWances otHer 2011 2010

K. Canca 68,000 675 221,000 289,675 791,491

A. Ntsonkota 59,500 5,183 202,100 266,783 656,949

N. Mqakama – – – – 28,364

C.T.S. Cossie 34,000 1,135 201,200 236,335 444,602

N. Mtakati 42,500 30,135 99,750 172,385 890,866

N. Tom 8,500 785 43,000 52,285 206,400

M. Sibam – – – – 156,250

S.L. Majombozi 120,000 30,893 690,525 841,418 1,440,911

P. White 68,000 – 217,750 285,750 161,100

A. Mabizela 76,500 – 93,750 170,250 118,800

S. Whitfield – – 19,000 19,000 22,500

R. Hill – – 26,600 26,600 19,000

477,000 68,806 1,814,675 2,360,481 4,937,334


Detailed Board members emoluments - Included in the amounts under “Other: are the following items:

Board MeMBers oVerseas traVeL reading docUMents sPeciaL ProJects otHer totaL

K. Canca 76,500 34,000 110,500 – 221,000

A. Ntsonkota 59,000 34,000 109,100 – 202,100

C.T.S. Cossie 76,500 34,000 90,700 – 201,200

N. Mtakati – 34,000 64,750 – 99,750

N. Tom – 34,000 9,000 – 43,000

S.L. Majombozi 336,000 48,000 306,525 – 690,525

S. Whitfield – – 19,000 – 19,000

R. Hill – – 26,600 – 26,600

P. White 76,500 34,000 107,250 – 217,750

A. Mabizela – 34,000 59,750 – 93,750

624,500 286,000 904,175 – 1,814,675

25. cHange in accoUnting PoLicY inVentorY

The Board change its accounting policy during the financial year relating to accounting treatment of inventory. Inventory previously carried as the lower of cost or net-realisable value has been changed to expensing these type of expenses in the year it has been incurred.


Decrease in inventory (18 453) (34 809)

Decrease in retained income (18 453) (34 809)

The reason for the change in treatment of inventory is due to the fact that inventory was previously disclosed in the annual financial statements is mainly made up of stationery and crockery purchased for internal ause and not for trading purposes.

26. coMParatiVe figUres

Certain comparative figures have been reclassified to show depreciation & amortisation and impairments separately in the statement of financial performance.

The effects of the reclassification are as follows:


Statement of Financial Performance

Increase in Depreciation and amortisation – 751 347


Decrease in Other Operating expenses – (751 347)

Increase in Impairment loss / Reversal of impairments – 422 273

Decrease in Administrative expenses – (422 274)

27. risK ManageMent

Liquidity risk – The Board manages liquidity risk through an ongoing review of the future commitments. Cash flow forecasts are prepared and monitored.

interest rate risk – The Board policy is to manage interest rate risk so that fluctuations in variable rates do not have material impact on surplus / (deficit). The following table illustrates the sensitivity of the entity’s and equity to interest rate changes should interest rates increase or decrease with 2% during the next financial year:


–2% –2%

Decrease in net deficit for the year (227 238) (510 163)

+2% +2%

Increase in net deficit for the year 227 238 510 163

credit risk – Credit risk consists mainly of cash deposits and cash equivalents. The Board only deposits cash with major banks with high credit standards. The Board has therefore no concentration of credit risks.

The board’s maximum exposure to credit risk is equal to the cost amount of the financial assets at balance sheet date and is summarised as below:


Trade and other receivables from exchange 1 401 323 1 545 178

Receivable on collection for distribution 6 921 310 6 822 755

Cash and cash equivalents 52 547 277 11 375 940

As of 31 March 2011, trade and other receivables was impaired with an amount of R156 000. The age analysis of financial assets are indicated in note 3.

28. financiaL instrUMents

The table below indicates the difference classes of financial instruments. The carrying value approximate their fair value as well.

Loans and receivables are non-derivative financial assets and financial liabilities with fixed or determinable payments that are not quoted in an active market other than those that the entity intends to sell, those that the entity upon initial recognition, designates as available for sale; or those for which the holder may not recover substantially all of its initial investment.


Available for sale financial instruments are those non-derivate financial assets that are designated as available for sale or are not classified loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss.

figUres in rand receiVaBLes/Loans aVaiLaBLe for saLe

2011

financial assets

Trade and other receivables from exchange 1 401 323 –

Receivable on collection for distribution 6 921 310 –

Prepayments 287 579 –


Trade and other payables from exchange (7 135 668) –

Payable on collections for distributions (52 321 195) –

2010

financial assets

Trade and other receivables from exchange 1 545 178 –

Receivable on collection for distribution 6 822 755 –

Prepayments 407 985 –


Trade and other payables from exchange (7 520 313) –

Payable on collections for distributions (7 008 875) –

29. going concern

The annual financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.

30. eVents after tHe rePorting date

A new board and audit committee was appointed after the reporting date on 01/04/2011. There were no further events after the reporting date that require disclosure in the financial statements.


31. frUitLess and WastefUL eXPenditUre


Opening balance – 19 986

Fruitless and wasteful expenditure – Prior year – 870

Fruitless and wasteful expenditure recovered from debtor – (870)

Fruitless and wasteful expenditure condoned – (19 986)

– –

No fruitless and wasteful expenditure was incurred during the year under review.2010: Interest of R870 was charged by a service provider on late payments of an invoice. An official has since paid the interest.

32. irregULar eXPenditUre


Opening balance – 795 272

Irregular expenditure – prior year – 8 893 785

Irregular expenditure – current year 1 657 835 –

Irregular expenditure approved by the board – (795 272)

Irregular expenditure condoned – (8 893 785)

1 657 835 –

descriPtion of irregULar eXPenditUre disciPLinarY stePs taKen/criMinaL Proceedings

details of irregular expenditure – prior year –The MEC approved the retrospective adjustment of Board Members feesDue to the casino licensing process for zone one and litigation relating to zone four, the Board incurred unexpected expenditure for legal costs.The travelling and subsistence expenditure and training costs increased due to overseas travel for study tours.The Board utilised services of consultants in the licensing process and the CFO support.

The Board has condoned and considers expenditure to be valid and therefore no disciplinary steps were taken.

details of irregular expenditure – current year 1 657 835

Over expenditure of the current year budget None taken, under investigation

33. criMinaL or disciPLinarY stePs taKen as a conseQUence of MateriaL Losses

None.


34. BUdget VersUs actUaL

The below indicate the over- or under on income and expenditure as per the approved budget to comply with GRAP01:


Under expenditure in Labour Cost 4 173 986 1 253 086

Under expenditure in Transport Cost 70 581 142 854

Under expenditure in Facility Cost 741 –

Under / (over) expenditure in Communication and System Costs 213 141 (128 422)

(Over) expenditure in Risk Management Costs (2 439 299) –

(Over) expenditure in Business Development Costs (3 613 391) (2 044 010)

(Over) expenditure in Other Costs (1 053 759) (2 928 949)

(Over) expenditure in Corporate Governance Costs (691 884) (4 255 501)

Under expenditure on CAPEX 164 007 617 577

Less: Over expenditure of direct expenditure in relation to hearings and investigations to be recovered 1 518 042 –

net deficit per approved budget (1 657 835) (7 343 365)

35. soccer WorLd cUP 2010 eXPenditUre

No expenditure has been incurred for the 31 March 2011 and 31 March 2010 which relates to the Soccer World Cup 2010.

Reviving local rivalry in boxing! Thabo Sonjica (Duncan Village) and Mcbute Sinyabi (Mdantsane) facing each other in an ECGBB-sponsored boxing tournament.

Crowds at the Orient Theatre in East London enjoying the boxing!

ANNUAL REPORT

20102011

ANNUAL REPORT

20102011

ECG&BB Building

Quenera Office Park | Quenera Drive | Beacon Bay | East London

P.O. Box 15355 | Beacon Bay | East London | 5205

Tel. +27 (0)43 702 8300 | Fax. +27 (0)43 748 2218

www.ecgbb.co.za

NATIONAL RESPONSIBLE GAMBLING PROGRAMME: 0800 006 008

PR121/2011 | ISBN: 978-0-621-40090-8

Title of Publication: Eastern Cape Gambling & Betting Board,

Annual Report 2010|2011

Documents

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