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PRESENTATION FOURTH QUARTER PERFORMANCE REPORT: 1 January – 31 March 2015

PRESENTATION FOURTH QUARTER PERFORMANCE REPORT: 1 January – 31 March 2015. PORTFOLIO COMMITTEE ON TRADE & INDUSTRY 7 August 2015 Cape Town Presenter: Ms Caroline Kongwa (Accounting Authority). CONTENT. Executive summary Performance against business plan

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PRESENTATION FOURTH QUARTER PERFORMANCE REPORT: 1 January – 31 March 2015

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  1. PRESENTATION FOURTH QUARTER PERFORMANCE REPORT: 1 January – 31 March 2015 PORTFOLIO COMMITTEE ON TRADE & INDUSTRY 7 August 2015 Cape Town Presenter: Ms Caroline Kongwa (Accounting Authority)

  2. CONTENT • Executive summary • Performance against business plan • Progress on actions in the risk register • Report against post audit implementation plan • Financial report • PFMA and Treasury regulation compliance checklist /calendar • Conclusion

  3. EXECUTIVE SUMMARY • Research was commissioned to monitor the prevalence of gambling and problem gambling and research to determine the socio-economic impact of illegal gambling with specific focus on online gambling and to determine the capacity required by National Gambling Board (NGB) to combat illegal gambling. • In Improving regulation and prosecution of online gambling, the NGB participated in various collaborative law enforcement Forums and commenced with the application for forfeiture of unlawful winnings to the state. • Development of a register of illegal operatives commenced. The illegal operator’s module concept document and the national registry concept document has been developed. • The NGB gathered national gambling statistics and information about the performance of the South African legalised gambling industry from all Provincial Licensing Authorities (PLA’s).

  4. EXECUTIVE SUMMARY cont....Increase in GGR (all modes) per quarter, FY15, from Quarter 1,2 & 3 • Gross Gambling Revenue (GGR) generated in the casino industry increased by 8.3% as a result of the increase of operational casinos positions in four out of the nine provinces i.e. Gauteng, Western Cape, KwaZulu-Natal and Northern Cape over the same period. • An increase of 10.2% in was reflected in the (Limited Payout Machine (LPM) industry. This is mainly as a result of a 1.9% increase in the roll out of active LPMs especially in Gauteng, Western Cape, Mpumalanga and Eastern Cape. • The most significant increase in GGR was noticed in the betting industry as GGR increased with 13.3% ,mainly as a result of increased GGR generated in sports betting (totalisators and bookmakers). • Decreases in GGR were noticed in the bingo industry mainly as a result of decreases in the generating of GGR in Gauteng during the first three quarters of FY15. It needs to be highlighted that operational gambling positions in the bingo industry increased by 44.7% from FY15 (Quarter 1: 4 577) to FY15 (Quarter 3: 6 622).

  5. EXECUTIVE SUMMARY cont.... GGRper gambling mode, all provinces, FY15, Quarters 1,2 & 3 Casino sector continues to dominate other gambling modes or sectors in terms contribution to GGR followed by betting sector ,LPM sectorand the bingo sector respectively

  6. EXECUTIVE SUMMARY cont.... GGR per province, all modes, FY15, Quarters 1,2 & 3 Gauteng accounts for the highest amount of GGR generated and taxes/levies contributions; One new casino has become operational in Northern Cape, resulting in a total of 37 operational casinos in South Africa; The highest number of licensed bookmaker outlets are still situated in the Western Cape, whereas Gauteng accounts for the most operational bookmakers and totalisator outlets; An increased roll out of LPMs in almost all provinces except KwaZulu-Natal, Free State and North West was noticed. No LPMs have been rolled out yet in the Northern Cape; and A substantial increase in the number of operational bingo outlets was noticed, primarily as a result of the roll out of 16 operational bingo outlets in KwaZulu-Natal. Total: R 17 919 336 882

  7. EXECUTIVE SUMMARY cont.... Key challenges Proposed action Collaborating with the dti in participating in the public outreach and initiatives organised by the dti. Capacitating the organisation in mission critical areas such as compliance generally, prevention and detection of illegal gambling as well as enforcement. The NGB continues to liaise with the banks in an attempt to obtain source documents for the confiscated suspected unlawful winnings. • Capacity constraints impacts on our ability to effectively reach out as broad as possible to sections of our communities when doing public awareness and education. • The Legal Skills in the NGB are scarce and this presents a major challenge in the regulatory environment within which NGB operates. • The NGB Trust which existed as a separate entity was de-registered and all confiscated winnings were transferred into an NGB-owned separate bank account. The NGB is experiencing challenges allocating the confiscated winnings due to inadequate documentation.

  8. PROGRESS AGAINST BUSINESS PLAN QUARTERLY MILESTONES

  9. PROGRESS AGAINST BUSINESS PLAN QUARTERLY MILESTONES (CONT…)

  10. PROGRESS AGAINST BUSINESS PLAN QUARTERLY MILESTONES (CONT…)

  11. PROGRESS AGAINST BUSINESS PLAN QUARTERLY MILESTONES (CONT…)

  12. SUMMARY PROGRESS ON ACTIONS IN THE RISK REGISTER

  13. Report against post audit implementation plan • Of a total of 134 findings , 121 have been resolved ,4 are currently in progress and 9 have not been addressed relating to annual financials statement matters that were planned to be addressed after the end of the financial year.

  14. FINANCIAL STATUS AND PERFORMANCE VARIANCE ANALYSIS (Figures reported are subject to change due to audited financial statements) • Administrative Expenses - The negative variance of R848,384 is attributable to the straight-lining of the lease liability which gave rise to a debit to the rental expense account. • Professional and Consulting Fees - The positive variance of R2,621,891 on professional fees was due to savings on projects which have been committed but not yet completed, such as the NCEMS technical advise (R714,072), an Omnibus research on the socio-economic impact of gambling (R340,000) and the on-going internal and external audits (R223,261). Also included in the positive variance is a savings of R1 million on legal fees.

  15. FINANCIAL STATUS AND PERFORMANCE (CONT…)Revenue Expenditure

  16. COMPLIANCE CALENDAR FOR THE FIRST QUARTER: 1 JANUARY 2015 – 31 MARCH 2015

  17. COMPLIANCE CALENDAR FOR THE FIRST QUARTER: 1 JANUARY 2015 – 31 MARCH 2015 cont....

  18. COMPLIANCE CALENDAR FOR THE FIRST QUARTER: 1 JANUARY 2015 – 31 MARCH 2015 cont....

  19. COMPLIANCE CALENDAR FOR THE FIRST QUARTER: 1 JANUARY 2015 – 31 MARCH 2015cont....

  20. CONCLUSION • 62.5% of the annual performance targets were achieved for the fourth quarter. • The financial position of the entity has been stabilised and a surplus of R1.060 million has been reported. As at year end 2015 the NGB has spent 92% expenditure against its total budget. • Established internal controls relating to management of expenditure and implemented cost containment measures. • No further irregular expenditure was incurred and irregular expenditure has been reduced from R3.6 million to R1.9 Million. Irregularly awarded contracts were cancelled. • Wasteful expenditure is at a nil balance. • The NGB will continue to monitor the market conduct and market share the information is based on raw data: • As at of year end 2015 growth in Gross Gambling Revenue was at 9.6% compared to end of 2014 at 4.3%. • A total amount of R 319 566 628 269 was wagered (turnover) as at year end 2015. • Direct employment in the gambling sector has been monitored annually. Based on the information submitted by PLAs direct employment per province and mode as at year end 2015 as per figures received from PLA’s is 19 994 permanent and temporary employment. • Based on the information submitted by PLAs, the average Broad-Based Black Economic Empowerment (BBBEE) status or level of the South African gambling industry as at 31 March 2015 per gambling mode and operator, was as follows: Average BBBEE level for casino operators: 2, totalisators: Level 2, LPM operators: Level 2 and bingo operators: Level 1

  21. Thank you 420 Witch-Hazel Avenue Eco-Glades 2, Block C,Eco Park, Centurion Telephone: 0100033475 Facsimile: 0866467150 info@ngb.org.za

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