2008/9 MLRF Annual Report

1. 2008/9 MLRF Annual Report Presentation to Portfolio Committee 10 November 2009

2. Mandate Related Objectives GOAL • To promote the conservation and sustainable use of marine and coastal resources. AIM • To manage the development, sustainable use and orderly exploitation of marine and coastal resources. • To protect the integrity and quality of marine and coastal ecosystems.

3. Functionality Related Objectives • Enhance Service Delivery and Systems Improvement. • Promote Equitable and Sound Corporate and Cooperative Governance. • Enhancement of Reputation and Collective Ownership of the Sectors.

4. Equitable & Sustainable use of natural resources

5. Equitable & Sustainable use of natural resources

6. Equitable & Sustainable use of natural resources

7. Build a sound scientific base for effective management of marine & coastal resources

8. Rebuild depleted fish stock

9. Compliance with marine and coastal legislation

10. Feasibility of new fisheries

11. Enabling environment for growth & development of marine aquaculture.

12. Conserve and mitigate threats to biodiversity

13. International multilateral & bilateral marine and fisheries agreements

14. Increased marine & coastal economic opportunities

15. FINANCIAL PERFORMANCE OF THE MLRF 2008/09

16. GENERAL OVERVIEW • Auditor-General expressed an unqualified audit opinion. • What does it mean? The 2008/2009 annual financial statements present fairly, in all material respects, the financial position of the MLRF as at 31 March 2009 and its financial performance and cash flows for the year. • No negative key governance responsibilities reported.

17. STATEMENT OF FINANCIAL POSITION ASSETS Plant & Equipment • Increased by 96% over the prior year • Additions of R17 million in 2008/09 • Excludes vessels funded by government grants Intangible assets • Computer software • Additions of R785 000 during the current year

18. STATEMENT OF FINANCIAL POSITION (continued) ASSETS Inventory • Confiscated abalone and shark fins on hand. • Include samples and unprocessed stock in MCM stores as well as at the processors. Trade and other receivables • Value of debtors at year-end. • Decreased by 56% over prior year. • Improved debtors management system and more aggressive debt collection.

19. STATEMENT OF FINANCIAL POSITION (continued) LIABILITIES • Total liabilities of R62.4 million. • 12.6% decrease over the prior year. • Consist of: • Increased skilled capacity in accounts payable section. • Improved processes and internal control environment.

20. STATEMENT OF FINANCIAL PERFORMANCE • Total revenue of R337.8 million. • Total expenditure of R312.1 million . • Net surplus of R25.7 million. • Prior year net surplus of R43.3 million. • 40.6% decrease in net surplus over the prior year. • 22% increase in total expenditure. • 12.9% increase in total revenue. • Obtained approval from National Treasury - section 53(3) - to retain the accumulated surplus (for current & future commitments).

21. STATEMENT OF FINANCIAL PERFORMANCE (continued) REVENUE • Increase of 12.9% in total revenue. • Operating revenue decreased by 11%. • Reduced income from levies and chartering of vessels. • Result of decrease in TAC and less chartering of vessels. • Other income increased by 31.2% • Grant for VOC increased by 85% • Confiscated Fish & fish products (mainly abalone) = 6.5% of total 2008/09 revenue budget

22. STATEMENT OF FINANCIAL PERFORMANCE (continued) EXPENDITURE • 22% increase in expenditure over the prior year • Mainly due to increase in transportation costs and other operational costs. • Major expenditure items included in other operational costs are:

23. STATEMENT OF FINANCIAL PERFORMANCE (continued) EXPENDITURE (continued) Transportation costs • Increased by 31.3%. • Consist of staff travelling of R12.9 million and the use of GG vehicles of R14.3 million. • Increase due to increase in fuel price and mileage. • Additional work done by MCM officials, i.e. investigations, surveillance, coastal management and research.

24. STATEMENT OF FINANCIAL PERFORMANCE (continued) EXPENDITURE (continued) Consultancy and outsourced services: • 7% increase over the prior year. • Consultants provide advisory services to the MLRF. • Total expenditure of R5.4 million for consultants. • Main consultants were: • Ernst & Young: Harbour Feasibility Study • Resolve Group: Fisheries Performance Reviews

25. STATEMENT OF FINANCIAL PERFORMANCE (continued) EXPENDITURE (continued) • Outsourced services utilised in areas where there is no in-house capacity. • Main suppliers of outsourced services were:

26. NOTES TO THE ANNUAL FINANCIAL STATEMENTS Note 24: Fruitless and wasteful expenditure • Interest of R2862 paid due to late payment of a supplier – approval obtained that costs incurred were irrecoverable. • Fully reported and investigated by the Accounting Authority as required by section 51(1)(b)(ii) of the PFMA.

27. FINANCIAL MANAGEMENT OF THE MLRF • All key governance responsibilities were met in 2008/09. • This includes: • No significant deficiencies in the design and implementation of internal controls relating to financial and risk management and compliance with applicable laws and regulations. • Appropriate information systems. • Clear trail of supporting documentation that is easily available. • High quality annual financial statements. • Effective Audit committee. • Documented fraud prevention plan.

28. THANK YOU