2010-2011 Annual Report

ANNUAL REPORT ANNUAL 2011 2010 ECG&BB Building NATIONAL RESPONSIBLE GAMBLING PROGRAMME: 0800 006 008 Quenera Office Park | Quenera Drive | Beacon Bay | East London 2010 P.O. Box 15355 | Beacon Bay | East London | 5205 PR121/2011 | ISBN: 978-0-621-40090-8 Tel. +27 (0)43 702 8300 | Fax. +27 (0)43 748 2218 Title of Publication: Eastern Cape Gambling & Betting Board, 2011ANNUAL REPORT www.ecgbb.co.za 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. Sunduza JSS pupils touching ECGBB sponsored computers for the first time in their lives. CONTENTS 1. BOARD OF DIRECTORS AND MANAGEMENT 5 5. GAMING PERFORMANCE 21 1.1 Board of Directors 5 5.1 Revenue and Tax Statistics 21 1.2 Management 5 5.2 Distribution of Gambling and Betting Takings 21 2. VISION AND MISSION 7 6. AUDIT COMMITTEE REPORT 23 2.1 Vision 7 2.2 Mission 7 7. THE AUDITOR GENERAL’S REPORT 25 2.3 Objectives & Functions of the Board 7 8. OPERATIONAL PERFORMANCE 29 3. AccOUNTING AUTHority’s RESPONSIBILITIES AND APPROVAL 9 8.1 Introduction 29 8.2 Definitions 29 4. CHAIRPERSON’S REPORT 11 8.3 Performance Against Operational Plan 29 4.1 Overview of Strategic Direction 11 8.4 Performance Report – Annexure 1 37 4.2 Performance Delivery 11 4.3 Community Development Projects 12 9. HR OVERSIGHT STATISTICS 39 4.4 Marketing Activities 12 9.1 ECGBB Organogram 53 4.5 Organisational Alignment and Balanced Score Card 13 4.6 Litigation 14 10. AUDITED FINANCIAL STATEMENTS 55 4.7 Corporate Governance 15 10.1 Statement of Financial Position 55 4.8 Related-Party Transactions 16 10.2 Statement of Financial Performance 56 4.9 International/Continental Travel 16 10.3 Statement of Changes in Net Assets 57 4.10 Attendance Register for Board and Committee Meetings 16 10.4 Cash Flow Statement 58 4.11 Organisational Review 17 10.5 Accounting Policies 58 4.12 Attracting Investments 17 10.6 Notes to the Annual Financial Statements 60 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 3 Thumbs Up! CEO Mabutho Zwane and ECGBB staff. 1. BOARD OF DIRECTORS AND MANAGEMENT 1.1 BOARD OF DIRECTORS 1.2 MANAGEMENT BOARD OF DIRECTORS & SENIOR MANAGEMENT 5 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 We are therefore committed to protecting the public We will achieve this through providing excellent mission is to ensure that the EC Gaming Industry is interest through regulation, licensing and appropriate service to our stakeholders and through facilitating conducted honestly and competitively with maximum enforcement. socio-economic benefits to communities within contribution to society. which we operate. 2.3 OBJECTIVES & FUNCTIONS OF THE BOARD The Board oversees all gambling and betting activities The functions of the Board include, among others: ~ Determining licence conditions. in the province and matters incidental thereto, as ~ Licensing of the gaming industry. contemplated in the Act and advises the responsible ~ Ensuring compliance with the Act by all licensees. It is the responsibility of the Board to ensure that an Member of the Executive Council of the Province for ~ Collection of gambling taxes on behalf of the accountable and credible legal gaming industry exists Economic Development, Environmental Affairs & province. in the province and that internationally recognised Tourism on gambling matters and to exercise certain ~ Combating illegal gambling. standards in the industry are complied with. further powers contemplated in the Act. ~ Undertaking licensing investigations. ~ Issuing and revocation of licences. VISION & MISSION 7 3. AccOUNTING AUTHority’s RESPONSIBILITIES AND APPROVAL The directors are required by the Public Finance standards for internal control aimed at reducing the light of this review and the current financial position, Management Act (Act 1 of 1999), to maintain risk of error or deficit in a cost effective manner. they are satisfied that the entity has or has access adequate accounting records and are responsible The standards include the proper delegation of to adequate resources to continue in operational for the content and integrity of the annual financial responsibilities within a clearly defined framework, existence for the foreseeable future. statements and related financial information included effective accounting procedures and adequate in this report. It is the responsibility of the directors to segregation of duties to ensure an acceptable level Although the accounting authority is primarily ensure the annual financial statements fairly represent of risk. These controls are monitored throughout the responsible for the financial affairs of the entity, they the state of affairs of the entity at the end of the financial entity and all employees are required to maintain are supported by the entity’s external auditors. year and the results of its operations and cash flows the highest ethical standards in ensuring the for that period. The external auditors are engaged to entity’s business is conducted in a manner that in The external auditors are responsible for express an independent opinion on the annual financial all reasonable circumstances is above reproach. independently reviewing and reporting on the entity’s statements and were given unrestricted access to all The focus of risk management in the entity is on annual financial statements. The annual financial financial records and related data. identifying, assessing, managing and monitoring statements have been examined by the entity’s all known forms of risk across the entity. While external auditors and their report is presented on The annual financial statements have been operating risk cannot be fully eliminated, the pages 25 to 27. prepared in accordance with standards of Generally entity endeavours to minimise it by ensuring that Recognised Accounting Practice (GRAP), including appropriate infrastructure, controls, systems and The annual financial statements set out on pages any interpretations, guidelines and directives issued ethical behaviour are applied and managed within 55 to 76, which have been prepared on the going by the Accounting Standards Board. predetermined procedures and constraints. concern basis, were approved by the accounting authority on 31 May 2011 and were signed on its The annual financial statements are based on The directors are of the opinion, based on the behalf by appropriate accounting policies consistently applied information and explanations given by management, and supported by reasonable and prudent judgments that the system of internal control provides reasonable and estimates. assurance that the financial records may be relied on for the preparation of the annual financial statements. The directors acknowledge that they are ultimately However, any system of internal financial control can responsible for the system of internal financial provide only reasonable, and not absolute, assurance R M ZWANE ADV A MAYOSI control established by the entity and place against material misstatement or deficit. Chief Executive Officer Chairperson considerable importance on maintaining a strong control environment. To enable the directors to meet The directors have reviewed the entity’s cash flow these responsibilities, the accounting authority sets forecast for the year to 31 March 2012 and, in the ACCOUNTING AUTHORITIES RESPONSIBILITIES & APPROVAL 9 4. CHAIRPERSON’S REPORT 4.1 OVERVIEW OF STRATEGIC DIRECTION The Eastern Cape Gambling and Betting Board’s licensees operate. A full report on this exercise is Divisions. Furthermore, the Board launched a new Board of Directors approved a revision of its Mission, presented in paragraph 5. logo in line with its stated strategic goals. The Board arising from the Board’s commitment of running an also has undertaken to fund community development efficient organisation that ensures the Eastern Cape The ECGBB currently has 8 Operating Divisions. projects to contribute to socio-economic development gambling industry is conducted competitively. In turn, However, part of the strategic review necessitated in the province. The Board is assisting in the building the Board wants to position the ECGBB, not only as a thorough work organisation review to support the or renovations of schools, crèches, sport (athletics an efficient regulator, but also one that empowers new strategy. It is anticipated this will change the and boxing) promotions, funding of orphanages, old the operators and communities within which the ECGBB’s structure in future to reflect fewer Operating age homes and feeding schemes. 4.2 PERFORMANCE DELIVERY 4.2.1 GLOBAL ECONOMIC RECESSION 4.2.3 REVIEW OF ECGBB ACT in its structure that will strengthen this weakness – Like most industries, the economic recession in the The Board is currently reviewing our enabling strategic services. The re-focusing of the organisation past two years has affected the gaming industry legislation to ensure that it creates an efficient has resource implications – more staff will need to be negatively. For two years the revenue collected has environment for the collection of revenue and all hired to achieve its strategic goals – from the current been around R90-million and the gross gaming matters incidental to its mandate. 27 to 41 staff members. revenue stabilising around the R1-billion mark. 4.2.4 ORGANISATIONAL ENVIRONMENT The environment in which ECGBB operates is largely 4.2.2 INDUSTRY PERFORMANCE The ECGBB has undertaken a comprehensive subservient to the gaming environment that prevails The gambling industry continues to create jobs, promote process of organisational development, aligning the in the country and world-wide, and that can be tourism and facilitates and contributes to significant organisation to the new strategy. This will result summarised as follows: infrastructural development and investments.

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