Annual Report Presentation - 2016 Portfolio and Select Committees Annual Report Presentation - 2016

Vision: to create Africa’s greatest conservation-based tourism destination driven by community empowerment Mission: To protect, conserve and present the Wetland Park and its World Heritage Values for current and future generations in line with the standards laid down by UNESCO and the World Heritage Act, and to deliver benefits to communities living in and adjacent to the Park by facilitating optimal tourism and related development

High-Level Structure Minister Board Chief Executive Officer Park Operations Director Business Research, Policy & Planning Senior Manager CFO

Summary Results Year Ended 2015/16 Key Performance Indicator Programme Info not provided No milestone Off target Work in progress On target Park Operations 1 8 Transformation 5 Commercialisation/Tourism 6 Corporate Governance 4 Total 23

Strategic objective: to ensure the world heritage values are conserved Programme One: Conservation & Park Operations Strategic objective: to ensure the world heritage values are conserved

Performance indicator Achievements/Challenges/Corrective Measures SO: To ensure the World Heritage Values are conserved Performance indicator Baseline Annual target 2015/16 Achievements/Challenges/Corrective Measures Detection of poaching incidents within 2 weeks 2 weeks Achievement: 2 weeks Detection of illegal developments within 48 hours 48 hours Achievement: 48 hours Response to EIA’s and reported developments 100% Achievement: 100% 5 environmental audits 5 Achievement: 5 15000ha of land rehabilitation 15000ha 15000ha follow-up/ 500ha initial/ 4 wetlands Achievement: 41618ha follow-up Challenges: securing funding for new clearing Corrective Measure: developing a strategy for funding and/or improving the efficiencies with the available funds Completion of annual game management programme Completion of annual programme Annual game management programme completed Achievements: Game introduction plan achieved Challenges: The drought is deepening – water may have to be trucked in – this will have cost implications Corrective Measures: n/a Applications in buffer actioned 80%

Performance indicator Achievements/Challenges/Corrective Measures SO: To ensure the World Heritage Values are conserved Performance indicator Baseline Annual target 2015/16 Achievements/Challenges/Corrective Measures Initiate implementation of hydrological solution for St Lucia Estuary Preferred solution initiated Implementation of preferred solution subject to availability of funds Achievement: Tender concluded and awarded Challenge: contract is for 100k cubic metres. Challenge sourcing funding for additional work Corrective Measure: Additional funding is being sought/ tender is a cost effective solution Complete annual infrastructure programme Annual programme achieved Achievement: Annual programme achieved Challenges: environmental compliance by one of the contractors and delays in the programme Corrective measure: penalties and weekend work

Programme Two: Transformation Strategic objective: to optimise the empowerment in all activities of the Park in a way that will improve the livelihoods of previously-disadvantaged

Performance indicator Achievements/Challenges/Corrective Measures SO: to improve access to work and income generation activities Performance indicator Baseline Annual target 2015/16 Achievements/Challenges/Corrective Measures Creation of temporary jobs 1514 1530 Achievement: 1547 Permanent jobs from park-related activities 23 10 Achievement: 15 Training 400 people Achievement: 1425 BEE smme’s through iSimangaliso programme 82 50 Achievement: 94 BEE procurement 71% Achievement: 93%

Programme Three: Tourism/Commercial Strategic objective: to optimise the Park’s revenue generation in a commercially- and environmentally-sustainable manner, that fosters job creation and empowerment of historically-disadvantaged communities

Performance indicator Achievements/Challenges/Corrective Measures SO: to improve financial sustainability Performance indicator Baseline Annual target 2015/16 Achievements/Challenges/Corrective Measures Increase revenue R11.9m R16.1m Achievement: R18.5m Visitor entries 533451 Achievement: 537173 Complete facilities management and maintenance programme Programme completed on spec, budget and time Achievement: programme completed on spec, budget and time Implementation of environmental education programme 2700 children in environ awareness 40 schools in school awards Achievement: 7470 children in school awareness/75 schools in school awards. An approach was made by Kingsley Holgate Foundation and various other funders to run a rhino walk project. Implementation of PR programme for claimants and traditional councils 12 workshops Achievement: 30 workshops. Internal decision made to increase the extent of the PR programme in respect of these stakeholder groups particularly in the advent of service delivery protests Implementation of PR programme for stakeholders other than local community 24 newsflashes Achievement: 25 newsflashes (database has some 15000 subscribers)

Programme Four: Corporate Governance Programme Four: Corporate Governance Strategic objective: to ensure that iSimangaliso’s operations are properly funded and cost-effectively managed while maintaining an appropriate system of internal control and reporting of accounting, management, and statutory information

Performance indicator Baseline Annual target 2015/16 SO: to make research relevant to park management and transform the research sector Performance indicator Baseline Annual target 2015/16 Achievements/Challenges/Corrective Measures Reports tabled quarterly 4 reports Achievement: 4 SO: effective financial management Performance indicator Baseline Annual target 2015/16 Achievements/Challenges/Corrective Measures Unqualified audit Achievement: Unqualified audit Tabling of annual report On 31 August Achievement: Tabled on due date SO: to cultivate an environment that will make iSimangaliso an employer of choice Performance indicator Baseline Annual target 2015/16 Achievements/Challenges/Corrective Measures Staff retention rate 80% Achievement: 100%

2015/16 Financial Performance Summary Accounting revenue increased by 47.3% from the previous financial year Expenditure increased by 6.7% (major contributors to the increase were project costs, legal fees, and professional fees. The increases were set off by a reduction in personnel costs which was largely a function of project recoveries Surplus of R62.4m as a result of the requirements of GRAP standards Two contingent liabilities: Sanyati contract – penalties levied on the contractor for non-achievement of labour penalties are being claimed by the liquidators – managements’ view that this claim has prescribed SQF – in the amount of R35.1m in respect of a veld fire that damaged plantations Total net assets increased by R62.4m

2015/16 Performance against Budget   Final budget Actual Net favourable/ (adverse) variance Explanation of variances Revenue: Grant funding - R(187 835 757) R(160 849 220) R(26 986 537) R8730359 is due to differences in the bases of accounting between the budget and the financial statements. The balance of R18256178 is due to delays in the lotto and GEF projects. In both cases tenders were issued but not awarded. GEF was retendered and successfully issued Admin fees R(1 576 301) R(3 073 509) R 1 497 208 Admin fees are recovered from project expenditure; delays were occasioned pending approval of business changes Park revenue  R(16 100 000)  R(18 521 610) R 2 421 610 Increases are due to implementation of a new commercial permitting system; in addition turnover-based fees from operators were higher than anticipated Other R(4 238 485) R(4 251 932) R 13 447

2015/16 Performance against Budget   Final budget Actual Net favourable/ (adverse) variance Explanation of variances Expenses: Chemicals & equip R 8 364 536 R 13 290 757 R(4 926 221) The variance relates to the grants awarded under the enterprise programme. The projections are based on the max that can be issued under each grant – the actual sum depends on the amount in each application submitted by the entrepreneurs Depreciation & amort R 24 427 181 R 22 893 131 R 1 534 049 Depreciation for the period is calculated using tentative dates for capitalisation of capital items. These dates are contingent on the execution of various projects by contractors and were pushed out Personnel costs (net of chg-outs) R 12 248 763 R 9 697 003 R 2 551 760 Certain costs of personnel allocated to projects are recovered from project budgets. The roll-out of the projects was faster than projected at time of budget and consequently the fees recovered were higher Maintenance & repairs R 8 185 001 R 9 882 111 R(1 697 110) The variance is due to a higher-than-anticipated increase in wage rates at various bargaining councils that regulate facilities management (projected 9% - settlement was 15%) as well as costs mouth management costs relating to the civil matter concerning the breaching of the St Lucia Estuary Mgt & admin R 5 254 503 R 5 389 363 R(134 860)

2015/16 Performance against Budget   Final budget Actual Net favourable/ (adverse) variance Explanation of variances Professional fees R 10 804 122 R 16 438 635 R(5 634 513) Professional fees relating in particular to the GEF project were incurred at a faster rate than projected due to project roll-out changes Subcontractors R 12 645 852 R 19 505 917 R(6 860 065) A larger number of land care contracts were issued during the course of the year due to an unexpected funding windfall Training R 3 517 821 R 3 169 807 R 348 014 Other - R 28 003 330 R 24 097 931 R 3 970 633 This variance is largely attributable to (a) decrease in gate management costs due to a renegotiation of the contract (b) use of boreholes instead of municipal water as a consequence of drought and service delivery difficulties. These gains exceeded the higher than anticipated legal fees expense flowing from the St Lucia Estuary and the Mngoboseleni Buffer Zone matters Net surplus/(deficit) R 0.00 R(62 396 848) R 62 396 848 The variance is due to a difference in the basis of preparation of the budget (as required by the PFMA) and the financial statements (as required by GRAP)

2015/16 Auditors’ Findings Clean audit for performance and finances Joint project to be undertaken with auditors to make the IT governance framework more robust as part of the continuous improvement strategy of iSimangaliso

STAFF DEMOGRAPHICS Year Ended (15/16) BASELINE: TARGET: QUARTER 2 QUARTER 3 YEAR END AFRICAN Male 9 - 15 Female 11 WHITE 3 6 INDIAN COLORED % African % Female % Mngmt - Female % PWD 46%bl 63% 60% 0% 65% 51% 55% 2% 71% 57% 59%

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