National Lotteries Board Portfolio Committee Briefing October 2005

Agenda Background Organisational Structure Financials Activities

Vision/Mission To be a world class regulator VISION and distributor of lottery funds VISION MISSION To ensure that that the national and other lotteries are run with the utmost integrity, that the interests of all players are protected, that the national lottery generates maximum revenues for good causes in a responsible way and that these revenues are disbursed expeditiously

National Lotteries Board Joseph Foster Nora Fakude-Nkuna Shelley Thomas Astrid Ludin (DTI) Henry Makgothi Nornan Axten George Negota

The National Lotteries Act Establishes the National Lotteries Board Sets up the process for awarding the licence Establishes the National Lottery Distribution Trust Fund (NLDTF) Sets up the process of Distribution Sets up process for Monitoring & Regulating Private & Society Lotteries Promotional Competitions

Functions/Objectives Advise the Minister on the issuing of Licence/s on the percentages allocated to good causes on the efficacy of Legislation related to Lotteries Protection of Players Maximize proceeds to good causes Administer NLDTF Monitor & Regulate Other Lotteries Manage the Central Applications Office

Structure NGOs CBOs NLB Uthingo NLDTF REGULATOR Monitors activities Applications REGULATOR Monitors activities & approves games NLB Central Applications Office Uthingo NLDTF Weekly transfer Operates the National Lottery 5% 22% 36% 22% 15% DA Art & Culture DA Charities DA Sport DA RDP DA Misc Allocation and distribution of funds (average turnaround time is 3 months)

Organisational Structure

National Lotteries Board’s Equity and Gender

Financial Statements

NLB Balance Sheet as at 31 March 2005 ASSETS Non-current assets Property, plant and equipment Intangible assets Current Assets Investment in securities Trade and other receivables Prepayments and advances Cash and cash equivalents Total assets EQUITY AND LIABILITIES Non-current liabilities Deferred income: Licence fees Current liabilities Trade and oher payables Current portion of provisions Current portion of deferred income    Total equity and liabilities 2005 R’000  528 67 595   136 736 209 15 1 063 138 023 138 618 - 137 783 607 228  2004 718 19 737 125 707 519 203 126 429 127 166 126 197 513 126 938

NLB Income Statement for the year ended 31 March 2005 2004 R’000 Grants and transfers Profit on disposal of fixed assests Licence signing fees Other income Administrative expenses Staff costs Other operating expenses Depreciation Deficit from operations Finance costs Income from investments Deficit for the year 16 618 1 228 51 16 898 5 230 9 075 2 250 412 (69) - 69 _______ _ - 8 578 4 111 8 921 4 899 7 488 745 625 (4 836) (1) 237 (4 600)

NLDTF Balance Sheet as at 31 March 2005 ASSETS Current Assets Investment in securities Trade and other receivables Cash and cash equivalents   Total assets EQUITY AND LIABILITIES Capital and reserves Current liabilities Trade and other payables Total equity and liabilities 2005 R’000 1 966 094 9 656 1 137 417 3 113 167 1 811 324 1 301 843 __________ 2004 1 807 390 14 386 1 057 631 2 879 407 1 693 676 1 185 731

NLDTF Income Statement for the year ended 31 March 2005 2004 R’000 R’000 Revenue Other income Disbursement of funds Assistance to the National Lotteries Board Other operating expenses Deficit from operations Finance income Operating surplus for the year 1 029 853 7 585 1 037 438 1 165 962 18 944 18 (147 486) 265 134 __________ 117 648 986 642 4 690 991 332 1 244 845 8 045 14 (261 572) 301 938 ________ 40 366

Budget 2004/2005 2005/2006 2006/2007 Income 348 6,848 36 Grant 16,618   2004/2005 2005/2006 2006/2007 Income 348 6,848 36 Grant 16,618 16,225 34,324 Expenditure 16,966 23,073 34,360

Cost/Disbursement Ratio NLB UK NDA

Activities Regulation Distribution of NLDTF National Lottery Other Lotteries & Promotional Competitions Distribution of NLDTF

Structure NGOs CBOs NLB Uthingo NLDTF REGULATOR Monitors activities Applications REGULATOR Monitors activities & approves games NLB Central Applications Office Uthingo NLDTF Weekly transfer Operates the National Lottery 5% 22% 36% 22% 15% DA Art & Culture DA Charities DA Sport DA RDP DA Misc Allocation and distribution of funds (average turnaround time is 3 months)

Regulating the National Lottery Retail Outlets Payments to the NLDTF Copyright and Trademarks Player Relations Advertising Security Systems Banking and Record Keeping Payment Security Ancillary Activities Directors, Shareholders and Subcontractors Social Responsibility

Salient Lottery facts for the year ended 31 March 2004 Prize Winners Millionaires Rollovers Highest Jackpot Highest Prize Average Number of Players Per Week Total LOTTO Sales (incl. VAT) Highest Weekly LOTTO sales Total Prizes Paid Total Contribution to NLDTF 40 309 617 113 47 R30 Million R23,3 Million 6,9m R4 248 320 948 R107 114 239 R2 044 143 166 R1 029 852 807

Contributions (average over 7years)

Ticket Sales Per Province (Rm)

Structure NGOs CBOs NLB Uthingo NLDTF REGULATOR Monitors activities Applications REGULATOR Monitors activities & approves games NLB Central Applications Office Uthingo NLDTF Weekly transfer Operates the National Lottery 5% 22% 36% 22% 15% DA Art & Culture DA Charities DA Sport DA RDP DA Misc Allocation and distribution of funds (average turnaround time is 3 months)

NLDTF Disbursements Actual Cash Paid 31 March 2005 (Mil) 2001 2002 2003 2004 2005 Total Charities 69.5 174.5 305.8 631.7 1 181.5 Arts 25.4 40.2 140.3 190.7 396.6 Sport 21.6 62.6 149.5 226.9 460.6 Miscellaneous 4.1 0.0 9.6 17.4 0.6 31.7 116.5 286.9 613.0 1 049.9 2 070.4

NLDTF Disbursements Available VS Allocated (R000) Beneficiaries Charities 762 154 504 980 956 Arts 474 229 310 401 266 Sport 372 609 389 199 750 Miscellaneous 84 684 633 1 Total 1 693 676 1 205 213 1973

NLDTF Disbursements Provincial Spread Arts Charities Sport Misc Total National 76 746 78 260 139 398 633 295 037 EC 13 402 55 244 26 390 95 036 FS 11 468 27 106 1 892 40 466 GP 73 039 120 347 34 063 227 449 KZN 32 653 56 633 35 419 124 705 LIM 11 244 13 641 30 891 55 776 MP 174 21 861 9 864 31 899 NC 2 988 22 020 20 407 45 415 NW 8 646 17 453 40 991 67 090 WC 80 041 92 415 49 884 222 340 310 401 504 980 389 199 1 205 213

NLDTF Commitments Grants made but not paid (Mil) as at 31 March 2005 Charities 357 Arts 482 Sport 463 Miscellaneous Total 1 302

Charities Focus Capacity Building Poverty Alleviation Community and Residential Programmes for children youth women the aged persons with disabilities people affected by / infected with HIV/AIDS the terminally ill drug abusers

Charities Activity Year Ending March No. of Applications received   Year Ending March No. of Applications received No. of Applications Approved No. of Applications Rejected Pending 2002 2255 849 1406 - 2003 4063 1357 2670 36 2004 3925 856 2302 767

Arts, Culture & Heritage Focus Major Projects of National Significance Rural Grants for projects designed to serve the community Creative Development Grants Festivals Film Production and Distribution Public Art Heritage: Architectural, Archaeological, Historical and Indigenous Knowledge Systems. Environment

Arts, Culture & Heritage Activity   Year Ending March No. of Applications received No. of Applications Approved No. of Applications Rejected Pending 2002 746 149 597 - 2003 1398 283 1097 18 2004 1838 680 48 1012  

Sports Focus Capacity building for sports people, managers, administrators and coaches. Equipment and kit for teams and clubs. Upgrading of existing sporting facilities. Major events

Sports Activity Year Ending March No. of Applications received   Year Ending March No. of Applications received No. of Applications Approved No. of Applications Rejected Pending 2002 535 247 288 - 2003 1016 408 606 2 2004 1457 209 194 1054  

Strategic Objectives 2006-8 Increasing National Lottery Sales and Contributions to the NLDTF Improved Licence Compliance Improved NLDTF Distribution Termination of Illegal Lotteries Improved Publicity Re-Licensing process

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