1. SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR (SADPMR)

2. PRESENTATION TO THE PARLIAMENTARY PORTFOLIO COMMITTEE SADPMR ANNUAL REPORT FOR THE 2014/ 2015 FINANCIAL YEAR

3. PRESENTATION OUTLINE Introduction
Audit Outcome from 2014/2015 financial year. matters from 2014/ financial year
Financial Performance Audit Report
Developments within the SADPMR
Achievements on Predetermined objectives
Human Resources
Annual Financial Statements
Challenges
Closure

4. INTRODUCTION
The audit report for the year under review was for the period 2014/2015, policies have been reviewed and aligned to the PFMA requirements and relevant financial systems and controls have been established and are correctly implemented

5. AUDIT OUTCOME FROM 2014/2015 FINANCIAL YEAR
The South African Diamond and Precious Metals Regulator received an unqualified audit outcome and;
The Regulator therefore had a few audit issues that needed to be addressed.

6. ANNUAL REPORT FOR THE 2014/15 FINANCIAL YEAR

7. FINANCIAL PERFORMANCE- AUDIT REPORT
AUDIT OPINION
UNQUALIFIED AUDIT OPINION ISSUED – WITH EMPHASIS OF MATTER.

8. FINANCIAL PERFORMANCE- AUDIT REPORT
Emphasis of matter
Matter reported
Restatement of corresponding figures
As disclosed in note 22 to the financial statements, the corresponding figures for 31 March 2014 have been restated as a result of an error discovered during 31 March 2015 in the financial statements of the SADPMR at, and for the year ended, 31 March 2015.
Action taken:
The financial statements were revised accordingly. Internal controls to prevent recurrence of similar error are in place.

9. FINANCIAL PERFORMANCE- AUDIT REPORT
Report on other legal and regulatory requirements
None
Predetermined objectives
No material findings concerning the usefulness and reliability of the information

10. ACHIEVEMENTS ON PREDETERMINED OBJECTIVES
Objectives are aligned to the DMR Strategic Objectives and the National Development Plan, 2030.
Ensure equitable access to resources for local beneficiation
For the period under review, 3522 clients visited the DEEC and placed and bid for diamond parcels against the set target of 1400 anticipated clients
During the same period, 176 diamond beneficiators visited the DEEC where they were given priority.
The DEEC was able to facilitate one (1) polished tender for the small diamond beneficiators.
Ensure compliance with legislative requirements
During the period under review, 521 diamonds valuations (s59, import and exports) were conducted for determination of fair market value.
The Regulator was able to conduct 1444 inspections within the diamond and precious metals industries against the set target of 1300 inspections.

11. ACHIEVEMENTS ON PREDETERMINED OBJECTIVES
Ensure competitiveness, sustainable development and job creation in the diamond and precious metals industries
During the 2014/2015 financial year, 63 beneficiation licenses were issued against the target of 50;
The Regulator assisted seven (7) prospective entrepreneurs in the diamond and precious metals industries; and
Also, the Regulator managed to facilitate five (5)skills development initiatives in the diamond and precious metals industries.

12. DEVELOPMENTS WITHIN THE SADPMR
ESTABLISHMENT OF THE BOURSE
The SADPMR was mandated to draft a Concept Document on the establishment of a State Bourse, by the Minister of Mineral Resources. The Board of the SADPMR approved the document, which recommends the establishment of the Bourse and the proposed framework of a State Bourse. After Board approval, it was sent to the Department in August 2015.
PARTNERSHIP WITH THE GGDA IN ESTABLISHMENT OF THE GIDZ
The Gauteng Growth Development Agency (GGDA) is building a Gauteng Industrial Development Zone (GIDZ) near OR Tambo, airport. The SADPMR was requested to collaborate with the GGDA, to establishment of a Jewellery Manufacturing Precinct within the GIDZ, where the State Bourse is envisaged to be situated as well. The sod-turning ceremony was in September 2015.
SADPMR WOMEN IN MINING STRATEGY
The SADPMR will be formulating a Women strategy. It will be in line with the DMR Woman-In-Mining strategy. The strategy will addresses challenges of women both inside and outside the industry.

13. HUMAN RESOURCES Organogram
Total: The SADPMR has a total of 115 employees by the end of March 2015.
Gender: Male – 47 , Female - 68.
Race: Coloured – 4, Indian – 4, white – 2 , black – 105.

14. Employment Equity statistics
NUMBER OF MALES
NUMBER OF
FEMALES
NUMBER OF PEOPLE WITH DISABILITIES
TOTAL
Executives: 4
Senior Managers: 4
Executives: 2
Senior Managers: 2
Executive: 0
Senior Managers: 0
Executives: 6
Senior Managers: 6
Professionals and skilled employees: 29
Professionals and skilled employees: 48
Professionals and skilled employees: 0
Professionals and Skilled employees: 77
deputy managers and senior officials)
Semi-skilled employees:8
Semi-skilled employees:11
Semi-skilled employees:0
Semi- skilled employees: 19
(below senior officials)
Unskilled employees: 2
Unskilled employees: 5
Unskilled employees: 0
Unskilled employees 7
(junior officials)
Total : 47 male employees
Total: 68 female employees
Total: None (one person with a dis-ability has been appointed during the current financial year 2015/2016, as a receptionist). He is semi-skilled employee.

15. HUMAN RESOURCES 6 new appointments 7 termination of services
NUMBER OF APPOINTMENTS MADE
NUMBER OF TERMINATION OF SERVICE
NUMBER OF INTERNAL PROMOTIONS
6 new appointments
7 termination of services
6 resignations
1 retirement
2 employees were promoted

16. HUMAN RESOURCES Labour relations- misconduct and disciplinary action
Nature of disciplinary action
Number
Verbal warning 3
Written warning 1
Final written warning
Dismissal
Total 5

17. Human Resources Development
INTERNSHIP PROGRAMME
FEMALES
MALES 5 2 3
TOTAL NUMBER OF INTERNAL STAFF ON BURSARIES
MALES
FEMALES 24 9 15

18. ANNUAL FINANCIAL STATEMENTS
OVERVIEW.
The Regulator submitted the budget of R 80,3 million to National Treasury via the Department of Mineral Resources.
The final allocation was R 45,9 million which left the Regulator with a shortfall of R 34,4 million.
The budget and the classification of funds were adjusted in accordance with the final allocation.
The Regulator obtained the National Treasury’s approval to utilise accumulated surplus for capital projects and other contractual obligations.
The allocation shortfall is augmented by the in-house generated revenue ( Levy, fees ,licences and penalties)

19. ANNUAL FINANCIAL STATEMENTS
Revenue
The actual revenue was R 87,7 million (incl. Transfer Payment of R 47,8 million).
The in-house generated revenue increase to R 39,9 million from R 34,4 million
The increase in the in-house generated revenue is due to the implementation of revised fees which was implemented on the 1st of October 2014.

20. ANNUAL FINANCIAL STATEMENTS
Expenditure
The actual expenditure for the year under review was R 92,6 million.
The major contributing expenditures were as follows:
Compensation of employees: R 59,8 million
Other operating expenditure: R 32,1 million
Non-cash expenditure: R 1,6 million
Various expenditure in delivering the mandate was kept within the budgeted expenditure.

21. ANNUAL FINANCIAL STATEMENTS
Transfer payment has been capped at an average of R 44,101 million for the last three years.
Grant received from DMR versus budget approved by the Board has been as follows:
  / / /13
R’ R’ R’000
Approved budget
Grant received   Add: Actual in house revenue
less: Expenditure
Deficit *(5 084) * (4 825) *(2 098)
  (* excluding accumulated funds retained as per National Treasury’s approval

22. ANNUAL FINANCIAL STATEMENTS
Trend on utilization of funds
Major cost items / / /13
R’000 R’ R’000
Compensation of employees
Other operating expenses
Payment for Capex
The employees head count has increased as a result of the review of the organizational structure and cost of living adjustment.
The operating expense has increased to ensure delivery of predetermined objectives enshrined on the annual performance plan

23. CHANGES IN NET ASSETS
The accumulated surplus as at 31 March 2015 was R43,8 million,
As per National Treasury approval, the accumulated surplus is used to fund capital assets.

24. REPORT AS AT 30 SEPTEMBER 2015 EXPENDITURE: Budgeted 22 551
Actual
Variance
Reasons for Variance:
There is no significant variance between projected and actual expenditure.

25. REPORT AS AT 30 SEPTEMBER 2015 REVENUE: R’000 Budgeted 20 079
Actual
Variance
The variance is attributable to the increase in levy income, licenses and service fees handled during the quarter.
Favourable cash flow based on the rate of exchange.

26. CHALLENGES & INTERVENTIONS
There has been decline in the diamond and precious metals industry, due to the economic global downturn.
Access to funding for emerging businesses is still a problem, however, the Regulator is engaging the Department of Trade and Industry regarding this matter.
Access to rough diamonds is dominated by financially strong buyers; the Regulator is engaging diamond producers to arrange special tenders for diamond beneficiators.
Access to markets for polished diamonds by small beneficiators is limited; the Regulator is facilitating polished diamond tenders as well as access to markets to promote small beneficiators.

27. THANK YOU
&
DISCUSSIONS