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. 2

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. 3

4. Equitable & Sustainable use of natural resources TargetReport Subsistence & small scale fisheries policy published. Target not achieved due to a range of challenges. According to the Equality Court ruling of November 2008, the Policy must be finalized & approved by 31 July 2009 A second Draft Policy was gazetted on 12 December 2008. Public Participation meetings were held in January, fishers to submit their comments by March 2009.  Declining Fish Stocks  Lack of consensus on the content of the Policy.  Request to include WCRL & Traditional Linefish subject to current court challenges. 4

5. Equitable & Sustainable use of natural resources TargetReport Finalized policy for allocation of BBWW & WSCD rights. Target achieved BBWW and WSCD policies approved & gazette notice published. Performance review for 40% commercial fishery sector. Target has not been met but process is well underway with new target set: 70% of commercial fisheries will have had performance reviewed by cluster by 31/03/2010 Service provider appointed. Project Plan finalized. Cluster workshop held in February 2009. Review documents & instruments, KPIs drafted.  Tight time frames/complexity 5

6. Equitable & Sustainable use of natural resources TargetReport Finalize policy on commercial rights transfer and application process. Target achieved Minister approved the final transfer policy with amendments. Implementation will commence in 2009/10 financial year.  Delays in finalization of policy National Plan of Action for Seabirds and Sharks finalized. Target partially achieved. A new target date for NPOA for sharks set for December 2009. NPOA for Seabirds finalized. Draft NPOA for Sharks in place. 6

7. Build a sound scientific base for effective management of marine & coastal resources TargetReport Research on catch and or effort limit for 21 fishery sectors. Target achieved All survey & stock assessments have been completed. All TAC/TAE recommendations completed in 21 fishery sector. Research on optimal non-consumptive use of 3 resources. Target achieved Great white shark population status investigated. Tagging experiment on turtles. Research information on humpback whales analyzed. 7

8. Rebuild depleted fish stock TargetReport Strategy for hake & abalone in respect of research management & compliance finalized & implementation strategy initiated. Target achieved but it should be noted that this is a 5 year strategic priority and will be in 2009 - 2014 Strategic Plan & targets. Hake and Abalone Strategy being implemented. All surveys completed including abalone although fishery is closed. 20 hour coverage maintained & tonnage of poached abalone reduced from 64 to 43 in 2009. Arrests increased by 194% from 185 to 514.  Funds for Hake research limited to stock assessment surveys.  Lack of sophisticated surveillance equipment to monitor abalone poaching. 8

9. Compliance with marine and coastal legislation TargetReport 30% of landings in 3 key fishery sectors (WCRL; Hake LL & Pelagics) monitored. Target achieved or met and exceeded 100% monitoring of landings in pelagic, hake long line, SCRL, WCRL & 30% in deep sea trawl & Tuna. Vehicles, slipways, FPEs & restaurants inspected. Cooperative initiatives with Organized crime Intelligence (SAPS) 9

10. Feasibility of new fisheries TargetReport Feasibility assessment of 2 fisheries. Target achieved but department is not able to pronounce on the viability of Natal deep water rock lobster. The Octopus fishery was re-launched. Feasibility study on Deep Water Natal rock lobster completed.  Targeted stakeholders lack the capacity & resources to invest in octopus fishery.  Experiments were conducted but the department is not able to pronounce on sustainability of fisheries. 10

11. Enabling environment for growth & development of marine aquaculture. TargetReport Research into 3 species and 2 pilot projects launched. Target achieved Feed experiments completed for Silver Kob Research report completed on reproductive cycle of scallops Research initiated on gonad enhancement of sea urchins. Finalized Marine Aquaculture policy and implementation plan. Development of Ranching guidelines completed. Recommendations made to SRPP on biological feasibility of pilot projects.. Final report for joint aquaculture research Frontier programme with DST completed 11

12. Conserve and mitigate threats to biodiversity TargetReport Declare 1 MPA & 80% management capacity in place for declare MPAs. Target achieved Stillbaai MPA declared in Oct 2008 Now 20 Declared MPAs: 12 MPAs with contracts & workplans by Provincial agencies 6 MPAs managed by SANParks (draft contracts). 1 managed by MCM managed by Cape Town City. Bill promulgated and draft implementation framework developed. Target achieved ICM Bill was signed by President (Act No.24 of 2008). Marine & Coastal Climate change variables identified. Target achieved Bi-annual State of the Ocean Reports produced. NPOA (for land-based sources of marine pollution) identified climate change variables 12

13. International multilateral & bilateral marine and fisheries agreements TargetReport Review & develop a co-ordination strategy for international engagements Target achieved Review of Marine & fisheries International obligations conducted. SA ratified SEAFO CCAMLR and ICCAT attended & outcomes implemented. Maintain annual engagements with at least 2 regional &/or sub regional organisations. Target achieved Participation in BCC activities (science & management) Participation in ASCLME, ACEP & SWIOFP workplans development. 1 successful SADC patrol conducted in March 2009 - Mozambique, Tanzania & Kenya 13

14. Increased marine & coastal economic opportunities TargetReport Fishing Harbours Feasibility study recommendations adopted & short term recommendations adopted. Target largely achieved but implementation will be a long term project Feasibility study completed Technical Task Team appointed to explore implementation of study recommendations. Policies finalized and access provided as per policy objectives (Large pelagics; Performance Reviews and Subsistence/small scale fisheries policy). Target achieved Large Pelagics Policy finalised. Service Provider appointed for Performance Reviews & criteria/KPIs developed.  Subsistence/small-scale policy delayed. 14

15. Ensure compliance with relevant Public Entity prescripts TargetReport 80% compliance Target achieved 95% of ministerial & DG tasks were submitted on time MLRF Strategic Plan tabled on schedule in April 2008. Quarterly Financial Reports submitted to DEAT & NT on schedule. All parliamentary questions submitted within specific timeframes. 100% implementation of the PMDS Target achieved Conducted information session in Feb 2009 (MCM & Harbors) 57 Probations were monitored & confirmed. Final Assessments conducted & completed. Provide a secure, efficient & pleasant working environment. Target achieved Renovations & upgrading in main centre completed. 15

16. FINANCIAL PERFORMANCE OF THE MLRF 2008/09

17. 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 Year 05/06Year 06/07Year 07/08Year 08/09 20 Qualifications = R247m misstated (Disclaimed opinion) 7 Qualifications = R26m misstated 0 Qualifications (Unqualified opinion) (Qualified opinion)

18. 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

19. 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

20. 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. R’000 Deferred income13 901 Donor funds13 002 Trade and other payables35 526 20

21. 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

22. 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% o Grant for VOC increased by 85% o Confiscated Fish & fish products (mainly abalone) = 6.5% of total 2008/09 revenue budget 22

23. 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: R’000 Audit fees1 497 Confiscation expenses5 216 Consultancy and outsourced services50 444 Legal services3 047 Vessel operating costs154 859 23

24. 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

25. 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: 1.Ernst & Young: Harbour Feasibility Study 2.Resolve Group: Fisheries Performance Reviews 25

26. 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: Ingwane Consulting and Anchor Environmental Consultants Observers for Ship Board Scientific Observer Programme Nosipho Marine Services and SAB&T Monitor commercial fish landings Sheltam AviationAerial surveillance for oil pollution SITAIT services 26

27. 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

28. FINANCIAL MANAGEMENT OF THE MLRF All key governance responsibilities were met in 2008/09. This includes: 1.No significant deficiencies in the design and implementation of internal controls relating to financial and risk management and compliance with applicable laws and regulations. 2.Appropriate information systems. 3.Clear trail of supporting documentation that is easily available. 4.High quality annual financial statements. 5.Effective Audit committee. 6.Documented fraud prevention plan. 28

29. THANK YOU 29