PRESENTATION TO SELECT COMMITTEE ON ECONOMIC DEVELOPMENT OF DMR 2011 / 12 ANNUAL REPORT 28 NOVEMBER 2012

Presentation Outline 1. Financial performance - Annual Financial Statements 2. Auditor General’s Report - 2011/12 Audit Findings

APPROPRIATION STATEMENT FOR 2011/2012 PROGRAMME 2011/12 Final Budget R'000 Actual Variance 2010/11 R’000 1. ADMIN 265,940 257,600 8,340 226,727 2. MHS 141,419 141,252 167 137,092 3. MR 184,396 188,608 4. MPP 447,210 446,187 1,023 442,270 Total 1,038,965 1,029,435 9,530 994,697

TREND ON UTILISATION OF FUNDS  Economic Classification 2011/12 R’000 2010/11 2009/10 Compensation of Employees 364,562 326,457 403,323 Goods and Services 222,639 200,013 263,475 Payment for Capex 18,558 28,347 48,690 Transfer and subsidy 420,837 438,120 3,828,303 Payments for financial assets 209 50 925 Interest and rent on land 2,630 1,710 Unspent 9,530 1,145 137,288 TOTAL (BUDGET) 1,038,965 995,842 4,682,004 % Under Spending 0.92% 0.11% 2.90%

Analysis of Unspent Funds Under spending has been consistently below 3% for the last three years For the year under review, the unspent funds of 0.92% is as indicated on slide 6

Analysis of major variance in Statement of Financial Performance (Actual expenditure) Items 2011/12 2010/11 Variance % variance R’000 % Compensation of employees Basic salary 248,912 217,268 31,644 14.56 Periodic payments 39 187 (148) (79.14) Pension 32,936 28,875 4,061 14.06 Goods and services Advertising 1,387 1,661 (274) (16.50) Communication 14,408 11,181 3,227 28.86

Analysis of major variance in Statement of Financial Performance (Actual expenditure)…cont Items 2011/12 2010/11 Variance % variance R’000 % Audit Cost 4,838 3,740 1,098 29.35 Operating leases 82,271 64,147 18,124 28.25 Transactions in financial assets and liabilities 209 50 159 318 Tangible capital assets Buildings and other fixed structures 864 17,059 (16,195) (94.93) Machinery and equipment 17,064 10,148 6,916 68.15 Software and other intangible assets 630 1,140 (510) (44.74)

Analysis of variances: Statement of Financial Position Items 2011/12 2010/11 Variance %variance R’000 % Current Assets   Cash and cash equivalents 9,383 37,493 (28,110) (74.97) Prepayments and Advances 89 40 49 122.5 Receivables 18,984 20,663 (1,679) (8.13) Current Liabilities Voted Funds to be surrendered 9,530 1,145 8,385 732.3 Revenue to be surrendered 3,097 44,180 (41,083) (92.9)

Analysis of variances: Statement of Financial Position Item 2011/12 2010/11 Variance %variance R’000 % Net Assets   Recoverable Revenue 2,129 1,052 1,077 102.4

Transfers and Subsidies to associated institutions Recipient 2011/12 Purpose of transfer payment Actual transfer R'000 Council for Geoscience 154,405 Core funding in terms of establishing act and research to prevent ingress of water into underground holdings. Council for Mineral Technology Research 196,956 R166.9 million -Core funding in terms of establishing act and R30 million - Mine Rehabilitation projects South African Diamond and Precious Metals Regulator 39,374 Core funding in terms of establishing act Mine Health and Safety Council 5,288

Auditor General’s Report The Department obtained unqualified audit report for 2011/12 Department’s goal is a “clean report” and will continue putting process and procedures in place to ensure the achievement of this goal by 2014

Auditor General’s Report (2011/2012) Emphasis of Matter No AG finding Action Plan 1. The corresponding figures for 31 March 2011 have been restated as a result of an error discovered during the audit of 31 March 2012 financial statements of the Department. Review, monitor and enhance the newly implemented revenue system and the calculation of environmental liability.

Auditor General’s Report (2011/2012)…cont Compliance with laws and regulations No AG finding Action Plan 1. The financial statements submitted for auditing were not prepared in all material respects in accordance with the requirements of section 40(1) of the PFMA. Material misstatements of disclosure items identified by the auditors were subsequently corrected. Manual and electronic systems in place to ensure proper reconciliation 2. Money owing by the department was not always paid within 30 days of receiving an invoice or statement, as required by section 38(1)(f) of the PFMA and TR 8.2.3. Monitoring system in place and reported on a monthly basis. To date 96% paid within 30 days. 3. Revenue Management Review, monitor and enhance the newly implemented the revenue system

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