1. PRESENTATION TO THE PORTFOLIO COMMITTEE SADPMR ANNUAL REPORT 2016/ 2017

2. PRESENTATION OUTLINE Introduction
Audit outcome for 2016/2017 financial year
Achievements on Predetermined objectives
Human Resources
Annual Financial Statements
6. Conclusions
7. Closure

3. MANDATE OF THE SOUTH AFRICAN DIAMOND AND PRECIOUS METALS REGULATOR
SADPMR is a schedule 3A public entity in terms of Public Finance Management Act, 1999 (as amended)
The mandate of the South African Diamond and Precious Metals Regulator is to regulate the buying, selling, importing and exporting of diamonds and precious metals.
In implementing this mandate the Regulator operates within the ambits of the following pieces of legislation:
The Diamond Act, 1986 (Act No 56 of 1986)
Diamond Export Levy (Administration) Act, 2007
Diamond Export Levy Act, 2007
Precious Metals Act, 2005 (Act No. 32 of 2005)
The SADPMR continues to advocate for the domestic beneficiation of locally mined minerals in the effort to grow the economy, create employment and support of transformation.

4. The SADPMR is structured as follows
Organogram
The SADPMR is structured as follows
SADPMR BOARD
CHIEF EXECUTIVE OFFICER
PROGRAMME 1
ADMINISTRATION
Finance & Supply Chain Management
Security Risk Management
HR, ICT, Communication, Transformation & Governance
PROGRAMME 2
DIAMOND TRADE
Diamond Exchange and Export Centre
Government Diamond Valuation
PROGRAMME 3
REGULATORY COMPLIANCE
Licensing
Diamond Inspectorate
Precious Metals & Beneficiation

5. SADPMR STRATEGIC OBJECTIVES LINKED TO THE NATIONAL DEVELOPMENT PLAN
NDP priorities
NDP focus areas
To improve competitiveness, sustainable growth and job creation in the diamond and precious metals industries
Raising employment through faster economic growth
Support for small businesses through better coordination of relevant agencies, development finance institutions and private incubators
To promote equitable access to resources for local beneficiation
Provide a more efficient and competitive infrastructure to facilitate economic activity that is conducive to growth and job creation
To transform the diamond and precious metals sectors
Improving the quality of education, skills development
Expand skills base through better education and vocation training
To enforce compliance with the legislative requirements
Building capacity of the State to play a development and transformation role
Reduce cost of regulatory compliance especially for small and medium sized firms
To improve organizational capacity for maximum execution of excellence
Building the capacity of the State to play a development and transformation role

6. AUDIT OUTCOME FROM 2016/2017 FINANCIAL YEAR
The South African Diamond and Precious Metals Regulator received unqualified audit opinion with matters of emphasis.
Error relates to the post employment liability which was not recognized in the previous years.
The annual financial statement has been restated to include the prior year error and the disclosure of the post-employment obligation for 3 retirees.

7. ACHIEVEMENTS ON PREDETERMINED OBJECTIVES: ADMINISTRATION
Enforce compliance with legislative requirements
During the period, all the repeat and new audit findings were addressed.
Improve organizational capacity for maximum execution of excellence
Five pillars of Human Resources plan were implemented.
Thirteen (13) workshops and meetings were conducted.
Three (3) Master Systems Plan (MSP) programmes were implemented.
Three (3) MSP programmes implemented.
100% of matters legal matters referred and addressed
100% of legal opinions on behalf of the Regulator were addressed.
100% of contracts and SLAs vetted.

8. ACHIEVEMENTS ON PREDETERMINED OBJECTIVES: DIAMOND TRADE
Improve competitiveness, sustainable development and job creation in the diamond and precious metals industries
Two skills initiatives were facilitated during the year under review against a target of 2.
During the period under review, 425 diamond evaluation activities were conducted by the GDV and 100% of these activities on diamonds offered/presented were valuated for fair market value (FMV). There was no dispute raised on FMV issues during the 2016/2017 financial year.
Improve equitable access to resources for local beneficiation
Due to the new facilities an improved total number of 2873 clients visited the DEEC to place and bid for diamond parcels.
During the same period, 103 diamond beneficiators visited the DEEC where they were given priority
The DEEC was able to facilitate over 18 special tenders for the small diamond beneficiators.

9. ACHIEVEMENTS ON PREDETERMINED OBJECTIVES: REGULATORY COMPLIANCE
Ensure competitiveness, sustainable development and job creation in the diamond and precious metals industries
The Regulator was able to conduct 1610 inspections services and 461 BBSEE compliance audits within the diamond and precious metals industries against the set target of 1478 and 408 inspections, respectively.
During the 2016/2017 financial year, 56 beneficiation licenses were issued against the target of 66
The Regulator assisted 10 prospective entrepreneurs in the diamond and precious metals industries, against the annual target of 9
31 inactive businesses were assisted, against the annual target of 30
Verification against skills development commitments by license holders improved to 75 from annual target of 70.

10. BUSINESS PREMISES INSPECTIONS
Safe storage
BUSINESS PREMISES INSPECTIONS

11. BUSINESS PREMISES INSPECTIONS

12. Chairing of the kp WORKING GROUP ON MONITORING
South Africa was welcomed as the new Chair of the WGM, at the 2016 KP Plenary meeting, held in Dubai, United Arab Emirates.
South Africa will be chairing the WGM for three (3) years, with the SADPMR as the Focal Point appointed by the Minister of Mineral resources.
Conduct peer review visits and missions on Kimberley Certification scheme minimum requirements. Contributed to the readmission of CAR on the Kimberley Process.
Drafting of Administration decisions.
Management and assessment of the 59 KP Participants annual reports. A total of 57 Annual reports was received.
Monitor the KP participants compliance with the minimum requirements

13. Employment Equity statistics
HUMAN RESOURCES
Employment Equity statistics
NUMBER OF MALES
NUMBER OF FEMALES
NUMBER OF PEOPLE WITH DISABILITIES
Executive Managers: 3
Executive Managers: 1
Executive Managers: 0
Senior Managers : 3
Senior Managers : 4
Senior Managers : 0
Professionals and skilled employees: 30
Professionals and skilled employees: 46
Professionals and skilled employees: 0
Semi-skilled employees: 11
Semi-skilled employees:14
Semi-skilled employees:1
Unskilled employees: 2
Unskilled employees: 5
Unskilled employees: 0
Total : 49 male employees
Total: 70 female employees
Total: 1

14. HUMAN RESOURCES 2 new appointments 5 termination of services
NUMBER OF APPOINTMENTS MADE
NUMBER OF TERMINATION OF SERVICE
NUMBER OF INTERNAL PROMOTIONS
2 new appointments
5 termination of services
3 resignations
1 retirement
1 expiry of contract
1 employee was promoted

15. Human Resources Development
INTERNSHIP PROGRAMME
MALES
FEMALES 7 1 6
TOTAL NUMBER OF INTERNAL STAFF ALLOCATED BURSARIES
MALES
FEMALES 10 5
TOTAL NUMBER OF ATTENDED SHORT COURSES
MALES
FEMALES 31 12 19

16. ANNUAL FINANCIAL STATEMENTS
OVERVIEW
The SADPMR submitted the budget of R 94.6 million to National Treasury via the Department of Mineral Resources.
The final allocation was R 53.2 million and R49 million was generated from the sale of services.
The budget and the classification of funds were adjusted in accordance with the final allocation.
The SADPMR obtained the National Treasury’s approval to retain and utilise accumulated surplus for capital projects and other contractual obligations.

17. ANNUAL FINANCIAL STATEMENTS
Revenue
The actual revenue recognised was R 102.1million (incl. Transfer Payment of R 53.2 million).
The in-house generated revenue increase to R 49 million compared to the budget of R million of 15/16 financial year.
The increase in the in-house generated revenue is due to the increase in collection of penalties and increase in the sale of services.
The rate of exchange which averaged R14.00 also contributed to the increase in revenue as compared to the estimated exchange rate of R13.00 which was used during the budgeting process.

18. ANNUAL FINANCIAL STATEMENTS
Expenditure
The actual expenditure for the year under review was R 96.7 million compared to R88.2 million of 15/16 Financial year.
The expenditures trends were as follows:
Compensation of employees: R 68.7 million;
Other operating expenditure: R 23.1 million;
Non-cash & abnormal expenditure: R 4.9 million;
Insignificant variances were identified and most of the expenditures were contained as directed by the National Treasury cost containment measures.

19. ANNUAL FINANCIAL STATEMENTS
The transfer payment remains a challenge when compared to the total budget.
The final result shows remarkable improvement from a surplus of R 4.9 million (2015/2016) to a surplus of R 5.4 million (2016/2017).
Financial Year
2016/2017
2015/2016
Approved budget
94 603
88 795
Transfer Payment
53 205
50 527
Sale of services
48 924
42 563
Total revenue
93 090
Total expenditure
96 705
88 234
Surplus
5 424
4 855

20. CHANGES IN NET ASSETS
Approval has been sought from National Treasury to retain the surplus for the year which will be used to fund capital expenditure.

21. Use of reserves
The approved reserves is ring fenced for capital expenditure and other contractual obligations.
2017/18
2018/19 6 
15 

22. CONCLUSIONS CHALLENGES INTERVENTIONS
DECLINE IN LOCAL BENEFICIATION OF DIAMONDS AND PRECIOUS METALS
PROJECT ON PROMOTING MINERALS BENEFICIATION IN THE NEAR MINING AREA COMMUNITIES
ACCESS TO START–UP CAPITAL OR FUNDING FOR HDSA
FACILITATE RELATIONSHIP BETWEEN THE HDSA AND THE FUNDING ENTITIES OR INSTITUTIONS OF GOVERNMENT
ACCESS TO INTERNATIONAL MARKETS FOR POLISHED DIAMONDS BY SMALL BENEFICIATORS
FACILITATING POLISHED DIAMOND TENDERS AND ACCESS TO INTERNATIONAL MARKETS
LACK OF INTRA- AFRICAN TRADE IN DIAMONDS
PROJECT ON PROMOTING INTRA-AFRICAN DIAMOND TRADE

23. THANK YOU
and
DISCUSSIONS