2005/2006 - SANParks

2005South African National ParksACCOUNTING AUTHORITY’S REPORTfor the year ended 31 March 2006The Accounting Authority of South African National Parks herebypresents its report for the year ended 31 March 2006.market. The fi nance cost reduction of R1,59 million from the previousyear is due to the settlement of one of the IDC loans.Nature of BusinessSouth African National Parks is a statutory organisation governed by theNational Parks Act, no. 57 of 1976 as amended, primarily engaged innature conservation as well as the tourism and hospitality industries.Financial ResultsFull detail of the fi nancial results for the year under review are set outon pages 106 to 137.RevenueTotal revenue from tourism, retail, concessioning and other increased toR486,05 million in 2006 from R441,18 million in 2005. This represents anincrease of 10,2%. The increase can be mainly attributed to increasedlodge concession fees, retail activities and tourism growth.Net Income Before Investing ActivitiesIn 2006 South African National Parks’ realised income before investingactivities amounted to R39,26 million compared to R40,03 million in2005. The main contributing factors were:• Improved gross revenue referred to above;• an increase of R17,09 million in operational grants mainly due tothe grant received from Department of Water Affairs and Forestryfor the management of the Knysna Forest areas; and• an increase of R12,12 million in donations.The improvements above are offset by:• the effect of infl ation on expenditure;• a decrease of R3,22 million in income from the sale of faunaand fl ora;• increased compensation of employees due to normal salaryadjustments but mainly due to increased head count as a result ofthe addition of the Knysna Forest Area and Camdeboo NationalPark; and• increased administration expenses primarily due to increasedmaintenance costs of R6,23 million due to continuous efforts toupgrade and refurbish tourism infrastructure, as well as increasedexpenses due to the addition of the Knysna Forest Area.Actual Performance versus BudgetThe South African National Parks budgeted for a profi t ofR50,10 million. A profi t of R 41,35 million was achieved in 2006. Thedeviation with the budget of R8,75 million is mainly due to wild cardincome not materialising as expected, increased depreciation due to thecapitalisation of assets acquired with expanded public works programmefunding, increased maintenance due to routine road maintenance inthe Kruger National Park that could not be done in 2005 which lead toincreased maintenance for 2006. The fi res in the Table Mountain NationalPark during 2006 also contributed to the overspending, however, thiswas reduced by assistance received from Working on Fire.Expanded Public Works ProgrammeThe focus of the 2005/6 fi nancial year was to complete the planningof all infrastructure projects, while implementation started from August2005 on many of the projects. In the fi nancial year under review,motivations for additional funding added another R26 million, bringingthe total programme value to R307 million. Expenditure of R91,6 millionwas achieved for the year, increasing the total expenditure toR106,1 million. The deliverables achieved so far are 343 378 persondays worked, 4 081 people employed, 23 127 days of training given,80 new SMME’s created, 330 SMME’s used while R50,1 million waspaid to SMME’s. Contracts to the value of R77 million were awardedof which 80% went to black owned companies and 16% to blackempowered companies. Construction of 52km of roads, 109km offences, creation of 72 new tourist beds and the upgrade of 17 staffaccommodation units was completed.Working-for-Water, Coast Care and Working-on-WetlandsprogrammesAll WfW projects for the 2005/6 cycle were concluded by 31 March 2006.The available budget of R31 million was increased to R31,8 million toaccommodate extra work done. The deliverables achieved include thefollowing: 171 851 person days worked; 23 164ha of initial clearingand 113 448ha of follow-up work done.The implementation of the Coast Care Programme has progressed well– 50% of all work was completed with a year left for implementation.R10,85 million of the available budget of R23,4 million was spent in2005/6. During this time, 114 210 persons days and 13 554 trainingdays were achieved.Net Investment IncomeThe income from investments and interest decreased by R1,19 million fromthe previous year. The decrease is mainly attributable to the liquidatingof all long-term investments and the lower interest rates prevailing in theThe Working on Wetlands programme is almost completed, with a monthextension granted to April 2006 to complete work on all projects – thisis mainly due to work days lost as a result of rain in the Kruger NationalPark and Golden Gate Highlands National Park. A total expenditure94