FPB Annual Report 20152016 1 Contents Mandate Vision

FPB Annual Report 2015/2016 1

• • • • Contents Mandate Vision , Mission and Values Organizational Achievements High Visibility, High Impact Strategy FPB Trends Use of Consultants Cost Saving Measures Statement of Financial Performance Revenue 2015/2016 Expenditure 2015/2016 Audit Report and Finding Categories Industrial Relations Issues Performance Information 2015/2016 2

FPB Mandate FPB mandate is derived from the Film and Publications Act, (Act 65 of 1996 as amended in 2004 and 2009). FPB is mandated to regulate the: • creation, • production and • distribution of films, games and certain publications. 3

FPB Vision, Mission and Values Vision ‘A leading and credible content regulator’ Mission “Ensure effective child protection, empowerment of consumers and contribution to economic growth of the industry through regulation of media content” Values üAccountability üHuman Dignity üSocial Justice üIntegrity üTransparency üProfessionalism 4

Organizational Achievements 2015/2016 • FPB received an unqualified Audit Report – in respect of both Financial and Performance Audits. • The AG has commented on the overall improvement in organizational performance at the FPB. • 86% of FPB’s annual performance plan targets were met. Where targets were not met this was due to financial considerations and subsequent reprioritization of plans. • Successful completion of the On-Line Policy consultation process (including presentations to iweek Conference, Highway Africa and other industry platforms), culminating in the policy being ready for gazetting. 5

High Visibility, High Impact Strategy • High visibility / high impact communications and public awareness program included the following: – Minister’s Imbizo’s – Representation in GCIS Forums – Safer Internet Day Commemoration (Back-to-School Program) in Eastern Cape and Gauteng and other outreach initiatives such as Rand Show. – Adverts placed on seven SABC Radio Stations in seven languages for Safer Internet Day – Collaboration with Justice Cluster on Child Protection matters. – Presence at key industry events, for example Durban International Film Festival, Loeries Awards, Feathers, r. Age Expo, Sexpo etc. • Effective expansion of the FPB footprint, with emphasis on the SADC regional program and interaction with other African Countries (Ghana and Kenya). • Successful hosting of the inaugural African Media Classification and Online Child Protection Conference – October 2015. 6

Employment Equity – Workforce Profile Male Female Total African 25 51 76 Coloured 3 1 Indian 3 2 White 3 1 Total 34 55 (38%) (62%) (85. 5%) 4 (4. 5%) 5 (5. 5%) 4 (4. 5%) 89 (100%) 7

FPB Trends Item Fact 2015/16 Physical Material Classified (Avg / month) 140 titles / month 2015/16 Games classified (Avg / quarter ) 52 titles / quarter Online content inspections (Avg / quarter) 1 212 / quarter including FPB Pro. Child, Online inspections, and Social Networking sites Regulation Income Prominent Classifiable elements found R 8 605 037, 98 - 2010 / 11 R 6 097028, 61 - 2016 / 17 Language and Violence Prominent Age Categories A, 13, 16 Registrations (New) 538 (2015 / 16) Registrations (Renewals) 2105 (2015 / 16) Appeals received 4 Appeals Child Abuse Content Analysed 2015 / 16 – 7 Cases lodged with 7917 items (videos / images) reviewed 2016 / 17 – 15 Cases lodged with 233 188 items (videos / images) reviewed 8

Consultants Description Amount R Risk Management : Disaster Recovery site and Fraud Hotline 275 255. 75 KPMG Cobit Assessment : IT Governance 121 170. 13 Pastel and Caseware consulting 131 848. 50 Staff Wellness 179 385. 72 Staff Coaching 174 763. 00 668 484. 31 Labour Matters FP Act Amendment Consultation 357 764. 17 Other Professional Consultations 97 927. 23 Total 2 006 598. 81 9

Cost saving Description Advertising Consulting and professional fees Printing and stationery Staff development, recruitment Telephone and fax Total 2016 R 332 684 R 2 006 599 R 326 749 R 2 034 986 R 2 063 279 2015 R 1 072 602 R 3 529 883 R 676 364 R 2 583 892 R 2 135 574 Diff R 739 918 R 1 523 284 R 349 615 R 548 906 R 72 295 R % Diff 69. 0% 43. 2% 51. 7% 21. 2% 3. 4% 3 234 018 Several cost saving initiatives were done during the financial year resulting in an overall operational expenditure increase of only 1. 5%, which is well below expected inflationary increases. 10

Statement of Financial Performance DESCRIPTION (Figures in Rand) 31 March 2016 REVENUE 88 587 418 87 117 973 Operational grant 82 359 000 78 901 000 5 374 638 6 594 515 853 780 1 622 458 EXPENDITURE (85 182 223) (82 075 142) Personnel (Incl. Classifiers) (45 168 525) (41 799 068) (2 097 959) (2 957 870) (37 915 739) (37 318 204) 3 405 195 5 042 831 Regulation fees Other income Depreciation and amortisation Administrative (DEFICIT)/ SURPLUS 31 March 2015 11

Revenue 2015/16 • R 5. 3 m was generated from regulation fees as compared to R 6. 5 m in the previous financial year. The decrease of 18% is due to the reduction in the number of registrations and physical submissions for classification of material. • Other income at R 853 k consist mainly of investment income and tender fees • Overall income received for the year ended 31 March 2016, was R 88. 5 m as compared to R 87. 1 m received in the previous financial year resulting in an overall increase of only 1. 6%. • The reduction of the accounting surplus from R 5 m to R 3. 4 m is due to more appropriate planning and forecasting. • The 2015/16 year surplus was retained and utilized to pay outstanding balances and for the Online Content Regulation Project. • 100% of the grant allocated was indeed spent during the 2015/16 year. 12

Expenditure 2015/16 • Staff costs of R 45. 1 m were incurred for the current year. This total includes Classifiers’ fees of R 4. 3 m paid during the financial year. • Operational expenditure of R 37. 9 m increased by only 1. 6% compared to the previous year due to cost saving measures implemented such as: - Reduction of consultancy fees by 43% compared to the previous year - 70% reduction of advertising expenditure - New vehicle leases entered into. 13

Audit Report • Opinion: Unqualified • Emphasis of Matter: Restatement of corresponding figures • Material Non Compliance: - Effective steps to prevent irregular, fruitless and wasteful expenditure not taken 14

Audit Report • The FPB had no material adjustments to the AFS or Performance Information • The FPB identified, disclosed and has implemented consequence management for all irregular, fruitless and wasteful expenditure disclosed in the AFS Note • Although the AGSA has not identified any additional irregular transactions for disclosure, and that the amounts identified by management were quantitatively immaterial, the AGSA still insist that the transgressions are qualitatively material due to previously raised irregular expenditure reoccurring. • The above assessment by the AGSA resulted in the modified audit report 15

Finding Categories 2014/15 9 Findings per Category 8 7 6 5 4 Series 1 8 3 6 5 2 4 3 1 3 2 1 1 0 Revenue & Receivables Expenditure & Payables PPE Disclosure SCM Performance Information Compliance ICT Controls 16

Finding Categories 2015/16 6 Findings per Category 5 4 3 Series 1 5 5 2 2 1 0 Revenue & Receivables 0 Expenditure & Payables 0 PPE Disclosure 1 1 SCM Performance Information 0 Compliance ICT 0 17 Controls

Audit Progress made 2015/16 Progress made on the following categories: • • • Expenditure and payables (0 findings) Property, plant and equipment (0 findings) Disclosures (Reduced from 4 to 2 findings) SCM (Reduced from 8 to 1 finding) Performance information (Reduced from 3 to 1 finding) Compliance and controls (0 findings) Regression in the following categories: • ICT (Increase from 3 to 5 findings) Overall a reduction in the number of findings from 33 to 14 18

Audit Progress made 2015/16 • 88% of previous unresolved findings were successfully cleared during the 2015/16 year • The AGSA reported an improvement in internal controls as per the Management Report • Proper accounting of revenue transactions and ICT general controls were flagged as areas of concern Irregular, fruitless and wasteful expenditure • Management is satisfied with the controls implemented over SCM processes and procedures. As a result of this control management reduced this from R 9. 1 m in 2014/15 year to R 487 k in the current year. 19

Industrial Relations Issues Q 1 Court Referral Theft of Pornography / Employee One–– Labour Theft of FPB material / unauthorised access to restricted area / dishonesty. • Labour Court Hearing – 12 May 2016. • Labour Court directed matter to Arbitration. • First day held 18 July 2016 – next date 14 September 2016. • Appeal by the employee lodged with Minister, Public Protector & Council Chair. Theft of Pornography / Employee Two – Labour Court Referral Theft of FPB material / unauthorised access to restricted area / dishonesty. • FPB referred matter to Labour Court – process underway. • Appeal lodged by the employee with Minister, Public Protector & Council Chair. 20

Industrial Relations Issues Tzaneen Nedbank Fraud Case – Reinstatement Misuse of company property / bringing FPB into disrepute / alleged involvement in Nedbank fraud case. • Employee dismissed 23 December 2014 • Arbitration award – reinstatement. • Reinstatement effective 07 January 2016 • Criminal Case withdrawn by Nedbank. Trainee Operations Manager – Non-suitability for post • Contract expired 15 July 2015. Employee declined offer to the previous post. • Referred to CCMA – Conciliation held 29 Oct. 2015. No settlement. • Employee elected to refer matter to Labour Court. No referral made within 90 -day period – 09 Dec. 2015. • Matter referred to Council Chairperson – by employees attorneys • Chairperson advised attorneys on proper legal process which had been followed. 21

Industrial Relations Issues Legal Manager – CCMA Constructive Dismissal Claim • Constructive Dismissal claim with CCMA. • Conciliation Hearing held 09 September 2015 – no settlement. • Arbitration held 18 January 2016 – employer not informed. • Default Arbitration Award issued 25 January 2016. • Rescission application successfully lodged by the employer. • Arbitration Hearing held 06 May 2016 – next date scheduled for 28 September 2016. Anonymous Complaint Alleged that FPB employee did not disclose misconduct with another Government Department and FPB did not screen properly. • Matter escalated from Risk / HR to Council Chair / Exco • Disciplinary Hearing held on 21 July 2016. • Found not guilty of gross dishonesty / misrepresentation. 22 • Next steps – respond to Whistle Blowing and inform Minister

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SO 1: Effective and visible monitoring of films games and certain publications throughout the entire value chain (content creators, producers and distributors of fpgs) to protect children and inform the general public Annual Target Implement Automated processes YTD Analysis Classify 100% of Achieved classifiable material submitted Implement reviewed Achieved classification governance framework ERMS Reports Governance framework None Implementation of Achieved Classifier's and Contracted Online distributors training program Development and Partially Achieved approval of the labelling system - Attendance registers and None workshop material surveys/ questionnaires Not Achieved FPB ONLINE and ERMS Reports Reasons for Variances There are still technical challenges that are experienced by classifiers though not much No electronic signage Model was developed late due to Poor participation by key role players None Conduct OSS industry Audits Achieved Evidence Test Reports Game Audit Model Classification reports SLA for appointment of service provider Labelling study report for Tender for suitable service provider re-advertised 25

SO 1: Effective and visible monitoring of films games and certain publications throughout the entire value chain (content creators, producers and distributors of fpgs) to protect children and inform the general public Annual Target Approval and Implementation of the online policy YTD Analysis Not Achieved Design and implement a Achieved Guidelines Review plan Develop and implement Achieved marketing strategy on finding of Children's study Impact of media material on children Conduct convergence Not Achieved surveys - 3000 respondents Develop project plans, Achieved convene focus groups and compile focus group reports per quarter with FPB stakeholders on implementation of Guidelines Implement regulation and Achieved Evidence Online Regulation Policy Approved Guidelines Review Plan Printed Report Signed To. Rs of Convergence study Minutes of reference group - Focus group concept paper - Reports of meetings held at schools - Focus group report Reasons for Variances Policy Approved by Council on 4 April 2016, after the financial year ended None Insufficient funds to rollout the project through UNISA Mo. U None Draft Bill, draft presentation None 26

SO 1: Effective and visible monitoring of films games and certain publications throughout the entire value chain (content creators, producers and distributors of fpgs) to protect children and inform the general public Annual Target YTD Analysis Identification of Achieved unregistered distributors on physical platforms: 2500 2703 Online compliance Achieved monitoring to ensure compliance of 2600 online distributors as well as attending to at least 90% of queries reported on RMS Evidence Reasons for Variances Inspections Slips and distributor database None Inspections reports None Inspections slips and distributor database Audit Reports Inspections reports RMS Reports Conduct 24 Raids with Law Achieved enforcement to enforce compliance with the Act: Raid Reports and Court Sabpoenas where applicable Lack of cooperation from law enforcement agencies. Inspection of existing Achieved distributors (Targeted) to physical platforms: 6000 Inspections Slips and distributor database None 27

SO 2: Consumers, general members of the public and industry informed about the mandate of the FPB Annual Target YTD Analysis Improve FPB Achieved brand identity and issue 4 quarterly copies of The Scene Newsletter. Issue 4 newsletters of The Scene, shifting to digital per quarter and there will be 100 print copies per quarter. Develop media Achieved relations plan for FPB programmes and Units. Opinion pieces written and pitched to media. Evidence Reasons for Variances *Activity reports None *Internal newsletters issued *Voucher Samples *Signed submission and SLA *Monthly media reports None *Adverts placed on Independent newspapers *Article placed on Independent newspapers *Proof of adverts placed on SABC radio *Approved media statements distributed *Opinion pieces written 28

SO 2: Consumers, general members of the public and industry informed about the mandate of the FPB Annual Target YTD Analysis Evidence Reasons for Variances Develop and Achieved implement outreach and public education campaigns. Leverage stakeholder events , industry conferences & exhibitions, film festivals, music festival, creative arts, activations. *Signed Outreach and Public None Education plan *Activity reports for all the activities FPB participated in *Attendance Registers for Online Regulation Policy consultations *Online Regulation Policy report *Attendance registers and activity reports for the roundtables *Activity reports for the exhibitions *Activity report for the screening *Quarterly Outreach and Awareness M&E report Develop and Achieved implement digital and social media strategy. Increase *Monthly social media report None *Digital and social media M&E report 29 *Draft social media strategy and

SO 2: Consumers, general members of the public and industry informed about the mandate of the FPB Annual Target Establish a PR/Marketing Agency for high visibility, high impact YTD Analysis Achieved Produce online Achieved and broadcast material to increase brand visibility, promote engagement and awareness of campaigns. Evidence Reasons for Variances *Approved Marketing Plan *3 year process plan was *Approved submission and linked to the Purchase Order for the appointment of a PR appointment of HDI agency. Budget not *Approved submission and allocated for an Purchase Order for the intergrated marketing appointment of Everlytic approach *Signed SLA *Online banner artwork and No budget was screenshots allocated for this *Report on adverts placed on deliverable. Times Media websites *Signed submission for the appointment of Motionworx *SABC placement report for Squeezebacks and Clocks *Approved Digital Media implementation plan 30

SO 3: Effective and efficient management of FPB Operations Annual Target YTD Analysis Review and implement Achieved approved TA Structure changes - Review of TA Structure in alignment with Organizational Needs Implement Achieved Remuneration Strategy -Competitive FPB Remuneration Strategy and Policy supporting the FPB Turnaround Structure. Evaluate impact of Partially Achieved organisational change management programme - Complete Management Coaching and Mentoring Evidence Reasons for Variances Internal Advertisement. Ongoing recruitment Submission for placement of based on turnover. posts. Submission for additional Suitability of candidates for posts. Management HR/Remco resolution. Independent submissions positions in terms of recruitment process. for additional posts. Job Grading report None OD Report Submission for Payscales Signed Job Profiles on Personnel Files Signed letters of adjustment on personnel files. HR/Remco Resolution for executive adjustments. Coach Report/Register. Lower level coaching Climate Survey results. subject to Climate Minutes of meeting held survey results and rewith CEO. establishing of SLA with Fresh Thinking. - Extension of SLA 31 problematic.

SO 3: Effective and efficient management of FPB Operations Annual Target YTD Analysis Implement Achieved organisational skills plan Review, Draft and Achieved implement the internal communication plan To identify critical posts Achieved in the FPB Structure and ensure that contingencies are in place for relief and internal promotion. FPB Strategy Achieved implementation Evidence Reasons for Variances PDP's filed on employee Lack of cooperation files from staff on Workplace Skills Plan submission of PDP Training and Development documentation. monitoring system implemented Newsletters issued Resolution to issue Attendance register internal newsletter bi Internal Communications -monthly Plan Minutes of workshop Staff survey not conducted but service provider appointed Draft succession plan. Process pending, taking into Acting Letters to individuals. consideration survey results. Council Resolution. Exco to give input to succession plan. Wellness Review Report. None HR/REMCO pack. 32 HR/Remco Resolutions on policies.

SO 3: Effective and efficient management of FPB Operations Annual Target YTD Analysis Evidence Reasons for Variances Implement revised Achieved tariffs as approved by Minister regulation fees: 4% of Achieved total revenue generated Approved Tariffs None Approved tariffs None Extend current lease Achieved (Head Office) and acquire new office space for regional Offices. 50% implementation of Achieved the ICT Strategy Report Lease Agreements None Submission approving the appointment of service provider. Test Cases for new guidelines Bandwidth Report Test cases and deployment configuration for the Pastel modules. Delays from service provider in revieweing and signing the SLA Implemented systems integration Achieved Automated business processes Achieved Delays in acquiring the Pastel modules Project update report with System stability for 33 all modules ready for Pre- remote connection to

SO 3: Effective and efficient management of FPB Operations Annual Target YTD Analysis Service Management implementation and review Service level management Achieved 50% Compliance to KIM Framework Achieved Quarterly Records Management audit assessments Achieved Annual Research plan developments Achieved Evidence Reasons for Variances SLA report for all internal Availability of incidents registered with the business ICT unit representatives VPN access to facilitate offshore development ECM Audit Report None '- KM Strategy - Council minutes - KM draft policy - KM Implementation plan - KM KPIs - Staff session report - Registers of training None sessions - ECM rate of usage - finalised FAQs - Finalised subject matter experts - Clean up fridays schedules - KM Champions minutes Research agenda None 34

SO 3: Effective and efficient management of FPB Operations Annual Target Child Pornography in SA: A study among professionals working with Children's rights YTD Analysis Partially Achieved Evidence Draft research report Desktop study on Anti- Achieved Child Pornography initiative in SADC region Research report on SADC initiatives Conduct quarterly trends analysis None Not Achieved Implementation of call Achieved centre system to ensure efficient service delivery. Decentralise Partially Achieved administration of distributor license applications to regional offices Reasons for Variances Report not yet approved by FPB Excutive management and Council None Insufficient Information Available. Reviewed customer care and None service delivery standards Call Centre system reports Net. Help. Desk Call Logging System reports Approved Proposal to pilot Delays in the administration and approval. classification in regions. Site visitation report Attendance registers minutes 35

SO 3: Effective and efficient management of FPB Operations Annual Target Accurate and timely distributor licenses issued within the set turnaround time. YTD Analysis Achieved Evidence FPB Online reports: self service and manual processing. Analysis report online vs manual processing Reasons for Variances Slow uptake of the Incentive scheme provisions in the approved 2015 -2016 tariff fees. Conduct quarterly client Achieved satisfaction surveys to assess quality of service rendered targeting 150 respondents Action plan update report Marketing and Publicity Achieved of the contact centre in line with the communication strategy Screenshots of marketing on None Facebook and Twitter. Ster Kinekor digital magazine Content for article in "The Scene" Quarterly compliance None management report (to be submitted at the April 2016 ARC meeting). Compliance Achieved management reporting None Analysis report of Client Satisfaction Surveys 36

SO 3: Effective and efficient management of FPB Operations Annual Target YTD Analysis Increased organisational Achieved risk maturity levels Evidence Strategic and operational risk register Reasons for Variances None Presentation on risk managementdelivered at the staff workshop. Fraud awareness email sent to staff. Implementation of fraud prevention strategy and plan Achieved Annual update and Partially Achieved implementation of Business Continuity Management plan and disaster recovery plans Risk Management and Fraud Framework, Policy and Plan. DRP and BCP. Fraud Prevention Policy, None Strategy and Plan Fraud Risk Assessment Form BCM and DRP Payments made to the DR service provider Quarterly report to ARC Documents could not be submitted in time for consideration at the Feb 2016 ARC. 37

SO 3: Effective and efficient management of FPB Operations Annual Target YTD Analysis Implement the Achieved organizational Performance Planning Management. Conduct annual Achieved strategic planning process 100% compliance with Achieved SCM policy. Implement Contract Management directive Achieved Accountability of all Achieved Evidence Reasons for Variances Q. 1 - Q. 4 2016/16 FY None Organisational Performance Inforamtion Reports Strategy and APP submission None National Treasury Circular 3 None of 2015 - Central supplier database Compliance matrix report SCM SLA tracking document The contract management procedure document which was approved after the APP approval was amended to give Legal the responsibility to report on contracts. 38 Asset register None

SO 3: Effective and efficient management of FPB Operations Annual Target YTD Analysis Evidence Reasons for Variances 100% compliance with Achieved the Corporate Governance Framework Signed Charter None 100% compliance with Achieved the Corporate Governance Framework Declaration forms None 100% implementation Achieved of the Annual Programme Minutes and attendance register None 39

SO 4: Ensure effective and innovative regulation of content distributed online, mobile and related platforms to protect children and inform the general public Annual Target YTD Analysis Evidence Reasons for Variances -Implement strategy Partially Achieved and policy - Launch Online regulation - Develop skill base for Online Classifiers and Monitoring Online regulation system and monitoring tools implemented According to ICT APP Service Provider only Appointed service appointed towards the provider had FPB end of quarter 4 compliance issues to be addressed. Review and Achieved Implement online and telephonic tools for addressing cyber safety of children RMS Reports and Call log reports None Minutes of Meetings and INHOPE reports ICCAM reporting system 40

SO 4: Ensure effective and innovative regulation of content distributed online, mobile and related platforms to protect children and inform the general public Annual Target YTD Analysis Evidence Reasons for Variances Inhope online training Achieved and certification of CPU, New Media Specialist and online monitors Train 300 Educators Partially Achieved: on cyber safety 266 Content Analyst Certificates None Attendance registers Survey forms Draft Educators' Training Manual Challenges were experienced initially with finalising the SLA with the Service provider, which created a delay in completing the manual Info hub rollout as per Achieved project plan No information included on the ICT APP in relation to the target and did not receive APP from the Research Unit UAT session and test Search functionality results. was limited and had to Business requirements be enhanced. document 41

SO 5: '- Expand our footprint as the FPB through partnership and stakeholder relationships in pursuance of our mandate Annual Target YTD Analysis Evidence Reasons for Variances Review and Implement Partially Achieved stakeholder relations strategy Draft strategy Strategy not yet Updated database approved by EXCO Activity reports Attendance Registers Draft implementation plan of the NFVF MOU Implement Cyber safety initiatives in Africa Achieved Signed MOU Reports None Host quarterly stakeholder engagement sessions Achieved Activity reports Attendance registers None Develop the Achieved partnership assessment report Submitted reports None Initiate eight strategic Achieved partnerships #Iam. Cyber. Savvy concept presentation Email Communication International engagement and benchmarking INHOPE attendance report Conference report Achieved None 42

SO 5: '- Expand our footprint as the FPB through partnership and stakeholder relationships in pursuance of our mandate Annual Target YTD Analysis Evidence Reasons for Variances Attend 3 international Achieved seminars and present papers Attendance registers None Conference report Emails and the concept paper for the FPB conference Attend 4 film and gaming festivals Registration confirmation and emails Activity Reports Achieved None 43

Conclusion • Request the Portfolio Committee on Communications to note that the annual report was tabled by the Ministry of Communications on the 9 th of September 2016. • Thank you. 44