SAFA Presentation -

Parliamentary Portfolio Committee

on Sport and Recreation

30 APRIL 2013

Documents in the Pack

• Consolidated Presentation which contains the following

• Governance Framework

• Transformation

• Technical Master Plan

• Legacy of the 2010 FIFA World Cup

• Match Fixing

• Financial Statements

• Report on sale / purchase of cars and buses

• 2011-12 Annual Report with Financial Statements

• Executive Summary of FIFA Report into Match Fixing

• Dossier on alleged corruption and maladministration in SAFA

• SAFA’s Response to the dossier

Introduction

• SAFA President’s Introductory Remarks

• Delegation

1. SAFA President: Mr Kirsten Nematandani

2. SAFA Vice President: Chief Mwelo Nonkonyana

3. Mr Mandla Mazibuko: Vice-President

4. SAFA Vice President; Dr Danny Jordaan

5. Mr Elvis Shishana: NEC Member

6. Mr Morris Tshabalala NEC Member

7. Mr Gerald Don: NEC Member

8. Mr Poobalan Govindasamy: NEC Member

9. Mr Dennis Mumble: SAFA CEO

10.Adv Norman Arendse

11. Dr Robin Petersen: CEO of SAFA Development

Agency

President’s Remarks

• There is no crisis in SAFA

• Developments of the past few months are unfortunate

• Documents by nameless and faceless persons led us to this stage

• We have been subjected to trial by the media

• -Match-fixing

• -We still support the independent judicial commission of enquiry

• -The Legacy Trust

-This is FIFA’s money

-FIFA has reiterated that their money has been accounted for

SAFA’s GOVERNANCE STRUCTURE

SAFA

The South African Football Association, as the governing body of

football in South Africa, is committed to:

► Promoting and facilitating the development of football through

sustainable infrastructural and training initiatives;

► Engaging in pro-active dialogue with the government to

generate a partnership in recognition of football as a national

asset;

► Creating an image of being a stable, progressive and

innovative institution;

► Creating a mutually beneficial relationship with the corporate

world;

► Contributing to Africa’s ascendancy in world football through

the hosting of major events in Africa, while aspiring and

striving to become a leading football playing nation.

The SAFA Mission Statement

SAFA NATIONAL

EXECUTIVE

COMMITTEE

8 COMMITTEE

CLUSTERS (consisting of 23

Standing Committees)

SAFA-FIFA

LEGACY TRUST

SAFA

INFRASTRUCTURE

FOUNDATION

SAFA

SECRETARIAT

SAFA

DEVELOPMENT

AGENCY

SAFA GENERAL COUNCIL

52 Regions

(311 Local Football Associations)

Governance Structure

R471m in the bank R18m in the bank

SAFA ASSETS

-SAFA House = R70m

-Cars & Buses = R73m

--Raphael House = R4.5m

Hyde Park = R7.5m

-Netcare Shares = R10m

STRUCTURE - SAFA NATIONAL EXECUTIVE COMMITTEE

President 1

Vice-Presidents 4 (including the VP from the NSL)

Provincial Representatives 18 (2 per province)

National Representatives 10

Honorary Life President 1

Honorary President 1

Honorary NEC Member 1

NSL Representatives 4 (incl. 1 VP)

Chief Executive Officer 1 (non-voting)

Governance – Structure of the NEC

Financial Update

Historical Financial Position (2001 – 2012)

YEAR PROFIT/LOSS RETAINED EARNINGS

2001 (R7,527,203) (R25,467,387)

2002 R12,928,361 (R12,539,026)

2003 (R38,945,247) (R51,484,273)

2004 (R22,337,895) (R73,822,168)

2005 (R24,789,376) (R98,611,544)

2006 R87,497,172 (R11,114,372)

2007 R53,481,907 R42,367,535

2008 (R3,632,285) R38,735,250

2009 R25,166,167 R63,901,867

2010 (R24,398,197) R39,503,670

2011 R59,262,294 R98,765,964

2012 (R56,471,977) R42,293,987

Snapshot of Finances

POSITION Loss of R56.4m reported for 2011-2012 financial year:

Impairment of assets = R16m

(scanners, buses)

Accounting provision for ‘loss’ in AFCON 2013 = R6m

Depreciation of unproductive assets = R7m

(Hyundai buses, Hyde Park House, Raphael)

Total depreciation = R24m

Expenditure decreased by R3m despite an increase of R12m

accruing from additional depreciation increased and insurance costs

of the assets

Investment in football:

National team expenditure rose by R15m (full program for all teams)

Expenditure on competitions, leagues and football development rose from R79m

to R92m

Governance expenditure increased by only 10%

Plan to close the liquidity gap on the next slide

Snapshot of Finances (continued)

POSITION Loss of R56.4m reported for 2011-2012 financial year:

Non-recurring items = R29m

Impairment of assets =R16m

(scanners, buses)

Accounting provision for ‘loss’ in AFCON 2013 =R6m

Depreciation of unproductive assets =R7m

(Hyundai buses, Hyde Park House, Raphael)

Operating loss = R27.4m

Closing the Liquidity Gap

Liquidity Gap R92,9m

Recovery Plan

1. Appointment of Financial Platform (Ernst & Young) R3,5m

2. Sold 22 Buses R17m

3. Sold 40% of Netcare shares R10m

-Further 20% awaiting decision R6m

4. Sold Hyde Park; Raphael on the market R7.5m

5. SARS refund obtained R7m

6. Renegotiated HPC debt (3 years, interest at prime 8.5%) R8m

7. AGM Approved a financial Budget for first time (previously done by NEC)

8. Limited progress with restructuring organogram

9. Regional grants paid to March 2013

10. Suppliers largely under control

11. Stricter cost control measures in place R21m

Closing the Liquidity Gap

Recovery Plan (continued)

1. Sponsorship for SAFA 2nd Division nearly concluded

2. Additional sponsorship for U13 and U15 boys and girls leagues

3. Sponsorship with telecommunications partner concluded

4. SuperSport broadcast contract concluded

5. Negotiations with vehicle sponsor taking place today (30 Apr ‘13)

6. Negotiations with potential sponsor for professional women’s league

commenced in Apr ‘13

7. Banyana Banyana sponsorship negotiations concluded

8. Secured grant from 2010 FIFA Legacy trust R20m

9. Received VIK from Tsogo Sun R2m

Cars & Buses 1996 - SAFA Referees program sponsored by Toyota (sponsorship ended in 1997) 1997 - 10 VW Kombis, 1 Audi A4 and 1 Audi A6 1998 - 25 Mercedes Benz Sprinter buses, 25 Neons vehicles 2005 - 6 Fiat vehicles sold after sponsorship ended 2006 - Sold the 1998 Mercedes Benz Sprinter buses 2009 - Mercedes Benz contract renewed and 10 cars added to SAFA fleet 2009 - Purchased 2 S-Class Mercedes Benz vehicles for VIP transport 2011 - 53 Mercedes Benz Sprinter buses 2011 - 53 Hyundai sedans from FIFA 2011 - 35 buses from a FIFA World Cup partner 2011 - 26 Mercedes Benz C180/C200 cars for Provincial representatives and those who service SAFA Regions 2012 - Mercedes Benz sponsorship ends and fleet returned TOTALS

• 239 vehicles over 15 years • 131 Mercedes Benz vehicles • 2 Toyotas • 88 Hyundais • 6 Fiats • 12 Volkswagens

-10 Kombis given to poorest Regions in 2001 -25 Mercedes Benz Sprinter buses sold in 2006 due to high maintenance costs -25 Neon vehicles sold as a result of the high cost of maintenance in 2001 -22 of the 45-seater buses sold as they were non-productive (in 2012)

Role of the PEC

SAFA’s Provincial Representatives

Comparison with Cricket/Rugby

SAFA Cricket SA SA Rugby

Year end date June 2012 April 2012 Dec 2012

R' Million R' Million R' Million

Revenue 312 430 689

Broadcast 27 277 307

Sponsorship 202 55 272

Other 83 98 110

Salary cost (Rugby incl players) 54 27 59

Number of employees (excl players) 105 55 80

Average salary per employee p.a. 514,286 490,909 737,500

Revenue per employee 2,971,429 7,818,182 8,612,500

Non exec director fees and allowances 10 2 4

Number of non exec directors 36 19 12

Average annual fees per non Exec p.a. 277,778 89,474 358,333

Revenue per Non exec 8,666,667 22,631,579 57,416,667

Fixed assets (at cost) 161 31 22

Motor vehicles/Busses 80 22 -

Leasehold improvements 61 7 7

Land and Buildings 8 - -

Computer equipment 8 2 9

Furniture 4 - 6

Reserves 42 533 68

Transformation in SA Football

Transformation of South African football is a process of

assessment, implementation, re-evaluation and re-invention.

Transformation, in its broadest context, must be tackled on

several fronts and is being implemented accordingly:

1. Racial

2. Economic

3. Sport Performance

4. Governance

5. Admin

6. National Priorities

SAFA shall have no other objectives save for objectives provided for below and the funds be employed

exclusively in the promotion of such objectives and provided further that SAFA’s activities shall be

limited to the Republic of South Africa. SAFA shall have the following aims and objectives:

2.1 to carry on the public benefit activity of administering, developing, co-ordinating and promoting

the game of football in which the participants take part in accordance with the principles as laid

down in the statutes of FIFA.

2.2 to improve the game of football constantly and promote, regulate and control it throughout the

territory of South Africa in accordance with the principles of fair play and its unifying, educational,

cultural and humanitarian values, particularly through youth and development programmes;

2.3 to organise competitions in Association Football in all its forms, by defining precisely, as required,

the areas of authority delegated to the various Members and Leagues of which it is composed;

2.4 to draw up regulations and provisions and to ensure their enforcement;

2.5 to protect the interests of its Members;

2.6 to respect and prevent any infringement of the statutes, regulations, directives and decisions of

SAFA, COSAFA, CAF and FIFA as well as the Laws of the Game and to ensure that these are

also respected by its Members;

2.7 to prevent all methods or practices which might jeopardise the integrity of matches or

competitions or give rise to abuse of Association Football;

2.8 to control and supervise all football matches of all forms played throughout the territory of South

Africa;

Aims & Objectives of SAFA – Article 2 - SAFA Constitution

2.9 to manage international sporting relations connected with Association Football in

all its forms;

2.10 to host competitions at both National and international levels;

2.11 to settle disputes arising between members or bodies or persons connected

directly or indirectly with football within the jurisdiction of SAFA;

2.12 to raise and administer the funds of SAFA in such a manner as SAFA may deem

advisable and in particular by means of subscriptions, donations and

sponsorships;

2.13 to acquire and develop playing facilities including the construction of stadia;

2.14 to distribute monies to its members for the protection, promotion and

advancement of amateur football;

2.15 to affiliate to FIFA, CAF, COSAFA and SASCOC;

2.15 to do all such things as may be incidental or conducive to the attainment of the

objective or any one of them;

Aims & Objectives of SAFA – Article 2 - SAFA Constitution

THE TRANSFORMATION OF

SOUTH AFRICAN FOOTBALL

SAFA

MODERN FOOTBALL’S

NEW REALITY

The river used to flow freely and

everyone could draw water

downstream ........ until someone built

a dam upstream and caused the river

to run dry downstream.

A strong national centre is therefore needed to acquire

resources using economies of scale to negotiate

sponsorships and to provide proper levels of support for

development

Racial

Transformation

1. Racial and Gender Transformation

Objectives

To strengthen participation by all racial groups in the country

To increase female participation in the sport

More coaching courses for school teachers and SGBs

Introduce Grassroots football in communities

Challenges

Accessibility to school sports thru Phys Ed

in the curriculum

Lack of infrastructure

Inadequately trained human resources

Parental involvement

Cultural challenges in rural areas

2. Economic Transformation

Objectives

To diversify income sources for football

Ownership and/or control of facilities

Football Pools

Capacity-building in our Regions

Broadcasting revenue base needs to increase drastically

Exploit hidden value embedded in the sport (merchandising, business potential)

Challenges

Mindset of Corporate South Africa is racially

based

Lack of an entrepreneurial culture in football

Negative public image of the sport

3. Sport Performance

Objectives

Establish grassroots football programmes to increase the fun element in the sport

Establishment of provincial, regional, local high performance centers

Improvement of the National School of Excellence at Elandsfontein

Become the center of Elite Football Development for the African continent

Become No. 1 in Africa at all age group levels

Qualify for FIFA and continental competitions at all levels

Increase the coaching culture at all levels

Challenges

Transfer of land for School of Excellence to be

accelerated

Acquisition of Esselen Park as the National

Center of Excellence for football

Increased engagement with government at Provincial and local levels

4. Governance

Objectives

Become the model of good governance amongst sporting codes in the country

Establish a strong regulatory environment to manage relations among the sport’s participants

Build a culture of ethical behaviour that permeates all the way to the grassroots structures

Use the 2010 FWC dividend to develop the game in the country

Challenges

Lack of respect for basic governance principles

Not enough resources to widen the educational programme on good governance

5. Administrative

Objectives

Build the most professional team to administer the sport

Use the 2010 FWC experience to strengthen the administration of the sport

Rebuild the culture of voluntarism in our football

Establish a strong SAFA Academy to train coaches, referees, administrators and other professionals who service the sport

Build culture of service and commitment among all staff throughout the country

Challenges

Lack of financial resources

Entitlement

Low skills base

6. National Priorities

Objectives

Compliance With the National Sports Plan

Challenges

Resources

THE LEGACY OF THE 2010

FIFA WORLD CUP

SAFA

BOARD

OF

TRUSTEES

The 2010 FIFA World Cup Legacy Trust

2010 Legacy Fund

There are 3 forms of 2010 FIFA World

Cup Legacy

direct payments from FIFA to SAFA

transfers of surplus funds from LOC to SAFA

2010 FIFA World Cup Legacy Trust

distributions to qualifying recipients

Direct payments from FIFA to SAFA

“USD 20 million was provided to SAFA in the build-up to the 2010 FIFA World Cup event for preparations and for construction of SAFA House.”

“The first project financed by FIFA was the purchase of 35 buses and a fleet of 53 cars which were handed over to SAFA for transport of their regional teams.”

Transfer of surplus funds from LOC to SAFA

“FIFA has also been consulted in respect of all grants made to SAFA by the LOC up to the current day. These matters have all been performed in compliance with the governance structures of the LOC.”

FIFA letter dated 27 February 2013

Asset disposal strategy approved by the Board of Directors on 1 December 2009

2010 FIFA World Cup Legacy Trust

“FIFA appointed Ernst & Young to

perform financial control functions within

the FIFA Legacy Trust and in particular to

monitor that donations are appropriately

authorised under the FIFA Legacy Trust’s

governance structure.”

Background

President Zuma and FIFA President Blatter announced

establishment of Trust in Dec 2010

Inaugural meeting of Board held on 18 April 2012 after

approval & registration of Trust Deed and basic set up of

the administration

FIFA transferred R450m to the Trust

Board expressed wish that funding should be primarily

used to improve all facets of South African football

World Cup Profit Distribution

Guaranteed Profit USD100m

SAFA House USD10m

Bafana preparation USD10m

Cars and buses USD10m

SAFA Development Programs USD5m

Total USD35m

Transferred to 2010 FWC Legacy Trust USD65m

Funds in the 2010 FIFA WC Legacy Trust

The USD65m (R450,8m) was invested as

follows:

ABSA R90m

INVESTEC R190m

NEDBANK R170m

The above investments have yielded interest of

R31,848,614 by 28 February 2013

Procedures

Call for applications : End of May 2012

Application process opened : 1 June 2012

closed : 30 September 2012

All applications registered and placed on database

Screened for compliance

Preliminary assessments made by staff

Evaluation panel considered the applications

Evaluation Panel

Dr Molefi Oliphant (SAFA)

Prof Lesole Gadinabokao (SAFA)

Dr Rendani Mulaudzi (University of Pretoria)

Mr Chris Fortuin (University of Johannesburg)

Mr Hubert Tiger (FIFA Representative)

APPLICATIONS RECEIVED

Applications

Category Number

Non-Football

Specific

Development through Football projects 74

Bursaries 27

Humanitarian 48

Football Specific

Funding below R10 000 3438

Funding for projects above R10 000 314

Schools 446

TOTAL # OF APPLICATIONS 4,347

ALLOCATIONS MADE

Summary of Allocations

Number of

Recipients

Category Amount

24 Bursaries to individuals serving football R0.5

33 Development through football R6.5m

916 Football Development R49m

973 TOTAL AMOUNT R56 m

Some of the Recipients

SAFA: R17.05m

For the delivery of Under-13 and Under-15

Leagues for Boys and Girls in 311 Local

Football Associations and 52 Regions

Some of the Recipients

SAFA WOMEN’S

FOOTBALL: R8.7 m R5.7m for the delivery of the SAFA Women’s Regional

League

R3.0m for the Long Term Women’s Development

Programme

Some of the Recipients

SAFA REGIONS:

R7.950m

R150 000 to each of the 53 SAFA Region for Office

Equipment, Training of Coaches, referees and

Administrators and a grant for administration

Some of the Recipients

SAFA LOCAL FOOTBALL

ASSOCIATIONS: R6.22m

R10 000 to each of 311 SAFA LFAs for

Office Equipment

R10 000 Grant for Administration

Some of the Recipients

WITS UNIVERSITY:

R317 000

For the training of Emergency Medical Personnel to do

duty at football matches

Some of the Recipients

20 CENTRES FOR 2010

R4 200 000

R210 000 to 20 Centres for Education and Health

programmes as part Community/Youth Development that

use football as the vehicle for development

5 Centres are in South Africa

15 Centres are in the rest of Africa

20 Centres for 2010

Some of the Recipients

800 LEGACY BAGS:

R6.0m

SAFA Regions, LFAs, Clubs and schools to receive bags

containing KIT, BAGS and training equipment to the

value of R7,500 each.

Some of the Recipients

SA Indoor Football Association: R2.350 m

Beach Football R750 000

Students Football R100 000

Bursaries R500 000

The Next Steps

We are refining the application process based on the

learnings of the first process

The next window for applications will open in July 2013 for

the year 2014