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TRANSCRIPT
Annual Report2012/13
1
Contents
PART A: GENERAL INFORMATION ..........................................................................3
1 South African Civil Aviation Authority’s General Information ..............................................................................................................4
2 List of Abbreviations / Acronyms .................................................................................................................................................5
3 Strategic Overview ....................................................................................................................................................................7
3.1 Vision......................................................................................................................................................................................7
3.2 Mission ...................................................................................................................................................................................7
3.3 SACAA Brand Promise ...............................................................................................................................................................7
3.4 SACAA Value System .................................................................................................................................................................7
4 Legislative Mandate ..................................................................................................................................................................8
5 Organisational Structure .............................................................................................................................................................8
6 Foreword by Chairperson ............................................................................................................................................................9
7 Acting Director of Civil Aviation’s Overview ....................................................................................................................................12
PART B: PERFORMANCE INFORMATION ................................................................15
1. Statement of Responsibility for Performance Information ................................................................................................................16
2. Overview of the SACAA’s Performance ..........................................................................................................................................17
3. Performance Information by Programme.......................................................................................................................................18
PART C: GOVERNANCE .............................................................................................21
1. Board of the South African Civil Aviation Authority (SACAA) .............................................................................................................22
2. Corporate Governance Report ......................................................................................................................................................23
3. Executive Management Committee ..............................................................................................................................................28
4. Strategic Risks ..........................................................................................................................................................................29
PART D: HUMAN RESOURCES ..................................................................................31
1. Human Resources Oversight Statistics ..........................................................................................................................................32
PART E: OPERATIONAL REVIEW ...............................................................................35
PART F: FINANCIAL INFORMATION ........................................................................87
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PART A:
GENERAL INFORMATION
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1. South African Civil Aviation Authority: General Information
REGISTERED NAME: South African Civil Aviation Authority
PHYSICAL ADDRESS: Building 16 Treur Close
Waterfall Park
Bekker Street
Midrand
POSTAL ADDRESS: Private Bag X 73
Halfway House
1685
TELEPHONE NUMBERS: +27 11 545 1000
FAX NUMBERS: +27 11 545 1465
EMAIL ADDRESS: [email protected]
WEBSITE ADDRESS: www.caa.co.za
EXTERNAL AUDITORS: Auditor-General of South Africa
BANKERS: Standard Bank of South Africa
COMPANY SECRETARY: Monica Sonjani (Acting)
5
2. List of Abbreviations / Acronyms
ACSA Airports Company South Africa
AFCAC African Civil Aviation Commission
AIID Accident and Incident Investigation Division
AIP Aeronautical Information Package
AMO Aircraft Maintenance Organisation
ANS Air Navigation Services
AO Air Operator
APS Aviation Personnel Standards
ASIB Accident Safety Investigation Board
ASP Advisory Safety Panel
ATNS Air Traffi c and Navigation Services
ATOs Aviation Training Organisations
ATSUs Air Traffi c Service Units
AvMed Aviation Medicine
AvSec Aviation Security
BBBEE Broad-based Black Economic Empowerment
CAA Civil Aviation Authority
CAHRS Confi dential Aviation Hazard Reporting System
CAP Corrective Action Plan
CAPSCA Cooperative Arrangement for the Prevention of the Spread of a Communicable Disease through Air Travel
CARCom Civil Aviation Regulations Committee
CAR Civil Aviation Regulation
CATS Civil Aviation Technical Standards
CDE Cabin Designated Examiners
CLS Client Services, Licensing and Exams
CMS Content Management System
COSCAP Cooperative Development of Operational Safety and Continuing Airworthiness Programme
CRM Customer Relationship Management
CSSR Central Safety and Security Reporting System
DCA Director of Civil Aviation
DFEs Designated Flight Examiners
DoT Department of Transport
EBS Enterprise Business System
EM Executive Manager
EXCO Executive Management Committee
FAA Federal Aviation Administration
FOD Flight Operations Department
FTP File Transfer Protocol
FIU Flight Inspection Unit
GA General Aviation
GASI General Aviation Safety Initiative
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GM General Manager
GNSS Global Navigation Satellite Systems
HR Human Resources
ICAO International Civil Aviation Organisation
ICASA Independent Communications Authority of South Africa
ICVM ICAO Coordinated Validation Mission
ILF Industry Liaison Forum
IM Information Management
ISO International Standard Organisation
IT Information Technology
JAAP Joint Aviation Awareness Programme
LOC Local Organising Committee
MOA Memorandum of Agreement
MoU Memorandum of Understanding
MTOW Maximum Take-Off Weight
NATJOC National Joint Operational Centre
NASCOM National Airspace Committee
NASC National Aviation Security Committee
NASP National Aviation Security Programme
NATJOINTS National Joint Operational and Intelligence Structure
OHS Occupational Health and Safety
PAPI Precision Approach Path Indicator
PFMA Public Finance Management Act, 1999
PPL Private Pilot’s Licence
RAASA Recreational Aviation Administration of South Africa
RQC Risk, Quality and Compliance
SAA South African Airways
SAAsMA Southern African Aerospace Medical Association
SACAA South African Civil Aviation Authority
SADC Southern African Development Community
SARPs Standards and Recommended Practices
SCM Supply Chain Management
SMS Safety Management Systems
SMTP Send Mail Transfer Protocol
SRO Southern Region Offi ce
UAS Unmanned Aircraft Systems
USOAP Universal Safety Oversight Audit Programme
WAN Wide Area Network
YTD Year to Date
7
3. Strategic Overview
3.1 Vision
The SACAA’s vision is to be rated amongst the top 30 CAAs within fi ve years.
3.2 Mission
• To regulate aviation safety and security through oversight in line with international standards;
• To minimise the impact of the aviation industry on the environment; and
• To promote transformation, development and sustainability in partnership with industry players.
3.3 SACAA Brand Promise
Our Excellence, Your Safety
3.4 SACAA Value System
VALUES BEHAVIOURAL ATTRIBUTES
G Good is never good enough Always giving best effort, and seeking to continuously improve.
IIntegrity Maintain high ethical standards and approach issues professionally
without any bias and in a transparent manner that engenders trust amongst all our stakeholders.
S Service delivery ahead of customer expectation Striving to always exceed customer expectations.
T Teaming and partnering Working with others where we are jointly accountable for the end result.
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4. Legislative Mandate
SACAA is a Schedule 3A public entity in terms of the Public Finance Management Act (“PFMA”). The South African Civil Aviation Authority (SACAA) was established on the 1st of October 1998, following the enactment of the now repealed South African Civil Aviation Authority Act,1998 (Act No.40 of 1998). The abovementioned Act was repealed as a whole by the Civil Aviation Act, Act 2009, (Act No.13 of 2009). The SACAA is an agency of the Department of Transport (DoT). The Civil Aviation Act, Act 2009, (Act No.13 of 2009) provides for the establishment of a stand-alone authority mandated with controlling, promoting, regulating, supporting, developing, enforcing and continuously improving levels of safety and security throughout the civil aviation industry. The above is to be achieved by complying with the Standards and Recommended Practices (SARPs) of the International Civil Aviation Organisation (ICAO), whilst considering the local context.
5. Organisational Structure
CAA BOARD
Flight Operations Thabo Fisha
Aircraft Certification
Lobang Thabantso(Acting)
Aviation Personnel Standards
Blake Vorster
Aviation MedicineDr. Lesego Bogatsu
General Manager: Air Safety
OperationsAnton Richman
General Manager: Air Safety
InfrastructureGawie Bestbier
General Manager: Aviation SecurityWillie Mathonsi
(Acting)
Client Services, Licensing &
Examinations Mary Stephens
Executive Manager: Legal
Mmanare Mamabolo
Executive Manager: Accident & Incident
Investigation Gawie Bestbier
(Acting)
Aerodromes & Facilities
Nelson Nkabiti
Air Navigation Service
Charles Ashford(Acting)
Supply Chain Management
Mbulelo Gingcana
Information Technology
Wayne van der Haar
Finance Mpho Mzangwe
(Acting)
Dangerous Goods & CargoNico Smit(Acting)
Safety Advisory Committee
Minister of Transport Ben Martins
General Manager:Risk & Compliance
Louise Stols
Information Management Eva Kgoedi
(Acting)
General Manager: Finance
Asruf Seedat
Executive Manager: DCA Office
Sphelo Ntaka (Acting)
General Manager: Aircraft Safety
Subash Devkaran (Acting)
Aircraft Airworthiness
Simon Segwabe
Company Secretary Monica Sonjani
(Acting)
Training and Certification
Luvuyo Gqeke
Corporate Communications &
MarketingPhindiwe Gwebu
Risk, Quality & Compliance
Danny Perumal
Accident & Incident Investigation
Frank Masoga(Acting)
Executive Manager Human Resources
Paul Moraka(Acting)
Human Resources, Training and Development
(Vacant)
Airports & AirlinesSheila Ngidi
Director of Civil Aviation
Poppy Khoza(Acting)
Chief Audit Executive: Internal Audit Phila Kewana
ProjectsRiaan Myburgh
Flight Inspection Unit
Albert Morudi(Acting)
Cape Town Office Riaan Myburgh
RAASA
Organisational Structure
31 March 2013
9
6. Foreword by Chairperson
Introduction
I am pleased to present the strategic overview and results of the South African Civil Aviation Authority (SACAA) for the fi nancial year ending 31 March 2013. The SACAA is mandated to develop and foster a safe aviation sector and environment.
The Board, with input from management, developed the SACAA 2012-17 strategic plan, taking into account the specifi c needs of the industry, global advances in aviation, the role of South Africa in the promotion of aviation safety and security within the Southern African Development Community (SADC), transformation of the aviation industry as well as the National Government and Department of Transport imperatives. This revised strategic plan and annual performance plan was adopted by the Board and subsequently approved by the Executive Authority on 7 March 2012.
Five strategic goals were defi ned by the Board for the 2012/13 performance period and these are highlighted below:
1 To develop, optimise and manage revenue streams and fi nancial management systems.
2 To demonstrate that the principles of corporate governance are underpinning the work of every SACAA member and all serviced by SACAA.
3 To infl uence the breadth and pace of the industry development and transformation agenda.
4 To build a continuously improving safety and security (operations, aircraft, aviation security and infrastructure) environment.
5 To build a resilient organisation with adequate capacity, capabilities and a high performance culture.
The safety and security of our airspace remains crucial to the country and the SACAA. In 2007 the SACAA achieved an ICAO compliance rating of 77%, which placed it at number 46 out of the 189 ICAO contracting regulators internationally audited. Our strong compliance and positioning enables the country to enjoy global economic access through our safe skies, and it remains our intention to continue to be rated amongst the best globally. Much time has therefore been spent by the organisation in preparation for the upcoming 2013/14 ICAO audit. We will be undertaking a preliminary independent assessment to gauge the level of compliance in April - May 2013 as a precursor to the upcoming ICAO audit in July 2013.
Performance
The SACAA achieved an audited 84% of its 2012/13 performance targets, refl ecting an improvement in comparison to 74% in the previous year.
As an entity we have once again obtained an unqualifi ed Auditor-General opinion, which demonstrates our continued adherence to sound fi nancial management practices, risk management and compliance to applicable Statutes and Treasury Regulations. In line with
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our aim of ensuring good corporate governance, our independently managed and anonymous Tip Offs hotline remains a success. Fifty-eight (58) cases were logged in this performance period, of which 48 have been successfully resolved.
The transformation of our industry remains a challenge, with just over 6.1% qualifi ed pilots and maintenance engineers being Black of which only 0.78% are female. This year the Regulator spent R 14 417 557 on the development of aviation-related skills, with 86% focused on technical training. We continued to conduct Aviation Career Awareness programmes, where we visited 498 schools. Collectively 26305 students throughout the country benefi tted from the Career Awareness programmes.
Accidents in the general aviation sector continue to be of concern, with 130 accidents in this period, compared to the previous year of 107. The development of a Cross-functional Accident Plan is currently under way to address accident causal factors, with fl ight crew errors being singled out as the major contributor. The plan will be implemented and regularly monitored to ensure optimum delivery.
Strategic Relationships
SACAA is involved in a number of strategic relationships that are critical in delivering on its mandate.
At national level, we participate in industry forums such as the General Aviation Safety Initiative (GASI), Industry Liaison Forum (ILF), and the Civil Aviation Regulation Committee (CARCom). These forums contribute to improved and transparent relations in the interests of aviation safety and development. Key inputs from the industry engagements through these forums are the common goals of the development of the industry-wide Transformation Strategy and the Cross-Functional Accident Reduction Plan. CARCom is part of the SACAA regulation development process and is represented by various industry role players. All regulations are discussed in detail within CARCom and its sub-structures.
The Recreational Aviation Administration of South Africa (RAASA) was established in 2009 with the objective of providing safety oversight in recreational aviation on behalf of the SACAA. The contract was renewed for a further three-year period on the 1st of April 2012. To date RAASA has issued 1679 licences and has initiated the capture of fl ying hours within the sector which will enable international best practice reporting. Our desire for greater regional cooperation in ensuring safe skies within SADC and the continent, led by our government, has seen the birth of an agreement within the SADC states to create the SADC Aviation Safety Organisation (SASO) which is currently in the process of establishment. The primary objective of SASO as a regional safety oversight organisation in SADC is to assist member states in meeting their safety oversight obligations in an environment of harmonised regional civil aviation regulations and technical procedures. The SACAA has contributed signifi cantly by playing a leading role in developing the Business Plan, Charter, and Budget under the guidance of the DoT. These were subsequently approved by the Civil Aviation Commission, a body mandated to establish SASO.
Internationally, we are proud to have been appointed as the Vice-Chair of the ICAO Aviation Security Panel, effective April 2013. The objective of this panel is to address aviation security development and the role we play reaffi rms our global position of ensuring aviation safety and security.
Board Challenges
The Board has had a diffi cult year, wherein it had a few resignations from Board members, which hampered the Board’s effectiveness.
Mr Sello Motau, Chairperson of the Finance and Audit Committee, resigned in the previous fi nancial year on 12 February 2012 and Dr N Sangweni, Chairperson of the Human Resources Committee, resigned on the 18th of May 2012. The Minister of Transport subsequently appointed two new members, Ms K Selane and Ms P Matlala, on 8 December 2012, to fi ll the two vacancies in the Board.
The organisation has also been plagued with a degree of instability at executive leadership, due to the role of the Director of Civil Aviation (DCA) remaining vacant since 1 January 2011. Mr Thwala was Acting Director of Civil Aviation from 1 January 2011. He was replaced by Ms Poppy Khoza as Acting DCA from the 1st of November 2012. The process of fi lling the vacancy has commenced and the Board is confi dent that this critical vacancy will be fi lled in the new fi nancial year, thereby ensuring stability in the organisation.
Future Focus
Aviation provides a powerful drive for global economic development and is estimated as accounting for 2.1% of the economy locally, as per IATA’s Press Statement No 27 released on the 12th of June 2012. The South African economy, including other global economies, is still recovering from the global economic downturn and the over-reliance on the Passenger Safety Charge (PSC) is a material
11
concern due to decreased passenger travel. The revenue streams of SACAA consist of the PSC (78%), Fuel Levy (5%) and User Fees (application fees at 17%). SACAA experienced a 2.1% decrease in 2012/13 passenger traffi c compared to the previous year. This, and unpredictable economic conditions will necessitate that we develop and implement a revised revenue model that broadens the mix of revenue sources to reduce the over-reliance on PSC.
The Engineering News statement in July 2013 refl ects on Africa’s poor aviation safety record by citing the 10.85 fatal accidents per million fl ight hours compared to a global average of 2. While this remains a serious concern for the continent, South Africa has registered zero fatal accidents in terms of the above criteria under scheduled commercial operations. Greater effort needs to be placed on regional and continental cooperation to improve the poor safety ratings across the continent and this will form one of the areas of focus in the upcoming years.
In pursuit of coordinated regional safety, the SACAA has contributed signifi cantly through a number of initiatives which include continued involvement in the Cooperative Development of Operational Safety and Continuing Airworthiness Programme (COSCAP). This programme aims to enhance safety and the effi ciency of air transport throughout the SADC states.
The Aviation Medicine Department of SACAA was appointed as an ICAO Vice-Chair Technical Advisor for the ICAO-CAPSCA Programme on the African continent. The role of the technical advisor is to train other countries to ensure harmonisation in the implementation of the ICAO Cooperative Arrangement for the Prevention of Communicable Disease through Air Travel, Annexes 6, 9, 11, 14 and 18.
Globally, environmentally sustainable aviation is also gaining momentum. The Regulator is prioritising and increasing its focus on guiding the industry towards achieving the objectives set out in global initiatives such as COP 17. The industry is being conscientised about the actions that South Africa is taking towards such initiatives.The phasing out of Chapter 2 aircraft will be one of our core areas of focus in the coming year in the roll-out of environmental programmes that will ensure that the civil aviation industry is compliant with global best practice in protecting the environment.
Conclusion
In conclusion, I acknowledge and express my appreciation for the support and focus brought by my fellow Board members, the Management and Staff that have collectively ensured the effective performance of the organisation. The demonstrated support that we received from the shareholder, represented by the Minister of Transport, the Honorable Dikobe Ben Martins, the Deputy Minister, the Honorable Ms Sindisiwe Chikunga and the offi cials from the Department of Transport, is always appreciated. Special thanks to the Acting Director of Civil Aviation, the executive team and the SACAA staff for their dedication and commitment.
I would also like to take this opportunity to welcome the Minister, Honorable Ms Dipuo Peters and to wish the Honorable Minister Martins all the best in his new portfolio.
The SACAA is continuously improving, albeit the new challenges that arise each year. There are still areas that must be improved, including harmonised industry development and transformation initiatives. But many successes can be highlighted and in partnership with the industry, the Board is confi dent that the civil aviation industry will grow from strength to strength.
Phindile Riba
Chairperson: SACAA Board
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7. Acting Directorof Civil Aviation’s Report
Introduction
The 2012/2013 fi nancial year was a busy year for the aviation fraternity, fi lled with many challenges and highlights. Looking back on the year with pride, I am pleased to report that many challenges were overcome and many successes achieved. This report highlights the organisational performance in both the technical and support functions under the strategic leadership of the Board.
Organisational Performance
SACAA’s performance continued to remain one of the focus areas for the organisation. A number of key initiatives were put in place to enhance organisational performance, and this has resulted in excellent performance towards our targets and deliverables.
The Auditor-General’s unqualifi ed audit opinion from both a fi nancial and operational performance perspective, attests to effective controls and good governance. The audit opinion is welcomed, as it underpins the outstanding performance of the SACAA for the fi nancial year under review.
We are pleased to report that the SACAA closes off the year as a viable going concern, having operated within budget.
As part of the international compliance requirements, SACAA was identifi ed by ICAO as one of the organisations to be audited. In November 2012, ICAO confi rmed that they would conduct an ICAO-Coordinated Validation Mission (ICVM) in July 2013. The main focus of this audit was to validate that the 2007 audit fi ndings had been addressed. An industry wide task team was constituted to prepare for the validation mission. Furthermore, the ICAO Regional Offi ce in Nairobi was approached to conduct an independent pre-audit assistance mission on South Africa’s state of preparedness in March 2013. A corrective action plan was put in place thereafter, and preliminary results of the ICAO Coordinated Validation Mission (ICVM) indicate no signifi cant safety concerns.
Organisational Highlights
It pleases me to present the following highlights:
• During the year I was honoured to be appointed as the Vice Chairman of the ICAO Aviation Security Panel for the period April 2013 to March 2014, thus giving South Africa the platform to infl uence the global aviation security agenda.
• The Aviation Medicine department participated in lecturing post graduate studies in Aerospace Medicine at the University of Pretoria. The fi rst ten students graduated during the year having served an internship programme at the SACAA. This association allows for targeted research in addressing identifi ed gaps in the South African Aerospace Medical fi eld, and creates an opportunity for future research programmes in Africa.
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• In August 2012 an awareness campaign was launched about the dangers of directing laser beams towards aircraft in fl ight, which may lead to catastrophic consequences. The campaign was well received and is still in progress.
• The new fl ight plan format introduced by ICAO, known as Flight Plan 2012, was successfully launched on the 15th of November 2012. This system replaces the format which was in existence since the 1950s and takes modern avionics technology into account.
• Two external audits conducted during the course of the year confi rmed SACAA’s ISO 9001 QMS certifi cation.
• Two independent aviation security audits and the Transport Security Administration of the United States, confi rmed the continued level of compliance by the SACAA.
• The SACAA approved the special Performance-Based Navigation (PBN) procedures to be utilised at Cape Town International Airport. These procedures will allow for optimum performance and reduced fuel burn and noise, leading to cost savings for aircraft operators.
• SACAA has exceeded its targeted level fi ve BBBEE accreditation by achieving a level four.
Key Challenges
The organisation is faced with three key challenges:
Safety within the general aviation sector remains a concern locally and internationally, with numerous fatal accidents reported in this category. In this regard, a number of inspectors were appointed to focus specifi cally on operations under the relevant department.
Transformation in the aviation industry remains a major challenge. SACAA is contributing towards addressing this challenge in the following ways:
• Focused career awareness interventions with High Schools;
• Cadet programmes and bursaries awarded to focus groups;
• Formulation of a transformation strategy intended to provide coordinated and sustainable transformation.
The amendment of the Civil Aviation Act, 2009 (Act No.13 of 2009) is another challenge, as it is necessary to align the Act with other prescripts. A way forward is being sought in partnership with the Department of Transport, to address this.
Highlights of Future Plans
The development of a 360 degree ICAO compliance monitoring programme for the 2014/15 fi nancial year is of paramount importance; this involves the intensifi ed monitoring of the following three aspects, namely:
• Previously closed fi ndings;
• Current Corrective Action Plan (CAP);
• Standards and Recommended Practices (SARPs).
A project that addresses the various closed protocol questions and checklists will be implemented to ensure continued compliance in these key areas. The second part of the project will fi rmly track the current corrective measures, and the fi nal part, addressing the SARPs, will ensure that ICAO’s new recommended practices are implemented before the due date.
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Acknowledgements
May I take this opportunity to thank the Department of Transport and the Board for keeping SACAA on track with strategy and governance matters. I also wish to congratulate the SACAA Management and staff on their performance.
Poppy Khoza
Acting Director of Civil Aviation
PART B:
PERFORMANCE INFORMATION
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1. Statement of Responsibility for Performance Information for the Year ended 31 March 2013
The Director of Civil Aviation is responsible for the preparation of the public entity’s performance information and for the judgements made in this information.
The Director of Civil Aviation is responsible for establishing and implementing a system of internal control designed to provide reasonable assurance as to the integrity and reliability of performance information.
In my opinion, the performance information fairly refl ects the actual achievements against planned objectives, indicators and targets as per the strategic and annual performance plan of the public entity for the fi nancial year ended 31 March 2013.
The South African Civil Aviation Authority’s performance information for the year ended 31 March 2013 has been examined by the external auditors with no material performance fi ndings and their report is presented on page 89.
The performance information of the entity set out from page 18 to page 20 was approved by the Board.
Poppy Khoza
Acting Director of Civil Aviation
Date: 29 July 2013
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2. Overview of the South African Civil Aviation Authority’s Performance
SACAA’s performance has been steadily improving over the years, with 74% of the prior year’s targets achieved, compared to the current 84% before weighted performance. Out of 29 deliverables, four were dependent on third parties, leaving 25 possible targets to be met. 21 out of 25 were achieved, culminating in 84% performance. The following four targets were not fully achieved:
Safety Advisory Board Implemented
Out of the 11 implementable safety recommendations, three were fully implemented and seven are in the process of being implemented. The 3 out of 11 translates into a 27% achievement.
Promotion of Aviation Awareness at Schools
The target was set to cover 70 schools in 9 provinces; however by March 2013, 498 schools were visited in six provinces. Although the number of schools surpassed the target by far, there were three provinces not visited as per the target.
Employer of Choice
An improvement plan based on the prior year’s employer of choice survey could not be developed, as the results were shared halfway into the year, due to a high turnover in Human Resource management. Consequently no new survey was carried out at the end of the year.
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risk-b
ased
ov
ersig
ht
impl
emen
ted;
al
l de
partm
ents
have
cap
ture
d ris
k pr
ofi lin
g. T
arge
t A
chie
ved.
Stan
dard
isatio
n of
Mas
ter S
urve
illanc
e Pl
ans (
MSP
) fac
ilitat
es o
ptim
ised
roll-
out o
f pen
ding
Ele
ctro
nic
Busin
ess
Solu
tion.
Ri
sk p
rofi l
ing
is th
e fi r
st ste
p in
in
corp
orat
ing
a ris
k-bas
ed o
vers
ight
app
roac
h.
2cA
nnua
l au
dits
cond
ucte
d ac
cord
ing
to M
SP10
%
Varia
nce
on
tota
l pl
anne
d M
SP.
5,15
8 ov
ersig
ht a
ctivi
ties
perfo
rmed
aga
inst
budg
eted
4,
782.
8%
Pos
itive
Varia
nce.
Ove
rsig
ht p
erfo
rman
ce in
clud
es fo
reca
sted
activ
ities
initia
ted
by e
nd u
sers
, e.
g. D
esig
nate
d Fl
ight
Exa
min
ers
and
AM
E va
lidat
ions
. A
dditio
nal s
peci
al
requ
ests
on B
isho,
Um
tata
and
Ric
hard
s Ba
y ac
coun
t for
mor
e ad
ditio
nal
insp
ectio
ns t
han
budg
eted
. A
n A
ircra
ft Sa
fety
ext
ra s
urve
illanc
e fo
llow
ing
an e
xpiry
of
MA
N 4
3 w
as n
eces
sary
to d
eter
min
e th
e le
vels
of in
dustr
y co
mpl
ianc
e.
2dIm
prov
ed e
nfor
cem
ent
App
ly
enfo
rcem
ent
to
all
enfo
rcea
ble
repo
rted
case
s.
Enfo
rcem
ent e
ffect
ed re
gard
ing
all c
ases
as
deta
iled
by
enfo
rcem
ent r
egist
er.
Enfo
rcem
ent
regi
ster
dem
onstr
ates
enf
orce
men
t re
gard
ing
all
enfo
rcea
ble
case
s; so
me
case
s m
ay ta
ke lo
ng to
be
clos
ed d
ue to
litig
atio
n pr
oces
ses
and
may
be
clos
ed in
sub
sequ
ent y
ears
.
2e
Prog
ress
ag
ains
t pl
an
of
50%
re
duct
ion
of a
ccid
ents
by 2
014
from
20
04
(Nat
iona
l se
min
ar
2006
)
Prog
ress
ag
ains
t ap
prov
ed
plan
.
Ann
ual s
tatis
tics
are
mea
sure
d pe
r fat
alitie
s on
cal
enda
r ye
ar b
asis.
The
tota
l bas
e ye
ar ta
rget
ed 5
0% re
duct
ion
by 2
014.
It
is 20
13 a
nd S
ACA
A h
as a
chie
ved
42%
re
duct
ion
alre
ady.
50%
red
uctio
n w
as a
chie
ved
in th
e la
st tw
o ye
ars,
as th
is is
a ta
rget
to b
e m
aint
aine
d.
Acc
iden
t sta
tistic
s m
ust t
ake
into
acc
ount
indu
stry
activ
ity, a
s m
ore
activ
ity
resu
lts in
incr
ease
d ris
k.
Ther
efor
e SA
CA
A’s
rate
of a
ccid
ents
for
the
50%
re
duct
ion
is ba
sed
on t
he r
egist
er s
ize
of a
ircra
ft.
It is
impo
rtant
to n
ote
that
the
fata
lities
in th
e ge
nera
l avia
tion
inte
rnat
iona
lly a
re n
ot c
onsid
ered
fo
r ac
cide
nt m
easu
rem
ent,
as th
is is
a re
crea
tiona
l sec
tor.
Sou
th A
frica
’s sc
hedu
led
oper
atio
ns h
ave
a ze
ro ra
te o
f acc
iden
ts, in
dica
ting
safe
ski
es.
2fPr
ogre
ss a
gain
st ap
prov
ed C
AP,
on
ICAO
U
nive
rsal
Se
curit
y A
udit
10%
Var
ianc
e ag
ains
t pla
n.SA
CA
A h
as c
ompl
eted
24
out o
f 27
CA
P re
quire
men
ts,
with
thr
ee r
emai
ning
alre
ady
appr
oved
by
CA
RCom
. 90
% p
rogr
ess
achi
eved
.
In to
tal t
here
wer
e 30
min
or fi
ndin
gs fo
r the
Uni
vers
al S
ecur
ity A
udit,
of w
hich
27
rela
ted
to S
ACA
A, t
hree
to b
e ad
dres
sed
by N
ASC
. N
ASC
reso
lved
to
fi le
a di
ffere
nce
on tw
o ou
t of t
he th
ree
min
or fi
ndin
gs.
2gPr
ogre
ss a
gain
st ap
prov
ed C
AP
on M
arch
201
2 IC
AO l
evel
of
com
plia
nce
Boar
d ap
prov
al
of
ICAO
M
arch
20
12
Cor
rect
ive
Act
ion
Plan
(CA
P).
One
fi n
ding
re
mai
ns
open
w
ith
SAC
AA
ha
ving
com
plet
ed a
ll its
task
s an
d aw
aitin
g ex
tern
al p
artie
s.
Ther
e w
ere
two
rem
aini
ng: M
inist
eria
l app
rova
l of t
he M
oU fo
r esta
blish
ing
the
inde
pend
ence
of t
he A
ccid
ent a
nd In
cide
nt In
vesti
gatio
n D
ivisio
n (A
IID),
and
Lette
r of A
gree
men
t sig
natu
re b
y AT
NS
and
ACSA
, for
mal
ising
that
the
rela
tions
hip
with
ser
vice
prov
ider
s ha
s be
en s
igne
d re
cent
ly.
The
seco
nd
fi ndi
ng h
as b
een
addr
esse
d.
19
SAC
AA
201
2/13
PER
FORM
AN
CE
TARG
ETS
AN
D D
ELIV
ERA
BLES
Ref N
oKe
y Pe
rfor
man
ce In
dica
tors
Ann
ual T
arge
t 201
2/20
13A
ctua
l Per
form
ance
Mar
ch 2
013
Com
men
ts
DoT
Out
com
e 2
: A
tran
spor
t sec
tor
that
is s
afe
and
secu
re (
Con
tinue
d)
2hIm
prov
ed R
egul
ator
y fra
mew
ork
Final
A
ct
amen
dmen
ts su
bmitte
d.
Final
pro
pose
d am
endm
ents
com
pile
d by
SAC
AA
wer
e su
bmitte
d to
LRC
Boa
rd S
ubco
mm
ittee
and
DoT
. It w
as
reso
lved
that
a s
ervic
e pr
ovid
er b
e ap
poin
ted
to a
ssist
in
the
amen
dmen
t of t
he A
ct. T
he re
late
d do
cum
ent o
n th
e sc
ope
of w
ork
was
sub
mitte
d to
DoT
for A
ppro
val.
DoT
has
agr
eed
to th
e ap
poin
tmen
t of t
he se
rvic
e pr
ovid
er, a
nd th
is w
ill as
sist
in e
nsur
ing
obje
ctivi
ty a
nd in
depe
nden
ce in
am
endi
ng th
e A
ct.
DoT
Out
com
e 5
: In
crea
sed
cont
ribut
ion
to jo
b cr
eatio
n
5.1
Org
anisa
tiona
l pe
rform
ance
m
easu
red
agai
nst
BBBE
E sc
orec
ard
Adh
eren
ce to
ann
ual B
BBEE
Sc
orec
ard
targ
ets
BBBE
E Le
vel F
our A
chie
ved
BBBE
E le
vel 4
ach
ieve
d ah
ead
of ta
rget
ed le
vel 5
5.2
Perfo
rman
ce
agai
nst
Publ
ic
Sect
or E
mpl
oym
ent E
quity
targ
ets
Ach
ieve
men
t of P
ublic
Sec
tor
Empl
oym
ent E
quity
Tar
gets.
Max
imum
poi
nts
on B
BBEE
mea
sure
d ag
ains
t SAC
AA
pe
rform
ance
:
Snr
Man
agem
ent
BBBE
E ta
rget
of
60%
; SA
CA
A h
as
66%
, Mid
dle
Man
agem
ent t
arge
t of 7
5%, S
ACA
A h
as
74%
, Ju
nior
Man
agem
ent
targ
et o
f 80
%,
SAC
AA
has
79
%.
SAC
AA
is c
ontra
cted
with
the
DoT
to re
ach
BBBE
E Le
vel 3
by
Mar
ch 2
017,
w
ith re
gard
to P
ublic
Sec
tor E
mpl
oym
ent E
quity
Tar
gets;
SAC
AA
is a
sin
gle
perc
enta
ge p
oint
from
fully
ach
ievin
g th
e ab
ove
targ
ets w
ell b
efor
e ta
rget
ed
time.
5.3a
Inte
rnat
iona
l C
ivil
Avia
tion
Day
(IC
AD
)par
ticip
atio
n by
SAC
AA
Con
tribu
tion
to
succ
essfu
l ho
sting
of I
CA
D b
y SA
CA
A.
ICA
D w
as a
reso
undi
ng s
ucce
ss w
ith S
ACA
A ta
king
the
lead
and
con
tribu
ting
R1.4
milli
on to
war
ds th
e pr
ojec
t.IC
AD
was
hos
ted
in M
afi ke
ng
5.3b
Prom
oted
avia
tion
awar
enes
s at
sc
hool
s70
sc
hool
s vis
ited
in
9 pr
ovin
ces.
Targ
et n
ot F
ully
Ach
ieve
d. 5
28 S
choo
ls vis
ited
durin
g th
e ye
ar:
Limpo
po 2
03,
Free
Sta
te 9
1, G
aute
ng 8
4, N
orth
ern
Cap
e 6,
KZN
65,
Nor
th W
est 7
9.
528
scho
ols
visite
d w
ith e
xpos
ure
to e
stim
ated
26,
305
lear
ners
. A
num
ber
of c
ases
’ res
ourc
es h
ad to
be
dive
rted
in o
rder
to a
ddre
ss th
e m
ost n
umbe
r of
stu
dent
s, pa
rticu
larly
whe
re t
here
wer
e re
ques
ts, a
s th
e ca
reer
inte
rest
wou
ld b
e re
vived
long
afte
r the
wor
ksho
p. IC
AD
201
1/12
was
hel
d in
the
Easte
rn C
ape.
DoT
Out
com
e 6
: In
crea
sed
cont
ribut
ion
envi
ronm
enta
l sus
tain
abili
ty
6aC
ontri
butio
n to
str
ateg
y in
co
mpl
ianc
e w
ith
the
ICAO
A
ssem
bly
Reso
lutio
n A
22
Con
tribu
te to
the
deve
lopm
ent
of
Stra
tegy
to
ad
here
to
IC
AO A
22 R
esol
utio
n.N
o Re
solu
tion
A22
requ
ests
wer
e re
ceive
d.SA
CA
A is
act
ively
invo
lved
in I
CAO
com
mitte
es in
ord
er to
ass
ist R
SA in
im
plem
entin
g th
e re
solu
tion.
6bPr
ogre
ss
agai
nst
Avia
tion
Envir
onm
enta
l Pr
otec
tion
Plan
(A
EP)
AEP
impl
emen
ted.
Mul
ti-yea
r AEP
Bus
ines
s Pla
n ap
prov
ed b
y Bo
ard
Safe
ty,
Secu
rity
and
Envir
onm
ent C
omm
ittee
for t
he la
st qu
arte
r 20
12/1
3 Fin
anci
al Y
ear.
Mul
ti-yea
r del
ivera
bles
are
impl
emen
ted
in c
onju
nctio
n w
ith ke
y sta
keho
lder
s.
6cC
ontri
butio
n to
CoP
17
sect
oria
l em
issio
ns s
trate
gyC
ontri
butio
n to
C
op
17
sect
oria
l em
issio
ns s
trate
gy.
No
inpu
t rec
eive
d fo
r SAC
AA
act
ion,
SAC
AA
con
tinue
d to
eng
age
DoT
on
inpu
t req
uire
men
ts.In
put o
n C
op 1
7 se
ctor
ial e
miss
ion
strat
egy
depe
nden
t on
DoT
requ
irem
ents.
SAC
AA
org
anis
atio
nal e
nabl
ers
not l
inke
d to
DoT
out
com
es
7.1a
Perfo
rman
ce
agai
nst
reve
nue
mod
el ro
ll-out
pla
nRe
venu
e w
ithin
10%
var
ianc
e of
roll-o
ut p
lan
Reve
nue
is 3.
8% b
elow
bud
get
with
in t
he p
resc
ribed
10
% th
resh
old
Redu
ctio
n in
the
num
ber
of a
ctive
airl
ines
con
tribu
ted
to t
he d
eclin
e in
re
venu
e.
Authority20
SAC
AA
201
2/13
PER
FORM
AN
CE
TARG
ETS
AN
D D
ELIV
ERA
BLES
Ref N
oKe
y Pe
rfor
man
ce In
dica
tors
Ann
ual T
arge
t 201
2/20
13A
ctua
l Per
form
ance
Mar
ch 2
013
Com
men
ts
SAC
AA
org
anis
atio
nal e
nabl
ers
not l
inke
d to
DoT
out
com
es
7.1b
Prog
ress
ag
ains
t M
IS
roll-o
ut
plan
Prog
ress
aga
inst
MIS
roll-
out
plan
.
Targ
et n
ot fu
lly a
chie
ved.
The
re a
re 9
app
rove
d sy
stem
s fo
r 20
12/1
3 fo
r ro
ll-out
. 7
have
bee
n im
plem
ente
d.
Requ
est f
or q
uota
tion
for E
BS w
as a
dver
tised
in M
arch
af
ter
boar
d su
bmiss
ion
for
notin
g an
d ap
prov
al o
f go
vern
ance
doc
umen
ts.
The
Reco
rds
Man
agem
ent
Back
Sca
nnin
g go
vern
ance
doc
s w
ere
signe
d an
d te
nder
doc
umen
ts ar
e un
der r
evie
w b
y th
e ad
judi
catio
n co
mm
ittee.
The
EBS
proc
urem
ent i
s a
maj
or p
roje
ct, r
equi
ring
a m
etic
ulou
s ap
proa
ch
and
cann
ot b
e ru
shed
due
to re
late
d im
plic
atio
ns.
7.1c
AG A
udit
Opi
nion
Unq
ualifi
ed
perfo
rman
ce
opin
ion.
Unq
ualifi
ed p
erfo
rman
ce in
form
atio
n AG
Opi
nion
.Th
e ta
rget
was
ach
ieve
d w
ith n
o iss
ues
raise
d on
the
Ann
ual R
epor
t.
7.2a
Num
ber o
f int
erna
l aud
it fi n
ding
s (In
tern
al A
udit)
No
repe
at a
udit
fi ndi
ngs
and
10%
redu
ctio
n ov
eral
l.Th
ere
are
no r
epea
t aud
it fi n
ding
s fo
r th
e ye
ar e
nded
M
arch
201
3.In
tern
al c
ontro
ls co
ntin
ue to
impr
ove.
7.2b
Num
ber o
f Aud
itor-
Gen
eral
au
dit fi
ndi
ngs
No
signi
fi can
t FM
fi n
ding
s an
d 10
% r
educ
tion
in t
otal
fi n
ding
s by
31
Mar
ch 2
014.
Ther
e w
ere
no
signi
fi can
t Fin
anci
al
Man
agem
ent
fi ndi
ngs
and
fi ndi
ngs
wer
e re
duce
d fro
m 1
5 to
10.
Findi
ngs
have
bee
n de
clin
ing
signi
fi can
tly o
ver t
he y
ears
.
7.3a
Empl
oyer
of c
hoic
e ra
ting
Tota
l 10
%
annu
al
impr
ovem
ent o
n ov
eral
l rat
ing.
Targ
et n
ot A
chie
ved.
The
Mar
ch 2
012
surv
ey w
as
fi nal
ised
in S
epte
mbe
r 201
2. E
thic
s, ca
reer
dev
elop
men
t, in
clus
ion
and
rem
uner
atio
n w
ere
high
light
ed.
Eth
ics
train
ing
was
und
erta
ken;
PM
S w
as re
-laun
ched
, con
stant
m
eetin
gs
held
w
ith
staff,
an
d sa
lary
be
nchm
arki
ng
unde
rtake
n.
Prog
ress
in a
ddre
ssin
g th
e su
rvey
con
cern
s is
adva
nced
, alb
eit n
ot th
roug
h an
app
rove
d C
orre
ctive
Act
ion
Plan
.
7.3b
Tech
nica
l sta
ff tu
rnov
er ra
tioTe
chni
cal
staff
turn
over
< 6
. 1%
Tech
nica
l tur
nove
r was
3.9
%
Cal
cula
tion
is ba
sed
on t
echn
ical
per
son
who
res
igne
d an
d do
es n
ot
incl
ude
com
plet
ed c
ontra
cts,
deat
h , r
etire
men
t and
dism
issal
. Th
e sta
tistic
s sh
ow a
n im
prov
emen
t com
pare
d to
the
prev
ious
yea
r.
7.4a
Prog
ress
aga
inst
succ
essio
n pl
an10
% V
aria
nce
agai
nst p
lan
A s
ingl
e po
sitio
n id
entifi
ed in
the
2009
suc
cess
ion
plan
w
as fi
lled
by a
des
igna
ted
cand
idat
e.
Four
vac
anci
es w
ere
iden
tifi ed
in
the
appr
oved
200
9 Su
cces
sion
Plan
du
ring
the
year
. Sn
r Man
ager
Qua
lity a
nd R
isk w
as a
ppoi
nted
in te
rms
of
succ
essti
on a
nd th
e fo
llow
ing
vaca
ncie
s ar
e no
t fi lle
d; G
M A
ircra
ft Sa
fety
, M
anag
er T
estin
g St
anda
rds,
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013.
PART C: GOVERNANCE
Authority22
1. Board of the South African Civil Aviation Authority
Vuwani Ndwamato
Poppy Khoza
(Acting DCA from 1 November 2012 to date)
Adv. Roshan R Dehal Patrick Ndlovu
Phindile Riba
(Chairperson)
Zukile Nomvete Monica Sonjani
(Acting Company Secretary)
(January 2013 to 31 March 2013)
*Kenosi Pearl Selane’s photograph was not available at the time of going to print.
Phuti Matlala
23
2. Corporate Governance Report
Introduction
SACAA is committed to effective corporate governance to ensure that the interests of the organisation and its stakeholders remain paramount. It subscribes to the principles of fairness, transparency, accountability and integrity in all its dealings with stakeholders. SACAA is a Schedule 3A public entity in terms of the Public Finance Management Act (“PFMA”). It applies the governance principles encapsulated in the King Report on Corporate Governance in South Africa, 2009 (“King III”) and continues to further entrench the recommended practices in its governance structures, systems, processes and procedures.
The Board’s function is to direct the organisation’s strategy to achieve sustainable economic, social and environmental performance. The Board has extensive experience and the skills required to enable them to exercise their fi duciary duties effectively. As the Accounting Authority in terms of the PFMA, the Board is responsible for ensuring that the organisation is fi nancially sustainable.
The Board is led by an independent non-executive Chairperson and reports to the Minister of Transport. The Board and the shareholder, the Minister, hold an annual general meeting.
The Civil Aviation Act requires the Minister, the SACAA Board and the Director of Civil Aviation (DCA) to enter into a written Performance Agreement which sets out key deliverables emanating from the strategic plan, which the SACAA has to achieve annually. The Minister assesses the achievement of these deliverables on a quarterly basis.
Board Composition
According to the Civil Aviation Act, the Board consists of the Director of Civil Aviation and seven non-executive members. All non-executive members are appointed by the Minister of Transport for a period of three years. In the year under review, one member of the Board resigned and two members were appointed to fi ll two vacancies in the Board. However, one of the newly appointed members has since retired from the Board.
In line with international best practice, the SACAA has a non-executive Chairperson at the helm of the Board. The Chairperson is appointed by the Minister. The Board is governed by a formal written Board Charter, setting out its duties and responsibilities, which are reviewed annually.
The Board retains full and effective control over the operations of the organisation and has delegated some of its powers to the ADCA and Executive Committee through a Delegation of Authority framework. The Delegation of Authority, however, does not disperse the responsibilities and accountability of the Board.
Board Subcommittees
The Board has delegated specifi c responsibilities to the Board’s Subcommittees, which have defi ned tasks in terms of their specifi c terms of reference. Reports of the Subcommittees’ activities are submitted to the Board. The Board has four Subcommittees, namely the Human Resources and Remuneration Committee (HR Committee), the Finance and Audit Committee (Finance Committee), Legislative and Regulatory Committee and the Safety, Security and Environment Committee. The Acting Director of Civil Aviation is an ex offi cio member of the Subcommittees.
Authority24
During the reporting period, the Subcommittees were constituted as follows:
Human Resources and Remuneration Committee
Mr Vuwani Ndwamato;
Mr Patrick Ndlovu; and
Ms Phuti Matlala.
This Committee is chaired by Mr Vuwani Ndwamato and operates in accordance with a Board-approved Terms of Reference. The Committee provides guidance to the Board on human resource and remuneration matters and strategies.
Finance and Audit Committee
Mr Patrick Ndlovu;
Adv RR Dehal; and
Ms Phuti Matlala.
Mr Patrick Ndlovu chairs this Committee. This Committee is responsible for the recommendation of fi nancial policies, budgets and goals to the Board. It reviews the Agency’s fi nancial performance against its set objectives and risk, and operates in accordance with an approved Terms of Reference. The Board is in the process of appointing an independent member to serve on this Committee.
Legislative and Regulatory Committee
Adv RR Dehal;
Ms Phuti Matlala; and
Mr Vuwani Ndwamato.
Adv RR Dehal chairs this Committee. This Committee is responsible for all legal and regulatory matters affecting the organisation.
Safety, Security and Environmental Committee
Mr Zukile Nomvete;
Adv RR Dehal;
Mr Patrick Ndlovu, and
Ms Phuti Matlala.
Mr Zukile Nomvete chairs this Committee. The main function of this Committee is to advise the Board on environmental issues and matters related to safety and security.
25
Board Attendance
The full Board meets formally at least four times per year, at such other times as may be necessary to address any signifi cant matters that may arise, and also communicates regularly between these meetings. The Board is regularly supplied with appropriate and timely information relating to all aspects of the SACAA. In addition, members of the Board are free to seek any further information they consider necessary in order to discharge their duties effectively. The collective responsibility of the Board ensures that all members of the Board are involved in the process of arriving at signifi cant decisions.
Board Induction and Continuing Education
The newly appointed members of the Board received induction, which was coordinated by the Acting Company Secretary. The induction process included an information pack and a session regarding the operations of the organisation to enable them to obtain a good understanding of the core business of the organisation.
The Board members undergo training on a regular basis to broaden their knowledge. The Offi ce of the Company Secretary plays a vital role in ensuring that all the relevant courses are sourced and brought to the attention of the Board for attendance. The Company Secretary keeps the Board abreast of the regulatory and legislative developments.
Company Secretary
The Company Secretary for the SACAA, Mr Mohau Motake, resigned in December 2012. Ms Monica Sonjani was appointed with effect from January 2013 to act in the position of the Company Secretary. The Company Secretary assists the Board in fulfi lling its functions and is empowered by the Board to perform his duties. All members of the Board have direct access to the Company Secretary at all times.
Board Remuneration
The remuneration of Board members is determined by the Minister, taking cognisance of the guidelines set by National Treasury. The Minister annually determines a cost-of-living adjustment to the Board remuneration.
Code of Conduct
SACAA has a Code of Conduct and a Code of Ethics which defi ne a set of values and behavioural principles expected of its directors, employees and contractors. These documents are intended to assist in ensuring a high ethical standard of business practice. All new staff members receive training on, among others, the Code of Conduct at induction. The values encapsulated in the Code of Conduct are continuously instilled through ongoing communication and training. Furthermore, all employees are required to continually declare interests.
SACAA has subscribed to a service that will enable all stakeholders, but most specifi cally its employees, to report anonymously on dishonesty by staff. The service, Tip-offs Anonymous, is administrated on the independent fi rm.
Attendance of Board and Subcommittee Meetings
The attendance of Board meetings is vital. Board members have to contribute meaningfully and constructively to the business of the organisation and to the discussions at Board meetings. This enables informed and credible decision-making.
Authority26
Scheduled Board and sub committee meeting attendance, from the period 1 April 2012 to 31 March 2013 was as follows:
MEETING ATTENDANCE FAC HRC SSEC LEG & REG BOARD AGM
Total Meetings (Including Special Meetings) 5 4 4 4 9 1
Ms P Riba (Chairperson) Non-member Non-member Non-member Non-member 8 1
Ms P Matlala (appointed on 1 December 2012) 1 2 0 0 1 0
Mr P Ndlovu 5 4 4 Non-member 8 1
Adv R Dehal 5 Non-Member 2 4 7 1
Mr V Ndwamato Non-member 3 Non-member 4 7 0
Mr Z Nomvete Non-member Non-member 3 Non-member 4 1
Ms K Selane (appointed on 1 December 2012 and retired in April 2013) 1 Non-member Non-member Non-member 1 0
Dr N Sangweni (resigned on 18 May 2012) Non-Member 0 Non-member Non-member 1 0
Mr Z Thwala (Acting Director until 30 October 2012) 2 2 2 2 5 0
Ms P Khoza (Acting Director from 1 November 2012) 2 1 2 1 2 1
Confl ict of Interest
Members of the Board are advised, on an ongoing basis, of any interests that could potentially confl ict with those of the SACAA. Where the Board believes that a confl ict exists, the confl ict is clearly recorded in the Board minutes and, if considered appropriate by the rest of the Board, the Board member concerned is not present at the meeting whilst the item is considered and discussed.
External Audit
During the fi nancial year, the Auditor-General was the external auditor for the SACAA in line with the Public Audit Act, 2004 (Act No. 25 of 2004).
Internal Audit
Introduction
The Internal Audit department (IA) ensures that there is continuous and regular monitoring of performance in the organisation. The department performs its duties according to the approved Internal Audit Charter (IAC), Annual Audit Plan and Strategy. One of its functions is to ensure that there is improved internal control within the organisation and compliance with applicable regulations. The Internal Audit reports are presented to the Board and the Internal Audit department’s performance is reviewed by management and the Board on a quarterly basis.
Internal Audit’s Responsibilities
The Internal Audit department is governed by the PFMA, King III, Treasury Regulations, International Standards for the Professional Practice of Internal Auditing (IIA Standards) and the Code of Ethics of the Institute of Internal Auditors.
27
The Effectiveness of Internal Control
The Internal Audit department is of the opinion that the internal controls within the SACAA have improved, based on the internal audit work done during this reporting period. The Chief Audit Executive reports directly to the Finance and Audit Committee and Board, and gives reasonable assurance that the SACAA is achieving its objectives with regard to the following:
(a) the information systems environment;
(b) the reliability and integrity of fi nancial and operational information;
(c) the effectiveness of operations;
(d) safeguarding of assets;
(e) compliance with laws, regulations and controls;
(f) establishment and communication of objectives and values;
(g) the monitoring of its accomplishment of objectives;
(h) ensuring of accountability; and
(i) preserving of corporate values.
The above is in keeping with Treasury Regulations 3.2.11, 3.2.12 and 27.2.
King Report on Governance for South Africa (King III), 2009
Principle 7.3 of the King III Report stipulates that the Internal Audit department should provide a written assessment of the effectiveness of the company’s system of internal controls and risk management.
Evaluation of Financial Statements
The Internal Audit department has evaluated the Annual Financial Statements of the SACAA for the year ended 31 March 2013.
Authority28
3. Executive Management Committee
Poppy Khoza
Director of Civil Aviation (Acting) (from 1 November 2012 to date)
Asruf Seedat
General Manager:Finance
Mmanare Mamabolo
Executive Manager:Legal
Anton Richman
General Manager:Air Safety Operations
Phila Kewana
Chief Audit Executive:Internal Audit
Louise Stols
General Manager:Risk and Compliance
Gawie Bestbier
General Manager:Air Safety Infrastructure
and Acting Executive: AIID
Subash Devkaran
General Manager:Aircraft Safety (Acting)
Willie Mathonsi
General Manager:Aviation Security (Acting)
Paul MorakaExecutive Manager:
Human Resources (Acting)
Sphelo NtakaActing Executive Manager:
Offi ce of the Director of Civil Aviation (Acting)
29
4. Strategic Risk Report
The SACAA’s risk management policy, strategy and framework were approved by the Board in 2012 after an external review of these documents by Grant Thornton in May 2012. It was confi rmed that the SACAA policy, strategy and framework are in line with King III, ISO 31000 and Treasury Regulations.
The SACAA Current Risk Profi le
During the year, the number of risks within SACAA decreased by 18 from 92 to 74 risks, as seen in the risk summary.
The graph below illustrates the residual risk scores per department for the four quarters of the 2012/13 fi nancial year. SACAA’s residual risk scores displayed more or less the same trend during this fi nancial year, with its highest risks remaining in the areas of business continuity, hard copy records and the Flight Inspection Unit.
80
70
60
50
40
30
20
10
0
Airc
raft
Safety
FOD
APS
AVM
EDAN
S
AER
ODRO
MES
AVS
ECFIN
AN
CE
SCM IT
RQC
CLS IM HR
LEG
AL
CO
MM
S
Safety P
romotio
nAIID FIU
SRO
Quarter 4
Quarter 3
Quarter 2
Quarter 1
However, when comparing SACAA’s average risk exposure per department for the last two years as indicated in the graph below, it is
noticeable that SACAA’s residual risk scores decreased in 14 departments and increased in fi ve departments in the 2012/13 fi nancial
year. The Southern Regional Offi ce (SRO) was only added in the 2012/13 fi nancial year. These increases can be contributed to the
following:
(a) Aviation Personnel Standards: The residual risk levels increased in 2012/13 due to inadequate inspector capacity within APS and scarcity of skills.
(b) Information Management: The extreme risk of SACAA not having Business Continuity Plans has been added in 2012/13 after a fi nding was raised in this regard.
(c) Human Resources: One new risk was identifi ed in 2012/13, resulting in a higher residual risk level.
(d) Safety Promotion: Risks with low residual risk levels were terminated, leaving one risk with a high rating, which resulted in an increase in the exposure score.
(e) Flight Inspection Unit: Two risks were terminated, leaving three risks with high ratings, resulting in an increase in the exposure score.
All remaining risks are being managed actively by the respective managers to ensure that the risks are mitigated going forward.
Authority30
Average Risk Exposure
Ris
k Exp
osu
re S
core
20
18
16
14
12
10
8
6
4
2
0
Airc
raft
Safe
ty
FOD
APS
AVM
ED
ANS
AERO
DRO
MES
AVSE
C
FIN
ANC
E
SCM IT
RQC
CLS IM HR
LEG
AL
CO
MM
S
Safe
ty P
rom
otio
n
AIID FIU
SRO
2012/13
2011/12
y R
The top fi ve Strategic Risks and mitigating actions for SACAA as at the end of March 2013 were as follows:
1 The Business Continuity policy, strategy and fi nal draft plans have been approved by the Board. The Board also approved an outsourced recovery site solution for which the procurement process has started. The Records Back Scanning project has been launched as well.
2 The examination database is receiving attention in that all the questions are being reviewed and each paper will be uniquely developed.
3 The SACAA revenue fee structure has been reviewed and benchmarked according to international standards. The same has been submitted to the Board for approval and achieved a positive outcome. The SACAA will develop robust debt collection procedures and also revise the regulations to ensure effective enforcement of administrative fees.
4 The Human Resources division is working on the retention and succession policies. They are also benchmarking remuneration levels for critical skills.
5 The information management and technology systems are being reviewed to ensure an integrated civil aviation system.
PART D: HUMAN RESOURCES
Authority32
1. State of Human Capital and Skills Development
Staffi ng Profi le
On 31 March 2013 SACAA had a total of 461 employees, 13 of whom were on fi xed- term contracts, the remaining 448 employees were permanently employed.
Staff Headcount
Staff Turnover
The overall staff headcount for the period under review shows a growth of 8.8% from 424 to 461. Turnover in the number of technical staff was 5.8%, which is below the industry benchmark. Interventions have been put in place to ensure the retention of key skills.
During the reporting period, the number of employees that left the employ of the authority has decreased from 50 to 48 employees, due to various reasons such as resignations, contracts ending, retrenchment, retirement, disability and dismissals. Resignations and contracts ending make up the major component of the skills loss.
The graph below indicates Employment Equity in terms of the Race and Gender profi le. The profi le shows that African females account for the largest number of employees, followed by African males.
180
160
140
120
100
80
60
40
20
0
1320
63
163152
1210 25
3
EMPLOYMENT EQUITY: RACE AND GENDER
AfricanMale
ColouredMale
IndianMale
WhiteMale
AfricanFemale
ColouredFemale
Indian Female
White Female
Foreign National
Employment Equity
As the graph above demonstrates, it is worth observing that in relation to the Employment Equity targets, SACAA has achieved Black People representation in both the Middle and Junior management occupational levels. SACAA will continue to use the Employment Equity Plan and other appropriate interventions to address the percentage of Black representation at Senior Management level.
33
Employee Age Analysis
In the light of the accompanying table, one can surmise that a greater age population distribution of the employees at SACAA is skewed towards the younger generation of 44 years and below. Since this group tends to be targeted for poaching and are mostly mobile, strategies have been put in place to ensure that core competencies and talent are nurtured and retained.
EMPLOYEES BY AGE PER DEPARTMENT AS AT 31 MARCH 2013
Division <25 25 to 34 35 to 44 45 to 54 55 to 64 >64 Total Employees
Accident & Incident Investigation 1 8 12 2 1 0 24
Air Safety Infrastructure 1 10 18 8 11 0 48
Air Safety Operations 4 21 33 15 5 1 79
Aircraft Safety 0 43 41 7 3 1 95
Aviation Security 0 8 28 4 1 0 41
Company Secretary 0 2 0 0 0 0 2
Finance 1 14 20 7 2 0 44
Flight Inspection Unit 0 4 2 2 1 0 9
Human Resources 0 4 3 1 0 0 8
Internal Audit 0 3 2 0 0 0 5
Legal 0 2 8 2 0 1 13
Offi ce of the DCA 0 6 7 3 1 0 17
Risk & Compliance 3 29 15 11 6 0 64
Southern Regional Offi ce 0 1 7 2 2 0 12
TOTAL 10 155 196 64 33 3 461
Authority34
Performance Management
Human Resources designed and implemented a strategy which was aimed at ensuring that a high performance culture is embedded within the organisation. To this end, an e-performance management system was implemented. Driving peak performance will continue to be our highest priority as an organisation, which will serve as the basis for ‘pay for performance’ remuneration strategies.
Skills Development
Learning and development continues to be a strategy through which SACAA seeks to create its competitive advantage. A total amount of R14, 417 557.86 was invested in a series of learning and development interventions during 2012/13. 89% of the training budget was focused on technical training so as to enhance the organisation’s operational capabilities. SACAA also offers study assistance to employees who wish to further their studies, including allowing employees to study full-time with contractual obligations.
Human Resources Strategy and Transformation Strategy
The Transformation Strategy was approved by the Board during the last quarter of 2012/13, and the Human Resources Strategy complements it. Delineated below are objectives of the current Human Resources Strategy and transformation pillars included in the approved Transformation Strategy, for ease of reference.
Human Resource Strategy Objectives Transformation Strategy Strategic Pillars
Enhance Total Rewards Strategy
Improve Industrial Relations
Infl uence Industry Transformation
Implement Optimum Manpower Planning
Improve Recruitment and On-boarding Process
Improve Human Resource Division Capacity
BBBEE Transformation
Change Management
Transformation Linked to PMS
Talent Management
Behavioural Attributes
Employee Health and Wellness
In order to encourage healthy lifestyles for SACAA employees, we have contracted Careways to provide our employees and their immediate families with 24-hour access to health and wellness services. The level of service usage by employees is satisfactory and this demonstrates that we are en route towards a healthier and a competitive organisation.
Employee Relations
SACAA values sound and harmonious industrial relations within its workplace. This is the attitude that the organisation has demonstrated in handling all matters relating to industrial relations. The employer, through the signed Collective Bargaining Agreement, continues to engage with unions on employee relations and other related substantive matters and always seeks solutions which are in the best interests of all parties. As a result of these engagements with stakeholders, there is a marked improvement between the trade unions and SACAA and parties will continue to ensure that this harmonious relationship is maintained in the future.
PART E: OPERATIONAL REVIEW
Authority36
Regulatory Compliance and Enforcement
The development of regulations is facilitated and monitored by the Civil Aviation Regulations Committee (CARCom). CARCom is a consultative, statutory body that has been established in terms of section 157 of the Civil Aviation Act, 2009 (Act No. 13 of 2009), to advise the Minister on any proposal with regard to, amongst others, the introduction, amendment or withdrawal of regulations. CARCom comprises the Director of Civil Aviation, the Chairperson of each subcommittee established by CARCom and representatives of the role players within the civil aviation industry as specifi ed in section 157(2) ( c) of the said Act.
CARCom has six subcommittees, namely Air Safety Operations, Aircraft Safety, Air Safety Infrastructure, Aviation Security, General Procedures and Fees. CARCom has a secretariat which consists of certain offi cials from the Legal Division.
The primary role of CARCom is to scrutinise all proposals for amendment, or the introduction of regulations and technical standards, to ensure that they conform to international and domestic standards and to ensure that they are practical and implementable.
During the 2012/2013 fi nancial year period, CARCom held nine scheduled meetings and the subcommittees held 15 meetings. A number of workgroups were also established to attend to certain parts of the Civil Aviation Regulations, 2011, namely Parts 43, 47, 66, 127 and 128.
The table below outlines the proposals tabled at CARCom during the reporting period:
DATES PROPOSAL TABLED
25 April 2012 Airport Slot Coordination Regulations
27 June 2012 Parts 66 Aircraft Maintenance Engineer Licensing ) and 187 (Fees and Charges)
25 July 2012Parts 21 (Certifi cation Procedures for Products and Parts), 34, (Engine Emission Certifi cation), 36, (Noise Certifi cation), 139, (Aerodromes and Heliports) and 187 (Fees and Charges)
29 August 2012 Parts 34 (Engine Emission Certifi cation), 36, (Noise Certifi cation), 61, (Pilot Licensing) and 187 (Fees and Charges)
26 September 2012Parts 1(Defi nitions), 21, (Certifi cation Procedures for Products and Parts), 63,( Flight Engineer Licensing), 66, (Aircraft Maintenance Engineer Licensing),67, (Medical Certifi cation ) and 187 (Fees and Charges)
28 November 2012 Parts 34 (Engine Emission Certifi cation), 36, (Noise Certifi cation), and 187 (Fees and Charges)
30 January 2013 Parts 91 and 92, (Conveyance of Dangerous Goods)
27 February 2013
Parts 1 (Defi nitions), 61, (Pilot Licensing), 63, (Flight Engineer Licensing), 65, (Air Traffi c Service Personnel Licensing), 66, (Aircraft Maintenance Engineer Licensing), 67, (Medical Certifi cation ), 91, (General Aviation and Operating Flight Rules), 92, (Conveyance of Dangerous Goods), 113, (Aviation Pandemic Preparedness) Part 121, (Air Transport operations,-Carriage on Aeroplanes carrying more than 19 passengers or cargo), 127, (Commercial Helicopter Operations: Passengers, Cargo and Mail), 135, (Air Transport Operations, Carriage on Aeroplanes carrying less than 20 passengers or cargo), 139, (Aerodromes and Heliports), 145, (Aircraft Maintenance Organisations), and 172 (Airspace and Air traffi c Services)
27 March 2013
Parts 1 (Defi nitions, 43, (General Maintenance Rules), 47, (Registration and Marking), 60, (Flight Simulator Training and Flight Training Simulator Devices), 91, (General Aviation and Operating Flight Rules), 93, (Corporate Operations), 121, (Air Transport Operations, Carriage on Aeroplanes carrying more than 19 passengers or cargo) 127, (Commercial Helicopter Operations: Passengers, Cargo and Mail) 128 (Helicopter Aerial Work Operations), 129, (Foreign Air Operations), 135, (Air Transport Operations, Carriage on Aeroplanes carrying less than 20 passengers or cargo), 145, (Aircraft Maintenance Organisations), 175, (Aeronautical Information Services) and 187 (Fees and Charges)
37
The following is reported in respect of Regulation Development:
• The Civil Aviation Regulations, 2011 (CAR, 2011) were promulgated on 1 June 2012 and came into operation on 1 August 2012.
• The Airport Slot Coordination Regulations, 2012 were promulgated on 22 February 2013 and came into operation on the same date. This regulation is administered by the Department of Transport.
• The CAR, 2011 repealed the CAR, 1997 as a whole. The CAR, 2011 incorporated a number of newly created Parts in order to ensure the implementation of more effective ways of technically regulating the industry in terms of the objectives of the Authority. The newly introduced Parts are Parts 44, (Maintenance Rules, Non-Type Certifi cated Aircraft), 68, (Glider Pilot’s Licence), 69, (Free Balloon Pilot’s Licence) 111, (Aviation Security), 112, (Aircraft Passenger Identifi cation), 136, (Air Transport Operations - Commercial Operation of Free Balloons), 140, (Safety Management System) and 173, (Flight Procedure Design).
• The main purpose of revisiting the Civil Aviation Regulations is to inter alia, insert a number of new Parts in order to ensure that the SACAA can properly comply with its mandate as a regulator; to comply with the latest International Civil Aviation Organisation requirements or Annexes; to remove ambiguous provisions and to make the Regulations effi cient and effective.
• The associated Civil Aviation Technical Standards in support of the CAR, 2011 also came into operation on 1 August 2012 and have undergone a revision exercise before being approved and issued by the Director of Civil Aviation.
• The proposed First and Second amendment of the Civil Aviation Regulations, 2011 were submitted to the Department of Transport for approval.
Projects related to Regulation Development
CAR Parts 108 (Air Cargo Security), 109 (Aviation Security Training Organisations) and 110 (Aviation Security Screener Certification)
The process of amending the above regulation and technical standards is on-going; with Part 109 regulations being accepted by the Civil Aviation Regulations Committee (CARCom) subject to endorsement of the Technical Standards by the AvSec Subcommittee of CARCom.
CAR Parts 21, 43, 47, 66, 145
A number of workgroups under the auspices of the Aircraft Safety Subcommittee which amongst others do research and bench-marking services have been established and each workgroup is still in the process of developing appropriate changes to the particular Parts. Workgroups have been established for Parts 21, (Certifi cation Procedures for Products and Parts), 43, (General Maintenance Rules), 47, (Registration and Marking), 66, (Aircraft Maintenance Engineer Licence), and 145, (Aircraft Maintenance Organisations).
CAR Parts 60, 91, 93, 127/128, 129
Proposals relating to Parts 60, 93, 127/128 and 129 of the CAR and the associated Civil Aviation Technical Standards (CATS) were recommended by the Civil Aviation Regulation Committee (CARCom) to be published for comment, before CARCom makes an informed decision.
The amendments to CAR Part 91.07.4 (helicopter landings and take-offs) and CAR Part 91.04.3 (aircraft operating lights) were approved by CARCom and is to be published as part of the fi rst amendment of the CAR, 2011 early in the next fi nancial year.
CAR Parts 61:
All licensing and application forms were replaced with effect from 1 August 2012 as a result of a change in regulation numbering in CAR 2011, Part 61.
A proposal to amend Part 61 CATS was submitted to CARCom in November 2012 and was published for public comment. No comment was received on the proposals. CARCom of 30 January 2013 therefore recommended the submission of these amendments for approval and publication. These amendments included completely new theoretical knowledge syllabi for the private, commercial and airline transport pilot’s licence examinations. These amendments have been approved by the Acting Director of Civil Aviation.
Authority38
CAR Parts 64, 67:
A proposal to amend Regulation 67.00.04 (4, 5 and 6) was accepted by CARCom and was published for public comment. This amendment was proposed to incorporate ICAO’s requirement of periodic auditing of the competence of the designated aviation medical examiners.
A proposal to amend CATS 64.02.2 was accepted by CARCom and was published for public comment. This amendment was proposed with respect to the training of cabin crew on identifi cation and management of suspected communicable diseases as prescribed in Annex 9 of ICAO.
A proposal to amend CAR 113 was accepted by CARCom and was published for public comment. This amendment was proposed to incorporate ICAO’s Aviation Pandemic Preparedness Plan in preparation for communicable disease of international concern or those that pose public health concerns. This requirement is prescribed in ICAO Annex 9.
A proposal to amend CAR 67.00.1 and 67.00.13 to incorporate ICAO’s terminology, by replacing ‘Medical Offi cers’ with ‘Medical Assessors’ was accepted by CARCom and was published for public comment.
A proposal to amend CAR 67.00.1 and 67.00.13 67 and CATS 67.00.10 regarding medical validations was accepted by CARCom and was published for public comment. The CATS submission included the insertion of the Oncology Protocol. This included the following cancers: Bladder, Colorectal, Breast, Testicular, Melanoma, Renal, Prostate and Oesophageal. The amendment of CATS 67 also included the Chest X-Ray and the Lung Function Test.
Approved Aviation Medicine Protocols - Technical Standards
The various protocols dealing with certain medical conditions which have to be taken into account when issuing medical certifi cates for pilots, air traffi c controllers and cabin crew members, were approved. The said protocols relate to persons diagnosed with:
(a) Mood disorders (Mood Disorder Depression Protocol).
(b) Cancer (Oncology Protocol).
(c) Pulmonary tuberculosis (Pulmonary Tuberculosis Protocol).
Furthermore, protocols relating to a development disorder (Single Kidney Protocol) and to assessment of respiratory systems, especially where an asymptomatic pulmonary disease can be expected.
The aim of implementing protocols is to set standards in order to mitigate any risks for aviation personnel with medical conditions.
39
Aviation Regulation Enforcement
• The Enforcement unit handled 83 cases in the 2012/2013 fi nancial year, which included the suspension or downgrading of licences, certifi cates or approvals, the issuing of penalty notices and warning letters and the withdrawal of a medical certifi cate.
• Forty-two Pilot’s Licence holders were issued with penalty notices to the total sum of R505 000.00 ranging from not following ATC orders, fl ying with expired Authority to Fly permits or licences, failing to report an accident, repairing an aircraft without being appropriately licensed and fl ying with dual registration markings.
• Two Pilot’s Licence holders were disqualifi ed from writing examinations for 12 months and 18 months respectively.
• Two criminal cases were reported to the South African Police Service.
• Three Air Operating Certifi cate holders were issued with penalty notices to the total sum of R88 000.00.
• Three Aircraft Maintenance Organisations were suspended.
• Four Aircraft Maintenance Organisations were issued with penalty notices to the total sum of R128 000.00
• One Air Traffi c Controller’s licence was suspended for a period of 24 months.
• Two Aviation Training Schools received suspended sentences for fi ve years and six months respectively.
• One Aircraft Maintenance Engineer’s aircraft type ratings were suspended.
• Two Aircraft Maintenance Engineers were issued with penalty notices to the total sum of R20 000.00.
• One Aviation Security Regulated Agent was issued with a penalty notice to the total sum of R24 000.00
• One Aviation Security Regulated Agent’s approval was suspended.
• Two Airport Licence holders were issued with warning letters.
Safety Indicators and the Investigation of Aircraft Accidents
Accident and Incident Investigation Division (AIID)
The AIID directs signifi cant attention to identifying systemic failures in aviation, that have the potential to result in catastrophic accidents and are often characterised by large numbers of fatalities and serious injuries.
In addition, the AIID has observed that many occurrences involve the repetition of past occurrences, where the contributing factors are similar and the safety issues are well known. In these circumstances, the likely safety benefi ts and lessons gained from an investigation may not always justify allocating signifi cant resources. Most of these occurrences are captured on the Eccairs data base for trends monitoring and data analysis. Furthermore, there is often as much or more to be learned from serious incidents or patterns of incidents as there is from accidents, and where appropriate, the AIID will give priority to these types of investigations.
Therefore it is important for all reporters to provide as much detail as possible when reporting an occurrence. There is a broad hierarchy for aviation (as indicated on the chart published on the website), which refl ects the priorities described above, and which must be taken into account when deciding whether to investigate and when determining the level of investigation response.
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Aviation Safety
The number of accidents has increased for the 2012/13 fi nancial year. 107 accidents were reported in the previous fi nancial year and 130 for this fi nancial year. This indicates that there has been an increase of 17.8 % in reported accidents. According to the reported accidents during the 2012/2013 fi nancial year, engine failures and loss of control were the main causes of accidents, followed by mechanical failure. The weather also played a major role in some of the accidents and incidents that were reported.
There has furthermore been an increase in the reported fatal accidents. The industry has seen an increase of 25 % compared to the previous fi nancial year. However, it must be noted that there has been a 7 % decrease in reported fatalities. The increase in reporting might be due to the increase in our aircraft register or fl ying activities, therefore there is no reason for concern; in fact, we encourage the industry to report accidents and incidents so that we can have accurate statistics. AIID is planning to conduct workshops together with Communications and RAASA; addressing the causal factors and contributing factors of the last fi nancial year.
Accident Statistics
Accidents
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total
2010/11 6 9 8 17 12 12 17 15 9 5 15 12 137
2011/12 12 6 8 10 10 10 6 10 8 9 11 7 107
2012/13 14 10 6 10 12 7 16 10 8 15 12 10 130
Monthly Rate of Fatal Aviation Accidents
In terms of fatal accidents, the SACAA noted an increase of 25% as compared to the previous fi nancial year. During this reporting period, there were 20 fatal accidents compared to 15 during the previous fi nancial year, which represents an increase of 25 %.
Fatal Accidents
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total
2010/11 2 2 0 2 3 1 0 2 0 2 2 0 16
2011/12 1 1 4 1 1 0 0 2 2 1 1 1 15
2012/13 4 3 1 2 2 1 1 1 0 3 1 1 20
Monthly Rate of Fatalities
A total of 31 fatalities were recorded in the period under review. During the previous fi nancial year, a total of 33 fatalities were recorded, which translates to a decrease of 6 %.
Fatalities
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total
2010/11 2 3 0 4 7 1 0 3 0 2 10 0 32
2011/12 1 2 4 2 13 0 0 2 3 2 1 3 33
2012/13 5 5 1 2 3 3 2 2 0 5 1 2 31
Serious Incidents
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total
2010/11 5 15 2 4 5 5 5 2 1 3 9 2 58
2011/12 3 6 5 5 7 3 4 8 4 5 11 7 68
2012/13 7 15 4 4 4 2 1 9 6 0 6 6 64
The Advisory Safety Panel (ASP) has continued with its task of reviewing accident reports, a function that has resulted in tremendous improvement of the accident reports in terms of depth over the years. The valuable comments made by the ASP have been considered
41
and in most cases have been implemented by the technical departments.
The table below gives the fi gures regarding the work of the ASP in reviewing accident reports:
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total
Reports Tabled 15 0 9 0 18 20 10 9 0 13 16 0 110
Reports Approved 14 0 8 0 14 15 9 8 0 8 8 0 84
Reports ref Back 1 0 1 0 3 5 1 1 0 5 8 0 25
Safety Recommendations
12 0 2 0 0 3 6 0 0 7 1 0 31
All non-mandatory incidents are reported via the central reporting system. During the period under review, a total of 3240 incidents were received through the system. An internal workshop was also held during this time to ensure buy-in from the organisation, thereby improving the effi ciency of the system. Futhermore, a CSSRS committee was formed to deal with challenges. The committee consists of representives from the Aircraft Safety, Airworthiness, Airports, Internal Audit, Legal and Security departments.
Central Safety and Security Reporting System
The central reporting system, which captures all non-mandatory incidents, received a total of 2 689 incidents. The Central Safety and Security Reporting System (CSSRS) team, with the assistance of the Corporate Communications and Marketing department, held an internal workshop with the SACAA executive and senior managers to improve the effi ciency of the system. A CSSRS committee comprising of representatives from Aircraft Safety, Airworthiness, Airports, Internal Audit, Legal, Accidents and Security departments was formed to deal with the challenges and reported incidents.
Through this system, the department has made the following safety recommendations to the DCA:
(I) Laser beams An on-going campaign on laser beams is in progress and is being facilitated by the CSSRS team and the Corporate Communications and Marketing department. This campaign is aimed at educating the public about the dangers of laser beams.
(II) Runway incursions Workshops were conducted at airports by the relevant SACAA departments to address the issue of runway incursions.
(III) Airspace infringement A memorandum was submitted to the DCA, recommending that an in-depth research be conducted to identify the causal factors behind airspace infringements and to make safety recommendations. The graph on the next page indicates the airspace infringements reported for the fi nancial year.
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A recommendation was made that an in-depth research be conducted to identify causal factors behind airspace infringements and to make safety recommendations. Consequently it was agreed that a reduction in airspace infringement plan with specifi c targets would be formulated.
The graph below indicates the airspace infringements reported for the fi nancial year.
TYPE OF INCIDENT NUMBER OF OCCURENCE TYPE OF INCIDENT 2 NUMBER OF OCCURENCE 2
Missing Firearm 1 Abandoned Security Post 1
Stowaway 1 Aiding and Abetting 1
Illegal gathering 2 Alleged Passenger Facilitation 1
Unlawful Access 11 Failure to Resolve 1
Theft 3 Fraudulent Operation 1
Refusal to be searched 1 Industrial Action (Strike) 1
Protest Action 1 Money Laundering 1
System Failure 3 Passenger Misled 1
Poss Murder 1 Procedure Failure 1
Prohibited Item 1 Refusal to cooperate with Aircrew 1
Bomb Threat 11 Screening Failure 2
Arson 1 Shine Laser Beam 1
Armed Robbery 1 Undeclared Firearm 1
Security Breach 1 Unruly Passenger 2
Unlawful Testing 1
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Current Status of Centralised Safety and Security Reporting System (CSSRS):
A CSSRS Database was developed with a unique control number for each incident. The CSSRS committee members have access to the database to monitor whether investigations are required. An incident investigator was appointed to investigate some of the reported incidents. A total of 2 689 incident reports were registered on the CSSRS Register for the past fi nancial year. The number of incident reports was compiled as follows:
0
100
200
300
400
500
600
700
800
900
1000
Apr- Jun Jul- Sep Oct- Dec Apr -Mar
Reported incidents 01 April 2012 - 31 March 2013
12
10
8
6
4
2
0
Thef
t
Stow
away
Poss
Mur
der
Syste
m F
ailu
re
Unl
awfu
l Acc
ess
Miss
ing
Fire
arm
Proh
ibite
d Ite
m
Refu
sal f
or S
earc
h
Pass
enge
r Misl
ed
Unr
uly
Pass
enge
r
Proc
edur
e Fa
ilure
Aid
ing
and
Abe
tting
Frau
dule
nt O
pera
tion
Aba
ndon
ed S
ecur
ity P
ost
Refu
sal t
o co
oper
ate
with
Airc
rew
Bom
b Th
reat
TOTAL
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Reported Incidents per Type
The reports are classifi ed in terms of the occurrences. The graph below indicates the most frequent occurrences. It is evident from the graph that technical, bird/wildlife strikes and airspace infringement incidents are predominant.
000
800
600
400
200
0
TYPE OF INCIDENTS REPORTED01 APRIL - 2012 TO 31 MARCH 2013
Tech
nica
l
Unl
awfu
l
Wea
ther
Bird
/Wild
life
Abo
rted
T/O
ff
Co-
ordi
natio
n
Pilo
t
Runa
way
Loss
of
Con
trol
Gro
und
TCA
S
Faci
lity
Acc
iden
t
Taxi
way
Proc
edur
al
Total
1 Analysis of the Incident Reports was divided into the following main categories:
(a) Technical - aircraft airworthiness etc.
(b) Operations – level bust, loss of separation, emergency/forced precautionary landings, loss of control, go-around or missed approach etc.
(c) Air Traffi c Service – ATC procedural errors, breakdown of communication etc.
(d) Security – unlawful interference, laser beams etc.
(e) Environment – bird/wildlife, weather etc.
(f) Aerodrome and airways facilities – navigational aids, markings and signs etc.
Furthermore, the technical reports were broken down as follows:
TECHNICAL INCIDENTS APRIL 2012 - MARCH 2013
ENGINE/PROPULSION
25%SYSTEM
47%AIRFRAME
28%
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Confi dential Aviation Hazard Reporting System (CAHRS)
The Confi dential Aviation Hazard Reporting System (CAHRS) has been in existence for the local South African aviation industry since September 2005. The intention of introducing the CAHRS was to comply with the State Safety Programme and Safety Management System (SMS) requirement to have hazards reported to the SACAA.
Current Status of Confi dential Hazard Reporting System (CAHRS)
The CAHRS database had to be developed by using information that had been manually recorded on the CAHRS Register File. To date, a total of 237 CAHRS were registered on the CAHRS register. The CAHRS reports were compiled as follows:
CAHRS INCIDENTS REPORTED FROM
2008 UNTIL 30 APRIL 2013
YEAR
2008
YEAR
2009
11
2425
41
69
84
YEAR
2010
YEAR
2011
YEAR
2012
YEAR
2013
0
10
20
30
40
50
60
70
80
90
The Division has launched a promotional campaign to promote and inform the industry about CSSRS / CAHRS. This is being done in partnership with the Communications department, through airshows / fl y-ins and also the operators who require specifi c presentations which suit their operations. Safety presentations have already been done in Mpumalanga and Durban. The decline in reported incidents is due to the introduction of the central safety and security reporting system (CSSRS) in 2010. The industry could be confusing the CSSRS, CAHRS and Hotline reporting which resides within the internal audit division. The Division started collaborating with internal audit and enforcement to share common information which assists in channelling the right information to the relevant departments. The Division also plans to publish safety information on the website, as is being done with the accidents reports, with the aim to encourage the industry to report, as they will be given feedback.
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State of Aircraft Safety
The Aircraft Safety Division is responsible for the registration and safety oversight of aircraft. This entails a number of functions to ensure the safety of aviators and the fl ying public, namely;
The determination of safety standards and the development of safety regulations for:
• Aircraft Design,
• Aircraft Manufacturing,
• Aircraft Registration,
• Unmanned Aircraft Systems,
• Aircraft Maintenance Engineers,
• Aircraft Maintenance, and
• Aircraft Technical Training.
The Division further has a system in place by means of which an operator can report malfunctions, failures and defects. These malfunctions, failures or defects are investigated with aircraft/aircraft part manufacturers; whereafter corrective action is taken to prevent a recurrent safety risk. This system ensures the highest levels of aircraft safety for aviators in the country.
The Division achieved its deliverables for the fi nancial year and ensured that high levels of aviation safety in the country were improved upon. This was achieved through the hard work of staff members and the involvement of the industry through working groups to ensure the progression of aircraft safety regulation. Efforts were also further directed towards ensuring ICAO compliance through a review of ICAO requirements and South African implemented standards.
During 2012 the division certifi ed operators to operate on Performance-Based Navigation routes. This development provides operators with optimised aircraft capability, while adhering to precise, modern, economic and more environmentally-friendly routes.
Regulations were further developed in the area of Safety Management Systems for both Aircraft Maintenance Organisations and Aviation Training Organisations; this development signifi cantly advances the progression of aviation safety with a shift from reactive to proactive analysis. Aircraft safety in the country has evolved to the point where there is no longer a ‘common cause’ for airplane accidents. Aircraft Safety is turning to predictive systems that anticipate aircraft accidents. These systems gather data from aircraft operations and maintenance. Trends which emerge are then identifi ed. As catastrophic events continue to be an unacceptable reality, this new approach focuses on risk, system design, and human factors to reduce aircraft accidents. In essence, the goal is to identify and mitigate risks affecting the safety of the aircraft before accidents occur.
The Division also focused its continuous improvement efforts towards the evaluation of repairs and modifi cations proposed by manufacturers or operators, to correct defi ciencies in aircraft already in service or to enhance their usefulness.
The Division comprises two departments, as follows:
The Aircraft Certifi cation Department (ACD) deals with type certifi cation, the evaluation of repairs and modifi cations proposed by manufacturers or operators to correct defi ciencies in aircraft already in service or to enhance their usefulness, and continuing airworthiness of type certifi cated products.
The functions of the Aircraft Airworthiness Department (A/W) include certifi cation/approval of aircraft maintenance organisations and aviation training organisations (maintenance). This includes the issuance and renewal of the Certifi cate of Airworthiness, licensing of aircraft maintenance personnel; incident investigation and development of aeronautical information circulars, guidance and regulations for continiung airworthiness as well as the promotion of aviation safety. Airworthiness, in collaboration with Flight Operations, certifi es/approves Air Operators within the South African border; the Department further conducts a continuous oversight function relating to all South African approval holders.
47
Aircraft Safety Surveillance
Aircraft Certifi cation
The South African Civil Aviation Register (SACAR)
Aircraft Registration - End March 2013
90
80
70
60
50
40
30
20
10
0
Target
Baseline
Actual
Regi
stra
tions
The graph above shows statistics pertaining to the registration of aircraft in the country. During the year under review, a total of 276 new aircraft registrations were projected and 432 were recorded as being newly registered. A total number of 121 aircraft were deregistered during the period under review. This resulted in a net positive addition of 311 aircraft being added to the SACAR during this period. At the end of the reporting period there was a total of11 801 aircraft registered in South Africa. This net positive addition of aircraft being registered in South Africa is an indicator of the development of aviation in the country.
Design Organisations
Design Organisations - End March 20133.5
3
2.5
2
1.5
1
0.5
0
Target
Baseline
Actual
Insp
ectio
ns
Authority48
The graph on the previous page shows that during the year under review, 9 audits were scheduled and conducted at Design Organisations. An increase in the number of Design Organisation applications were received during the year under review, showing signs of positive growth in the aircraft design sector in the country. Amongst other benefi ts to the aviation industry, a constantly growing number of Design Organisations provides a platform for job opportunities to engineering graduates in the country and further allows for greater development of skills.
Manufacturing Organisations
Manufacturing Organisations Inspection - End March 2013
6
5
4
3
2
1
0
Target
Baseline
Actual
Insp
ectio
ns
TaTTaTaTTTTTaTTaTaTaTTaTaTaTTaaaaaTaTaaTaTaTaaaaaaaaTaaTaTaTTTaaaaaaaaTaTaTTaaTaTaaaaaTaaTaTTTTaaaaaTaTTTaaaTaTaTaaaTaaTaTTTaaTTaTaaaaaaTaT rgrgrrgrrgrrgggrgrggrgrgrrgrgrgrrggrggrgggrrrgrgrrrgggrgrggrgrrrrggrgrgrgrgrgrgrrgrrrrgrggrrrrrrrgrrrrrrgggrgrrggrrrgggggrrrrrrrrgggggggggggetetteteteteeteeteeeeetetetettteeteeeeteteeteeeeeeeeetteteeeeeeeeeeeeeeeeeteteeeeeeeeeteeetee
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AcAcAcAcAcAcAcAcAAAcAcAcAcAAcAcAcAAcAAcAAcAcAAAAcAcAcAAcAAAcAcAcAAcAAAcAAcAcAAcAcAccccccAcccAAAAAAcAcAcAcAcccccAAcAAcAAcAAcAcccccccAAAAAAccAAAccAAAcAAAcAAAAAcAAcccAcAAAcAAccAAAAAccccctututututututttttuttutututttututututttttutututttuuuututtuuuuuuttuuuuuuttuuuutuuuuuuuuuuuuuuaalalalalalalaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaa
The graph above shows that during the year under review, a total of 28 audits were performed at Aircraft Manufacturing Organisations in the country. The routine auditing of Manufacturing Organisations in the country determines the level of compliance during aircraft manufacturing processes at each Manufacturing Organisation. The highest levels of production standards are required from aircraft manufacturers.
Aircraft Airworthiness
The graphs on the opposite page indicate the activities conducted by the Airworthiness department during the 2011/12 Fiscal year. Annual plans are developed at the start of each fi nancial year; however activities are primarily demand-driven. These graphs represent the planned and non-planned activities. Planned activities are renewal and scheduled surveillance audits. Non-scheduled implies amendment, certifi cation of new organisations and follow-up of ad-hoc audits based on noticed trends. There graphs included both domestic and international organisations.
49
Part 121 (Aircraft Maintenance Organisations)
Airworthiness Part 121 - Large Aircraft
Insp
ectio
ns
45
40
35
30
25
20
15
10
5
0
Target
Baseline
Actual
The graph above shows that during the year under review, a total of 192 audits were performed at Part 121 Aircraft Maintenance Organisations in the country. The verifi cation of standards of maintenance performed by these organisations is an important factor for the safety of commercial aviation and the safety of the fl ying public in the country. The varying number of monthly audits is largely the result of the corresponding expiry dates of approvals granted.
Part 127 (Aircraft Maintenance Organisations)
Airworthiness Part 127 - Helicopters
16
14
12
10
8
6
4
2
0
Target
Baseline
Actual
Insp
ectio
ns
The graph above shows that during the year under review, a total of 77 audits were performed at Part 127 Aircraft Maintenance Organisations in the country. The verifi cation of standards of maintenance performed by these organisations is an important factor for the safety of helicopter aviators in the country. The varying number of monthly audits is largely the result of the corresponding expiry dates of approvals granted.
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Part 135 (Aircraft Maintenance Organisations)
Airworthiness Part 135 - General Aviation
30
25
20
15
10
5
0
Target
Baseline
Actual
Insp
ectio
ns
The graph above shows that during the year under review, a total of 216 audits were performed at Part 135 Aircraft Maintenance Organisations in the country. The verifi cation of standards of maintenance performed by these organisations is an important factor for the safety of fi xed wing general aviation in the country. The varying number of monthly audits is largely the result of the corresponding expiry dates of approvals granted.
Part 66 (Aircraft Maintenance Engineer Licences)
Airworthiness Part 66 - 2012200
180
160
140
120
100
80
60
40
20
0
Target
Baseline
Actual
Insp
ectio
ns
The graph above shows the Division’s activity in the area of Aircraft Maintenance Engineer Licences. The Division ensures aviation safety by determining appropriate standards for persons performing maintenance on aircraft. These Aircraft Maintenance Engineers play a key role in ensuring that an aircraft adheres to its original manufacturer’s recommendations for safe operation throughout its time in service. Defects identifi ed in this regard are also communicated to the SACAA for corrective action. The establishment of a baseline will take place in the next fi nancial year.
51
Part 145 NTCA (Aircraft Maintenance Organisations)
Airworthiness Part 145 - NTCA
7
6
5
4
3
2
1
0
Target
Baseline
Actual
Insp
ectio
ns
The graph above shows that during the year under review, a total of 23 audits were performed at NTCA Aircraft Maintenance Organisations in the country. These organisations are responsible for performing maintenance on NTCA which are used by Aviation Training Organisations for pilot training. The varying number of monthly audits is largely the result of the corresponding expiry dates of approvals granted.
Part 141 Aviation Training Organisations (Aircraft Maintenance)
Airworthiness Part 141 - ATO AME12
10
8
6
4
2
0
Target
Baseline
Actual
Insp
ectio
ns
The graph above shows that during the year under review, a total of 61 audits were performed at Part 141 Aircraft Training Organisations in the country. The verifi cation of standards of training performed by these organisations is an important factor for aviation safety. These organisations are entrusted with the task of training Aircraft Maintenance Engineers in the country to perform maintenance on aircraft in the safest manner. The varying number of monthly audits is largely the result of the corresponding expiry dates of approvals granted.
Authority52
Aircraft Safety Highlights
1 Most Procedures and Technical Guidance Material were reviewed and improved upon.
2 Numerous assistance missions were performed with SADC countries.
3 The turnaround time for modifi cation applications has been further improved to cater for the requirements of the industry.
4 The Division conducted benchmarking in areas of design organisation, modifi cation and experimental approvals in New Zealand and Australia. This exercise assists the SACAA to gauge and improve upon its service offering to the aviation industry.
5 Hosting of the JARUS Working Group meeting in South Africa. This Working Group is comprised of international experts in the area of Unmanned Aircraft Systems (UAS). The purpose of the Working Group is to develop regulations to allow the safe integration of UAS into commercial airspace.
6 Inspectorate skills were developed signifi cantly to improve the level of service to the aviation industry.
State of Aviation Security
One of the key functions of the SACAA is to oversee aviation security in South Africa and this role is fulfi lled by the Aviation Security (AvSec) Division. This mandate relates specifi cally to airports, air operators, cargo, the safe transportation of dangerous goods as well as aviation security training organisations and aviation security personnel.
National Aviation Security Programme (NASP)
Following the approval of the NASP by the Minister of Transport, the AvSec division played an active role in guiding the industry in adjusting their security plans to be in line with the revised NASP. As a way of offering support and advocating compliance, guidelines were developed and workshops conducted with the industry on the Programme, leading up the continuous process of approval.
The restricted website page housing the approved NASP was reactivated at the Department of Transport (DoT), and user names together with passwords, allowing relevant industry players access to the document, were issued in order to facilitate the process of amendment and the approval of security plans.
Aviation Security Surveillance
This Division is responsible for monitoring compliance in the industry and that is done by way of various activities, ranging from inspections, audits, covert security tests, screener certifi cation and accreditation. The stats and graphs on the opposite page depict initial inspections, licence renewals, ad-hoc inspections, follow-up inspections, ATO renewals, screener certifi cation and ASTO approvals.
53
Below are the graphs depicting the activities that were planned against what was achieved:
Aviation Security Surveillance
Airports and Airlines
Airports & Airlines Oversight Statistics as at 31 March 2013353025201510
50
Target
Baseline
Actual
The above graph depicts the surveillance work done on designated airports and scheduled airlines over the period under review. The surveillance activity was based on the Master Surveillance Plan as approved at the beginning of the fi nancial year. The plan was for 198 audits and inspections to be conducted, however a total of 207 were conducted, indicating a positive variance of 4.6%.
Cargo Security
Cargo Security - Inspections as at March 201360
50
40
30
20
10
0
Target
Baseline
Actual
The above graph depicts the surveillance work done on Regulated Cargo Agents over the period under review. The surveillance activity was based on the Master Surveillance Plan as approved at the beginning of the fi nancial year. The plan was for 338 audits and inspections to be conducted, however a total of 344 were conducted, indicating a positive variance of 1.8%.
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Dangerous Goods
Dangerous Goods - Inspections as at March 201380706050403020100
Target
Baseline
Actual
The above graph depicts the surveillance work done by the Dangerous Goods Section over the period under review. The work of this section comprises inspections on airports, cargo agents as well as airlines. The surveillance activity was based on the Master Surveillance Plan as approved at the beginning of the fi nancial year. The plan was for 381 audits and inspections to be conducted, however a total of 393 were conducted, indicating a positive variance of 3.1%.
Training & Certifi cation
TRAINING AND CERTIFICATION AUDITS, INSPECTIONS ANDSITE VISITS AS AT 31 March 2013
70
60
50
40
30
20
10
0
Target
Baseline
Actual
The above graph depicts the surveillance work done by the Training and Certifi cation Department over the period under review. The work of this department comprises inspections and audits conducted on screening functions performed at airports and Regulated Cargo Agents. The department also oversees the activities of Aviation Security Training Organisations. The surveillance activity was based on the Master Surveillance Plan as approved at the beginning of the fi nancial year. The plan was for 327 audits and inspections to be conducted, however a total of 281 were conducted, indicating a negative variance of 14%.
Aviation Security Highlights Equipment Evaluation
During the month of August 2012, AvSec embarked on evaluation of the existing cargo screening equipment utilised by Regulated Cargo Agents at O.R. Tambo International Airport, in line with Part 108 requirements. The aim of the exercise was to ensure that the equipment was still in compliance with the latest security standards, thus ensuring continued effectiveness of the security controls applied.
55
Major Events
The airports affected by various events such as the Africa Olympics 2012, the AFCON Soccer Tournament and BRICS Summit were visited to evaluate and monitor the implementation of approved Security Operational Plans. No security incidents or breaches were reported.
Aviation Security Tests
Covert security tests were conducted in line with the Test Programme, geared to test the effectiveness of security systems at airports, airlines and cargo operators respectively. In areas where vulnerabilities were identifi ed, corrective measures were implemented immediately in order to ensure that a high level of security was maintained.
State of Air Safety Operations
The objectives of the Air Safety Operations division are:
• Regulatory compliance and safety oversight of all Air Operators, Aviation Training Organisations, Designated Flight Examiners, Designated Aviation Medical Examiners and Cabin Designated Examiners.
• Maintenance of examinations, Testing Standards, and Aviation Medical Standards for South African Aviation Personnel and ensuring regulatory compliance to these standards.
• Issuing of Air Operator Certifi cates (AOCs) and Aviation Training Organisation (ATO) approvals.
• Ensuring that non-compliances are addressed and appropriate corrective actions are taken.
Activities of the Air Safety Operations Division include the following:
• Scheduled annual inspections and audits
• Ad-hoc surveillance inspections
• Non-compliance follow-up inspections
• Oversight of Designated Examiners
• Enhancing Civil Aviation Regulations
• Advising the Air Service Licensing Councils on aviation licensing issues
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Air Safety Operations Surveillance
Flight Operations Annual Renewal Audits – Per Unit
PART 121 PART 135 PART 127 CABIN SAFETY PART 141
Target
Baseline
Actual
250
200
150
100
50
0
Part 121 Part 135 Part 127 Cabin SafetyPart 141
(ATOs)
Target
(Planned April 2012 - March 2013)58 158 87 62 224
Actual
(Completed April 2012 - March 2013)39 166 96 52 202
Baseline
(Completed April 2011 - March 2012) 61 147 88 52 210
% of total AOCs/ATOs completed to date 67% 105% 110% 84% 92%
Notes:
1 The % of total AOCs/ATOs completed refers to completed inspections as a percentage of the total number of Air Operator Certificates (AOCs) or Aviation Training Organisations (ATOs) of the specified Part on the Master Surveillance Plan for the financial year.
2 The adjusted figure for the percentage of Part 121 AOCs completed for the full year would be 103% because there has been a dramatic decrease in the number of Part 121 operators reported by the Flight Operations Department, from 58 to 38. This is as a result of the change to the threshold of Part 121 aircraft from 5700 kg MTOW to above 19 passenger seats, or above 8618 kg MTOW for cargo aircraft. This was brought about by the CAR 2011, which became effective in August 2012.
Flight Operations Overall Annual Renewal Audits – Air Operator Certifi cates (AOCs)
The Flight Operations Department achieved 99% of the number of planned AOC renewal audits. Each operator is subjected to one annual renewal audit and the planning requires an estimate of the number of operators that will be active during the fi nancial year. It was estimated that 303 operators would be active during the fi nancial year, and the number that was active and therefore audited was 301.
57
Flight Operations Overall Annual Renewal Audits – Air Operator Certifi cates (AOCs)
Baseline
Target
Actual
40
35
30
25
20
15
10
5
0Apr May June July Aug Sep Oct Nov Dec Jan Feb MarA M l A N b M
Apr May Jun July Aug Sep Oct Nov Dec Jan Feb Mar
Target
(Planned Apr 2012 – Mar 13)32 20 22 13 28 27 28 34 19 22 26 32
Actual
(Completed April 2012 - Mar 13)21 28 24 28 23 24 29 35 13 18 20 38
Baseline
(Completed Apr 2011 – Mar 12)31 20 22 12 30 32 29 35 18 20 20 37
% of total completed to date 8% 18% 26% 36% 44% 53% 63% 70% 74% 80% 87% 99%
The comparative fi gure in the previous fi nancial year was 309 operators active and audited.
Flight Operations Overall Annual Renewal Audits – Approved Training Organisations (ATOs)
Baseline
Target
Actual
40
35
30
25
20
15
10
5
0Apr May June July Aug Sep Oct Nov Dec Jan Feb MarAAAAAAA MMMMMM l AAAAA NNNNNNNN bbbb MMMMMM
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
TargetPlanned Apr 12 – Mar 13
17 9 31 21 23 10 18 21 13 20 28 13
ActualCompleted Apr 12 - Mar 13
13 24 30 19 10 11 16 22 15 21 15 9
BaselineCompleted Apr 11 – Mar 12
14 11 37 23 35 23 12 17 12 12 13 5
% of total completed to date 6% 17% 30% 38% 43% 48% 55% 64% 71% 81% 88% 92%
Notes:
Each ATO is subjected to one annual renewal audit and the planning requires an estimate of the number of operators that will be active during the financial year. It was estimated that 224 ATOs would be active during the financial year, whereas the number that were active and therefore audited was 205. The comparative figure in the previous financial year was 217 ATOs active and audited.
Authority58
Aviation Personnel Standards
Designated Flight Examiners (DFE) and Cabin Designated Examiners (CDE) – Oversight Programme
The Civil Aviation Regulations, Part 61, require that a DFE and a CDE, prior to initial designation or re-designation and during the year of designation undergo oversight by an authorised offi cer during the commission of a skills test. This is for the purpose of monitoring the standard of skills tests performed.
120
100
80
60
40
20
0AIRLINE NON
SCHEDULEDGENERALAVIATION
HELICOPTER CABIN CREW
Number of DFEs For the period
Planned progressive
Number completed to date
Notes:
1 Oversight is demand-driven – oversight is only requested by the DFE/CDE if he/she intends applying for re-designation in the following year and if he/she has been approached for a skills test that would be suitable for oversight – he/she then applies for oversight to be conducted.
2 79% of the planned number of DFEs were overseen for the 2012/2013 period. This is as the result of fewer than expected DFEs requesting oversight and therefore being eligible for reappointment in the following financial year.
3 98% of the current CDEs were overseen for the 2012/2013 period.
4 DFEs and CDEs who did not meet the requirements for re-designation, including oversight, by 31 March 2013 were not designated for the period 1 April 2013 to 31 March 2014.
The number of DFEs in a particular grouping may change, as DFEs are reappointed or migrated between different operators or from airline to GA, or vice versa.
OVERALL DFE/CDE MONTHLY OVERSIGHT PROGRAMME – APRIL 2012 to MARCH 2013
Category AIRLINE NON - SCHEDULED GENERAL AVIATION HELICOPTER CABIN CREW
Number of DFEs at end of year 114 25 63 17 45
Planned progressive (full year) 100 23 55 14 50
Number completed (full year) 86 19 54 14 44
Percentage completed (end of year) 75 76 86 82 98
Aviation Medicine
Medical Certification Processes
AvMed serves as the Secretariat of the Aeromedical Committee. A total of 294 complicated medical cases were presented to this committee during the fi nancial year. AvMed administered and coordinated the committee meetings; presented all the cases and distributed information to applicants informing them of the outcome of the deliberations by the panel.
59
Verification Processes
Two hundred and forty-one AvMed verifi cation letters were written and sent to the applicants of medical certifi cates, informing them of the outcome of the verifi cation process. These are applicants who had been declared temporarily unfi t by the doctors from the Institute of Aviation Medicine who conduct verifi cation on behalf of the Director. The AvMed department communicates the outcome to the applicant and quality-assures all documentation of applicants who have been declared temporarily unfi t.
Aviation Medicine Training for Designated Examiners
AvMed is working closely with the Institute of Aviation Medicine and the University of Pretoria to train doctors in aviation medicine.
Technical Standards (Medical Protocol) Workshops
The following protocols were reviewed and work-shopped with medical specialists and senior designated aviation medical examiners and are due for submission to CARCom:
• Proposed Medical Regulations for Unmanned Aircraft presented to the SAAsMA Conference/SACAA Workshop;
• Proposed Medical Standards for Air Traffi c Controllers presented to the SAAsMA Conference/SACAA Workshop;
• Proposed Oversight Requirements for DAMEs presented to the SAAsMA Conference/SACAA Workshop;
• Proposed Upper Age Limit presented to the SAAsMA Conference/SACAA Workshop;
• Proposed Endocrinology Protocol presented to the SACAA Workshop and Obesity/Hyperlipidaemia presented at the SAAsMA Conference;
• Proposed Haematology Technical Standards presented to the SAAsMA Conference and
• Proposed Respiratory Technical Standards presented to the SAAsMA Conference/SACAA Workshop.
Air Safety Operations: HighlightsTechnological Advancement in flight
Mango Airlines was approved for the use of Wi-Fi onboard their aircraft. This has improved the operator’s customer service offering while ensuring no interference with aircraft systems.
1Time Airlines
Until the cessation of operations at 1Time Airline, enhanced oversight was carried out by way of route surveillance every week, to mitigate any potential additional risk while it operated under Business Rescue. It was signifi cant that enhanced safety oversight was undertaken as a result of the fact that the airline was operating under abnormal circumstances with attendant fi nancial and human stresses which could have had safety implications.
Continuous Monitoring and Evaluation of ATOs
Testing Standards Offi cers regularly visit ATOs throughout the country to interact with fl ight instructors by monitoring the standard of training being given. If necessary, remedial action is proposed with follow-up action taking place. This helps to maintain a high standard of fl ight instruction.
Appointment of the 2nd Aeromedical Committee
The Acting Director of Civil Aviation has appointed the second civilian Aeromedical Committee (AMC). The AMC is an advisory body of medical, psychological, surgical, ancillary health and aviation industry experts charged with advising the SACAA on any medical risks posed by existing or prospective aviation personnel who are required in terms of the Civil Aviation Regulations (1997) to hold medical certifi cates. The specialists are appointed from the local medical universities (University of Pretoria, Wits University and the University of Limpopo). The Committee has representation from the Institute for Aviation Medicine (National Department of Defence), Southern African Aerospace Medical Association (SAAsMA) and other members of the industry.
Authority60
State of Air Safety Infrastructure
This division houses the following departments: Aerodrome Safety and Facilities, Air Traffi c Services and Air Navigation Services.
Air Safety Infrastructure Surveillance
Airport Licensing Inspections
Baseline
Target
Actual
30
25
20
15
10
5
0
Janu
ary
Febr
uary
Mar
ch
Apr
il
May
June July
Aug
ust
Sept
embe
r
Oct
ober
Nov
embe
r
Dec
embe
r
The November inspections were done in December due to strike action.
Airports Licence Inspections
April May June July August September October November December January February March
Target (Planned Apr 2012 - Mar 2013
0 18 9 7 22 18 19 15 0 15 9 0
Actual (Completed April 2012 - March 2013)
3 18 10 7 22 18 19 0 15 15 9 1
Baseline (Completed April 2011 - March 2012)
0 18 9 7 23 10 28 22 2 16 0 0
% of total completed to date inf 15.9 23.5 28.8 45.5 59.1 73.5 73.5 84.8 96.2 103.0 103.8
61
Airport Surveillance Inspections
Janu
ary
Febr
uary
Mar
ch
Apr
il
May
June July
Aug
ust
Sept
embe
r
Oct
ober
Nov
embe
r
Dec
embe
r
Baseline
Target
Actual
14
12
10
8
6
4
2
0
Airports Surveillance Inspections
April May June July August September October November December January February March
Target (Planned Apr 2012 - Mar 2013
11 3 6 0 1 0 1 10 3 1 5 3
Actual (Completed April 2012 - March 2013)
11 5 6 0 2 0 1 12 4 2 5 3
Baseline (Completed April 2011 - March 2012)
3 3 4 4 4 2 2 11 1 0 0 4
% of total completed to date 25.0 36.4 50.0 50.0 54.5 54.5 56.8 84.1 93.2 97.7 109.1 115.9
ATSU Inspections
Target (PlannedApr 2012 - Mar 2013)
Baseline (CompletedApr 2012 - Mar 2013)
Actual (CompletedApr 2012 - Mar 2013)
18
16
14
12
10
8
6
4
2
01 2 3 4 5 6 7 8 9 10 11 12
Additional inspections for airspace changes at PE, Polokwane and Richards Bay.
ATSU Inspections
April May June July August September October November December January February March
Target (Planned Apr 2012 - Mar 2013
4 3 4 4 5 5 5 7 13 3 4 5
Actual (Completed April 2012 - March 2013)
5 4 5 4 5 5 6 8 16 3 5 6
Baseline (Completed April 2011 - March 2012)
4 3 4 4 5 6 3 8 1 4 4 5
% of total completed to date 10.6 17.2 25.0 31.3 39.1 46.9 56.3 68.8 93.8 98.4 106.3 115.6
Authority62
CNS InspectionsJa
nuar
y
Febr
uary
Mar
ch
Apr
il
May
June July
Aug
ust
Sept
embe
r
Oct
ober
Nov
embe
r
Dec
embe
r
Baseline
Target
Actual
25
20
15
10
5
0
A number of inspections during the year were rescheduled due to staff training activities.
CNS Inspections
April May June July August September October November December January February March
Target (Planned Apr 2012 - Mar 2013
8 4 6 3 3 3 6 4 15 3 0 0
Actual (Completed April 2012 - March 2013)
8 4 6 3 0 5 5 14 23 3 0 0
Baseline (Completed April 2011 - March 2012)
8 3 3 4 9 4 5 0 4 3 4 1
% of total completed to date 14.5 21.8 32.7 38.2 38.2 47.3 56.4 81.8 123.6 129.1 129.1 129.1
New Air Navigation Service Providers
Two new ANSPs, namely Indiza and AVIC, were granted approvals by the SACAA. The new service providers are operating at Richards Bay airport and at Oudtshoorn airport respectively.
ICAO Air Navigation Conference
ANS personnel formed part of the South African delegation to the ICAO Air Navigation Conference held in Montreal, Canada from 19 - 30 November 2012. The conference enabled South Africa to give input into the Global Air Navigation Plan, which aims to increase effi ciencies through the “One Sky” concept.
US Trade and Development Agency
ANS formed part of a South African delegation invited by USTDA for a reverse trade mission from 3 - 13 February 2013 held in Washington, Houston and Orlando. Participants were afforded the opportunity to view the latest systems and tools available for future Air Traffi c Management and to establish contact with key American offi cials.
ICAO Aeronautical Communication Panel
ANS (CNS section) is involved in the activities of the ACP Working Group for Frequency Spectrum Management (ACP WG -F) where the position of ICAO towards frequency spectrum management is being formulated, including future aeronautical systems and ICAO’s position regarding the next World Radio Conference (WRC-15) and includes the updating of relevant ICAO publications.
63
Department of Science and Technology
ANS is also actively involved, through the CNS section, in the DST’s drive to introduce the Satellite Based Augmented System (SBAS) to users of GPS through participation in the activities of the South African National Space Agency (SANSA). Several training workshops were attended, locally as well as overseas. Augmentation of the GPS service will enable accurate and reliable aeronautical navigation by this means, especially in remote areas.
ICASA Interaction
The CNS section manages the aeronautical frequency spectrum in terms of the Memorandum of Understanding with the Independent Communications Authority of South Africa (ICASA) whereby cooperation between the SACAA and ICASA has been streamlined for the coordination of the aeronautical frequency spectrum management.
ICAO Performance-Based Navigation (PBN) Symposium
ANS presented a paper at the Montreal symposium in October 2012, showing the impact of the implementation of PBN procedures on an economically-challenged airport. The paper, which illustrated Pietermaritzburg Airport’s dramatic economic turn-around due to the improved accessibility directly related to the PBN procedure implementation was extremely well–received, and was republished in two international publications. The Air Navigation Bureau addressed a letter of appreciation to the CAA’s presenter.
PBN Implementation in South Africa
The Acting Director of the SACAA authorised an alternate method of approval for the special PBN procedures (RNP-AR) initiated by South African Airways (SAA), for use at the Cape Town International airport. These procedures are the fi rst of their type to be implemented on the African continent and places South Africa fi rmly amongst the world leaders in the adoption of such technology. The procedures allow for optimum performance by aircraft, thus reducing fuel burn and noise, and allow for signifi cant cost savings for airlines that are certifi ed to use them. In addition, this reduces carbon emissions and noise footprints.
The implementation of PBN procedures is continuing, with an increase of 181% in the number of procedures validated and implemented in 2012/13.
Software Implementation
The Procedure Design and Cartography section has acquired and is implementing AutoCAD, ArcGIS, ICAO Annex 14 Obstacle Evaluation and Obstacle Application Process Management software packages. This software will greatly enhance the capacity and services provided in these areas by the SACAA.
ICAO Instrument Flight Procedures Panel
ANS represented South Africa on the ICAO Instrument Flight Procedures Panel (IFPP) in Montreal and Hong Kong in September 2012 and March 2013 respectively.
SACAA attends these panel meetings on behalf of the Department of Transport to represent South Africa’s interests and indirectly that of Africa, in the establishment and amendment of the ICAO standards pertaining to Flight Procedure Design and associated disciplines. The SACAA representative ensured that priority was given to standards which would be benefi cial to the enablement of PBN and GNSS operations in remote areas in line with the requirements of the Draft Green Paper on Aviation in South Africa.
Contribution to Environmental Sustainability
During the past fi nancial year, the SACAA approved 34 sites across the country for the development of wind-farms and 154 for solar energy installations by contractors to the Department of Minerals and Energy.
Authority64
Flight Inspections Unit
The mandate of the Flight Inspection Unit (FIU) is to make sure that in the interests of the Government of South Africa, the Department of Transport and the South African Civil Aviation Authority, we continue to ensure that the Navigational Aids in South Africa are safe by focusing on precision certifi cation for the commissioning of newly installed navigation aids and periodic checks of technical and operational parameters of the existing surveillance and navigation instruments.
Flight Inspection Hours
Table 1 below shows the monthly statistics of hours fl own by the Unit in the fi nancial year 2012/13. It indicates no activity during the fi rst two months of this fi nancial year, due to maintenance during. The table further indicates that from April 2012 to March 2013, FIU fl ew 92.84% of the planned hours for the fi nancial year; therefore FIU fl ew 27.6 hours or 7.2% less than targeted for the period April 2012 to March 2013. The above led to FIU generating a total of 358 operational hours (revenue generating) whilst it was expected of FIU to fl y 386 hours. The difference between the two fi gures is 28 hours (7.2%).
Hours fl own in Fin year 2012-13 (Accumulative Monthly)
Month Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Total Percentage
Target 32 64 96 128 160 192 224 256 288 320 352 386 386 100
Actual 0 0 12 53 91 107 182 238 287 287 306 358 358 92.84%
Variance 32 64 84 75 69 85 42 18 1 33 46 28 28 7.16%
Table 1
Note: The figures above do not include the hours used for test flights and some crew training.
Revenue Statistics
Table 2 below shows the monthly statistics for the fi nancial year 2012/13. It indicates no activity during the fi rst two months, due to maintenance (Phase 1 - 5 and Phase 1 – 4) during this period. The table further indicates that from April 2012 to March 2013, FIU fl ew 92.84% of the planned hours for the fi nancial year; therefore FIU fl ew 28 hours or 7.16% less for the period April 2012 to March 2013. This also indicates a good recovery from the four months [April to May 2012 (Phase 1 - 5) and December 2012 to January 2013 (Phase 1 - 4)] when the aircraft was in maintenance.
The above led to FIU generating a total of R16, 126, 188 while SACAA was expecting FIU to generate R17, 369, 946. The difference between the two fi gures is R1, 243, 757 (7.16%) which is the defi cit for the fi nancial year 2012/13. Staff-related costs for FIU were budgeted at R5, 955,773 and the actual fi gure was R5, 257,908, leaving a variance of R505, 147. FIU training was budgeted at R910,000 with most of the training performed outside the borders of the RSA. The actual fi gure was R725, 483, with a variance of R184, 517. Overall repairs and maintenance of the aircraft including operating cost was allocated a budget of R6, 585,474 and the actual fi gure was R7, 031,344 with a variance of R965, 493. Note that the breakdown of the allocation for repairs and maintenance of an aircraft was R4,500,000 and the actual fi gure was R3,773,655 with a variance of R726,345; and operations budget at R2,085,474 and the actual fi gure was R3,257,688 with a variance of R1,172,214.
Total Revenue in Fin year 2012-13 (Accumulative Monthly)
Mon
th
Apr
May Ju
n
Jul
Aug
Sept
Oct
Nov
Dec Jan
Feb
Mar
Tota
l
Perc
enta
ge
Target 1,447,495 2,894,991 4,342,486 5,789,982 7,237,477 8,684,973 10,132,468 11,579,964 13,027,459 14,474,955 15,922,450 17,369,946 17,369,946 100.00%
Actual 0 0 544,645 2,367,631 4,082,998 4,794,187 8,174,588 10,731,270 12,896,347 12,896,347 13,769,580 16,126,189 16,126,189 92.84%
Variance 1,447,495 2,894,911 3,797,841 -3,422,351 3,154,479 3,890,786 1,957,880 848,694 131,112 1,578,608 2,152,870 1,243,757 1,243,757 7.16%
Table 2Note: The figures above do not include the non-revenue hours used for test flights and some training.
65
Targeted Hours vs Actual Hours Accumulative
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Variance 32 64 84 76 70 86 43 19 3 35 48 28
Actual 0 0 12 53 91 107 182 238 287 287 306 358
Target 32 32 32 32 32 32 32 32 32 32 32 32
0
50
100
150
200
250
300
350
400
450
Notes:
The above graph highlights the relationship between the accumulative targeted hours and actual hours fl own by the FIU in the fi nancial year 2012/13 ending March 2013. In the graph, it is clear that the Unit had zero fl ying hours for the months April, May and December 2012. This was due to the planned mandatory maintenance which SACAA’s aircraft (ZS-CAR) had to undergo. Although the Unit had planned for zero fl ying hours in December 2012, the Unit fl ew 14.3 hours due to the needs of a client and that led to the late start of the planned maintenance; hence the overlap to January 2013 when the Unit had zero fl ight time.
Targeted revenue vs Actual Revenue Accumulative
Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Variance 1,447,495 1,447,495 902,850 -375,491 -267,871 736,306 -1,932,906 -1,109,186 -717,582 1,447,495 574,263 -909,113
Actual 0 0 544,645 2,367,631 4,082,998 4,794,187 8,174,588 10,731,270 12,896,347 12,896,347 13,769,580 16,126,189
Target 1,447,495 2,894,991 4,342,486 5,789,982 7,237,477 8,684,973 10,132,468 11,579,964 13,027,459 14,474,955 15,922,450 17,369,946
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
Notes:
The above graph highlights the relationship between the accumulative targeted revenue and actual revenue generated by FIU in the fi nancial year 2012/13 ending March 2013. In the graph above, it is clear that the Unit had zero fl ying hours for the months April, May and December 2012; thus, zero revenue. This was due to the planned mandatory maintenance which the Unit’s aircraft (ZS-CAR) had to undergo. Although the Unit planned zero fl ying hours in December 2012, it fl ew 14.3 hours (resulting in the generation of R643, 671.60) due to the needs of a client and that led to the late start of the planned maintenance, hence the overlap to January 2013 when the Unit had zero fl ight time.
Authority66
Flight Inspection System (FIS) machine
The FIS machine is the machine used to calibrate the navigational aids. This machine was fi tted over ten years ago and because of ageing, had to be replaced or upgraded. The SACAA Board approved the upgrade of the FIS machine in 2012. The process of upgrading the FIS machine was started and will be completed in May 2013.This will give the Unit 10 more years with the machine, which will be in line with the life of the engine fi tted in the aircraft. Thus when the aircraft retires, the machine would have reached its life expectancy as well.
Special Projects
Transfer of AIS function to ATNS
A project was initiated to transfer the current roles and responsibilities associated with the publication of the Integrated Aeronautical Information Publication (static data) from the SACAA to the Air Traffi c and Navigation Services Company (ATNS). On completion of the project and introduction of the Centralised Aviation Database (CAD), ATNS will be the aeronautical information service provider and SACAA the regulator of the service provider.
A project transition team was formed to address the management baseline for the execution of the Integrated Aeronautical Information Package (IAIP) transition project.
The Centralised Aviation Data Base in cooperation with ATNS is key in the evolution from a product-centric AIS to the enlarged scope of data-centric aeronautical information management.
The current aeronautical information services will transition from a “paper-based” information-sharing platform to a “digital” information-sharing platform.
ICAO Aviation Security Audit
Following the ICAO aviation security Universal Audit Programme of South Africa from 18 - 25 August 2011, which registered 30 minor fi ndings, 24 have been closed. A resolution was taken by the National Aviation Security Committee (NASC) to fi le a difference on two of these fi ndings, which are related to facilitation, and based on recommendations which are impractical to implement at this stage.
The remaining four are currently being addressed as they involve long-term and extensive processes such as the introduction of a Business Enterprise Solution as well as policy formulation and direction ranging from changes in the Civil Aviation Act and amendment of Regulations Part 109 and 110 to incorporate the following:
• Inclusion of the requirement for instructor certifi cation as per ICAO Annex 17 requirement;
• Development of guidance material for the training of personnel who perform baggage reconciliation for airlines; and
• The inclusion of Cargo Security Training requirements into Part 109 of the CAR. Air Cargo Security training currently covered under Part 108 will be brought under the umbrella of Part 109 in order to have all security training regulations centralised under one Part of the CAR.
U.S. Transportation Security Administration (TSA)
As part of growing relations between the United States and South Africa, a Memorandum of Cooperation (MOC) was concluded between these States as global players in the AvSec arena, with the aim of creating a workable framework, highlighting cooperation and support through the exchange of expertise and information on security-related matters, in order to achieve continuous improvement.
An assessment by the TSA took place over the period 30 April to 4 May 2012, and was a resounding success. No fi ndings were recorded, save for an observation on improvement in the airport system. A positive formal report was subsequently received from the TSA.
As part of strengthening relations between the U.S. TSA and South Africa, the latter received screening test kits sponsored by the TSA. This equipment forms part of the tools of the trade which assist the industry in enhancing security measures.
67
As part of the deliverables of the Memorandum of Cooperation (MOC) concluded between the two States, which calls for, among other things, information-sharing programmes and periodic assessment, an invitation was received from the TSA to visit the United States with a view to benchmarking best practices and to assess security arrangements, given that our national carrier (SAA) operates to and from New York and Washington. This visit was undertaken in October 2012, when SACAA AvSec led the South African delegation comprising of the Airports Company South Africa (ACSA), South African Airways (SAA), South African Police Service (SAPS), State Security Agency (SSA) and South African Revenue Service (SARS).
This visit was a huge success and of benefi t to South Africa in that it afforded the delegation an opportunity to compare its own security systems, processes and technologies with those applied by the U.S. which in turn, affi rmed our view that our systems are on par with international best practices.
Colour Assessment and Diagnosis (CAD) Testing Equipment
The growing concern by the International Civil Aviation Organisation (ICAO) about the general lack of standardisation and consistency in colour vision testing for aircrew internationally, the general increased need for safety in aviation, the advancement in the technology of aircraft and its demand for visual acuity, complexity of aerodromes and the increased risk for litigation with colour vision assessment methods, has prompted the Aviation Medicine department (AvMed) to review the colour vision protocol and move towards a more reliable and consistent method in colour vision testing.
The CAD system is now a preferred test and is being used by several airlines and civil aviation authorities. It is used by the European Aviation Safety Agency/Joint Aviation Authorities (EASA/JAA), Federal Aviation Administration (FAA), United Kingdom Civil Aviation Authority (UKCAA), Nigerian Civil Aviation Authority (NCAA), Italian Air Force, Fly Emirates, Nigeria, etcetera. The City of London University has recently been running CAD courses for countries that have acquired CAD, including Norway, the United Arab Emirates, and later in 2012, Singapore. To date, Nigeria is the only African country that has acquired the in-house CAD equipment.
Upon acquiring the CAD test, the AvMed department will be able to conduct colour vision testing on the SACAA premises and to pay back the expense incurred for the system and generate revenue for the SACAA through the user fees that will be collected. The acquisition of the CAD will reaffi rm the position of SACAA as a leading aviation authority in the SADC region. Legally, a reputable, objective, and defendable testing system like CAD will reduce the risk of possible litigation and the number of appeal cases that could arise from conventional unstandardised tests.
Participation in the Training of BSc. Honours in Aerospace Medicine
The SACAA has a very close working relationship with the University of Pretoria through the Institute for Aviation Medicine, a unit of the South African Military Health Service which falls under the National Department of Defence. The department participates in the training of designated aviation medical examiners and the BSc. Honours in Aerospace Medicine offered by the University of Pretoria. The University has also has approached the Aviation Medicine Department for appointment as an extraordinary lecturer. The fi rst class of students (10) trained through the SACAA graduated from the University of Pretoria in April of 2013.The relationship between the SACAA and the University benefi ts both parties in that the students are allocated topics that are relevant to the gaps identifi ed by the SACAA related to regulations, technical standards and research.
Authority68
Aviation Examination
New modernised syllabi to cater for the regulatory changes of CAR 2011 and the new theoretical knowledge syllabi for commercial and airline transport licences as well the instrument rating examinations have been recommended by CARCom and approved by the Acting DCA.
All examination questions contained in the examination data bases are under constant review. The reference books from which the CAA compiles its examinations are published on the CAA website. All the questions that are asked can be referenced to a particular chapter and page of the approved reference material. All examination questions are moderated to check for applicability, ambiguity, and ease of understanding.
AFCAC Meeting
The General Manager: Aviation Security and Senior Manager: Airlines and Airports attended an AFCAC meeting in Nairobi, Kenya from 25 - 27 April 2012 to discuss progress made on the Avsec Roadmap and the review in line with the Joint Declaration approved by the Ministers responsible for aviation.
The meeting presented an opportunity for SACAA to play a prominent role in advocating compliance, interaction and cooperation among African Regions, for enhanced aviation security in Africa, in line with its strategic objectives. It also served as a good measure of compliance and as an indicator that South Africa is ingeniously far advanced on aviation security measures aimed at preventing acts of unlawful interference against civil aviation, both technologically and physically.
International and Regional Participation and Cooperation
Machine Readable Travel Documents (MRTD)
ICAO, with the support of the Civil Aviation Authority of Zimbabwe, hosted a Regional Seminar on MRTDs, Biometrics and Border Security from 27 to 29 November 2012 at the Victoria Falls, Zimbabwe, which was attended by the Senior Manager: Airports and Airlines.
AvSec participated in this seminar so as to stay current and share best practices on the matters of security of travel documents and border security, as part of the deliverables of the ICAO Declaration on Aviation Security, unanimously adopted at the ICAO 37th Assembly; which places particular emphasis on the collection, analysis and timely sharing of information, and urges States to share best practices in areas such as travel document security, fraud detection and effective border controls.
The Seminar addressed current and emerging ICAO MRTD specifi cations, identity management best practices and related border security issues with particular reference to the African region. It also focused on the advantages and disadvantages of using biometric data in travel documents, points of importance with regard to implementing electronic passports, MRTD procurement issues, reading travel documents at the borders, and the role of the ICAO Public Key Directory (PKD) in achieving robust global security.
Presentations and expertise shared by security experts pointed out many factors to be considered by government agencies for improved effi ciency in the implementation of MRTDs and interoperability. South Africa fi nds solace in that we comply with ICAO standards in so far as machine readable passport and travel documents are concerned, with the deadline set by ICAO being 2015.
ICAO High-level Aviation Security Meeting
This meeting took place in Montreal, Canada from 11 to 14 September 2012 and South Africa took part under the leadership of the Deputy Minister of Transport. The General Manager: AvSec participated and all proposals generated by South Africa were fully endorsed by the delegates at the Conference. The meeting was geared towards reemphasising the importance of aviation security in the global arena, to strengthen relationships and to map a way forward on how States should ensure that civil aviation is protected against acts of unlawful interference.
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Australian Aviation Security Assessments
The audit team from the Australian Offi ce of Transport Security carried out security assessments over the period 20 - 24 August 2012. Particular emphasis was given to the Cargo Security regime of S.A. and the results were a resounding success, with no fi ndings recorded. This again confi rms that South Africa’s standards are conformant to the International Civil Aviation Organisation’s Standards and Recommended Practices. SACAA welcomes such audits, as they always prevent us from being complacent and they strengthen our awareness to the obligations we have towards the country and the public.
Cargo and Mail Supply Chain Security Forum
In October 2012, AvSec attended the Cargo Security forum in Geneva, Switzerland. In recognition of successes achieved by South Africa in the area of Air Cargo Supply Chain Security, the South African delegation was requested to deliver a presentation, highlighting aspects of the regulatory framework governing the Air Cargo Security Supply Chain concept. This presentation was well received and South Africa was commended for the leadership demonstrated in this regard.
ICAO Working Group Meeting on Amendment 13 of Annex 17
From 25 to 27 October 2012 the Senior Manager: Airports and Airlines and Manager: General Aviation attended this meeting in Geneva, Switzerland; wherein proposed amendments to the identifi ed Annex 17 Standards and Recommended Practices were deliberated. Draft amendments and the report thereof were developed for tabling before the 24th Meeting of the ICAO AvSec Panel in April 2013, for consideration and adoption.
ICAO Working Group on Air Cargo Security (WGACS)
The GM: AvSec and Manager: Cargo Security represented South Africa in two meetings of the above Working Group which is responsible for the development of harmonised standards that will lead to the enhancement of Aviation Security. The Acting DCA, in her capacity as GM:AvSec, was appointed as the co-chair of the working group.
AvSec Cooperation with the UK Department of Transport
As part of the on-going discussions between South Africa and the UK Transport Department regarding enhanced cooperation and relations on matters relating to aviation security, AvSec met with this department on 22 November 2012 and initiated the process of drafting a Memorandum of Cooperation. Areas of assistance were also identifi ed, which resulted in the UK offering explosive trace detection equipment. An outcome of these discussions also yielded security-related training, facilitated by the UK.
Recognition of the Air Cargo Security Programmes between US: TSA and SACAA
The TSA of the United States also conducted an evaluation of the National Cargo Security Programme for recognition and as a matter of cooperation between the two States (U.S. and S.A) in order to give recognition to the air cargo security measures implemented in South Africa. The evaluation was successful.
Following this successful evaluation, the United States Transportation Security Administration (TSA) would formally recognise South Africa’s National Cargo Security Programme (NSCP) as commensurate to the requirements of the US. Such formal recognition would be announced in the new fi nancial year, following a robust process and assessments conducted towards the recognition process. The on-going collaboration and cooperation between TSA and the South African Civil Aviation Authority (SACAA) is critical to the enhancement of international air cargo security. Recognition of NCSPs has several benefi ts; it allows for greater facilitation of goods and commerce between our two countries, and eases the burden on industry by lifting, where appropriate, duplicative or redundant measures while still ensuring the highest levels of security that both TSA and the SACAA require.
TSA’s recognition of another country’s NCSP is subject to certain conditions that are intended to ensure a robust security system, on-going information exchange, full air carrier compliance, appropriate enforcement when and where necessary, fulfi lment of U.S. legislative mandates and a fl exible coordinated response to new and emerging threats.
It is our belief that the National Air Carrier, South African Airways, will benefi t from this recognition, as SAA will see fewer stringent measures being imposed upon it at a huge cost. This recognition agreement is the fi rst on the Continent and a huge milestone in terms of cooperation with other States on aviation security matters.
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ICAO 6th Worldwide Air Transport Conference
The Acting DCA, together with the GM: Finance and the GM: ASO, attended the ICAO 6th Worldwide Air Transport Conference in Montreal, Canada, from 18 to 22 March 2013.
These SACAA representatives were part of the South African delegation to the Conference, lead by the Honourable SA Deputy Minister of Transport, Sindisiwe Chikunga, and His Excellency, the SA High Commissioner to Canada, Membathisi Mdladlana.
The key current issues presented at the Conference of relevance to the work of the SACAA representatives included the following:
1 The Dual Oversight Model for the Interchange of Aircraft from Different States.
2 Airspace Sovereignty and the delegation of the provision of air traffi c services.
3 Cost Effectiveness of Safety Oversight Cooperation System within regions.
4 Liberalisation of airline ownership and control and the need for safeguards to promote the development of regional liberalisation initiatives.
5 Consumer protection and the need for the development of an industry code of conduct, including for example, consumer protection in the event of overbooking, cancellation of fl ights and lengthy delays.
6 The inclusion of aviation in the Emission Trading Scheme (ETS) by the European Union.
Swaziland CAA
Assistance was provided on request to the Swaziland CAA for their certifi cation of a new Air Operating Certifi cate. The certifi cation was a Class III operation, which dealt with crop-spraying and fi re-fi ghting operations. The assistance mission was successful and promoted cooperation on safety oversight between South Africa and Swaziland.
ICAO/CAPSCA State Assistance Visit
The Aviation Medicine Department of SACAA was appointed as an ICAO Vice-Chair Technical Advisor for the ICAO-CAPSCA Programme on the African continent. The role of the technical advisor is to train other countries to ensure harmonisation in the implementation of the ICAO Cooperative Arrangement for the Prevention of Communicable Disease through Air Travel, Annexes 6, 9, 11, 14 and 18. The department, in consultation with the ICAO Regional Offi ce, conducted two State assistance visits in Mozambique and Tanzania. These visits promoted regional preparedness to deal with incidents of communicable diseases in air transport.
ICAO/CAPSCA Global Meeting in Chile
The Aviation Medicine Department of the SACAA (AvMed) presented a paper at the ICAO-CAPSCA Global Meeting in Chile on retrospective analysis, using the thermal scanner during HINI at airports as its subject. The purpose of the presentation was to discuss the effectiveness of thermal scanners in identifying suspected cases of communicable diseases and to compare them to other screening tools such as questionnaires. The usefulness of scanners at airports has been a matter of debate for years. Thermal imaging has been promoted as a way of protecting the public. Thermal scanners use short-wavelength infrared radiation band and provide a relation between the emissive power and skin temperature around the inner eye auricular areas of the body.
The presentation focused on the science behind the thermal scanner; the advantages, disadvantages and limitations of thermal scanners and other screening tools such as questionnaires. A literature review of the effectiveness of screening tools during H1N1 was conducted by Japan, New Zealand and Singapore. The conclusion of the presentation was that there is no single screening measure that provides the requisite sensitivity and specifi city to identify suspected cases of communicable diseases and that a combination of measures may be required, depending upon the prevailing situation. Symptom-based border screening cannot detect infections among persons who are asymptomatic on arrival, and airport thermal scanners benefi t short incubation diseases. It was recommended that States need to consider the fl ight time, as passengers travelling on short haul fl ights may be missed, as symptoms would become evident after entry. The thermal scanner has to be supplemented by core temperature measurement. The screening thermograph remains the best way to screen people in crowds for elevated temperature values, and cost benefi t analyses need to be considered.
The presentation and the video were well received by the 110 States attending the ICAO/CAPSCA global meeting and the Chief Medical Offi cer of ICAO recommended that South Africa should scientifi cally publish the study.
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Cooperative Arrangement for the Prevention of the Spread of Communicable Disease through Air Travel (CAPSCA)
The Civil Aviation Authority of Kenya, in consultation with the International Civil Aviation, held a conference in Nairobi, Kenya from 19 to 22 June 2012 to discuss the progress made on the continent regarding the implementation of the CAPSCA. AvMed was represented by the Senior Manager of AvMed, who had been appointed as a Vice Team Leader (Technical Advisor on behalf of ICAO for the continent). The Senior Manager of AvMed presented two documents (Challenges in the Implementation of the CAPSCA and the Proposed Memorandum of Understanding (MoU) between the Department of Transport and the Department of Health).
ICAO, Montreal requested that the draft MoU and the video be shared with other countries as a guide. The purpose of the agreement is to ensure the implementation of ICAO Annexes 6, 9, 11 and 14 which require States to establish a National Aviation Plan in preparation for an outbreak of a communicable disease posing a public health risk or public health emergency of international concern. Article 14 of ICAO requires each State to take effective measures to prevent the spread of communicable diseases by means of air navigation and requires States to remain in close consultation with the agencies concerned with international regulations relating to sanitary measures applicable to aircraft.
The aim of the Aviation Pandemic Preparedness Plan is to mitigate the risk of a pandemic at the level of the population, as well as that of the travellers and crew on board an aircraft, and furthermore to mitigate the fi nancial impact of a pandemic. The CAPSCA Regulations and Technical Standards came into effect on 1 July 2012.
Air Safety Infrastructure Assistance Programme for other States in Africa (ASI)
In line with ICAO recommendations that require developed states to assist under-developed states on matters relating to aviation safety and security, a few airports in the SADC region were assisted with matters relating to Precision Approach Path indicators (PAPI) calibration and they included the airports listed below. This has assisted in improving safety in the SADC region and improving relations with our neighbouring states.
1 Namibian Airports:
(a) Hosea Kutako International Airport;
(b) Eros International Airport;
(c) Walvis Airport;
(d) Keetmanshoop Airport;
(e) Luderitz Airport; and
(f) Ondangwa Airport.
2 Zimbabwe Airport:
(a) Harare International Airport.
State of Quality and Compliance
Aviation Personnel Licensing
The country has a total of 27 858 active aviation personnel, of which 4 461 are representative of licences issued for the fi rst time during the reporting period. In comparison with the previous fi nancial year, there was a 1.54% increase in the number of licences revalidated and an 18.68% increase in the number of initial licences issued by the SACAA during this reporting period.
For effective monitoring of transformation efforts, the total number of active licences is categorised in terms of gender and race as depicted in the tables below.
The demographical information clearly indicates that South African pilots are still predominantly White and that additional efforts and strategies are required for transformation in this area. In this regard SACAA has embarked on various projects to make school leavers aware of aviation careers, including pilot careers; however, this does not seem to have had the desired effect up to now. The high cost of pilot training has been identifi ed as a possible hindrance to historically disadvantaged individuals entering the market and greater avenues of funding is being explored within.
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African Male Coloured Male Indian Male White Male
Aeroplane LicenceSouth
African National
Foreign National
South African
National
Foreign National
South African
National
Foreign National
South African
National
Foreign National
Total 2012/2013
Private Pilot 95 464 39 11 59 101 4886 612 6267Commercial Pilot 68 587 17 38 39 305 2279 407 3740Airline Transport Pilot 68 23 28 11 42 6 2745 207 3130Total 231 1074 84 60 140 412 9910 1226 13137
African Male Coloured Male Indian Male White Male
Helicopter LicenceSouth
African National
Foreign National
South African
National
Foreign National
South African
National
Foreign National
South African
National
Foreign National
Total 2012/2013
Private Pilot 27 62 4 2 13 4 1091 98 1301Commercial Pilot 17 50 12 0 6 1 687 81 854Airline Transport Pilot 2 1 1 0 0 0 243 22 269
Total 46 113 17 2 19 5 2021 201 2424
African Male Coloured Male Indian Male White Male
Other Licences
South African
NationalForeign
National
South African
NationalForeign
NationalSouth African
NationalForeign
National
South African
NationalForeign
NationalTotal
2012/2013
Student Pilot 188 329 56 7 73 22 1784 121 2580
Student Pilot Integrated Course 5 45 1 1 2 2 49 7 112
Cabin Crew 570 36 134 2 71 2 315 8 1138
Hot Air Balloon Pilot 0 0 0 0 0 0 33 5 38
Maintenance Engineers 142 111 22 2 33 0 1639 73 2022
Flight Engineers 0 0 0 0 0 0 40 0 40
Validations 0 38 0 5 0 4 30 668 745
Total 905 559 213 17 179 30 3890 882 6675
African Female Coloured Female Indian Female White Female
Aeroplane Licence
South African
NationalForeign
National
South African
NationalForeign
National
South African
NationalForeign
National
South African
NationalForeign
NationalTotal
2012/2013
Private Pilot 33 36 2 5 8 8 320 45 457
Commercial Pilot 20 54 2 3 4 22 212 35 352
Airline Transport Pilot 4 0 4 0 5 0 156 15 184
Total 57 90 8 8 17 30 688 95 993
African Female Coloured Female Indian Female White Female
Helicopter Licence
South African
NationalForeign
National
South African
NationalForeign
National
South African
NationalForeign
National
South African
NationalForeign
NationalTotal
2012/2013
Private Pilot 4 7 1 0 1 0 90 3 106
Commercial Pilot 10 4 1 0 0 1 59 9 84
Airline Transport Pilot 0 0 0 0 0 0 8 3 11
Total 14 11 2 0 1 1 157 15 201
African Female Coloured Female Indian Female White Female
Other Licences
South African
NationalForeign
National
South African
NationalForeign
National
South African
NationalForeign
National
South African
NationalForeign
NationalTotal
2012/2013
Student Pilot 68 43 15 1 13 1 221 17 379
Student Pilot Integrated Course 5 3 0 1 0 0 4 2 15
Cabin Crew 1610 98 356 4 200 3 1050 16 3337
Hot Air Balloon Pilot 0 0 0 0 0 0 2 0 2
Maintenance Engineers 8 3 1 0 0 0 5 1 18
Flight Engineers 0 0 0 0 0 0 0 0 0
Validations 0 39 0 0 0 1 1 52 93
Total 1691 186 372 6 213 5 1283 88 3844
*A total of 584 licence holders declined to have their personal data used for statistical purposes.
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Client Services
The Client Services section within the Client, Licensing and Examination Service department is responsible for front-line services to the SACAA walk-in customers. The number of walk-in clients assisted at the customer service centre for the reporting period was 31 112. This is a decrease of 3.05% from the previous reporting period. A decrease in the number of walk-in clients is not necessarily a good or bad indicator, as it is solely dependent on the customers’ choice to visit SACAA personally or not. Many other means of interaction with the SACAA are in place and are being used by customers.
Examination Systems
The SACAA Examination section administered all professional pilot, fl ight engineer, cabin crew and aircraft maintenance engineer examinations during the year. A total of 19 467 examinations were undertaken at the CAA Online Examination Centre in Midrand and an additional 3 624 examinations were written at the Outstation Examination sittings for the reporting period.
During the period under review, 24 463 examinations were conducted at the various online examination centres situated across the country, mostly at fl ight schools, in an attempt to satisfy this entry requirement for obtaining a private pilot’s licence.
Technical Library
The Technical Library continues with its responsibility to maintain an up-to-date library service, focusing on infomation required by the SACAA personnel to perform their duties in compliance with the International Civil Aviation Organisation (ICAO) Standards and Recommended Practices. A total number of 388 new library manuals and periodicals were procured through various means, such as inspectors, operators and manufacturers and 14 signifi cant subscriptions were renewed for safety critical information. The Technical Library embarked on the projects of doing the inventory, bar-coding and labelling of library material. 1468 operator manuals were bar-coded and labelled during the year. A total of 5474 manufacturer manuals and 1603 operator manuals were captured.
Records Management
An implementation plan regarding the approved fi le plan was developed throughout the organisation. Given the fi nancial constraints, the fi le plan was not implemented during the 2012/13 fi nancial year. However, a new specifi cation to acquire the assistance of a service provider for the implementation of the fi le plan was developed, and a service provider will be appointed to implement the fi le plan in the 2013/14 fi nancial year.
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ICAO Coordination and Compliance
South Africa and the USOAP CMA
In 2011 ICAO launched the Universal Safety Oversight Audit Programme (USOAP) Continuous Monitoring Approach (CMA). This new approach provides for continuous monitoring and incorporates the analysis of safety risk factors, which is applied universally to assess States’ oversight capability on an ongoing basis.
SACAA embraced this new approach and proactively launched an internal CMA project early in 2012. At the end of 2012 SACAA was advised that ICAO was planning an ICAO Coordinated Validation Mission (ICVM) for South Africa during July 2013 (24th to 30th July).
During the year, the required pre-audit documents were updated online by SACAA and the external participants. A task team was established in November 2012 to conduct self-assessment of the effective implementation of the eight critical elements of a safety oversight system by South Africa. The SACAA, in conjunction with DoT and all other pertinent stakeholders such as ATNS, SA Weather Service and the SA Search and Rescue Authority are all hard at work to ensure that the ICVM in July 2013 is a national success.
State Letters
ICAO offi cially communicates to States through State Letters, regarding for example, new Annex Standard and Recommended Practice (SARP) amendments, the scheduling of international workshops and regional events that are required to be attended by the SACAA technical staff. State Letters are managed by the DoT as the offi cial ICAO focal point of South Africa. States are expected to respond to all State Letters and SACAA responds to all State Letters that affect its operations.
During the fi nancial year, as compared to the previous three fi nancial years, the total number of State Letters to which SACAA responded was as follows.
2009/10 2010/11 2011/12 2012/13
State Letters 193 228 199 288
ICAO and AFI Regional Initiatives and Events
During the period under review SACAA participated in numerous relevant safety, security and environmental events such as high-level panels, conferences and seminars. SACAA’s participation in these events within the continent and the region is critical in order for it to proactively contribute to regional and continental decisions made regarding safety and security policies and strategies, which will affect its operations and its compliance to international standards. SACAA is furthermore able to exchange ideas with and render assistance to regional partners, where a need for this exists.
AFI meetings scheduled AFI meetings attended SADC meetings scheduled SADC meetings attended
Apr-Jun 2 2 13 13
Jul-Sep 6 6 4 4
Oct-Dec 10 10 0 0
Jan-Mar 2 0 4 3
Total 20 18 21 20
Safety Management System
ICAO has adopted a new risk-based approach to managing safety, in an attempt to decrease the rate of accidents at a global level. This new approach has been consolidated into a new Annex 19 that requires States to implement a Safety Programme which defi nes the ‘acceptable level of safety’ within the State. The approach further requires the implementation of a Safety Management System (SMS) by each organisation and operator certifi cated by the State. In South Africa, the SACAA is responsible to carry out the obligations of this new safety approach and has recently reviewed its Safety Programme.
As part of the SACAA’s promotional events, the Safety Risk section, under the auspices of the Flight Operations Department and Corporate Communications department, has conducted presentations on the new SMS regulations promulgated in June 2013, effective from 1 August 2013. In terms of the phased implementation, all affected aviation organisations, namely air operators, aviation training organisations, aircraft maintenance engineers, aerodromes and air traffi c service providers, have to ensure that they have a fully implemented Safety Management System by end of July 2015. The presentations were conducted in Johannesburg, Cape Town and
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Durban and the feedback received was positive.
Oversight of SMS has been incorporated into the certifi cation and surveillance for the affected certifi cate holders listed above and compliance with the requirement for SMS is being audited by inspectors.
The need to consolidate the current SMS regulatory requirements was identifi ed and the review of the regulations commenced.
Occupational Health and Safety
Occupational Health and Safety forms part of SACAA’s integrated management system. Management fulfi lled its responsibility to ensure that safe working procedures are clearly understood and consistently observed. SACAA’s system equally requires staff members to care for their personal welfare and the welfare of their fellow employees.
The following table refl ects the number of non-compliances with the OHS Act identifi ed and addressed during the year, in comparison with the previous fi nancial year:
Number raised Number closed Number open
2011/12 36 21 15
2012/13 37 33 4
The ten occupational incidents (injuries) sustained during the year were all minor incidents, although one employee required x-rays to confi rm whether the incident was serious. The remaining four non-compliances are at an advanced stage of closure by the supply chain management.
Quality Assurance
Quality Management System (QMS)
SACAA was one of the fi rst three aviation regulatory authorities to implement a certifi ed quality management system in 2000, shortly after the time that ICAO introduced the standard for quality management for industry service providers. The system is important to the SACAA, as it assists SACAA to produce high quality services and products to its customers and it enables the continual improvement of weak areas identifi ed. SACAA has maintained its ISO 9001 quality management system certifi cation, confi rming that the quality management system is being effectively implemented. Two external audits were carried out in the fi nancial year; one surveillance audit during which one (1) fi nding was raised and one re-certifi cation audit, during which two (2) fi ndings were raised. All corrective action requests were addressed within the agreed time frames. Furthermore SACAA celebrated National Quality Week in November, with the theme “Releasing your Quality Potential”.
The approved internal audit schedule was implemented and all audits were carried out as planned.
Internal Audit Findings 2012/13
SACAA continues to take action to eliminate the causes of non-conformances in order to prevent recurrence, in accordance with its commitment to continuous improvement of its system. Audits are conducted monthly on different departments within SACAA, ensuring that the entire organisation is audited every twelve months. Open fi ndings are required to be closed within three months from the fi nding being raised.
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Information Technology
Cape Town Regional Offi ce
A new systems solution was successfully implemented at the Midrand and Cape Town offi ces, which includes the Aircraft Registry, licensing systems, fi nancial systems and Eccairs (Accident and Incident Investigation system). Database mirroring will commence early in June 2013 and server hardware upgrades are expected to be implemented in the new fi nancial year. The database monitoring process is an initiative driven by the need for disaster management and load balancing and will provide redundancy in our system and provide seamless fall-back in the event of system failure, which is disaster management.
Internet Bandwidth
The organisation is currently seeking to increase its internal bandwidth. If implemented, this will seek to double internet speeds in the next fi scal year. The SACAA has placed the PPL examination system within a secure hybrid cloud, placing tremendous strain on our internal bandwidth and in addition, the Cape Town offi ce shares this bandwidth. The upgrade aims to accommodate the existing requirements and place the SACAA in a position to benefi t from implementing a future-proof business system i.e. cloud-based. Internet bandwidth is critical to allow the following:
• Business communication (SMTP send mail transfer protocol from ISP);
• Operating system and anti-virus defi nition, security and patch updates;
• FTP (File transfer protocol) fi le server to transfer large fi les;
• WAN (Wide Area Network ) connectivity – Cape Town Offi ce and Lanseria; and
• Email mobility (Secure Email to smartphone and remote access via internet protocol)
Computer Equipment Budget Consumed
The IT department has implemented a tender to accommodate the need for laptops and desktop replacements, to provide a solution to hardware that has become uneconomical to repair or replace and is affecting operations. The tender will seek to appoint a suitable service provider that will provide a determined number of equipment with one year of fi xed pricing, support and maintenance. IT will be in a position to request the hardware when required for the duration. This will ensure that all staff members are equipped with the necessary tools to be effective in the fulfi lment of our mandate.
Telephone Systems
The telephone fi rmware was upgraded to ensure that the system is future-proof and that hardware is supported by the vendor. The telephone system upgrade embedded new functionality in telephone presence management. The functionality seeks to improve our telephonic experience in that the switchboard will be able to determine the status of a user/staff member and route the call appropriately. The telephone presence management is integrated to the outlook calendar and upon predetermined rules will be able to route the call appropriately (i.e. in a meeting – voicemail etc.).
EBS System
The SACAA has identifi ed the need to implement an EBS (Enterprise Business System) to assist the Authority to streamline the effectiveness of its internal and external processes and services systematically. The initiative will be implemented and rolled out over several years, prioritised in terms of risk and business impact. The system will allow the Authority to invest and leverage information to allow the Authority to improve on its mandate to regulate and enforce safety and security within aviation. The EBS platform will enable the use of mobile solutions, i.e. iPADS and smartphones to conduct real-time business activities remotely, i.e. Inspectorate Audits etc.
CRM Project – Client Services, Licensing and Examinations
The SACAA has identifi ed that the customer is key in the way that it conducts its business and exercises its mandate. The CRM (Customer Relationship Management) system will provide such a platform that will ensure that business enquiries, issues and complaints are routed to the appropriate departments and are allocated to an employee through a structured workfl ow with delegation escalation and
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performance management underpinned. The system will provide a track and trace, 360-degree transparency in resolution to customer- related contact. The system will ensure that the SACAA conducts customer experience surveys in line with performance targets and allows improvement of these processes.
The Portal Project – Communications and Marketing
The SACAA identifi ed the need for a CMS (Content Management System). The website and intranet will be developed on CMS platforms that allow secure, accurate and approved information to be presented internally and/or externally to provide integrity and effectiveness of information. The platforms will allow for expansion to streamline business processes in future and allow online transactions where possible (i.e. E-commerce). The project includes a SACAA Intranet, SACAA Website upgrade, the SACAA Application and the CAA Corporate email banner. A graphic designer was engaged in March 2013 to assist Corporate Communications and Marketing with design concepts. The implementation of a SACAA Intranet and Application as well as email banner will be rolled out in the new fi nancial year; however the website is in progress.
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Broad-Based Black Economic Empowerment
BBBEE Accreditation
In the 2011/12 fi nancial year the organisation achieved a Level 6 BBBEE accreditation. It must be noted that it was the SACAA’s fi rst attempt to get accredited. The SACAA engaged an accreditation agency to do the accreditation.
In the 2012/13 fi nancial year the SACAA had shown a drastic improvement on its accreditation. The Authority achieved a Level 4 BBBEE accreditation. A target of Level 5 had been set but we managed to exceed our expectation in the area of Procurement and Social Responsibility. The SACAA still needs to improve on its Enterprise Development, as this is the only area in which it did not perform well. We hope that we will be able to achieve better points in this area.
The target as agreed in the performance with the Department of Transport is to achieve a level 5 for the 2012/13 fi nancial year. The SACAA has over-achieved this within a year, in line with its performance agreement. It must be noted that we encourage the use of BBBEE-accredited suppliers in our supply chain activities. We also have managed to build SMME through our Enterprise Development plans by ensuring that they get paid from one day to ten days of receipt of their invoices.
Spending on Broad-Based Black Economic Empowerment - Procurement from BBBEE suppliers over three years
The BBBEE spend for the three-year period is illustrated in the graph below. Our BBBEE target is 60% and we are proud to announce this achievement which exceeds the fi gures for the 2011/12 fi nancial year by 15.8%. The Supply Chain Management department has maintained an upward trend far in excess of the minimum requirement. The Department’s payment cycle has been planned from 1 - 10 days on submission of invoices by the BBBEE companies. The Department has set this target to ensure that its contribution towards the Enterprise Development target is met and is working in conjunction with the Finance department to ensure that its payment to suppliers is maintained and done within the 30-day cycle as required by government. It also does supplier performance measurement to ensure that the quality of service is improved to meet its needs.
Graphical Representation of the BBBEE Spend over 3 years
100
90
80
70
60
50
40
30
20
10
0
2010 Target %
2010 BBBEE Spend %
2011 Target %
2011 BBBEE Spend %
2012 Target %
2012 BBBEE Spend %
Target BBBEE
Spend %
Target BBBEE
Spend %
Target BBBEE
Spend %2010 2011 2012
2010 2011 2012
Target % BBBEE Spend % Target % BBBEE Spend % Target % BBBEE Spend %
60 65.48 60 68 60 86.2
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Stakeholder Management and Engagement
National Aviation Security Committee (NASC)
Since the NASC was reconstituted in line with the new Civil Aviation Act, Act 2009, (Act 13 of 2009); and with SACAA assuming the responsibility of Secretariat, there has been notable improvement in meeting the statutory requirements as prescribed in the Act.
NASC meetings were held quarterly from 4 May 2012, with the last meeting held on 26 February 2013. This is where AvSec matters and future items on the agenda were discussed with a view to directing aviation security in the country. New developments include
• the reconstitution of the Facilitation Committee,
• the formulation of a policy on cyber threat,
• the representation of South Africa in the IATA work group on Checkpoint of the Future, and
• the accreditation of private security companies rendering AvSec functions.
Additional Industry Meetings Attended by the Aviation Security Team
• Government Sector Security Council Meeting – 14 June 2012;
• Consultative meeting in preparation for the High Level Conference on AvSec – 14 June 2012;
• Airlift Strategy Meeting facilitated by DoT, to present the NASP and AvSec- related legislation;
• AvSec workshop held with government agencies at Lanseria airport – 3 May 2012;
• ICAO AvSec Panel Work Group, Singapore – 28 to 29 May 2012: to discover key principles on Cargo Security to be adopted at the ICAO High Level Conference in September 2012;
• AFCAC / EU meeting on Air Cargo Security, Dakar, Senegal – June 2012;
• Africa Cup of Nations: the briefi ng of NATJOINTS/SACAA and the industry took place on 2 October 2012 as part of the preparation;
• SACAA met with industry players and provided guidance on the procurement of security equipment in line with Chapter 8 of the NASP on 8 October 2012;
• The Part 108/109 work group meeting took place on 26 October 2012, when the training curricula for Levels 2 and 3 were fi nalised, in line with the importing of Air Cargo Training from Part 108 to Part 109 which is AvSec training;
• Numerous meetings were held with cargo agents and handlers to discuss new requirements pertaining to the procurement and approval of screening equipment at the cargo sector. This follows a newly promulgated regulation compelling cargo agents and handlers to obtain approval from SACAA for procurement of any screening equipment;
• The Africa Aviation Summit was hosted by ATNS on 7 November 2012;
• The ACSA Security Forum took place on 26 November 2012 in Cape Town, where a way forward was mapped to address security incidents / breaches at all airports owned by ACSA;
• The Women in Aviation Conference took place from 27 - 29 November 2012 in Sandton, Johannesburg;
• The CARCom: A workshop to discuss proposals to amendments of Part 92 of the Civil Aviation Regulations was held on 28 November 2012. The amendments were in relation to defi nitions, Dangerous Goods forbidden for transportation by air unless exempted, and loading of cargo aircraft.
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Industry Support offered by the Aviation Security Team
• In March 2013, AvSec provided assistance and guidance to Mafi keng and Pilanesburg airports in the process of procuring screening technology which will enhance security at these airports respectively;
• In July 2012, a joint assessment of Mafi keng airport was conducted by all departments in the AvSec division, at the request of the DCA, which was followed by a comprehensive report on the status of these airports; and
• Richards Bay and Pietermaritzburg airports were visited in August and September for comprehensive assessments as part of close monitoring, and to provide guidance and support in fast-tracking compliance with the NASP and applicable aviation security legislation.
Aviation Personnel Standards Industry Conferences and Engagements
APS hosted various conferences during this period, as follows: nine for fl ight instructors, nine for designated fl ight examiners and two for cabin designated examiners, which were held in Gauteng, Cape Town, Port Elizabeth and Durban. The conferences are a regulatory requirement of CAR, Parts 61 and 64.
The aim of these conferences is the maintenance of training and testing standards by fl ight and cabin instructors as well as designated fl ight examiners and designated cabin examiners.
Survey results continue to indicate that the conferences are a resounding success, with very positive feedback being received regarding all aspects.
The Senior Manager: APS and one Testing Standards offi cer (pilot) attended the International Civil Aviation Organisation (ICAO) conference on English Language Profi ciency in Montreal, Canada over the period 25 - 27 March 2013.
APS is partnering with the Aeroclub in the Flight Safety Campaign and a presentation was made to a meeting of the General Aviation Safety Initiative (GASI) in December on how the SACAA and Aeroclub can work together by coordinating their safety efforts on both offi cial websites simultaneously. The launch of this coordinated effort is planned for August 2013.
Aviation Medicine Industry Workshops (4) CAPSCA
The Medical department, in consultation with the representatives from the National Department of Health, held workshops to discuss the proposed MoU between the National Departments of Transport and Health to address the implementation of the International Health Regulations (2005). Unfortunately, the World Health Organisation has granted an extension to States for the implementation of these regulations, which were due from 2012 to 2014. This has serious implications for the implementation of the Aviation Pandemic Preparedness Plan as prescribed in ICAO Annex 9. The MoU was recently submitted to DoT.
Aviation Medicine Industry Workshops (6) ATC Medical Standards
Avmed, in consultation with the Air Traffi c Navigation Services Company (ATNS), specialists, the Institute for Aviation Medicine (IAM) and SAsMA held two workshops to discuss the medical requirements applicable to air traffi c controllers. The developed medical protocols applicable to the ATC environment (not altitude issues) as applicable to pilots have been drafted and are currently being circulated for preparation for CARCom submission. This will lead to less applicants being declared medically unfi t and decrease the number of unnecessary medical appeals.
Aviation Medicine Industry Workshops(7)-ATC Medical Standards
AvMed, in consultation with general surgeons, urologists, Designated Aviation Medical Examiners (DAMEs) and industry, held workshops to develop the protocol relating to malignant conditions, including melanoma, the oesophagus, the prostate, the bladder, and breast and kidney cancer. All protocols, except for the Melanoma Protocol, are new; the protocols went through the CARCom process and were approved by the Director of the SACAA. These protocols will improve the medical certifi cation processes, as applicants with these cancers, SACAA medical team, Institute for Aviation Medicine and designated medical examiners in determining medical fi tness.
81
Aviation Pathology Standards
ICAO has developed a chapter in Aviation Pathology, which aims at assisting States in developing standards for the investigation of the medical aspects of aircraft investigation. AvMed, in consultation with the Accident and Incident Investigation Department (AIID) of the SACAA, held a workshop with forensic pathologists from the University of Pretoria and the University of Limpopo to discuss medical and psychological requirements relating to aircraft accidents. A draft document was developed as a tool to assist AIID with regard to this part of the accident investigation.
Aerospace Medical Association Annual Conference
The medical department is reviewing a number of medical protocols to ensure compliance with ICAO and to be in line with other CAA authorities. The attendance of these conferences helps the department keep abreast with International Best Practices.
Aerospace Medical Association Annual Conference
The annual scientifi c meeting by the Aerospace Medical Association that took place in Atlanta from the 13th to 17th of May 2012 was a success. The theme for this year’s meeting was “Evolving travel medicine issues, global concerns and human performance.” The topics ranged from “The Fear of Flying, Travel and Transport Medicine, Motion Sickness, Psychology”, to “Natural Disasters, such as a Tsunami, Disaster Medicine; how these affect aviation safety and how to learn from such situations”. Representatives from Japan led discussions relating to lessons learned from Natural Disasters.
The meeting presentations were in the form of clinical case presentations, discussion panels, grand rounds and exhibitions. A number of clinical topics were covered, such as the latest advances in Cardiology, including heart transplants, Colour Vision (which has always been a contentious issue), Advances in understanding Head, Brain and Spinal injuries, Aeromedical Certifi cation of the Aviator after a Stroke, Updates in Nephrology, and Advances in Aerospace Medicine.
Other topics included Aircrew Fatigue and Fatigue Risk Management, Enhancing Human Performance, (training and systemic evaluation of human performance), Effects of Environmental factors and Travel on Aircrew, Disabled Pilots, Operational Aviation Medicine issues, International Relations, and ICAO Updates.
Flight Plan 2012
The Air Safety Infrastructure team, in partnership with ATNS, conducted awareness workshops in six venues around the country to ensure the successful implementation of Flight Plan 2012; the new format approved by ICAO, which was successfully implemented by South Africa on 15 November 2012.
Safety and Security Promotions Events and Campaigns
The mandate of the South African Civil Aviation Authority requires that the Authority ensure and facilitate the development and functioning of the civil aviation industry. Additionally, the mandate requires that we promote civil aviation safety and security. In fulfi lling this mandate, the Authority develops and executes a safety and security promotions programme for the year and on the next page is the list of activities undertaken by the Authority, which includes exhibitions at airshows, safety talks at fl ying clubs around the country, and organising industry workshops in conjunction with the technical departments in support of their safety and security promotion efforts.
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Below is the list of activities that were organised and / or attended during the fi nancial year:
1. Stellenbosch Flying Club Safety Presentation 13 April 2012
2. Zebula Airshow 14 April 2012
3. Grand Rand Airshow 20 May 2012
4. Limpopo BBBEE Information Session 25 May 2012
5. New Castle Airshow 2 June 2012
6. Richards Bay Airshow 9 June 2012
7. ICAO GSI-OPS Workshop 11-27 June 2012
8. Ulundi Airshow 16 June 2012
7. Pietermaritzburg Airshow 23 June 2012
8. Mpumalanga BBBEE Information Session 29 June 2012
9. Klerksdorp Airshow 30 June 2012
10. Margate Airshow 7 July 2012
11. Virginia Airshow 14 July 2012
12. Durban Flight Plan Workshop 24 August 2012
13. Virginia Safety Presentation 25 August 2012
14. Bloemfontein Runway Incursion and Regulation Changes Workshop 31 August 2012
15. Cape Town Flight Plan Workshop 31 August 2012
16. Nelspruit Flight Plan Workshop 7 September 2012
17. Barberton Airshow 8 September 2012
18. East London Flight Plan Workshop 14 September 2012
19. Waterkloof Africa and Aerospace Defence Airshow 19-23 September 2012
20. Bloemfontein Flight Plan Workshop 21 September 2012
21. Johannesburg Flight Plan Workshop 28 September 2012
22. Inspector Training Systems (ITS) Course 10-28 September 2012
23. Johannesburg Regulation Changes Workshop 26 October 2012
24. Bloemfontein Safety Presentation 31 October 2012
25. Cape Town Regulation Changes Workshop 23 November 2012
26. Durban Regulation Changes Workshop 14 December 2012
27. FAA SMS International Training 22 January to 1 February 2013
28. Bultfontein Airshow 8 March 2013
6Th National Aviation Safety Seminar 2012 (16-17 October 2012)
The Communications department was instrumental in the successful hosting of the 6th National Safety Seminar which was held at the Midrand Conference Centre on 16 and 17 October 2012. The theme of this seminar was “Safety Begins with Me”. The seminar is one of the various platforms created by the SACAA to interact with the industry. Furthermore, the industry gets an opportunity to ask questions, debate issues and engage with other industry experts. The seminar was well attended and received by various industry role players.
The two-day seminar had signifi cant value for both delegates and the SACAA. Some of the key points on the two-day programme included:
• ICAO Continuous Monitoring Approach to Safety;
• Technology in the Aviation Industry and its Impact on Safety;
• Report-back from the workgroups formed after the recommendations of the 5th National Safety Seminar;
• Fickleness of Judgment in the Low Level Display Circuit.
The summarised overall feedback from delegates on the presentations was rated as good, and this included the overall effectiveness of the seminar.
83
Aviation Career Awareness Campaigns
Aviation Career Awareness Campaigns
The South African Civil Aviation Authority is part of the Joint Aviation Awareness Programme (JAAP), an aviation programme comprising of the following member organisations: Department of Transport, South African Airways, Air Traffi c and Navigation Services, Airports Company South Africa, South African Air Force and the South African Police Service Air Wing. The purpose of this programme is to promote aviation career awareness to previously disadvantaged learners. The aim is to empower the learners so that they can consider a career in aviation in the long run. This programme contributes positively to the efforts of government in changing the face of civil aviation in this country to be more representative of the demographics of the country. The target is learners from rural areas across the country, who are in grades 10 – 12. The emphasis is on Mathematics and Science learners.
During the reporting period the programme included visits to learners as listed below:
Details Date No. of SchoolsProvince
Mopani District Career Exhibition -7819 learners Maths and Science 15-20 April 2012 149 Limpopo
Motheo District – 4692 Maths and Science learners 07-11 May 2012 64 Bloemfontein
Soweto Career Expo – 2000 Maths and Science learners 17-18 May 2012 50 Gauteng
Kimberly Youth Indaba Career Expo 28-29 June 2012 6 Northern Cape
SAWIA Career Awareness - 350 Maths and Science learners 15-17 June 2012 7 KwaZulu-Natal
New Castle Youth Express –500 Maths and Science learners 20-22 July 2012 31 KwaZulu-Natal
Makgathle and Mankweng Circuit - 1350 Maths and Science learners 13-14 September 2012 9 Limpopo
Waterkloof AAD – an estimated 1 000 Maths & Science learners 19-23 September 2012 12 Gauteng
My Tomorrow Career Expo at Nasrec – 3000 Maths and Science learners 09-11 October 2012 24 Gauteng, Free State and North West
Senaona School visit - 450 Maths and Science learners 26-October 2012 5 Gauteng
Mafi keng International Civil Aviation Day (ICAD) – 2270 learners 5-7 December 2012 79 North West
Bergville - 2000 Maths and Science learners 08-09 February 2013 27 KZN
Winterveldt School visit - 1305 Maths and Science learners 12-14 February 2013 5 Gauteng
Burgersfort Career Awareness – 240 Maths and Science learners 19-21 February 2013 3 Limpopo
Bethlehem and Harrismith Career Awareness – 480 learners 11-15 February 2013 22 Free State
Bultfontein Career Awareness -180 Maths and Science learners 06-10 March 2013 5 Free State
TOTAL 498
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Industry Fora
The SACAA meets with industry in various fora to discuss issues that affect the different sectors in the industry. These meetings are hosted by the SACAA. The following industry forum meetings took place during the reporting period:
Forum Dates
National Airspace Committee
The objectives of NASCOM is to afford all ‘users’, service providers and the regulating authorities a forum where amendments to airspaces and associated routes and facilities, can be debated, thereby providing the DCA with transparent, sound, participative and complete information, prior to and as guidance for, the publication of any such changes.
10 May 2012
16 August 2012
8 November 2012
14 February 2013
25 April 2012
27 June 2012
25 July 2012
29 August 2012
26 September 2012
28 November 2012
30 January 2013
27 February 2013
27 March 2013
National Aviation Security Committee
NASC is the national body with the objective to advise the Minister with regard to the aviation security policy; review and make recommendations on the effectiveness of security measures and procedures; and provide for coordination to ensure the proper and diligent implementation of the NASP.
3 May 2012
23 May 2012
5 September 2012
20 February 2013
Industry Liaison Forum
The Industry Liaison Forum is chaired by the Director of Civil Aviation and aims to provide a platform whereby members of the aviation industry and the SACAA can engage on matters pertinent to the industry. Meetings take place quarterly and members include industry organisations such as the Aeroclub, Commercial Aviation Association, Air Traffi c and Navigation Services, Aircraft Owners and Pilots Association, Recreational Aviation Administration, Airport Operators and Board of Airline Representatives.
16 April 2012
9 July 2012
22 October 2012
5 February 2013
General Aviation Safety Initiative
This forum was created as a response to the rise in fatal accidents which took place in October 2008. The aim of the committee was to look for new and effective ways of reducing the rate of accidents in this country. The committee therefore proposes safety programmes and initiatives that must be implemented by the SACAA and industry.
3 April 2012
5 June 2012
7 August 2012
1 October 2012
4 December 2012
4 February 2013
South African Civil Aviation Authority/Air Traffi c and Navigation Services Forum
This forum was created to address specifi c issues that affect both organisations in a speedy and effi cient manner. It is attended by senior offi cials from both organisations. The purpose of the stakeholder meetings between ATNS and SACAA is to engage in issues pertaining to the Southern African Airspace and infrastructure and fi nd solutions to challenges faced by both organisations in this regard.
19 April 2012
24 July 2012
25 September 2012
5 March 2013
85
Internal Stakeholders
The Corporate Communications and Marketing department is responsible for all corporate and staff events.
Staff events contribute towards staff morale, as some staff socialising contributes towards a motivated workforce. Various events were organised and executed during the reporting period, including the following:
• International Mandela Day in July;
• Take a Girl Child to Work Day;
• Men in the Making campaign;
• Women’s Day in August;
• Father’s Day in June;
• Secretaries’ Day in September;
• Annual SACAA Charity Golf Day in September;
• Casual Day in September, which raised funds for those who are less fortunate; and
• Year-end Function in December.
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PART F:
FINANCIAL INFORMATION
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Index
The reports and statements set out below comprise the fi nancial statements presented to parliament:
Page
Report of the Auditor - General 89
Accounting Authority’s Responsibilities and Approval 91
Finance and Audit Committee Report 92
Accounting Authority’s Report 94
Company Secretary’s Certifi cation 97
Statement of Financial Position 98
Statement of Financial Performance 99
Statement of Changes in Net Assets 100
Cash Flow Statement 101
Statement of Comparison of Budget and Actual Amounts 102
Accounting Policies 103
Notes to the Financial Statements 119
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
89
Report Of The Auditor-General To Parliament On The South African Civil Aviation Authority
REPORT ON THE FINANCIAL STATEMENTS
Introduction 1 I have audited the fi nancial statements of the South African Civil Aviation Authority set out on pages 92 to 139, which comprise
the statement of fi nancial position as at 31 March 2013, the statement of fi nancial performance, statement of changes in net assets and the cash fl ow statement for the year then ended, and the notes, comprising a summary of signifi cant accounting policies and other explanatory information.
Accounting authority’s responsibility for the fi nancial statements2 The accounting authority is responsible for the preparation and fair presentation of these fi nancial statements in accordance
with South African Standards of Generally Recognised Accounting Practice ( SA Standards of GRAP ) and the requirements of the Public Finance Management Act of South Africa, 1999 ( Act No.1 of 1999) ( PFMA) , and for such internal control as the accounting authority determines is necessary to enable the preparation of fi nancial statements that are free from material misstatement, whether due to fraud or error.
Auditor-General’s responsibility 3 My responsibility is to express an opinion on these fi nancial statements based on my audit. I conducted my audit in accordance
with the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA), the General Notice issued in terms thereof and International Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.
4 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the fi nancial statements.
5 I believe that the audit evidence I have obtained is suffi cient and appropriate to provide a basis for my unqualifi ed audit opinion.
Opinion6 In my opinion, the fi nancial statements present fairly, in all material respects, the fi nancial position of the South African Civil
Aviation as at 31 March 2013, and its fi nancial performance and cash fl ows for the year then ended, in accordance with South African Standards of Generally Recognised Accounting Practice ( SA Standards of GRAP) and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No.1 of 1999) (PFMA).
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South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
90
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
7 In accordance with the PAA and the General Notice issued in terms thereof, I report the following fi ndings relevant to performance against predetermined objectives, compliance with laws and regulations and internal control, but not for the purpose of expressing an opinion.
Predetermined objectives 8 I performed procedures to obtain evidence about the usefulness and reliability of the information in the annual performance
report as set out on pages 17 to 20 of the annual report.
9 The reported performance against predetermined objectives was evaluated against the overall criteria of usefulness and reliability. The usefulness of information in the annual performance report relates to whether it is presented in accordance with the National Treasury’s annual reporting principles and whether the reported performance is consistent with the planned objectives. The usefulness of information further relates to whether indicators and targets are measurable (i.e. well defi ned, verifi able, specifi c, measurable and time bound) and relevant as required by the National Treasury Framework for managing programme performance information.
The reliability of the information in respect of the selected objectives is assessed to determine whether it adequately refl ects the facts (i.e. whether it is valid, accurate and complete).
10 There were no material fi ndings on the annual performance report concerning the usefulness and reliability of the information.
Compliance with laws and regulations 11 I did not identify any instances of material non-compliance with specifi c matters in key applicable laws and regulations as set
out in the General Notice issued in terms of the PAA.
Internal control 12 I did not identify any defi ciencies in internal control which I considered suffi ciently signifi cant for inclusion in this report .
Pretoria
31 July 2013
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
91
Accounting Authority’s Responsibilities and ApprovalThe members are required by the Public Finance Management Act (Act 1 of 1999), to maintain adequate accounting records and are responsible for the content and integrity of the fi nancial statements and related fi nancial information included in this report. It is the responsibility of the members to ensure that the fi nancial statements fairly present the state of affairs of the entity as at the end of the fi nancial year and the results of its operations and cash fl ows for the period then ended. The external auditors are engaged to express an independent opinion on the fi nancial statements and were given unrestricted access to all fi nancial records and related data.
The fi nancial statements have been prepared in accordance with Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.
The fi nancial statements are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.
The members acknowledge that they are ultimately responsible for the system of internal fi nancial control established by the entity and place considerable importance on maintaining a strong control environment. To enable the members to meet these responsibilities, the accounting authority sets standards for internal control aimed at reducing the risk of error or defi cit in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defi ned framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the entity and all employees are required to maintain the highest ethical standards in ensuring the entity’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the entity is on identifying, assessing, managing and monitoring all known forms of risk across the entity. While operating risk cannot be fully eliminated, the entity endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.
The members are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the fi nancial records may be relied on for the preparation of the fi nancial statements. However, any system of internal fi nancial control can provide only reasonable, and not absolute, assurance against material misstatement or fraud.
The members have reviewed the entity’s cash fl ow forecast for the year to 31 March 2014 and, in the light of this review and the current fi nancial position, they are satisfi ed that the entity has or has access to adequate resources to continue in operational existence for the foreseeable future.
Although the accounting authority is primarily responsible for the fi nancial affairs of the entity, they are supported by the entity’s external auditors.
The external auditors are responsible for independently reviewing and reporting on the entity’s fi nancial statements. The fi nancial statements have been examined by the entity’s external auditors and their report is presented on pages 89 to 90.
The fi nancial statements set out on pages 94 to 139, which have been prepared on the going concern basis, were approved by the accounting authority on 29 July 2013 and were signed on its behalf by:
Ms P Riba Mr P NdlovuChairperson SACAA Board Chairperson Finance and Audit Committee
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South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
92
Finance and Audit Committee ReportWe are pleased to present our report for the fi nancial year ended 31 March 2013.
Finance and audit committee members and attendance
The Finance and Audit Committee is an independent statutory committee and consists of three independent Non-Executive Directors listed hereunder, which have been approved by the Board Committee of SACAA. It meets at least four times per annum as per its approved terms of reference. During the current year fi ve meetings were held.
Name of member Number of meetings attendedMr P Ndlovu (Chairperson) 5 Adv R R Dehal 5 Ms K Selane (Appointed 1 December 2012 and retired 30 April 2013) 1
The Chairman of the Board, Director of Civil Aviation, General Manager Finance, Chief Audit Executive, external auditors and other assurance partners (legal, compliance and risk) attend committee meetings by invitation only.
Finance and audit committee responsibility
The Finance and Audit Committee’s roles and responsibilities include its statutory duties as per the Public Finance Management Act, 1999 (Act No.1 of 1999) (“PFMA”) as well as the Treasury Regulations issued in terms of the PFMA and the responsibilities assigned to it by the Board Committee. The Committee reports that it has complied with its responsibilities arising from section 50(1) and 51(1) of the PFMA and Treasury Regulation 3.1.
The Finance and Audit Committee executed its duties in terms of the requirements of King III, and also reports that it has adopted appropriate formal terms of reference as its audit committee charter, has regulated its affairs in compliance with this charter and has discharged all its responsibilities as contained therein.
The effectiveness of internal control
The system of internal controls applied by the entity over fi nancial and risk management is effective, effi cient and transparent. In line with the PFMA and the King III Report on Corporate Governance requirements, Internal Audit provides the fi nance and audit committee and management with assurance that the internal controls are appropriate and effective. This is achieved by means of the risk management process, as well as the identifi cation of corrective actions and suggested enhancements to the controls and processes. From the various reports of the Internal Auditors, the Audit Report on the fi nancial statements, and the management report of the Auditor-General South Africa, it was noted that no material matters were reported which indicate defi ciencies in the system of internal control or any deviations there from. Accordingly, we can report that the system of internal control over fi nancial reporting for the period under review was effi cient and effective.
The Finance and Audit Committee is satisfi ed with the content and quality of monthly and quarterly reports prepared and issued by the Accounting Authority of the entity during the year under review.
Evaluation of fi nancial statements
The Finance and Audit Committee has:
• reviewed and discussed the audited fi nancial statements to be included in the annual report, with the Auditor-General and the Accounting Authority;
• reviewed the Auditor-General of South Africa’s management report and management’s response thereto;
• reviewed the entities compliance with legal and regulatory provisions;and
• reviewed signifi cant adjustments resulting from the audit.
The Finance and Audit Committee concur with and accept the Auditor-General of South Africa’s report on the fi nancial statements, and are of the opinion that the audited fi nancial statements should be accepted and read together with the report of the Auditor-General of South Africa.
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
93
Finance and Audit Committee Report (continued)
Internal auditThe Finance and Audit Committee is responsible for ensuring that the SACAA’s Internal Audit function is independent and has the necessary resources, standing and authority within the SACAA to enable it to discharge its duties. Furthermore, the Committee oversees cooperation between the internal and external auditors, and serves as a link between the Board of Directors and these functions.
The Finance and Audit Committee considered and recommended the Internal Audit Charter and three year Coverage Plan for approval by the Board. The Committee also approved the annual Internal Audit Plan.
The Internal Audit function reports centrally with responsibility for reviewing and providing assurance on the adequacy of the internal control environment across all of the SACAA’s operations. The Chief Audit Executive is responsible for reporting the fi ndings of the internal audit work against the agreed internal Audit Plan to the Finance and Audit Committee on a regular basis. The Chief Audit Executive has direct access to the Committee, primarily through its Chairperson. The Committee is also responsible for the assessment of the performance of the Chief Audit Executive and the Internal Audit function. During the year, the Committee met with the external auditors and with the Chief Audit Executive without Management being present.
The Finance and Audit Committee is satisfi ed that the Internal Audit function is operating effectively and that it has addressed the risks pertinent to the entity and its audits.
Auditor-General of South AfricaThe Finance and Audit Committee has met with the Auditor-General of South Africa to ensure that there are no unresolved issues.
Mr P Ndlovu
Chairperson of the Finance and Audit Committee
Date: 29 July 2013
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South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
94
Accounting Authority’s ReportThe members submit their report for the year ended 31 March 2013.
1. IntroductionThe Board as Accounting Authority presents its fi fteenth report in terms of the Civil Aviation Act, 2009 (Act No. 13 of 2009) and the Public Finance Management Act , 1999 (Act No. 1 of 1999), which forms part of the audited fi nancial statements for the year ended 31 March 2013.
The Board is of the opinion that the SACAA complies with the provisions of the PFMA.
2. Review of activitiesMain business and operations
The entity is a public entity whose primary focus is to control and regulate civil aviation in the Republic of South Africa and to oversee the functioning and development of the civil aviation industry.
The SACAA was established as a juristic body in terms of the now repealed South African Civil Aviation Authority Act, 1998 (Act No. 40 of 1998), and is presently regulated in terms of the Civil Aviation Act, 2009. The Act is read in conjunction with the South African Civil Aviation Authority Levies Act, 1998 (Act No. 41 of 1998), enables the SACAA to charge the Passenger Safety Charge on scheduled operations, fuel levy on non-scheduled operations and general aviation, and charges for services to the aviation industry, allowing it to generate revenue to fund its operations.
The SACAA continues to conduct aviation accident and incident investigations on behalf of the Department of Transport and receives an annual payment for these services.
During the year there were no major changes in the activities of the business.
The operating results and state of affairs of the entity are fully set out in the attached fi nancial statements and do not in our opinion require any further comment.
Net surplus of the entity, for the fi nancial year under review, was R 22,892,514 (2012: surplus R 11,745,384).
3. Going concernThe fi nancial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to fi nance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.
4. Subsequent eventsSubsequent to year end, the members are not aware of any matter or circumstance arising since the end of the fi nancial year, which may had an impact on the results for the fi nancial year under review.
5. Accounting policiesThe fi nancial statements are prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP), including any interpretations of such Statements issued by the Accounting Standards Board.
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
95
Accounting Authority’s Report (continued)
6. Accounting AuthorityThe members of the entity during the year and to the date of this report are as follows:
Name Appointed ResignationsMs P Riba Appointed 01 April 2011 Mr Z Nomvete Appointed 01 April 2011 Dr N Sangweni Appointed 01 April 2011 Resigned 18 May 2012 Mr P Ndlovu Appointed 01 April 2011 Adv. RR Dehal Appointed 01 April 2011 Mr V Ndwamato Appointed 01 April 2011 Ms P Matlala Appointed 01 December 2012 Ms K Selane Appointed 01 December 2012 Retired 30 April 2013
7. Company SecretaryThe secretary of the entity Mr A Motake resigned on 31 December 2012 and Ms M Sonjani was appointed as Acting Company Secretary effective from 1 January 2013:
Business addressIkhaya LokundizaBuilding 16, Treur CloseWaterfall Park, Bekker StreetMidrand
Postal addressPrivate Bag X73Halfway House1685
8. Corporate governanceGeneral
The accounting authority is committed to business integrity, transparency and professionalism in all its activities. As part of this commitment, the accounting authority supports the highest standards of corporate governance and the ongoing development of best practice.
The entity confi rms and acknowledges its responsibility to total compliance with the Code of Corporate Practices and Conduct (“the Code”) laid out in the King Report on Corporate Governance for South Africa, 2009 (“King III Report”). The accounting authority discuss the responsibilities of management in this respect, at Board meetings and monitor the entity’s compliance with the code on a quarterly basis.
The salient features of the entity’s adoption of the Code is outlined below:
Board of directors
The Board:
• retains full control over the entity, its plans and strategy;
• acknowledges its responsibilities as to strategy, compliance with internal policies, external laws and regulations, effective risk management and performance measurement, transparency and effective communication both internally and externally by the entity;
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South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
96
Accounting Authority’s Report (continued)• is of a unitary structure comprising:
- non-executive directors, all of whom are independent directors as defi ned in the Code; and- executive directors.
• has established a Board directorship continuity programme.
Chairperson and Director of Civil Aviation
The Chairperson is a non-executive and independent director (as defi ned by the Code).
The roles of Chairperson and Director of Civil Aviation are separate, with responsibilities divided between them, so that no individual has unfettered powers.
Remuneration
The upper limits of the remuneration of the Director of Civil Aviation who is the only executive director of the entity, is determined by the Parent entity, and the accounting authority will determine the remuneration within the above mentioned limits.
Board meetings
The accounting authority has met on 9 occasions during the fi nancial year. The accounting authority schedules to meet at least 4 times per annum.
Non-executive directors have access to all members of management of the entity.
9. AuditorsThe Auditor - General will continue in offi ce for the next fi nancial period.
10. Number of EmployeesThe average number of employees during the period was 455 (2012: 447).
11. Materiality FrameworkThe South African Civil Aviation Authority has a materiality framework whereby all material and signifi cant information is disclosed to the Finance and Audit Committee on a quarterly basis.
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
97
Company Secretary’s Certifi cation I hereby certify that SACAA has lodged all returns as required by the Public Finance Management Act, 1999 (Act No. 1 of 1999), as amended by Act No 29 of 1999.
Ms M Sonjani
Acting Company Secretary
Midrand
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South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
98
Statement of Financial Position as at 31 March 2013
2013 2012Note(s) R R
Assets Current Assets Trade and other receivables 3 39,038,404 48,991,920Cash and cash equivalents 4 189,827,210 165,617,033
228,865,614 214,608,953
Non-Current Assets Property, plant and equipment 5 36,103,963 20,037,144Intangible assets 6 5,109,255 136,607
41,213,218 20,173,751
Total Assets 270,078,832 234,782,704
Liabilities Current Liabilities Operating lease liability 7 7,143,972 8,877,857Trade and other payables 8 45,380,647 34,639,929Unspent conditional grants and receipts 9 4,256,629 4,256,629Provisions 10 84,832,653 82,795,718
Total Liabilities 141,613,901 130,570,133
Net Assets 128,464,931 104,212,571
Net Assets Reserves Non-distributable reserves 11 54,635,362 53,275,516Accumulated surplus 73,829,569 50,937,055
Total Net Assets 128,464,931 104,212,571
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Statement of Financial Performance
2013 2012Note(s) R R
Revenue Revenue 13 377,766,797 311,437,958Accidents and incidents investigation 16,025,000 10,716,000Interest received 15 9,371,757 5,719,671Other income 14 3,540,678 5,205,023
Total revenue 406,704,232 333,078,652
Expenditure Personnel cost 16 (246,519,559) (216,023,047)Depreciation and amortisation (4,416,203) (4,575,726)Impairment loss - (1,800,190)Finance costs 19 (281,932) (622,223)Debt impairment 17 (17,453,796) (6,520,831)Repairs and maintenance (5,189,103) (4,742,182)Operating expenses 18 (111,127,289) (87,019,228)
Total expenditure (384,987,882) (321,303,427)
Operating surplus 21,716,350 11,775,225Loss on scrapping of assets (70,984) (29,841)Profi t on disposal of assets 143,000 -Reversal of impairment loss 1,104,148 -
1,176,164 (29,841)
Surplus for the year 22,892,514 11,745,384
Attributable to:Owners of the controlling entity 22,892,514 11,745,384
Authority
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Statement of Changes in Net Assets
Note(s)Non-
distributable Reserves
Accumulated surplus Total net assets
R R R
Balance at 01 April 2011 53,275,516 39,191,671 92,467,187Changes in net assets Surplus for the year - 11,745,384 11,745,384
Total changes - 11,745,384 11,745,384
Balance at 01 April 2012 53,275,516 50,937,055 104,212,571Changes in net assets Surplus for the year - 22,892,514 22,892,514Fixed asset adjustments 1,359,846 - 1,359,846
Total changes 1,359,846 22,892,514 24,252,360
Balance at 31 March 2013 54,635,362 73,829,569 128,464,931
Note(s) 11Represented by:Capital funding by government 43,275,516 7,931,000 51,206,516Government subsidies received - 49,404,915 49,404,915Accumulated funds - 16,493,654 16,493,654Fixed asset adjustments 1,359,846 - 1,359,846Asset replacement reserve 10,000,000 - 10,000,000
Total 54,635,362 73,829,569 128,464,931
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Cash Flow Statement
2013 2012Note(s) R R
Cash fl ows from operating activities
ReceiptsReceipts from customers and Department of Transport 403,745,313 305,233,409Interest income 9,371,757 5,719,671
413,117,070 310,953,080
PaymentsPayments made to suppliers and employees (365,705,301) (213,567,154)Finance costs (281,932) (622,223)
(365,987,233) (214,189,377)
Net cash infl ows from operating activities 22 47,129,837 96,763,703
Cash fl ows from investing activities
Purchase of property, plant and equipment 5 (6,658,870) (7,679,802)Proceeds from sale of property, plant and equipment 142,999 -Purchase of intangible assets 6 (4,325,254) (158,426)Proceeds from liquidation of investments - 20,000,000Purchase of work in progress (12,078,535) -
Net cash fl ows from investing activities (22,919,660) 12,161,772
Net increase in cash and cash equivalents 24,210,177 108,925,475Cash and cash equivalents at the beginning of the year 165,617,033 56,691,558
Cash and cash equivalents at the end of the year 4 189,827,210 165,617,033
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Statement of Comparison of Budget and Actual Amounts
Budget on Accrual Basis
Approved budget Adjustments Final Budget
Actual amounts on comparable
basis
Difference between fi nal
budget and actual
Reference
R R R R R
Statement of Financial PerformanceRevenueRevenue from exchange transactionsOther income 335,340 2,817,990 3,153,330 3,540,678 387,348Accidents and incidents investigation 16,025,000 - 16,025,000 16,025,000 -Interest received 906,660 7,619,010 8,525,670 9,371,757 846,087
Total revenue from exchange transactions 17,267,000 10,437,000 27,704,000 28,937,435 1,233,435
Revenue from non-exchange transactionsTransfer revenuePassenger safety charge 306,798,000 - 306,798,000 292,990,916 (13,807,084) 33User fees 67,863,000 - 67,863,000 65,637,224 (2,225,776) 33Fuel levy 17,068,000 2,408,000 19,476,000 19,138,657 (337,343) 33
Total revenue from non-exchange transactions 391,729,000 2,408,000 394,137,000 377,766,797 (16,370,203)
Total revenue 408,996,000 12,845,000 421,841,000 406,704,232 (15,136,768)
ExpenditurePersonnel (278,315,000) (360,000)(278,675,000) (246,519,559) 32,155,441 33Depreciation and amortisation (11,411,000) (992,000) (12,403,000) (4,416,203) 7,986,797 33Finance costs (508,800) 240,800 (268,000) (281,932) (13,932)Debt impairment - - - (17,453,796) (17,453,796) 33Repairs and maintenance (7,285,000) (591,000) (7,876,000) (5,189,103) 2,686,897General Expenses (111,476,200) (11,142,800) (122,619,000) (111,127,289) 11,491,711 33
Total expenditure (408,996,000) (12,845,000) (421,841,000) (384,987,882) 36,853,118
Operating surplus - - - 21,716,350 21,698,043Loss on scrapping of assets - - - (70,984) (70,984)Gain on disposal of assets - - - 143,000 143,000Reversal of impairment loss - - - 1,104,148 1,104,148 33
Surplus - - - 22,892,514 22,892,514
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Accounting Policies
1. Presentation of Financial StatementsThe fi nancial statements have been prepared in accordance with the Standards of Generally Recognised Accounting Practice (GRAP) including any interpretations, guidelines and directives issued by the Accounting Standards Board.
These fi nancial statements have been prepared on an accrual basis of accounting and are in accordance with historical cost convention unless specifi ed otherwise. They are presented in South African Rand.
A summary of the signifi cant accounting policies, which have been consistently applied, are disclosed below.
1.1 Signifi cant judgements and and accounting estimatesIn preparing the fi nancial statements, management is required to make estimates and assumptions that affect the amounts represented in the fi nancial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the fi nancial statements. Signifi cant judgements include:
Loans and receivables
The entity assesses its loans and receivables for impairment at the end of each reporting period. In determining whether an impairment loss should be recorded in surplus or defi cit, the entity makes judgements as to whether there is observable data indicating a measurable decrease in the estimated future cash fl ows from a fi nancial asset.
Management has applied judgement in estimating the extent of any impairment deemed necessary on the gross carrying value of loans and receivables and have impaired all accounts in arrears for a period longer than normal expected trading terms. The impairment loss is recognised in surplus and defi cit when there is objective evidence that it is impaired.
Fair value estimation
The fair value of fi nancial instruments traded in active markets is based on quoted market prices at the end of the reporting period. The quoted market price used for fi nancial assets held by the entity is the current bid price.
The fair value of fi nancial instruments that are not traded in an active market (for example, over-the counter derivatives) is determined by using valuation techniques. The entity uses a variety of methods and makes assumptions that are based on market conditions existing at the end of each reporting period. Quoted market prices or dealer quotes for similar instruments are used for long-term debt. Other techniques, such as estimated discounted cash fl ows, are used to determine fair value for the remaining fi nancial instruments.
The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value of fi nancial liabilities for disclosure purposes is estimated by discounting the future contractual cash fl ows at the current market interest rate that is available to the entity for similar fi nancial instruments.
Impairment testing
The recoverable amounts of cash-generating units and individual assets have been determined based on the higher of value-in-use calculations and fair values less costs to sell. These calculations require the use of estimates and assumptions. It is reasonably possible that the assumption may change which may then impact our estimations and may then require a material adjustment to the carrying value of goodwill and tangible assets.
The entity reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. Assets are grouped at the lowest level for which identifi able cash fl ows are largely independent of cash fl ows of other assets and liabilities. If there are indications that impairment may have occurred, estimates are prepared of expected future cash fl ows for each group of assets. Expected future cash fl ows used to determine the value in use of tangible assets are inherently uncertain and could materially change over time.
Authority
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Useful lives of property, plant and equipment
The entity’s management determines the estimated useful lives and related depreciation charges for property, plant and equipment. This estimate is based on industry norm. Management will increase the depreciation charge where useful lives are less than previously estimated useful lives.
In estimating the useful lives of the assets, management assesses the present status of the assets and the expected future benefi ts associated with the continued use of the assets.
Provisions
Provisions were raised and management determined an estimate based on the information available. Additional disclosure of these estimates of provisions is included in the notes to the annual fi nancial statements under provisions.
1.2 Property, plant and equipmentProperty, plant and equipment are tangible non-current assets that are held for use in the production or supply of goods or services, rental to others, or for administrative purposes, and are expected to be used during more than one period.
The cost of an item of property, plant and equipment is recognised as an asset when:
• it is probable that future economic benefi ts or service potential associated with the item will fl ow to the entity; and
• the cost of the item can be measured reliably.
Property, plant and equipment is initially measured at cost.
The cost of an item of property, plant and equipment is the purchase price and other costs attributable to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Trade discounts and rebates are deducted in arriving at the cost.
Where an asset is acquired through a non-exchange transaction, its cost is its fair value as at date of acquisition.
Where an item of property, plant and equipment is acquired in exchange for a non-monetary asset or monetary assets, or a combination of monetary and non-monetary assets, the asset acquired is initially measured at fair value (the cost). If the acquired item’s fair value was not determinable, it’s deemed cost is the carrying amount of the asset(s) given up.
When signifi cant components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised.
The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the cost of property, plant and equipment, where the entity is obligated to incur such expenditure, and where the obligation arises as a result of acquiring the asset or using it for purposes other than the production of inventories.
Recognition of costs in the carrying amount of an item of property, plant and equipment ceases when the item is in the location and condition necessary for it to be capable of operating in the manner intended by management.
Major spare parts and stand by equipment which are expected to be used for more than one period are included in property, plant and equipment. In addition, spare parts and stand by equipment which can only be used in connection with an item of property, plant and equipment are accounted for as property, plant and equipment.
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Major inspection costs which are a condition of continuing use of an item of property, plant and equipment and which meet the recognition criteria above are included as a replacement in the cost of the item of property, plant and equipment. Any remaining inspection costs from the previous inspection are derecognised.
Property, plant and equipment are depreciated on the straight line basis over their expected useful lives to their estimated residual value.
Property, plant and equipment is carried at cost, less accumulated depreciation and any impairment losses.
The useful lives of items of property, plant and equipment have been assessed as follows:
2013 2012
Calibration equipment 15 years 15 yearsFurniture and fi ttings 8 years 6 yearsComputer equipment 5 years 3 yearsMotor vehicles 5 years 5 yearsLeasehold improvements Period of lease Period of lease
Included in the aircraft are the following components with the respective remaining useful lives:
Airframe 12 years 13 years
Left engine 2 809 hours 3 178 hoursRight engine 2 862 hours 3 231 hoursAvionics 8.5 years 9,5 yearsUndercarriage 19 152 cycles 19 368 cyclesInterior 3 years 4 years
The residual value, and the useful life and depreciation method of each asset are reviewed at the end of each reporting date. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate.
Reviewing the useful life of an asset on an annual basis does not require the entity to amend the previous estimate unless expectations differ from the previous estimate.
Each part of an item of property, plant and equipment with a cost that is signifi cant in relation to the total cost of the item is depreciated separately.
The depreciation charge for each period is recognised in surplus or defi cit unless it is included in the carrying amount of another asset.
Items of entity are derecognised when the asset is disposed of or when there are no further economic benefi ts or service potential expected from the use of the asset.
The gain or loss arising from the derecognition of an item of property, plant and equipment is included in surplus or defi cit when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item.
Authority
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1.3 Intangible assetsAn asset is identifi ed as an intangible asset when it:
• is capable of being separated or divided from an entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, assets or liability; or
• arises from contractual rights or other legal rights, regardless whether those rights are transferable or separate from the entity or from other rights and obligations.
An intangible asset is recognised when:
• it is probable that the expected future economic benefi ts or service potential that are attributable to the asset will fl ow to the entity; and
• the cost or fair value of the asset can be measured reliably.
Intangible assets are initially recognised at cost.
When Intangible assets are acquired at no or nominal cost, the cost shall be its fair value as at the date of acquisition.
An intangible asset acquired through a non-exchange transaction, the cost shall be its fair value as at the date of acquisition.
Expenditure on research (or on the research phase of an internal project) is recognised as an expense when it is incurred.
An intangible asset arising from development (or from the development phase of an internal project) is recognised when:
• it is technically feasible to complete the asset so that it will be available for use or sale.
• there is an intention to complete and use or sell it.
• there is an ability to use or sell it.
• it will generate probable future economic benefi ts or service potential.
• there are available technical, fi nancial and other resources to complete the development and to use or sell the asset.
• the expenditure attributable to the asset during its development can be measured reliably.
Intangible assets are carried at cost less any accumulated amortisation and any impairment losses.
An intangible asset is regarded as having an indefi nite useful life when, based on all relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash infl ows or service potential. Amortisation is not provided for these intangible assets, but they are tested for impairment annually and whenever there is an indication that the asset may be impaired. For all other intangible assets amortisation is provided on a straight line basis over their useful life.
The amortisation period and the amortisation method for intangible assets are reviewed at each reporting date.
Reassessing the useful life of an intangible asset with a fi nite useful life after it was classifi ed as indefi nite is an indicator that the asset may be impaired. As a result the asset is tested for impairment and the remaining carrying amount is amortised over its useful life.
Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are not recognised as intangible assets.
Amortisation is provided to write down the intangible assets, on a straight line basis, to their residual values as follows:
Item Useful lifeComputer software 3 years
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1.4 Financial instrumentsClassifi cation
The entity has the following types of fi nancial assets (classes and category) as refl ected on the face of the statement of fi nancial position or in the notes thereto:
Class Category Investments Financial asset measured at amortised cost Trade and other receivables Financial asset measured at amortised cost Cash and cash equivalents Financial asset measured at amortised cost
The entity has the following types of fi nancial liabilities (classes and category) as refl ected on the face of the statement of fi nancial position or in the notes thereto:
Class Category Trade and other payables Financial liability measured at amortised cost Operating lease liability Financial liability measured at amortised cost
Initial recognition
The entity recognises a fi nancial asset or a fi nancial liability in its statement of fi nancial position when the entity becomes a party to the contractual provisions of the instrument.
The entity recognises fi nancial assets using trade date accounting.
Initial measurement of fi nancial assets and fi nancial liabilities
The entity measures a fi nancial asset and fi nancial liability initially at its fair value plus transaction costs that are directly attributable to the acquisition or issue of the fi nancial asset or fi nancial liability.
The entity measures a fi nancial asset and fi nancial liability initially at its fair value.
Subsequent measurement of fi nancial assets and fi nancial liabilities
The entity measures all fi nancial assets and fi nancial liabilities after initial recognition using the following categories:
• Financial instruments at fair value.
• Financial instruments at amortised cost.
• Financial instruments at cost.
All fi nancial assets measured at amortised cost, or cost, are subject to an impairment review.
Fair value measurement considerations
The best evidence of fair value is quoted prices in an active market. If the market for a fi nancial instrument is not active, the entity establishes fair value by using a valuation technique. The objective of using a valuation technique is to establish what the transaction price would have been on the measurement date in an arm’s length exchange motivated by normal operating considerations. Valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash fl ow analysis and option pricing models. If there is a valuation technique commonly used by market participants to price the instrument and that technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions, the entity uses that technique. The chosen valuation technique makes maximum use of market inputs and relies as little as possible on entity-specifi c inputs. It incorporates all factors that market participants would consider in setting a price and is consistent with accepted economic methodologies for pricing fi nancial instruments. Periodically, an entity calibrates the valuation technique and tests it for validity using prices from any observable current market transactions in the same instrument (i.e. without modifi cation or repackaging) or based on any available observable market data.
Authority
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The fair value of a fi nancial liability with a demand feature (e.g. a demand deposit) is not less than the amount payable on demand, discounted from the fi rst date that the amount could be required to be paid.
Reclassifi cation
The entity does not reclassify a fi nancial instrument while it is issued or held unless it is:
• combined instrument that is required to be measured at fair value; or
• an investment in a residual interest that meets the requirements for reclassifi cation.
Where the entity cannot reliably measure the fair value of an embedded derivative that has been separated from a host contract that is a fi nancial instrument at a subsequent reporting date, it measures the combined instrument at fair value. This requires a reclassifi cation of the instrument from amortised cost or cost to fair value.
If fair value can no longer be measured reliably for an investment in a residual interest measured at fair value, the entity reclassifi es the investment from fair value to cost. The carrying amount at the date that fair value is no longer available becomes the cost.
If a reliable measure becomes available for an investment in a residual interest for which a measure was previously not available, and the instrument would have been required to be measured at fair value, the entity reclassifi es the instrument from cost to fair value.
Gains and losses
A gain or loss arising from a change in the fair value of a fi nancial asset or fi nancial liability measured at fair value is recognised in surplus or defi cit.
For fi nancial assets and fi nancial liabilities measured at amortised cost or cost, a gain or loss is recognised in surplus or defi cit when the fi nancial asset or fi nancial liability is derecognised or impaired, or through the amortisation process.
Impairment and uncollectibility of fi nancial assets
The entity assess at the end of each reporting period whether there is any objective evidence that a fi nancial asset or group of fi nancial assets is impaired.
Financial assets measured at amortised cost:
If there is objective evidence that an impairment loss on fi nancial assets measured at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows discounted at the fi nancial asset’s original effective interest rate. The carrying amount of the asset is reduced directly or through the use of an allowance account. The amount of the loss is recognised in surplus or defi cit.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed directly or by adjusting an allowance account. The reversal does not result in a carrying amount of the fi nancial asset that exceeds what the amortised cost would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in surplus or defi cit.
Financial assets measured at cost:
If there is objective evidence that an impairment loss has been incurred on an investment in a residual interest that is not measured at fair value because its fair value cannot be measured reliably, the amount of the impairment loss is measured as the difference between the carrying amount of the fi nancial asset and the present value of estimated future cash fl ows discounted at the current market rate of return for a similar fi nancial asset. Such impairment losses are not reversed.
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Derecognition
Financial assets
The entity derecognises fi nancial assets using trade date accounting.
The entity derecognises a fi nancial asset only when:
• the contractual rights to the cash fl ows from the fi nancial asset expire, are settled or waived;
• the entity transfers to another party substantially all of the risks and rewards of ownership of the fi nancial asset; or
• the entity, despite having retained some signifi cant risks and rewards of ownership of the fi nancial asset, has transferred control of the asset to another party and the other party has the practical ability to sell the asset in its entirety to an unrelated third party, and is able to exercise that ability unilaterally and without needing to impose additional restrictions on the transfer. In this case, the entity :- derecognise the asset; and - recognise separately any rights and obligations created or retained in the transfer.
The carrying amounts of the transferred asset are allocated between the rights or obligations retained and those transferred on the basis of their relative fair values at the transfer date. Newly created rights and obligations are measured at their fair values at that date. Any difference between the consideration received and the amounts recognised and derecognised is recognised in surplus or defi cit in the period of the transfer.
If the entity transfers a fi nancial asset in a transfer that qualifi es for derecognition in its entirety and retains the right to service the fi nancial asset for a fee, it recognise either a servicing asset or a servicing liability for that servicing contract. If the fee to be received is not expected to compensate the entity adequately for performing the servicing, a servicing liability for the servicing obligation is recognised at its fair value. If the fee to be received is expected to be more than adequate compensation for the servicing, a servicing asset is recognised for the servicing right at an amount determined on the basis of an allocation of the carrying amount of the larger fi nancial asset.
If, as a result of a transfer, a fi nancial asset is derecognised in its entirety but the transfer results in the entity obtaining a new fi nancial asset or assuming a new fi nancial liability, or a servicing liability, the entity recognise the new fi nancial asset, fi nancial liability or servicing liability at fair value.
On derecognition of a fi nancial asset in its entirety, the difference between the carrying amount and the sum of the consideration received is recognised in surplus or defi cit.
If the transferred asset is part of a larger fi nancial asset and the part transferred qualifi es for derecognition in its entirety, the previous carrying amount of the larger fi nancial asset is allocated between the part that continues to be recognised and the part that is derecognised, based on the relative fair values of those parts, on the date of the transfer. For this purpose, a retained servicing asset is treated as a part that continues to be recognised. The difference between the carrying amount allocated to the part derecognised and the sum of the consideration received for the part derecognised is recognised in surplus or defi cit.
If a transfer does not result in derecognition because the entity has retained substantially all the risks and rewards of ownership of the transferred asset, the entity continue to recognise the transferred asset in its entirety and recognise a fi nancial liability for the consideration received. In subsequent periods, the entity recognises any revenue on the transferred asset and any expense incurred on the fi nancial liability. Neither the asset, and the associated liability nor the revenue, and the associated expenses are offset.
Financial liabilities
The entity removes a fi nancial liability (or a part of a fi nancial liability) from its statement of fi nancial position when it is extinguished — i.e. when the obligation specifi ed in the contract is discharged, cancelled, expires or waived.
An exchange between an existing borrower and lender of debt instruments with substantially different terms is accounted for as having extinguished the original fi nancial liability and a new fi nancial liability is recognised. Similarly, a substantial modifi cation of the terms of an existing fi nancial liability or a part of it is accounted for as having extinguished the original fi nancial liability and having recognised a new fi nancial liability.
The difference between the carrying amount of a fi nancial liability (or part of a fi nancial liability) extinguished or transferred to another
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party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in surplus or defi cit. Any liabilities that are waived, forgiven or assumed by another entity by way of a non-exchange transaction are accounted for in accordance with the Standard of GRAP on Revenue from Non-exchange Transactions (Taxes and Transfers).
Presentation
Interest relating to a fi nancial instrument or a component that is a fi nancial liability is recognised as revenue or expense in surplus or defi cit.
Dividends or similar distributions relating to a fi nancial instrument or a component that is a fi nancial liability is recognised as revenue or expense in surplus or defi cit.
Losses and gains relating to a fi nancial instrument or a component that is a fi nancial liability is recognised as revenue or expense in surplus or defi cit.
A fi nancial asset and a fi nancial liability are only offset and the net amount presented in the statement of fi nancial position when the entity currently has a legally enforceable right to set off the recognised amounts and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
In accounting for a transfer of a fi nancial asset that does not qualify for derecognition, the entity does not offset the transferred asset and the associated liability.
1.5 LeasesA lease is classifi ed as a fi nance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classifi ed as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership.
When a lease includes both land and buildings elements, the entity assesses the classifi cation of each element separately.
Finance leases - lessee
Finance leases are recognised as assets and liabilities in the statement of fi nancial position at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of fi nancial position as a fi nance lease obligation.
The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease.
Minimum lease payments are apportioned between the fi nance charge and reduction of the outstanding liability. The fi nance charge is allocated to each period during the lease term so as to produce a constant periodic rate of return on the remaining balance of the liability.
Any contingent rents are expensed in the period in which they are incurred.
Operating leases - lessee
Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset or liability.
1.6 Impairment of non-cash-generating assetsCash-generating assets are those assets held by the entity with the primary objective of generating a commercial return. When an asset is deployed in a manner consistent with that adopted by a profi t-orientated entity, it generates a commercial return.
Non-cash-generating assets are assets other than cash-generating assets.
Impairment is a loss in the future economic benefi ts or service potential of an asset, over and above the systematic recognition of the loss of the asset’s future economic benefi ts or service potential through depreciation (amortisation).
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Carrying amount is the amount at which an asset is recognised in the statement of fi nancial position after deducting any accumulated depreciation and accumulated impairment losses thereon.
A cash-generating unit is the smallest identifi able group of assets held with the primary objective of generating a commercial return that generates cash infl ows from continuing use that are largely independent of the cash infl ows from other assets or groups of assets.
Costs of disposal are incremental costs directly attributable to the disposal of an asset, excluding fi nance costs and income tax expense.
Depreciation (Amortisation) is the systematic allocation of the depreciable amount of an asset over its useful life.
Fair value less costs to sell is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.
Recoverable service amount is the higher of a non-cash-generating asset’s fair value less costs to sell and its value in use.
Useful life is either:
(a) the period of time over which an asset is expected to be used by the entity; or
(b) the number of production or similar units expected to be obtained from the asset by the entity.
Identifi cation
When the carrying amount of a non-cash-generating asset exceeds its recoverable service amount, it is impaired.
The entity assesses at each reporting date whether there is any indication that a non-cash-generating asset may be impaired. If any such indication exists, the entity estimates the recoverable service amount of the asset.
Irrespective of whether there is any indication of impairment, the entity also test a non-cash-generating intangible asset with an indefi nite useful life or a non-cash-generating intangible asset not yet available for use for impairment annually by comparing its carrying amount with its recoverable service amount. This impairment test is performed at the same time every year. If an intangible asset was initially recognised during the current reporting period, that intangible asset was tested for impairment before the end of the current reporting period.
Value in use
Value in use of non-cash-generating assets is the present value of the non-cash-generating assets remaining service potential.
The present value of the remaining service potential of a non-cash-generating assets is determined using the following approach:
Depreciated replacement cost approach
The present value of the remaining service potential of a non-cash-generating asset is determined as the depreciated replacement cost of the asset. The replacement cost of an asset is the cost to replace the asset’s gross service potential. This cost is depreciated to refl ect the asset in its used condition. An asset may be replaced either through reproduction (replication) of the existing asset or through replacement of its gross service potential. The depreciated replacement cost is measured as the reproduction or replacement cost of the asset, whichever is lower, less accumulated depreciation calculated on the basis of such cost, to refl ect the already consumed or expired service potential of the asset.
The replacement cost and reproduction cost of an asset is determined on an “optimised” basis. The rationale is that the entity would not replace or reproduce the asset with a like asset if the asset to be replaced or reproduced is an overdesigned or overcapacity asset. Overdesigned assets contain features which are unnecessary for the goods or services the asset provides. Overcapacity assets are assets that have a greater capacity than is necessary to meet the demand for goods or services the asset provides. The determination of the replacement cost or reproduction cost of an asset on an optimised basis thus refl ects the service potential required of the asset.
Authority
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
112
Recognition and measurement
If the recoverable service amount of a non-cash-generating asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable service amount. This reduction is an impairment loss.
An impairment loss is recognised immediately in surplus or defi cit.
Any impairment loss of a revalued non-cash-generating asset is treated as a revaluation decrease.
When the amount estimated for an impairment loss is greater than the carrying amount of the non-cash-generating asset to which it relates, the entity recognises a liability only to the extent that is a requirement in the Standards of GRAP.
After the recognition of an impairment loss, the depreciation (amortisation) charge for the non-cash-generating asset is adjusted in future periods to allocate the non-cash-generating asset’s revised carrying amount, less its residual value (if any), on a systematic basis over its remaining useful life.
Reversal of an impairment loss
The entity assess at each reporting date whether there is any indication that an impairment loss recognised in prior periods for a non-cash-generating asset may no longer exist or may have decreased. If any such indication exists, the entity estimates the recoverable service amount of that asset.
An impairment loss recognised in prior periods for a non-cash-generating asset is reversed if there has been a change in the estimates used to determine the asset’s recoverable service amount since the last impairment loss was recognised. The carrying amount of the asset is increased to its recoverable service amount. The increase is a reversal of an impairment loss. The increased carrying amount of an asset attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined (net of depreciation or amortisation) had no impairment loss been recognised for the asset in prior periods.
A reversal of an impairment loss for a non-cash-generating asset is recognised immediately in surplus or defi cit.
After a reversal of an impairment loss is recognised, the depreciation (amortisation) charge for the non-cash-generating asset is adjusted in future periods to allocate the non-cash-generating asset’s revised carrying amount, less its residual value (if any), on a systematic basis over its remaining useful life.
1.7 Employee benefi tsEmployee benefi ts are all forms of consideration given by an entity in exchange for service rendered by employees.
Termination benefi ts are employee benefi ts payable as a result of either:
• an entity’s decision to terminate an employee’s employment before the normal retirement date; or
• an employee’s decision to accept voluntary redundancy in exchange for those benefi ts.
Other long-term employee benefi ts are employee benefi ts (other than post-employment benefi ts and termination benefi ts) that are not due to be settled within twelve months after the end of the period in which the employees render the related service.
Vested employee benefi ts are employee benefi ts that are not conditional on future employment.
A constructive obligation is an obligation that derives from an entity’s actions where by an established pattern of past practice, published policies or a suffi ciently specifi c current statement, the entity has indicated to other parties that it will accept certain responsibilities and as a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities.
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
113
Short-term employee benefi ts
Short-term employee benefi ts are employee benefi ts (other than termination benefi ts) that are due to be settled within twelve months after the end of the period in which the employees render the related service.
Short-term employee benefi ts include items such as:
• wages, salaries and social security contributions;
• short-term compensated absences (such as paid annual leave and paid sick leave) where the compensation for the absences is due to be settled within twelve months after the end of the reporting period in which the employees render the related employee service;
• bonus, incentive and performance related payments payable within twelve months after the end of the reporting period in which the employees render the related service; and
• non-monetary benefi ts (for example, medical care, and free or subsidised goods or services such as housing, cars and cellphones) for current employees.
When an employee has rendered service to the entity during a reporting period, the entity recognises the undiscounted amount of short-term employee benefi ts expected to be paid in exchange for that service:
• as a liability (accrued expense), after deducting any amount already paid. If the amount already paid exceeds the undiscounted amount of the benefi ts, the entity recognise that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund; and
• as an expense, unless another Standard requires or permits the inclusion of the benefi ts in the cost of an asset.
The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs. The entity measures the expected cost of accumulating compensated absences as the additional amount that the entity expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
The entity recognises the expected cost of bonus, incentive and performance related payments when the entity has a present legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made. A present obligation exists when the entity has no realistic alternative but to make the payments.
Post-employment benefi ts: Defi ned contribution plans
Defi ned contribution plans are post-employment benefi t plans under which an entity pays fi xed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold suffi cient assets to pay all employee benefi ts relating to employee service in the current and prior periods.
When an employee has rendered service to the entity during a reporting period, the entity recognises the contribution payable to a defi ned contribution plan in exchange for that service:
• as a liability (accrued expense), after deducting any contribution already paid. If the contribution already paid exceeds the contribution due for service before the reporting date, an entity recognise that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in future payments or a cash refund; and
• as an expense, unless another Standard requires or permits the inclusion of the contribution in the cost of an asset.
Where contributions to a defi ned contribution plan do not fall due wholly within twelve months after the end of the reporting period in which the employees render the related service, they are discounted. The rate used to discount refl ects the time value of money. The currency and term of the fi nancial instrument selected to refl ect the time value of money is consistent with the currency and estimated term of the obligation.
Authority
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
114
Termination benefi ts
The entity recognises termination benefi ts as a liability and an expense when the entity is demonstrably committed to either:
• terminate the employment of an employee or group of employees before the normal retirement date; or
• provide termination benefi ts as a result of an offer made in order to encourage voluntary redundancy.
The entity is demonstrably committed to a termination when the entity has a detailed formal plan for the termination and is without realistic possibility of withdrawal. The detailed plan includes:
• the location, function, and approximate number of employees whose services are to be terminated;
• the termination benefi ts for each job classifi cation or function; and
• the time at which the plan will be implemented.
Implementation begins as soon as possible and the period of time to complete implementation is such that material changes to the plan are not likely.
Where termination benefi ts fall due more than 12 months after the reporting date, they are discounted using an appropriate discount rate. The rate used to discount the benefi t refl ects the time value of money. The currency and term of the fi nancial instrument selected to refl ect the time value of money is consistent with the currency and estimated term of the benefi t.
In the case of an offer made to encourage voluntary redundancy, the measurement of termination benefi ts shall be based on the number of employees expected to accept the offer.
1.8 Provisions and contingenciesProvisions are recognised when:
• the entity has a present obligation as a result of a past event;
• it is probable that an outfl ow of resources embodying economic benefi ts or service potential will be required to settle the obligation; and
• a reliable estimate can be made of the obligation.
The amount of a provision is the best estimate of the expenditure expected to be required to settle the present obligation at the reporting date.
Where the effect of time value of money is material, the amount of a provision is the present value of the expenditures expected to be required to settle the obligation.
The discount rate is a pre-tax rate that refl ects current market assessments of the time value of money and the risks specifi c to the liability.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement is treated as a separate asset. The amount recognised for the reimbursement does not exceed the amount of the provision.
Provisions are reviewed at each reporting date and adjusted to refl ect the current best estimate. Provisions are reversed if it is no longer probable that an outfl ow of resources embodying economic benefi ts or service potential will be required, to settle the obligation.
Where discounting is used, the carrying amount of a provision increases in each period to refl ect the passage of time. This increase is recognised as an interest expense.
A provision is used only for expenditures for which the provision was originally recognised.
Provisions are not recognised for future operating defi cits.
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
115
If an entity has a contract that is onerous, the present obligation (net of recoveries) under the contract is recognised and measured as a provision
A constructive obligation to restructure arises only when an entity:
• has a detailed formal plan for the restructuring, identifying at least:- the activity/operating unit or part of a activity/operating unit concerned;- the principal locations affected;- the location, function, and approximate number of employees who will be compensated for services being terminated;- the expenditures that will be undertaken; and- when the plan will be implemented.
• has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected by it.
A restructuring provision includes only the direct expenditures arising from the restructuring, which are those that are both:
• necessarily entailed by the restructuring; and
• not associated with the ongoing activities of the entity.
No obligation arises as a consequence of the sale or transfer of an operation until the entity is committed to the sale or transfer, that is, there is a binding arrangement.
After their initial recognition contingent liabilities recognised in entity combinations that are recognised separately are subsequently measured at the higher of:
• the amount that would be recognised as a provision; and
• the amount initially recognised less cumulative amortisation.
Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note 24.
1.9 Revenue recognition from non-exchange transactionsNon-exchange transactions are defi ned as transactions where the entity receives value from another entity without directly giving approximately equal value in exchange.
Revenue is the gross infl ow of economic benefi ts or service potential during the reporting period when those infl ows result in an increase in net assets, other than increases relating to contributions from owners.
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction.
Measurement
The invoice value of sales and services rendered, excluding value added tax, in respect of trading operations is recognised at the date services are provided.
Safety charge is based on the number of passengers on scheduled services departing from all airports in the country. This data is obtained from all the airports in South Africa and the various airline companies.
Fuel levies are based on fuel supplied by fuel companies to the General Aviation Operations and Charter Operators. This is based on the litres audited by the fuel company auditors.
Accident and incident investigations fees are based on the number of accidents and incidents that are investigated and the revenue generated varies according to the nature and extent of the investigation.
User fees are generated from examinations, license renewals, certifi cations, airworthiness and calibrations. The revenue is recognised when the service is rendered.
Authority
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
116
Goverment grants are not recognised until there is reasonable assurance that the organisation will comply with the conditions attached to them and the grants will be received.
Goverment grant whose primary condition is that the organisation should purchase, construct or otherwise acquire non-current assets are recognised as deferred income in the statement of fi nancial position and transfered to surplus or defi cit on a systematic and rational basis over the useful lives of the related assets.
Other goverment grants are recognised as income over the periods necessary to match them with the costs for which they are intended to compensate, on a systematic basis. Goverment grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate fi nancial support to the organisation with no future related costs are recognised in surplus or defi cit in the period in which the grant becomes receivable.
The organisation has recognised the goverment grants immediately with the exception of the grant relating to the Plettenberg Bay accident, as there are no conditions attached thereto. The organisation is therefore unconditionally entittled to the grant awarded on the award date.
1.10 Investment income
Investment income is recognised on a time-proportion basis using the effective interest method.
1.11 Borrowing costsBorrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of that asset until such time as the asset is ready for its intended use. The amount of borrowing costs eligible for capitalisation is determined as follows:
• Actual borrowing costs on funds specifi cally borrowed for the purpose of obtaining a qualifying asset less any investment income on the temporary investment of those borrowings.
• Weighted average of the borrowing costs applicable to the entity on funds generally borrowed for the purpose of obtaining a qualifying asset. The borrowing costs capitalised do not exceed the total borrowing costs incurred.
The capitalisation of borrowing costs commences when all the following conditions have been met:
• expenditures for the asset have been incurred;
• borrowing costs have been incurred; and
• activities that are necessary to prepare the asset for its intended use or sale are undertaken.
Capitalisation is suspended during extended periods in which active development is interrupted.
Extended periods is periods that exceeds 6 months.
Capitalisation ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.
When the entity completes the construction of a qualifying asset in parts and each part is capable of being used while construction continues on other parts, the entity ceases capitalising borrowing costs when it completes substantially all the activities necessary to prepare that part for its intended use or sale.
All other borrowing costs are recognised as an expense in the period in which they are incurred.
1.12 Translation of foreign currenciesForeign currency transactions
A foreign currency transaction is recorded, on initial recognition in Rands, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction.
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
117
At each reporting date:
• foreign currency monetary items are translated using the closing rate;
• non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction; and
• non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous fi nancial statements are recognised in surplus or defi cit in the period in which they arise.
When a gain or loss on a non-monetary item is recognised directly in net assets, any exchange component of that gain or loss is recognised directly in net assets. When a gain or loss on a non-monetary item is recognised in surplus or defi cit, any exchange component of that gain or loss is recognised in surplus or defi cit.
Cash fl ows arising from transactions in a foreign currency are recorded in Rands by applying to the foreign currency amount the exchange rate between the Rand and the foreign currency at the date of the cash fl ow.
1.13 Comparative fi guresWhere necessary, comparative fi gures have been reclassifi ed to conform to changes in presentation in the current year.
1.14 Unauthorised expenditureUnauthorised expenditure means:
• overspending of a vote or a main division within a vote; and
• expenditure not in accordance with the purpose of a vote or, in the case of a main division, not in accordance with the purpose of the main division.
All expenditure relating to unauthorised expenditure is recognised as an expense in the statement of fi nancial performance in the year that the expenditure was incurred. The expenditure is classifi ed in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of fi nancial performance.
1.15 Fruitless and wasteful expenditureFruitless expenditure means expenditure which was made in vain and would have been avoided had reasonable care been exercised.
All expenditure relating to fruitless and wasteful expenditure is recognised as an expense in the statement of fi nancial performance in the year that the expenditure was incurred. The expenditure is classifi ed in accordance with the nature of the expense, and where recovered, it is subsequently accounted for as revenue in the statement of fi nancial performance.
1.16 Irregular expenditureIrregular expenditure as defi ned in section 1 of the PFMA is expenditure other than unauthorised expenditure, incurred in contravention of or that is not in accordance with a requirement of any applicable legislation, including -
(a) this Act; or
(b) the State Tender Board Act, 1968 (Act No. 86 of 1968), or any regulations made in terms of the Act; or
(c) any provincial legislation providing for procurement procedures in that provincial government.
National Treasury practice note no. 4 of 2008/2009 which was issued in terms of sections 76(1) to 76(4) of the PFMA requires the following (effective from 1 April 2008):
Authority
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
118
Irregular expenditure that was incurred and identifi ed during the current fi nancial year and which was condoned before year end and/or before fi nalisation of the fi nancial statements must also be recorded appropriately in the irregular expenditure register. In such an instance, no further action is also required with the exception of updating the note to the fi nancial statements.
Irregular expenditure that was incurred and identifi ed during the current fi nancial year and for which condonement is being awaited at year end must be recorded in the irregular expenditure register. No further action is required with the exception of updating the note to the fi nancial statements.
Where irregular expenditure was incurred in the previous fi nancial year and is only condoned in the following fi nancial year, the register and the disclosure note to the fi nancial statements must be updated with the amount condoned.
Irregular expenditure that was incurred and identifi ed during the current fi nancial year and which was not condoned by the National Treasury or the relevant authority must be recorded appropriately in the irregular expenditure register. If liability for the irregular expenditure can be attributed to a person, a debt account must be created if such a person is liable in law. Immediate steps must thereafter be taken to recover the amount from the person concerned. If recovery is not possible, the accounting offi cer or accounting authority may write off the amount as debt impairment and disclose such in the relevant note to the fi nancial statements. The irregular expenditure register must also be updated accordingly. If the irregular expenditure has not been condoned and no person is liable in law, the expenditure related thereto must remain against the relevant programme/expenditure item, be disclosed as such in the note to the fi nancial statements and updated accordingly in the irregular expenditure register.
1.17 Conditional grants and receiptsRevenue received from conditional grants, donations and funding are recognised as revenue to the extent that the entity has complied with any of the criteria, conditions or obligations embodied in the agreement. To the extent that the criteria, conditions or obligations have not been met a liability is recognised.
1.18 Budget informationEntity are typically subject to budgetary limits in the form of appropriations or budget authorisations (or equivalent), which is given effect through authorising legislation, appropriation or similar.
General purpose fi nancial reporting by entity shall provide information on whether resources were obtained and used in accordance with the legally adopted budget.
The approved budget is prepared on a accrual basis and presented by economic classifi cation linked to performance outcome objectives.
The approved budget covers the fi scal period from 2012/04/01 to 2013/03/31.
The budget for the economic entity includes all the entities approved budgets under its control.
The fi nancial statements and the budget are on the same basis of accounting therefore a comparison with the budgeted amounts for the reporting period have been included in the Statement of comparison of budget and actual amounts.
1.19 Related PartiesThe entity operates in an economic environment currently dominated by entities directly or indirectly owned by the South African Government. As a result of the constitutional independence of all three spheres of the South African Government, only parties within the national sphere of the South African Government will be considered to be related parties.
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
119
Notes to the Financial Statements
2. New standards and interpretations
2.1 Standards and interpretations issued, but not yet effectiveThe entity has not applied the following standards and interpretations, which have been published and are mandatory for the entity’s accounting periods beginning on or after 01 April 2013 or later periods:
Standard/ Interpretation:Effective date:
Years beginning on or after
Expected impact:
• GRAP 18: Segment Reporting 01 April 2013 No impact on entity• GRAP 25: Employee benefi ts 01 April 2013 Impact currently being
assessed• GRAP 105: Transfers of functions between entities under common control 01 April 2014 No impact on entity• GRAP 106: Transfers of functions between entities not under common control 01 April 2014 No impact on entity• GRAP 107: Mergers 01 April 2014 No impact on entity• GRAP 20: Related parties 01 April 2013 Impact currently being
assessed• IGRAP 11: Consolidation – Special purpose entities 01 April 2014 No impact on entity• IGRAP 12: Jointly controlled entities – Non-monetary contributions by
ventures01 April 2014 No impact on entity
• GRAP 6 (as revised 2010): Consolidated and Separate Financial Statements 01 April 2014 No impact on entity• GRAP 7 (as revised 2010): Investments in Associates 01 April 2014 No impact on entity• GRAP 8 (as revised 2010): Interests in Joint Ventures 01 April 2014 No impact on entity• GRAP 1 (as revised 2012): Presentation of Financial Statements 01 April 2013 Impact currently being
assessed• GRAP 3 (as revised 2012): Accounting Policies, Change in Accounting
Estimates and Errors01 April 2013 Impact currently being
assessed• GRAP 7 (as revised 2012): Investments in Associates 01 April 2013 No impact on entity• GRAP 9 (as revised 2012): Revenue from Exchange Transactions 01 April 2013 Impact currently being
assessed• GRAP 12 (as revised 2012): Inventories 01 April 2013 No impact on entity• GRAP 13 (as revised 2012): Leases 01 April 2013 Impact currently being
assessed• GRAP 16 (as revised 2012): Investment Property 01 April 2013 No impact on entity• GRAP 17 (as revised 2012): Property, Plant and Equipment 01 April 2013 Impact currrently being
assessed• GRAP 27 (as revised 2012): Agriculture (Replaces GRAP 101) 01 April 2013 No impact on entity• GRAP 31 (as revised 2012): Intangible Assets (Replaces GRAP 102) 01 April 2013 Impact currently being
assessed• IGRAP16: Intangible assets website costs 01 April 2013 Impact currently being
assessed• IGRAP1 (as revised 2012):Applying the probability test on initial recognition
of revenue01 April 2013 Impact currently being
assessed
Authority
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
120
2013 2012R R
3. Trade and other receivables
Trade receivables 62,007,710 59,407,330Provision for bad debts (25,883,797) (12,819,887)Unallocated reciepts (634,959) (860,794)Prepayments 353,348 428,184Deposits 685,505 634,163Other debtors 1,961,148 1,939,383Accrued interest income 373,781 -Staff advances 175,668 263,541
39,038,404 48,991,920
Trade receivables ageing
As at the end of the year, the trade receivables ageing was as follows:
Current 28,379,486 30,159,7950 to 30 days 4,484,783 5,413,63031 to 60 days 1,918,109 4,557,43061 to 90 days 619,370 4,573,083Over 91 days 26,605,962 14,703,392
62,007,710 59,407,330
Credit quality of trade and other receivables
The credit quality of trade and other receivables that are neither past due nor impaired can be assessed by reference to historical information about counterparty default rates as well as payment history.
None of the fi nancial assets that are fully performing have been renegotiated in the last year.
Fair value of trade and other receivables
Trade and other receivables 39,038,404 48,991,920
The Board of Directors considers the carrying amount of other fi nancial assets to approximate fair value.
Trade and other receivables past due but not impaired
Trade and other receivables which are past due are not considered to be impaired. At 31 March 2013, R 9,591,744 (2012: R 18,232,246) were past due but not impaired.
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
121
2013 2012R R
The ageing of amounts past due but not impaired is as follows:
1 month past due 4,473,482 4,934,9922 months past due 1,876,372 3,723,7813 months past due 446,963 3,729,867Older than 3 months past due 2,794,927 5,843,606
9,591,744 18,232,246
Management have implemented a number of steps to recover outstanding debts which resulted in the improvement in debt collection during the fi nancial year.
Trade and other receivables impaired
As of 31 March 2013, trade and other receivables of R 25 883 797 (2012: R 12 819 887) were impaired and provided for.
The ageing of these trade and other receivables is as follows:
0 to 3 months 246,899 2,134,237Over 3 months 25,636,898 10,685,650
25,883,797 12,819,887
Reconciliation of provision for impairment of trade and other receivables
Opening balance 12,819,887 15,985,931Provision for impairment 18,110,175 7,910,828Unused amounts reversed (5,046,265) (11,076,872)
25,883,797 12,819,887
The creation and release of provision for impaired receivables have been included in surplus for the year.
The increase in the provision for impairment of trade and other receivables in the current fi nancial year is mainly as a result of the provisional liquidation of 1Time Airline.
The maximum exposure to credit risk at the reporting date is the fair value of each class of trade and other receivable balances mentioned above. The entity does not hold any collateral as security.
4. Cash and cash equivalentsCash and cash equivalents consist of:
Cash on hand 20,000 17,000Bank balances 27,840,945 68,319,464Short-term deposits 161,966,265 97,280,569
189,827,210 165,617,033
Cash and cash equivalents held have not been encumbered. Bank balances have decreased as all surplus funds in bank balances are invested in short term deposits.
Authority
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
122
5. Property, plant and equipment
2013 2012
Cost Accumulated depreciation
and accumulated
impairment
Carrying value Cost Accumulated depreciation
and accumulated
impairment
Carrying value
Furniture and fi xtures 12,468,412 (7,479,130) 4,989,282 10,337,141 (6,992,119) 3,345,022Motor vehicles 2,101,993 (938,851) 1,163,142 1,890,933 (1,250,560) 640,373IT equipment 16,222,873 (11,318,365) 4,904,508 13,861,185 (12,758,927) 1,102,258Leasehold improvements 2,295,187 (2,220,737) 74,450 2,295,187 (1,838,205) 456,982Generator 733,989 (69,321) 664,668 733,989 (20,389) 713,600Aircraft 21,383,221 (10,598,565) 10,784,656 21,383,221 (10,710,940) 10,672,281Calibration equipment 23,292,339 (9,855,829) 13,436,510 12,085,100 (9,050,155) 3,034,945Canteen equipment 104,405 (17,658) 86,747 75,900 (4,217) 71,683
Total 78,602,419 (42,498,456) 36,103,963 62,662,656 (42,625,512) 20,037,144
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
123
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-(1
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6,65
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11,2
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63
Reco
ncili
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n of
pro
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and
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20,0
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44
Authority
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
124
Included in the movement in aircraft is a reversal of impairment loss of R 1 104 148 (2012: impairment loss R 1 800 190) which arises from the difference between the carrying value of the aircraft compared to the recoverable amount. The recoverable amount is the fair value less cost to sell based on a valuation performed in dollars. The impairment reversal is as a result of deterioration of ZAR / USD exchange rate from R7.6776 at the beginning of year to R9.2251 as at 31 March 2013.
6. Intangible assets
2013 2012
Cost Accumulated amortisation and
accumulated impairment
Carrying value Cost Accumulated amortisation
and accumulated
impairment
Carrying value
Computer software 10,143,537 (5,034,282) 5,109,255 7,251,793 (7,115,186) 136,607
Reconciliation of intangible assets - 2013
Opening balance
Additions Work in Progress Amortisation Total
Computer software 136,607 4,325,254 871,297 (223,903) 5,109,255
Reconciliation of intangible assets - 2012
Opening balance
Additions Amortisation Total
Computer software 75,512 158,426 (97,331) 136,607
7. Operating lease liability 2013 2012R R
Current liabilities 7,143,972 8,877,857
The operating lease liability relates to the smoothing of the rental lease payment over the lease period.
8. Trade and other payables
Trade payables 8,857,090 1,784,556Income received in advance 559,234 1,512,659Sundry accruals 15,953,457 16,313,218Salaries control account 6,945,573 6,897,83713th Cheque accrual 645,210 675,241Leave pay accrual 12,420,083 7,456,418
45,380,647 34,639,929
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
125
2013 2012R R
9. Unspent conditional grants and receipts
Unspent conditional grants and receipts comprises of:
National Department of Transport 4,256,629 4,256,629
Movement during the year
Balance at the beginning of the year 4,256,629 -Additions during the year - 4,500,000Income recognition during the year - (243,371)
4,256,629 4,256,629
The grant was received in October 2011 from the National Department of Transport specifi cally to be utilised towards the investigation on the underwater survey and salvage of the aircraft that crashed into the sea near Plettenberg Bay on 8 February 2011. Surveys conducted did not uncover wreckage at the identifi ed site. The planned salvage of the wreckage therefore did not take place.
The investigation was concluded during March 2013 and the fi nal report has been submitted to the Advisory Safety Panel for review and approval.
10. ProvisionsReconciliation of provisions - 2013
Opening Balance
Additions Utilised during the year
Reversed during the year
Total
Performance bonus provision 21,662,308 23,699,243 (19,137,023) (2,525,285) 23,699,243Passenger safety charge provision 61,133,410 - - - 61,133,410
82,795,718 23,699,243 (19,137,023) (2,525,285) 84,832,653
Reconciliation of provisions - 2012
Opening Balance
Additions Total
Performance bonus provision - 21,662,308 21,662,308Passenger safety charge provision - 61,133,410 61,133,410
- 82,795,718 82,795,718
Uncertainties and assumptions
Provisions are recognised when the company has a present obligation, whether legal or constructive, because of a past event for which it is probable that an outfl ow of resources embodying economic benefi ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement is recognised only when the reimbursement is virtually certain. The amount to be reimbursed is recognised as a seperate asset. Where the company has a joint and several liability with one or more other parties, no provision is recognised to the extent that those other parties are expected to settle part or all of the obligation.
Authority
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
126
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the obligation at the balance sheet date. The discount rate used to determine the present value refl ects current market assessments of the time value of money and the risks specifi c to the liability.
Performance bonus provision
The performance bonus provision is calculated based on the performance of the company as well as the individual performance ratings for the fi nancial year ended 31 March 2013.
Passenger safety charge provision
The passenger fee provision is as a result of the uncertainty that exists with regards to the over collection of the passenger fee. The gazette that increased the fee from R 12 to R 18 per passenger was effected and charged to the passengers on 1 August 2011. The Finance Minister’s concurrence to a passenger safety fee of R 16 was received on 1 November 2011. The Transport Minister only accepted this concurrence at R16 with effect from 1 March 2012 which resulted in an over collection of R 6 per passenger from 1 August to 29 February 2012. This provision will be released to revenue in compliance with GRAP 23 when the conditions attached to the provision are satisfi ed.
2013 2012R R
11. Non-distributable reserves
Assets transfered from the National Department of Transport at inception 43,275,516 43,275,516Asset replacement reserve 10,000,000 10,000,000Fixed asset adjustments 1,359,846 -
54,635,362 53,275,516
12. Employee benefi t obligationsDefi ned contribution plan
It is the policy of the entity to provide retirement benefi ts to all its employees. A defi ned contribution provident fund subject to the Pension Fund Act exists for this purpose.
The entity is under no obligation to cover any unfunded benefi ts.
The amount recognised as an expense for defi ned contribution plans is 26,637,275 25,557,117
13. Total Revenue
Other income 3,540,678 5,205,023Accidents and incidents investigation 16,025,000 10,716,000Interest received 9,371,757 5,719,671Passenger safety charge 292,990,916 231,477,358User fees 65,637,224 65,145,331Fuel levy 19,138,657 14,815,269
406,704,232 333,078,652
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
127
2013 2012R R
The amount included in revenue arising from exchanges of goods or services are as follows:Other income 3,540,678 5,205,023Accidents and incidents investigation 16,025,000 10,716,000Interest received 9,371,757 5,719,671
28,937,435 21,640,694
The amount included in revenue arising from non-exchange transactions is as follows: Passenger safety charge 292,990,916 231,477,358User fees 65,637,224 65,145,331Fuel levy 19,138,657 14,815,269
377,766,797 311,437,958
14. Other income
Sundry income 2,091,880 2,566,899Sponsorship income 1,316,500 2,557,154Insurance claim recieved 132,298 80,970
3,540,678 5,205,023
15. Interest received
Interest receivedFinancial institutions 8,299,898 5,277,281Interest charged on trade and other receivables 1,071,859 442,390
9,371,757 5,719,671
16. Personnel cost
Basic 159,377,980 141,964,571Bonus 21,173,958 21,932,336Medical aid - company contributions 9,704,068 9,064,086UIF 744,714 640,867WCA 538,343 627,281SDL 1,957,789 1,579,874Leave pay provision charge 6,958,600 3,600,770Post-employment benefi ts - Pension - Defi ned contribution plan 26,637,275 25,557,117Travel, motor car, accommodation, subsistence and other allowances 1,680,798 911,23013th Cheques 284,466 346,901Acting allowances 1,535,197 881,586Stand by allowance 1,910,381 1,802,435Temporary staff 14,015,990 7,113,993
246,519,559 216,023,047
Authority
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
128
2013 2012R R
17. Debt impairment
Debt impairment 17,453,796 6,520,831
18. Operating expenses
Auditors remuneration 1,312,155 243,515Bank charges 701,870 413,996Cleaning 1,050,172 1,221,784Consulting and professional fees 11,019,782 16,217,921Consumables 345,910 190,680Entertainment 1,701,254 672,325Hire charge 377,684 355,647Insurance 1,233,153 1,198,610Conferences and seminars 2,399,479 807,625IT expenses 1,745,312 1,562,975Lease rentals on operating lease 14,309,479 14,180,985Marketing 541 3,188Public Relations 2,643,039 571,328Magazines, books and periodicals 1,082,091 3,205,364Motor vehicle expenses 17,275 6,536Fuel and oil 224,329 159,169Placement fees 1,885,196 463,735Postage and courier 317,987 473,107Printing and stationery 2,072,002 1,875,232Safety and promotion 650,721 258,501Security 1,882,747 1,977,957Software expenses 2,091,280 676,374Staff welfare 208,625 282,236Telephone and fax 4,987,623 4,362,143Training 13,188,262 7,294,748Travel - local 13,099,075 8,487,723Travel - overseas 9,829,668 4,052,850Electricity 4,199,841 3,739,374Refuse 64,284 103,618Uniforms 69,784 32,491Sponsorships 2,170,652 2,456,428Recreation Aviation Administration of South Africa 4,225,812 3,043,800Premises 1,987,433 1,531,263Aircraft operation expenses 3,257,688 3,379,584Regulation development 1,718,701 (108,267)Other expenses 3,056,383 1,624,683
111,127,289 87,019,228
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
129
2013 2012R R
19. Finance costs
Foreign exchange loss 281,932 276,635Interest paid on late payment of old government pension fund contributions - 345,588
281,932 622,223
20. TaxationNo provision has been made for 2013 tax as the entity is exempted in terms of section 10 (1) (CA) (1) of the Income Tax Act.
21. Auditors’ remuneration
Fees 1,312,155 243,515
22. Cash generated from operations
Surplus 22,892,514 11,745,384
Adjustments for:
Depreciation and amortisation 4,416,203 4,575,726(Profi t) /loss on sale and scrapping of assets (72,016) 29,841Impairment loss reversal (1,104,148) -Impairment loss - 1,800,190Debt impairment 17,453,796 6,520,831Movements in operating lease liability (1,733,885) (581,057)Movements in provisions 2,036,935 82,795,718
Changes in working capital:
Trade and other receivables 9,953,516 (16,920,551)Consumer debtors (17,453,796) (6,520,831)Trade and other payables 10,740,718 9,061,823Unspent conditional grants and receipts - 4,256,629
47,129,837 96,763,703
Authority
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
130
2013 2012R R
23. CommitmentsAuthorised capital expenditure
Not yet contracted for and authorised by Accounting Authority• Property, plant and equipment 21,500,000 13,140,402• Intangible assets 20,000,000 10,890,000
41,500,000 24,030,402
This capital expenditure relates to property, plant and equipment for replacement of aircraft and IT equipment and intangible assets for enterprise business systems and will be fi nanced by available bank facilities, retained surpluses, existing cash resources, and funds internally generated.
The capital expenditure budget for the year ending 31 March 2014 is approximately R 64,900,000.
Operating leases - as lessee (expense)
Minimum lease payments due - within one year 11,685,397 12,758,675 - in second to fi fth year inclusive 10,185,481 20,501,806
21,870,878 33,260,481
Operating lease payments represent rentals payable by the entity for certain of its offi ce properties. Leases are negotiated for an average term of three years. No contingent rent is payable.
24. Contingencies
Pending obligation - regulatory matters 38,895,642 28,800,000Pending obligation - employee related matters 100,000 350,000
38,995,642 29,150,000
These contingent liabilities relate to estimated legal or settlement costs with regard to legal cases for or against the SACAA. While the entity’s legal representation believes that the cases are unlikely to be successful, the entity is obliged to disclose these amounts.
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
131
25. Related partiesThe sole shareholder of the company is the Minister of Transport, on behalf of the South African Government, in terms of the Civil Aviation Act, 2009 (Act No. 13 of 2009)
Related party balances 2013 2012R R
Loan accounts - Owing (to) by related partiesDepartment of Transport (4,039,460) (1,466,959)South African Airways 315,342 249,798Denel (Certifi cation and maintenance) (409) (20,350)Air Traffi c and Navigation Services 1,782,827 2,096,314South African Police Services (7,903) 11,664South African Airforce 7,860 206,338National Parks Board 4,500 590Airport Company of South Africa (Licences) (90,113) (3,137)SA Express (Passenger safety charge and general aviation) 54,619 (32,315)Mango 30,183 26,842Airports Company of South Africa - (305,891)
(1,942,554) 762,894
No expense has been recognised in the current period for impairment of trade receivables in respect of amounts owed by related parties.
The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received.
All the companies listed above report to the various ministerial departments of the government and hence are considered related parties.
Related party transactions
Transaction value received / (paid) to related partiesDepartment of Transport (Accidents and incidents) 16,025,000 15,216,000Department of Transport (Secondments) (3,847,585) (891,245)Air Traffi c and Navigation Services 8,556,074 11,005,338Airports Company of South Africa (Licenses) 933,557 1,171,633South African Airways (Safety fees and general aviation) 92,107,733 82,516,778SA Express (Safety fees and general aviation) 24,236,895 23,886,529South African Air Force (Calibration) 841,946 2,412,948South African Police Services (AIPs - Info) 74,870 79,440Denel (Certifi cation and maintenance) (51,769) 69,788National Parks Board (Aerodrome licenses) 22,410 15,440Mango (Safety fees) 28,284,326 24,657,036Recreation Aviation Administration of South Africa (4,225,812) (2,603,499)ACSA (1,012,579) (659,453)
161,945,066 156,876,733
These transactions are carried out on commercial terms and conditions.
26. Comparative fi guresCertain comparative fi gures have been reclassifi ed.
Authority
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
132
27.
Mem
bers
’ em
olum
ents
Exec
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e M
anag
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t20
13
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1,67
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: Fin
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86,7
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73,1
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81,5
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Exec
utive
943,
925
52,5
2415
1,76
919
8,48
51,
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Ms
M M
amab
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: Leg
al34
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36,0
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000
Mr E
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ilton
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: Risk
and
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345,
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14,4
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s M
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phen
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pril
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onl
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2,76
010
,092
-68
,832
Mr S
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n (A
ctin
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Mar
ch 2
012)
GM
: Airc
raft
Safe
ty81
7,85
634
,635
128,
838
122,
937
1,10
4,26
6M
s M
Son
jani
(Act
ing
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1 Ja
nuar
y 20
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Com
pany
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reta
ry77
3,12
022
,857
119,
927
102,
987
1,01
8,89
1M
s Z
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(Act
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r 201
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31
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r 20
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EM: D
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s O
ffi ce
210,
021
5,56
624
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-24
0,10
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Mr W
illie
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i (A
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)G
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5,42
312
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28,2
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216,
315
Ms S
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Ngi
di (A
ctin
g fro
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ruar
y 20
13 to
31
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ch 2
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GM
: Avia
tion
Secu
tity12
6,99
35,
130
21,1
76-
153,
299
13,7
50,0
3153
9,59
12,
040,
202
2,52
2,16
118
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,985
* M
r Z T
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rans
port.
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was
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onde
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the
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AA
by
the
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of T
rans
port
from
1 Ja
nuar
y 20
11 to
31
Oct
ober
201
2.
** M
s G
NB
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a w
as a
ppoi
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as
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with
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ct fr
om 1
Nov
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r 201
2.
***
Mr
Indi
a w
as s
econ
ded
to th
e D
epar
tmen
t of T
rans
port
in M
arch
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7 w
ith th
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ram
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). M
r In
dia
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n be
half
of th
e M
inist
er o
f Tra
nspo
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d th
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publ
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th A
frica
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on 3
0 N
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012.
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ls w
as s
econ
ded
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ia fr
om 1
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31
Oct
ober
201
2.
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
133
2012
Des
igna
tion
Sala
ryM
edic
al A
idPr
ovid
ent
Fund
Lum
sum
/ le
ave
pay
/ bo
nus
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l
Mr A
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hman
GM
: Air
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ty O
pera
tions
1,06
1,95
263
,136
189,
691
-1,
314,
779
Mr G
H B
estb
ier
GM
: Air
Safe
ty In
frastr
uctu
re99
5,96
959
,637
177,
428
-1,
233,
034
Mr N
R M
agoa
i (Re
signe
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Janu
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2012
)EM
: Leg
al82
6,71
851
,202
148,
045
235,
158
1,26
1,12
3M
r O C
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(Res
igne
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ruar
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12)
GM
: Airc
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ty1,
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9,06
515
0,44
41,
326,
506
Mr S
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31 M
arch
201
3)EM
: Hum
an R
esou
rces
1,01
9,86
8-
172,
968
66,8
501,
259,
686
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ka (A
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g Ex
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anag
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om D
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020,
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53,9
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1,58
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GM
: Avia
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966,
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65,6
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4,04
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1,25
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r MG
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84,2
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8,57
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14,4
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Exec
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914,
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ctin
g as
GM
: Fin
ance
unt
il 10
Aug
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r Ind
ia w
as s
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ded
to th
e D
epar
tmen
t of T
rans
port
in M
arch
200
7 w
ith th
e cr
eatio
n of
the
Nat
iona
l Avia
tion
Secu
rity
Prog
ram
me
(NA
SP).
Mr I
ndia
had
to c
ham
pion
the
impl
emen
tatio
n of
the
NA
SP o
n be
half
of th
e M
inist
er o
f Tra
nspo
rt an
d th
e Re
publ
ic o
f Sou
th A
frica
as
a w
hole
.
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Ms
L Sto
ls w
as s
econ
ded
to IC
AO N
amib
ia w
ith e
ffect
from
1 M
ay 2
011.
****
Mr Z
Thw
ala
is em
ploy
ed b
y th
e D
epar
tmen
t of T
rans
port
as D
eput
y D
irect
or G
ener
al: T
rans
port.
He
was
sec
onde
d to
the
SAC
AA
by
the
Min
ister
of T
rans
port
with
effe
ct fr
om
1 Ja
nuar
y 20
11. B
efor
e hi
s se
cond
men
t he
serv
ed a
s ex
-offi
cio
mem
ber o
n th
e SA
CA
A B
oard
.
Authority
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
134
Non-executive Director’s fees2013
Members’ fees TotalMs P Riba 185,530 185,530Mr Z Nomvete 174,178 174,178Dr N Sangweni (Resigned 18 May 2012) 42,270 42,270Mr P Ndlovu 226,532 226,532Adv. RR Dehal 214,556 214,556Ms MP Matlala (Appointed 1 December 2012) 51,966 51,966Mr V Ndwamato - -Ms K Selane - -
895,032 895,032
2012
Members’ fees TotalMs P Riba 200,282 200,282Mr Z Nomvete 179,102 179,102Dr N Sangweni 165,964 165,964Mr P Ndlovu 170,202 170,202Adv. RR Dehal 205,025 205,025Mr V Ndwamato - -Mr S Motau 141,605 141,605
1,062,180 1,062,180
Fees
No directors fees were paid to Mr V Ndwamato and Ms K Selane as they are in the full time service of the state.
28. Risk managementCapital risk management
The entity’s objectives when managing capital are to safeguard the entity’s ability to continue as a going concern in order to provide returns for owner and benefi ts for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.
The capital structure of the entity consists of cash and cash equivalents disclosed in note 4, and equity as disclosed in the statement of fi nancial position.
As SACAA is not exposed to debt, there is no meaningful debt to equity ratios such as gearing ratio to be disclosed.
There are no externally imposed capital requirements.
There have been no changes to what the entity manages as capital, the strategy for capital maintenance or externally imposed capital requirements from the previous year.
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
135
Financial risk management
The entity’s activities expose it to a variety of fi nancial risks: market risk (including currency risk, fair value interest rate risk, cash fl ow interest rate risk and price risk), credit risk and liquidity risk.The entity does not enter into or trade fi nancial instruments, including derivative fi nancial instruments, for speculative purposes.
Management meet on a regular basis to analyse interest rate exposures and evaluate treasury management strategies against revised economic forecasts. Compliance with policies and exposure limits is reviewed by the management on a continuous basis. Management believe, to the best of their knowledge, that there are no signifi cant undisclosed fi nancial risks.
Liquidity risk
Liquidity risk refers to the risk that an entity will encounter diffi culty in meeting obligations associated with fi nancial liabilities.
Prudent liquidity risk management implies maintaining suffi cient cash and marketable securities, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. Management is satisfi ed that the entity will be able to settle their fi nancial liabilities (payables and provisions) in the normal course of business.
The entity’s risk to liquidity is a result of the funds available to cover future commitments. The entity manages liquidity risk through an ongoing review of future commitments and credit facilities.
Cash fl ow forecasts are prepared and adequate utilised borrowing facilities are monitored.
The liquidity ratio below illustrates:
2013 2012R R
Current Assets 228,865,614 214,608,953Current Liabilities 141,613,901 130,570,132
Current Ratio 1.62 : 1 1.64 : 1
Interest rate risk
Interest rate risk is the risk that the fair value or future cash fl ows of a fi nancial instrument will fl uctuate because of changes in market interest rates. SACAA is exposed to interest rate risk as it invest funds in the money market at fl oating interest rates. As at 31 March 2013 no derivative fi nancial instruments were used to manage the SACAA’s exposure to interest rate risk.
SACAA has adopted a policy of investing the majority of surplus cash in fi xed investments options as a means to safeguard and mitigate interest rate risk. The risk is further managed through the fact that the surplus funds are invested with reputable fi nancial institutions.
Credit risk
SACAA has exposure to credit risk, which is the risk of fi nancial loss to SACAA if a counterparty to a fi nancial instrument fails to meet its contractual obligations.
Credit risk consists mainly of cash deposits, cash equivalents, derivative fi nancial instruments and trade and other receivables. The entity only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party.
Trade receivables comprise a widespread customer base. Management evaluated credit risk relating to customers on an ongoing basis. If customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its fi nancial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board. The utilisation of credit limits is regularly monitored.
Certain credit limits were exceeded during the reporting period, and where management considered these debtors to be impaired a provision for doubtful debts was raised.
Authority
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
136
Financial assets exposed to credit risk at year end were as follows:
2013 2012R R
`Financial instrumentTrade receivables less unallocated receipts 61,372,751 58,546,536Other debtors 1,961,148 1,939,383Staff advances 175,668 263,541Cash and cash equivalents 189,827,210 165,617,033
253,336,777 226,366,493
Default
Default occurs when: a) Credit limits are exceeded; and or b) Payments are not received within the approved period. In such cases the necessary collection measures were taken with due regard to the fi nancial risk connected to a specifi c debtor account. Collection measures included handing accounts over to legal department for follow up.
As at 31 March 2013, the entity did not consider that any signifi cant concentration of credit risk existed in the receivable book which had not been adequately provided for.
The table below provides an analysis of credit risk exposure inherent in the loans and receivables book at the year end reporting dates, reconciled to the carrying value of net trade receivables as reported in note 4.
2013 Direct Charges
Indirect Charges Total
Current balances 263,014 28,116,472 28,379,486Overdue balances 12,599,145 21,029,079 33,628,224
Total 12,862,159 49,145,551 62,007,710Impairment provision (4,525,604) (21,358,193) (25,883,797)
2012 Direct Charges
Indirect Charges Total
Current balances 641,858 29,517,937 30,159,795Overdue balances 12,261,515 16,986,020 29,247,535
Total 12,903,373 46,503,957 59,407,330Impairment provision (3,694,209) (9,125,678) (12,819,887)
Defi nitions
Direct charges include regulatory fees and calibration fees
Indirect charges include passenger safety fees and fuel levies
Liquidation
As soon as it becomes known that a debtor has been placed into provisional liquidation / sequestration or has been placed into fi nal liquidation / sequestration, the credit facility is automatically revoked. Interest is charged from the date of last payment to the date of fi nal liquidation / sequestration and the debt is provided in full as irrecoverable.
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
137
Foreign exchange risk
SACAA incurs currency risk as a result of expenses in foreign currencies, hence exposure to exchange rate fl uctuations arise. The currency in which SACAA primarily deals is the US Dollar. No forward cover is taken out for these transactions. Management consider the foreign currency risk to be insignifi cant.
29. Going concernThe fi nancial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to fi nance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business.
30. Events after the reporting dateManagement is not aware of any signifi cant events that occured after the reporting date that would require adjustments to or disclosure in the fi nancial statements. Furthermore management is not aware of any circumstances which exist that would impede the company’s ability to continue as a going concern.
2013 2012R R
31. Fruitless and wasteful expenditure
Personnel costs HR: Executive 2,325,809 -Personnel costs 388,626 -Penalties on late payment of workmens compensation - 58,000Interest paid on late payment of pension fund - 345,588VAT paid to non-registered VAT vendor - 146,791
2,714,435 550,379
During the year under review R2 714 435 (2012: R550 379) was recorded as fruitless and wasteful expenditure.
An amount of R2 325 809 (includes salary costs, leave pay, performance bonus and a settlement amount) was paid to the Human Resources Executive Manager who was suspended in the reporting period. The case has been settled and the employee’s contract terminated in full and fi nal settlement.
In June 2010 SACAA anthorised an employee to enrol for Masters in Aviation offered at an institution in France. The program was for two years and the agreement was that the employee would commence work with the SACAA on 1 April 2012. The employee did not return to SACAA as agreed. An amount of R388 626 was paid to the employee in the form of salary from 1 April 2012 to 30 November 2012.
Authority
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
138
2013 2012R R
32. Irregular expenditure
Opening balance 1,887,134 1,887,134Add: Irregular expenditures - current year - 8,079,980Less: Amounts condoned - (8,079,980)
1,887,134 1,887,134
Details of irregular expenditure – current yearContracts renewed and utilised without competitive bidding
-
-
6,710,829
Goods and services procured without competitive bidding
1,369,151
- 8,079,980
33. Budget variancesMaterial differences between budget and actual amounts
Passenger safety charge
The variance is due to drop in passenger numbers for the year of 2.1%. The rationalisation of the industry, including the liquidation of two low cost airlines namely 1Time Airline and Velvet Sky as well as a combination of general lacklustre economic growth and turbulence in the domestic market contributed to lower than expected passenger numbers. There is a direct correlation between passenger numbers and Gross Domestic Product (GDP), when GDP declines then passenger numbers also decline.
Fuel levy
Fuel levy income is 1.7% below budget due to drop in activity mainly in the aviation leisure industry.
Personnel costs
Personnel costs are 11.5% below budget. The two main factors contributing to this are:
• Salary costs were budgeted to increase by 12% however actual increases were lower than budget, with a 7.2% for management and 10% for employees belonging to the bargaining council.
• Vacant positions were budgeted for in full, however there were 21 vacant posts on average that were not fi lled during the year.
Depreciation and amortization
Only R22 717 355 of the capital expenditure budget was spent during the year. The budget for Aircraft and the Enterprise Business System “EBS” was not utilised. Approval has been sought to rollover these items into the new fi nancial year.
Debt Impairment
The debt impairment relates to provision for bad debts made for the provisional liquidation of 1Time Airlines.
South African Civil Aviation AuthorityFinancial Statements for the year ended 31 March 2013
139
General expenses
The main contributing factor to the variance is training costs. The optimistic budget was embarked on to cater for training backlog. However the need to balance the human capital resource in line with operational demands resulted in lower training spend.
Reversal of impairment loss
The reversal of impairment loss arises from the difference between the carrying value of the aircraft compared to the recoverable amount. The recoverable amount is the fair value less cost to sell based on a valuation performed in dollars. The impairment reversal is as a result of deterioration of ZAR/ USD exchange rate. This was not budgeted for.
Changes from the approved budget to the fi nal budget
The changes between the approved and fi nal budget are a consequence of adjustments and reallocations made to the budget. These adjustments and reallocations were necessary to align the budgets to business needs.
Authority140
NOTES
141
NOTES
Authority142
NOTES
143
NOTES
Physical Address:Ikhaya Lokundiza
Building 16, Treur CloseWaterfall Park, Bekker Street
Midrand
Postal Address:Private Bag X 73
Halfway House 1685
Tel: +27 (0) 11 545 1000Fax: +27 (0) 11 545 1465Email: [email protected]
Website: www.caa.co.za
RP267/2013ISBN: 978-0-621-42178-1