The NLC fulfils its mandate through the application of the principles of openness and transparency. We are proud to present our first Integrated Report, which aims to highlight our successes and challenges throughout 2017/18 financial period. We are working toward meeting all requirements of the International <IR> Framework as we progress on our integrated reporting journey.
The Integrated Report 2017/18 is our primary report to stakeholders covering the financial period 1 April 2017 to 31 March 2018. The report includes the NLC and NLTDF’s leadership overviews, organisational overviews, financial performance, strategic performance, outlook and corporate governance overview. We, as regulators of the lotteries industry, do not report Ithuba Holdings (RF) Pty Ltd or the National Lotteries Participant Trust.
The content covers our material matters that impact on the sustainability of our industry, organisation industry and our stakeholders and the way the organisation creates value for the broader society over the short-, medium- and long-term. Our material matters are identified, evaluated, prioritised and determined in line with the NLC Materiality Framework. The materiality framework is reviewed annually and included in the Annual Performance Plan. Material matters are featured here in this report and developed after consideration of the ministerial priorities here, strategic risk register here, our strategy as well as our reporting framework.
Our Integrated Report 2017/18 endeavours to be concise. However, we are cognisant of addressing all material stakeholder reporting requirements enshrined in the Lotteries Act, PFMA and Treasury Regulations as well as National Treasury Reporting Standards guidelines which are published on our website http://www.nlcsa.org.za/acts/. Our group annual financial statements (AFS) follow GRAP standards for Annual Financial Statements. During the period under review, we adopted the King IV code. Details on our transition to King IV are detailed in the Corporate Governance Report. The report draws on information from other detailed reports. We relied on our Five-Year Strategy Plan and Annual Performance Plan published on our website and reflecting the NLC’s long-term, mid-term and short-term objectives in line with National Treasury Framework for Strategic Plans and Annual Performance Plans.
The NLC has adopted the combined assurance model, which has been designed to highlight the relevant high-risk areas and the assurance to be provided for the NLC to be appraised of the risk management efforts undertaken to manage the risks to an acceptable level.
| Activity | Standard/Code | Assurance Provider |
| Financial Information presented here | GRAP | Auditor-General South Africa |
| Strategic Performance | PFMA | Auditor-General South Africa |
| Operational Information | PFMA and Lotteries Act |
Auditor-General South Africa |
| B-BBEE Information | BEE Act 53 of 2003 and Codes of Good Practice | BEE Online |
| National Lotteries Participants Trust Financial Information on part F of the report |
IFRS | Kwinana & Associates Inc |
The board acknowledges its responsibility to ensure the integrity of information contained in the Integrated Report 2017/18. The Board Audit and Risk Committee was instrumental in providing guidance on this process and keeping the Board abreast of the reporting progress. The Board is of the opinion that this Integrated Report 2017/18 is presented in compliance with the Integrated Reporting International <IR> Framework.
To the best of our collective knowledge and belief, the Board confirms that:
For the period under review, the NLC has produced limited print copies of the integrated report. The full integrated report is also available electronically at www.nlcsa.org.za.
Ms TCC Mampane
Commissioner
26 July 2018
| Material Matters | Impact | NLC’s Response | Strategic link | Strategic Risk and Opportunity |
| Macro-Economic Conditions
The Economic situation in South Africa has resulted in decreased revenue and increased demand on the shrinking funds of the NLDTF. On average, the NLC distributes R1.5bn each year with more than 14000 applications requesting more than R10bn. |
Factors such as the change in VAT rate are projected to impact negatively on available funds for good causes. | The NLC is exploring a collaborative effort with key national stakeholders. |   |
R5 |
| Interpretation of Legislation
Our stakeholders grappled with the amended legislation, notwithstanding the intense capacity building programmes initiated by the NLC. The areas of contention resulting from a lack of understanding of legislation and NLC processes relating to the Regulation 14 – Cooling Off period, Part II, Regulation 10 on Agents and Conduits and section 2A of the Act relating to proactively funded projects. The Legal Division report here seeks to provide a summary of the NLC’s legislative interpretation |
Non-compliance with legislative requirements and impaired stakeholder relations resulting in less funding for applicants. | Enhanced and structured stakeholder engagements and publication of guidance notes |  |
R6, R4 |
| Challenges in Regulation
Challenges identified by the Board in regulating the lotteries industry include conflicting legislation and different regulators for gambling and lotteries. This created ambiguity in regulation as well as a lack of enforcement powers to effectively regulate lotteries. Refer to Regulatory Compliance Divisional Report |
Lack of enforcement powers results in a low prosecution rate and repeat offenders. | Enhancing relations with security agencies and other regulatory bodies to police and enforce sanctions. | |
R6 |
| Illegal Lotteries and Online Gaming
Illegal Lotteries and Online Gaming pose a threat to participants or public protection and cannibalising of the territory or regulated lotteries and sports pools. Refer to Regulatory Compliance Divisional Report |
Harm to the public at large and dilutes funding for good causes. | The NLC is engaging with policy makers to provide direction as trends have preceded legislation. Greater emphasis and resources have been channelled into the manner in which the NLC regulates. | |
R3 |
| Fraud Risk
The NLC has established controls to mitigate against potential fraud risk. Fraud risks can never be eliminated; however, the Risk unit ensures that identified and reported instances of fraud are addressed to discourage occurrence and re-occurrences. The NLC is enhancing its strategy on combating activities and targeting of educational institutions by individuals purporting to be Agents of the NLC. |
Harm to the public at large, leakage of information and funding for good causes and information security risks. | Education and awareness, capacity building, reporting mechanisms in line with industry standards and increase transparency of NLC dealings. |  |
R2, R77 |
