caa 2010 a_report
TRANSCRIPT
1. Vision, Mission and Strategic Objectives 2
2. Chairperson’s Report 3
3. Chief Executive Officer/Commissioner’s Report 6
4. Board 10
5. Corporate Governance 11
6. Executive Management Team 14
7. Performance Information 15
8. Operational Review 20
9. Annual Financial Statements 58
a. Contents Page 59
b. Report of the Auditor-General 60
c. Statement of Responsibility 62
d. Report of Accounting Authority 63
e. Statement of Financial Performance 65
f. Statement of Financial Position 66
g. Statement of Changes in Net Assets 67
h. Statement of Cash Flows 68
i. Notes to the Cash Flow Statement 69
j. Accounting Policies 70
k. Notes to the Annual Financial Statements 81
10. Acronyms 94
2
VisionTo be a credible and dynamic world-class civil aviation regulator.
MissionTo promote and maintain a safe, secure and sustainable civil aviation environment, while adhering to international standards.
To regulate and oversee the functioning and development of the industry in an effi cient, cost-effective, and customer-friendly manner.
To promote an enabling environment for transformation and development.
Strategic Objectives• Comply with legislation and international civil aviation standards and recommended practices.• Accelerate transformation and promote a value-based organisation.• Improve corporate governance, fi nancial sustainability and empowerment.• Attract, develop and retain skilled human capital.• Improve internal systems and processes.• Increase assistance to improve Africa’s civil aviation capacity.• Improve stakeholder relations.
993
Mr Desmond Golding
It is with great pleasure that I present to you the state of civil aviation in South Africa for the period 2009/10. As leaders across the globe will testify, the past fi nancial year was a testing period for many, if not all organisations and companies world-wide.
Thus, you will discover in reading this report that the South African Civil Aviation Authority (CAA), amid the non-buoyant international economic conditions, unwaveringly delivered on its value proposition of deepening its position as a dynamic world-class civil aviation regulator.
Delivering on the promise
The tenure of the current Board will be coming to an end during the current year, and the process of appointing a new Board is imminent. If we look back at the road traversed, this Board can pride itself that it has contributed visibly in the attainment of the vision and mission of this organisation, that of ensuring that our civil aviation environment remains safe, secure and sustainable, within the ethos of continued improvement
and transformation.
This strategic offering has found its expression through systematic and systemic operational effi ciencies and organisational sustainability measures. Not only has our safety record remained commendable, but the organisation (under the tenure of this Board) received unqualifi ed audits, a demonstration that we took seriously and underscored that prudential fi nancial and resource management are imperative in unlocking the real value and functionality of this organisation. We had to ensure that it was ‘business unusual’ and we needed to shift the paradigm in order to accelerate service delivery and foster institutional sustainability.
At the time of publishing this report, the FIFA 2010 World Cup™ would have come and gone. Six years may seem like an awful long time to start a project of this magnitude. In making sure that the country delivered on its promise of a world-class soccer event, organisations such as the CAA had to make sure that its planning was integrated and synergised with other critical organisations and government departments throughout the whole country.
Our abilities to synergise our efforts and deliver were put to the test, and without a doubt the world has judged us favourably regarding the execution of our responsibilities. The integrated planning and implementation required thought, leadership, and a patriotic and selfl ess attitude. Despite economic austerity caused by the global fi nancial meltdown, the CAA spent an additional R1,7 million to ensure that our FIFA 2010 World Cup™ – as a strategic project of national importance – was realised with no incidents and glitches.
The New Civil Aviation Act of 2009
This new Act (Civil Aviation Act, Act No. 13 of 2009) came into effect on 31 March 2010, as we were preparing for the closure of the fi nancial year.
As reported in the previous report, this new Act came into being as the result of closing an audit fi nding from both the International Civil Aviation Organisation (ICAO) and the Federal Aviation Administration (FAA) of the USA.
The reader will notice that we are in the process of implementing most of the changes required in terms of the new Act which will ensure that civil aviation regulations are functionally optimised, whilst ensuring industry effi ciency, responsiveness, transformation and sustenance. Without discounting the challenges presented by the new Act, the Authority is well prepared for this transition, with measurable transitional measures in place.
Continuous implementation and monitoring of the organisation’s strategic plan
The implementation of strategic objectives set out in the strategic plan, adopted and approved in November 2008, is progressing well. These plans, executed and monitored through our Performance Agreement with the Department of Transport, integrated organisational turnaround measures, which included austerity and cost- cutting measures. These measures never affected the core functionality of the business, but streamlined and optimised value through limited resources.
Chairperson’s Report
4
Not only did we budget for a defi cit budget, we also planned for an improved fi nancial deployment with less overruns in the succeeding year.
Core to the strategic plan was not only the rekindled vision of organisational sustainability, but also policy alignment and the introduction of new policy prescripts, including the Employment Equity Plan and Retention Policy.
A representative and transformed aviation industry
The Board resolved to pursue visible transformation in the mainstream aviation at CAA management and the industry in general. This entails visibility of leadership of women, youth and blacks in critical core areas of aviation, and not only in support functionality.
The Board continued to pursue this strategic proposition through systematic programmes, with measured milestones and continued impact analysis. Among others, the Human Resources Division has developed a programme according to which women in aviation will be nurtured, developed and supported to reach greater heights within this industry.
Succession planning
The Board approved the Succession Planning framework. The rationale behind this Plan is to set out guidelines on how succession will be implemented. The plan is specifi c regarding the nature and type of training needed and the list of possible identifi ed future leaders.
This is the time for Africa
The CAA continues to share its expertise with its regional counterparts by hosting several visits from CAAs across the African continent, thus contributing towards building strong relations with neighbouring countries. Africa’s safety record has been under the spotlight for a long time, however, recent statistics show that Africa’s efforts in addressing its challenges are bearing fruit. Whilst much has been done, a lot still need to be done to remove the negative perception around civil aviation safety in the continent. Various counterparts from Ethiopia and Tanzania have been hosted to share best practice and forge strategic relations to further strengthen the safety environment in the region. Surely these interactions will go a long way towards the ethos of the African Renaissance vision.
Harmonisation of regional aviation regulations
A Work Group that was established to harmonise regulations amongst the Southern African Development Community (SADC) member States is continuing with the harmonisation process. The CAA, on behalf of South Africa, is part of the said Work Group. Harmonising the regulations amongst the SADC States will be of great benefi t to all the States involved, in that uniform regulatory standards could easily assist the States in modelling their national regulations accordingly. This will increase cooperation amongst these States, particularly regarding issues pertaining to safety and security.
The struggle continues…
Like any learning organisation, the CAA is not without its own challenges. The CAA has set out to establish an in-house internal audit
995
department. By the end of the calendar year we should have a full-fl edged and functional internal audit division. This process is imperative in strengthening corporate governance, prudential employment of resources and quality assurance. These institutional measures will assist in the deepening of capacity to deal also with challenges that were identifi ed by the forensic auditing process.
The implementation of IT strategy had its shortcomings, and we are confi dent that the corrective measures will yield speedy results. The Board appreciates that the organisation is facing challenges with regards to offi ce space, and the process has been put in place to evaluate various options. Other challenges identifi ed include the strengthening of integrated planning to optimise operational excellence. Thank you
As we wrap up the tenure of this Board, which also coincides with the transition to a new legislative regime under the new Act, we remain indebted to very many people and organisations that have helped us in ensuring that we remain ahead of the curve of ever-unpredictable change.
The Chairperson of the Board, Ms Nonkululeko Msomi, and Board Member, Ms Sindi Ngaba, resigned in March 2010 and September 2009 respectively, due to work-related commitments.
I wish to thank the Honourable Minister of Transport, Mr Sibusiso Ndebele and his Deputy, Mr Jeremy Cronin for their unwavering support in everything we do. Your support, Sirs, has made our work much easier than it could have been.
We further congratulate the management and staff of the Authority for all the hard work they have put into making sure that we deliver another successful year in terms of civil aviation safety and security, and our central theme remains that we make the Authority work faster, harder and smarter with less.
Mr Desmond GoldingActing Chairperson of the BoardSouth African Civil Aviation Authority
6
Colin JordaanCEO/Commissioner
There is something about the year 2010 which makes it special and more peculiar than the rest. Normally the change of the millennium and the end of a decade would bring with it a sense of hope that things will be better, easier and possible. There’s that lingering expectation that something is about to change and the way we know things would change. Having said this, I am quite aware that this feeling was not something out of the ordinary and that this year was fi lled with many apprehensions and expectations, almost the same expectations we had when we were eagerly waiting for the Y2K with all its mysteries and promises. But just like the change of the millennium, 2010 came and life was still going on both at the CAA and the rest of South Africa.
The 2009/2010 fi nancial year has been a very challenging period in my leadership as head of the South African Civil Aviation Authority. Economists predicted the end of the recession and the FIFA World Cup countdown started almost immediately from the 500th day to kick-off. Media around the world had turned their attention to South Africa. Suddenly, what happened on our shores was noticeable and mattered, because something big was coming. The state of crime, safety and security, infrastructure and all that goes with this took centre stage in agendas the world over. The whole world, and in particular South Africans, were nervously waiting for the most popular sporting event ever to be played.
While this hype was going on about South Africa, the CAA was under more pressure to make sure that, as a global player, we sell South Africa to the rest of the world. All eyes were on us to prepare and deliver a hazard-free and accident-free civil aviation environment for the World Cup. Allow me to present to you a summary of the projects in which we engaged in preparation for this much awaited and most popular sporting event and, through the reports from individual divisions within the Authority, details of how we managed to achieve our mandate as the regulator of safety and security in the civil aviation space.
Unprecedented reduction in the rate of aircraft accidents
During the year under review there was a remarkable decrease in the number of accidents. The reported accident rate was reduced by 15 % compared to the 2008/2009 fi nancial year.
The number of fatal accidents was reduced by 54% from the previous fi nancial year. What was most noteworthy was the reduction in the number of fatalities from the previous year by 70%.
This is as a result of a combination of interventions put in place in the past two years, including amongst others, the creation of the General Aviation Safety Initiative (GASI) and the appointment of an Advisory Safety Panel which contributed to ensuring that accident investigations are concluded faster. The major inspector recruitment and training drive that took place in early 2008 is making its mark, with industry oversight and compliance at an all-time high.
Advisory Safety Panel delivering on the promise
In 2008, we appointed a fi ve (5) member Advisory Safety Panel to review fi nal accident reports and ensure that they achieve a high standard. This panel consists of highly qualifi ed and knowledgeable industry experts who provide this service on a voluntary basis to the CAA. One of the primary functions of the Panel is to review the content and quality of the draft fi nal reports with the purpose of clearly identifying the cause of the accident and ensuring that safety recommendations contained in the report are clear and feasible.
Chief Executive Offi cer/Commissioner’s Report
997
Enforcement action
In order for the law to be meaningful, enforcement action must be taken against those who are in contravention. The CAA has been sending a clear message that non-compliance to regulations will not be tolerated. A report detailing actions taken is featured in the Operational Review.
The CAA has been working closely with other law enforcement agencies such as the South African Police Service (SAPS) and the National Prosecuting Authority (NPA) to ensure that appropriate action is taken to restrict the activities of criminal elements that emerge in this industry from time to time.
Appointment of investigators to boost enforcement team
The creation of an independent Enforcement Section will necessitate the full-time secondment of investigators to ensure that the goals of this section are adequately met. The Authority will be prioritising this initiative in the new fi nancial year.
CAA’s fi rst Type Certifi cate - the Jonker Sailplane The South African Civil Aviation Authority issued its fi rst Type Certifi cate since the formation of the organisation in 1998. This is a milestone achievement for the organisation, since it demonstrates the State’s capability of certifying an aircraft to international standards.
Hosting the Federal Aviation Administration (FAA) Bilateral Airworthiness Agreement review
The CAA invited the US’s FAA to discuss the existing bilateral airworthiness agreement between the two States. The meeting was concluded successfully with the FAA being satisfi ed with the CAA’s aircraft certifi cation processes. The FAA is, however, in the process of reviewing all its bilateral airworthiness agreements, and for there to be full mutual recognition of certifi cates, it will have to witness and shadow various design, manufacturing and certifi cation activities with the CAA.
The Standing Committee on Regulation Rewrites (SCORR)
The Standing Committee on Regulation Rewrites (SCORR) was formed to systematically improve the Civil Aviation Regulations applicable to the Air Safety Operations’ ambit of responsibility. During the year under review, SCORR addressed Parts 1, 91, 93, 121, 135 and 137, together with members of the industry. These rewrites are now being processed through the Civil Aviation Regulations Committee.
Staff information sessions
As a result of an internal communications survey conducted by the Communications and Marketing department, my offi ce in conjunction with this department set up quarterly staff interaction sessions where I host about six sessions a day, addressing staff on the strategic direction of the organisation. Staff members are requested to submit issues and topics to be addressed by the CEO/Commissioner in advance, which are then addressed during the sessions. This effort is in addition to the formal organisational tools used to communicate with staff on an ongoing basis.
ICAO gap analysis
It is with great pride that we are able to announce that between 28 September and 2 October 2009, ICAO performed a gap analysis of South Africa’s compliance to International Standards, in which various industry stakeholders and representatives from the Department of Transport participated. The gap analysis confi rmed that South Africa ‘is highly evolved and South Africa is aligned with most of the Global Aviation Road Map best practices and is at a highly evolved state’.
South Africa hosted several ICAO courses in 2009 and CAA representatives attended various meetings, workshops and events in order to assist with the regional development of aviation safety.
ICAO presidential visit
The President of ICAO visited the CAA on 12 August 2009 to strengthen the relationship between the organisations and to discuss the CAA’s continued support of regional initiatives.
8
ICAO compliance
The CAA is 98.6% compliant with ICAO’s eight (8) critical elements of an oversight system with only six (6) fi ndings remaining open at the end of the period. The graph below refl ects the ‘Effective Implementation’ of the Safety Oversight system. This is reported more fully later in the Annual Report under Risk and Compliance.
Customer Relationship Management and Satisfaction Survey
The CAA introduced a Customer Relationship Management system at the end of the previous fi nancial year which included the launch of a monthly customer feedback survey. The results that have been captured for the year are as follows:
Customer Feedback Summary: 2009- 2010
Apr-Jun 09 Jul-Sep 09 Oct-Dec 09 Jan-Mar 10 TotalQueries 24 34 54 48 160Complaints 9 5 18 16 48Compliments 9 9 34 27 79Total 42 48 106 91 287
100
90
80
70
60
50
40
30
20
10
0
Global average 42.28% (145 States)
RSA at July 07
RSA at Dec 08
RSA at July 09
RSA at Mar 10
KEY
A B C D E F G H
A Primary Aviation Legislation E Technical Guidance Material
B Specifi c Operating Regulations F Licensing and Certifi cation
C CAA Structure and Safety G Continued Surveillance
D Qualifi ed Technical Personnel H Resolution of Safety Issues
Effective implementation of eight critical elements (%)
Per
cent
age
(%)
999
The general survey results have been converted into a Customer Satisfaction Ratio and we set ourselves a stretch target of 72,5% for the year. Although the month-to-month survey results have fl uctuated, the CAA achieved a 71.1% cumulative ratio during this period, narrowly missing the stretch target, but nevertheless it is a very satisfying result.
Conclusion
The achievements registered by the Authority during the reporting period are encouraging and indicate that this organisation is headed for bigger things. True to the principle of continuous improvement, this organisation has various opportunities for growth, and learning from the experiences of this reporting period will be a good start. A fi rm foundation has been laid to create one of the best civil aviation authorities yet.
Finally to my colleagues and Executive Team at the CAA, only you and I know the amount of extra time we have put in and the number of sacrifi ces we have had to make, to turn this organisation into a world-class civil aviation authority, and for that I thank you most sincerely.
Captain Colin JordaanChief Executive Offi cer/Commissioner
79%
77%
75%
73%
71%
69%
67%
65%
Actual
Actual YTD
KEY
April June Aug Oct Dec/Jan Mar
Wei
ghte
d Av
erag
e
General Survey Results
10
Board
Nonkululeko MsomiFormer Chairperson of the Board
Mohau (Agente) MotakeCompany Secretary
Sindi Ngaba (Resigned)
Colin JordaanCEO/Commissioner
Phindile RibaChair: HR & Remuneration Committee
Nwabisa Mtshali
Desmond GoldingActing Chairperson
Anwar GanyMajor–General Mandla Mangethe
9911
The CAA is committed to sound and transparent business practices, and upholds the principles of fairness, accountability, responsibility and transparency associated with good corporate governance. As such, the Board of the CAA (the Board) is committed to the highest standards of corporate governance and takes pride in the organisation’s ethical business standards. The Board is also committed to complying with the principles contained in the King Report on Corporate Governance for South Africa, 2009 (King III) as well as to the requirements of the Public Finance Management Act, 1999 (Act No. 1 of 1999) (“PFMA”). Overall responsibility for the strategic direction of corporate governance within the CAA lies with the Board. On the other hand, operational responsibility and day-to-day functioning of the organisation lies with the executive team with the CEO/Commissioner at the helm.
The enabling legislation for the CAA requires the Minister of Transport, the SACAA Board and the CEO/Commissioner to enter into a written Performance Agreement. The Performance Agreement relates to, among others, the Minister’s requirements in respect of the Board and the CAA’s scope of business, effi ciency and fi nancial performance and the achievements of objectives. In line with the enabling legislation, the Performance Agreement was negotiated and entered into between the Board, the CEO/Commissioner (as he was then known) and the Minister during the year under review. The Performance Agreement reinforces accountability by the CAA to the Minister as the Executive Authority. The Performance Agreement further sets out the deliverables, objectives and key performance indicators (“KPIs”) with which the CAA has to comply.
The Board
The Board comprises six (6) non-executive directors and one (1) executive director, now known as the Director of Civil Aviation. In line with international best practice, the CAA has a unitary Board with the Chairperson at the helm of the Board. The Chairperson is a non-executive member appointed by the Minister and the position of the Chairperson is distinct from that of the CEO/Commissioner. The Chairperson is not a member of any of the subcommittees.
The Board is responsible for corporate governance and its duties include approving the strategic plan, monitoring and assessing performance, and acting as a resource for management in matters of planning and policy. The fi duciary duties and other general duties of the Board are set out in the Act and the PFMA. The Board is informed by a formal Board Charter, setting out its duties and responsibilities.
The Board has reserved, among others, the following powers for itself:• Approving and monitoring the implementation of the strategic/corporate plan; • Determining overall policies and processes to ensure the integrity of the CAA’s management of risk and
internal controls; and• Approving all governance policies in the organisation.
While retaining overall accountability, and subject to matters reserved to itself, the Board has delegated the Chief Executive Offi cer/Commissioner to run the day-to-day affairs of the CAA.
The Board maintains the highest standard of integrity, responsibility and accountability to ensure a fair balance between conforming to corporate governance principles and the performance of the CAA.
Board Committees
Specifi c responsibilities have been delegated to the committees of the Board, with full access to independent advice at the CAA’s expense. The Board has two (2) subcommittees, namely: Human Resources and Remuneration Committee (“HR Committee”) and the Finance and Audit Committee (“Finance Committee”). The HR and Audit Committees assist the Board in the discharge of its duties and report to the Board on their activities. Each Committee acts within its written terms of reference, under which certain functions of the Board are delegated with clearly defi ned purposes and membership requirements. The terms of reference are reviewed to ensure that they remain current and relevant. The performance and effectiveness of the committees were evaluated during the annual evaluation by the Board.
Corporate Governance
12
The Finance Committee is responsible for internal controls, external audit, fi nance and risk management within the CAA. This committee has carried out its responsibilities by ensuring full compliance with the PFMA, and has taken remedial actions, including the recommendation to the Board of the appointment of forensic investigators, where there were allegations and suspicions of violations of internal policies and legislation.
Board induction and continuing education
All new members of the Board receive a comprehensive induction. The induction is the responsibility of the Company Secretary and includes a comprehensive information pack, an explanation of their fi duciary duties and responsibilities, meetings with the Chairman and executive team to facilitate an understanding of the CAA’s affairs and operations, and director development programmes arranged through the Institute of Directors.
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 CAA is Mr. AE Motake and he provides the Board as a whole, and directors individually, with detailed guidance on discharging their responsibilities. He is a central source of information and advice to the Board and within the CAA on matters of ethics and good governance. He also ensures that the proceedings and affairs of the Board and its committees are properly administered in accordance with relevant legislation. 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 in consultation with the Minister of Finance. The remuneration of the Chief Executive Offi cer/Commissioner is determined by the Board, based on the recommendation of the HR Committee.
Code of Conduct
The CAA has endorsed a comprehensive code of conduct founded on the highest levels of honesty, integrity and respect. All employees are expected to comply with the code at all times. The Board hereby confi rms that systems and procedures have been implemented to entrench the values and ethics laid down in the code of conduct, and to monitor compliance with the code.
There is a code of ethics in place to complement the code of conduct. All new staff members receive training on, among others, the code of conduct at induction. These values are continuously instilled through ongoing communication and training.
9913
Conclusion
The attendance at 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. During the year under review, the chairperson, Ms N Msomi, and Board member, Ms. Sindiso Ngaba, resigned from the Board.
Scheduled Board meeting attendance, from the period 1 April 2009 to 31 March 2010, was as follows:
Type of meetingFinance and Audit Committee
HR and Remuneration Committee Board
Total of meetings7 (Including special meetings)
4 (Including special meetings)
10 (Including special meetings and AGM)
Ms N Msomi (former Chairperson) Non-Member Non-Member 8Mr D Golding (FAC/Acting Chairperson) 7 Non-Member 7 (1 Teleconference)Ms P Riba(HRC Chairperson) 4 (1 Teleconference) 4 9Mrs N Mtshali 7 4 9Ms S Ngaba Non-Member 2 (Resigned) 3 (1 Teleconference)Maj-Gen M Mangethe 3 0 1Mr A Gany 3 Non-Member 7 Mr C Jordaan 5 4 8
14
Executive Management Team
Anton RichmanGM: Air Safety Operations
Shadrack LesoroExecutive Manager: HR
Gawie BestbierGM: Air Safety Infrastructure
Dumisani MaphumuloGM: Finance
Obert ChakarisaGM: Aircraft Safety
Rennie Van ZylActing Executive: Accidentand Incident Investigations
Poppy KhozaGM: Aviation Security
Louise StolsGM: Risk and Compliance
Ntheri MogoaiExecutive Manager: Legal and EWRM
Sphelo NtakaExecutive Manager: Planning and
Communications
9915
CAA Performance InformationApril 2009 – March 2010
1st N
atio
nal O
bjec
tive:
Mee
t Sou
th A
frica
’s N
atio
nal T
rans
port
Obj
ectiv
esBu
sines
s O
bjec
tives
Annu
al P
erfo
rman
ce
Indi
cato
rsBa
selin
e/ A
ctua
lTa
rget
sPe
rform
ance
Res
ults
Rea
son
for V
aria
nce
1. E
nsur
e th
e gr
owth
of
Civi
l Avia
tion
in
a sa
fe a
nd s
ecur
e en
viron
men
t.
2. E
nsur
e C
ivil A
viatio
n R
egul
atio
ns (“
CAR
S”)
and
Tech
nica
l St
anda
rds
(“CAT
S”)
conf
orm
with
the
Civi
l Avia
tion
Act a
nd
ICAO
Ann
exes
and
SA
RPS
.
3. M
eet t
he c
ount
ry’s
inte
rnat
iona
l avia
tion
oblig
atio
ns.
4. E
nfor
cem
ent o
f Sa
fety
and
Sec
urity
R
egul
atio
ns.
1a) A
ccid
ent r
ate
for j
et
trans
port
airc
raft.
1b) A
vera
ge ti
me
take
n to
re
gist
er a
nd d
ereg
ister
ai
rcra
ft.
1c) %
Red
uctio
n in
the
num
ber o
f avia
tion
accid
ents
, fat
al a
viatio
n ac
ciden
ts a
nd n
umbe
r of
fata
lities
.
2. P
rogr
ess
agai
nst p
lan
of
prom
ulga
tion
of C
ATS
and
CAR
s to
ach
ieve
co
mpl
ianc
e w
ith IC
AO
Anne
xes
and
SAR
PS,
whe
re a
ppro
pria
te.
3. Im
plem
enta
tion
of th
e IC
AO C
orre
ctive
Act
ion
Plan
(CAP
) acc
ordi
ng to
sc
hedu
le.
4. P
erce
ntag
e of
aud
its
cond
ucte
d ag
ains
t M
aste
r Sur
veilla
nce
Plan
with
ens
uing
en
forc
emen
t.
1a) G
loba
l acc
iden
t rat
e (h
ull lo
sses
per
milli
on
fl ight
s of
Wes
tern
-bui
lt je
t airc
raft)
= .8
1.
1b) B
asel
ine
not a
vaila
ble.
1c) T
otal
avia
tion
accid
ents
=
165
Fata
l Avia
tion
Ac
ciden
ts =
31
Avia
tion
Fata
lities
= 85
2. A
viatio
n Bi
ll app
rove
d by
N
atio
nal A
ssem
bly
and
NC
OP.
3. 9
4% c
ompl
ianc
e to
8
critic
al e
lem
ents
ac
hiev
ed a
s at
31
Mar
ch
2009
.
4. 9
5% o
f aud
its c
ondu
cted
ac
cord
ing
to M
SP.
1a) A
ccid
ent r
ate
equi
vale
nt to
or
less
than
.58.
1b) 1
0% re
duct
ion
in ti
me
by 3
1 M
ar 1
0.
1c) R
educ
tion
of a
ll acc
iden
t st
atist
ics b
y 25
% d
urin
gFY
09/
10.
2. 2
0% o
f CAT
S an
d C
ARS
in
line
with
the
Civi
l Avia
tion
Act
to b
e de
velo
ped
by 3
1 M
arch
20
10.
3. E
xcee
d 95
% c
ompl
ianc
e to
8
critic
al e
lem
ents
by
31 M
arch
20
10.
4. a
) 100
% o
f aud
its c
ondu
cted
.
4. b
) Enf
orce
men
t act
ions
co
mpl
eted
.
4. c
) Enf
orce
men
t reg
ister
to b
e ke
pt u
p to
dat
e
1a) 1
.0 h
ull lo
sses
per
milli
on fl
ight
s.
1b) 1
4.3%
redu
ctio
n in
ave
rage
tim
e ta
ken.
1c) T
otal
avia
tion
accid
ents
= 12
6 (2
4% re
duct
ion)
Fata
l Avia
tion
Accid
ents
= 16
(50%
redu
ctio
n)Av
iatio
n Fa
taliti
es=
28 (6
7% re
duct
ion)
2. C
ivil A
viatio
n Ac
t of 2
009
beca
me
effe
ctive
on
31
Mar
ch 2
010.
2.1
Nin
e (9
) CAT
S w
ere
amen
ded
durin
g th
e ye
ar.
2.2
A m
ajor
rew
rite
of P
arts
91,
121
and
135
(Mai
n ai
rcra
ft op
erat
ing
regu
latio
ns) w
as c
ompl
eted
.
3. 9
8.6%
com
plia
nce
to IC
AO 8
crit
ical e
lem
ents
ac
hiev
ed.
4. a
) Tec
hnica
l dep
artm
ents
sur
veilla
nce
perfo
rman
ce:
Flig
ht O
pera
tions
= 1
13%
Airp
orts
and
ATS
Us
= 10
7%Ai
rcra
ft Sa
fety
= 1
43%
Av
iatio
n Se
curit
y =
107%
4. b
) Firs
t mod
ule
of e
lect
roni
c su
rvei
llanc
e sy
stem
im
plem
ente
d by
Flig
ht O
pera
tions
.
4. c
) Thi
rty-fo
ur (3
4) e
nfor
cem
ent a
ctio
ns
u
nder
take
n du
ring
the
year
.
4. d
) Enf
orce
men
t reg
ister
was
revie
wed
at l
east
on
a m
onth
ly ba
sis a
s co
ntra
cted
.
In th
e la
st 1
milli
on fl
ight
sec
tors
that
hav
e ta
ken
plac
e fro
m A
CSA
airp
orts
, onl
y 1
hull l
oss
expe
rienc
ed (A
irlin
k D
ec 2
009)
.
Bette
r tha
n ta
rget
.
Sign
ifi can
tly b
ette
r tha
n ta
rget
.
Alth
ough
it is
est
imat
ed th
at th
e ta
rget
w
as a
chie
ved,
mor
e C
ARS
will
be a
ligne
d in
201
0/11
follo
win
g th
e de
laye
d da
te o
f ef
fect
ivene
ss o
f the
Act
.
Bette
r tha
n ta
rget
.
Sign
ifi can
t pos
itive
varia
nce
due
to in
crea
sed
ad h
oc in
spec
tions
and
FIF
A 20
10 W
orld
Cup
TM
prep
arat
ions
.
Impl
emen
ted
with
in b
udge
t.
A sig
nifi c
ant a
mou
nt a
ttrib
uted
to A
irlin
k en
forc
emen
t act
ivitie
s.
No
varia
nce.
16
2nd
Nat
iona
l Obj
ectiv
e: E
ffi cie
nt a
dmin
istra
tion
of th
e or
gani
satio
nBu
sines
s O
bjec
tives
Annu
al P
erfo
rman
ce
Indi
cato
rsBa
selin
e/ A
ctua
lTa
rget
sPe
rform
ance
Res
ults
Rea
son
for V
aria
nce
1. R
obus
t qua
lity
a
ssur
ance
of
S
ACAA
pro
duct
s
and
ser
vices
.
2. Im
prov
ed c
lient
sat
isfac
tion.
3. E
stab
lish
regi
onal
of
fi ces
to w
iden
C
AA p
rese
nce
in
the
coun
try a
nd
prov
ide
bette
r se
rvice
.
4. E
ffect
ive
perfo
rman
ce
man
agem
ent
lead
ing
to
perfo
rman
ce-
base
d in
crea
ses
for a
ll sta
ff.
5. In
trodu
ce
Elec
troni
c R
ecor
ds
and
Doc
umen
t M
anag
emen
t Sy
stem
.
6. E
ntity
pro
cess
es
anal
ysed
, map
ped
and
optim
ised
to im
prov
e ef
fi cie
ncie
s.
1. M
aint
enan
ce o
f ISO
900
1 ac
cred
itatio
n.
Num
ber o
f rep
eat
fi
ndin
gs IS
O a
udits
.
Num
ber o
f fi n
ding
s in
IS
O a
udits
ann
ually
.
2. R
esul
ts o
f mon
thly
clien
t
sur
veys
.
Per
cent
age
ratio
of
com
plim
ents
to
c
ompl
aint
s.
3. R
egio
nal o
ffi ce
s
e
stab
lishe
d or
not
.
4. T
arge
ts s
et in
acc
orda
nce
w
ith p
erfo
rman
ce
a
gree
men
t and
act
ual
p
erfo
rman
ce a
ccur
atel
y
ass
esse
d.
5. E
RD
MS
impl
emen
tatio
n
pro
gres
s ag
ains
t pla
n.
6. In
tegr
ated
sys
tem
s
impl
emen
ted
acco
rdin
g
to p
lan.
1. IS
O C
ertifi
catio
n
mai
ntai
ned
since
200
0.
0 re
peat
fi nd
ings
.
4 m
inor
fi nd
ings
.
2. S
urve
y sy
stem
has
bee
n im
plem
ente
d.
B
asel
ine
is 70
.5%
.
3. C
ape
Tow
n of
fi ce
pilo
t in
p
roce
ss.
4. N
ew P
erfo
rman
ce
M
anag
emen
t Sys
tem
intro
duce
d.
5. P
aper
-bas
ed s
yste
m
fo
r rec
ord
and
docu
men
t
man
agem
ent.
6. N
on-in
tegr
ated
sys
tem
s.
1. 0
repe
at fi
ndin
gs.
4
min
or/0
maj
or fi
ndin
gs.
2. 7
2.5%
on
a 5
poin
t wei
ghte
d
sys
tem
. (10
0% =
Exc
elle
nt (5
)
acr
oss
the
boar
d).
3. S
et u
p re
gion
al o
ffi ce
s in
Cap
e
Tow
n by
Sep
tem
ber 2
009.
4. N
ew P
MS
used
for
a
sses
smen
t of e
mpl
oyee
per
form
ance
for c
urre
nt fi
scal
yea
r.
5. T
ende
r aw
arde
d by
31
Mar
ch
2
010.
6. a
) Pro
cure
men
t Sy
stem
sol
utio
n in
pla
ce b
y31
Aug
ust 2
010.
6. b
) Stra
tegi
c pl
ans
for I
M a
nd IT
in p
lace
by
30 S
ept 2
009.
1. 0
repe
at fi
ndin
gs a
nd 4
min
or fi
ndin
gs b
y
con
tract
ed e
xter
nal I
SO a
udito
rs.
2. 7
1.2%
sat
isfac
tion
rece
ived
for 1
2 m
onth
s
end
ing
Mar
ch 2
010.
Qua
rterly
ana
lysis
of c
ompl
aint
s an
d co
mpl
imen
ts
are
disc
usse
d at
EXC
O a
nd a
ctio
n pl
ans
deve
lope
d by
resp
ectiv
e G
Ms.
3. S
ACAA
regi
onal
offi
ces
wer
e se
t up
in C
ape
T
own
by S
epte
mbe
r 200
9.
4. B
usin
ess
Perfo
rman
ce S
yste
m (B
PS) u
sed
fo
r qua
rterly
revie
ws
for s
taff
perfo
rman
ce
m
anag
emen
t.
5. T
ende
r Spe
cifi c
atio
n w
as re
ady
for p
ublic
atio
n
by
mid
–Feb
201
0. S
ITA
requ
este
d to
eva
luat
e
bef
ore
publ
icatio
n –
conc
erns
wer
e ra
ised.
6. a
) PO
P, a
pro
cure
men
t sys
tem
was
intro
duce
d in
Aug
ust 2
009.
6. b
) Inf
orm
atio
n M
anag
emen
t and
Tec
hnol
ogy
S
trate
gy P
lan
appr
oved
by
Boar
d an
d in
effe
ct
b
y ta
rget
dat
e.
No
varia
nce.
1.3
perc
enta
ge p
oint
s be
low
am
bitio
us ta
rget
–
no
sig
nifi c
ant p
robl
em a
reas
iden
tifi e
d.
Targ
et a
chie
ved.
Syst
em fu
lly fu
nctio
nal.
SITA
is b
usy
revis
ing
the
spec
ifi cat
ion
with
the
SAC
AA.
Impl
emen
ted
as p
lann
ed.
No
varia
nce.
9917
3rd
Nat
iona
l Obj
ectiv
e: C
orpo
rate
gov
erna
nce
and
legi
slativ
e co
mpl
ianc
eBu
sines
s O
bjec
tives
Annu
al P
erfo
rman
ce
Indi
cato
rsBa
selin
e/ A
ctua
lTa
rget
sPe
rform
ance
Res
ults
Rea
son
for V
aria
nce
1. C
ompl
ianc
e w
ith
P
FMA.
2. C
ompl
ianc
e w
ith
P
FMA
Supp
ly
C
hain
Man
agem
ent
P
olicy
.
3. C
ompl
ianc
e w
ith
o
ther
pol
icies
/
Cod
es o
f Con
duct
/
Cod
e of
Eth
ics.
4. S
usta
inab
le
fi
nanc
ial
pe
rform
ance
.
1.C
ompl
ianc
e w
ith
BEE
Act o
f 200
3 in
tern
ally.
2. P
ersu
ade
avia
tion
indu
stry
sta
keho
lder
s to
acc
eler
ate
trans
form
atio
n.
1. P
erce
ntag
e co
mpl
ianc
e to
PFM
A.
2. R
educ
tion
in In
tern
al
Audi
t Fin
ding
s on
th
e Su
pply
Cha
in
Man
agem
ent
Polic
y an
d Tr
easu
ry
Reg
ulat
ions
.
3. IS
O fi
ndin
gs o
n th
e la
ck o
f adh
eren
ce to
po
licie
s; in
tern
al Q
A fi n
ding
s.
4a) P
erfo
rman
ce a
gain
st
budg
et in
term
s of
re
venu
e/ex
pend
iture
.
4b) P
rogr
ess
agai
nst
plan
for n
ew fi
nanc
ial
reve
nue
mod
el.
1. L
evel
of B
EE
Proc
urem
ent.
2. E
viden
ce o
f visi
ble
trans
form
atio
n w
ith
clien
t org
anisa
tions
.
1. N
o re
cord
ed in
stan
ces
of n
on-c
ompl
ianc
e w
ith
PFM
A.
2. P
revio
us y
ear s
uppl
y ch
ain
man
agem
ent
fi ndi
ngs
(11)
.
3. N
o m
ajor
ISO
fi nd
ings
.22
Inte
rnal
QA
min
or
fi ndi
ngs.
4a) N
et d
efi c
it of
R13
,6
milli
on.
4b) P
roje
ct fo
r new
fi n
ancia
l mod
el 5
3%
com
plet
e.
1. T
otal
BEE
spe
nd
curre
ntly
at 6
0% a
cros
s th
e bo
ard.
2. M
ost a
viatio
n co
mpa
nies
with
in S
A ha
ve lo
w le
vels
of
trans
form
atio
n.
1. 1
00%
com
plia
nce
for fi
nan
cial
year
/unq
ualifi
ed a
udit
repo
rt.
2. A
ll fi n
ding
s by
inte
rnal
aud
it on
sup
ply
chai
n m
anag
emen
t clo
sed
out b
y 31
Mar
ch 2
010.
3. Z
ero
maj
or IS
O fi
ndin
gs.
10 m
inor
QA
fi ndi
ngs.
4a) L
oss
of R
9m fo
r FY
08/0
9.
4b) I
ncre
ase
pass
enge
r saf
ety
char
ges
by 1
Jul
y 20
09.
4c) N
ew re
venu
e m
odel
pro
ject
co
mpl
ete
by 2
8 Fe
b 20
10,
cons
ulta
tion
with
indu
stry
co
mpl
ete
31 M
ar 2
010.
1. 1
00%
com
plia
nce
in n
on-
safe
ty c
ritica
l are
as a
nd
whe
re p
rodu
cts
can
be lo
cally
so
urce
d.
2. H
old
two
wor
ksho
ps w
ith
indu
stry
for t
he fa
cilita
tion
of
trans
form
atio
n by
31
Mar
ch
2010
1. U
nqua
lifi ed
Aud
it R
epor
t ach
ieve
d –
two
inst
ance
s of
frui
tless
and
was
tefu
l exp
endi
ture
.
2. 8
sig
nifi c
ant a
nd 1
7 m
inor
fi nd
ings
wer
e re
porte
d.
3. Z
ero
maj
or fi
ndin
g;O
ne m
inor
fi nd
ing;
One
obs
erva
tion.
4a) A
defi
cit
of R
9.07
m w
as a
chie
ved
agai
nst
a bu
dget
defi
cit
of R
7.1m
. Tar
get w
as re
vised
fo
llow
ing
dela
ys in
get
ting
appr
oval
s fo
r fue
l le
vy in
crea
ses.
4b) P
asse
nger
saf
ety
char
ge w
as in
crea
sed
by R
1ef
fect
ive 1
Jun
e 20
09.
4c)
A ne
w re
venu
e m
odel
has
bee
n ap
prov
ed
and
will
be d
elib
erat
ed in
the
new
Fee
s Su
bcom
mitt
ee o
f CAR
CO
M in
term
s of
the
Civi
l Av
iatio
n Ac
t of 2
009.
1. A
tota
l BEE
spe
nd o
f 68.
41%
was
ach
ieve
d ac
ross
the
boar
d. O
nly
min
or s
pend
was
in
curre
d lo
cally
from
non
-BEE
acc
redi
ted
supp
liers
.
2. S
ACAA
hel
d tw
o w
orks
hops
in O
ctob
er 2
009
and
Mar
ch 2
010
to fo
ster
tran
sfor
mat
ion
in
avia
tion.
Disc
iplin
ary
proc
esse
s w
ere
not w
ell m
anag
ed,
resu
lting
in re
inst
atem
ent o
f sus
pend
ed
empl
oyee
s.
A fo
cuse
d fo
rens
ic au
dit w
as p
erfo
rmed
in
200
9, w
hich
acc
ount
s fo
r the
sig
nifi c
ant
varia
nce.
Maj
or im
prov
emen
t attr
ibut
ed to
man
y fi n
ding
s in
200
8/9
year
with
no
such
aud
it pe
rform
ed in
20
07/8
yea
r due
to IC
AO a
udit.
Min
or v
aria
nce
agai
nst t
arge
t. R
even
ue
signi
fi can
tly b
elow
bud
get d
ue to
eco
nom
ic
dow
ntur
n. E
xpen
ditu
re c
aref
ully
cont
rolle
d to
ba
lanc
e bu
dget
.
Targ
et a
chie
ved.
A ne
w ta
riff r
evie
w s
truct
ure
has
been
in
trodu
ced
by th
e Ac
t and
will
form
par
t of
indu
stry
liaiso
n.
Base
line
signi
fi can
tly e
xcee
ded.
Targ
et a
chie
ved.
4th
Nat
iona
l Obj
ectiv
e: B
lack
Eco
nom
ic Em
pow
erm
ent
18
5th
Nat
iona
l Obj
ectiv
e: E
mpl
oym
ent e
quity
Busin
ess
Obj
ectiv
esAn
nual
Per
form
ance
In
dica
tors
Base
line/
Act
ual
Targ
ets
Perfo
rman
ce R
esul
tsR
easo
n fo
r Var
ianc
e
1. R
ecru
itmen
t of
tech
nica
l, se
nior
an
d ex
ecut
ive
man
ager
s in
lin
e w
ith th
e Em
ploy
men
t Eq
uity
Act
.
1. A
viatio
n aw
aren
ess
prom
otio
n at
sc
hool
s, c
aree
r gu
idan
ce fo
rum
s an
d ra
dio
prog
ram
mes
.
2. D
evel
opm
ent o
f Tr
aini
ng P
rogr
amm
es
blac
k pi
lots
and
te
chni
cians
in
conj
unct
ion
with
va
rious
Gov
ernm
ent
Dep
artm
ents
.
N/A
1. M
aint
ain
Fede
ral A
viatio
n Ad
min
istra
tion
(FAA
) Cat
egor
y 1
stat
us.
2. In
crea
se IC
AO
com
plia
nce
for
fore
ign
oper
ator
s.
3. D
evel
op S
ACAA
O
pera
tiona
l C
apac
ity P
lan.
1. P
erce
ntag
e of
new
re
crui
ts th
at a
re fr
om
desig
nate
d gr
oups
in
cludi
ng d
isabl
ed
peop
le.
1. N
umbe
r of a
viatio
n pr
omot
iona
l cam
paig
ns
cond
ucte
d an
nual
ly.
2. P
rogr
ess
on
esta
blish
men
t of t
rain
ing
prog
ram
mes
.
N/A
1. N
umbe
r of r
emai
ning
IC
AO fi
ndin
gs to
be
close
d ou
t.
2. A
ll for
eign
ope
rato
rs
eval
uate
d ac
cord
ing
to IC
AO s
tand
ards
be
fore
For
eign
Ope
rato
r Pe
rmits
are
issu
ed.
3. P
lan
deve
lope
d or
not
.
1. 8
2% o
f new
recr
uits
are
fro
m d
esig
nate
d gr
oups
.
1. 8
0 ca
mpa
igns
per
annu
m.
2a) S
AAF/
SAA
Afric
an
Trai
ning
Initia
tive
plan
ning
com
plet
ed.
2b) U
nit s
tand
ards
re
gist
ered
with
SAQ
A.
N/A
1. 5
5 of
63
fi ndi
ngs
close
d.
2. R
obus
t FO
P re
com
men
datio
ns m
ade
for a
ll app
licat
ions
.
3. N
o pl
an e
xists
.
1. 8
0% o
f rec
ruits
from
de
signa
ted
grou
ps; p
ilots
an
d te
chni
cians
acc
ordi
ng to
av
aila
bility
of c
andi
date
s w
ith
the
nece
ssar
y ex
perie
nce
requ
ired
in te
rms
of IC
AO
com
plia
nce.
1. 1
00 c
ampa
igns
per
ann
um.
2. E
viden
ce o
f sup
port
for
the
impl
emen
tatio
n of
ATI
w
orks
hops
, inp
ut to
trai
ning
cu
rricu
lum
. Flig
ht tr
aini
ng
inno
vatio
n pr
ogra
mm
e in
pla
ce
31 M
ar 1
0.
N/A
1. C
lose
out
7 o
utst
andi
ng
fi ndi
ngs
by 3
1 M
ar 2
010.
2. 1
00%
com
plia
nce.
3. O
pera
tiona
l cap
acity
pla
n by
Ju
ne 2
009.
1. 9
8% o
f rec
ruits
from
des
igna
ted
grou
ps in
no
n-te
chni
cal p
ositio
ns; 8
8% o
f all r
ecru
its
from
des
igna
ted
grou
ps. A
tota
l of 5
1 ne
w s
taff
mem
bers
join
ed th
e SA
CAA
dur
ing
the
year
in
revie
w.
1. E
stim
ated
14,
820
lear
ners
from
mor
e th
an 1
00
scho
ols
atte
nded
avia
tion
awar
enes
s ca
mpa
igns
co
nduc
ted
by th
e SA
CAA
mar
ketin
g an
d co
mm
unica
tions
team
.
2. P
ilot D
evel
opm
ent I
nitia
tive
Wor
k G
roup
was
fo
rmed
in M
arch
201
0 to
ass
ist in
impr
ovin
g tra
nsfo
rmat
ion.
SAA
and
SAA
F ar
e re
pres
ente
d.
N/A
1. W
ork
requ
ired
to c
lose
out
6 o
f rem
aini
ng 7
fi n
ding
s w
as c
ompl
eted
dur
ing
the
year
. Aw
aitin
g tra
nsla
tion
and
Min
ister
ial a
ppro
val
2. A
ll for
eign
ope
rato
rs h
ave
been
eva
luat
ed
acco
rdin
g to
ICAO
sta
ndar
ds a
nd a
ppro
pria
te
reco
mm
enda
tions
mad
e to
Int.
Lice
nsin
g Se
rvice
s C
ounc
il.
3. F
IFA
2010
Wor
ld C
upTM
Ope
ratio
nal P
lan
com
plet
ed b
y 23
Apr
il 200
9 an
d su
bmitt
ed to
D
oT.
Targ
et s
igni
fi can
tly e
xcee
ded.
Targ
et a
chie
ved
- Max
imum
lear
ner e
xpos
ure
was
targ
eted
as
oppo
sed
to fo
cuss
ing
on
num
ber o
f cam
paig
ns.
Prog
ram
me
on tr
ack.
N/A
Rem
aini
ng fi
ndin
g re
late
s to
sig
ning
of M
OU
w
ith IC
ASA.
So
lutio
n ex
pect
ed b
y en
d of
Jun
e 20
10.
Impl
emen
ted
in fu
ll due
to n
atio
nal
signi
fi can
ce.
Targ
et a
chie
ved
wel
l with
in ta
rget
dat
e.
6th
Nat
iona
l Obj
ectiv
e: C
orpo
rate
soc
ial in
vest
men
t
7th
Nat
iona
l Obj
ectiv
e: E
xten
ded
Publ
ic W
orks
Pro
gram
me
(EPW
P)
8th
Nat
iona
l Obj
ectiv
e: F
IFA
2010
Wor
ld C
upTM
Obj
ectiv
es
9919
9th
Nat
iona
l Obj
ectiv
e: E
xten
ded
Publ
ic W
orks
Pro
gram
me
(EPW
P)Bu
sines
s O
bjec
tives
Annu
al P
erfo
rman
ce
Indi
cato
rs
Base
line/
Act
ual
Targ
ets
Perfo
rman
ce R
esul
tsR
easo
n fo
r Var
ianc
e
N/A
1. In
crea
se
assis
tanc
e to
impr
ove
Afric
a’s
Civi
l Avia
tion
Cap
acity
.
2. P
artic
ipat
ion
in
the
esta
blish
men
t
of A
frica
n R
egio
nal
Auth
oritie
s.
3. P
artic
ipat
ion
in
the
harm
onisa
tion
of S
ADC
avia
tion
regu
latio
ns.
N/A
1. P
artic
ipat
ion
in A
FI
wor
kgro
ups
and
% o
f
assis
tanc
e re
ques
ts
resp
onde
d to
.
2. P
rogr
ess
tow
ards
esta
blish
men
t of A
RAs
.
3. S
igni
fi can
t out
put
from
CO
SCAP
ste
erin
g
Com
mitt
ee. (
Parti
cipat
ion
in A
FI w
orkg
roup
s)
N/A
1. A
ssist
ance
pro
vided
to A
frica
n co
untri
es o
n
requ
est.
2. C
once
ptua
l sta
ge a
t
begi
nnin
g of
fi na
ncia
l
year
.
3. P
artic
ipat
ed in
AFI
wor
kgro
ups
with
in
budg
etar
y an
d re
sour
ce
cons
train
ts.
N/A
1. 8
0% o
f ass
istan
ce re
ques
ts
resp
onde
d to
and
ass
istan
ce
give
n.
2. P
artic
ipat
ion
in c
onfe
renc
es
and
wor
ksho
ps w
here
reso
urce
s pe
rmit.
3. P
artic
ipat
ion
in 8
0% o
f AFI
wor
kgro
ups.
N/A
1. 1
00%
ass
istan
ce o
n AF
I req
uest
s w
ithin
budg
etar
y co
nstra
ints
, a n
umbe
r of s
ympo
sium
s
wer
e he
ld b
y SA
, hos
ted
and
chai
red
vario
us
regi
onal
initia
tives
.
2. C
AA p
artic
ipat
ed in
all r
egio
nal in
itiativ
es w
ith th
e
exce
ptio
n of
one
due
to o
pera
tiona
l con
stra
ints
.
3. C
AA n
omin
ated
thre
e ex
perts
to p
artic
ipat
e
in d
rafti
ng re
gion
al re
gula
tions
. 100
% o
f FSW
G
mee
tings
wer
e at
tend
ed.
N/A
20%
pos
itive
varia
nce
due
to th
e le
adin
g ro
le
Sout
h Af
rica
cont
inue
s to
pla
y in
the
cont
inen
t
and
the
regi
on.
Targ
et s
ubst
antia
lly a
chie
ved.
Targ
et a
chie
ved.
10th
Nat
iona
l Obj
ectiv
e: O
ther
bus
ines
s ob
ject
ives
20
CAA mandate
The mandate of the CAA is to regulate and oversee the civil aviation industry in South Africa to ensure industry compliance to applicable Civil Aviation Regulations (CARS) and the Standards and Recommended Practices (SARPs) as defi ned by ICAO. In line with international best practice, the CAA has embarked on a process of continuous improvement. To this end, many initiatives are highlighted in the report.
CAA organisational structure as at 31 March 2010
Operational Review
9921
The state of civil aviation safety and investigation of aircraft accidents
The Accident and Incident Investigations Division (AIID) is primarily responsible for the investigation of accidents and incidents, dissemination of accident statistics and reports as well as the prevention of accidents and incidents through a system called the Confi dential Aviation Hazard Reporting System (CAHRS).
Investigation of aviation accidents and incidents is one of the key activities of the CAA, which it has carried out on behalf of the National Department of Transport since 1998. In this regard, the AIID is mandated to investigate the causes of accidents and incidents in South Africa in adherence to the applicable regulations and in compliance to Annex 13 of the International Convention on Civil Aviation.
In terms of the Act, on a date still to be determined by the Minister of Transport, the role of investigating accidents and serious incidents will rest with the Aviation Safety Investigation Board (ASIB). The CAA will remain responsible for investigating all accident and incidents that ASIB elects not to investigate.
In order to enable the Accident and Incident Investigations Division to undertake its mandate, the Department of Transport provides the CAA with an annual grant. This is done on a cost-recovery basis whereby the Department of Transport makes quarterly payments to the CAA. In practice it has been found that the actual expenditure exceeds the grant allocation and the Authority has initiated a process of recovering the shortfall from the Department. Despite fi nancial constraints, the Division has done exceptionally well in terms of accident investigations. This achievement is evident in view of the number of accident reports produced as well as meaningful safety recommendations that were made in the reports.
The main purpose of an aircraft accident investigation is to determine the facts, conditions and circumstances pertaining to the accident with a view to establishing the probable cause of the accident so that appropriate steps may be taken to prevent a recurrence of the accident and the factors that led to it. Therefore, the purpose of an investigation is not to apportion blame; and as such the results of the investigation may not be used during litigation or for punitive purposes. Should it be required, a parallel investigation is undertaken by the enforcement section of the Authority to determine whether enforcement action is required.
Accident statistics
The 2009/2010 fi nancial year proved to be a good year as far as safety oversight and aviation safety was concerned. The reported accident rate decreased by 15 % compared to the 2008/2009 fi nancial year. There were 165 accidents in the 2008/2009 fi nancial year compared to 139 accidents in the 2009/2010 fi nancial year.
Furthermore, there were 14 fatal accidents during the reporting period as compared to 31 during the previous reporting period. This achievement translates to a decrease of almost 54% in fatal accidents. Likewise, there was a decrease in the number of fatalities, with 85 recorded during the preceding reporting period and 25 during the year under review. This translates into a 70% decrease in reported fatalities during the year under review as compared to the year before.
Overall, the industry recorded the lowest accident rate in the past fi ve (5) years. The decline in serious incidents and accidents can be attributed to various factors, including vigilant and increased safety oversight conducted by the CAA inspectors as well as safety initiatives by the regulator in collaboration with the industry. The downturn in the number of fl ying activities in the general aviation environment due to the economic recession could also have contributed to the decline in accidents.
Review of accident reports
In order to ensure that the CAA produces thorough and factually credible accident investigation reports, the Accident and Incident Investigations Division involves, where necessary, external expertise during the accident investigation and analysis process. Such expertise varies and often includes experts from other accident investigation bodies such as the USA’s National Transportation Safety Board.
In addition, the Commissioner appointed a fi ve-member Advisory Safety Panel to review fi nal accident reports to ensure that high standards are maintained. The primary function of the Panel, which provides its services on a voluntary basis, is to review the content and quality of the draft fi nal reports with the purpose of clearly identifying the cause of the accident and ensuring that safety recommendations emanating from the report are adequate and feasible.
22
The table below outlines outputs of the Advisory Safety Panel.
Conforming to ICAO requirements
Annex 13 of the ICAO Chicago Convention requires that the signatory states such as South Africa notify ICAO about accidents and serious incidents involving aircraft exceeding a takeoff mass of 2250 kg. During the reporting period, 19 of such notifi cations were submitted to ICAO.
In addition, ICAO requires that each member state maintains an accident and incidents database to facilitate effective analysis of information and data exchange. To meet this requirement, the AIID introduced the European Coordinating Centre for Accidents and Incidents Reporting System (ECCAIRS) a few years ago. However, to ensure effective application of the system, all investigators received extensive training during the year under review and the whole division is now using the system.
A signifi cant improvement has also been effected to the content of the ECCAIRS during the reporting period. The database has been expanded to include all reported accidents and serious incidents for the period 2000 to 2010. A moderation project will still need to be implemented to verify that the input of data is correct and to fi nalise closure of completed investigations.
Research and sharing of information
A number of research studies have been completed by the research section within the Accident and Incident Investigations Division. These reports include wire strikes and accidents that occur at unlicensed aerodromes as well as a fi ve-year safety analysis. The section has further made it possible for external organisations and individuals to access safety information and statistics. A booklet on how to respond to an aircraft accident scene has been published and distributed to emergency services throughout the country.
Furthermore, a project aimed at posting all completed fi nal reports on the CAA website was initiated. This is a signifi cant transformation in line with international best practice and makes the sharing of accident prevention information more accessible.
The tables below depict a three-year comparison of accident statistics.
Three-Year Accident Rate Comparison Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total1 Apr 07 – 31 Mar 08 18 10 17 20 15 14 8 16 19 11 22 21 1911 Apr 08 – 31 Mar 09 22 15 7 18 15 15 18 12 14 7 11 11 1651 Apr 09 – 31 Mar 10 10 16 10 11 7 6 8 17 12 11 20 11 139
Three-Year Fatal Accident Rate Comparison Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total1 Apr 07 – 31 Mar 08 2 2 1 1 1 4 1 4 2 3 1 3 251 Apr 08 – 31 Mar 09 4 1 1 1 2 5 7 4 1 1 2 2 311 Apr 09 – 31 Mar 10 0 1 0 1 2 0 1 3 3 0 2 1 14
ASP Performance Statistics 1 April 09 – 31 March 10 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar TotalNumber of meetings 0 2 1 1 1 1 2 1 0 1 1 1 12Reports reviewed 0 19 15 17 20 20 18 16 0 17 15 20 177Approved reports 0 17 13 14 15 14 12 14 0 14 14 16 143Number of reports referred back
0 2 2 3 5 6 6 2 0 3 1 4 34
Number of safety recommendations
0 29 7 7 15 12 3 22 0 6 15 5 121
9923
Two-Year Comparison of Fatal Accidents Per Operation Category Private Parachute Agriculture Airshow Training1 Apr 08 – 31 Mar 09 47 2 1 0 41 Apr 09 – 31 Mar 10 18 1 1 1 2
The graph below depicts a combined three-year comparison of accident statistics.
Three-Year Fatalities Rate Comparison Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total1 Apr 07 – 31 Mar 08 4 2 1 1 1 7 1 9 3 7 3 6 451 Apr 08 – 31 Mar 09 7 1 2 1 6 30 26 4 1 1 2 4 851 Apr 09 – 31 Mar 10 0 1 0 1 4 0 2 5 8 0 3 1 25
Three-Year Serious Incidents Statistics Comparison Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Total1 Apr 07 – 31 Mar 08 5 5 8 7 8 9 6 10 5 2 2 4 711 Apr 08 – 31 Mar 09 3 4 7 8 1 2 3 3 1 2 3 1 381 Apr 09 – 31 Mar 10 0 3 1 2 0 1 1 4 1 0 1 6 20
Three-Year Combined Statistics ComparisonAccidents Fatal Accidents Fatalities Serious Incidents
1 Apr 07 – 31 Mar 08 191 25 45 711 Apr 08 – 31 Mar 09 165 31 85 381 Apr 09 – 31 Mar 10 139 14 25 20
The table below depicts a two-year comparison of accident statistics.
250
200
150
100
50
0
Total Accidents
Total Fatalities
Total Fatal Accidents
Total Serious Incidents
KEY
01 Apr 07–31Mar 08
01 Apr 08–31Mar 09
01 Apr 09–31Mar 10
191 165 13925 31 1445 85 2571 38 20
Tota
l
Combined Accidents
24
Consolidation of aviation legislation and compliance enforcement
The Civil Aviation Act, Act No. 13 of 2009, (“the Act”) came into effect on 31 March 2010. The Act repeals and consolidates existing aviation laws that gave effect to certain international civil aviation conventions. Ultimately the Act aims to, among others, address the fi ndings made by the ICAO and FAA Audits that were conducted during 2007. It also provides for the establishment of a South African Civil Aviation Authority which is bestowed with safety and security oversight functions. The Act also provides for the establishment of an independent Aviation Safety Investigation Board, in compliance with Annex 13 of the Chicago Convention. It further delineates the functions and powers of the Department of Transport on civil aviation security issues, particularly on policy matters, as well as those of the CAA, especially on security operational oversight. Notably, the position of the Chief of Aviation Security has been abolished. Furthermore, the Act gives effect to the Convention for the suppression of unlawful acts against the safety of civil aviation and will provide for the National Aviation Security Programme and additional measures directed at more effective control of the safety and security of aircraft, airports and the like.
On a more practical level, the Act presents various changes within the civil aviation regulatory environment. Firstly, the Act introduces some changes with regard to the functions and authority of senior personnel and their job titles. For example, the Act does away with the positions of the Chief Executive Offi cer and Commissioner and substitutes them with the Director of Civil Aviation who will assume overall accountability for safety and security oversight. Another critical area of the Act is the provision for the creation of a separate and independent Aviation Safety Investigation Board that will be responsible for accident and incident investigation. The Act introduces a novel approach to appeals by allowing the Director of Civil Aviation to expeditiously handle appeals. Moreover, it also provides for the creation of Appeal Committees to handle appeals lodged against the Director’s decisions. The Act mainly consolidates various previous aviation-related Acts which were fragmented and uncoordinated.
Formation of the Standing Committee on Regulations Rewrite (SCORR)
The Standing Committee on Regulations Rewrites (SCORR) and the CAA-CARCom Work Group (consisting of SCORR and representatives from the industry) were formed during the 2009/2010 fi nancial year. The purpose behind the establishment of the SCORR process is to systematically improve the Civil Aviation Regulations applicable to the ambit of responsibility of the Air Safety Operations and Aircraft Safety Divisions in order to ensure that all ICAO Standards and Recommended Practices are addressed in the new regulations. To achieve this, any given proposals or comments from the Inspectorate and CAA stakeholders are considered in drafting these proposed regulations prior to submission to the Civil Aviation Regulations Committee (CARCom).
SCORR consists of a chairperson/vice-chairperson, committee coordinator and subject matter specialists from various departments within the CAA. Membership includes various industry aviation organisations and representation from the DoT. The Committee Coordinator ensures that proposals are distributed for comments to appropriate committee members for review and action.
Civil Aviation Regulation Committee and review of specifi c operating regulations
CARCom is a committee appointed by the Commissioner to advise on the amendment, withdrawal or introduction of regulations or technical standards issued in terms of the Civil Aviation Act. The Committee comprises representatives of the CAA and various aviation industry role players.
The key role of the Committee 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 reporting period, the Committee continued to entrench itself as a consultative body in so far as regulations and technical standards are concerned. The Committee held six scheduled meetings during the reporting period and called one special meeting. A total of 44 submissions for amendment of regulations were tabled during this reporting period.
9925
The table below outlines the submissions made during this reporting period.
Dates Proposal tabled25 Feb 2009 Part 24, Part 65, Part 108, Part 13921 April 2009 Part 61, Part 18724 June 2009 Part 11, Part 61, Part 62, Part 12126 August 2009 Part 47, Part 12128 October 2009 Part 6109 December 2009 Part 61, Part 65, Part 66, Part 12124 February 2010 Part 12, Part 61,62, Part 139, Part 172, Part 187
The table below outlines promulgated regulations.
Development of aviation security regulations
Having identifi ed a gap in the regulations, the CAA’s Aviation Security (AvSec) division worked tirelessly to develop Part 108 in 2008, which is aimed at regulating cargo security. The new regulation came into effect in July 2009. In terms of Part 108, air carriers will not be allowed to carry unknown cargo, meaning that cargo intended for loading on board an aircraft will need to be processed through a regulated agent who is required to apply security controls to such cargo and who holds a certifi cate of approval, issued by the CAA.
The implementation of Part 108 was seamless, with the industry showing keen interest in achieving compliance. The AvSec Division continues to engage with the industry through a subcommittee of the Industry Liaison Forum; with the objective of dealing effectively with any difference of interpretation between the industry and the CAA. To date 209 operators have been approved by the CAA under Part 108.
In terms of the Training and Certifi cation Regulations as well as Technical Standards, the AvSec Division succeeded in developing Part 109 and Part 110 of the Regulations. These two Parts were approved by the Minister of Transport and promulgated on 4 September 2009 with an effective implementation date of 1 April 2010.
Regulation Promulgation date5th Amendment (South African Civil Aviation Act : 1998(Act no.40 of 1998) 1 June 200937th Amendment : Appeal procedures 12 June 200938th Amendment (Reference : A1/04/09) : Parts 109 and 110 4 September 2009
26
Part 109 deals with aviation security training, while Part 110 regulates the certifi cation of aviation security screeners. In practical terms, Part 109 entails the approval of any organisation conducting aviation security training and Part 110 focuses on the evaluation and confi rmation that a screener is competent to perform the assigned functions as defi ned by the CAA.
Compliance enforcement
During the period under review, the number of enforcement actions taken in all areas doubled compared to the previous year, namely 34 actions compared to 17 in the previous year. Twenty of these were from the Aircraft Safety Division and 14 from Air Safety Operations. The increase in the number of enforcement actions was due mainly to enforcement action taken against SA Airlink in December 2009, when 14 aircraft in their Jetstream fl eet were grounded.
Despite the increased number of enforcement actions taken, none of these were challenged legally. This can still be attributed largely to the effi ciency and effectiveness of the enforcement process that was revamped at the beginning of the fi nancial year. By ensuring that enforcement actions taken are legally and factually justifi ed and that procedures are followed, the CAA managed to avoid resultant court actions.Some of the enforcement actions taken were as follows:• One Private Pilot’s Licence suspended and subsequently cancelled;• One Private Pilot’s Licence suspended but later uplifted after certain requirements were met; • Two cases of fraud reported to the police;• One instrument rating suspended but later reinstated after requirements were met; • One Commercial Pilot’s Licence suspended and the instrument-rating revoked. Suspension uplifted after
30 days;• One Flight School Approval suspended for 30 days; • One Commercial Pilot’s Licence student disqualifi ed from writing examinations for 6 months;• Two Grade II Flight Instructor ratings suspended for 30 days and two Dornier 228 ratings revoked;• One National Pilot’s Licence suspended for 30 days;• Two Private Pilot’s Licence students disqualifi ed from writing examinations for
12 and 18 months respectively; and• One Grade II Instructor Rating suspended for 14 days.
The state of Civil Aviation Security
The role of the Aviation Security (AvSec) Division is to oversee aviation security in South Africa. This mandate relates specifi cally to airports, air operators, cargo, safe transportation of dangerous goods as well as aviation security training organisations and aviation security personnel. As a means of ensuring that the industry is fully prepared for compliance to the new regulations, the AvSec Division conducted workshops across the country.
Overview of airport and airline security
One of the key mandates of the AvSec Division is oversight over airport and airline security. The Minister of Transport approved the amended National Aviation Security Plan (NASP) in March 2009 for implementation by all relevant air operators. During the period under review, the Aviation Security Division solicited and received aviation security plans from airports and airlines with the aim of ensuring that they are in line with the NASP. These plans have been evaluated and on-site validations conducted. The recommendation for approval shall be submitted to the Department of Transport for approval by the Minister of Transport as required by the Act.
To date 44 airlines out of 52 have submitted their plans and the variance is due to airlines that are no longer operating. Eighteen designated airports have also submitted out of 20 and it is due to two airports no longer dealing with scheduled operations.
9927
Development and implementation of aviation security regulations
The development and review of aviation security regulations is covered elsewhere in this report.In order to implement Part 110 effectively, the Aviation Security Division sought the technological intervention of an online electronic certifi cation system for the purposes of ensuring that screeners are evaluated appropriately and that confi rmation of their competence is in line with the set requirements. The implementation meant that some processes were developed, including examination questions. In addition, the Division also validated certain training centres that will be used as examination centres for the purposes of certifying aviation security screeners. This initiative makes South Africa one of the few countries, if not the only one, that uses technology to ensure oversight in this fi eld.
In addition, the Division developed Training and Certifi cation ISO processes, procedures, oversight tools and evaluation instruments and application forms. All these were approved in time for implementation by industry. Aviation security audits and oversight inspection statistics
The Aviation Security Division ensures adherence to safety standards through a programme of scheduled annual licence renewal inspections, ad-hoc surveillance inspections, and non-compliance follow-up inspections.
In terms of airports, airlines and general aviation oversight, the Aviation Security Division’s Airlines and Airports Department planned a total of 177 inspections for the fi nancial year and concluded 185. This represents an increase of 16% from the previous fi nancial year. Reasons for an increase vary from vacant positions being fi lled and an increase in the staff complement.
The graph below outlines oversight statistics in terms of airports, airlines and general aviation sectors.
The Air Cargo Security Section in the Dangerous Goods and Cargo Security Department planned a total of 250 inspections for the fi nancial year and achieved 321. This indicates an increase of 300% compared to the previous fi nancial year. The reasons for an increase are the implementation of the Part 108 Regulation, which necessitated increased visits to operators for inspections and the approval of agents.
30
25
20
15
10
5
0
Target–2009
Actual–2009/10
Baseline–2008
KEY
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar5 12 9 15 16 18 16 19 15 14 18 202 7 6 12 18 0 22 11 6 22 27 2610 17 14 8 19 18 18 22 15 0 16 28
Airports/Airlines oversight as at 31 March 2010
80
60
40
20
0
Target
Actual
Baseline
KEY
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar25 25 25 25 25 25 10 25 5 20 20 207 7 8 28 4 4 14 7 0 6 12 10
28 8 48 58 24 25 12 27 5 21 30 35
Cargo Security Section – Inspections 1 April 2009 – 31 March 2010
28
The Dangerous Goods Section in the Dangerous Goods and Cargo Security Department had planned a total of 309 inspections for the fi nancial year and achieved 367. This indicates an increase of 3% in the reporting period. The increase can be attributed to a full staff complement and more effi cient processes.
The Aviation Security’s Training and Certifi cation Department planned a total of 129 inspections for the fi nancial year and achieved 49. In the previous year there were no inspections conducted due to the non-existence of the department and legislation. Part 109 and Part 110 came into effect on 1 April 2010. It was envisaged that the industry would start their preparations early and that there would be more visits, but preparatory work for the implementation of both Parts took priority over visits, which led to a negative variance of 62%. It is expected that in the next fi nancial year, there will be a dramatic increase in oversight inspections.
When consolidating departmental audits, the entire Aviation Security Division had planned a total of 865 inspections for the fi nancial year and achieved 922. In the previous year the actual inspections conducted were 657, which indicates an increase of 40% compared to the previous fi nancial year. Reasons for an increase vary from the fi lling of vacant positions to the implementation of Part 108 and the expansion of the Division. There are now three new departments compared to the previous year, which means that there were more activities in this fi nancial year than the previous fi nancial year.
80
70
60
50
40
30
20
10
0
Target–2009
Actual–2009
Baseline–2008
KEY
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar21 36 17 22 34 28 28 29 17 23 30 2436 17 22 34 28 28 70 28 16 23 30 2437 37 27 31 37 23 32 29 11 15 55 33
Dangerous Goods Oversight March 2010
30
25
20
15
10
5
0
Target
Actual
Baseline
KEY
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar19 19 11 0 0 0 0 10 8 25 13 240 0 0 0 0 0 0 0 0 0 0 0
17 0 2 0 0 0 0 2 6 7 9 6
Aviation Security Division – Departmental Audits 1 April 2009 – 31 March 2010
9929
The table and graph below outline the Division’s combined number of audit statistics.
An overview of Aircraft Safety
One of the key mandates of the CAA is to ensure aircraft safety.
The main functions of the Aircraft Safety Division include, among others:• Ensuring that aircraft are properly certifi ed before being entered into the South African Civil Aircraft
Register;• Ensuring that all aircraft fl ying in the country are airworthy, ie. fi t and safe for fl ight; and• Conducting audits and subsequent approvals of Aircraft Maintenance Organisations, Design
Organisations and Manufacturing Organisations.
In addition, the division is mandated to ensure that aircraft maintenance engineers perform their tasks in line with the approved standards, procedures and best international practice. Industry adherence to safety standards is ensured through the implementation of a programme of scheduled and ad-hoc inspections.
Overview of aircraft airworthiness
Aircraft airworthiness oversight is critical for ensuring a safe aviation system, since it seeks to ensure that only aircraft that fully comply with the requirements of the Civil Aviation Regulations are permitted to operate.
The Division’s Part 121 Unit conducts oversight of Aircraft Maintenance Organisations that are approved to conduct maintenance on large passenger transport aircraft. During the year under review, 99 audits were scheduled and 146 audits were achieved, exceeding the target by 47 audits.
300
250
200
150
100
50
0
Target
Actual
Baseline
KEY
Jun Sep Dec Mar224 206 182 251147 156 174 180245 243 179 255
Aviation Security Division – Divisional Audits 1 April 2009 – 30 September 2009
Type of inspections Target (Planned) Actual (Achieved) Variance
Percentage achieved (%)
All types 865 922 57 106.59% TOTAL 865 922 57 106.59%
25
20
15
10
5
0
Target
Actual
Baseline
KEY
Airworthiness Part 121 Unit – Large Aircraft
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar11 5 6 8 10 7 8 11 12 6 13 25 5 5 5 5 5 5 5 5 5 4 48 8 11 8 11 9 22 18 11 6 16 18
30
The Aircraft Safety Division’s Part 127 Unit conducts oversight of Aircraft Maintenance Organisations that are approved to conduct maintenance on all helicopters in the country. During the year under review, 61 audits were scheduled and 82 audits were achieved, exceeding the target by 21 audits.
The Aircraft Safety Division’s Part 135 Unit conducts oversight of Aircraft Maintenance Organisations that are approved to conduct maintenance on small general aviation aircraft below 5,700 kg. During the year under review, 120 audits were scheduled and 115 audits were achieved. The fi ve (5) outstanding audits were undertaken during the month of April 2010.
Overview of aircraft certifi cation
During the reporting period, the Aircraft Safety Division conducted a comprehensive review of the South African Civil Aircraft Register. The project focused on the verifi cation of details of type-certifi ed aircraft. The project was further expanded to ensure that non-type-certifi ed aircraft details are also reviewed and corrected where applicable.
18
16
14
12
10
8
6
4
2
0
Target
Actual
Baseline
KEY
Airworthiness Part 127 Unit – Helicopters
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar4 9 5 4 4 5 5 5 3 5 6 65 8 5 5 5 8 5 6 5 5 5 42 11 3 5 4 8 7 6 3 6 17 10
25
20
15
10
5
0
Target
Actual
Baseline
KEY
Airworthiness Part 135 Unit – Small Aircraft/General Aviation
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar15 7 8 6 8 10 6 14 5 15 11 1510 10 10 7 8 10 8 6 6 10 11 138 7 5 5 11 10 6 15 6 15 7 20
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The graph below shows the activities of the Aircraft Registration Unit with regard to the registration of aircraft. During the year under review, the South African Civil Aviation register grew by 285 aircraft.
The Aircraft Safety Division’s Part 148 unit in the Aircraft Certifi cation Department conducts oversight of manufacturing organisations. During the year under review, 36 audits were scheduled and 50 audits were achieved, exceeding the target by 14 audits.
A summary of aircraft airworthiness audit and surveillance
The audits currently being undertaken have increased tremendously in terms of depth and scope. This has resulted in increased compliance by industry to the applicable Civil Aviation Regulations. Furthermore, most audit fi ndings and non-compliances are scrutinised and monitored to ensure that they are fully resolved by the industry.
During the year under review, the division established the Defect Reporting and Monitoring Unit to ensure that evidence of all defects recorded by the maintenance industry is collected and disseminated to the relevant manufacturers and aviation authorities to ensure that the recurrence of defects is prevented. The industry has increased its utilisation of this defect reporting mechanism which is a mandatory requirement in terms of ICAO Standards and Recommended Practices.
9
8
7
6
5
4
3
2
1
0
Target
Actual
Baseline
KEY
Certifi cation – Part 148 Manufacturing Organisations
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar3 3 3 3 3 3 3 3 3 2 4 32 3 3 3 3 3 3 3 3 1 3 23 4 1 2 3 7 6 8 5 2 5 4
60
50
40
30
20
10
0
Target
Actual
Baseline
KEY
Certifi cation – New Aircraft Registrations
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar35 35 35 35 35 35 35 35 35 35 35 3530 30 30 30 30 30 30 30 30 30 30 3029 27 40 40 27 36 30 54 34 22 32 33
32
An overview of Air Safety Infrastructure
The Air Safety Infrastructure division is responsible for ensuring that South African airspace is safe; including airports, helistops, and heliports. In addition, the division ensures that off-airport structures that may affect the safety of air navigation, comply with all safety standards as required by Civil Aviation regulations.
The division is also responsible for the approval of fl ight procedures and the licensing of air traffi c controllers as well as the issuing of permission for certain aviation activities, such as balloon releases, fi rework displays, and advertising blimps.
The Air Safety Infrastructure division is also responsible for the provision of up-to-date prescribed aeronautical safety information to the industry in accordance with ICAO requirements. These include, among others:• Aeronautical Information Circulars;• Notice to Airmen (plain language summaries) – NOTAM Summaries; and• Aeronautical Information Publication.
Adherence to safety standards is ensured through a programme of scheduled annual licence renewal inspections, ad-hoc surveillance inspections, and non-compliance follow-up inspections of all licensed aerodromes.
Publication and maintenance of the Integrated Aeronautical Information
The primary task of the Air Safety Infrastructure division as defi ned in ICAS’s Annex 15 to the Chicago Convention is to ensure the fl ow of aeronautical information necessary for the safety, regularity and effi ciency of international air navigation. In meeting this mandate, the division disseminates the Integrated Aeronautical Information Package to the entire aviation community within South Africa and internationally.
One of the highlights of the division during the period under review was the transition from paper to electronic publication of vital aeronautical information. In this regard, the CAA now publishes the monthly integrated aeronautical information package on CDs. In addition, NOTAMs (Notice to Airmen) are published regularly on the CAA website. The publication of the Aeronautical Information Publication Supplements and Circulars on the CAA website allows for easy access.
Provision of Air Traffi c Services
The number of air traffi c controllers and assistants has grown steadily since 2002. However, this trend took a dip during the 2007/2008 fi nancial year. This could be attributed to poaching by more affl uent countries as well as the global economic recession, making it fi nancially diffi cult for new entrants to enrol. However, statistics emerging from the beginning of 2010 indicate that the situation is improving again. A total of 89 new air traffi c services licences were issued for a net gain of 45 licences for the year. This compares with a net gain of 36 in the previous year and a net loss of5 for the 2007/2008 fi nancial year.
9933
The graph below depicts statistics of air traffi c controllers and air traffi c service assistants as far back as 2002.
Audit inspections and compliance surveillance
In terms of the annual inspection programme, twenty-one (21) approval inspections were conducted during the year under review, thereby achieving the set target. As a result, the same number of certifi cates was issued for Air Traffi c Service Units (ATSUs) and Aviation Training Organisations (ATOs) that were found to be compliant. In addition, twenty-four (24) surveillance inspections were conducted at the same ATSUs and ATOs; thereby meeting the set target.
All non-compliances which were identifi ed at the various ATSUs and ATOs were addressed either through follow-up inspections or enforcement action. In addition, all reported incidents related to air traffi c services were followed up and where necessary, remedial action was taken. This process helps to ensure continuous improvement in both the safety of services provided and the effi ciency of such services.
The division’s notable highlight was helping Airports Company South Africa with the transition from the old Durban International Airport to the new King Shaka International Airport. Moreover, the division played a key role in the certifi cation, approval and publication of aeronautical information about the new King Shaka International Airport. Additionally, the Air Safety Infrastructure division played a critical role in the design of airspace for the new King Shaka International Airport which was approved by the Commissioner of Civil Aviation in January 2010.
Air Navigation Service, a department within the Air Safety Infrastructure Division, draws up a training programme annually with the intention of exposing its personnel to the latest techniques and advances in aviation. In this reporting period, all inspectors completed on-the-job training where required as well as assigned formal training courses, which included among others, human factors, accident investigation and prevention.
Communication, Navigation and Surveillance
A total of 56 surveillance inspections of communication and navigational facilities were conducted in the period under review against a target of 49 inspections. The seven additional inspections conducted was due to the fact that the fi rst seven inspections of the 2010/2011 fi nancial year were fast-tracked in order to accommodate the FIFA 2010 World CupTM.
The development of the King Shaka International Airport and the staging of the FIFA 2010 World CupTM in South Africa resulted in a surge of aeronautical frequency applications. A total of nearly 400 applications were received during the year, many of which were amendments to current licences and several temporary assignments to accommodate activities pertaining to the FIFA 2010 World CupTM. The normal annual activity relating to frequency spectrum assignments is usually around 60 applications per annum.
Unforeseen technical problems experienced by the calibration aircraft plagued the Flight Inspection Unit (FIU) and many extensions to the validity of inspection certifi cates for Instrument Landing Systems (ILS) and very high frequency Omnidirectional Radio Range (VOR) had to be issued. These extensions were granted based on the history and stability of equipment. A total of 42 extensions were issued.
The division actively participated with the development of the Astronomy Geographic Advantage Act and the regulations which were introduced mainly for the purposes of safeguarding the Northern Cape area against radio interference in preparation for the Square Kilometre Array (SKA) radio telescope. Notably, aviation posed
600
500
400
300
200
100
0
Series 1
KEY
2002 2003 2004 2005 2006 2007 2008 2009 2010
34
a major threat to the SKA due to the high altitude of aircraft and the large footprint area of aircraft transmissions in the vicinity of the proposed SKA site, which is very near to the busy Cape Town to Johannesburg route and virtually under the Cape Town and Johannesburg terminal area boundary where radio transmissions reach a peak. Overall, aeronautical interests were well protected.
The division has also made inputs to the Wind Farm Development Project, as wind farms have the potential to interfere with communications, navigation and surveillance systems, especially radar.
Provision of cartography and procedure design services
During the period under review, a total of 109 instrument fl ight procedures were validated. These included new procedures for OR Tambo and King Shaka international airports as well as the Pietermaritzburg Airport.
A total of 122 aeronautical charts were published during this reporting period. The charts for the new procedures at OR Tambo and King Shaka international airports are included in this total.
A total of 1 387 applications for the approval of obstacles and 33 applications for wind farms were received during the period under review. The increase in obstacle applications is due to the expansion of cellular telecommunications. The increase in the number of wind farm applications is due to the requirement for alternative energy to supplement the ESKOM network.
The table below depicts cartography and procedure design services offered during the reporting period.
Apr ‘09
May ‘09
Jun ‘09
Jul ‘09
Aug ‘09
Sep ‘09
Oct ‘09
Nov ‘09
Dec ‘09
Jan ‘10
Feb ‘10
Mar ‘10 Total
Procedure ground validation 4 5 4 14 9 37 9 8 10 4 3 2 109Aeronautical charts 15 0 5 41 13 0 5 1 5 14 0 23 122Obstacle applications 24 62 64 66 55 43 132 402 89 126 114 210 1 387Wind farm applications – – – 2 – – – 9 2 6 13 1 33
During the year under review, the Division’s Aeronautical Information Services Department saw an increase in the number of clients; from 14 590 in April 2009 to 15 750 in March 2010. This increase is mainly attributed to the cleanup of the aircraft registry and the updating of pilots’ details on the licensing system.
An overview of safety at aerodromes
In terms of aerodrome safety, one of the division’s major roles is to provide aerodrome licence holders with the necessary advice in order to enable them to comply with applicable regulations. This entails advice regarding civil infrastructure, electrical installations, aerodrome operations and quality management as well as rescue and fi re-fi ghting services.
In addition to the licensed aerodromes, the division also runs a safety advice project targeting unlicensed aerodromes and helistops. During the reporting period, the division consistently ran a project involving the voluntary registration of unlicensed aerodromes and helistops.
9935
Inspections and surveillance at aerodromes
The Aerodrome Safety Department conducted inspections as per the approved year plan. The number of aerodrome inspections planned for 2009/2010 was 137 for annual licence renewal. The Department also set itself a target of 23 surveillance inspections. As such, the Aerodrome Safety Department managed to meet its target for both annual licence renewal and surveillance inspections, as refl ected in the table below.
The table below depicts the number of surveillance audits undertaken during the 2009/2010 fi nancial year.
Licensed Aerodromes Planned Inspected VarianceGauteng Province 18 18 0Free State Province 10 9 -1Western Cape Province 7 7 0Mpumalanga and Limpopo Province 24 24 0KZN Province 19 19 0Northern Cape Province 19 19 0Eastern Cape Province 15 15 0(Eastern Cape) Karoo 10 10 0North West Province 15 16 +1Total 137 137
In addition to the above inspections, four military aerodromes earmarked for civil operations during the FIFA 2010 World CupTM period were inspected. These were Overberg Military Airbase, Langebaanweg Military Airbase, Hoedspruit Military Airbase and Waterkloof Military Airbase.
Additional ad-hoc inspections were carried out at aerodromes also earmarked for use during the FIFA 2010 World CupTM. In addition, the Aerodrome Safety Department ensured that intellectual support was provided to aerodromes that were struggling with compliance. As part of its oversight role, the Department observed and evaluated full-scale emergency exercises at various aerodromes. Cooperation between the various aerodromes and their respective local governments was generally of the required standard; but where necessary, the CAA ensured that remedial action was implemented. The Department’s Aerodrome Rescue and Fire-Fighting Services team is taking the lead in ensuring that all the fi re-fi ghters of licensed aerodromes are properly registered and qualifi ed in terms of the South African Qualifi cations Act (SAQA) requirements. The Transport SETA (TETA) has signed an agreement with the CAA on the accreditation of aviation-related training programmes. In an effort to ensure that the relevant programmes are developed, the CAA has issued an invitation to relevant stakeholders in order to form a working group which will deliver on Aerodrome Rescue and Fire-Fighting training programmes.
The level of compliance in the areas of aerodrome quality management as well as implementation of the Safety Management System (SMS) has improved tremendously. For instance, during the 2008/2009 fi nancial year, 84 cases of non-compliance were recorded compared to 33 cases during the reporting period. During this reporting period, there was a decrease in the various categories of aerodrome airside incidents as compared to the 2008/2009 fi nancial year. The table below depicts the decrease.
Category 2008-2009 2009-2010 PercentageApron equipment against apron equipment
46 31 32% decrease
Apron equipment against vehicle 46 41 10% decreaseVehicle against vehicle 38 17 55% decreaseVehicle against facility or property 28 25 10.7% decreaseAircraft against facility or property 12 6 50% decreaseAircraft against vehicle 3 2 33.3% decreaseAircraft against aircraft 2 0 100% decreaseFuel spill 172 144 16.2% decreaseRunway incursions 11 12 8.33% increaseTotals 395 332 15.95% Decrease
36
Following an awareness campaign to get unregistered aerodromes to register and comply with applicable standards, 18 previously unregistered aerodromes applied for registration. Additionally, an information circular was published to prescribe the minimum expected safety level at unlicensed aerodromes.
During the reporting period, 45 proposed helipad sites were inspected and found compliant and added to the data base of registered helipads. During the course of the reporting period, the Aerodromes Safety Department delisted three abandoned helipads. In addition, one new aerodrome was licensed whilst another aerodrome was withdrawn during the 2009/2010 fi nancial year. Furthermore, two helipads that were deemed unsafe were closed; whilst 11 new helipads were approved.
In terms of trends, the Aerodrome Safety Department has established that budget constraints and lack of skills at domestic aerodromes (municipal aerodromes) have generally led to poor maintenance of such aerodromes. There is also, in general terms, a lack of accountability by licence holders of domestic aerodromes, especially those managed by municipalities.
Oversight of Air Safety Operations
One of the key mandates of the CAA entails carrying out various safety oversight activities across the civil aviation industry and these are primarily focussed on fl ight operations, aviation personnel standards, aviation medicine, and fl ight inspection. This role is carried out by the CAA’s Air Safety Operations Division.
As such, the Division’s main responsibilities include, but are not limited to the following.• Industry surveillance, oversight and approval of all air operators and aviation training organisations.• Oversight of all designated fl ight examiners, designated examiners, and designated aviation medical
examiners.• Resolution of aviation safety and aviation medical concerns.• Establishment and maintenance of the master surveillance programme.• Inspection of ground radio navigational aids.• Enhancing Civil Aviation Regulations.• Advising the Air Service Licensing Council on aviation licensing issues.
Audit and oversight inspection statistics
The Air Safety Operations Division carries out a programme of scheduled annual inspections and audits, ad-hoc surveillance inspections, and non-compliance follow-up inspections in order to ensure that the industry adheres to applicable regulations and standards.
During the year under review, all planned audits by the various departments were completed and in some cases exceeded, due to the accelerated Audit Programme for the FIFA 2010 World CupTM, i.e. with the exception of Part 127. The Part 127 department missed the target with one (1) audit due to staff shortages.
The table and graph below depicts annual renewal audits per the Division’s respective departments.
Part 121 Part 135 Part 127 Cabin Safety
Part 141 (ATOs)
Target(Planned Apr 09 – Mar 10) 59 142 67 36 237Actual(Completed Apr 09 – Mar 10) 59 153 66 45 267Baseline(Completed Apr 08 – Mar 09) 55 171 68 41 252% Completed to Date 100% 108% 99% 125% 113%
9937
The following table and graph depict ad-hoc audits conducted on Air Operators and Aviation Training Organisations.
The following table and graph depict ad-hoc audits carried out by the various departments of the Air Safety Operations Division.
The following table and graph depict ad-hoc audits carried out by the various departments of the Air Safety Operations Division.
Target
Actual
Baseline
KEY
Part 121 Part 135 Part 127 Cabin Safety Part 141
300
250
200
150
100
50
0
Apr May Jun July Aug Sep Oct Nov Dec Jan Feb MarTarget(Planned Apr 09 – Mar 10)
44 38 62 56 62 48 41 44 44 52 38 38
Actual(Completed Apr 09 – Mar 10)
47 44 58 49 50 48 49 38 45 32 63 67
Baseline(Completed Apr 08 – Mar 09)
36 48 65 48 48 45 54 56 32 39 64 52
% Completed to Date
8% 16% 26% 35% 44% 52% 61% 68% 75% 81% 92% 104%
80
70
60
50
40
30
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10
0
Target
Actual
Baseline
KEY
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Part 121 Part 135 Part 127 Cabin Safety
Part 141 (ATOs)
Target(Planned Apr 09 – Mar 10) 60 164 74 96 270Actual(Completed Apr 09 – Mar 10) 115 210 76 104 255Baseline(Completed Apr 08 – Mar 09) 80 255 116 103 83% Completed to Date 192% 128% 103% 108% 94%
38
The following table and graph depict ad-hoc audits conducted on Air Operators and Aviation Training Organisations.
Apr May Jun July Aug Sep Oct Nov Dec Jan Feb Mar
Target
(Planned Apr 9 – Mar 10)
43 48 57 46 46 47 56 51 56 50 57 46
Actual
(Completed Apr 9 – Mar 10)
61 57 54 66 56 69 84 78 54 55 70 56
Baseline
(Completed Apr 8 – Mar 09)
42 34 52 63 47 58 62 52 53 39 74 61
% Completed to date
11% 17% 26% 37% 46% 58% 72% 85% 91% 100% 111% 120%
A summary of aviation personnel standards
The CAA makes use of Designated Flight Examiners (DFEs) to conduct the majority of the required skills testing. In order for a pilot to act as a DFE, he or she must be overseen by a CAA authorised offi cer on an annual basis. The DFE, in many cases, is reliant on a member of the public approaching him/her for a skills test. Planning an oversight programme that can be strictly adhered to, is therefore not possible.
90
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0
Target
Actual
Baseline
KEY
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
DFE MONTHLY OVERSIGHT PROGRAMME (excludes Cabin Crew and AMEs)
APRIL 2009 – MARCH 2010 Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb MarNumber of DFEs 251 251 251 251 251 251 251 251 251 251 251 251Planned Oversight 21 21 21 21 21 21 21 21 21 21 21 20Number tested per month
21 11 20 13 34 32 20 12 17 16 10 21
Number completed to date
21 32 52 65 99 131 151 163 180 196 206 227
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Target
Actual
Baseline
KEY
Part 121 Part 135 Part 127 Cabin Safety Part 141
9939
Flight inspections
The role of the Flight Inspection Unit is to perform regular fl ight inspections of civil aviation navigation aids in South Africa and the region in accordance with the recommendations prescribed by ICAO. During the reporting period, the planned targets were exceeded. Activity Planned targets Completed VarianceNavigation aids inspections 145 148 +3Flying hours 338.6 370.8 +32.2
Development of aviation medicine protocols
In order to meet its obligations, the CAA continuously reviews its regulations and technical standards and, where necessary, amends them or introduces new ones. Given the fact that the fi eld of medicine is ever-changing, with advancements being made regularly, it is imperative that the CAA’s Aviation Medicine Department reviews its protocols on a regular basis. During the period under review, several key protocols were reviewed. Below are two of the protocols that were approved by the Commissioner.
The addition of Plavix to the list of acceptable medication
Plavix is an anti-coagulant drug that is commonly used in the treatment of Myocardial Infarction post-intervention. Previously this drug was not allowed in aviation. A consultative workshop with specialist cardiologists, specialist physicians, and senior designated aviation medical examiners was held to discuss the use of Plavix. It was established that Plavix is integral in the management of Myocardial Infarction and the risk of sudden incapacitation due to side effects was low. As a result, Plavix has been added to the list of acceptable medication.
Colour vision requirements for Class I and Class II
Previously, applicants with Grade III colour-blindness were restricted to fl ying as Private Pilot Licensed pilots only, and to fl y Visual Flight Rules by day only. Although ICAO still stipulates that applicants with colour-defi ciencies should not be allowed to fl y as Class I pilots, international best practice shows that applicants with colour-defi ciencies are allowed to progress to Commercial and Airline Transport Pilot type licences by countries such as the United Kingdom and the United States of America. Further research shows that aviation colours and warning systems have improved drastically since the time when these restrictions were drawn up. Modern aircraft have different colours and hues, and the pilot can select contrast levels visible to him/her. There are also auditory warning systems to warn pilots of any dangers. The CAA’s Aviation Medicine Department has subsequently introduced new requirements for colour-defi cient applicants, in terms of which applicants with Grade III colour-defi ciencies are allowed to progress to a higher class of medical certifi cate, provided they undergo a thorough examination by a ophthalmologist, and pass a practical fl ight test with a CAA-designated instructor.
300
250
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150
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5
0
Target
Actual
Baseline
KEY
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar09 09 09 09 09 09 09 09 09 09 09 09
40 99
An overview of the CAA’s Risk Management, Compliance with ICAO and National Requirements
The Risk and Compliance Division was established in 2008 to centralise the organisational control functions of quality management, ICAO compliance and coordination, risk and safety management, customer feedback management, and the administration of examinations and professional licences. ICAO requires States to comply with the requirements of the Convention, Annexes, Guidance Material and the eight (8) critical elements of a safety oversight system and therefore the responsibility of regulators to ensure compliance with ICAO requirements internally was raised in the 2007 Universal Safety Oversight Audit of South Africa.
To further enhance the capacity of this division, client relationship management and information management completes the portfolio. Client relationship management is of great importance due to its role in creating a culture of customer service within the CAA which not only has a direct impact on the image of the CAA, but is also monitored by the Board for reporting to the Minister.
Information Management is crucial and relates on the one hand to the provision of reference information to technical divisions to ensure legal compliance by the industry and on the other hand to record-keeping internally, ensuring compliance with ICAO, the National Archives and PFMA requirements. Information Management is further aimed at business improvement and data governance within the CAA, both of which are critical to the optimisation of CAA processes and both will provide the foundation for the automation of core business activities.
Compliance with ICAO requirements
After the Universal Safety Oversight Audit (USOAP) in 2007, the ICAO Compliance and Coordination Section was set up to oversee the implementation of ICAO international best practice through policy, regulations and procedures. The ICAO Compliance and Coordination Section, within the Risk and Compliance Division, is responsible for continuously monitoring the CAA’s compliance with ICAO standards and recommended practices. In future, this Section will measure the CAA’s compliance with the eight (8) critical elements of a safety oversight system by means of compliance audits in order to ensure that South Africa’s oversight system remains one of the best in the world.
By the end of the 2009/2010 fi nancial year, CAA was 98.6% compliant with the eight (8) critical elements of an oversight system with only six (6) fi ndings remaining open. The graph below and table on the next page refl ect the effective implementation of the Safety Oversight System.
100
90
80
70
60
50
40
30
20
10
0
Global average 42.28% (145 States)
RSA at July 07
RSA at Dec 08
RSA at July 09
RSA at Mar 10
KEY
A B C D E F G H
A Primary Aviation Legislation E Technical Guidance Material
B Specifi c Operating Regulations F Licensing and Certifi cation
C CAA Structure and Safety G Continued Surveillance
D Qualifi ed Technical Personnel H Resolution of Safety Issues
Effective implementation of eight critical elements (%)
Per
cent
age
(%)
9941
Global average 42.28%(145 States)
RSA atJuly 07
RSA atDec 08
RSA atJuly 09
RSA atMar 10
Primary Aviation Legislation 73.75 75.00 100.00 100.00 100.00Specifi c Operating Regulations 63.24 68.86 83.83 85.03 100.00CAA Structure and Safety Oversight Functions
55.30 72.28 90.43 92.34 95.22
Qualifi ed Technical Personnel 39.57 69.77 97.76 97.76 100.00Technical Guidance Material 58.12 68.12 89.37 91.87 97.50Licensing and Certifi cation Obligations
65.97 92.92 96.25 96.71 98.59
Continued Surveillance Obligations
55.57 87.06 95.29 95.29 100.00
Resolution of Safety Issues 50.23 82.98 100.00 97.87 97.87
The ICAO Compliance and Coordination Section is also the offi cial contact point for liaison with the Department of Transport with respect to ICAO, the Southern African Development Community (SADC), the African Civil Aviation Commission (AFCAC) and other regional aviation activities and forums.
The graph and table below illustrate the State Letters that were responded to during the reporting period.
250
200
150
100
5
0
Other AFI SLs
Independent ICAO SLs
ICAO HQ SLs
Regional ICAO SLs
KEY
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
ICAO State Letters 2009 – 10 (Accumulative)
Num
ber
No Category of State Letter Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Totals
1. ICAO SLs. 18 3 2 12 12 7 2 3 5 7 4 7 822. Independent (individual
to States) SLs. 0 1 0 2 0 0 0 0 1 0 0 0 4
3. Regional (ESAF Offi ce).
2 5 3 5 11 5 1 0 3 2 5 5 47
4. Other (AFCAC, SADC, COSCAP and ACIP etc.).
1 4 6 8 6 4 7 3 3 2 6 10 60
Totals 21 13 11 27 29 16 10 6 12 11 15 22 193ICAO HQ SLs 18 21 23 35 47 54 56 59 64 71 75 82Independent ICAO SLs 0 1 1 3 3 3 3 3 4 4 4 4Regional ICAO SLs 2 7 10 15 26 31 32 32 35 37 42 47Other AFI SLs 1 5 11 19 25 29 36 39 42 44 50 60Totals - Accumulative 21 34 45 72 101 117 127 133 145 156 171 193
South Africa hosted several ICAO courses in 2009 and attended various regional meetings, workshops and events in order to augment efforts to develop aviation safety in the region. This also served to enhance aviation safety and security in the African (AFI) region, which is both a CAA and a national (DoT) objective.
42
Monitoring safety risk
One of the CAA’s key functions is the management of the effective implementation of ICAO’s Safety Management requirements, both within the CAA and the civil aviation industry. During the reporting period, the CAA therefore embarked upon the establishment of the required State Safety Programme (SSP) and managed to draft and implement the regulatory requirements for the successful implementation of Safety Management Systems (SMS) within the industry.
By the end of the fi nancial year, the said Regulation was at an approval stage; and once approved, compliance with these requirements will be ensured. Industry stakeholders such as approved training organisations, air operators, aircraft maintenance organisations, aerodrome operators and air navigation service providers will identify, analyse and control the safety risk within their operations. Part of the role of the CAA in assisting industry is to provide SMS training to the industry, which is done by ICAO certifi ed trainers.
Enterprise risk management
Enterprise Wide Risk Management forms an integral part of the business processes and risk assessments of the CAA. The primary focus is on risks related to strategy, core operations and support services. The risk assessment process seeks to review previously identifi ed risks and identify new risks, as and when such come to the fore. During the period under review, a total of 110 risks were identifi ed and management controls and mechanisms were introduced to deal with those risks. Throughout the fi nancial year, management controls were continually introduced and, where necessary, improved to ensure that the risk exposure is at a minimal level.
The table below illustrates how risk is managed by the CAA.
Risk Exposure Level
Risk Exposure Rating Explanation of Risk Management Approach
Residual Riskas at endMarch 2010
13 to 25 Extreme Managed by executive management who is responsible for intervention with regular reporting on the progress, results as well as performance to the Board of Directors of the SACAA.
0
10 to12 High Managed by the executive management who is responsible for intervention.
7
6 to 9 Medium/Moderate
Managed by management intervention and by means of the policies of the SACAA.
17
1 to 5 Low Managed by routine policies and operational procedures of the SACAA.
2
35
30
25
20
15
10
5
0
Other (AFCAC, SADC, COSCAP & ACIP etc.)
Independent (Individual to States) SLs
ICAO SLs
Regional (ESAF Offi ce)
KEY
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
ICAO State Letters 2009 – 10N
umbe
r
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Integrated management system
The CAA’s Integrated Management System has been expanded from being purely a quality management system to incorporating Occupational Health and Safety during the reporting period. This management system is in place to ensure compliance with the ISO 9001 standard and the Occupational Health and Safety Act. It further assists the CAA to meet the requirements under critical element fi ve (5) of ICAO and incorporates National Archive requirements and civil aviation regulatory requirements. The CAA’s Integrated Management System has been recertifi ed to the ISO 9001:2008 International Quality Standard with only four (4) minor fi ndings having been identifi ed. The internal audit programme for the new fi nancial year was approved in this reporting period. Internal audits comprise an internal verifi cation of conformance against policies, procedures and other requirements. During the period under review, robust internal audits were conducted and an extensive audit follow-up ensured closure of 85% of system document management and change control support review processes and amendments have been completed for all identifi ed shortcomings.
Occupational Health and Safety
The CAA system is compliant with the Occupational Health and Safety (OHS) Act, no. 85 of 1983. The CAA is in the process of improving its Occupational Health and Safety programme which forms part of its Integrated Management System, based upon the completion of a gap analysis in the second quarter of the year. As a result, an amendment to the OHS Policy has been approved and procedures have been reviewed and improved. Various types of inspections, including facility and equipment inspections, have been introduced as required by the Act and the Regulations and shortcomings were addressed. Health and Safety Representatives were appointed and the Health and Safety Committee has been revived.
Aviation Personnel Licensing
The country has a total of 23 409 active aviation personnel, of which a total of 4 877 were represented by licences issued for the fi rst time during the reporting period. There was a 10% decrease in the number of licences issued by the CAA during this reporting period, in comparison to the previous fi nancial year. The decline in numbers can be attributed to the recent global economic recession, as well as the formation of the Recreation Aviation Administration of South Africa (RAASA), which now issues recreational aviation licences.
For effective monitoring of transformation efforts, the number of issued licenses are categorised in terms of gender and race as depicted in the tables below.
African Male Coloured Male Indian Male White Male
Aeroplane Licence
South African National
Foreign National
South African National
Foreign National
South African National
Foreign National
South African National
Foreign National
Total 2009/2010
Total2008/2009
Differ-ence %
Private Pilot 11 184 2 8 10 97 461 96 869 801 8.49%Commercial Pilot 7 56 4 8 9 72 308 76 540 502 7.57%Airline Transport Pilot 9 2 2 3 6 0 220 27 269 208 29.33%Total 27 242 8 19 25 169 989 199 1 678 1 511 11.05%
During the reporting period there was a decrease of 43% in the number of males with South African nationality and an increase of 70% in the number of males with foreign nationalities who hold valid South African aeroplane licences in relation to the categories above.
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During the reporting period there was an increase of 121% in the number of males with South African nationality and a decrease of 26% in the number of males with foreign nationalities who hold valid South African helicopter licences in relation to the categories above.
During the reporting period there was a decrease of 41% in the number of males with South African nationality and a decrease of 46% in the number of males with foreign nationalities who hold valid other South African licences in relation to the categories above.
African Male Coloured Male Indian Male White Male
Helicopter Licence
South African National
Foreign National
South African National
Foreign National
South African National
Foreign National
South African National
Foreign National
Total 2009/2010
Total2008/2009
Differ-ence %
Private Pilot 9 30 1 0 5 1 178 15 239 207 15.46%Commercial Pilot 4 6 3 0 1 0 97 0 111 106 4.72%Airline Transport Pilot
0 0 0 0 0 0 37 1 38 34 11.76%
Total 13 36 4 0 6 1 312 16 388 347 11.82%
African Male Coloured Male Indian Male White Male
Other Licences
South Afri-can Na-tional
For-eign Na-tional
South Afri-can Na-tional
For-eign Na-tional
South Afri-can Na-tional
For-eign Na-tional
South Afri-can Na-tional
For-eign Na-tional
Total2009/2010
Total2008/2009
Differ-ence %
Student Pilot 49 171 9 4 13 52 839 96 1 233 1 700 -27.47%Cabin Crew 71 7 16 1 14 1 50 2 162 148 9.46%Hot Air Bal-loon Pilot
0 1 0 0 0 0 5 0 6 4 50.00%
Mainte-nance Engineers
10 13 7 0 4 0 74 4 112 172 -34.88%
Flight Engi-neers
0 0 0 0 0 0 1 0 1 1 0.00%
Validations 0 17 0 0 0 6 13 197 233 246 -5.28%Total 130 209 32 5 31 59 982 299 1 747 2 271 -23.07%
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African Female Coloured Female Indian Female White Female
Aeroplane Licences
South African Na-tional
Foreign Na-tional
South African Na-tional
Foreign Na-tional
South African Na-tional
Foreign Na-tional
South African Na-tional
Foreign Na-tional
Total2009/2010
Total2008/2009
Differ-ence %
Private Pilot 1 15 0 3 0 9 52 12 92 72 27.78%
Commercial Pilot 9 5 0 0 0 3 31 3 51 95 -46.32%
Airline Trans-port Pilot 1 0 0 0 2 0 23 1 27 20 35.00%
Total 11 20 0 3 2 12 106 16 170 187 -9.09%
African Female Coloured Female Indian Female White Female
Helicopter Licences
South African Na-tional
Foreign Na-tional
South African Na-tional
Foreign Na-tional
South African Na-tional
Foreign Na-tional
South African Na-tional
Foreign Na-tional
Total2009/2010
Total2008/2009
Differ-ence %
Private Pilot 1 15 0 3 0 9 17 2 47 32 46.88%
Commercial Pilot 2 1 0 0 0 0 2 1 6 10 -40.00%
Airline Trans-port Pilot 0 0 0 0 0 0 2 1 3 1 200.00%
Total 3 16 0 3 0 9 21 4 56 43 30.23%
During the reporting period there was a decrease of 44% in the number of females with South African nationality and an increase of 25% in the number of females with foreign nationalities who hold valid South African aeroplane licences in relation to the categories above.
During the reporting period there was a decrease of 40% in the number of females with South African nationality and an increase of 533% in the number of females with foreign nationalities who hold valid South African helicopter licences in relation to the categories above.
During the reporting period there was an increase of 94% in the number of females with South African nationality and an increase of 133% in the number of females with foreign nationalities who hold valid other South African licences in relation to the categories above.
African Female Coloured Female Indian Female White Female
Other Licences
South Afri-can Na-tional
For-eign Na-tional
South Afri-can Na-tional
For-eign Na-tional
South Afri-can Na-tional
For-eign Na-tional
South Afri-can Na-tional
For-eign Na-tional
Total2009/2010
Total2008/2009
Differ-ence %
Student Pilot 15 24 1 1 2 1 97 14 155 205 -24.39%
Cabin Crew 260 37 53 1 46 0 240 40 677 570 18.77%
Hot Air Bal-loon Pilot 0 0 0 0 0 0 0 0 0 0 0.00%
Maintenance Engineers 2 0 0 0 0 0 2 0 4 2 100.00%
Flight Engi-neers 0 0 0 0 0 0 0 1 1 1 100.00%
Validations 0 0 0 0 0 0 0 1 1 15 -93.33%
Total 277 61 54 2 48 1 339 56 838 793 5.67%
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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 CAA walk-in customers. During the reporting period the customer service centre attended to 32 475 walk-in clients; this is an increase of 2.46% from the previous reporting period. This could be as a result of clients preferring to visit the CAA instead of sending their documents by mail. During the year, new cash management procedures were implemented to strengthen the security regarding cash payments made to cashiers.
Examination administration
The CAA Examination section administered all pilot, fl ight engineer, cabin crew and aircraft maintenance engineer examinations during the year. A total of 25 703 examinations were undertaken at the CAA Examination Centre in Midrand and an additional 4 896 examinations were written at the eight (8) outstation examination sittings for the reporting period.
Online examinations
Besides the initial niggling technical challenges, a new online examination system for the Private Pilot’s Licence was successfully installed on the CAA’s fi le servers. To ensure the maximum effectiveness of online examination centres throughout the country, two invigilator seminars were held in Port Elizabeth and Cape Town respectively. Furthermore, such seminars are being planned for the coming fi nancial year. These seminars are intended to train fl ight school staff in administration, scheduling of students as well as reporting and assessments.
During the period under review, close to 23 000 examinations were conducted at the various online examination centres situated across the country, mostly at fl ight schools.
Comprehensive information management
The Information Management Department which was established more than a year ago, consists of the Technical Library, the Records Management functions and the newly introduced Business Improvement function. During the 2009/2010 fi nancial year, the department successfully positioned itself as the custodian of reliable information that enables operational effi ciency. Tremendous progress has been made to lay the foundation for its goals, which include the streamlining of statistical reporting between the CAA, the aviation industry and the Department of Transport. Preliminary work has been done on the governance of data and organisation key data identifi ed as part of the deliverables of the Data Governance and Business Reporting Requirements project. Key recommendations emanating from the project are being considered, which will result in an organisation-wide plan to ensure data integration, develop data defi nitions and perform data clean-up in order to implement effective data governance and achieve data integrity.
The CAA’s Technical Library continues to be an information hub for the organisation. The management of library materials was enhanced through the enforcement of material loan periods, engaging with the technical divisions to ensure that the library acquires and keeps technical material that staff members require to do their work and increasing the acquisition of electronic-based materials over printed versions for easy and speedy access. Notably, a decision was made to provide the aviation industry with access to up-to-date aviation legislation on the CAA website. Besides the fact that the industry now has free access to aviation legislation, an ICAO fi nding from the 2007 audit was closed.
The CAA File Plan has received attention from the National Archives and Records Services. Approval was granted for the support function portion of the fi le plan, with implementation being under way. In an effort to ensure that a procured tool for Enterprise Content Management and the implementation thereof meets the regulatory requirements and is properly implemented, the State Information and Technology Agency was approached to assist in the procurement process. A business agreement in terms of the SITA Acts is being fi nalised.
Management of projects
The CAA identifi ed the need for formal project management methodology during 2009. A project management framework was developed to clarify and standardise all projects. The framework will ensure that risks
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associated with project deliverables, project delivery and business continuity are identifi ed, managed and effectively mitigated. It will further allow the CAA to manage all projects in a measurable, standardised and consistent way. Monitoring has been centralised for high impact projects and this will ensure that the interests of the CAA are protected.
The following high impact strategic projects were managed in the period under review.
South African Civil Aircraft Register (SACAR)
This project was initiated in two phases and its main aim is to verify information captured in the aircraft register database for accuracy. The fi rst phase, dealing with type-certifi ed aircraft information, has been completed. The current phase, dealing with non-type-certifi ed aircraft, started in this reporting period and is 66% complete.
Review of the Telephone and PABX System (VOIP)
Based on complaints received from customers and employees, the functionality of the CAA telephone system was reviewed. As a result, it was determined that the CAA needs to upgrade the current functionality of the system and research has started to investigate systems on the market.
Business Intelligence (Data Governance)
A decision to investigate automation in the CAA indicated a shortcoming in information and data management. This led to the initiation of a project to identify data requirements, to identify data sources and owners; and to defi ne data policies and a data governance philosophy. The project was completed in the reporting period.
Electronic Records and Document Management System (ERDMS)
Records are the core references for all CAA activities and many records have to be retained for very long periods due to their legal signifi cance. As a result, the implementation of an electronic system to manage the records has been identifi ed as a priority. During the reporting period, the CAA started the procurement process that has now been extended to include the State Information Technology Agency (SITA).
File Plan The CAA has reviewed its fi le plan and discovered a misalignment between the fi le plan and the CAA operational activities. As a result, a project was launched to deliberate and amend the File Plan to accurately refl ect the operational activities. The File Plan was fi nalised and submitted to National Archives for approval in the reporting period.
Integrated (Compliance) Management System (IMS)
Due to a new requirement introduced by ICAO, the CAA has to obtain and manage a national system for compliance that includes national safety reporting capabilities. As a result, a project was launched for the defi nition and procurement of such a system. The procurement phase was started during the course of the reporting period.
Integrated Operations Management Information System (IOMIS)
As a result of complex operational processes, now required to comply with ICAO guidance, the CAA has identifi ed the need to investigate the implementation of an integrated operational management system for its core business activities. This need was further confi rmed by the outcome of the project on data governance, and during this reporting period research was done on the availability of custom systems for civil aviation authority systems. It is envisaged that the procurement process will start in the new fi nancial year.
Key projects and industry development initiatives
The development of the aviation industry is one of the CAA’s primary mandates. During the year under review, the CAA undertook a number of projects, both on its own and in partnership with industry players, which will lead to the development of the industry. Although some of these initiatives have been reported under the various divisional reports, they are grouped together to ensure compliance of this annual report to the PFMA.
48
Issuing of the fi rst Type Certifi cate since the establishment of the SACAA
As previously reported, the CAA issued its fi rst Type Certifi cate for a glider aircraft made in South Africa since the creation of the organisation in 1998. The awarding of the certifi cate follows a rigorous process to ascertain the glider manufacturer’s capability and capacity to design and manufacture an airworthy aircraft. The certifi cate endorses the glider aircraft as airworthy and thus certifi ed to fl y in all the signatory states of the International Civil Aviation Organisation (ICAO) Convention of 1944. This project also attests to the CAA’s commitment to one of its mandates, which entails the development of South Africa’s civil aviation capabilities, skills and services for the benefi t of the country.
Hosting of the ICAO Unmanned Aircraft Systems Study Group (UASSG) meeting
The CAA organised and hosted the fourth ICAO Unmanned Aircraft Systems Study Group meeting in South Africa. This was done in collaboration with various stakeholders including the DoT, CSIR as well as Aerospace, Maritime and Defence Industries Association of South Africa. The meeting was a resounding success and much progress was made towards the fi nalisation of the ICAO Unmanned Aircraft Systems Circular which will provide States and industry with a clear understanding of how unmanned aircraft systems should be regulated within the ICAO framework.
Hosting of the Federal Aviation Administration Airworthiness Bilateral Review
The CAA invited the United States’ Federal Aviation Administration (FAA) to discuss the present bilateral airworthiness agreement between the two States. The meeting was undertaken successfully, with the FAA being satisfi ed with the CAA aircraft certifi cation processes. The FAA is, however, in the process of reviewing all its bilateral airworthiness agreements and for full mutual recognition of certifi cates, the FAA will have to witness and shadow various designs, manufacturing and certifi cation activities with the CAA. It is anticipated that further discussions and engagements with the FAA will take place during the 2010/2011 fi nancial year.
Development of Identity Security Screening Regulations
The draft regulation requires passengers to produce their valid identifi cation documents prior to boarding an aircraft. A gap was identifi ed by the Aviation Security Division after it was discovered that there was a weakness in the system which was exploitable by fraudsters and it seeks to qualify the defi nition of a bona fi de passenger, being passengers who are known and whom air carriers are able to carry on board the aircraft.
There were a number of consultation meetings with the industry to look into the issue and the meeting agreed that regulations must be developed. The fi nal drafts were considered by the working group and the industry and in 2010/2011 will follow the regulation development process.
Development of Minimum Aviation Security Standards for General Aviation Operations
A draft document has been produced and after receiving ICAO guidance material it is now aligned to ICAO standards. The purpose of the minimum standards is to close a gap in the general aviation sector where there currently is no requirement for those in general aviation operations to implement aviation security measures. The draft document is being discussed at various forums for direction and will be fi nalised in the 2010/2011 fi nancial year.
Whilst the Aviation Security Division acknowledges the fact that general aviation operations are quite complex, it seeks to introduce these minimum requirements to the industry for their compliance. The Aviation Security Division is also working closely with Government security agencies and the DoT, to map a way forward. The intention is to adopt a phased-in approach when introducing these minimum requirements, bearing in mind the issue of resources. Notwithstanding, designated airports are a priority and thereafter expansion shall be to all other operations.
Augmenting Aviation Security in preparation for FIFA 2010 World CupTM
In preparation for the FIFA 2010 World CupTM, the Aviation Security Division developed an operational plan that would be implemented prior to, and during the World Cup. This plan was approved by the National Aviation Safety Committee and was shared with the industry for implementation. In addition, the Division embarked on road shows with the intention of assisting operators and to ensure that airports and airlines are fully compliant and that aviation operations would not be exposed to acts of unlawful interference during the soccer tournament.
9949
Further, the Aviation Security Division attended a number of meetings with stakeholders and government security agencies to craft plans in preparation for the FIFA 2010 World CupTM. The Division also played a role in the Aviation Sub-Sector Task Team that was responsible for the planning of the FIFA 2010 World CupTM from an aviation point of view.
Development of Technical Guidance Material for use by Part 141 Flight Inspectors
During the year under review, the Air Safety Operations Division developed Technical Guidance Material for use by Part 141 Flight Inspectors during the aviation training organisation certifi cation process. The Technical Guidance Material has proven to be essential in standardising both internal and external certifi cation processes.
Amendment of Private Pilot’s Licence study material
During the reporting period, the Air Safety Operations Division successfully amended the recommended study material for Private Pilot’s Licence examinations. The amended document has been published via an Aeronautical Information Circular and is also available on the CAA website. A decision was made to base the examinations on one set of affordable, quality reference materials. In this case, the set is based on the Air Pilot’s Manual series.
Workshops by the Air Safety Operations Division
The Civil Aviation Aircrew licensing regulations require that designated fl ight examiners for pilots and cabin safety crew attend an annual conference presented by the CAA in order to be designated as examiners in the following year. Flight instructors who give less than 20 hours of instruction in the year preceding their revalidation skills test, are also required by the regulations to attend a Flight Instructor Conference in the year preceding the skills test. The CAA has also instituted a number of conferences for Designated Examiners who examine prospective fl ight instructors for their initial grading as well as any instructor upgrade.
In the past fi nancial year the Air Safety Operations Division hosted, in various parts of South Africa, eight (8) Designated Flight Examiner conferences, eight (8) Flight Instructor conferences as well as two (2) Designated Cabin Safety Examiner conferences.
In all instances, the primary objective of these conferences was to inform participants of new developments in terms of regulations. The conferences were also used to educate participants about the requirements and implications of the regulations as well as to encourage the maintenance of standards.
Online examinations
Besides the initial niggling technical challenges, a new online examination system was successfully installed at the CAA’s online examination centres. To ensure maximum effectiveness of examination centres, two (2) Invigilator Seminars were held at Port Elizabeth and Cape Town respectively. More of such seminars are planned for the next fi nancial year. These seminars are intended to train centre staff in administration, scheduling of students as well as reporting and assessments.
Cooperative Arrangement for the Prevention of the Spread of Disease by Air Travel
The International Civil Aviation Organisation, International Airline Authority and Airports Council International estimate that more than 2 billion passengers using ultra-long range fl ights are able to be at the opposite end of the world in less than 24 hours. This means that passengers with communicable disease can carry a disease to various parts of the world in just a few hours.
Realising this, ICAO has introduced a programme named the Cooperative Arrangement for the Prevention of the Spread of Communicable Disease by Air Travel (CAPSCA). In terms of the CAPSCA programme, ICAO requires member States to establish a national aviation plan in preparation for a possible outbreak of a communicable disease posing a public health risk, or public health emergency of international concern.
In October 2009, ICAO measured South Africa’s preparedness to react and manage the outbreak of communicable disease through airports at O.R Tambo and Cape Town international airports. The exercise was successful and South Africa was provided with a certifi cate of approval. In addition, South Africa was appointed as the CAPSCA coordinator for eastern and southern Africa. As such, South Africa, through the CAA’s Air Safety Operations Division, will play a pivotal role in helping to harmonise the national aviation plans within the region, and to assist with the implementation of CAPSCA in signatory member States in southern and eastern Africa.
50
A snippet of future key projects
The CAA’s Legal Division plans to form teams dedicated to regulations development, in order to, amongst others, fast-track the implementation of the new Civil Aviation Act, by overhauling the regulations to ensure that they are aligned to the Act. Having these teams in place will also assist in ensuring that regulations are continuously up to date. Furthermore, according to the Act, the CARCom meetings have to take place every month and this will mean more work in terms of drafting and processing of the proposals. To this end and in line with the Act, various subcommittees shall be formed to expedite the development and/or amendment of regulations.
In order to further improve on enforcement, the organisation is currently planning to have a separate enforcement section which will not be attached to any technical division. The section will investigate all enforcement cases as well as conduct ad-hoc audits within the aviation industry to ensure that the inspectors/authorised offi cers are effectively doing what they are supposed to be doing. The aim is to eliminate any confl ict of interest between CAA employees and the industry, whilst promoting aviation safety and enhancing expeditious resolution of safety concerns. The creation of an enforcement section will necessitate the recruitment of investigators, in order to ensure that the goals of this section are met.
The Aerodrome Safety Department intends to introduce new regulations on Category Z (or unlicensed) aerodromes, many of which cater for the tourist industry. During the course of the next fi nancial year, the Department intends to continue improving safety levels at unlicensed aerodromes through registration and safety workshops. These efforts will be augmented by increasing the number of specially trained inspectors.
Regional and international cooperation
Harmonising aviation regulations amongst the SADC states will be of great benefi t to all the States involved, in that uniform regulatory standards will assist the States in modelling their national regulations accordingly. This will increase cooperation amongst these States, particularly on issues pertaining to safety and security. In this regard, a Regulations Work Group, of which the CAA is part, continued with endeavours during the period under review to harmonise regulations amongst the SADC member states.
The CAA, as part of the South African delegation, was involved in the amendment of the Montreal Convention and the Hague Convention, so that these conventions could address the new and emerging threats within civil aviation. Key among other initiatives is the introduction of transport offences. Notably, these instruments were fi nalised by the ICAO Legal Committee, in which the CAA took part in September 2009. A Diplomatic Conference is scheduled to take place in China in September 2010, where the two instruments will be presented for adoption by the ICAO member States.
The CAA is also part of the Commission that is preparing for the implementation of an international fund to assist victims of international terrorism. This fund has been created in terms of the Convention on Compensation for Damage to Third Parties Resulting from Acts of Unlawful Interference Involving Aircraft. In January 2010 the CAA in conjunction with the DoT and the Department of International Relations and Cooperation, hosted the fi rst meeting of the Commission. A number of issues, including among others, the regulations of the Fund were considered.
In terms of practical assistance, a number of countries in the region requested assistance from the CAA’s Aircraft Safety Division to assist in conducting inspections on aircraft that they do not have expertise on locally. To this end, the CAA’s Airworthiness inspectors participated in such joint audits with various counterparts in the region.
The Aviation Security Department participated in various African Civil Aviation Commission (AFCAC) forums to advance the aviation security agenda. There was an AFCAC Aviation Security Working Group meeting held from 28-30 July 2009 in Dakar and the session was chaired by South Africa. This session produced an Aviation Security Framework/roadmap to be considered by African Ministers in a meeting planned for April 2010. That meeting will also adopt the joint declaration on aviation security matters.
The Air Safety Infrastructure Division, as with any other division of the CAA, has processes and platforms in place which were invented primarily for stakeholder engagement. During the reporting period, inspectors from the division’s Air Traffi c Service section were actively involved in the CARCom. In addition, the Division ensured that the CAA had representation on the Enforcement Committee. Notably, CAA inspectors from the Air Traffi c Service section participated in the ICAO Study Group and Task Force meetings held in Kenya and Senegal. The inspectors also participated in two international conferences on pilot-air traffi c control issues which were held in Johannesburg.
9951
The Air Safety Infrastructure Division represented the CAA during the Global Aeronautical Information Management conference held in South Africa in June 2009. At that conference the absence of Aeronautical Information Services regulations was on the agenda. This is a global shortcoming and states were edged on to address it as a matter of urgency. During the past year, the Division championed the introduction of new Aeronautical Information Management regulation in South Africa. As such, South Africa is one of the early adopters of this critical ICAO requirement.
The CAA also received a request from the Namibian Airports Company to calibrate PAPI Lights on their aerodromes. The CAA obliged and the task was carried out in August 2009 at the following aerodromes: Hosea Kutako International Airport, Eros Airport, Ondangwa Airport, and Keetmanshoop Airport.
Stakeholder management
The CAA regards stakeholder management to be at the centre of its existence. As with the previous reporting period, during this review period the CAA augmented its stakeholder outreach programme.
Customer Relationship Management and Satisfaction Survey
As previously reported, the CAA introduced a customer relationship management system and launched a monthly customer feedback survey during the fi nancial year under review. This was also done to satisfy the requirement of the ISO 9001: 2008 standard that requires customer feedback mechanisms to be in place. This need was also identifi ed by the CAA Board in support of the CAA Customer Service Charter that was developed in the previous fi nancial year.
The main area of complaint pertained to the telephone services, or switchboard. This matter has been reviewed by the executives and a project has been launched to correct the problems being experienced. The compliments received in this system pertained mainly to superb service delivery organisation-wide, recognising specifi c individuals.
Although the month-to-month survey ratio has fl uctuated, the CAA has achieved a 71.1% accumulative customer satisfaction ratio during this period as contained in the CEO/Commissioner’s report. It is believed that the survey system will mature during the next year and therefore customers are encouraged to complete the survey to enable the CAA to identify areas for improvement. As from the next reporting period, the CAA will be able to supply annual comparative fi gures. The customer survey feedback indicated that customers are generally dissatisfi ed with the time that it takes to process payments, to approve manuals and to provide feedback on general enquiries. Some customers indicated that the incorrect information on requirements has been provided to them and others informed the Authority that they believe that the three-hour published turnaround time for processing licences is too long. Some indicated that the friendliness of the staff needs to be improved upon. The CAA is taking cognisance of the feedback regarding these matters and will review its internal processes to bring about an improvement in these areas.
On the other hand, our customers provided feedback that they are satisfi ed with the service rendered by our frontline staff and aircraft registry staff, as well as some individuals that have been singled out in terms of exemplary service. They further complimented our inspectors on the service that they had rendered during audits and their professional behaviour.
The CAA thanks all customers that take the effort to complete the surveys for the valuable feedback provided.
Promotion of aviation careers and opportunities
The Joint Aviation Awareness Programme (JAAP) an initiative by a group of companies, celebrated its second running of the week-long Aviation Week programme, which is the brainchild of Sci-Bono Discovery in Newtown and JAAP. This unique partnership brings together high school learners from around Gauteng and all aviation industry players to exhibit and impart aviation-related information and a marathon of presentations given by the different aviation personnel ranging from pilots, air traffi c control offi cers, ground personnel and many others.
This programme is gaining momentum in terms of credibility, based on the quality of the exhibitions displayed and presentations delivered to empower young South Africans with information about careers and opportunities available in this industry. The programme was also supported and sponsored by the French Embassy.
52
During the reporting period more than 100 schools were visited, with over 14 000 learners reached during the CAA’s outreach programmes in all the provinces, with the emphasis on previously disadvantaged learners.
The JAAP group of companies also encouraged the involvement of the same learners by inviting them to participate in a competition to produce a logo for JAAP. The competition will be concluded in the new fi nancial year, when entries to the competition will be judged by independent judges from reputable graphic design houses and aviation personnel. The learners will win prizes for them as individuals and also on behalf of their schools. The sponsors of this competition are the member companies of JAAP.
On the other hand, JAAP was approached by Etihad Airlines with a request to submit a list of learners who are interested in obtaining Pilot’s Licences. JAAP submitted a list of 21 names from the schools that were visited previously and out of this list, about eight (8) learners managed to make it through to the short-listing stage. This list comprised only previously disadvantaged learners.
Furthermore, the CAA’s Information Technology Department has donated computer equipment to the School Net project administered by Net Day. Net Day is a non-profi t organisation that helps to empower schools by providing them affordable ways to access information and communication technologies.
Promoting safety and security among stakeholders
The Safety and Security Promotions section provides a professional support service to the CAA’s (4) core technical departments by facilitating all their industry workshops. During the year under review, the following campaigns were managed in conjunction with the core divisions: Unmanned Aircraft Systems ICAO workgroup meeting, Safety Management System Workshops country-wide, AVSEC Training and Certifi cation workshops country-wide, ICAO Gap Analysis workshop, ICAO ECCAIRS Course, CAPSCA workshop, Cabin Safety workshop and an Airworthiness industry workshop.
The department also delivered educational presentations to the SAPS on required pilot and aircraft documentation to be checked at aerodromes that were to be used during the 2009 Confederations Cup and the FIFA 2010 World CupTM period.
National Safety Seminar and other stakeholder engagement activities
The Corporate Communications and Marketing department organised a very successful third National Safety Seminar which was hosted by the CEO/Commissioner during the Transport Month in October 2009. The annual event targets different sectors of the industry with the main purpose of promoting safety messages and information. One–hundred–and–fi fty (150) invited members of the industry attended and participated in an informative programme which dealt with various fl ight safety and maintenance case studies, with the aim of learning valuable safety lessons.
The department also facilitated industry forums such as the Industry Liaison Forum (ILF), the ATNS/CAA Forum and the General Aviation Safety Initiative (GASI) forum throughout the fi nancial year. All these forums address various issues of interest to the different sectors of the industry.
Safety Link Magazine
The Safety and Security Promotions Section successfully produced the four planned editions of the Safety Link publication. This publication is used as a tool for educating and promoting safety messages in the industry and is distributed electronically via the organisation’s website. Hard copies are distributed to pilots via the AICs, quarterly. The publications featured fl ying clubs which are active in different provinces.
Perception management and information dissemination through the media
The CAA was in the spotlight towards the end of the fi nancial year due to the industry experiencing its fi rst fatal commercial scheduled airline accident on South African soil, which took place in Durban. This incident was followed by a few other incidents from the same airline, which ultimately resulted in the CAA grounding the Airlink’s turboprop fl eet. This put the CAA under the spotlight from local and international media. Media analysis reports indicated that the CAA handled this matter appropriately from a media perspective and the impact on the organisation’s reputation ranged from neutral to positive, with only a few members of the media giving the CAA negative coverage.
The CAA successfully handled an average of more than 100 media queries each quarter. It can be said that the CAA enjoys an amicable relationship with the media due to its concerted efforts around the handling of
9953
media queries. Media monitoring statistics revealed that over the four quarters, the CAA managed to achieve an average 70% media analysis reputation rate. This is slightly above the target rate for the year.
The CAA’s Aviation Security Division is tasked with promoting and creating awareness about aviation security. During the review period, the Division undertook a campaign in the December holidays to offer passengers ‘safe travelling tips’. As part of this campaign, a media release was issued, banners were exhibited at various airports and a television interview on ‘travel tips’ was conducted. Due to fi nancial constraints, no printed materials could be produced.
The AvSec Division continually strives to improve relations and partnerships with the industry. During the reporting period, the Division implemented a customer relations management programme with the aim of ensuring quality service to clients. In addition, the Division’s management ensures that, on an ongoing basis, they interact with clients with the purpose of ensuring that a quality service is offered to clients. King Shaka International Airport, Margate, Lanseria and Mthatha are some of the airports visited during the reporting period.
Likewise, the Aviation Security Managers Forum continues to play an important role in ensuring that the CAA engages the industry on aviation security matters and that it provides for a platform to exchange, educate and inform each other of any developments. This forum also discusses regulatory amendments and it is also a platform for consultation.
Investing in technology
The 2009/2010 fi nancial year saw the implementation of new systems and technologies by the CAA’s Information Technology department in order to streamline business processes in various areas. In terms of licence compliance, the IT Department introduced a Direct Enterprise Agreement with Microsoft in order to ensure compliance with software licensing.
The package includes a built-in software assurance option to cater for future changes and training which will help strengthen business continuity.
As far as customer service improvement is concerned, the Department introduced a Microsoft Customer Relation Management System to enable better management of CAA client relations and provide a history database for service level report and statistics. The Department also invested in Microsoft SharePoint Services in order to enable document repository for the purposes of control, collaborating, protecting and sharing of documents.
The IT Department also introduced a new security system. In this regard, the Kaspersky enterprise security solution was installed as a comprehensive antivirus solution. The security system managed a 98.3% detection rate. In addition, an intrusion prevention system was implemented to safeguard the information technology infrastructure against network penetrative exploitation elements such as malicious users, worms, viruses and denial of service.
In terms of telephony, the implementation of a “least cost routing” solution has helped curb telephone costs, particularly from landline to cell phone. The solution has provided a substantial savings in terms of telephone costs. During the reporting period, the CAA upgraded the Internet Service Provider (ISP) bandwidth from 768KB to 1.5MB. This initiative has proved to be a worthwhile investment as it has enabled the CAA to provide speedy and robust online examination services. Moreover, the Department has augmented business continuity and disaster management solutions. In this case, the Department implemented a secondary WINET wireless ISP link to allow internet services as a business imperative in terms of online examination, emails and patch update management. In addition, there was an upgrade to the Examinations department’s Uninterrupted Power Supply (UPS) to cater for additional examination capacity as per the observed client demands. The UPS system will also be invaluable in ensuring uninterrupted service in the event of a power failure.
54
Investment in Human Capital and Skills Development
Employee satisfaction and skills development is at the core of the CAA’s functionality. During the reporting period, the CAA continued to invest in its human capital.
Employee Satisfaction Barometer
The CAA’s Engagement Survey of February 2010 assessed staff perception of the working environment and the level to which employees felt engaged in the work of the organisation. Two–hundred–and–sixty–four (264) respondents participated in the survey, a 63.3 per cent response rate compared to a 43.9 per cent achieved in 2008. The overall results of the survey show that 56.8 per cent of participants experience the climate positively; whilst in 2008 the number stood at 48.4 per cent.
In addition, the Communications Section conducted an Internal Communications Survey with the aim of improving internal communication processes and also evaluating existing communication tools. A 55% participation by employees was achieved. An action matrix has been developed as result of the survey and the CEO monitors the output of this tool on a quarterly basis. One of the actions emanating from the survey was the establishment of Information Sessions hosted by the CEO on a quarterly basis. These sessions have improved the relations between staff and the CEO’s offi ce, as participation in these sessions is encouraged organisation-wide. The sessions are also used to engage the CEO on matters affecting staff and also for feedback on Executive and Board decisions reached during a quarter.
Personnel profi le
As at 31 March 2010 the CAA employed 433 staff members, which included 19 people on fi xed–term contracts. In the 2009/10 fi nancial year, the CAA’s turnover rate for permanent staff was 5.5 per cent, a signifi cant reduction from 14.9 per cent reported during the year 2008/09. Turnover is calculated as the number of staff who have left the organisation as a percentage of the number of employees in the organisation at the time. Notably during the year, fourteen employees also received recognition for 10 years of continuous service with the Authority.
The table below outlines the number of employees per department.
DivisionApproved numbers
Total permanent employees
Fixed-term contracts
Total employees
Aircraft Safety 99 96 1 97Air Safety Operations 91 76 10 86Air Safety Infrastructure 46 44 0 44Accident and Incident Investigation 27 21 2 23Finance 51 40 0 40Legal 13 11 0 11CEO Offi ce 18 11 3 14Aviation Security 46 43 1 44Human Resources 12 11 0 11Risk and Compliance 67 61 2 63TOTAL 470 414 19 433
9955
The table below shows a breakdown of employees per occupational level.
M
ale
Fem
ale
Fore
ign
Nat
iona
lsTO
TAL
Occ
upat
iona
l lev
elA
frica
nC
olou
red
Indi
anW
hite
Afri
can
Col
oure
dIn
dian
Whi
teM
ale
Fem
ale
N
o.%
No.
%N
o.%
No.
%N
o.%
No.
%N
o.%
No.
%N
o.%
No.
%
Top
man
agem
ent
00
00.
000
0.00
110
00
00
0.00
00.
000
0.00
00.
000
01
Seni
or m
anag
emen
t4
44.4
40
0.00
00.
002
22.2
21
11.1
10
0.00
00.
001
11.1
11
11.1
10
09
Prof
essi
onal
ly q
ualifi
ed a
nd
expe
rienc
ed s
peci
alis
ts a
nd
mid
-man
agem
ent
2629
.89
22.
305
5.75
2225
.29
2326
.44
11.
151
1.15
33.
453
3.45
11.
149
87
Skille
d te
chni
cal a
nd a
cade
m-
ical
ly q
ualifi
ed w
orke
rs, j
unio
r m
anag
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t, su
perv
isor
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and
sup
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ents
8731
.87
41.
4713
4.76
5921
.61
7527
.47
62.
204
1.47
238.
422
0.73
00
273
Sem
i-ski
lled
and
disc
retio
nary
de
cisi
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akin
g11
18.3
31
1.67
00.
000
039
653
5.00
11.
675
8.33
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000
060
Uns
kille
d an
d de
fi ned
dec
i-si
on–m
akin
g1
33.3
30
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02
66.6
70
0.00
00.
000
0.00
00.
000
03
TOTA
L12
929
.79
71.
6218
4.16
8419
.414
032
.33
102.
316
1.39
327.
396
1.39
10.
231
433
Dis
abilit
y1
16.6
70
0.00
116
.67
00.
003
50.0
00
0.00
00.
001
16.6
70
0.00
00.
006
56
The table below depicts staff age profi le.
<25 25 to 34 35 to 44 45 to 54 55 to 64 >64 TotalAircraft Safety 3 56 27 5 6 0 97Air Safety Operations 3 14 28 12 19 10 86Air Safety Infrastructure 0 10 18 7 9 0 44Accident and Incident Investigation
1 7 10 3 1 1 23
Finance 1 16 13 7 3 0 40Legal 0 3 6 1 1 0 11CEO Offi ce 0 4 8 1 1 0 14Aviation Security 0 15 24 3 1 1 44Human Resources 0 5 4 2 0 0 11Risk and Compliance 2 31 15 11 4 0 63TOTAL 10 161 153 52 45 12 433% of total Staff 2.31 37.18 35.33 12.01 10.39 2.77 100.00
Skills development
During 2009, managers as well as some of the union representatives were sent on an IATA certifi ed course called Managing People Performance and another one offered by the University of Pretoria called Workplace Employee Relations. These courses were aimed at ensuring that our managers and shop-stewards are equipped with skills, knowledge and the right attitudes to manage the human resource confl ict in the organisation within best practice employee relations systems and practices. Eleven (11) candidates out of thirty-one (31) who attended the Workplace Employment Relations Course passed with distinctions, and twenty- two (22) out of forty-nine (49) who attended the IATA training passed with distinctions. The CAA ran internal and external programmes for 591 participants, with many staff members attending more than one course.
The table below depicts the number of employees that attended training courses.
Division Number of employees Number of employees that attended training
Aircraft Safety 97 75Air Safety Operations 86 50Air Safety Infrastructure 44 26Accident and Incident Investigation 23 13Finance 40 26Legal 11 5CEO Offi ce 14 10Aviation Security 44 20Human Resources 11 12Risk and Compliance 63 26TOTAL 433 263
Code of conduct
All CAA staff must comply with a comprehensive code of conduct as a condition of their employment. The CAA Code of Conduct fully refl ects the values and behaviours expected of CAA employees working within the South African Government framework.
As a regulatory authority, CAA takes particular care to guard against actual, potential or perceived confl ict of interest for any member of its staff. All employees complete a confl ict of interest declaration form on commencement of their duties.
9957
Spending on Broad–Based Black Economic Empowerment
The BBBEE spend for the three-year period is illustrated below. The CAA increased its BBBEE targets from 40% to 60% in 2006.
In the 2007/08 FY the target was missed by 5% due to the procurement of goods and services internationally in order to achieve compliance in ICAO and FAA audits conductedin 2007.
The BBBEE Aviation Charter requires a minimum BBBEE spend of 25.1%. As such the Authority has managed to maintain a level far in excess of the minimum requirement.
The Authority managed to exceed its target by 12,6% for the year under review and intends to maintain a positive growth trend toward BBBEE. Refer to the table below for the graphical representation and comparatives for the three-year period.
Year BBBEE Spend %FY 2007/08 55.00FY 2008/09 78.15FY 2009/10 72.60
Expenditure related to the FIFA 2010 World Cup™
Whilst supportive of the country hosting the FIFA 2010 World Cup™, the CAA did not spend any funds on purchasing match tickets. In line with the spirit that captured the country leading up to the tournament, the CAA planned a staff event earmarked for 21 April to mark 50 days celebrations to the kick-off of the World Cup. In this case, the CAA purchased fl ags, soccer balls, squeeze bottles and related promotional items that were used as incentives for staff participation. Additional funds went into hiring a DJ as well as dance instructors that helped staff with the “diski dance” choreography.
In addition, the CAA purchased 60 Bafana Bafana T-shirts that were used as an incentive for participation in the organisation’s Climate Survey which is a tool used to gauge employee morale and happiness. All the above purchases totalled R40 371.95.
58
Annual Financial Statements
31 March 2010
9959
Contents
Report of the Auditor-General 60
Statement of Responsibility 62
Report of the Accounting Authority 63
Statement of Financial Performance 65
Statement of Financial Position 66
Statement of Changes in Net Assets 67
Statement of Cash Flows 68
Notes to the Cash Flow Statement 69
Accounting Policies 70
Notes to the Annual Financial Statements 81
60
Report on the Financial Statements
Introduction
I have audited the accompanying fi nancial statements of the South African Civil Aviation Authority, which comprise the statement of fi nancial performance, the statement of fi nancial position as at31 March 2010, and the statement of changes in net assets and statement of cash fl ows for the year then ended, a summary of signifi cant accounting policies and other explanatory information, and the report of the accounting authority, as set out on pages 63 to 93.
Accounting Authority’s responsibility for the fi nancial statements
The accounting authority is responsible for the preparation and fair presentation of these fi nancial statements in accordance with the South African Standards of Generally Recognised Accounting Practice (SA Standards of GRAP) and in the manner required by the Public Finance Management Act, 1999 (Act No. 1 of 1999) (PFMA) and the South African Civil Aviation Authority Act, 1998 (Act No. 40 of 1998) (SACAA Act). This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of fi nancial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditor-General’s responsibility
As required by section 188 of the Constitution of South Africa and section 4 of the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) and section 17 of the SACAA Act, my responsibility is to express an opinion on these fi nancial statements based on my audit.
I conducted my audit in accordance with International Standards on Auditing and General Notice 1570 of 2009 issued in Government Gazette 32758 of 27 November 2009. 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.
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.
I believe that the audit evidence I have obtained is suffi cient and appropriate to provide a basis for my audit opinion.
Opinion
In my opinion, these fi nancial statements present fairly, in all material respects, the fi nancial position of the South African Civil Aviation Authority as at 31 March 2010, and its fi nancial performance and its cash fl ows for the year then ended are prepared, in all material aspects, in accordance with SA Standards of GRAP and in the manner required by the PFMA.
Emphasis of matter
I draw attention to the matter below. My opinion is not modifi ed in respect of these matters:
Fruitless and wasteful expenditure
As disclosed in note 20 to the fi nancial statements, fruitless and wasteful expenditure to the amount of R1 625 685 was incurred, since offi cials were reinstated following their suspension.
REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE FINANCIAL STATEMENTS OF THE SOUTH AFRICAN CIVIL AVIATION AUTHORITY FOR THE YEAR ENDED 31 MARCH 2010
9961
REPORT OF THE AUDITOR-GENERAL TO PARLIAMENT ON THE FINANCIAL STATEMENTS OF THE SOUTH AFRICAN CIVIL AVIATION AUTHORITY FOR THE YEAR ENDED 31 MARCH 2010 (CONTINUED)Report on other Legal and Regulatory Requirements
In terms of the PAA of South Africa and General notice 1570 of 2009, issued in Government Gazette No. 32758 of 27 November 2009 I include below my fi ndings on the report on predetermined objectives, compliance with the PFMA, SACAA Act and fi nancial management (internal control).
Findings
Predetermined objectives• Usefulness of information
The following criteria were used to assess the usefulness of the planned and reported performance:• Consistency: Has the entity reported on its performance with regard to its objectives, indicators and targets
in its approved strategic plan, ie. are the objectives, indicators and targets consistent between planning and reporting documents?
• Relevance: Is there a clear and logical link between the objectives, outcomes, outputs, indicators and performance targets?
• Measurability: Are objectives made measurable by means of indicators and targets? Are indicators well defi ned and verifi able, and are targets specifi c, measurable, and time bound?
The following audit fi ndings relate to the above criteria:The SACAA has not reported on its performance against predetermined objectives which is consistent with the approved strategic plan; planned and reported performance targets are not specifi c, measurable and time bound; planned and reported indicators are not well defi ned; and planned and reported indicators not verifi able.
Compliance with laws and regulations
No matters to report.
Internal control
I considered internal control relevant to my audit of the fi nancial statements and the report on predetermined objectives and compliance with the PFMA and SACAA Act, but not for the purposes of expressing an opinion on the effectiveness of internal control. The matters reported are limited to the defi ciencies identifi ed during the audit.
No matters to report.
Pretoria30 July 2010
62
The Board which is the Accounting Authority of the South African Civil Aviation Authority (SACAA) is responsible for the preparation, integrity and fair presentation of the annual fi nancial statements.
The annual fi nancial statements for the year ended 31 March 2010 have been prepared in accordance with:
• The Public Finance Management Act No. 1 of 1999;• Standards of Generally Recognised Accounting Practice; • South African Statements of Generally Accepted Accounting Practice; and• International Financial Reporting Standards.
They are based on appropriate accounting policies which have been consistently applied and which are supported by reasonable and prudent judgements and estimates. The going concern basis has been adopted in preparing the annual fi nancial statements. The Board has no reason to believe that the SACAA will not be a going concern in the foreseeable future, based on forecasts and available cash resources.
The Board is also responsible for the SACAA’s system of internal controls. These are designed to provide reasonable, but not absolute, assurance as to the reliability of the annual fi nancial statements and to adequately safeguard, verify and maintain accountability of assets. These controls are monitored throughout the SACAA by management and employees, in an attempt to address the segregation of authority and duties with available resources. Processes are in place to monitor internal controls, to identify material breakdowns and implement timely corrective action.
The Board and SACAA Management treat corporate governance matters seriously and whenever any instances of non–compliance to regulation are uncovered or reported, appropriate disciplinary measures in terms of policy and legislation are instituted
The annual fi nancial statements were approved by the Board on 29 July 2010 and are signed on its behalf:
Mr D GoldingActing Chairperson
Finance and Audit Committee
As stated elsewhere in this report, SACAA adheres to the principles of good corporate governance. Towards the end of the year under review, the Chairman of the Board, Ms. Nonkululeko Msomi, resigned from the Board of the SACAA. Mr. Desmond Golding, the current Chairperson of Finance and Audit Committee, was appointed as Acting Chairperson of the Board. This temporary appointment will cease as soon as the Minister appoints a new Chairperson.
Given Mr. Golding’s vast knowledge and experience in governance issues, the Board resolved to appoint him to guide the Board in the execution and discharge of its fi duciary duties. Should the Minister confi rm Mr. Golding’s appointment as Chairperson of the Board, Mr. Golding will forthwith vacate the chairmanship of the Finance and Audit Committee, and a new member will be appointed to chair Finance and Audit Committee.
Statement of Responsibilityfor the year ended 31 March 2010
Mr D GoldingActing ChairpersonSACAA Board
9963
Report of the Accounting Authorityfor the year ended 31 March 2010
Introduction
The Board as Accounting Authority hereby presents its twelfth report in terms of the South African Civil Aviation Authority Act, 1998 (Act No. 40 of 1998) and the Public Finance Management Act, 1999 (Act No.1 of 1999), which form part of the audited fi nancial statements for the year ended 31 March 2010.
The Board is of the opinion that the SACAA, to a large extent, complies with the provisions of the PFMA.
Nature of business
The SACAA is a statutory body tasked with controlling and regulating civil aviation in the Republic of South Africa. The SACAA is also responsible for overseeing the functioning and development of the civil aviation industry.
The SACAA was established as a juristic body in terms of the South African Civil Aviation Authority Act, 1998 (Act No. 40 of 1998). This, read in conjunction with the South African Civil Aviation Authority Levies Act, 1998 (Act No. 41 of 1998), enables the SACAA to impose a passenger safety charge on scheduled operations, a 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 (“DoT”) and receives an annual payment for these services.
Corporate governance
The Board subscribes to the values and principles of good corporate governance and recognizes the need to conduct the enterprise with integrity and transparency and in accordance with generally accepted corporate practices. The Board members confi rm that during the year under review, the SACAA complied with the recommendations contained in the King Report on Corporate Governance for South Africa, 2002, and will, in the future, be aligning its policies and procedures with the newly published King Report on Governance for South Africa, 2009 (“King III report”).
Statements of responsibility
The Board is responsible, to the best of its knowledge, for the maintenance of adequate accounting records, the preparation and integrity of the fi nancial statements and related information. The Auditors are required to report on the fair presentation of fi nancial statements by the entity. The fi nancial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and in the manner required by the PFMA and the South African Civil Aviation Authority Act, 1998 (Act No. 40 of 1998).
The Board is responsible for the entity’s system of internal controls. These are designed to provide reasonable assurance as to the reliability of the fi nancial statements, and to adequately safeguard, verify and maintain accountability of assets, and to prevent and detect misstatements and losses. Nothing has come to the attention of the Board to indicate that any material breakdown in the functioning of these controls, procedures and systems has occurred during the year under review.
Going concern
The fi nancial statements have been prepared on the going concern basis. The Board has every reason to believe that the SACAA has adequate resources in place to continue operations for the foreseeable future.
64
Financial results
The SACAA recorded a defi cit of R9,318,672 for the year compared to a defi cit of R13,609,707 for the FY 2008/09.
Number of employees
The average number of employees during the period was 420 (2009: 402).
Materiality framework
The SACAA has a materiality framework whereby all material and signifi cant information is disclosed to the Finance and Audit Subcommittee on a quarterly basis.
Accounting Authority
The members of the Board in offi ce at the time of this report and during the period under review are as
Name Appointment date statusMs. TN Msomi 01 May 2008 Resigned in March 2010Ms. PSV Ngaba 01 May 2008 Resigned in September 2009Ms. P Riba 01 May 2008 ActiveMrs. N Mtshali 01 May 2008 ActiveMr. D Golding 01 May 2008 ActiveMr. AA Gany 01 May 2008 Ex offi cio member from the DoTMajor-General MMM Mangethe 01 May 2008 ActiveCaptain CF Jordaan 10 December 2007 Active
Report of the Accounting Authoritycontinuedfor the year ended 31 March 2010
9965
2010 2009
Notes R R
Revenue 1 244 420 192 227 630 616
Other income 2 18 694 931 10 349 299
Employee expenses 3 (182 093 089) (156 091 317)
Depreciation 4 (8 232 249) (6 810 348)
Amortisation 5 (336 016) (831 560)
Other expenses 6 (86 833 484) (95 946 742)
Defi cit from operations (14 379 715) (21 700 052)
Investment income 7 5 061 043 8 090 345
Interest paid – –
Net defi cit (9 318 672) (13 609 707)
Statement of Financial Performancefor the year ended 31 March 2010
66
Statement of Financial Positionas at 31 March 2010
2010 2009
Notes R R
ASSETS
Non-current assets 25 046 331 31 687 173
Property, plant and equipment 9 24 294 148 30 598 974
Intangible assets 10 752 183 1 088 199
Current assets 126 010 402 121 231 384
Investments 11 78 963 055 77 257 547
Trade and other receivables 12 38 629 879 23 149 148
Cash and cash equivalents 13 8 417 468 20 824 689
TOTAL ASSETS 151 056 733 152 918 557
NET ASSETS AND LIABILITIES
Capital and reserves 94 462 108 102 075 272
Non-distributable reserves 14 53 275 518 53 275 518
Accumulated funds 41 186 590 48 799 754
Current liabilities 56 594 625 50 843 285
Trade and other payables 15 31 778 466 25 716 841
Provisions 16 15 000 000 15 580 560
Operating lease liability 17 9 816 159 9 545 884
TOTAL NET ASSETS AND LIABILITIES 151 056 733 152 918 557
9967
Non- Total
distributable Accumulated reserves funds Notes R R R
Restated balance as at 31 March 2007 53 275 518 57 234 168 110 509 686
Fair value adjustment through equity – 1 890 740 1 890 740
Fair value adjustment released to
statement of fi nancial performance – (18 510) (18 510)
Net surplus for the year – 631 371 631 371
Balance as at 31 March 2008 53 275 518 59 737 769 113 013 287
Fair value adjustment through equity 11 – 2 671 692 2 671 692
Net defi cit for the year – (13 609 707) (13 609 707)
Balance as at 31 March 2009 53 275 518 48 799 754 102 075 272
Fair value adjustment through equity 11 – 1 705 508 1 705 508
Net defi cit for the year – (9 318 672) (9 318 672)
Balance as at 31 March 2010 53 275 518 41 186 590 94 462 108
Represented by:
Capital funding by Government 14 43 275 518 7 931 000 51 206 518
Government subsidies received – 49 404 915 49 404 915
Accumulated funds – (16 149 325) (16 149 325)
Asset replacement reserve 14 10 000 000 – 10 000 000
Total 53 275 518 41 186 590 94 462 108
Statement of Changes in Net Assetsfor the year ended 31 March 2010
68
Statement of Cash Flowsfor the year ended 31 March 2010
2010 2009 Notes R R
CASH FLOW FROM OPERATING ACTIVITIES
Receipts: 252 704 551 281 913 314
Receipts from customers and Dept of Transport 247 643 508 273 822 969
Interest received 5 061 043 8 090 345
Payments: (263 175 232) (249 379 987)
Payments made to suppliers and employees (263 175 232) (249 379 987)
Interest Paid – –
Net cash (outfl ow)/infl ow from operating activities A (10 470 681) 32 533 327
CASH FLOW FROM INVESTING ACTIVITIES
Additions to property, plant and equipment 9 (1 936 540) (5 352 215)
Additions to intangible assets 10 – (373 029)
Additions to Held to Maturity Investments 11 – (50 000 000)
Net cash infl ow/(outfl ow) from investing activities (1 936 540) (55 725 244)
NET INCREASE/(DECREASE) IN CASH
AND CASH EQUIVALENTS (12 407 221) (23 191 917)
Cash and cash equivalents at beginning of year 20 824 689 44 016 606
CASH AND CASH EQUIVALENTS AT END OF YEAR B 8 417 468 20 824 689
8 417 468 20 824 689
9969
Notes to the Cash Flow Statementfor the year ended 31 March 2010
2010 2009 R R
A. RECONCILIATION OF LOSS FOR THE YEAR
TO CASH TO CASH UTILISED IN OPERATIONS
Defi cit for the year (9 318 672) (13 609 707)
Adjustment for:
Depreciation 8 232 249 6 810 348
Amortisation 336 016 831 560
Loss on sale of property, plant and equipment 9 117 23 956
Increase in operating leases liability 270 275 1 045 318
(Decrease)/Increase in provisions (580 560) 2 080 461
Net cash fl ow before working capital changes (1 051 575) (2 818 064)
Working capital changes: (9 419 106) 35 351 391
(Increase)/decrease in trade and other receivables (15 480 731) 35 843 054
Increase/(decrease) in trade an other payables 6 061 625 (491 663)
Cash utilised in operations (10 470 681) 32 533 327
B. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand,
balances with banks and investments in money
market instruments. Cash and cash equivalents
included in the cash fl ow statement comprise
of the following balance sheet amounts:
Funds on call and on deposit 128 513 10 887 928
Bank balances and cash 8 288 955 9 936 761
Cash and cash equivalents 8 417 468 20 824 689
70
Accounting Policiesfor the year ended 31 March 2010
The fi nancial statements have been prepared in South African rands on the historical cost basis except where otherwise stated, and in accordance with the Public Finance Management Act, 1999 (Act 1 of 1999) as amended, the South African Statements of Generally Accepted Accounting Practices (GAAP) including any interpreations of such Statements issued by the Accounting Practices Board, with effective Standards of Generally Recognised Accounting Practices (GRAP) issued by the Accounting Standards Board replacing the equivalent GAAP statements as follows:
Standard of GRAP Standard of GAAPGRAP 1: Presentation of fi nancial statements AC101: Presentation of fi nancial statements
GRAP 2: Cash fl ow statements AC118: Cash fl ow statements
GRAP 3: Accounting policies, changes in accounting estimates and errors
AC103: Accounting policies, changes in accounting estimates and errors
Currently the recognition and measurement principles in the above GRAP and GAAP statements do not differ or result in material differences in items presented and disclosed in the fi nancial statements. The implementation of GRAP 1, 2 and 3 has resulted in the following changes in the presentation of the fi nancial statements:
1. Terminology differences: Standard of GRAP Replaced statement of GAAP Statement of fi nancial performance Income statement Statement of fi nancial position Balance sheet Statement of changes in net assets Statement of changes in equity Net assets Equity Surplus/defi cit Profi t/loss Accumulated surplus/defi cit Retained earnings Contributions from owners Share capital Distributions to owners Dividends
9971
Accounting Policies continuedfor the year ended 31 March 2010
At the date of authorisation of these annual fi nancial statements, the following Standards and Interpretations were in issue but not yet effective.
Interpretation Details
Effective date – annual periods commencing on or after
IFRS 1 First-time Adoption of International Financial Reporting Standards – Amendments relating to oil and gas assets and determining whether an arrangement contains a lease
1 January 2010
IFRS 1 First-time Adoption of International Financial Reporting Standards – Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters
1 July 2010
IFRS 2 Share-based Payment – Amendments resulting from April 2009 Annual Improvements to IFRSs
1 July 2009
IFRS 2 Share-based Payment – Amendments relating to company cash-settled, share-based payment transactions
1 January 2010
IFRS 3 Business Combinations – Comprehensive revision on applying the acquisition method
1 July 2009
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations – Amendments resulting from May 2008 Annual Improvements to IFRSs
1 July 2009
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations – Amendments resulting from April 2009 Annual Improvements to IFRSs
1 January 2010
IFRS 8 Operating Segments – Amendments resulting from April 2009 Annual Improvements to IFRSs
1 January 2010
IFRS 9 Financial Instruments – Classifi cation and Measurement 1 January 2013IAS 1 Presentation of Financial Statements – Amendments resulting
from April 2009 Annual Improvements to IFRSs 1 January 2010
The directors anticipate that the adoption of these Standards and Interpretations in future periods will not have a material impact on the fi nancial statements.
Some amendments to existing standards will not have a material impact on the fi nancial statements.
Revenue recognition The invoiced value of sales and services rendered, excluding value added tax, in respect of trading operations is recognised at the date on which services are provided.
72
Accounting Policies continuedfor the year ended 31 March 2010
Revenue recognition (continued)
The 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 Operators and Charter Operators. This is based on the litres audited by the fuel company auditors.
Accident and incident investigation 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, licence renewals, certifi cations, airworthiness and calibrations. This revenue is recognised when the service is rendered.
Government 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.
A government grant of which the primary condition is that the organisation should purchase, construct or otherwise acquire non-current assets is recognised as deferred income in the statement of fi nancial position and transferred to surplus/defi cit on a systematic and rational basis over the useful lives of the related assets.
Other government 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. Government 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 government grants immediately (no deferral) as there are no conditions attached thereto. The organisation is therefore unconditionally entitled to the grant awarded on the award date.
Investment income comprise interest income and is accrued on a time proportion basis, taking into account the principal outstanding and the effective interest rate over the period to maturity.
Leasing
Leases are classifi ed as fi nance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classifi ed as operating leases.
9973
Accounting Policies continuedfor the year ended 31 March 2010
Leasing (continued)
Assets held under fi nance leases are recognised as assets of SACAA at their fair value at the inception of the lease. The assets are capitalised if the minimum lease payments are 85% or more of the assets’ fair value at inception of the lease. The corresponding liability to the lessor is included in the statement of fi nancial position as a fi nance lease obligation.
Lease payments are apportioned between fi nance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are charged to surplus or defi cit, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the SACAA’s general policy on borrowing costs (see below). Leased assets are depreciated over lesser of the useful life and the lease period. Rentals payable under operating leases are charged to surplus or defi cit on a straight-line basis over the term of the relevant lease. Benefi ts received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term. The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date of whether the fulfi lment of the arrangement is dependent on the use of a specifi c asset or assets or the arrangement conveys a right to use the asset. The classifi cation of the lease is determined using IAS 17 (AC 105) (Leases).
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. To the extent that variable rate borrowings are used to fi nance a qualifying asset and are hedged in an effective cash fl ow hedge of interest rate risk, the effective portion of the derivative is deferred in equity and released to the statement of fi nancial performance when the qualifying asset impacts profi t or loss.
To the extent that fi xed rate borrowings are used to fi nance a qualifying asset and are hedged in an effective fair value hedge of interest rate risk, the capitalised borrowing costs refl ect the hedged interest rate.
Investment income earned on the temporary investment of specifi c borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in the statement of fi nancial performance in the period in which they are incurred. Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Depreciation is charged so as to write off the cost or valuation of assets to its residual value over the estimated useful lives, using the straight-line method as indicated under critical and accounting judgments below.
Residual values and estimated useful lives are assessed on an annual basis.
The gain or loss arising on the disposal or retirement of an item of plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the assset and is recognised in the statement of fi nancial performance.
74
Accounting Policies continuedfor the year ended 31 March 2010
Impairment of assets
At each balance sheet date, the organisation reviews the carrying amounts of its tangible assets and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indications exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing the value in use, the estimated future cash fl ows are discounted to their present value using the pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in surplus or defi cit unless the relevant asset is carried at a revalued amount in which case the reversal of the impairment loss is treated as a revaluation decrease.
When an impairment loss subsequently reverts the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increase carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of impairment loss is recognised immediately in surplus or defi cit unless the relevant asset is carried at a revalued amount in which case the reversal of the impairment loss is treated as a revaluation increase. Financial instruments
Details of the signifi cant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of fi nancial asset, fi nancial liability and equity instrument are disclosed below:
Financial assets
Investments are recognised and derecognised on trade date where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, plus transaction costs, except for those fi nancial assets classifi ed as at fair value through profi t or loss, which are initially measured at fair value.
Financial assets are classifi ed into the following specifi ed categories: fi nancial assets ‘at fair value through profi t or loss’ (FVTPL), ‘held-to-maturity’ investments, ‘available-for-sale’ (AFS) fi nancial assets and ‘loans and receivables’. The classifi cation depends on the nature and purpose of the fi nancial assets and is determined at the time of initial recognition Effective interest method
The effective interest method is a method of calculating the amortised cost of a fi nancial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the fi nancial asset, or, where appropriate, a shorter period. Income is recognised on an effective interest basis for debt instruments other than those fi nancial assets designated as at FVTPL.
9975
Accounting Policies continuedfor the year ended 31 March 2010
Financial instruments (continued)
Financial assets at FVTPL
Financial assets are classifi ed as at FVTPL where the fi nancial asset is either held for trading or it is designated as at FVTPL. A fi nancial asset is classifi ed as held for trading if: – it has been acquired principally for the purpose of selling in the near future; or – it is a part of an identifi ed portfolio of fi nancial instruments that the Entity manages together and has a
recent actual pattern of short-term profi t-taking; or – it is a derivative that is not designated and effective as a hedging instrument.
Financial assets at FVTPL
A fi nancial asset other than a fi nancial asset held for trading may be designated as at FVTPL upon initial recognition if:– such designation eliminates or signifi cantly reduces a measurement or recognition inconsistency that
would otherwise arise; or– the fi nancial asset forms part of a entity of fi nancial assets or fi nancial liabilities or both, which is managed
and its performance is evaluated on a fair value basis, in accordance with the Entity’s documented risk management or investment strategy, and information about the entitying is provided internally on that basis; or
– it forms part of a contract containing one or more embedded derivatives, and IAS 39 (AC 133) Financial Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.
Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profi t or loss. The net gain or loss recognised in profi t or loss incorporates any dividend or interest earned on the fi nancial asset. Fair value is determined in the manner described in note 18.
Held-to-maturity investments
Bills of exchange and debentures with fi xed or determinable payments and fi xed maturity dates that the Entity has the positive intent and ability to hold to maturity are classifi ed as held-to-maturity investments. Held-to-maturity investments are recorded at amortised cost using the effective interest method less any impairment, with revenue recognised on an effective yield basis.
Available-for-sale fi nancial assets
Unlisted shares and listed redeemable notes held by the Entity that are traded in an active market are classifi ed as being AFS and are stated at fair value. Fair value is determined in the manner described in note 19. Gains and losses arising from changes in fair value are recognised directly in equity in the investments revaluation reserve with the exception of impairment losses, interest calculated using the effective interest method and foreign exchange gains and losses on monetary assets, which are recognised directly in profi t or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously recognised in the investments revaluation reserve is included in profi t or loss for the period.
Dividends on AFS equity instruments are recognised in profi t or loss when the Entity’s right to receive the dividends is established. The fair value of AFS monetary assets denominated in a foreign currency determined in that foreign currency and translated at the spot rate at the balance sheet date. The change in fair value attributable to translation differences that result from a change in amortised cost of the asset is recognised in profi t or loss, and other changes are recognised in equity.
76
Accounting Policies continuedfor the year ended 31 March 2010
Financial instruments (continued) Loans and receivables
Trade receivables, loans, and other receivables that have fi xed or determinable payments that are not quoted in an active market are classifi ed as loans and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
Impairment of fi nancial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the fi nancial asset, the estimated future cash fl ows of the investment have been impacted.
For unlisted shares classifi ed as AFS, a signifi cant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment.
For all other fi nancial assets, including redeemable notes classifi ed as AFS and fi nance lease receivables, objective evidence of impairment could include:– signifi cant fi nancial diffi culty of the issuer or counterparty; or– default or delinquency in interest or principal payments; or– it becoming probable that the borrower will enter bankruptcy or fi nancial re-organisation.
For certain categories of fi nancial asset, such as trade receivables, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Entity’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 60 days, as well as observable changes in national or local economic conditions that correlate with default on receivables.
For fi nancial assets carried at amortised cost, the amount of the impairment is 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 fi nancial asset is reduced by the impairment loss directly for all fi nancial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profi t or loss.
9977
Accounting Policies continuedfor the year ended 31 March 2010
Financial instruments (continued)
Impairment of fi nancial assets (continued)
With the exception of AFS equity instruments, 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 through profi t or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.
In respect of AFS equity securities, impairment losses previously recognised through profi t or loss are not reversed through profi t or loss. Any increase in fair value subsequent to an impairment loss is recognised directly in equity. Derecognition of fi nancial assets
The Entity derecognises a fi nancial asset only when the contractual rights to the cash fl ows from the asset expire; or it transfers the fi nancial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Entity neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Entity recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Entity retains substantially all the risks and rewards of ownership of a transferred fi nancial asset, the Entity continues to recognise the fi nancial asset and also recognises a collateralised borrowing for the proceeds received.
Financial liabilities
Financial liabilities are classifi ed as either fi nancial liabilities ‘at FVTPL’ or ‘other fi nancial liabilities’
Financial liabilities at FVTPL
Financial liabilities are classifi ed as at FVTPL where the fi nancial liability is either held for trading or – it is designated as at FVTPL. A fi nancial liability is classifi ed as held for trading if: – it has been incurred principally for the purpose of repurchasing in the near future; or – it is a part of an identifi ed portfolio of fi nancial instruments that the Entity manages together and has a
recent actual pattern of short-term profi t-taking; or – it is a derivative that is not designated and effective as a hedging instrument. A fi nancial liability other than a fi nancial liability held for trading may be designated as at FVTPL upon initial recognition if:– such designation eliminates or signifi cantly reduces a measurement or recognition inconsistency that
would otherwise arise; or – the fi nancial liability forms part of a entity of fi nancial assets or fi nancial liabilities or both, which is managed
and its performance is evaluated on a fair value basis, in accordance with the Entity’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or
78
Accounting Policies continuedfor the year ended 31 March 2010
Financial instruments (continued)
Financial liabilities at FVTPL (continued)– it forms part of a contract containing one or more embedded derivatives, and IAS 39 (AC 133) Financial
Instruments: Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at FVTPL.
Financial liabilities at FVTPL are stated at fair value, with any resultant gain or loss recognised in profi t or loss. The net gain or loss recognised in profi t or loss incorporates any interest paid on the fi nancial liability. Fair value is determined in the manner described in note 18.
Other fi nancial liabilities
Other fi nancial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. Other fi nancial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a fi nancial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the fi nancial liability, or, where appropriate, a shorter period.
Derecognition of fi nancial liabilities
The Entity derecognises fi nancial liabilities when, and only when, the Entity’s obligations are discharged, cancelled or they expire.
Employee benefi ts
The entity participates in a defi ned contribution fund, which is governed by the Pension Fund Act 1956, (Act no. 24 of 1956) and in which all employees participate. Current contributions to the retirement benefi t fund are charged to surplus or decifi t in the period incurred.
Critical accounting judgements and key sources of estimation uncertainty
In the process of applying the organisation’s accounting policies,which are described above, management has made the following judgments that have the most signifi cant effect on the amounts recognised in the fi nancial statements (apart from those involving estimations, which are dealtwith below).
Residual values For the current year residual values were taken into consideration when calculating depreciation and these values will be assessed annually.
9979
Accounting Policies continuedfor the year ended 31 March 2010
Critical accounting judgements and key sources of estimation uncertainty (continued)
Useful lives
Included in the aircraft are the following components with the respective remaining useful lives:
2010 2009Airframe 15 years 16 yearsLeft engine 358 hours 780 hoursRight engine 217 hours 634 hoursAvionics 7 years 8 yearsUndercarriage 19 776 cycles 19 897 cycles
Interior 6 years 7 years
The following rates are used for the depreciation of plant, property and equipment:
2010 2009Aircraft Refer above Refer aboveCalibration equipment 15 years 15 yearsFurniture and fi ttings 6 years 6 yearsComputer equipment 3 years 3 yearsMotor vehicles 5 years 5 yearsIntangible assets 3 years 3 years
Intangible assets consist of computer software and have a fi nite useful life. These items are amortised over three years.
Leave pay accrual
Employee entitlements to annual leave are recognised when it accrues to employees. An accrual, based on total employment cost is raised for the estimated liabilities as a result of services rendered by employees up to the date of the statement of fi nancial position.
Performance bonus provision
The value of the bonus entitlements is calculated based on the bonus scheme established by the South African Civil Aviation Authority, the value of which is dependant on the employees grade and performance.
Provision for doubtful amounts
Management assessed the recoverability of each debtor’s balance and provided in full for any doubtful amounts.
80
Accounting Policies continuedfor the year ended 31 March 2010
Critical accounting judgements and key sources of estimation uncertainty (continued)
Fair value methods and assumptions
The fair value of fi nancial instruments not traded in an organised fi nancial market, is determined using a variety of methods and assumptions that are based on market conditions and risk existing at the date of the statement of fi nancial position, including independant appraisals and discounted cash fl ow methods. The fair value determined is adjusted or any transaction costs necessary to realise the assets or settle the liabilities.
The carrying amounts of fi nancial assets and liabilities with a maturity of less than one year are assumed to approximate their fair value.
Asset replacement reserve
The asset replacement reserve which is part of non-distributable reserves, represents a portion of surpluses generated during the fi nancial year based asset replacement needs and funds availability. This reserve is created to enable the organisation to maintain an asset base that is in line with the aviation safety mandate.
Related parties
The enitity 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.
Irregular, unauthorised, fruitless and wasteful expenditure
Irregular expenditure means expenditure incurred in contravention of, or not in accordance with, a requirement of any applicable legislation, including: – the Public Finance Management Act 1999 (Act No 1 of 1999) as amended; or – any legislation providing for procurement procedures in Government.
Unauthorised expenditure is expenditure that has not been budgeted, expenditure that is not in terms of the conditions of an allocation received from another sphere of Government or organ of state and expenditure in the form of a grant that is not permitted in terms of the Public Finance Management Act (Act No 1 of 1999).
Fruitless and wasteful expenditure means expenditure that was made in vain and could not have been avoided had reasonable care been exercised.
All irregular, unauthorised, fruitless and wasteful is accounted for as expenditure in the statement of fi nancial performance and where recovered, it is subsequently accounted for as revenue in the statement of fi nancial performance.
9981
Notes to the Annual Financial Statementsfor the year ended 31 March 2010
2010 2009 R R
1. REVENUE Revenue comprise of the following: Aircraft passenger safety charge 185 308 436 169 917 122 User fees 55 857 594 52 843 369 Fuel levy 3 254 162 4 870 125
244 420 192 227 630 616
2. OTHER INCOME Other income comprise of the following: Accident and incident investigations 17 291 749 7 464 000 Examination cancellations and tender document fees 35 261 262 552 Sundry Income 1 284 097 2 521 422 (Loss) on sale of assets (9 117) (23 956) Insurance claims received 75 656 124 351 Bad debts recovered – 930 Foreign exchange differences 17 285 –
18 694 931 10 349 299
3. EMPLOYEE EXPENSES Staff remuneration (Including executive
directors’fees – see note 8.1 and 8.2) 125 727 303 107 227 836 Provident fund 21 912 490 18 102 717 Medical aid 8 095 276 6 689 534 Bonus 14 163 025 15 668 448 Consultants, contractors and temporary staff 12 194 995 8 402 782
182 093 089 156 091 317
4. DEPRECIATION Aircraft 1 777 824 1 984 821 Calibration equipment 809 445 811 150 Furniture and fi ttings 1 328 727 603 688 Computer equipment 3 505 967 3 402 070 Motor vehicles 427 755 (373 912) Leasehold improvements 382 531 382 531
8 232 249 6 810 348
82
Notes to the Annual Financial Statements (continued)for the year ended 31 March 2010
2010 2009 R R
5. AMORTISATION Computer software 336 016 831 560
6. OTHER EXPENSES Staff costs – other than remuneration 20 501 974 19 996 922 Premises 17 962 581 6 469 433 Communication costs 5 554 284 13 615 424 Operating costs 9 410 279 6 894 552 Public relations 2 034 898 2 461 209 Travel costs 13 825 681 14 117 666 Repairs and maintenance 8 821 658 5 760 666 Internal audit fees 1 713 641 1 233 586 External audit fees 752 368 1 490 364 Legal fees 738 890 2 042 478 Regulation development 143 503 1 991 701 Aero Club/RAASA 2 778 750 542 224 Administration costs 460 598 233 854 Operating lease expenses 2 100 761 10 262 973 ICAO Project – 4 734 771 Bad debts written off 4 686 898 – Adjustment to bad debts provision (4 653 280) 4 098 919
86 833 484 95 946 742
7. INVESTMENT INCOME Interest – Safety debtors 251 919 527 530 Interest – Bank accounts 4 809 124 7 562 815
5 061 043 8 090 345
9983
Notes to the Annual Financial Statements (continued)for the year ended 31 March 2010
Lumpsum/ Provident Medical leave pay/ Salary fund aid bonus Total
8. RELATED PARTIES
8.1 Executive Management fees 2010 Mr CF Jordaan (DCA) 1 946 679 326 673 51 135 588 438 2 912 925 Mr DN Maphumulo (CFO) 790 484 143 950 – 125 600 1 060 034 Mr A Richman 901 442 164 482 51 135 187 369 1 304 428 Mr GH Bestbier 845 213 154 056 45 579 161 804 1 206 652 Mr NR Magoai 854 506 157 090 52 626 153 038 1 217 260 Mr O Chakarisa 937 847 162 194 – 170 351 1 270 392 Mr S Lesoro 835 175 150 060 – 165 525 1 150 760 Mr S Ntaka 840 702 138 590 40 671 – 1 019 963 Ms GNB Khoza 850 316 152 528 31 485 158 474 1 192 803 Ms MG India 969 484 161 458 – 246 260 1 377 202 Ms L Stols 861 615 154 506 28 083 148 511 1 192 715 Mr R Van Zyl 1 057 500 – – 140 580 1 198 080
11 690 963 1 865 587 300 714 2 245 950 16 103 214
Executive Management fees 2009 Mr CF Jordaan (CEO) 1 698 946 315 000 45 669 40 378 2 099 993 Mr DN Maphumulo (CFO) 680 000 120 000 – – 800 000 Mr A Richman 799 231 149 100 45 669 – 994 000 Mr GH Bestbier 753 477 137 689 40 695 8 335 940 196 Mr NR Magoai 773 327 142 188 46 986 – 962 501 Mr O Chakarisa 841 448 146 093 – 145 051 1 132 592 Mr S Lesoro 754 592 131 898 – 17 487 903 977 Mr S Ntaka 733 644 133 520 36 303 – 903 467 Ms GNB Khoza 745 888 136 627 40 875 923 390 Mr MG India 815 914 143 985 – 61 929 1 021 828 Ms L Stols 666 125 123 149 25 077 734 335 1 548 686 Mr R Van Zyl 948 464 – – – 948 464
10 211 056 1 679 249 281 274 1 007 515 13 179 094
84
Notes to the Annual Financial Statements (continued)for the year ended 31 March 2010
2010 2009 R R
8. RELATED PARTIES (continued)
8.2 Board Members’ fees Miss M Magasa – 7 955 Miss BM Mohlala – 7 955 Mr JT Morrison – 7 955 Mr TA Ntsibande – 7 955 Mr MD Moroosi – 10 608 Ms P Riba 119 736 94 668 Mr MMM Mangethe 119 736 94 668 Mr DK Golding 119 736 94 668 Ms N Mtshali 119 736 94 668 Ms S Ngaba* 53 004 94 668 Ms T Msomi (Chair) 132 747 125 620
664 695 641 388
*Ms Ngaba resigned from the SACAA boardin September 2009
8.3 Public entities and transaction value received/(paid) Department of Transport (Accidents and Incidents) 16 989 401 7 464 000 Department of Transport (Secondments) 2 910 651 1 761 926 Telkom (Masts) 1 180 9 980 Air Traffi c and Navigation Services (Calibration) 8 573 274 10 390 759 Airports Company of South Africa ( Licenses) 635 916 305 549 South African Airways (Safety Fees) 60 258 554 53 754 771 SA Express (Safety Fees) 15 766 551 12 837 295 South African Air Force (Calibration) 2 772 436 595 923 South African National Defence Force (Fuel) – (82 506) South African Police Services (AIP’s –Info) 8 325 611 353 Denel (Certifi cation and Maintenance) 59 864 156 313 National Parks Board (Aerodrome Licence) – 10 750 Eskom (Mass Towers) 47 250 11 147 Mango (Safety Fees) 13 941 896 12 132 620 South African Revenue Services (PAYE SDL) (40 678 005) (31 989 291) Recreation Aviation Administration of South Africa (2 992 500) (2 492 578) Telkom –Telephone and IT (2 500 989) (3 401 014) Government Printers (262 236) (542 287) Auditor General –Audit Fees (784 709) (829 791)
74 746 859 60 704 919
9985
Notes to the Annual Financial Statements (continued)for the year ended 31 March 2010
2010 2009 R R
8. RELATED PARTIES (continued)
8.4 Balances owing by/(to) public entities as at 31 March 2010 Department of Transport (Accidents and Incidents) 9 510 749 – Department of Transport (Secondments) 1 051 474 – South African Airways (32 262) 384 975 SA Express (Safety Fees) (125 593) – Mango (Safety Fees) 44 153 – Denel (Certifi cation and Maintenance) 8 630 10 655 Air Traffi c and Navigation Services 1 385 764 944 246 South African Police Services (5 761) 2 261 South African Airforce 683 460 (6 990) Eskom (Mass Towers) 13 856 3 447 Auditor General –Audit Fees (17 278) – Telkom –Telephone and IT (21 026) 2 131 South African Revenue Services (PAYE SDL) (2 686 594) (2 223 410) Recreation Aviation Administration of South Africa (213 750) (427 500) Government Printers (97 171) (144 256) Airports Co of South Africa 7 552 (2 747)
9 506 203 (1 457 188)
These balances are included in Trade and other receivables or Trade and other payables respectively.
86
Notes to the Annual Financial Statements (continued)for the year ended 31 March 2010
Opening Movements/ Closing balance Additions disposals balance R R R R
9. PROPERTY, PLANT AND EQUIPMENT Cost 2010 Aircraft 20 471 322 – – 20 471 322 Calibration equipment 12 141 673 – – 12 141 673 Furniture and fi ttings 9 655 813 1 167 954 (649 660) 10 174 107 Computer equipment 16 104 696 506 301 (2 653 613) 13 957 384 Motor vehicles 1 410 993 262 285 480 000 2 153 278 Leasehold improvements 2 295 187 – – 2 295 187
62 079 684 1 936 540 (2 823 273) 61 192 951
2009 Aircraft 20 471 322 – – 20 471 322 Calibration equipment 12 159 668 18 190 (36 185) 12 141 673 Furniture and fi ttings 8 055 202 1 836 733 (236 122) 9 655 813 Computer equipment 15 454 807 3 146 865 (2 496 976) 16 104 696 Motor vehicles 1 060 566 350 427 – 1 410 993 Leasehold improvements 2 295 187 – – 2 295 187
59 496 752 5 352 215 (2 769 283) 62 079 684
Accumulated depreciation 2010 Aircraft 8 274 475 1 777 824 – 10 052 299 Calibration equipment 6 662 994 809 445 – 7 472 439 Furniture and fi ttings 5 101 851 1 328 727 (590 089) 5 840 489 Computer equipment 10 219 043 3 505 967 (2 704 067) 11 020 943 Motor vehicles 531 735 427 755 480 000 1 439 490 Leasehold improvements 690 612 382 531 1 073 143
31 480 710 8 232 249 (2 814 156) 36 898 803
2009 Aircraft 6 289 654 1 984 821 – 8 274 475 Calibration equipment 5 821 056 811 150 30 788 6 662 994 Furniture and fi ttings 4 726 002 603 688 (227 839) 5 101 851 Computer equipment 9 389 078 3 402 070 (2 572 105) 10 219 043 Motor vehicles 905 647 (373 912) – 531 735 Leasehold improvements 308 081 382 531 – 690 612
27 439 518 6 810 348 (2 769 156) 31 480 710
9987
Notes to the Annual Financial Statements (continued)for the year ended 31 March 2010
2010 2009 R R
9. PROPERTY, PLANT AND EQUIPMENT (continued) Net book value Aircraft 10 419 023 12 196 847 Calibration equipment 4 669 234 5 478 679 Furniture and fi ttings 4 333 618 4 553 962 Computer equipment 2 936 441 5 885 653 Motor vehicles 713 788 879 258 Leasehold improvements 1 222 044 1 604 575
24 294 148 30 598 974
10. INTANGIBLE ASSETS (Computer Software) Cost opening balance 7 093 366 6 807 358 Additions – 373 029 Reclassifi cation – (87 021)
Cost closing balance 7 093 366 7 093 366
Amortisation opening balance (6 005 167) (5 236 799) Amortisation (336 016) (831 560) Reclassifi cation 63 192
Amortisation closing balance (6 341 183) (6 005 167)
Net book value 752 183 1 088 199
11. INVESTMENTS Held to maturity Investment 50 000 000 50 000 000
Held to Maturity Investments comprise of the following: 1 ABSA Bank – Fixed deposit; Amount – R10 million; Fixed interest rate – 7.90%;
Maturity date – 14 Oct 2010 2 Investec Bank – Fixed deposit; Amount – R20 million; Fixed interest rate – 8.00%;
Maturity date – 30 Aug 2010 3 Standard Bank – Fixed deposit; Amount – R20 million; Fixed interest rate – 7.85%;
Maturity date – 9 Sept 2010”
Momentum Group Limited Opening balance 27 257 547 24 585 855 Fair value gain through equity 1 705 508 2 671 692
Closing balance 28 963 055 27 257 547
Total investment 78 963 055 77 257 547
88
Notes to the Annual Financial Statements (continued)for the year ended 31 March 2010
2010 2009 R R
12. TRADE AND OTHER RECEIVABLES 35 985 061 19 677 692 Trade receivables 43 942 718 31 491 820 Provision for doubtful debts (6 904 788) (11 475 127) Unallocated receipts (1 052 869) (339 001)
Other receivables: 2 644 818 3 471 456 Sundry debtors 13 179 351 012 Deposits 634 172 598 999 Prepayments 778 370 1 549 113 Accrued interest 1 179 575 832 274 Staff advances 39 522 140 058
38 629 879 23 149 148
As at the end of the year the trade receivablesageing was as follows:
Current 20 361 775 13 841 855 0 to 30 days 7 307 851 1 858 835 31 to 60 days 4 950 735 567 747 Over 61 days 11 322 357 15 223 383
43 942 718 31 491 820
As at 31 March 2010 trade receivables at nominalvalue of R6 904 788 (2009: R11 475 127)were impaired and provided for. Movements in theprovision for impairment of receivables were as follows:
Balance at the beginning of the year 11 475 127 7 384 918 Raised during the year 41 471 4 090 209 Utilised during the year (4 611 810) –
Balance at the end of the year 6 904 788 11 475 127
The receivable’s impairment was estimated based onirrecoverable amounts and reference to past default.The concentration of credit risk is limited due tocustomer base being unrelated. Accordinglymanagement believes that there is no further creditprovision required in excess of the current allowancefor doubtful debts.
13. CASH AND CASH EQUIVALENTS Cash and balances with banks 8 155 498 9 886 761 Short term deposits 128 513 10 887 928 Cash shown as current assets 133 457 50 000
8 417 468 20 824 689
9989
Notes to the Annual Financial Statements (continued)for the year ended 31 March 2010
2010 2009 R R
14. NON-DISTRIBUTABLE RESERVES Assets transferred from the National
Department of Transport at inception 43 275 518 43 275 518 Asset replacement reserve 10 000 000 10 000 000
53 275 518 53 275 518
15. TRADE AND OTHER PAYABLES Trade payables 8 942 011 7 065 637 13th Cheque accrual 629 708 538 226 Income received in advance 1 232 875 1 456 328 Sundry accruals 6 471 516 4 611 781 Salaries control account 4 886 560 4 878 284 Safety charge creditors 1 992 336 1 992 336 Leave pay accrual 7 623 460 5 174 249
31 778 466 25 716 841
16. PROVISIONS Performance bonus (current) Opening balance 15 580 560 13 500 099 Utilised during the year (14 163 025) (13 587 989) Raised during the year 13 582 465 15 668 450
Closing balance 15 000 000 15 580 560
The performance bonus provision is based onperformance assessments done and is subject tothe approval of the board and therefore the timingof the outfl ows is uncertain.
17 OPERATING LEASE LIABILITY The operating lease liability relates to the smoothing 9 816 159 9 545 884 of the lease in terms of IAS 17
18 OPERATING LEASE COMMITMENTS The organisation has commitments for future operating
lease payments as per the lease agreements for therental of property as detailed below:
Payable within one year 10 805 974 10 797 961 Payable after one year but within fi ve years 39 730 176 37 084 566 Payable after fi ve years 2 815 820 13 509 077
53 351 970 61 391 604
90
Notes to the Annual Financial Statements (continued)for the year ended 31 March 2010
Notes 0-1 years > 1 year Total R R R
19. FINANCIAL INSTRUMENTS Categories of Financial Instruments
2010 Financial assets
Available-for sale Investments 11 28 963 055 – 28 963 055
Held to maturity Investments 11 50 000 000 – 50 000 000
Loans and receivables Cash and cash equivalents 13 8 417 468 – 8 417 468 Trade and other receivables 12 38 629 879 – 38 629 879 Due to system constraints it is not possible to disclose receivables >1 year.
Financial liabilities Trade and other payables 15 31 778 466 – 31 778 466
157 788 868 – 157 788 868
Percentage profi le 100% 0% 100%
2009 Financial assets
Available-for sale Investments 11 27 257 547 – 27 257 547
Held to maturity Investments 11 50 000 000 – 50 000 000
Loans and receivables Cash and cash equivalents 13 20 824 689 – 20 824 689 Trade and other receivables 12 23 149 148 – 23 149 148 Due to system constraints it is not possible to disclose receivables >1 year.
Financial Liabilities Trade and other payables 15 25 716 841 – 25 716 841
146 948 225 – 146 948 225
Percentage profi le 100% 0% 100%
9991
Notes to the Annual Financial Statements (continued)for the year ended 31 March 2010
19 FINANCIAL INSTRUMENTS (continued) Capital risk management As the SACAA is not exposed to debt, there is no meaningful debt to equity ratios such as gearing
ratios to be disclosed.
Financial risk management objectives 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.
These risks include market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity risk and cash fl ow interest rate risk. The entity does not enter into or trade fi nancial instruments, including derivative fi nancial instruments, for speculative purposes.
Market risk The entity’s activities are of such a nature that it does not materially expose the SACAA to fi nancial
risks of changes in foreign currency exchange rates and interest rates as referred to below. Market risk exposures are closely monitored by management.
There has been no change to the entity’s exposure to market risks or the manner in which it manages and measures the risk.
Foreign currency risk management The 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 US Dollars. No forward cover is taken out for these transactions. Management consider the foreign currency risk to be insignifi cant.
Interest rate risk management 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. This risk is further managed through the fact that the surplus funds are invested with reputable fi nancial institutions.
Credit management Credit risk refers to the risk that a counterparty would default on its contractual obligations resulting
in fi nancial loss to the entity. The entity has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of fi nancial loss from defaults.
Account facility There are two categories of services to consider for granting credit: a) Those services for which the
cost can be determined up front. b) The services for which the cost can only be determined after the service has been delivered.
92
Notes to the Annual Financial Statements (continued)for the year ended 31 March 2010
19 FINANCIAL INSTRUMENTS (continued) 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 must be taken with due regard to the fi nancial risk connected to a specifi c debtor account. Collection measures will include inter alia: legal action and handing over the account to debt collectors.
As at 31 March 2010, the entity did not consider that any signifi cant concentration of credit risk existed in the receivables 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 12
Direct Indirect 2010 charges charges Total
Current balances 2 126 751 18 235 024 20 361 775 Overdue balances 21 600 999 1 979 944 23 580 943
Total 23 727 750 20 214 968 43 942 718 Impairment provision (2 817 730) (4 087 058) (6 904 788)
2009 Current balances (496 337) 14 338 192 13 841 855 Overdue balances 11 967 710 5 682 255 17 649 965
Total 11 471 373 20 020 447 31 491 820 Impairment provision (7 807 276) (3 667 851) (11 475 127)
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 written off as irrecoverable in terms of the delegation authority.
9993
Notes to the Annual Financial Statements (continued)for the year ended 31 March 2010
19 FINANCIAL INSTRUMENTS (continued) Liquidity risk management Liquidity risk refers to the risk that an entity will encounter diffi culty in meeting obligations associated
with fi nancial liabilities. 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 liquidity ratio below illustrates:
2010 2009 R R
Current assets 126 010 402 121 231 384 Current liabilities (56 594 625) (50 843 285) 2.23:1 2.38:1
20 FRUITLESS AND WASTEFUL EXPENDITURE During the period under review, salaries amounting to R1 625 685 were paid to two offi cials who
were suspended for alleged misconduct. Both offi cials’ suspensions have since been lifted and they have both resumed their duties.
Offi cial in the offi ce of the CEO 963 200 321 948 Related legal costs 280 797 Offi cial in the fi nance department 381 688 –
1 625 685 321 948
21 CONTINGENT LIABILITIES Pending litigation 17 313 080 1 270 500
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 these cases are unlikely to be successful, the entity is obliged to disclose these amounts per IAS 37.
22 TAXATION No provision for South African Normal Taxation has been made as SACAA is exempted in terms of
section 10 (1) (CA) (1) of the Income Tax Act
94
Acronyms
ACSA Airports Company South AfricaAFCAC African Civil Aviation CommissionAFI African and Indian OceanAIC Aeronautical Information CircularAIID Accidents and Incidents Investigations
DivisionAIP Aeronautical Information PackageANS Air Traffi c Navigation ServicesASIB Aviation Safety Investigation BoardATOs Aviation Training OrganisationsATSUs Air Traffi c Service UnitsAVMED Aviation MedicineAVSEC Aviation SecurityCAHRS Confi dential Aviation Hazard Reporting
SystemCAPSCA Cooperative Arrangement for the
Prevention of a Spread of Communicable Disease by Air Travel
CARCom Civil Aviation Regulations CommitteeCARS Civil Aviation RegulationsCOSCAP Co-operative development of Operational
Safety and Continuing Airworthiness Programme
CRM Customer relationship managementDFEs Designated Flight ExaminersDoD Department of DefenceDoE Department of EducationDoL Department of LabourDoT Department of TransportDPE Department of Public EnterprisesECCAIRS European Coordinating Centre for
Accidents and Incidents Reporting SystemEM Executive ManagerEXCO Executive Management CommitteeFAA Federal Aviation AdministrationGA General AviationGASI General Aviation Safety InitiativeGM General ManagerGNSS Global Navigation Satellite Systems
HR Human ResourcesICAO International Civil Aviation OrganisationILF Industry Liaison ForumILS Instrument Landing SystemsJAAP Joint Aviation Awareness ProgrammeKPIs Key Performance IndicatorsLOC Local Organising CommitteeMP Member of ParliamentNASP National Aviation Security PlanNCOP National Council of ProvincesNDoT National Department of TransportNOTAM Notice To AirmenNPA National Prosecuting AuthorityPAA Public Audit Act, 2004PFMA Public Finance Management Act, 1999RAASA Recreational Aviation Administration of
South AfricaRVSM Reduced Vertical Separation MinimumSAA South African AirwaysSACAA South African Civil Aviation AuthoritySADC Southern African Development CommunitySAQA South African Qualifi cations ActSARPs Standards and Recommended PracticesSCM Supply Chain ManagementSCORR Standing Committee on Regulations Re-
writeSKA Square Kilometre Array radio telescopeSMs Senior ManagersSMS Safety Management SystemsSSP State Safety Programmethe ACT South African Civil Aviation Act, 1998UAS Unmanned Aircraft SystemsVOR Very high frequency Omnidirectional radio
Range
9995
Notes
96
Notes
