UCBSA TREASURER'S REPORT 2002

1. INCOME STATEMENT

As indicated in the financial statement, the comparative figures have been adjusted to conform with the changes in presentation in the current year. Changes are also in place in readiness for the split between the Amateur and Professional arms of cricket administration which came into effect with the adoption of the new Constitution of the UCBSA on 27 April 2002.

i. Revenue

(Increased from R127.9 million in 2001 to R196.8 million)
The main reason for the increase in revenue is the increase in international television income (from R36.6 million in 2001 to R105 million) because South Africa hosted two major incoming tours in the 2001/2 season - India and Australia. We also received the benefit of the payments being made in US$ during the period of devaluation of the Rand (payments received at R13:$1).

Gates revenue (R7 million) was not what it should have been for a season containing two such major incoming international tours and this is cause for concern. Gate revenue showed an increase of less than 10% over the previous year. Crowd attendance at both international and domestic cricket was disappointing, with a total of 96 000 people attending the 10 Standard Bank One Day Internationals in the South Africa-India-Kenya series and only 31 415 people in total attending the three matches in the Castle Lager/MTN Test series against India. Attendances were better in the series against Australia, with 93 441 people watching the Castle Lager/MTN Test matches at the grounds and 96 652 people coming to the grounds for the seven Standard Bank One-Day internationals. Crowds in domestic cricket were again cause for grave concern.

ii. Cricket Expenses

(R78 million) Amateur Cricket and Cricket Development Programmes - Amateur Cricket shows a reduction in expenditure (from R8.4 million in 2001 to R5.6 million) due to the reclassification of these expenses between development expenses and amateur cricket expenses. The two amounts should be aggregated in order to obtain the actual expenditure on amateur and development (R25.6 million). Therefore 25% more was spent on amateur cricket this year.

Cricket Operations and Umpires (R5.1 million) - Increased from R610 000 last year. This year all umpiring expenses are shown in this line, where previously these expenses were shown under international tour expenses or domestic competitions. Included in this line is also the R1.6 million paid to the full-time umpires.

Domestic Competitions (R9.9 million) - The increase shown is a result of increases in air fares and hotel accommodation.

Junior Tours Home and Away (R2.4 million) - Includes the participation in the Under 19 World Cup in New Zealand, as well as South Africa 'A' games against India and Australia.

SA Team Expenses (R21.2 million an increase of 31%) - The national contracted players received a 34% increase in salaries as the UCB moved closer to a system of remunerating players based on the revenue earned which relates directly to revenue generated by the international games ( gate revenue and international sponsorships). The salaries were fixed for two years to include the 2003 ICC Cricket World Cup and should show very little increase in the next year.

Senior Tours Home and Away (R12.2 million) -The reduction in this expenditure can be directly attributed to the number of tours into and out of the country. In the previous year tours were undertaken to the West Indies, Sri Lanka, the ICC Knockout in Kenya as well as a short tour to Australia. In addition, certain expenses for home tours, for example, Umpires, are reflected elsewhere.

Women's Cricket (R1 million) -The increased expenditure on women's cricket was as a result of the first incoming international women's tour, by India.

World Cup 2003 Legacy Projects (R234 000) - These projects will be funded by the ICC 2003 Cricket World Cup through the generous contributions of major sponsors and the Government. The amount reflected is a small portion of the R25 million to be used to leave behind a legacy of cricket facilities throughout the country.

iii. Administrative Expenses

(See Note 2 to the Financial Statement)
(R33.4 million)
A substantial increase in ICC subscriptions (from R155 000 to R6.6 million) was charged. The ICC makes use of these funds to develop cricket around the globe and the UCBSA is committed to this development of cricket as a global sport.

Marketing - It is disappointing to see that although the Marketing budget was increased from R1.4 million to R7.9 million, this did not result in a proportional increase in income from gate revenues or suppliers.

Restructuring - Following amendments to the Tax Act relating to Public Benefit Organisations, the UCB appointed consultants to assist with the restructuring of South African cricket into Professional and Amateur arms in order to comply with the tax requirements. This culminated in the adoption of the new Constitution on 27 April 2002.

Annual Indaba - This was held at KwaMaritane and was an opportunity for cricket stakeholders to examine the continuing adherence to the Transformation charter adopted in 1998.

Tenth Anniversary Celebrations - A banquet was held at the Sandton Convention Centre to celebrate 10 years of Unity and the development programme.

Finance Charges (R192 109) - Interest on the overdraft was incurred as a result of cash flow problems experienced at the beginning of the year due to certain principal debtors not meeting their agreed upon payment arrangements.

Net Income before allocations to provinces - The total income before the allocations to the affiliates was R89.2 million.

Provincial Allocations (R74.8 million an increase of R36 million) - An extra R22 million was distributed to the provinces from the International TV revenue due to the foreign exchange gains made on that revenue.

Net Income after provincial allocations - R14.4 million - Cricket is in a healthy financial state and has accumulated a total of R62.4 million in funds.

2. BALANCE SHEET

i. Accounts Receivable

(R25.5 million)
The improvement is due to the Finance Department's concentrated and efficient collection of outstanding amounts owed by debtors.

ii. World Cup 2003 (see note 7)

(R24.7 million)
All assets, liabilities, income and expenditure in connection with the 2003 ICC Cricket World Cup have been deferred pending the formation of a special purpose vehicle company, whose only activity will be the hosting of the World cup in 2003.

iii. Accounts Payable

(R19.3 million)
Increased due to the payment of increased ICC subscriptions.

iv. Receipts in Advance

(R30 million)
Consists of International Television Revenue received in advance.

v. Ordinary members

(R17 million)
R11 million of this amount was for the international TV allocations to affiliates unpaid at year end and R6 million was for claims and scorecard monies outstanding at year end.

3. OUTLOOK

The United Cricket Board of South Africa has had a good financial year and is on a firm footing to meet the challenges ahead. The warning that sport revenues are under pressure should, however, never be ignored and for this reason I once again ask the affiliates to make sure that they conform to strict financial disciplines as we go into the World cup year.

4. APPRECIATION

My sincere appreciation goes to Gerald Majola and his team for the enthusiastic and dedicated way in which they have implemented the necessary controls and disciplines surrounding the financial aspects of the UCB of SA, and to the Finance Committee for their support throughout the year.

© United Cricket Board of South Africa