2005/6 Annual Report

1. 2005/6 Annual Report Presented to: The Portfolio Committee on Arts and Culture Presented by: Vuyo Maphela and Allie Achmat September 2006

2. Contents • Introduction • Background • Context • Strategy • Organisational Score-card • Organisational Structure • Strategic Risks • Financial Summary

3. Introduction • Operated as a Section 21 Company from June 1998 - March 2005 • Declared as a National Monument in February 1996 • Declared as a Cultural Institution in April 2005

4. BackgroundHistorical organisational challenges • Last 2-3 years have been a traumatic rollercoaster ride • Forensic audit • Frequent leadership change • Challenge of being declared a Cultural Institution • Poor 2004/5 audit report on compliance from Auditor-General • Challenge of complying to PFMA and Treasury regulations. • Governance structures have collapsed • Council did not have the 7 members required during 2005/6 • Audit Committee did not function as required • Stakeholder dissatisfaction • DAC (Eg. technical non-compliance, non-delivery on mandate) • Artistic industry (Eg. calls for closure by some) • Community (Eg. irregular programme, etc.) • Tough environment • Hillbrow • Theatre industry is struggling

5. BackgroundPrinciples for restructuring the Windybrow • DAC remained committed to the continued existence of the Windybrow provided we fulfill the challenges set out on the previous slide. • We had until March 2006 in which to show significant improvement. • We needed to sort out compliance failures as a matter of urgency WITHOUT losing sight of organisational effectiveness. • It was important not to overreach our grasp BUT to make a real contribution. • We had the resources to restructure and re-launch. • The restructuring process was a priority of everyone at the Windybrow. • We needed to work as a team and stay focused on the plan. There is much to do; but we have the required support and resources

6. 1. Fix compliance • Reconstitute Council • Reconstitute Audit Committee • Establish Internal Audit function • Fix technical compliance issues • Restores confidence • Releases funds • Allows pursuit of strategy • 2. Develop cohesive strategy • High-level strategy • Operational strategy: • - Artistic • - Fundraising • - Marketing/PR • - Building/Theatre • - Accounting • Shared vision & mandate • Focuses our resources • Establishes success factors • 3. Implement strategy • Artistic • Fundraising • Marketing/PR • Building/Theatre • Accounting • Real action and outputs • Achievement of mandate • Significant contribution BackgroundRestructuring approach & outcomes

7. BackgroundRestructuring progress overview as at 31 March 2006 COMPLIANCE • All compliance issues raised in the 2004/5 audit report have been resolved. ORGANISATIONAL • Significant organisational improvements have been made on all fronts. • A cohesive strategy, with almost unanimous buy-in, has been formulated as set out in this document • The strategy is already being implemented.

8. ContextArts and culture policy directions “The role of the arts is to uplift our spirits, to entertain, to stimulate our minds, to excite critical thought and to enrich our lives by touching those areas of being beyond the reach of everyday discourse.” “We have striven to pursue policy options that can yoke the immense wealth that lies hidden in Africa and amongst her people’s diverse culture.” Minister of Arts and Culture, State Theatre, Pretoria, 4 June 2005 “The demands placed on our department were that we invest in the development of the arts and culture at community level by: Physical and social infra-structure development. Improving the organizational capacity of community based cultural bodies; Providing training for members of the community; and Identifying and developing local heritage for preservation. “ “Our international relations portfolio maintains numerous cultural agreements that have facilitated exchanges between South Africa and other countries. They have offered us opportunities to showcase South African talent in these countries, establish dialogue between our creative communities and have enriched us greatly. I will visit Ghana, Mali, Gabon, Ethiopia, Burkina Faso, Benin, Greece and Norway to sign cultural agreements with each of these countries this year. “ Minister of Arts and Culture, National Assembly, 18 May 2005. KEY WORDS: Africa, Development, Community-based, Diversity

9. Western South African Commercial Development South African African ContextPerforming arts policy playing field The state directs resources where the market fails to deliver public goods

10. ContextSA Performing arts industry realities • Institutions are concentrated in these categories: • State-funded professional and developmental • English commercial • Afrikaans commercial • Community-based • Tendency towards certain genres . • Economic dualism is mirrored by artistic/cultural dualism. • Lack of knowledge of Baumol’s cost disease and inadequate responses thereto. • Changing consumer tastes and the challenge of new media. • New mega-performance venues. • Cultural Institutions operate in isolation. The performing arts industry is tough BUT not hopeless

11. A large gap exists here! Western Commercial Development South African African ContextThe Johannesburg theatre scene Montecasino Carnival City Emperors Gold Reef CIVIC RAU (Afrikaans) Market Community Public entities must support policy BUT must also try to avoid duplication.

12. ContextWindybrow realities • Hillbrow/Berea at night is not for sissies! But this does not apply to the entire neighbourhood. • Hillbrow/Berea demographics suggests there is an audience that may be developed here. (135 000 residents, 70% employed, 70%+ satisfy their entertainment needs in Hillbrow/Berea). • Hillbrow/Berea is a diverse community from all over sub-Saharan Africa BUT +-50% are South African. • We can sustain a limited night-time programme during 2006/7. We will need to augment this by developing a significant day-time programme. • Theatre economics suggests that we should not be spending more than R250 000 per in-house production. Where a production has legs we should engage other theatre spaces like The Market, State Theatre, etc. • The Windybrow has become home to spoken word practitioners. • Our most accessible target markets are: • Hillbrow/Berea/Inner city community • Performance artists in search of African inspiration • Aspirant performance artists in need of development

13. Our focus will be on development and exchange with Africa. With measured efforts to commercialise what we develop. Western Montecasino Carnival City Emperors Gold Reef CIVIC Market RAU (Afrikaans) Community Commercial Development Windybrow South African African ContextWindybrow positioning This positioning is aligned to policy, community needs and is differentiated

14. StrategyHigh-level objectives VISION: The Windybrow Centre for the Arts is a well-governed, innovative and respected cultural institution that is an incubator for the development of high quality performance artists and productions that are inspired by Africa, its diversity and its rich store of cultural forms. • OUR MISSION IS TO: • Actively facilitate cultural exchange between theatres and theatre practitioners from South Africa and those from other parts of Africa by serving as an artistic point of contact. • Devise and deliver outstanding educational programmes for the development of performing arts skills in areas that are currently underserved. • Discover, develop, commission and stage productions that are artistically excellent, delight our audiences and are financially prudent. • Provide a full fledged rental space for productions that support the achievement of our vision. • Develop mutually beneficial artistic and organisational partnerships with our fellow cultural institutions, the City of Johannesburg and Gauteng Province. • Provide comfortable dining and bar facilities for our customers. • Achieve full compliance with legislation and the principles of good governance. • Develop our staff, forge a motivated team and create a workplace environment that is conducive to high productivity and accountability.

15. StrategyOperational objectives

16. Organisational scorecard

17. PA CEO CFO Marketing Manager Artistic Director • Finance Clerk • Public Relations Officer • FOH Manager • Receptionist • FOH Night Officer • Box office cashier • Cleaning X 6 • Gardening X 1 • Producer • Production Manager • Sound engineer • Lighting engineer • Stage manager • Stage manager trainee • Technical Manager Organisational structure Staff complement = 25 Additional headcount = 6

18. Strategic risksMitigation measures Inability to recover quickly from negative perceptions of Windybrow • An institution level marketing/PR campaign is planned. • We’ll adopt a cautious approach to night-time programming. • We’ll begin with day-time developmental programmes. • We’ll surprise with our compliance and other gains. Refurbishment will negatively affect programming • The theatre space is out of bounds for major works. • We’ll adopt a phased approach that minimises effect on performances. Further deterioration of Hillbrow/Berea area • This is unlikely since it is already quite bad. • The city has a strategy which is being effected. African interaction may be larger than planned Windybrow capability • Our approach is measured and will avoid creating undue expectations. • If our 2006/7 programme works we’ll work to raise funds for an expanded programme.

19. Financial Summary Governance Highlights • Completion of Compliance Documents • Completion of Systems & Controls • Unqualified Audit Opinion • Completion of Policy Manuals

20. Financial SummaryRevenue

21. Financial SummaryExpenditure

22. Commentary on ResultsIncome • The Coffee Shop sales increase by 691% due to increased activities • Ticket Sales increased by 2 780% due to increased activities • Venue Hire increased by 12%. Improved focus to utilise opportunities • Profit on sale of fixed asset was in respect of a claim on a lost item that was fully depreciated • Interest earned improved by 1 594%. Improved cashflow management

23. Commentary on ResultsExpenditure • Employee related costs decreased by 35,74% due to restructuring. • Director’s emoluments decreased by 71,57% of which 48,21% relates to a prior year provision reversed in the current year. The other 23,36% relates to a decreased package for the new Director. • Audit fees of the current financial year represents prior year internal and external audit fees. • Bad debts increased by 150% due to an inappropriate system of debt control. This represents a 17% write-off on Venue Hire.

24. Commentary on ResultsExpenditure • Bank charges increased by 50% due to an increase in bank transactions. • Depreciation increased by 11,54% due to fixed assets additions. • Consulting and professional fees increased by 98%.This was necessary to conform to various compliance issues and had a major impact on an unqualified audit opinion. • General expenses rose by 62%.A large proportion of this increase was incurred in theatre costs, motor vehicle expenses, municipal charges, etc. • An increase of 120% surplus funds is largely due to capacity constraints in the procurement department.