gpw presentation portfolio committee on home affairs annual report for the year ended 31 march 2007...

GPW PresentationGPW PresentationPortfolio Committee on Home AffairsPortfolio Committee on Home Affairs

Annual Report for the Year ended 31 March 2007Annual Report for the Year ended 31 March 2007

Tom Moyane - CEOTom Moyane - CEOCape Town 12 February 2008Cape Town 12 February 2008

Government Printing Works

Overview of the Year under ReviewOverview of the Year under Review

1.1. Contextualise the strategic role and Contextualise the strategic role and position of GPW to service delivery position of GPW to service delivery programmes of DHA.programmes of DHA.

2.2. Review and report on the Corporitisation Review and report on the Corporitisation and transformation agenda within GPW.and transformation agenda within GPW.

3.3. Review the operating environment.Review the operating environment.

4.4. Review and report and the appropriate Review and report and the appropriate measures taken to address management measures taken to address management weaknesses identified by the Office of the weaknesses identified by the Office of the Auditor General during the audit in the Auditor General during the audit in the context of 3 above .context of 3 above .


MANDATEMANDATETo provide security printing needs of To provide security printing needs of

GovernmentGovernment

to print all enabling face value documents:to print all enabling face value documents: birth certificates, birth certificates, identification documents identification documents passports, passports, visa labelsvisa labels Permits and licenses.Permits and licenses.

to produce and distribute central to produce and distribute central Government information products:Government information products: Government gazettes,Government gazettes, Tender bulletinsTender bulletins Annual ReportsAnnual Reports


BACKGROUNDBACKGROUND GPW is a Trading Account operating within the DHA GPW is a Trading Account operating within the DHA

vote vote

Received R199 000Received R199 000

GPW operates purely on commercial basis :GPW operates purely on commercial basis :

Generates its revenue to defray costs.Generates its revenue to defray costs.

Surplus is paid over to Revenue Fund at National Surplus is paid over to Revenue Fund at National Treasury. Treasury.

Surplus retention is in place after consultation Surplus retention is in place after consultation with & approval by National Treasury.with & approval by National Treasury.


PRODUCTS AND SERVICESPRODUCTS AND SERVICES

Security Printing:Security Printing: Passports,Passports, ID’s,ID’s, Permits Permits licenseslicenses examinations (questions & memoranda), examinations (questions & memoranda), voters roll etcvoters roll etc Certificates (Road Worthy Certificates, etc)Certificates (Road Worthy Certificates, etc)

Distribution & dissemination of Government Distribution & dissemination of Government Information:Information:

Government Gazettes Government Gazettes Tender bulletinsTender bulletins Annual ReportsAnnual Reports Supply of stationerySupply of stationery


GPW STRATEGIC PLANGPW STRATEGIC PLAN


Strategic Objective # 1Strategic Objective # 1CorporitisationCorporitisation

• Preparation of a draft business casePreparation of a draft business case

• Prepare a draft Security printer’s billPrepare a draft Security printer’s bill

• Develop the Legal Transformation Process Develop the Legal Transformation Process towards reconstituted organisation as public towards reconstituted organisation as public entityentity

• Development of Holistic all encompassing Development of Holistic all encompassing conversion plan and accountabilitiesconversion plan and accountabilities

• Development of a new corporate identity and Development of a new corporate identity and logo around 'brand promise'logo around 'brand promise'


Strategic Objective # 2Strategic Objective # 2Organisational Alignment and StaffingOrganisational Alignment and Staffing

• Restructure organisation into a Restructure organisation into a flatter organisation – on going.flatter organisation – on going.

• Develop a health and safety strategyDevelop a health and safety strategy

• Conduct skills assessment – on goingConduct skills assessment – on going


Strategic Objective # 3Strategic Objective # 3Develop a Marketing StrategyDevelop a Marketing Strategy

• Quantitative Market Survey and AnalysisQuantitative Market Survey and Analysis

• Qualified and quantified present and Qualified and quantified present and future print market trendsfuture print market trends

• Detailed competitor analysisDetailed competitor analysis

• Benchmark against similar operations/ Benchmark against similar operations/ technologytechnology


Strategic Objective # 4Strategic Objective # 4Business Systems and Technology Business Systems and Technology

ImprovementsImprovements

• Select and implement effective and efficient Select and implement effective and efficient business systems – on goingbusiness systems – on going

• Upgrade infrastructure and environmentUpgrade infrastructure and environment

• Procurement of state of the art printing presses Procurement of state of the art printing presses

• Create capacity for proper Management Create capacity for proper Management Information and Business IntelligenceInformation and Business Intelligence


On Going Developments On Going Developments CorporitisationCorporitisation

Successful printing and delivery ofSuccessful printing and delivery of::

Draft Business Case Draft Business Case - completed- completed

Draft Security Printer’s Bill Draft Security Printer’s Bill - completed- completed

11stst Presentation to joint DPSA & Treasury Panel Presentation to joint DPSA & Treasury Panel - 7 May 2007- 7 May 2007

Review of the recommendations of the panel by TAPReview of the recommendations of the panel by TAP - On going- On going

22ndnd & Final Presentation to joint DPSA & Treasury & Final Presentation to joint DPSA & Treasury – – WaitingWaiting


Strategic Vulnerability AreasStrategic Vulnerability Areas

People People Staff turnover - inability to attract the best skills Staff turnover - inability to attract the best skills

including artisans, remuneration incompatible including artisans, remuneration incompatible with industry norms.with industry norms.

ManagementManagement Leadership in terms of strategic & operational Leadership in terms of strategic & operational

depth lacking.depth lacking.TechnologyTechnology

Very old machines – average age +40 years Very old machines – average age +40 years (efficiency and quality affected and compromised)(efficiency and quality affected and compromised)

Location Location Current location not ideal – very old & Current location not ideal – very old &

inappropriateinappropriate


AUDIT OPINIONAUDIT OPINION

Auditor General expressed an Auditor General expressed an ADVERSE ADVERSE AUDITAUDIT opinion for the financial year ended opinion for the financial year ended 31/03/07.31/03/07.


MATTERS THAT GAVE RISE TO THE MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION”“ADVERSE OPINION”

Management of debtors.Management of debtors. Inventory.Inventory. Creditors (Payables).Creditors (Payables). Plant and Property.Plant and Property. Investigation.Investigation. Basic Conditions of Employment.Basic Conditions of Employment. Information Systems Control and Communication.Information Systems Control and Communication. Control Environment.Control Environment.



Management of debtorsManagement of debtors::

Lack of effective and efficient steps to collect Lack of effective and efficient steps to collect outstanding debtsoutstanding debts

Corrective measures:Corrective measures: Identity top 10 defaulter with a view to take Identity top 10 defaulter with a view to take

corrective measures on paymentscorrective measures on payments Verification of the correctness of invoices issuedVerification of the correctness of invoices issued Monthly letters of demand and acknowledgement Monthly letters of demand and acknowledgement

of debt to be sent Departmental CFO’s and DG’sof debt to be sent Departmental CFO’s and DG’s Last resort - consider termination of services to Last resort - consider termination of services to

defaulting departments defaulting departments OOutstanding debt as of 31utstanding debt as of 31stst March 2007 – March 2007 – R135,4 millionR135,4 million To date Jan 2008 outstanding debt - R138,3*To date Jan 2008 outstanding debt - R138,3*



Management of debtors - continuedManagement of debtors - continued

Suspense account resolved on a monthly basisSuspense account resolved on a monthly basis Debtors age analysis exceeded approved credit limitsDebtors age analysis exceeded approved credit limits Policy on long outstanding debtorsPolicy on long outstanding debtors Debtors reconciliations & systems generated age analysis do not agree Debtors reconciliations & systems generated age analysis do not agree

at year endat year end

Corrective measures:Corrective measures:

On a daily basis these accounts will be cleared as and when departments On a daily basis these accounts will be cleared as and when departments provide remittance advices. provide remittance advices.

Request collaboration of departmental CFO’s to submit remittance Request collaboration of departmental CFO’s to submit remittance advises.advises.

GPW will request departments to apply and agree on credit limits during GPW will request departments to apply and agree on credit limits during the course of the year.the course of the year.

Formal policy on outstanding debts is in place and signed off 2006 and Formal policy on outstanding debts is in place and signed off 2006 and will be rigorously implementedwill be rigorously implemented

Age analysis on PECAS is real time!Age analysis on PECAS is real time!



Inventory Management Inventory Management

Thorough analysis of the system and processes Thorough analysis of the system and processes will be done by the service provider to address will be done by the service provider to address inconsistencies between report and job tickets.inconsistencies between report and job tickets.

GPW relies on the PECAS software to evaluate its GPW relies on the PECAS software to evaluate its semi-finished products which are reflected in semi-finished products which are reflected in WIPWIP

In the interim the profit margin on labour will be In the interim the profit margin on labour will be removed from WIPremoved from WIP



PayablesPayables

To comply with IAS 39 on payables not recognised at To comply with IAS 39 on payables not recognised at fair value, the follow will be done:fair value, the follow will be done: GPW will bring consultants to train our people in order to GPW will bring consultants to train our people in order to

address this problem.address this problem. Reconciliation of goods received account will be finalised Reconciliation of goods received account will be finalised

by the end of February 2008.by the end of February 2008. Payment of all the suppliers within 30 days will be Payment of all the suppliers within 30 days will be

implemented with immediate effect.implemented with immediate effect. Appoint a person to manage Creditors by April 2008Appoint a person to manage Creditors by April 2008



Property, Plant and EquipmentProperty, Plant and Equipment

A thorough stock take will be conducted on assets for A thorough stock take will be conducted on assets for revaluation.revaluation.

Write off and dispose of all unserviceable or obsolete Write off and dispose of all unserviceable or obsolete equipment.equipment.

Update the asset register to be completed by the 28 Update the asset register to be completed by the 28 March 2008.March 2008.

In the next financial year all assets will be bar-coded.In the next financial year all assets will be bar-coded.



Special InvestigationSpecial Investigation On-goingOn-going Gobodo Forensic Report pointed towards Gobodo Forensic Report pointed towards

‘possible’ wasteful or fruitless expenditure ‘possible’ wasteful or fruitless expenditure occurred between 1 April 2003 and 31 December occurred between 1 April 2003 and 31 December 2004.2004.

Management has sought second opinion from Management has sought second opinion from Special Investigation Unit (SIU) to check on Special Investigation Unit (SIU) to check on possible materiality if any, in order to proceed possible materiality if any, in order to proceed with the final closurewith the final closure..



Basic Condition of Employment ActBasic Condition of Employment Act Compliance to Section D.2(c) overtime concernCompliance to Section D.2(c) overtime concern

Major contributory factors:Major contributory factors: Staff turnover and high levels of resignationsStaff turnover and high levels of resignations Shortages in qualified artisans and machine Shortages in qualified artisans and machine

mindersminders Incompatible remuneration policy Incompatible remuneration policy Pressure to deliver on time exacerbates Pressure to deliver on time exacerbates

need to increase overtime in contravention need to increase overtime in contravention of section D.2(c).of section D.2(c).



Audit Committee & Internal AudiAudit Committee & Internal Audi

Fraud prevention planFraud prevention plan– A fraud prevention committee has been A fraud prevention committee has been

formed to implement the fraud prevention formed to implement the fraud prevention policy which was officially signed off in policy which was officially signed off in November 2007.November 2007.

– In December 2007 a draft Whistle blowing In December 2007 a draft Whistle blowing policy completed which has been circulated policy completed which has been circulated for inputs before being signed off and for inputs before being signed off and implementation.implementation.



Audit Committee & Internal Audit - Audit Committee & Internal Audit - contcont Risk AssessmentRisk Assessment

– The Audit Committee approved the previous risk The Audit Committee approved the previous risk assessment plan.assessment plan.

– A risk plan was approved in November 2007. A risk plan was approved in November 2007.

Audit committee and internal functionAudit committee and internal function

– In March 2007 a fully fledged GPW Audit Committee In March 2007 a fully fledged GPW Audit Committee was established and has met regularly.was established and has met regularly.



Internal Control – Information Systems Internal Control – Information Systems & Communication& Communication

- Specific initiatives have been undertaken to Specific initiatives have been undertaken to improve IT control and communication improve IT control and communication environmentenvironment

- A strategic business plan has been formulated – A strategic business plan has been formulated – circulated for comments, discussion and adoption circulated for comments, discussion and adoption by Exco before end of this financial year. by Exco before end of this financial year.


Achievements 2006/07Achievements 2006/07

Successful printing and delivery ofSuccessful printing and delivery of::South African Examinations for Grades 9,10, South African Examinations for Grades 9,10,

11 & 12 (11 & 12 (Exam papersExam papers))

QtyQty RR

Limpopo Limpopo 10,5mn10,5mn17,01mn17,01mn

North WestNorth West 0,92mn0,92mn 1,48mn 1,48mn

GautengGauteng 1,13mn1,13mn 3,87mn3,87mn

Total Revenue generatedTotal Revenue generated 22.36mn22.36mn



Successful printing and delivery Successful printing and delivery

ofof::

Ministry of Finance (LesothoMinistry of Finance (Lesotho))

Revenue StampsRevenue Stamps 8,500 sheets8,500 sheets R130 462,00R130 462,00



Passport productionPassport production2006/072006/07 2005/062005/06

QtyQty 1 041 478 1 041 478 1 013 724 1 013 724

Value Value R18 746 604R18 746 604 R16 006 702 R16 006 702

Identity Cards producedIdentity Cards produced 2006/072006/07

2005/062005/06QtyQty 2 079 114 2 079 114 2 255 2 255

225 225 Value Value R9 480 760 R9 480 760 R9 020 R9 020

900900



Procurement - Contract Printing Procurement - Contract Printing

OrdersOrders ValueValue %% BEEBEE 720720 R89,4 mnR89,4 mn 9292 Non BEENon BEE 66 66 R 7.7 mnR 7.7 mn 8 8

To date BEETo date BEE R130mR130m

Procurement – Print BranchProcurement – Print Branch

ValueValue %% In HouseIn House R168,6 mnR168,6 mn 6464 OutsourceOutsource R 97.1 mnR 97.1 mn 3636


BALANCE SHEET BALANCE SHEET AS AT 31 MARCH 2007AS AT 31 MARCH 2007

20072007 20062006R’000R’000 R’000R’000

ASSETSASSETS Non-current assetsNon-current assets 25 520 25 520 35 723 35 723

Property, plant & equipmentProperty, plant & equipment 25 520 25 520 35 723 35 723

CURRENT ASSETSCURRENT ASSETS 406 004406 004 392 488392 488InventoriesInventories 96 022 96 022 103 338 103 338Trade & other receivablesTrade & other receivables 143 025 143 025 170 941 170 941Cash & Cash equivalentsCash & Cash equivalents 166 957 166 957 118 209 118 209

Total AssetsTotal Assets 431 524431 524 428 211428 211

EQUITY AND LIABILITIESEQUITY AND LIABILITIES

FundsFunds 346 314346 314 346 093346 093Capital fundCapital fund 189 098 189 098 189 098 189 098Machinery & Equip FundMachinery & Equip Fund 152 911 152 911 95 932 95 932Funds distr to National TreasuryFunds distr to National Treasury 4 305 4 305 61 063 61 063

Current LiabilitiesCurrent Liabilities 85 210 85 210 82 118 82 118Trade & other payablesTrade & other payables 78 782 78 782 74 249 74 249ProvisionsProvisions 6 428 6 428 7 869 7 869Total Equity & LiabilitiesTotal Equity & Liabilities 431 524431 524 428 211428 211


COMPARATIVE ANALYSIS COMPARATIVE ANALYSIS 2005/06 vs 2006/072005/06 vs 2006/07

Bank BalanceBank Balance 2006/072006/07 R166,9 millionR166,9 million 2005/062005/06 R118,2 millionR118,2 million GrowthGrowth 29,1%29,1%

ProfitabilityProfitability 2006/072006/07 R61,0 millionR61,0 million 2005/062005/06 R 4,3 millionR 4,3 million DecreaseDecrease (92,9)%(92,9)%

DebtorsDebtors 2006/072006/07 R143,0 millionR143,0 million 2005/062005/06 R170,9 millionR170,9 million Decrease in debts Decrease in debts (16,3)%(16,3)%


THANK YOUTHANK YOU


gpw presentation portfolio committee on home affairs annual report for the year ended 31 march 2007...

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