Annual Report 2016/17 Financial Year Presentation to the Portfolio Committee by Ms Thandi Moyo Acting Chief Executive Officer 05 October 2017 Celebrating 125 years

Contents History of the Government Printing Works Legislative Mandate Contribution to National Outcomes Strategic Outlook Summary of Performance (achieved and not achieved targets) Summary of not achieved targets and causes Financial performance Audit opinion Challenges Key priorities for 2018/19 APP Celebrating 125 years

Legislative Mandate On 9 October 2009, GPW became a Government Component* reporting to the Minister of Home Affairs with oversight by the Parliamentary Portfolio Committee Form To deliver security printing and related services to the Government of South Africa Mandate *A new form of Entity in terms of Schedule 3 of the Public Service Act of 1994 as amended; Section 7(5)(c) Celebrating 125 years

Contribution to national outcomes Government Printing Works strives to make a significant contribution to the national outcomes of government including the following: Create a better South Africa and contribute to a better and safer Africa and the world. An efficient, effective and development oriented public service and an empowered, fair and inclusive citizenship. Decent employment through inclusive economic growth. A skilled and capable workforce to support an inclusive growth path. Celebrating 125 years

Strategic Outlook Mission Vision Values Reliability Integrity Accuracy Stakeholder satisfaction Mission To provide cost effective, reliable and timeous services in security printing to all spheres of Government To provide the public with valuable information To disseminate Government information through technology, innovation and service excellence Vision To be the State’s mandated security printer Celebrating 125 years

History of the Government Printing Works Celebrating 125 years

Summary of Performance Financial Year Total Targets Achieved Not Achieved % Achieved 2016/17 28 22 6 79% Branch Total Targets Achieved Not Achieved % Achieved Production and Operations 4 3 1 75% Strategic Management 9 7 2 78% Financial Services 10 70% Human Resources 5 100% TOTAL 28 22 6 79%

Reasons for non-achievement Targets not achieved Planned Target Actual Achievement Reasons for non-achievement Branch: Production and Operations 3 new equipment items procured according to the recapitalization plan 2 equipment items procured Tender process for 3rd Kraft Press completed but not awarded due to the bid price exceeding the budget by 200% Branch: Strategic Management Implement security risk management according to approved plan 80% implemented 11% of the items was dependent on the completion of the construction of the MasterPlan and GPW Head office The remaining 9% of the items was in progress at 31 March 2017 90% of annual internal audit plan, as approved by the audit committee implement 71% of the annual audit plan implemented Audits relating to construction, eGazette and ICT could not be completed due to capacity challenges within the Internal audit Unit Audit for Business continuity could not be conducted as the plan was not finalized‘ Audit of transport and logistics was in progress

Targets not achieved (cont…) Planned Target Actual Achievement Reasons for non-achievement Branch: Financial Services Maintain clean audit opinion for 2015/16 Unqualified with emphasis of matter The GPW incurred R36-million in irregular expenditure relating to the appointment of a construction service provider for Pavilion 3 Conclude SLA’s with 10 additional external customers and 10 supplier 9 SLA’s with external customers 10 SLA’s with suppliers The GPW only signed up 9 additional customers during the year Submit all the required and identified documentation for the establishment of a State Owned Company to Parliament for approval Target partially achieved and to be tabled to Parliament in 2017 The Business Case, Socio-Economic Impact Assessment (SEIA) were approved Draft SOC Bill approved by the Minister and on route to Cabinet for gazetting for public comment

Financial Performance Statement of Profit or Loss and other comprehensive income Statement of Financial Position 2016/17 FY R’000 Revenue 1 432 037 Cost of sales (713 445) Gross Profit 718 592 Other income 81 846 Operating expenses (208 481) Surplus for the year 591 957 2016/17 FY R’000 Non-Current Assets 829 948 Current Assets 2 347 193 Total Assets 3 177 141 Net Assets 2 414 645 Non-current Liabilities 561 755 Current Liabilities 200 741 Total Net Assets and Liabilities

Revenue growth (2014/15 to 2016/17) Revenue grew as follows: 11% from 2014/15 to 2015/16 and 21% from 2015/16 to 2016/17

Audit Opinion The GPW received an unqualified audit opinion for the 2016/17 financial year. The matters of emphasis relates to irregular expenditure classified as follows: Reasons for the irregular expenditure 2016/17 R’000 2015/16 Reasons recorded for not obtaining three quotations is not justifiable 394 1 005 No reasons for recorded for obtaining three quotations 127 - Deviations from competitive bidding not justifiable to AGSA 12 717 5 464 Request for quotations did not include a specific condition and specify the minimum threshold for local production and content 338 Quotations not evaluated using the prescribed preference points system 911 B-BBEE points awarded without verification of supporting documentation (Accumulation of GVK contract for Pavilion 3 ending 2017) 135 162 24 949 TOTAL 148 738 32 329 The cumulative amount relating to irregular expenditure is R181,067,000

Key challenges in the past 12 months Leadership, management capacity and skills at SMS level. Intervention: disciplinary action instituted, mentoring, training and close performance monitoring through regular assessments and through EXCO bi-weekly and MANCO monthly meetings) 2. GPW’s compliance with requirements of National Treasury with regards to Supply Chain Management, Human Resources and Labour Relations. (duration varying from 3-5 years) Intervention: Compliance register place and monitored monthly and quarterly by CFO and Internal Audit. Regular reports considered at every EXCO and MANCO meetings. 3. Organisational structure (job levels and remuneration levels) not aligned to printing and packaging industry resulting in a lot of unhappiness, low staff morale and conflict and challenges with organized labour Intervention: Cabinet Memo submitted to Ministry for tabling for approval for a GPW Special Organisational Dispensation by DPSA. GPW have commissioned a service provider to do benchmarking of GPW organizational and remuneration structure which will be implemented as part of the OSD, once approved by Cabinet. (Approval Oct 2017 and implement 1 April 2018)

Key priorities for 2018/19 APP Role players Project manage the RSA e-passport project for delivery in March 2019 (2017-2019) GPW, DHA, SSA, GCIS, ACSA , DA&C, and others Curb irregular expenditure and achieve a clean audit (ongoing) GPW, NT Implement a new GPW Organisational structure in line with printing and packaging industry (1st draft benchmarking report due at end October) GPW Enhance and strengthen security in the production floor (2017/18 and 2018/19) GPW, SSA Regulations approved for state security printing and digitization (2017) DHA, SSA Ongoing and annual vetting of staff, security personnel and service providers Operational and secure dispatch centre for security printing  (Visagie street Pavillion 3) (December 2017 – February 2018)

Key priorities for 2018/19 APP Role players Occupation of GPW Administration block (Head office) GPW, DPW Begin construction of GPW masterplan (final completion planned for 2020/2021) Localisation strategy of the production equipment and consumables GPW, DTI, DEPT OF SMALL BUSINESS Marketing plan for implementation of Africa footprint strategy - Finalise Swaziland - Follow up on discussions with Mauritius and finalise the MOU between GPW RSA and GPW Mauritius - Pursue additional 1 or 2 more country. GPW, DIRCO Automate finance and HR administration processes GPW

Thank You Celebrating 125 years