1. DEPARTMENT OF PUBLIC ENTERPRISES
ANNUAL REPORT 2000
PRESENTATION TO PUBLIC ENTERPRISES PORTFOLIO COMMITTEE
Venue: CAPE TOWN Date: 14TH November Time: 11h00 – 13h00

2. ANNUAL REPORT 2000 CONTENT VISION AND MISSION OBJECTIVES
ORGANISATIONAL STRUCTURE
INTERNAL AND EXTERNAL ACHIEVEMENTS
KEY PROGRAMS:
MINISTRY ACHIEVEMENTS
RESTRUCTURING OF SOE’s ACHIEVEMENTS
PERFORMANCE MONITORING ACHIEVEMENTS
STRATEGIC ANALYSIS ACHIEVEMENTS
ATERNATIVE SERVICE DELIVERY ACHIEVEMENTS
CORPORATE SERVICES ACHIEVEMENTS
FINANCIALS
KEY CHALLENGES

3. STATE OWNED ENTERPRISES GLOBALLY COMPETITIVE ENVIRONMENT PROMOTING
VISION
RESTRUCTUREd
STATE OWNED ENTERPRISES
IN A
GLOBALLY COMPETITIVE ENVIRONMENT PROMOTING
ECONOMIC GROWTH
AND A
BETTER LIFE FOR ALL

4. STATE OWNED ENTERPRISES
MISSION
DIRECT AND MANAGE
THE ACCELERATED
RESTRUCTURING OF
STATE OWNED ENTERPRISES
TO MAXIMIZE
SHAREHOLDER VALUE

5. OBJECTIVES
DEVELOP AND DIRECT COHERENT APPROACH TO THE RESTRUCTURING AND TRANSFORMATION OF SOE’s
CREATE AND IMPLEMENT RESTRUCTURING FRAMEWORKS
DEVELOP SYSTEMATIC METHOD FOR MONITORING SOE PERFORMANCE
DEVELOP A COMPREHENSIVE APPROACH TO ALTERNATIVE SERVICE DELIVERY

6. ORGANISATIONAL STRUCTURE

7. INTERNAL ACHIEVEMENTS (Some Highlights)
UNQUALIFIED AUDIT REPORT
INTERNAL AUDIT COMPONENT AND AUDIT COMMITTEE FORMED
PERFORMANCE MANAGEMENT SYSTEM
UPGRADING IT INFRASTRUCTURE
LOGIS PROVISIONING SYSTEM IN PLACE
HIV/AIDS COMMITTEE
GENDER COMMITTEE

8. EXTERNAL (Some Highlights)
Restructuring of Transnet’s debt burden
Eskom Conversion Act passed July
Divisionalisation of Portnet in preparation for Restructuring
Preparations and Cabinet approval for the introduction of SEP for Denel
Signing of Shareholder Compact with Transnet

9. MINISTRY ACHIEVEMENTS
Stakeholder participation and interaction with Government through effective use of the National Framework Agreement (NFA)
Created an enabling environment for SOEs to explore business opportunities in Africa and abroad, through political support and facilitation for participation in BiNational Commissions, access to major overseas Government contracts especially in the defense sector and support for NEPAD

10. MINISTRY ACHIEVEMENTS
Created capacity and institutional mechanisms to leverage resources and support from SOEs for Government’s Integrated Rural Development Strategy (IRDS)
Key milestones include:
Arrivia.kom:
The Botswana National Identification Project and the Malawi National Transport Information System
Spoornet:
Agreement was reached with CFM of Mozambique on the Ressano Garcia Rail Line
Locomotives leased to Pointe Noire in Congo Brazzaville and Sudan to help stimulate economic activities
No outstanding Parliamentary questions

11. RESTRUCTURING OF SOE’s ACHIEVEMENTS
Transport Sector:
Ports
Progress in finalising Ports policy enabling the restructuring of the port operations
Ports Policy Steering Committee produced Ports policy framework, public consultation to finalise policy year end
Separating Regulatory functions of the Ports Authority from the National Ports Authority –transition model until National Ports Authority is separated from Transnet
Apron Services
Divesture of 30% interest to an SEP transaction in progress
Spoornet
Restructuring model for Spoornet freight business submitted to Cabinet

12. ../ RESTRUCTURING cont. ACHIEVEMENTS
Energy Sector:
Eskom Conversion Act passed July converting Eskom into a public company
Rotek Industries
RFP’s have been issued to solicit interest from potential Strategic equity partners for Rotek Engineering and Roshcon
Defence Sector:
Denel
Cabinet approval for introduction of SEP
Transactions launched February 2001
Due diligence March – May 2001
BAE Systems and Turbomeca negotiations current

13. ../ RESTRUCTURING cont. ACHIEVEMENTS
Forestry Sector
Eastern Cape North transaction concluded August 2001
Kwazulu Natal transaction completed October 2001
Northern Province and Mpumalanga transaction in negotiation with final preferred bidders

14. IPO OFFICE ACHIEVEMENTS
Closed the sale of 3% equity stake to Ucingo
Finalising the transfer of 2% equity to the Trust representing Telkom employees.
Extensive media and education campaign ready for a launch
Structured the retail offer – targeting both HDI and General investors
Listing locations of Johannesburg and New York approved by Cabinet and discussions underway with JSE and NYSE
Made significant progress on the negotiations with the SEP to secure their support and protect government’s shareholder interest

15. TELCOMMS ACHIEVEMENTS
M-Cell
In July, Government sold 75 million shares in M-Cell shares for R2, 45 billion.
Significant progress on the Phase 2 sale include:
Performing both financial and legal due diligence.
Information memorandum & RFP is ready.
Share sale & purchase agreements prepared.

16. PERFORMANCE MONITORING ACHIEVEMENTS
Developed shareholder compacts
Signed by Transnet
Popularized protocol at SOEs
Developed and implemented the Financial Performance Evaluation model to evaluate SOEs
Developed a Board Appointment Policy as an instrument for good governance in SOEs

17. STRATEGIC ANALYSIS ACHIEVEMENTS
Donor Funds secured:
Corporate Governance study
Database Enhancement (for the SOE Audit)
ESOP Study
Ports Sector specialist
Internal Research:
Policy Framework
Study into Regulatory Regimes
Input into Ports Policy and Rail Policy

18. ALTERNATIVE SERVICE DELIVERY ACHIEVEMENTS
Translated the Communication strategy into a Campaign strategy for all ASD initiatives
Project to ensure that SOE Procurement Policy is aligned to Government policy, is currently underway

19. CORPORATE SERVICES ACHIEVEMENTS
Internal Policies Developed for DPE
Affirmative action and employment equity
Sexual harassment
Performance management
Leave
Job evaluation
Resettlement
Overtime
Cell phone usage
Working hours & working arrangement
transport
HIV/Aids awareness programs
Implementation of gender consideration programs
Implementation of a Senior Management System Service
Appointment of a Security Manager (M.I.S.S)

20. FINANCIALS SALIENT FEATURES Unqualified Audit Report
No roll-over of funds
Greater utilisation of donor funds
Despite underspending by R12.5 million, DPE achieved goals set out in 2000/01 business plan

21. ../ FINANCIALS cont. ACHIEVEMENTS Income statement 31 March 2001
Voted funds
47,079
Other receipts
000
Total income
EXPENDITURE
34,312
NET SURPLUS
12,767
TRANSFERRED TO NRF

22. ../ FINANCIALS cont. ACHIEVEMENTS Cash Flow Statement 31 March 2001
Cash Flows from Operating activities
R’000
Net cash flow – operating activities including capital items
10,994
Cash Flows from Investing activities
(3,996)
Purchase of Plant and Equipment
Net cash Flows from Operating and Investing activities
6,998
Cash Flows from Financing activities
(16,447)
Movements on receivables, pre-payments, advances, payables and provisions
Net increase /(decrease) in cash and cash equivalents
(9,449)
Cash and cash equivalents at beginning of period
(9,986)
Cash and cash equivalents at end of period
(19,435)

23. ../ FINANCIALS cont. ACHIEVEMENTS Balance Sheet as at 31 March 2001
ASSETS
R’000
Current Assets
26,440
Unauthorised, irregular, fruitless and wasteful expenditure
26,165
Receivables
207
Pre-payments and advances 68
Non-current assets
14,872,309
Investments
Total Assets
14,898,749
LIABILITIES
Current Liabilities
Cash and cash equivalents
19,435
Revenue to be surrendered ,0
Voted funds to be surrendered
6,998
Payables 7
Non-Current Liabilities
Provisions
Total liabilities

24. Stakeholder liaison and consultation
KEY CHALLENGES
Market volatility
Stakeholder liaison and consultation