2. GPW Presentation Portfolio Committee on Home Affairs Annual Report for the Year ended 31 March 2007 Tom Moyane - CEO Cape Town 12 February 2008 Government Printing Works

3. Overview of the Year under Review 1. Contextualise the strategic role and position of GPW to service delivery programmes of DHA. 2. Review and report on the Corporitisation and transformation agenda within GPW. 3. Review the operating environment. 4. Review and report and the appropriate measures taken to address management weaknesses identified by the Office of the Auditor General during the audit in the context of 3 above. Government Printing Works

4. MANDATE  To provide security printing needs of Government  to print all enabling face value documents:  birth certificates,  identification documents  passports,  visa labels  Permits and licenses.  to produce and distribute central Government information products:  Government gazettes,  Tender bulletins  Annual Reports Government Printing Works

5. BACKGROUND  GPW is a Trading Account operating within the DHA vote  Received R199 000  GPW operates purely on commercial basis :  Generates its revenue to defray costs.  Surplus is paid over to Revenue Fund at National Treasury.  Surplus retention is in place after consultation with & approval by National Treasury. Government Printing Works

6. PRODUCTS AND SERVICES  Security Printing:  Passports,  ID’s,  Permits  licenses  examinations (questions & memoranda),  voters roll etc  Certificates (Road Worthy Certificates, etc)  Distribution & dissemination of Government Information:  Government Gazettes  Tender bulletins  Annual Reports  Supply of stationery Government Printing Works

7. GPW STRATEGIC PLAN Government Printing Works

8. Strategic Objective # 1 Corporitisation Preparation of a draft business case Preparation of a draft business case Prepare a draft Security printer’s bill Prepare a draft Security printer’s bill Develop the Legal Transformation Process towards reconstituted organisation as public entity Develop the Legal Transformation Process towards reconstituted organisation as public entity Development of Holistic all encompassing conversion plan and accountabilities Development of Holistic all encompassing conversion plan and accountabilities Development of a new corporate identity and logo around 'brand promise' Development of a new corporate identity and logo around 'brand promise' Government Printing Works

9. Strategic Objective # 2 Organisational Alignment and Staffing Restructure organisation into a flatter organisation – on going. Restructure organisation into a flatter organisation – on going. Develop a health and safety strategy Develop a health and safety strategy Conduct skills assessment – on going Conduct skills assessment – on going Government Printing Works

10. Strategic Objective # 3 Develop a Marketing Strategy Quantitative Market Survey and Analysis Quantitative Market Survey and Analysis Qualified and quantified present and future print market trends Qualified and quantified present and future print market trends Detailed competitor analysis Detailed competitor analysis Benchmark against similar operations/ technology Benchmark against similar operations/ technology Government Printing Works

11. Strategic Objective # 4 Business Systems and Technology Improvements Select and implement effective and efficient business systems – on going Select and implement effective and efficient business systems – on going Upgrade infrastructure and environment Upgrade infrastructure and environment Procurement of state of the art printing presses Procurement of state of the art printing presses Create capacity for proper Management Information and Business Intelligence Create capacity for proper Management Information and Business Intelligence Government Printing Works

12. On Going Developments Corporitisation Successful printing and delivery of :  Draft Business Case - completed  Draft Security Printer’s Bill - completed  1 st Presentation to joint DPSA & Treasury Panel- 7 May 2007  Review of the recommendations of the panel by TAP- On going  2 nd & Final Presentation to joint DPSA & Treasury – Waiting Government Printing Works

13. Strategic Vulnerability Areas  People  Staff turnover - inability to attract the best skills including artisans, remuneration incompatible with industry norms.  Management  Leadership in terms of strategic & operational depth lacking.  Technology  Very old machines – average age +40 years (efficiency and quality affected and compromised)  Location  Current location not ideal – very old & inappropriate Government Printing Works

14. AUDIT OPINION  Auditor General expressed an ADVERSE AUDIT opinion for the financial year ended 31/03/07. Government Printing Works

15. MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION”  Management of debtors.  Inventory.  Creditors (Payables).  Plant and Property.  Investigation.  Basic Conditions of Employment.  Information Systems Control and Communication.  Control Environment. Government Printing Works

16. MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION”  Management of debtors :  Lack of effective and efficient steps to collect outstanding debts  Corrective measures:  Identity top 10 defaulter with a view to take corrective measures on payments  Verification of the correctness of invoices issued  Monthly letters of demand and acknowledgement of debt to be sent Departmental CFO’s and DG’s  Last resort - consider termination of services to defaulting departments  O utstanding debt as of 31 st March 2007 – R135,4 million  To date Jan 2008 outstanding debt - R138,3* Government Printing Works

17. MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION”  Management  Management of debtors - continued  Suspense  Suspense account resolved on a monthly basis  Debtors  Debtors age analysis exceeded approved credit limits  Policy  Policy on long outstanding debtors  Debtors  Debtors reconciliations & systems generated age analysis do not agree at year end  Corrective  Corrective measures:  On  On a daily basis these accounts will be cleared as and when departments provide remittance advices.  Request  Request collaboration of departmental CFO’s to submit remittance advises.  GPW  GPW will request departments to apply and agree on credit limits during the course of the year.  Formal  Formal policy on outstanding debts is in place and signed off 2006 and will be rigorously implemented  Age  Age analysis on PECAS is real time! Government Printing Works

18. MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION”  Inventory  Inventory Management  Thorough  Thorough analysis of the system and processes will be done by the service provider to address inconsistencies between report and job tickets.  GPW  GPW relies on the PECAS software to evaluate its semi-finished products which are reflected in WIP  In  In the interim the profit margin on labour will be removed from WIP Government Printing Works

19. MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION”  Payables  To  To comply with IAS 39 on payables not recognised at fair value, the follow will be done:  GPW  GPW will bring consultants to train our people in order to address this problem.  Reconciliation  Reconciliation of goods received account will be finalised by the end of February 2008.  Payment  Payment of all the suppliers within 30 days will be implemented with immediate effect.  Appoint  Appoint a person to manage Creditors by April 2008 Government Printing Works

20. MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION”  Property,  Property, Plant and Equipment  A  A thorough stock take will be conducted on assets for revaluation.  Write  Write off and dispose of all unserviceable or obsolete equipment.  Update  Update the asset register to be completed by the 28 March 2008.  In  In the next financial year all assets will be bar-coded. Government Printing Works

21. MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION”  Special  Special Investigation On-going On-going Gobodo Gobodo Forensic Report pointed towards ‘possible’ wasteful or fruitless expenditure occurred between 1 April 2003 and 31 December 2004. Management Management has sought second opinion from Special Investigation Unit (SIU) to check on possible materiality if any, in order to proceed with the final closure. Government Printing Works

22. MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION”  Basic  Basic Condition of Employment Act  Compliance  Compliance to Section D.2(c) overtime concern Major contributory factors:  Staff  Staff turnover and high levels of resignations  Shortages  Shortages in qualified artisans and machine minders  Incompatible  Incompatible remuneration policy  Pressure  Pressure to deliver on time exacerbates need to increase overtime in contravention of section D.2(c). Government Printing Works

23. MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION”  Audit  Audit Committee & Internal Audi Fraud prevention plan –A –A fraud prevention committee has been formed to implement the fraud prevention policy which was officially signed off in November 2007. –In –In December 2007 a draft Whistle blowing policy completed which has been circulated for inputs before being signed off and implementation. Government Printing Works

24. MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION”  Audit  Audit Committee & Internal Audit - cont  Risk  Risk Assessment –The –The Audit Committee approved the previous risk assessment plan. –A –A risk plan was approved in November 2007.  Audit  Audit committee and internal function –In –In March 2007 a fully fledged GPW Audit Committee was established and has met regularly. Government Printing Works

25. MATTERS THAT GAVE RISE TO THE “ADVERSE OPINION”  Internal  Internal Control – Information Systems & Communication -Specific -Specific initiatives have been undertaken to improve IT control and communication environment -A -A strategic business plan has been formulated – circulated for comments, discussion and adoption by Exco before end of this financial year. Government Printing Works

26. Achievements 2006/07 Successful printing and delivery of :  South African Examinations for Grades 9,10, 11 & 12 ( Exam papers ) QtyR  Limpopo 10,5mn17,01mn  North West0,92mn 1,48mn  Gauteng1,13mn 3,87mn Total Revenue generated 22.36mn Total Revenue generated 22.36mn Government Printing Works

27. Achievements 2006/07 Successful printing and delivery of :  Ministry of Finance (Lesotho )  Revenue Stamps8,500 sheetsR130 462,00 Government Printing Works

28. Achievements 2006/07  Passport production 2006/07 2005/06  Qty 1 041 478 1 013 724  Value R18 746 604 R16 006 702  Identity Cards produced 2006/072005/06  Qty 2 079 114 2 255 225  Value R9 480 760 R9 020 900 Government Printing Works

29. Achievements 2006/07  Procurement - Contract Printing OrdersValue%  BEE720R89,4 mn92  Non BEE 66R 7.7 mn 8  To date BEER130m  Procurement – Print Branch Value%  In HouseR168,6 mn64  OutsourceR 97.1 mn36 Government Printing Works

30. BALANCE SHEET AS AT 31 MARCH 2007 20072006 R’000R’000 ASSETS Non-current assets 25 520 35 723 Property, plant & equipment 25 520 35 723 CURRENT ASSETS406 004392 488 Inventories 96 022 103 338 Trade & other receivables 143 025 170 941 Cash & Cash equivalents 166 957 118 209 Total Assets431 524428 211 EQUITY AND LIABILITIES Funds 346 314346 093 Capital fund 189 098 189 098 Machinery & Equip Fund 152 911 95 932 Funds distr to National Treasury 4 305 61 063 Current Liabilities 85 210 82 118 Trade & other payables 78 782 74 249 Provisions 6 428 7 869 Total Equity & Liabilities431 524428 211 Government Printing Works

31. COMPARATIVE ANALYSIS 2005/06 vs 2006/07  Bank Balance  2006/07R166,9 million  2005/06R118,2 million  Growth29,1%  Profitability  2006/07R61,0 million  2005/06R 4,3 million  Decrease(92,9)%  Debtors  2006/07R143,0 million  2005/06R170,9 million  Decrease in debts (16,3)% Government Printing Works

32. THANK YOU Government Printing Works