REPUBLIC OF SOUTH AFRICA - Government Printing Works

REPUBLIC OFSOUTH AFRICA

GOVERNMENT PRINTING WORKSANNUAL REPORT 2010 - 2011

governmentprintingGovernment Printing WorksDepartment:

REPUBLIC OF SOUTH AFRICA

governmentprintingGovernment Printing WorksDepartment:

REPUBLIC OF SOUTH AFRICA

ANNUAL REPORT 2010 - 2011GOVERNMENT PRINTING WORKS

04 Overview

10 About GPW

12 GPW Service Offerings

14 History and Milestones

22 Our People

24 Our Future

28 Annual Financial Statements

62 Performance Report

72 Human Resources Report

Contents

2 GOVERNMENT PRINTING WORKS – ANNUAL REPORT 2010 - 2011

Did you know?

The GPW has the most modern laser imaging

technology in the world. This technology is used for,

amongst others, the production of laser perforations

in paper-based documents and personalisation of

passports and identification cards.

Chapter 01OVERVIEW

Esteemed Minister of Home Affairs, Dr NC Dlamini-Zuma gives an outline on the progress made over the past year by the GPW, while GPW’s acting CEO, JP Engelbrecht provides further detail on how the organisation is meeting its overall goals and overcoming challenges.

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Preface by Dr. N.C. Dlamini-Zuma, MP, Minister of Home Affairs

The Government Printing Works (GPW) is key to the delivery of security printing and related services to the Department of Home Affairs (DHA) and to other government departments. The security of the state and of individuals depends on the country having secure identification systems and secure documents are an essential component of such systems. In the international arena, the security of documents such as passports and visa permits is critical to South Africa’s credibility and image and the ease with which South Africans can travel abroad.

To this end, the GPW has made substantial progress by launching a programme to modernise its equipment and establish a secure, new production plant.

During the previous financial year, the GPW developed a detailed action plan to address specific shortcomings in the area of financial management, which were identified by the Auditor-General. Progress with this action plan continued with further refinement of its financial management processes during the 2010/2011 financial year, resulting in the GPW again receiving an unqualified audit opinion from the Auditor-General.

In support of its business operations improvement strategy, the GPW commenced during 2010 with the development and implementation of an Enterprise Resource Planning (ERP) system, which includes a new activity based costing system that will enable the GPW to accurately cost its services. This project is on track for completion by April 2012.

Substantial progress has been made with the GPW’s re-capitalisation programme, in line with its strategic objectives. This equipment modernisation strategy will result in the deployment of modern, high-speed production equipment and the mechanisation of selected existing manual processes. A significant development in this regard was the procurement of a sophisticated new sheet-fed offset printing press with capacity to incorporate advanced security features into paper based documents. Commissioning of this machine will make the GPW independent pertaining to the printing of high value security documents, such as passport visa sheets.

OVERVIEW


The relocation to a new plant that will ensure the GPW’s operational effectiveness is a critical requirement for the institution’s development towards establishing a profitable government component. During the year under review, the Department of Public Works (DPW) completed a feasibility study at the erstwhile Government Garage premises in Visagie Street, Pretoria and recommended the site to be suitable for providing in the GPW’s future spatial needs. Funds for the move have been approved and further development of the site is scheduled to commence during the next financial year.

The attraction of skilled personnel, particularly within the technical grades, remained one of the GPW’s main challenges. However, a new personnel structure has been approved with effect from 1 April 2010 and the majority of the newly created posts have been job evaluated during the year under review. This new structure, together with provision to improve its remuneration structures over the next three financial years, will serve as basis for the GPW’s future recruitment drives.

N.C. Dlamini-Zuma

Minister of Home Affairs

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The GPW has a long history of manufacturing security printed matter and related services of the highest quality for government institutions.

Since its establishment as a trading entity during 1999 when the Public Finance Management Act came into effect, the institution has been operating on business principles, being to generate sufficient revenue from services rendered to defray its operational expenditure.

However, with the development of the government component as a new form of entity in terms of Schedule 3 of the Public Service Act – Section 7(5)(c), which came into effect on 1 April 2008, this new format of entity was considered to be a more suitable framework for manufacturing concerns such as the GPW. A conversion project subsequently commenced during 2008, which culminated in the GPW finally being established as government component within the mandate and full control of the state during October 2009. This conversion was to allow the institution to start operating on sound business principles, setting it on the path towards full profitability within a three-year cycle starting April 2010.

Looking forward, the GPW’s goal is to obtain total customer satisfaction with its products and services, produced by a qualified and motivated workforce that has access to modern equipment. This goal in particular emphasises the GPW’s commitment towards the following aspects:

Equipment modernisation programme.

As the complexity of requirements related to the manufacturing of identification-, travel- and other face value documents grows, the associated demand for sophisticated production equipment also increases.

The GPW had not fully re-capitalised its machinery and equipment for many years, resulting in a production plant that consisted of outdated tools, which lacked the capacity to produce modern security documents.

The GPW has developed an asset replacement programme with the objective to replace its dilapidated production equipment over the MTEF period. Substantial progress in this regard has resulted in the institution presently operating one of the most advanced passport manufacturing facilities in the world. Other achievements include the commissioning of laser imaging technology with the capacity to incorporate unique and high-value security features into documents at economical costs. The procurement of a new sheet-fed offset printing press during the financial year is also considered an important addition to the GPW’s technology, as it will provide in-house capacity to print paper based security documents, such as passport visa sheets.

Pertaining to card personalisation technology, a new South African crew member card was developed and introduced during September 2010. The card is a high security document, issued to airline crew members in conformity with standards set by the International Civil Aviation Organisation (ICAO). The new card, considered to be a milestone on the African continent, is equipped with contactless technology and is recognised to be equivalent to a biometric electronically enabled passport.

CHIEF EXECUTIVE OFFICER’S REPORT


The GPW will continue with its asset replacement programme towards creating internal capacity to provide its customers with innovative, customised solutions to their printing requirements.

Development of a new production facility.

Safeguarding of sensitive printed matter during its production cycle is considered a cornerstone for the provision of security printing services. In this regard, the GPW approached the DPW to assist with development of a new site, which in addition to basic plant security will provide adequate infrastructure to protect the GPW’s high value-assets, people, property and intelligence.

In response, the DPW allocated a site at Visagie Street, Pretoria, where the GPW’s new passport factory and special products division have since been established. The DPW also conducted a feasibility study on the remainder of the site and in its final report, submitted towards the end of 2010/2011, concluded that the site is viable for development towards consolidation of the GPW’s spatial needs.

The GPW will continue with this development in collaboration with the DPW, which is estimated to be finalised at a cost of ZAR480 million.

The financial year under review also had numerous challenges, in particular with regard to the recruitment of senior managers as well as qualified operational staff. During May 2010, the Chief Executive Officer (CEO) left the GPW and this position remained vacant for the duration of the 2010/2011 financial year.

In view of these circumstances the GPW could not fill its vacancy of marketing manager, which is considered an essential resource for the GPW to effectively market itself towards establishing a footprint in the African security printing market. Also, two other vacant general manager positions, being human resources and strategic management, as well as a senior management vacancy in information communications technology, could not be filled. Recruitment for these positions will remain a priority to the GPW as its leadership core in a new dispensation will assist the institution to focus on its service delivery targets and bring stability in strategic planning for the future.

J P Engelbrecht

Acting Chief Executive Officer

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Did you know?The GPW does a page-by-page quality check on every voter’s roll that it prints.

Chapter 02ABOUT GPWWhat is the GPW? How does is operate? Chapter 02 answers these questions and many more.

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ABOUT GPW

The GPW is a South African security printing specialist that deals with the printing of passports, visas, birth certificates, smart card identification documents and examination materials, as well as government stationery and publications.

The GPW also functions as the publisher and editor of the South African Government Gazette and uses its additional capacity to print non-security printed matter such as posters, annual reports, brochures and high volume standard forms that are used by government departments for administration purposes.

Based in Pretoria, Gauteng, the GPW boasts a rich history spanning 123 years, during which it has adhered to the overall goal of security printing, that is, to prevent forgery, counterfeiting and tampering that could lead to fraud and identity theft.

It has done this by continuously updating its security printing technology and today boasts a new state-of-the-art facility that has been benchmarked internationally and is widely divergent from its humble beginnings. As capacity and investment grow, further amenities and equipment will be added.

Part of this modernisation is due to the GPW’s decision in 2009 to convert from a trading account within the DHA to a government component organisation that operates as a self-funded business entity within regulated parameters of the DHA.

This conversion has so far proven to be financially valuable to the GPW. It has more than tripled its profit to date...

In this way, the GPW has shown that it can deliver and operate as a sustainable, viable business in South Africa, as well as explore further business opportunities within the South African Development Community (SADC).

This also places it on the right path to achieving its vision, which is to be the security printer of choice in both South Africa and the SADC region. Its mission is to focus on providing both the public and private sector with an efficient and effective one-stop security printing solution to solve the complex security problems associated with document fraud. It aims to do this in an efficient and customer-centric manner that is underlined by its core values of excellence, integrity, accountability, quality and reliability.


Chapter 03GPW SERVICE OFFERINGS

The GPW’s ongoing investment in new equipment and facilities has strengthened and enriched its services offering. This chapter looks at what the GPW can deliver.

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Document security features generally function on three levels. First level security consists of elements such as watermarks and tactile features, which can be readily verified with the naked eye under natural light. Second level features consist of hidden elements such as invisible ink and micro-printed text, which can be verified only with the use of elementary tools. The most intricate, however, is the third level of security, which consists of covert elements such as infrared detectable inks, which can be verified only with the use of sophisticated laboratory equipment.

The knowledge and capacity of the GPW to produce documents containing all three levels of security, places it among the most modern printing facilities in the country and in line with international best practice standards.

Almost ZAR500 million was invested in developing the GPW’s Security Printing Division’s new facility, which resembles a laboratory more than the traditional printing factory. It is located a few streets away from the GPW’s head office within a highly secured environment, ensuring that the internal security measures are also supported and safeguarded by external security factors.

The modern facility prides itself on its new multi-unit web press and sheet-fed press, both with the capacity to produce advanced feature rainbow printing technology and enables the use of various high security inks in order to protect documents against forgery.

In addition to its Security Printing Division, the GPW is made up of the following three business divisions, located at its head office:

Stationery Warehouse;

Government Gazette services; and

Bookshop Services.

The Stationery Warehouse division is responsible for the production of standard documents that are used across government departments and entities, such as medicine registers and leave forms.

As publisher and editor of the Government Gazette, the GPW is accountable for the publication’s content. The Government Gazette division compiles, edits and typesets the publication before printing and disseminating it.

Publications and hard copy items such as maps, patent journals and terminology dictionaries, as well as self-help books created to assist with the social and economic growth of all South Africans, fall under the Bookshop Services division.

In order to meet its mandate, the GPW is required to commit to a substantial investment in sophisticated equipment and processes, which, if restricted to the production of security printed matter only, would not be utilised economically. It is thus considered imperative that other related non-security services also be rendered by the GPW to ensure optimum use of the institution’s internal production capacity.

GPW SERVICE OFFERINGS


Chapter 04HISTORY AND MILESTONES

The first GPW was founded in 1888 and has seen a rich and varied history since then. Chapter 04 looks at times past, right up to present day.

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HISTORY AND MILESTONES

1. From 1652 to 1976

During its rule of the Eastern Cape region of South Africa from 1652 to 1799, the Dutch East Indian Company did not allow the operation of any printing facilities until its final years of existence in the regions.

The first attempt to produce printed matter in the Cape was initiated during 1782 by Governor van Plettenberg, when a ship, transporting money from the Netherlands, was delayed due to poor weather conditions at sea. This resulted in a shortage of money and the Governor had no option other than to produce primitive banknotes on a parchment substrate, as an interim measure.

During 1784, the Dutch East Indian Company appointed Johann Christian Ritter, a Bavarian born in Beyrouth during 1755, to assume duties as an artisan bookbinder in the Cape. He brought with him a small printing press and successfully produced a variety of maps on behalf of the organisation over the year. As a result of his success, the first printing plant was established in the Cape in 1785, with Ritter being appointed the first printing superintendent. Historically, it is thus widely accepted that Ritter is the founder of the printing industry in the Republic of South Africa.

A number of other artisans joined Ritter’s printing company in the following years and, although a variety of printed matter such as government notices, handbills and other documents were produced, printing facilities remained limited until 1800 when Walker & Robertson, a prominent company in the trading of slaves, imported a complete set of printing machines and support equipment, which were installed in February 1800 at the company’s premises situated at 35 Plein Street in Cape Town. Subsequently, the company was appointed by Governor Yonge to commence duties as the sole supplier of government printed matter in the Cape colony. Yonge also authorised the company to produce a weekly gazette, which commenced circulation with effect from 1 August 1800, known as the “Kaapsche Stads Courant”. This publication was the precursor to what is today known as the “Government Gazette”.

Following his appointment as the new governor of the Cape colony during 1801, Major-General Dundas decided to monopolise all government and commercial printing and subsequently issued an order of attachment on the printing facility of Walker & Robertson. On 8 October 1801, the entire printing works was moved to the Castle and the first GPW was established under the supervision of Sir John Barrow, a government official who also served as accounts auditor of the Cape colony. He held this position until British re-occupation of the Cape during 1806, when George Ross was appointed the superintendent of printing.

The first apprentice to learn and complete a printing trade in South Africa was BJ van der Sandt, who enrolled at the printing facility during 1811 and remained there until retirement age, eventually also being appointed as the superintendent of printing.

A fierce battle to break the government’s monopoly on printing and to establish a free press erupted during 1824 between the governor, Lord Charles Somerset on the one hand, and


his opposition being a group of obstinate Scotsmen, comprising George Greig, a printer who originated from the King’s Printing Office in Shacklewell, Thomas Pringle who was a 1820 settler and John Fairbairn, who was a prominent South African journalist. This battle continued for five years, culminating in Sir Lowry Cole’s 1829 declaration of a free press in South Africa.

Immediately, the number of commercial printers increased, with printing facilities being established in places as far away as Grahamstown, Port Elizabeth, Bloemfontein, Durban and many others. As a result, most of the printing presses at the Castle facility were sold during 1829 and the government’s printing requirements were divided equally between the printing establishments of George Greig and William Bridekirk.

Bridekirk and his later associate, SJ Mollet, were awarded a ten-year government contract for the production of the Gazette. During 1847, Saul Solomon & Company purchased Bridekirk’s printing facility and remained government’s main printing supplier until 1881, when a new company, WA Richards & Sons, obtained the majority of all the government contracts. During this period, printing establishments also expanded to other areas with the northbound movement of pioneers and the establishment of the Republic of Transvaal.

When Marthinus Wessel Pretorius became the president of the Republic of Transvaal in 1856, he invited Cornelius Petrus Moll and Jan Cilliers to establish a printing plant at Potchefstroom. This company produced the first Government Gazette of the Republic on 25 September 1857. However, as Cornelis Moll also utilised the Gazette to publish his own editorial viewpoints in opposition to the government’s opinion, the president had no option other than to place the printing facility under direct government control and thus government purchased the printing facility from Moll and Cilliers in September 1859. Whilst Jan Cilliers moved back to the Cape, Cornelius Moll retained his position as printing superintendent and when the Republic of Transvaal moved its capital from Potchefstroom to Pretoria in 1860, he moved the entire printing works to Pretoria where it was modernised to the extent where it produced the first postage stamps for Transvaal on 4 April 1879, utilising printing plates and gum-paper from suppliers in Germany.

During 1873, Cornelius Moll’s earlier partner Jan Cilliers, moved back to Pretoria from the Cape and successfully negotiated to purchase the printing works from government. Subsequently, he established the plant as a private printing works with contracts to produce printed matter for government, operating from his premises in Church Street, Pretoria under the name Cilliers and Rous. This position remained unchanged until the annexation of the Republic of Transvaal by the British Empire during 1877.

The British confiscated the printing works and utilised the facility for the provision of local government printed matter. However, when the war broke out, Cilliers managed to get hold of old, dilapidated machines, which he repaired sufficiently to continue with the printing of private documents and newsletters. General Piet Joubert continuously collected donations and utilised the funds for upgrading Cilliers’ existing dilapidated machines and to purchase new equipment, thus Cilliers was able to maintain a printing facility of reasonable proportion throughout the war.

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After the war ended, the House of Assembly authorised government to establish a proper GPW on 4 July 1888, to procure the necessary equipment for such a plant and also to appoint printing staff on a permanent basis. In view of this, the printing works, which Cilliers successfully maintained during the war, was purchased by government to serve as a basic facility for further development in accordance with the resolution taken by the House of Assembly. On 1 August 1888, the new GPW commenced with its duties under the supervision of PWT Bell, who was appointed as the first government printer in South Africa. The printing works operated from premises situated between Church Street and Bureau Street in the centre of Pretoria, with a staff complement consisting of two clerks, six typesetters and two machine operators.

On the afternoon of 14 March 1891, the building caught fire after being struck by lightning. Whilst the GPW staff attempted to put out the fire, the police and fire brigade arrived at the scene. The chief of local police and the fire chief, however, could not agree on who was in charge of the limited fire fighting equipment. The disagreement quickly turned ugly and the two officials became involved in a fistfight in the middle of Church Street. The two officials, being fairly evenly matched, continued to fight for several minutes after which the fire chief, apparently a southpaw, managed to finally put the police chief down. Unfortunately, by this time, the entire GPW building was completely incinerated. Government decided to rebuild the building in a project, which was completed on 29 May 1891.

Continuous expansion of printing operations during the following years, necessitated government to seek alternative premises to house the printing works and subsequently eight stands, located in Koch Street, Pretoria (today Bosman Street) were purchased from the late estate of AH Nelmapius during 1894. A tender was awarded to a building contractor, WJ Geerts, to erect the buildings for an amount of 20,940 pounds and construction commenced during the same year.

The building project was completed during 1897 at a final cost of 24,504 pounds and remains the head office of the GPW until this day.

2. From 1976 to 2008

During 1976, the GPW was established as a trade account. This implied that the GPW had to operate on regular business principles and since then, financial viability of the institution thus depended entirely on the GPW’s ability to generate sufficient revenue from services rendered to defray all its operational and capital expenditure. Being functionally charged with the rendering of inter-departmental services, National Treasury (NT) directed the trade account’s operations within the following framework:

Meeting its mandate required the GPW to commit substantial investment in sophisticated equipment and processes, which, if restricted to the production of security printed matter only, would not be utilised economically and thus it was considered imperative that other related services also be rendered by the GPW to ensure optimum utilisation of the institution’s internal capacity.

In view of this, NT directed that government institutions be obliged to source all of their printing related services only from the GPW.


The afore-mentioned arrangement established the GPW as a centralised national printing facility with a stable customer base, ensuring optimum utilisation of its infrastructure by rendering security printing services as well as related non-security services to government institutions.

Following the 1994 general election, all printing facilities of the former independent states and self-governing territories were allocated to the GPW. The new political dispensation implied that South Africa had six printing facilities and the GPW, operating on business principles, had to absorb all these facilities, which presented the GPW with a substantial duplication of personnel and equipment. Given this untenable situation, Cabinet was approached with a recommendation that the Department of Home Affairs be authorised to re-organise and rationalise government’s printing functions. Cabinet approved this recommendation on 24 February 1996.

Upon completion of its investigation, the DHA submitted a Cabinet memorandum with recommendations that certain printing facilities, such as the Umtata Printing Works, be closed down whilst other facilities be restructured to serve as provincial offices of the GPW.

The restructuring was subsequently completed, leaving the GPW’s head office in Pretoria with regional offices in Polokwane, Mmabatho, East London and Cape Town respectively.

3. From 2008 to present day

During 2008, the GPW prepared a business case to propose its conversion to a government component. During September 2008, this business case was presented to a joint panel (NT Department of Public Service and Administration and the DHA), which was subsequently approved by the Ministers of Finance, Home Affairs and Public Service and Administration respectively. Emanating from this process, the GPW was established as a government component on 9 October 2009 (refer Government Gazette 32616 dated 9 October 2009).

As a government component, the GPW will continue to fulfil a key role into the future pertaining to the delivery of security printing services to government.

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The Government Printing Works

Clymerʼs Columbian Press (1816)Harry Ransom Center: Gutenberg Bible Primary Source Education Modulehttp://www.hrc.utexas.edu/exhibitions/education/modules

1800Walker & Robertson import printing machines and produce the first Government Gazette in the guise of the “Kaapse Stads Courant”.

1801 The first GPW is established at the Castle under Sir John Barrow.

1811BJ van der Standt enrols as the first printing trade apprentice.

1824 Lord Charles Somerset and his opposition are embroiled in a battle to break government’s monopoly over the local print industry.

1829Sir Lowry Cole’s declaration of a free press in South Africa is announced and William Bridekirk is awarded a ten-year government contract for the production of the Gazette, which lasted until 1881 under Saul Solomon & Company.

1857 Cornelius Petrus Moll and Jan Cilliers produce the first Government Gazette of the Republic of Transvaal.

1859 The printing facility is purchased by government from Moll and Cilliers, while Moll retains position as printing superintendent.

1782 Governor van Plettenberg makes a first attempt to produce printed matter in SA.

1785The first printing plant is established in the Cape by Johann Christian Ritter.


1782 - 2011

1888 The House of Assembly authorises government to establish a proper GPW.

1891The GPW is struck by lightning and burns down, but is rebuilt by government.

1897The GPW building project is completed and remains its head office to today.

1976 The GPW is established as a trade account.

1994 All printing facilities of the former independent states and self-governing territories are allocated to the GPW.

1996 The GPW is restructured.

2009 The GPW is established as a government component.

1860 Moll moves printing works to Pretoria.

1877 The Republic of Transvaal is annexed by the British Empire, confiscating the printing works.

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Did you know?

In order to produce travel documents, the GPW must

comply with both international directives of best

practice and minimum requirements as set out by the

International Civil Aviation Organisation (ICAO).


Chapter 05OUR PEOPLE

This chapter examines the GPW human resources department: how it operates and how the organisation is progressing since the restructuring in 2009.

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GPW human resources

Following its establishment as a government component in 2009, the GPW reviewed and realigned its organisational structure to deliver on its mandate, carry out proper job profiling and evaluate newly created and defined jobs.

However, the departure of the CEO at the beginning of the 2010 financial year has had a major impact on the filling of senior management posts. This in turn has affected the roll-out of the new organisational structure, particularly as the posts for both general manager : strategic management and general manager : human resources were vacant during the financial year.

The GPW has mainly given greater focus to the filling of lower level posts, an exercise that has seen good progress thus far. At this stage, the 26.6 percent vacancies within the organisation fall mostly within the artisan, senior management and other specialist position categories.

The recruitment of artisans into the printing discipline has remained challenging over the financial year. Various learner positions across the printing discipline have recently been advertised to attract and train new artisans.

Progress has been made with the drafting and revision of GPW human resources policies. Several policies being used were adopted from the previous mother department and the conversion of the GPW to a government component has highlighted a need for these to be amended. This will ensure improved governance and compliance.

Study bursaries for GPW employees have been re-introduced and 14 new bursaries were granted in the financial year.

Training in preparation for the new ERP systems was further provided to various employees.In addition, the relationship between organised labour and the GPW has been strengthened through regular interaction. Serious misconduct cases were limited to five cases, less than one percent of the employees.

The human resources department has been striving to increase visibility, in order to improve communication and service delivery. Its efforts have seen success through more regular visits to regional offices and employees at head office. Finally, human resources has also embarked on the mass verification of all its employees’ qualifications, in order to improve the integrity of its information.

OUR PEOPLE


Chapter 06OUR FUTURE

Looking to the future, the GPW’s strategic plans and investments are firmly focused on moving forward.

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OUR FUTURE

The market for security printed matter is on the increase. This growth is mainly driven by the need for modern security documents, including documents that incorporate biometric features. Today, the GPW is well positioned to take advantage of this growth and with its new security printing facility it has the capacity to expand its business in order to become one of the leading security printing services provider on the African continent.

Additionally, the rapid innovations occurring in the security printing industry create the right environment for the GPW to be a meaningful contributor to both the social and economic landscape in South Africa. With growth come skills attraction, retention and development as well as profits for future developments.

It is planned that by 2014, the GPW will have invested a ZAR314 million to replace its legacy systems with the most advanced products and software.

This investment will further increase its competitive edge and allow the opportunity of providing a fully functional African security printing press to all SADC regions, much of which is currently outsourced to printers in Europe.

A further ZAR500 million has been determined by the DPW to expand and refurbish the new GPW site in order to allow all head office operations to move to the modern facility. This will allow for greater customer satisfaction as it closes the gap between departmental silos, resulting in excellent service and a faster turnaround time.

In conclusion, whether it is South African passports, Malawian examination papers, Mozambican vehicle registration certificates or Tanzanian ballot papers – to name but a few – the GPW has the technology, materials and solutions to deliver these – securely and in accordance with international best practice.


Chapter 07FINANCIAL

Annual Financial Statements for the year ended 31 March 2011

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28 Audit Committee Report

30 Accounting Officer’s Responsibilities and Approval

31 Accounting Officer’s Report

36 Auditor-General Report

39 Statement of Comprehensive Income

40 Statement of Financial Position

41 Statement of Changes in Net Assets

42 Statement of Cash Flows

43 Accounting Policies

49 Notes to the Annual Financial Statements

Contents

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Audit Committee Report

We are pleased to present our report for the financial year ended 31 March 2011

Audit committee members and attendance:

The audit committee consists of the members listed hereunder and should meet at least four times per annum as per its approved terms of reference. The terms of engagement of the members expired during 2010/11. In order to retain continuity and experience, approval was granted to extend the chairperson’s contract for a further period.

New members were appointed with effect from 01 November 2010 and only one meeting took place since their appointments during the period ending 31 March 2011. Three meetings took place during the year under review.

Name of the member PositionNumber of

meetings heldNumber of

meetings attended

Ms. MAF Moja Chairperson 3 3

Mr. A Keyser Member – Contract expired 2 2

Mr. SL Ndaba Member – New 1 1

Ms. M Strydom Member – New 1 1

Ms. M Sedite Member – New 1 1

Mr. AN Mhlongo Member – Resigned 03/06/2011 1 1

Audit committee responsibility

We report that we have adopted appropriate formal terms of reference in our charter in line with the requirements of Section 38(1)(a) of the Public Finance Management Act, No.1 of 1999 as amended by Act 29 of 1999 and Treasury Regulations 3.1.13. We further report that we conducted our affairs in compliance with this charter and have discharged all our responsibilities as contained therein.

The charter is reviewed annually and complies with principles of good governance and with the requirements of the above mentioned act and regulations.

The effectiveness of internal control

The GPW is still in the transition phase of being corporatised out of the Department of Home Affairs (DHA). This resulted in management concentrating on strategic matters of the new structure of the organisation. The director of internal audit was appointed with effect from 01 August 2010 and also focused on the unit’s strategic issues. The internal audit unit is not yet fully capacitated, however the recruitment of the vacant positions as per the approved structure is in process.

28 GOVERNMENT PRINTING WORKS – ANNUAL REPORT 2010 - 2011GOVERNMENT PRINTING WORKS – ANNUAL REPORT 2010 - 2011

Evaluation of financial statements

We have reviewed the financial statements and the report of progress made against pre-determined objectives and recommended for management to submit them for audit by Auditor-General South Africa.

We further have:

• Reviewed the Auditor-General South Africa’s management report and management’s response thereto.

• Reviewed and discussed the audited annual financial statements due to be included in the annual report with the Auditor-General South Africa’s and the Accounting Officer’s reports.

• Reviewed significant adjustments resulting from the audit.

We concur with and accept the Auditor-General South Africa’s report on the annual financial statements.

Appreciation

The audit committee expresses its appreciation to the Accounting Officer, management team, and the Auditor-General for their contribution to fulfill our obligations.

Ms. MAF MojaChairperson of the audit committee

Date: 29 July 2011

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Accounting Officer’s Responsibilities and Approval

The Accounting Officer is required by the Public Finance Management Act (PFMA), 1999 (Act No. 1 of 1999) (as amended by Act No. 29 of 1999), to ensure that the GPW maintains and implements adequate accounting records and is responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is the responsibility of the Accounting Officer to ensure that the annual financial statements fairly present the state of affairs of the entity as at the end of the financial year and the results of its operations and cash flows for the year then ended. The external auditors are engaged to express an independent opinion on the annual financial statements and were given unrestricted access to all financial records and related data.

The annual financial statements have been prepared on the going concern basis and in compliance with South African Statements of Generally Accepted Accounting Practice. Unless otherwise indicated, the financial statements are prepared on the same basis and accounting policies as in previous years to comply with South African Statements of Generally Accepted Accounting Practice except where it is directed by National Treasury (NT).

The Accounting Officer is of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss.

The Accounting Officer has reviewed the entity’s cash flow forecast for the year to March 31, 2012 and, in the light of this review and the current financial position, the Accounting Officer is satisfied that the entity had or has access to adequate resources to continue in operational existence for the foreseeable future.

The Annual Financial Statements set out on pages 39 to 59, which have been prepared on the going concern basis, were approved by the Accounting Officer on May 30, 2011.

Mr J P EngelbrechtAccounting Officer

PretoriaMonday, May 30, 2011

The Government Printing Works Annual Financial Statements for the year ended 31 March 2011


Accounting Officer’s Report

EXECUTIVE SUMMARY

The GPW was founded in 1888 for purposes of rendering security printing and related services to government. During 1976, the GPW was established as a trading account within the DHA. During 1999, when the Public Finance Management Act came into effect, the institution was established as a trading entity and since then the GPW has been operating mainly on regular business principles by generating sufficient revenue from services rendered, to defray its operational expenditure.

With the development of the government component, as a new form of entity, in terms of Schedule 3 of the Public Service Act – Section 7(5)(c) which came into effect on 1 April 2008, this new format of entity was considered to be most suitable as a framework for manufacturing concerns such as the GPW and subsequently during 2008 a project commenced with the objective to convert the GPW into a government component. In this regard, the GPW collaborated with various key stakeholders such as the DHA, NT and the Department of Public Service and Administration, a process that culminated in the GPW being established as a government component during October 2009. This conversion was to allow the entity to start operating on sound business principles, setting the GPW on the path to full profitability within a three-year cycle starting April 2010.

1. MANDATE AND CORE BUSINESS

Having operated as a government component with effect from 09 October 2009, the GPW remained within the mandate and full control of the state. Its core business is the rendering of security printing and related services to government departments, provincial institutions and local authorities, which entails the following:

Compiling, editing, printing and distribution of official Gazettes.

The procurement and stocking of departmental forms and face value documents.

The provision of printing and related services pertaining to high security documents and also printed matter of a general nature.

The procurement and distribution of standard stationary items.

2. CONSOLIDATION OF THE GPW AS A GOVERNMENT COMPONENT

The GPW’s main strategic objective is to develop internal capacity for the rendering of modern, secure printing services to government, and to also provide specialised services to other states of the SADC region.

Pertaining to further development and consolidation of the government component, the GPW identified the following strategic priorities in support of its objectives:

2.1 Development of a new head office and production facility

The GPW’s existing head office, situated at Bosman Street, Pretoria, is not suitable for development into a modern secure printing facility. In view of this, the GPW approached the Department of Public Works (DPW) for alternative premises, to be allocated for development of the GPW’s head office and printing facility.


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Emanating from this request, the DPW allocated premises situated at Visagie Street, Pretoria which the GPW is presently in the process of developing as a phased approach. The following progress has since materialised:

(i) Phase 1 involved the development of a new, high security passport production and personalisation section. This phase was completed during 2009.

(ii) Phase 2 involved the development of a new security printing division. This phase was completed during 2010 and the GPW is currently in the process of commissioning new printing presses and related support equipment.

(iii) Phase 3 will involve development of the remnant areas of the entire property. The GPW has engaged the DPW to execute all professional services required to compile a layout and design plan, to ensure optimum utilisation of the available land and property. This phase is scheduled to commence during the 2011/12 financial year.

2.2 Equipment modernisation programme

The GPW has not fully re-capitalised its machinery and equipment for many years. As a result, the majority of its production equipment is in a poor condition and in many instances no longer economically viable to maintain. Furthermore, technological advances in printing technology resulted in a lack of capacity to produce modern, high security printed matter, which necessitates the modernisation of all existing outdated production equipment.

An asset replacement programme has been developed to replace old technology over the next three financial years. Implementation of this programme will support the GPW in its drive to create internal capacity for production of the best possible standards of printed matter, which adheres to the quality standards required by international bodies. During the year under review the following has been achieved:

(i) Procurement of three new folding machines to replace the GPW’s existing dilapidated finishing equipment.

(ii) Procurement of a sophisticated multi-colour lithographic offset sheet-fed printing press. This machine will provide capacity to deliver high-value security features, such as rainbow printing techniques, which are required for the production of documents such as passport visa sheets and others.

(iii) Commissioning of an automated computer-to-plate system for internal production of printing plates in support of the new printing presses.

(iv) Commissioning of a web-fed laser imaging system, with capacity to incorporate advanced security features into paper-based documents.

(v) Development and implementation of a Quality Management System at the passport factory, in compliance with ISO 9001-standards.

2.3 Business improvement strategy

To realise the strategic objective of expanding its markets into the SADC region, the GPW requires an efficient business operations improvement strategy to become competitive and cost effective. In support of this objective, the GPW has commenced with developing and implementing an Enterprise Resource Planning (ERP) system as well as a new activity based costing system. During the period under review, the first phase of the ERP project, being a fact finding analysis of all existing business practices, was concluded. In line with this exercise, the design phase of the GPW’s envisaged new operating systems has also been finalised and implementation thereof has commenced. This project is scheduled for completion by the end of the 2011/12 financial year. The activity based costing model has also progressed well and a paper-model as well as an Excel model was developed during the year. This basis model will be refined during the next financial year and will be integrated with the ERP system, also going live at the end of the 2011/12 financial year.


3. MARKETING OPPORTUNITIES

During the year under review, the GPW was awarded substantial printing orders by government departments such as Home Affairs, Education, Police, Health, Justice, International Relations and Cooperation.

On the regional scale, GPW was awarded a security printing contract by the Department of Transport and Communication for the Government of the Republic of Mozambique, to print its new vehicle inspection certificates. GPW also printed revenue stamps on behalf of the Lesotho government.

3.1 Opportunities in the local market

Beyond the increase in economic activity, there is opportunity to expand the range and value of products that could fall within the security printing segment. The introduction of enhanced security features to a wider range of government forms and documents provide scope for the sophistication of printing services and, in addition to providing support to law enforcement agencies in the fight against identity theft and other criminal activities associated with document fraud, it will broaden the potential remit of the government component.

3.2 Marketing - opportunities in the SADC region

A number of governments within the Southern African Development Community (SADC) do not have access to modern printing facilities, but have the need for a range of secure printing production for their own security documents. Much of this is currently outsourced to private sector printers in Europe.

A confident, well performing and well established government component, with all proper protocols, procedures, facilities and security accreditation, would be very well placed to bid for and win at least a proportion of such work. Government ownership coupled with improved corporate governance, and proven service delivery standards would confer additional “credibility” when bidding for this work. However, this opportunity is dependent on the mandate allowing competition with non-South African private sector printers.

3.3 Research and development in new technologies

Research and development is the cornerstone of the security printing organisation, and collaboration with similar institutions locally and internationally has become imperative. The GPW’s participation in seminars and workshops organised by international bodies such as the International Civil Aviation Organisation, supports this initiative.

4. NEW CARD PRODUCTION FACILITY

Development of the GPW’s new passport production facility was completed during April 2009. The facility was expanded by developing a card production centre, which was utilised for the development of a new South African crew member certificate during 2010. This new electronically enabled document is configured in smart-card format with internationally benchmarked security features and was successfully launched by the DHA during October 2010.

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5. APPOINTMENT OF SENIOR MANAGERS

The GPW has over a number of years experienced an inability to fill senior critical posts. During May 2010, the CEO left the institution and this position remained vacant for the duration of the 2010/11 financial year. In view of these circumstances, the GPW could also not proceed with the filling of two other vacant general manager positions, being in human resources and strategic management, as well as other senior management vacancies in marketing and information communications technology. Filling of these positions remain a priority as the leadership core in a new dispensation will assist the GPW to focus on its service delivery targets and bring stability in strategic thinking and planning for the future.

6. CHALLENGES

Service delivery is still adversely affected by problems emanating from its human and material resources. The successful transformation of the GPW is largely dependent on the organisation’s ability to galvanise the effort of all its human capital towards a common goal. Currently, business divisions are functionally structured and, therefore, make it difficult for functions and departments to integrate effectively and efficiently. The current functional structure and lack of integration contribute to poor customer service, high costs and inability to deliver on time as well as poor quality of some products. There is also the lack of skilled staff within GPW, primarily as a result of uncompetitive remuneration packages compared to the printing industry. The uncompetitive remuneration structure is lagging on average by between 20 percent and 30 percent compared to the local printing industry. This mainly applies to the technical grades, where significant shortages of skills exist.

A new structure for the GPW has been approved with effect from 1 April 2010. The new structure provides for more specialist positions and strengthens the managerial capacity of the GPW. Good progress has since been made with the job evaluation of the newly created positions and the recruitment process for several managerial and specialist positions has commenced during the last quarter of 2010. It is planned to have all newly created posts job evaluated by 30 June 2011. As more managerial positions are filled the appointment in lower level vacancies will be expedited. The target is to have at least 90 percent of the approved posts filled by the end of the 2011/12 financial year. Provisions were made over the next three financial years to address the remuneration structures, especially on the technical grades were the most problems are experienced.

Although the GPW is in the process of implementing a new ERP system, the organisation still operates currently utilising the old and fragmented systems. This makes the reporting and management of the organisation a time consuming, costly and disjointed process. Furthermore, although the ERP implementation phase has started and is expected to be completed at the end of the 2011/12 financial year, the project faces daily challenges as it competes for the same scarce resources with other projects as part of the conversion process.

7. SUCCESSES

Whilst the GPW has not fully achieved its deliverables for the year under review, primarily due to its human resources challenges, the organisation still succeeded in achieving the following:

Completion of the first phases pertaining to development and implementation of new ERP and cost accounting systems.

Completion of the high security printing division as Phase 2 of the development project to establish the GPW’s new head office and production premises. Progress includes the commissioning of various new items of production equipment.

Implementation of an ISO 9001-compliant Quality Management System at the new passport manufacturing and personalisation facility.


Production statistics for selected strategic printing services rendered during the review period are as follows:

Production Statistics Product 2009/10 2010/11 % Variance

Passports (booklets) 832 262 857 695 +3,1%

Identity Documents (booklets) 2 463 147 2 233 493 -9,3%

Examinations (scripts) 29 868 940 21 726 216 -27,3%

Government Gazettes (editions) 2 292 2 390 +4,3%

Government Gazettes (total quantity of A4 text pages per annum) 105 915 107 044 +1,1%

8. AUDITOR-GENERAL REPORT AND FINDINGS

During past financial years, the GPW received qualified audit opinions from the Auditor-General covering a number of items as disclosed during those years. During the 2008/09 financial year, the GPW developed a detailed action plan to not only address the shortcomings as identified by the Auditor-General, but also to address financial management concerns identified by the GPW management. The objective of the plan was to receive an unqualified audit opinion during the 2010/11 financial year.

Although the GPW has received an unqualified audit opinion already from the Auditor-General for the 2009/10 financial year, the action plan was further refined in order to address shortcomings in the financial management area. It is an objective of the GPW only to receive unqualified audit opinions, but also to achieve its vision for the finance division to provide financial management services of excellence to GPW and its partners, so that they achieve their overall objectives economically, efficiently and effectively, hence promoting good governance, accountability and sustainability.

Although the GPW could not recruit additional skills and expertise required within the organisation during the year under review as planned, significant efforts and progress were achieved with regards to the implementation of the plan of action, some of which are tabulated below:

Debtors days were significantly reduced from 148 days outstanding (2007/08) to 63 days outstanding (2009/10). During the year under review this status was maintained and at year-end debtors days outstanding stood at 61 days.

The inventory clean up exercise was continued in order to bring stock holding to a more acceptable level. Planning processes in this area was also further improved.

More work was done to address the suspense accounts that caused several qualified audit opinions in the past.

The first phase as well as the design phase of the ERP project were successfully completed and implementation of the new designed system has commenced during February 2011. This project is scheduled for completion by the end of the 2011/12 financial year.

The activity based costing model has also progressed well and a paper-model as well as an Excel model were developed during the year.

Mr J P Engelbrecht

Accounting Officer

PretoriaMonday, May 30, 2011

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Report of the Auditor-General to Parliament on the Financial Statements of the Government Printing Works.

Report on the Financial Statements

Introduction

1. I have audited the accompanying financial statements of the Government Printing Works (GPW), which comprise the statement of financial position as at 31 March 2011, and the statement of comprehensive income, statement of changes in net assets and cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information as set out on pages 39 to 59.

Accounting officer’s responsibility for the financial statements

2. The accounting officer is responsible for the preparation and fair presentation of these financial statements in accordance with South African Statements of Generally Accepted Accounting Practice (SA Statements of GAAP) and the requirements of the Public Finance Management Act of South Africa, 1999 (Act No. 1 of 1999) (PFMA) and for such internal control as management determines necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor-General’s responsibility

3. As required by section 188 of the Constitution of the Republic of South Africa, 1996 (Act No. 108 of 1996) and section 4 of the Public Audit Act of South Africa, 2004 (Act No. 25 of 2004) (PAA), my responsibility is to express an opinion on these financial statements based on my audit.

4. I conducted my audit in accordance with International Standards on Auditing and General Notice 1111 of 2010 issued in Government Gazette 33872 of 15 December 2010. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

5. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

6. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

7. In my opinion, the financial statements present fairly, in all material respects, the financial position of the Government Printing Works as at 31 March 2011, and its financial performance and cash flows for the year then ended in accordance with SA Statements of GAAP and the requirements of the PFMA.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

8. In accordance with the PAA and in terms of General Notice 1111 of 2010, issued in Government Gazette 33872 of 15 December 2010, I include below my findings on the annual performance report as set out on pages 62 to 70 and material non-compliance with laws and regulations applicable to the government component.


Predetermined objectives

Usefulness of information

9. The reported performance information was deficient in respect of the following criteria:

• Existence: The report on predetermined objectives was not prepared for some business units.

The following audit findings relate to the above criteria:

Strategic objectives, indicators and targets were not reported for some business units (Existence)

10. For the finance, marketing, internal audit and finance business units some of the strategic objectives, indicators and targets included in the strategic plan were not reported on in the annual performance report.

Compliance with laws and regulations

Human resource management and compensation

11. Overtime worked by GPW employees exceeded 10 hours per week. This constitutes a contravention of section 10 of the Basic Conditions of Employment Act, 1997 (Act No. 75 of 1997).

12. Employees were paid overtime in excess of 30% of their monthly salary in contravention of Public Service Regulations Part V paragraph D.2 (c).

Internal audit

13. The accounting officer did not ensure that there is an adequately resourced and functioning internal audit unit that identifies internal control deficiencies and recommends corrective action effectively as required by Treasury Regulations (TR) 3.2.11 and 3.2.12.

Revenue management

14. The accounting officer did not take effective and appropriate steps to collect all money due to the government component, as required by section 38(1)(c)(i) of the PFMA and Treasury Regulation 11.2.1 (a).

Expenditure management

15. The accounting officer did not take effective and appropriate steps to prevent irregular expenditure as required by section 38(1)(c)(ii) of PFMA and TR 9.1.1.

Risk assessment

16. The accounting officer did not ensure that a risk assessment is conducted regularly to identify emerging risks of the institution as required by TR 3.2.1 and PFMA, Section 38(1)(i).

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INTERNAL CONTROL

17. In accordance with the PAA and in terms of General Notice 1111 of 2010, issued in Government Gazette 33872 of 15 December 2010, I considered internal control relevant to my audit, but not for the purpose of expressing an opinion on the effectiveness of internal control. The matters reported below are limited to the significant deficiencies that resulted in the findings on the annual performance report and the findings on compliance with laws and regulations included in this report.

Leadership

18. The accounting officer does not exercise oversight responsibility over reporting and compliance with laws and regulations and internal control. The GPW does not have the required capacity to perform all the necessary functions within the entity, resulting in excessive overtime being worked by employees.

Financial and performance information

19. The accounting officer did not review and monitor compliance with laws and regulations. Non- compliance with the following laws and regulations could have been prevented had compliance been properly reviewed and monitored:

• Public Service Regulation

• Treasury Regulations

• PFMA

• Basic Conditions of Employment Act

20. The accounting officer did not implement controls over daily and monthly processing and reconciling of transactions.

Governance

21. The government component did not conduct a risk assessment for the entire entity.

22. Although the government component has an internal audit division, it is not adequate for the purposes of the audit due to the insufficient capacity that resulted in internal audit not being able to fully perform their duties.

Pretoria29 July 2011


Statement of Comprehensive Income

Note(s) 2011 2010

R ‘000 R ‘000

Revenue 2 753,443 639,035

Cost of sales 3 (473,799) (497,025)

Gross profit 279,644 142,010

Other income 4 63,427 60,248

Operating expenses 5 (128,257) (109,278)

Operating profit 214,814 92,980

Surplus for the year 214,814 92,980

Other comprehensive income - -

Total comprehensive income 214,814 92,980

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Statement of Financial Position as at 31 March 2011

Note(s) 2011 2010

R ‘000 R ‘000

Assets

Non-Current Assets

Property, plant and equipment 7 395,040 359,411

Current Assets

Inventories 8 120,889 160,373

Trade and other receivables 9 211,973 152,561

Cash and cash equivalents 10 645,541 390,923

978,403 703,857

Total Assets 1,373,443 1,063,268

Net Assets and Liabilities

Net Assets

Capital fund 11 469,096 356,410

Surplus distributable to National Treasury 214,811 112,683

683,907 469,093

Liabilities

Non-Current Liabilities

Deferred income 12 543,251 506,788

Current liabilities

Trade and other payables 13 144,038 85,276

Provisions 14 2,247 2,111

146,285 87,387

Total Liabilities 689,536 594,175

Total Net Assets and Liabilities 1,373,443 1,063,268



Statement of Changes in Net Assets

Capital fund

Surplus distributable to National Treasury

Net assets

R ‘000 R ‘000 R ‘000

Balance at April 01, 2009 356,410 19,703 376,113

Changes in net assets

Total comprehensive income for the year - 92,980 92,980

Total changes - 92,980 92,980

Balance at April 01, 2010 356,410 112,683 469,093

Changes in net assets

Total comprehensive income for the year - 214,814 214,814

Transfers of treasury approved surplus to capital fund 112,686 (112,686) -

Total changes 112,686 102,128 214,814

Balance at March 31, 2011 469,096 214,811 683,907

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Statement of Cash Flows

Note(s) 2011 2010

R ‘000 R ‘000

Cash flows from operating activities

Cash receipts from contributors and other sources 899,410 1,105,840

Cash paid to suppliers and employees (540,629) (745,374)

Cash generated from operations 15 358,781 360,466

Interest income - -

Net cash from operating activities 358,781 360,466

Cash flows from investing activities

Acquisition of property, plant and equipment 7 (104,163) (72,850)

Total cash movement for the year 254,618 287,616

Cash at the beginning of the year 390,923 103,307

Total cash at end of the year 10 645,541 390,923



Accounting Policies

1. BASIS OF PREPARATION

The annual financial statements have been prepared in accordance with South African Statements of Generally Accepted Accounting Practice, and the Public Finance Management Act (PFMA), 1999 (Act No. 1 of 1999) (as amended by Act No. 29 of 1999). The annual financial statements have been prepared on the historical cost basis, and incorporate the principal accounting policies set out below.

The GPW concluded that the annual financial statements present fairly the entity’s financial position, financial performance and cash flow. These accounting policies are consistent with the previous year, except where the government component has adopted certain new and amended South African Statements of Generally Accepted Accounting Standards.

1.1 Property, plant and equipment

The cost of an item of property, plant and equipment is recognised as an asset when:

it is probable that future economic benefits associated with the item will flow to the entity; and

the cost of the item can be measured reliably.

Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is de-recognised.

Cost or fair valueProperty, plant and equipment are carried at cost less accumulated depreciation and any accumulated impairment losses.

DepreciationDepreciation is calculated so as to write off the cost of property, plant and equipment on a straight-line basis, over the estimated useful life. Depreciation of an asset commences when the asset is ready for its intended purpose and brought to use.

Profits and losses arising on the disposal or retirement of an item of property, plant and equipment, determined as the difference between the actual proceeds and the carrying amount of the assets, are recognised in the statement of financial performance in the period in which they occur.

The annual depreciation rates are based on the following estimated asset lives:

Item YearsLeasehold property 20 yearsPlant and equipment 1-10 yearsOffice furniture 6 yearsMotor vehicles 5 yearsComputer equipment 3 years

Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item shall be depreciated separately.

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1.2 Financial assets and liabilities

1.2.1 Initial recognition

Financial instruments are recognised initially when the entity becomes a party to the contractual provisions of the instruments.

The entity classifies financial instruments, or their component parts, on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the substance of the contractual arrangement.

Financial instruments comprise of trade and other receivables, trade and other payables, cash and cash equivalents.

Financial instruments classified as loans and receivables are recognised as assets when the entity becomes a party to the contract and as a consequence has a legal right to receive cash.

1.2.2 Profit and losses and fair value adjustments

Profits, losses and fair value adjustments on financial instruments through surplus or deficit, both realised and unrealised are included in the statement of financial performance.

1.2.3 De-recognition

A financial asset is de-recognised when the entity loses control over the contractual rights that compromises the asset and consequently the substantive risk and benefits associated with the asset are transferred. This occurs when the rights are realised, expired or are surrendered.

The financial liability is de-recognised when the obligation specified in the contract is discharged, cancelled or expired.

Where an existing financial liability is replaced by another from the same lender on substantially different terms, or terms of an existing liability are substantially modified, such an exchange or modification is treated as de-recognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amount is recognised in the statement of financial performance.

1.2.4 Interest

Interest income is recognised in the statement of financial performance as it accrues, using the original effective interest rate of the instrument calculated at the acquisition of origination date. Interest income includes amortisation of any discount or premium or any other differences between the initial carrying amount of an interest-bearing instrument and its amount at maturity calculated on an effective interest rate basis.

1.2.5 Trade and other receivables

Trade receivables are recognised initially at fair value. Appropriate allowances for estimated irrecoverable amounts are recognised in surplus or deficit when management believes that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 90 days overdue) are considered indicators that the trade receivable is impaired.

The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in the statement of financial performance within operating expenses. The amount of the allowance is calculated


in accordance with the doubtful debt policy of the GPW. When a trade receivable is irrecoverable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited in the statement of financial performance.

Trade and other receivables are classified as loans and receivables.

1.2.6 Trade and other payables

Trade payables are initially measured at fair value.

1.2.7 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and deposits held and owed by Paymaster General.These are initially and subsequently recorded at fair value.

1.3 Operating leases

Leases of assets under which all the risks and benefits of ownership are effectively retained by the lessor are classified as operating leases. Payments made under operating leases are charged to the statement of financial performance on a straight-line basis over the period of the lease, except where it is immaterial in relation to the total lease payments and where variable escalation forms part of the payments.

Operating leases are those leases that do fall within the scope of the above definition. Operating lease rentals are expensed as they become due.

1.4 Inventories

Inventories are measured at the lower of cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects is assigned using specific identification of the individual costs.

When inventories are sold, the carrying amount of those inventories are recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs.

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1.5 Impairment of assets

The entity assesses at each statement of financial position date whether there is any indication that an asset may be impaired. If any such indication exists, the entity estimates the recoverable amount of the asset.

If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is determined.

If there is any indication that assets may be impaired, the recoverable amount is estimated for the individual asset.

The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. That reduction is an impairment loss.

An impairment loss of assets carried at cost less any accumulated depreciation is recognised immediately in profit or loss.

The increased carrying amount of assets attributable to a reversal of an impairment loss does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years.

A reversal of an impairment loss of assets carried at cost less accumulated depreciation is recognised immediately in profit or loss.

1.6 Retirement benefits

1.6.1 Pension funds

The GPW contributes to the Government Employees Pension Fund in respect of employer’s contribution to the fund, as prescribed by law and therefore recognised as an expense in the accounting period. No provision is made for pension retirement benefits in the financial statements of the GPW as the pension scheme is administrated by National Treasury (NT). Once the employee leaves the GPW, he/she becomes a pension member under the auspices of the NT and has no relationship with the GPW.

1.6.2 Medical benefits

The GPW provides medical benefits for its employees in accordance with Public Service conditions of service benefits. These benefits are funded by employer and employee contributions. Employer contributions to the fund are expensed when money is paid to the fund. No provision is therefore made for medical benefits in the financial statements of the GPW. The GPW does not bear any responsibility for medical benefits for employees who have retired.

1.6.3 Termination benefits

Termination benefits are recognised and expensed only when payment is made and the actual costs are reflected. These benefits are pro rata leave and pro rata service bonus when an employee resigns or when an employee retires.


1.7 Provisions and contingencies

Provisions are recognised when:

the entity has a present obligation as a result of a past event;

it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

a reliable estimate can be made of the obligation.

The amount of a provision is the present value of the expenditure expected to be required to settle the obligation.

Provisions are not recognised for future operating losses.

Provisions shall not be recognised for future operating losses. If an entity has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision.

1.8 Conditional grants and receipts

Government grants are recognised when there is reasonable assurance that:

the entity will comply with the conditions attached to them; and

the grants will be received.

The deferred income relating to grants is recognised on the following basis:

Capital contributions on plant and equipment: The deferred income will be credited to the Statement ofFinancial Performance over the useful life of the asset starting when the asset is brought to use.

1.9 Revenue recognition

Revenue from the sale of goods is recognised when all the following conditions have been satisfied:

the entity has transferred to the buyer the significant risks and rewards of ownership of the goods;

the entity retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;

the amount of revenue can be measured reliably;

it is probable that the economic benefits associated with the transaction will flow to the entity; and

the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Contract revenue comprises:

the initial amount of revenue agreed in the contract;

variations in contract work, claims and incentive payments;

– to the extent that it is probable that they will result in revenue; and

– they are capable of being reliably measured.

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Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax.

1.10 Interest income

Interest is recognised on a time-proportion basis using the effective interest method.

1.11 Translation of foreign currencies

The functional and presentation currency of the GPW is the South African Rand. Transactions in foreign currencies are initially recorded in the functional currency at the rate ruling at the date of the transaction. At the date of the statement of financial position, monetary assets and liabilities denominated in foreign currencies are translated to the functional currency, being the South African Rand, at exchange rates ruling at the date of the statement of financial position. Exchange differences arising on the settlement of transactions, at rates different from those at the date of the transaction, and unrealised foreign exchange differences on unsettled foreign currency monetary assets and liabilities, are recognised in the statement of financial performance and included in financing costs.

1.12 Significant judgements, estimates and assumptions

In preparing the annual financial statements, management is required to make estimates and assumptions that affect the amounts represented in the annual financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the annual financial statements. Significant judgements include: allowance for doubtful debts, allowance for slow moving inventory, residual values, useful lives and depreciation methods, employee obligations and asset impairment tests.

Other judgements made relate to classifying financial assets and liabilities into categories.


Notes to the Annual Financial Statements

2011 2010R ‘000 R ‘000

2. RevenueRevenue 753,443 639,035

Regular sales 648,353 534,999

Contract printing 105,090 104,036

753,443 639,035

3. Cost of salesDirect labour 50,930 54,927

Manufacturing overheads 25,102 58,857

Direct materials 331,600 323,285

Depreciation-factory equipment 66,167 59,956

473,799 497,025

4. Other incomeBad debts recovered 798 2,862

Discount received 1,511 1,643

Deferred income 60,765 55,391

Other recoveries 316 281

Telephone refunds 37 71

63,427 60,248

5. Operating expenditureAdministration and management fees 23,830 20,186

Audit fees 3,864 3,485

Bad debts provision 7,371 4,637

Bad debts written off 2 1

Depreciation-other equipment 2,366 2,170

Employee costs 49,252 44,923

Other operating expenditure 39,534 32,310

Loss on exchange differences 2,038 1,565

128,257 109,277

6. Net surplus for the yearThe following items have been charged in arriving at net surplus

Depreciation 68,533 62,128

Auditors’ remuneration 3,864 3,485

Consultant fees 798 2,605

73,195 68,218

49


7. Property, plant and equipment

2011 2010

Cost / valuation

Accumulateddepreciation

Carryingvalue

Cost /Valuation

Accumulateddepreciation

Carryingvalue

Plant and equipment 544,966 (203,096) 341,870 489,389 (141,176) 348,213

Office furniture 13,643 (9,312) 4,331 12,571 (8,250) 4,321

Motor vehicles 880 (704) 176 880 (528) 352

Computer equipment 22,303 (17,622) 4,681 21,284 (14,759) 6,525

Leasehold improvements 45,107 (1,125) 43,982 - - -Total 626,899 (231,859) 395,040 524,124 (164,713) 359,411

Reconciliation of property, plant and equipment - 2011

2011

Opening balance

Additions Disposals Depreciation Total

Plant and equipment 348,213 56,126 - (62,469) 341,870

Office furniture 4,321 1,252 (1) (1,241) 4,331

Motor vehicles 352 - - (176) 176

Computer equipment 6,525 1,679 - (3,523) 4,681

Leasehold improvements - 45,106 - (1,124) 43,982

Total 359,411 104,163 (1) (68,533) 395,040

Reconciliation of property, plant and equipment - 2010

2010

Opening balance

Additions Disposals Depreciation Total

Plant and equipment 335,346 70,355 - (57,488) 348,213

Office furniture 4,093 1,398 (9) (1,161) 4,321

Motor vehicles 528 - - (176) 352

Computer equipment 8,729 1,097 - (3,301) 6,525

Total 348,696 72,850 (9) (62,126) 359,411


8. Inventories

2011 2010

R ‘000 R ‘000

Raw materials, components 65,377 102,782

Work in progress 13,726 23,317

Finished goods 42,709 35,349

Subtotal 121,812 161,448

Inventories (write-downs) (923) (1,075)

120,889 160,373

Inventories are valued consistent to previous years as stated in note 1.4. During the year under review slow moving and obsolete stock amounting to R null million (2010: R 0,727 million) were written off. A reduction in the provision for slow moving and obsolete stock amounting to R 0,152 million was passed during the current financial year.

9. Trade and other receivables

2011 2010

R ‘000 R ‘000

Trade receivables 183,346 105,698

Other receivables 28,627 46,863

211,973 152,561

Included in other receivables are the following: disallowance creditors of R 1,086 million (2010: R 7,405 million), Incapacity leave of R (0,57) million (2010: R 0,233 million), VAT of R 25,738 million (2010: R 20,543 million) and creditors with debit balances of R 0,698 million (2010: R 0,279 million).

The GPW considers that the carrying amount of trade and other receivables approximates to their fair value. Concentrations of credit risk with respect to trade receivables are limited due to the majority of receivables being owed by government departments. Management believes that no additional credit risk beyond amounts provided for collection losses is inherent in the entity’s trade receivables.

Trade and other receivables impaired

As at 31 March 2011 trade and other receivables in the amount of R 25,302 million was considered to be impaired and the provision for doubtful debts of R 7,370 million was raised.

Reconciliation of provision for impairment of trade and other receivables

2011 2010

R ‘000 R ‘000

Opening balance 31,372 52,281

Provision created 7,370 4,637

Less: utilised (13,440) (25,546)

25,302 31,372

51

The creation and release of provision for impaired receivables have been included in operating expenses in the statement of comprehensive income (note 5). Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.

10. Cash and cash equivalents

Cash and cash equivalents consist of:

2011 2010

R ‘000 R ‘000

Cash on hand 39 34

Bank balances 17,296 125,122

Paymaster General 628,206 265,767

645,541 390,923

11. Capital fund

2011 2010

R ‘000 R ‘000

Balance at the beginning of the year 356,410 356,410

Transfer of the NT approved surplus 112,686 -

469,096 356,410

The capital fund originated through the transfer of net surplus in previous years after the approval of the NT was obtained for the necessary transfers. The purpose of the fund is the financing of the operations of the GPW.

12. Deferred income

During the financial year under review the GPW received an amount of R 97 million from NT via the DHA as a contribution towards the transformation of the GPW, including the procurement of new production equipment. The deferred income will be credited to the Statement of Comprehensive Income over the useful life of the asset starting when the asset is brought to use.

2011 2010

R ‘000 R ‘000


Grants received during the year 97,228 338,495

Deferred income realised through depreciation and appropriation (60,765) (55,391)

Closing balance 543,251 506,788


13. Trade and other payables

2011 2010

R ‘000 R ‘000

Trade payables 109,893 57,154

Other payables 29,435 23,319

Accrued expense - Leave pay 4,710 4,803

144,038 85,276

Included in other payables are the following: unallocated deposits of R 22,679 million (2010: R 13,823 million) and debtors with credit balances of R 6,673 million (2010: R 9,422 million).

Management considers that the carrying amount of trade and other payables approximates their fair value.

The entity changed its leave policy in 2002 due to the new dispensation. The entity capped all employees’ unused leave from the previous years prior to June 2000, limiting employees to take such leave during their working life at the entity under specific conditions. Capped leave is payable, based on the salary notch at the date of termination, which is only applicable if the termination of service is as a result of retirement, ill-health, death and specific leave conditions.

Accrued leave pay

2011 2010

R ‘000 R ‘000


Additions - 182

Utilised during the year (93) -

4,710 4,803

14. Provisions

Reconciliation of provisions - 2011

Opening balance Additions Total

Service bonus 2,111 136 2,247

Reconciliation of provisions - 2010

Opening balance Additions Total

Service bonus 1,961 150 2,111

The service bonus payable is based on an employees’ monthly salary on date when the bonus is due (month of birth). Bonus payable to employees is only applicable if an employee is still in the service of the entity or else on a pro rata basis in instances of retirement, ill-health and death.

53

15. Cash generated from operations

2011 2010

R ‘000 R ‘000

Surplus for the year 214,814 92,980

Adjustments for:

Depreciation and amortisation 68,534 62,127

(Profit) loss on sale of assets - 1

Movements in provisions 136 150

Fixed assets written off - 8

Changes in working capital:

Inventories 39,484 (36,182)

Trade and other receivables (59,412) (13,107)

Trade and other payables 58,762 (28,614)

Deferred income 36,463 283,103

358,781 360,466

16. Operating leases

The GPW leases various items of office equipment, including photocopying machines, fax machines, a franking machine and a letter opener from various lessors. These lessors are Minolta and Pitney Bowes. The NT entered into these lease agreements on behalf of the GPW. The lease agreements are for three years and can be renewed at the end of the lease term. The lease arrangement does not impose any restrictions.

Future minimum lease payments at 31 March 2011.

R’000 R’000 R’000

Up to 1 year 1 to 5 Years More than 5 years

R 34 R 10 R Nil

17. Depreciation - operating expenditure

2011 2010

R ‘000 R ‘000

Plant and machinery 50 47

Motor vehicles 124 124

Office equipment 757 798

Computer equipment 1,435 1,201

2,366 2,170

Total depreciation - operating expenditure 2,366 2,170


18. Employee benefits

2011 2010

R ‘000 R ‘000

Salaries and wages 84,049 79,962

Employer contributions:

Pension 6,943 6,571

Housing 3,172 2,233

Medical 5,492 5,238

Public Service Co-ordinate Bargaining Council 3 3

General Public Service Bargaining Council 25 12

99,684 94,019

19. Emoluments19.1. Executive remuneration

2011 2010

R ‘000 R ‘000

Chief Executive Officer (Resigned 31/5/2010)

Basic 128 733

Flexible portion of package 97 489

225 1,222

Currently the Executive Director: Operations is acting as Chief Executive Officer.

Chief Financial Officer (Appointed 2/1/2010)

Basic 593 147


1,007 245

Executive Director: Operations

Basic 593 461


Acting allowance - Chief Executive Officer 213 -

1,204 768

Executive Director: HR and Transformation

Basic 299 -

Flexible portion of package 86 -

Acting allowance 85 -

470 -

Currently the GPW has an acting Executive Director: HR and Transformation.

55

2011 2010

R ‘000 R ‘000

Director: Costing (Contract ended 31/12/2010)

Basic 293 98


515 163

Director: Internal Audit ( Appointed 1/08/2010)

Basic 276 -


456 -

Director: Factory Manager

Basic 402 381


626 635

Director: Financial Management (Appointed 1/12/2010)

Basic 109 -


236 -

Director: Project Management (Appointed 1/12/2010)

Basic 106 -


177 -

20. Remuneration of audit committee members

2011 2010

R ‘000 R ‘000

Audit committee members 35 19

21. Contingencies

These contingent liabilities represent guarantees to various financial institutions for housing loans to personnel. In the event the liability arises, then the GPW will be liable to pay out and then institute claims against personnel. Although the exposure appears reasonable, there is no limit to these contingent liabilities because they are purely dependent on employees exercising the benefit.


List of institutions: ABSA, FNB, Old Mutual, Nedbank and Standard Bank

2011 2010

R ‘000 R ‘000

Guarantees to various financial institutions for housing loans 19 62

22. Related partiesThe core business of the GPW is the provision of printing and related services to government entities across all spheres of government. Due to the number of entities involved, the listing of all of the disclosure requirements of IAS is not feasible.

2011 2010

R ‘000 R ‘000

Related party balances

Amounts included in Trade Receivable (Trade Payable) regarding related parties

The DHA 36,422 9,383

Deferred income

Grant received from National Treasury, via the DHA 97,228 338,495

Related party transactions

The following transactions pertaining to the major related parties to the GPW are disclosed:

The DHA

Sales 304,539 171,466

23. Post balance sheet eventsEvents that occurred after the balance sheet date, but before the financial statements were authorised for issue, were considered. There were no events that indicated evidence of any adverse or favourable conditions that existed on balance sheet date that should be adjusted for.

24. Rental of buildingsCertain buildings occupied by the GPW are owned and provided by the DPW

25. Unauthorised expenditureThere was no unauthorised expenditure during the year, hence there was no need for disciplinary action.

57

26. Irregular expenditure2011 2010

R ‘000 R ‘000

Overtime in excess of 30% of basic salary 2,119 3,265

Opening balance 3,265 -

Add: Irregular expenditure - currant year 2,119 3,265

5,384 3,265

27. Fruitless and wasteful expenditureThere was no fruitless and wasteful expenditure during the year.

28. Gifts and donationsNo gifts and donations were made during the year.

2011 2010

R ‘000 R ‘000

29. Ex-gratia paymentsPayments made during the year. 25 25

30. Financial instrumentsGeneral

The GPW’s activities expose it to a variety of risk. This section summarises these risks and the manner in which the GPW manages them.

2011 2010

R ‘000 R ‘000

Categories of financial instruments

Financial assets

Cash and bank balances 645,541 390,923

Trade receivables 182,260 105,608

Financial liabilities

Trade payables 102,494 57,154


Operational risk

Operational risk is the risk of loss arising from system failure, human error or external events. When controls fail to perform, operational risk can cause damage to reputation, have legal or regulatory implications or can lead to financial loss. The GPW can’t expect to eliminate all operational risks, but by initiating a rigorous control framework and by monitoring and responding to potential risk, the GPW is able to manage the risk. Controls include effective segregation of duties, access control, authorisation and reconciliation procedures, staff education and assessment processes and financial.

Price risk

As the entity has no significant interest-bearing assets, the entity’s income and operating cash flows are substantially independent of changes in market interest rates.

Fair value

At 31 March 2011, the carrying amounts of cash, accounts receivable, accounts payable and accrued expenses approximated their fair values due to the short term maturities of these assets and liabilities.

Credit risk

The GPW sells to government departments, state organs and the general public. It does not apply the credit management policies in a normal trading environment due to the fact that credit sales are only to government departments. Sales to the general public are either on a pre-paid or cash basis.

Currency risk

The entity operates in the Republic of South Africa and is exposed to foreign exchange risk except to the extent that local suppliers pass increased cost due to exchange rate fluctuations onto the GPW. At year end, the GPW was exposed to the Japanese Yen and the EURO due to agreements for the supply of machinery for which contracts were concluded in Japanese Yen and EUROs.

The entity did not hedge for foreign exchange fluctuations on these contracts, due to the utilisation of the Paymaster General account.

Liquidity risk

The entity’s exposure to liquidity risk is minimal since the GPW resorts under the auspices of the DHA which is the ultimate responsible party of the GPW.

59

Chapter 08PERFORMANCE REPORT

The GPW is proud to present the section on overall performance for the 2010/11 financial year.

61

Performance Report

Overall performance

Department: The Government Printing Works (GPW) is proud to present the section on overall performance for the 2010/11 financial year.

Statement of financial performance

The information in the table below demonstrates the improved overall financial performance since the proclamation of the GPW as a government component on the 9th of October 2009.

2011 2010 2009

Revenue 753 443 639 035 487 074

Cost of sales (473 799) (497 025) (403 771)

Gross profit 279 644 142 010 83 303

Other income 63 427 60 248 28 341

Operating expenses (128 257) (109 278) (100 668)

Operating profit 214 814 92 980 10 976

Interest received 4 260

Profit for the year 214 814 92 980 15 236

Core business

The GPW’s core business is the rendering of security printing and related services to government departments, provincial institutions and local authorities and entails the following:

• Compiling, editing, printing and distribution of Government Gazettes and Provincial Gazettes.

• The procurement and stocking of departmental forms and face value documents.

• The provision of a printing service pertaining to high security documents and also printed matter of general nature.

• The procurement and distribution of standard stationary items.

Over and above the core business, GPW also undertakes other functions and services in the printing market to ensure financial viability.

Summary of business units

GPW was transformed from a trading entity and established as a government component during 2009. GPW responded to the challenges of transforming and diversifying offerings in the security printing space by structuring the organisation into business units for purposes of performance reporting against objectives. These business units are as follows:

• Operations;

• Finance;

• Human resources;

• Marketing;

• Information and communications technology;

• Internal audit; and

• Security.


Key strategic objectives achievements

One of the strategic objectives for the DHA, set in 2007/08 ,is to provide credible, secure, accurate and timeous enabling documents to all eligible persons. GPW has set and obtained approval for the following key strategic objectives that are closely linked to the objective of the DHA and the turnaround programme of GPW:

• Conversion to a government component organisation to perform as a ring-fenced business entity with flexibility and within regulated parameters.

• Optimise production processes and facilities to increase operational effectiveness and improved customer service.

• Migration of technology across the spectrum to enable current and new processes as well as increasing production capacity.

• Implement an effective market strategy to ensure that GPW retains high value customers and consolidates its position as security printer of the state.

• Ensure strong financial management by cleaning its balance sheet.

For the 2010/2011 financial year, the GPW can demonstrate performance for all the strategic objectives set except for the implementation of an effective marketing strategy mainly as a result of inadequate resources. The performance in the different areas is reflected under the section dealing with business unit performance.

Overview of the organisational and service delivery environment for 2010/11

For the 2010/2011 financial year, the GPW continued on the journey of transformation with the challenges of the organisation being run on purely business principles governed by market forces and at the same time operating within the public service milieu, after being classified as a government component.

The GPW’s financial viability is dependent on its ability to generate revenue from services rendered. The principal clientele of the GPW are state departments and their statutory bodies, such as the Departments of Home Affairs, Education, Police, Health, Justice and others, to which GPW provides security printing services on a cost recoverable basis. On the regional scale, the GPW continued with the security printing contract through the Department of Transport and Communication for the Government of the Republic of Mozambique for its vehicle inspection certificates.

The GPW continued producing high quality printing at the new passport production facility, which was launched in 2009. This facility produces the new South African passport, with internationally benchmarked security features. Production statistics for selected products during the year under review are as follows:

Product 2010/11 2009/10 2008/09

Passports (booklets) 859 884 832 262 1 259 611

Identity Documents (booklets) 2 233 493 2 463 147 2 499 419

Examinations (books) 21 726 216 29 868 940 38 794 029

Government Gazettes (editions) 2 390 2 292 2 496

Government Gazettes (total number of A4 pages per annum) 107 044 105 915 110 281

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Although GPW can report on increased outputs, service delivery has been adversely affected by problems emanating from its human and material resources. In the field of human resources, the GPW has operated without a permanently appointed CEO since May 2010. The lack of experienced and qualified senior managers, artisans and administrative personnel impacts on service delivery, resulting in the GPW being compelled to outsource certain functions.

The further development and financing of the facilities as well as the technology upgrade necessary for the GPW to deliver on its mandate would remain a challenge without any additional funding from the fiscus.

Through the delivery of its services and products, the GPW is contributing to the outcome of government as “an efficient, effective and development oriented public service and an empowered, fair and inclusive citizenship”.

Key policy developments and legislative changes

During the year there were no key policy developments or legislative changes.

Collection of revenue

The GPW continuously strives to identify new measures to raise additional revenue or to ensure more efficient/effective collection of outstanding debts. During the 2010/2011 financial year, the GPW has maintained the debtors days outstanding at the same levels as was achieved during the 2009/2010 financial year. Debtors days outstanding at the end of the 2010/2011 financial year stood at 61 days compared to 63 days the year before.

Departmental expenditure

2010/11 – 595 085 2009/10 – 606 303

Conditional grants and earmarked funds

R 97 228 million received from NT to assist with the implementation of the asset replacement programme as well as the development of the new facility, situated at Visagie Street, Pretoria.

Business unit performance

For the year under review, the GPW has used the strategic objectives defined in its strategic plan as a basis to further refine the service delivery objectives and key performance indicators for the different business units, taking guidelines for planning and reporting on performance information issued by NT during the 2010/2011 financial year into account.

Operations business unit

Purpose: To provide strategic printing services.

Strategic objectives per strategic plan: Equipment recapitalisation, increase productivity level, customer satisfaction and improvement of spoilage and rework volumes.

Service delivery objective for business unit: Provide high quality printing services to government.

Service delivery objectives and indicators:


Operations business unit

Operations and technical alignment business unit

Service delivery objective

Measure/indicator

Actual performance against target Reason for variance/commentsTarget Actual

Provide high quality printing services to government

Quantity of Government Gazettes published by the GPW

100% of Government Gazette editions published, must conform to the client’s quality specifications

100% of the 2 390 of the Government Gazette editions published, conformed to the specified quality standards.

No deviation

Produce 100% of the required number of Government Gazettes within the client’s specified timeframes

100% of the 2 390 of the Government Gazette produced, were published within the specified timeframe.

No deviation

Quantity of identity document production

100% of identity documents produced, must conform to the client’s quality specifications

99,9 % achieved. Of the 2 233 493 identity documents produced, 2494 booklets (0,1%) were spoiled.

The percentage spoils emanated from regular production operations. However, all spoils were rectified prior to delivery.

Produce 100% of the required number of identity documents within a turnaround time of 3,0 days

3,5 days average turnaround time achieved for the 2 233 493 identity documents produced.

Regular manpower could not always cope with fluctuating quantities of identity documents received by the GPW for processing.

Quantity of passports production

100% of passport booklets produced, must conform to the client’s quality specifications

100% of the target was achieved. All of the 857 695 passports produced, conformed to the specified quality standards.

No deviation

Quantity of passports spoiled during booklet personalisation.

To maintain a spoilage percentage not exceeding 5% of the total annual quantity of passports personalised.

1,7% spoilage level achieved. Of the 857 695 passports personalised, 14 542 (1,7%) were spoiled.

The percentage spoils emanated from regular production operations. However, all spoils were rectified prior to delivery.

Quantity of examination scripts printed

Produce 100% of the required number of examination scripts within the client’s specified timeframes.

100% achieved. All of the 21 726 216 examination scripts produced, were delivered within the specified timeframes.

No deviation

New product development

Development and implementation of electronically enabled crew member certificate by September 2010

Development and implementation of the new product was completed within the specified timeframe.

No deviation

Development and printing of high security vehicle registration certificate for Mozambique by November 2010

The project was completed within the specified time frame.

No deviation

65

The achievement of the above targets contributed directly to the GPW’s outcome of growing towards becoming the leading provider of security printing services on the African continent.

Finance business unit

Purpose: To provide financial management support services to GPW.

Strategic objectives per strategic plan: The provision of fully compliant financial management services, to achieve optimal client satisfaction, strengthen the GPW’s capability to fulfil its mandate and continuous improvement of financial management performance and reporting.

Service delivery objective for business unit: Provide quality financial management services in compliance with legislation and with client needs to contribute towards financial sustainability.


Finance business unit


Measure/indicator

Actual performance against target Reason for variance/comments

Target Actual

Provide quality financial management services in compliance with legislation and with client needs to contribute towards financial sustainability

R-value of revenue 740 507 753 443 More security product sales than were budgeted for.

Operating costs as percentage of revenue

24,3% 17.02% Not all the staff appointments were made as anticipated.

Gross profit margin 23,90% 37.11% Due to higher product sales and not filling of all posts as planned for.

Debtor collection period 92 days 61 days Debtor control procedures were enforced and more stringently applied.

R-value of procurement between HDIs and non-HDIs

HDI 23%Non-HDI 77%

HDI 24%Non-HDI 76% Marginal increases in HDI spend.

Inventory turnover ration

2,98 3,33Prudent inventory management

Investment in additional production assets

168 111 56 126 The Department of Public Works must still finalise the development plans for Visagie Street, all the equipment couldn’t be procured as planned.

Return on capital investment

0,06 0,18 Higher income due to product sales and less operating expenditure due to non-filling of all vacancies.

The actual achievements against the targets demonstrate the finance division’s contribution to improved accountability and sustainability.


Human resource business unit

Purpose: To provide human resource management support services to GPW.

Strategic objectives per strategic plan: To have customised HR policies, standard operation procedures and strategies in place, develop and implement human capital strategy, to have a new GPW structure approved, to have as many as possible senior management posts approved, to migrate all staff, verify qualifications and audit of personal files, work towards becoming an employer of choice and have attractive remuneration bands for senior managers, critical and other jobs.

Service delivery objective for business unit: Provide quality human resource services in compliance with legislation and within external and internal client needs.




Measure/indicatorActual performance against target Reason for variance/

commentsTarget Actual

Provide quality human resource services in compliance with legislation and within external and internal client needs

Approved GPW establishment

1 April 2010 GPW establishment approved on 1 April 2010

Percentage of completed job descriptions

a) To have 80% of SMS posts job description finalised.

b) To have 50% of newly created lower level posts job descriptions finalised.

a) 83% job descriptions finalised.

b) 60% of newly created lower level posts job descriptions finalised.

Completed draft migration plan according to the new approved GPW establishment

30 September 2011 30 September 2011

Number of completed job evaluations (or percentage)

c) To have 80% of SMS posts job evaluated.

d) To have 50% of newly created lower level posts job evaluated.

c) 83% posts were job evaluated.

d) 60% of new lower level posts were job evaluated.

Number of SMS posts advertised (or percentage)

To have 60% posts advertised by 31 March 2011

22.6% posts were advertised.

The request from the ministry not to fill posts above level 14. Furthermore to this only two out of the four general manager posts are filled, which affected the filling of posts in the branches of strategic management and human resources.

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Percentage of SMS posts filled

To have 60% posts filled by 31 March 2011

19% Posts were filled The leaving of the CEO and request from the ministry not to fill posts above level 14. Furthermore to this only two out of the four general manager posts are filled, which affected the filling of posts in the branches of strategic management and human resources.

Number of critical artisan posts advertised

To advertise all vacant artisan positions.

All critical artisan positions were advertised.

Number of critical artisan posts filled

80% of vacant posts to be filled by 30 March 2011

30% of vacant posts were filled.

Remuneration an obstacle. Furthermore selection panels could not finalise selection processes before the end of the financial year.

Skills development initiatives implemented

Provide new study-aid to 2% of total permanent staff complement

12 bursaries were granted to employees, which represent 2.7% of total permanent staff.

The actual achievements against the targets demonstrate the human resources division’s contribution to providing quality human resource management services.

Marketing including publication and advertising business unit

Purpose: Provide marketing services to GPW including publications and advertising.

Strategic objectives: Grow the market share of GPW within the South African government, SADC and international markets through marketing, and continuous interactions with customers and stakeholders to build on improved relations.

Strategic objectives per strategic plan: Support the new/improved production capacity, diversification of product mix within security printing, aggressive marketing strategy to retain and grow the market, increase revenue and reduce stock.

Service delivery objective for business unit: Grow the market share of GPW within the South African government, SADC and international markets through marketing, and continuous interactions with customers and stakeholders to build on improved relations.

Performance against service delivery objectives and indicators: No performance can be reported against the objectives and indicators due to a lack of resources in the key performance area of marketing.


Information communications technology business unit

Purpose: Implement secure and reliable systems that enable best-of-class printing and implement and maintain systems that support printing core functions.

Strategic objectives per strategic plan: Business continuity solution that supports redundancy and functionality with recovery, approved master systems plan, implement the SLDC and functional specifications for the new system, and replace current business system and electronic Gazette on the web.

Service delivery objective for business unit: Implement ICT planning processes and methodologies, acquire and improve systems that enable business strategy, support business and ICT processes, applications and infrastructure, monitor systems and ensure regulatory compliance and provide good ICT governance.


Information communications technology business unit




Implement ICT planning processes and methodologies, acquire and improve systems that enable business strategy, support business and ICT processes, applications and infrastructure, monitor systems and ensure regulatory compliance and provide good ICT governance

Completed and approved GPW IT strategy

31 August 2010 13 September 2010 Strategy approval process was delayed due to capacity constraints.

Appointed service providers for environmental upgrade of all hardware and software

12 November 2010 18 February 2011 Due to capacity constraints, the technical evaluation process was only completed in December 2010 and the final adjudication in February 2011.

Implemented new Active Directory

10 September 2010 31 August 2010 Completed before target.

Completed PC literacy assessments for all GPW officials

31 December 2010 30% completed by 31 March 2011

Due to extension of phase 1 of the ERP project, PC literacy assessments commenced later than planned.

Developed and implemented track and trace system for matriculation and other grade examination papers

10 September 2010 Development of track and trace system completed for matriculation and other grade examination papers by 31 December 2010

Due to the specialised printer required for printing of barcodes, software programming had to be changed.

Completed phase I of Ubumbano (ERP project)

30 June 2010 31 December 2010 Due to capacity constraints as well as the magnitude of the work that had to be performed.

The achievements against the targets demonstrate the contribution towards implementing secure and reliable systems to enable best- of- class printing and supporting printing core functions.

69

Internal audit business unit

Purpose: Provide internal audit interventions and advisory services.

Strategic objectives per strategic plan: Risk management, fraud preventing, execution of internal audit plan.

Service delivery objective for business unit: Provide independent objective assurance and consulting activities designed to add value and improve GPW’s operations through quality risk based reviews.

Performance against service delivery objectives and indicators: No performance can be reported against the objectives and indicators due to the unit only being recently established. Security business unit

Purpose: Provide security services to GPW including physical security, document security, personnel security and investigations.

Strategic objectives per strategic plan: Provide proactive, effective, efficient quality security services to GPW and clients.

Service delivery objective for business unit: Provide proactive quality security services to GPW and clients to contribute towards secure information.


Security business unit


Measure/indicatorActual performance against target Reason for

variance/commentsTarget Actual

Provide proactive quality security services to GPW and clients to contribute towards secure information

Completed draft evacuation plan

Completed draft evacuation plan by 31 March 2011

Completed draft evacuation plan by 31 March 2011

None

Number of security awareness/security screening workshops conducted

Security screening workshops at:- passport factory- human resources

department

Completed security screening workshops at:- passport factory- human resources

department

None

Number of completed threat and risk appraisals (TRAs)

Complete threat and risk appraisals at National Key Point and East London regional office

Completed threat and risk appraisals at National Key Point and East London regional office

None

Completed draft security plan

Complete draft security plan by 31 March 2011

Completed draft security plan by 31 March 2011

None

Completed draft vetting strategy

Complete draft security plan by 31 March 2011

Completed draft security plan by 31 March 2011

None

The achievements against the targets demonstrate the contribution towards secure information.

J P ENGELBRECHTActing Chief Executive Officer29 July 2011


Chapter 09HUMAN RESOURCES

71

Human Resources

1. SERVICE DELIVERY

The tables below reflect the components of the service delivery improvement plan as well as progress made in the implementation thereof.

Table 1.1 – Main service for service delivery improvement and standards

Main services Actual customers Potential customers who may be integrated Standard of services Actual achievements

against standards

Operations and production

All public service departments and South African citizens.

African countries that may require security printing services.

Service delivery standards are set out in the GPW business model.

The re-capitalisation programme and building of printing capacity.

Table 1.2 – Consultation arrangements for customers

Type of arrangement Actual customer Potential customer Actual achievements

Direct interaction with clients. The implementation of an ERP solution to be completed in 2011/2012, which will include a GPW Internet: website.

All public service departments and South African citizens.

African countries that may require security printing services.

Table 1.3 – Service delivery strategy

Strategy Actual achievements

Continuous interactions with various customers and stakeholders to build on improved relations.Commissioning of new equipment and technology.

Improved capacity and on-time services.

Table 1.4 – Service information tool

Type of information tool Actual achievements

Daily interaction with various customers and stakeholders. Was not measured.

Table 1. 5 – Complaints mechanism

Complaints mechanism Actual achievements

Suggestion boxes Was not measured.


2. EXPENDITURE

The Government Printing Works (GPW) budgets in terms of clearly defined programmes. The tables below summarise final audited expenditure (Table 2.1) and by salary level (Table 2.2). In particular, it provides an indication of the amount spent on personnel costs in terms of the salary bands within the GPW.

Table 2. 1 – Personnel costs

ProgrammeTotal

expenditureR’000

Personnel expenditure

R’000

Training expenditure

R’000

Professional and special

servicesR’000

Personnel cost as % of total

expenditure

Average personnel cost per employee

R’000

Employment

GPW 595,085 99,641 742 5,900 16,7 193,854 514

Total 595,085 99,641 742 5900 16,7 193,854 514

Table 2.2 – Personnel costs by salary band

Salary bands Personnel expenditureR’000

Percentage of total personnel cost

Average personnel cost per employee

R’000

Lower skilled (levels 1-2) 1,421 1.4 109,308

Skilled (levels 3-5) 40,066 41.0 140,091

Highly skilled production (levels 6-8) 27,867 28.2 226,561

Highly skilled supervision (levels 9-12) 6,822 6.9 379,000

Senior management (levels 13-16) 2,254 2.3 751,333

Contract (levels 3-5) 12,604 13.1 242,385

Contract (levels 6-8) 2,088 2.1 189,818

Contract (levels 9-12) 1,711 1.7 570,333

Contract (levels 13-16) 2,275 2.3 758,333

Periodical remuneration 1,004 1.0 502,000

Total 98,112 100.0 190,879

73

Table 2.3 – Salaries, overtime, home owners’ allowance and medical aid

Programme

Salaries OvertimeHome owners

allowanceMedical assistance

AmountR’000

Salaries as % of

personnel cost

OvertimeR’000

Overtime as % of

personnel Cost

HOAR’000

HOA as % of

personnel Cost

Medical ass.

R’000

Medical ass. as % of personnel

cost

Government Printing Works 65,214 66.1 10,173 10.3 3,252 3.3 5,474 5.5

Total 65,214 66.1 10,173 10.3 3,252 3.3 5,474 5.5

Table 2.4 – Salaries, overtime, home owners allowance and medical aid by salary band

Salary bands

Salaries OvertimeHome owners

allowanceMedical assistance

AmountR’000

Salaries as % of

personnel cost

OvertimeR’000

Overtime as % of

personnel Cost

HOAR’000

HOA as % of

personnel Cost

Medical ass.

R’000

Medical ass. as % of personnel

cost

Lower skilled

(levels 1-2) 841 59.2 78 5.5 117 8.2 183 12.9

Skilled (levels 3-5) 23,548 58.7 5013 12.5 2128 5.3 3371 8.4

Highly skilled production

(levels 6-8) 17,942 63.3 2569 9.1 916 3.2 1629 5.8

Highly skilled

supervision

(levels 9-12) 4,840 70.8 285 4.2 66 1 270 3.9

Senior management

(levels 13-16) 1,755 77.6 0 0 24 1.1 18 0.8

Contract (levels 3-5) 10,491 83.2 2104 16.7 0 0 0 0

Contract (levels 6-8) 1,963 94.0 125 6.0 0 0 0 0

Contract (levels 9-12) 1,623 94.9 0 0 0 0 0 0

Contract (levels 13-16) 2,211 97.2 0 0 0 0 3 0.1

Total 65,214 66.1 10,174 10.3 3,251 3.3 5,474 5.5


3. EMPLOYMENT AND VACANCIES

The tables in this section summarise the position with regard to employment and vacancies.

The following tables summarise the number of posts of the establishment, the number of employees, the vacancy rate and whether there are any staff that is additional to the establishment.

Table 3.1 – Employment and vacancies, 31 March 2011

Programme Number of postsNumber of posts filled

Vacancy rateNumber of posts

filled additional to the establishment

GPW 701 514 26.7 0

Total 701 514 26.7 0

Table 3.2 – Employment and vacancies by salary bands, 31 March 2011

Salary band Number of postsNumber of posts filled

Vacancy rateNumber of posts filled additional to the establishment

Lower skilled (levels 1-2),

permanent 24 16 33.3 0

Skilled (levels 3-5), permanent 367 334 9.0 0

Highly skilled production

(levels 6-8), permanent 216 137 36.6 0

Highly skilled supervision


Senior management


Interns/learners 0 0 0.0 0

Total 701 514 26.7 0

The above-mentioned numbers include 80 contract employees.

75

Table 3.3 – Employment and vacancies by critical occupation, 31 March 2011

Critical occupationsNumber of

postsNumber of posts filled

Vacancy rateNumber of posts

filled additional to the establishment

Compositors typesetters and related

printing workers 40 37 7.5 0

Bookbinding and related machine

operators 32 20 37.5 0

Printing and related machine operators 23 13 56.5 0

Finance and economics related

managers 8 3 62.5 0

Human resources related, permanent 25 10 60.0 0

Senior managers 30 6 80.0 0

Total 158 89 43.7 0

4. JOB EVALUATION

The following table (Table 4.1) summarises the number of jobs that were evaluated during the year under review. The table also provides the statistics on the number of posts that were upgraded or downgraded.

Table 4.1 – Job evaluation

Salary band on 31 March 2011

Number of posts

Number of jobs

evaluated

% of posts evaluated

Number of posts upgraded

% of Upgraded

posts evaluated

Number of posts

downgraded

% of downgraded

posts evaluated

Lower skilled (levels 1-2) 24 0 0.0 0 0.0 0 0.0

Skilled (levels 3-5) 367 37 10.1 14 43.8 0 0.0

Highly skilled production (levels 6-8) 216 20 9.3 0 0.0 0 0.0

Highly skilled supervision (levels 9-12) 64 34 53.1 0 0.0 0 0.0

Senior management (levels 13-16) 30 25 83.3 0 0.0 0 0.0

Total 701 116 16.6 14 43.8 0 0.0

Table 4.2 – Profile of employees whose positions were upgraded due to their posts being upgraded

Beneficiaries African Asian Coloured White Total

Beneficiaries 7 0 0 1 8


Table 4.3 – Employees whose salary level exceed the grade determined by job evaluation [i.t.o PSR 1.V.C.3]

Total number of employees whose salaries exceeded the upgrades determined by job evaluation in 2010/2011 None

Table 4.4 – Profile of employees whose salary level exceeded the grade determined by job evaluation [i.t.o. PSR 1.V.C.3]

Beneficiaries African Asian Coloured White Total

Female 0 0 0 0 0

Male 0 0 0 0 0

Total 0 0 0 0 0

Employees with a disability 0 0 0 0 0

5. EMPLOYMENT CHANGES

This section provides information on changes in employment over the financial year. Table 5.1 summarises appointments, promotions and service terminations by race, gender and disability. In addition, the table provides an indication of the impact of these changes on the employment of the GPW.

Table 5.1 – Annual turnover rates by salary band

Salary bandEmployment at

beginning of periodAppointments Terminations Turnover rate

Lower skilled (levels 1-2) 16 0 0 0.0

Skilled (levels 3-5) 271 25 9 3.3

Highly skilled production (levels 6-8) 124 7 9 7.3

Highly skilled supervision (levels 9-12 ) 18 1 2 11.1

Senior management service band A 1 1 0 0.0

Senior management service band B 1 0 0 0.0

Senior management service band C 1 1 1 100.0

Senior management service band D 0 0 0 0.0

Interns 0 0 0 0.0

Total 432 35 21 4.9

Contract (levels 3-5), permanent 44 4 20 45.5



Contract (band A), permanent 1 2 1 100.0

Contract (band B), permanent 1 0 1 100.0

Total 82 14 26 31.7

77

Note 1: The above-mentioned information includes the appointment of 18 employees in a permanent capacity who were initially employed on contract. Their information is also reflected under the terminations of the contract information.

Note 2: A total of 81 contract employees were appointed for a period of six months or shorter during the financial year to assist with special projects. These appointments and service terminations are not reflected in the above-mentioned information (Table 5.1).

Table 5.2 – Annual turnover rates by critical occupation

OccupationEmployment at

beginning of periodAppointments Terminations Turnover rate

Bookbinding and related machine operators 18 2 1 5.6

Compositors typesetters and related printing workers 33 7 3 9.1

Printing management and supervisory personnel 23 1 1 4.4

Senior managers 6 4 3 50.0

Total 80 14 8 10.0

Table 5.3 – Reasons why staff are leaving Government Printing Works

Termination type NumberPercentage of total

resignationsPercentage of total

employment

Death 5 10.6 1.0

Resignation 6 12.8 1.2

Transfer 2 4.3 0.4

Retirement early 4 8.5 0.8

Dismissal-misconduct 2 4.3 0.4

Retirement normal 2 4.3 0.4

Contract terminations (normal) 8 17.0 1.6

Converted to permanent employment 18 38.3 3.5

Total 47 100.0 9.1

Resignations as % of permanent employment 9.1


Table 5.4 – Granting of employee initiated severance packages

CategoryNo of

applications received

No of applications

referred to the MPSA

No of applications

supported by MPSA

No of packages

approved by department

Lower skilled (salary level 1-2) 0 0 0 0

Skilled (salary level 3-5) 0 0 0 0

Highly skilled production (salary level 6-8) 0 0 0 0

Highly skilled production (salary level 9-12) 0 0 0 0

Senior management (salary level 13 and higher) 0 0 0 0

Total 0 0 0 0

Table 5.5 – Promotions by critical occupation

OccupationEmployment

at beginning of period

Promotions to another salary

level

Salary level promotions as a % of

employment

Progressions to another

notch within salary level

Notch progressions

as a % of employment

Bookbinding and related machine operators 18 1 5.6 18 100.0

Compositors typesetters and related printing workers 20 0 0.0 15 75.0

Printing management and supervisory personnel 22 0 0.0 14 63.6

Total 60 1 5.6 47 78.3

Table 5.6 – Promotions by salary band

Salary bandEmployment at beginning of period

Promotions to another salary

level

Salary level promotions


Progressions to another

notch within salary level

Notch progressions


Lower skilled (levels 1-2) 16 0 0.0 8 50.0

Skilled (levels 3-5) 315 2 0.6 249 79.1

Highly skilled production (levels 6-8) 151 2 1.3 73 48.3

Highly skilled supervision (levels 9-12) 27 0 0.0 7 25.9

Senior management (levels 13-16) 5 1 20.0 1 20.0

Total 514 5 1.0 338 65.8

79

6. EMPLOYMENT EQUITY

The tables in this section are based on the formats prescribed by the Employment Equity Act, 55 of 1998.

Table 6.1 – Total number of employees (including employees with disabilities) per occupational category (SASCO)

Occupational categoriesMale

AfricanMale

colouredMale Indian

Male total blacks

Male white

Female African

Female coloured

Female Indian

Female total blacks

Femalewhite

Total

Legislators, senior officials and managers 2 0 0 2 2 1 0 0 1 1 6

Professionals 1 0 0 1 1 0 0 0 0 3 5

Technicians and associate professionals 35 3 1 39 13 22 2 1 25 10 87

Clerks 22 2 0 24 3 35 2 1 38 16 81

Service and sales workers 12 1 0 13 1 4 0 0 4 0 18

Craft and related trades workers 29 1 2 32 37 19 1 0 20 13 102

Plant and machine operators and assemblers 50 4 0 54 30 51 9 1 61 44 189

Elementary occupations 9 1 0 10 5 10 0 0 10 1 26

Total 160 12 3 175 92 142 14 3 159 88 514

Male African

Male coloured

Male Indian

Male total blacks

Male white

Female African

Female coloured

Female Indian

Female total blacks

Femalewhite

Total

Employees with

disabilities 3 0 0 3 4 1 0 0 1 3 11


Table 6.2 – Total number of employees (incl. employees with disabilities) per occupational band

Occupational bands

Male African

Male coloured

Male Indian

Male total blacks

Male white

Female African

Female coloured

Female Indian

Female total blacks

Femalewhite

Total

Top management 0 0 0 0 2 0 0 0 0 0 2

Senior management 1 0 0 1 0 1 0 0 1 0 2

Professionally qualified and experienced specialists and mid-management, 7 1 1 9 5 1 0 0 1 3 18

Skilled technical and academically qualified workers, junior management, supervisors, foremen 35 2 1 38 30 33 1 1 35 22 125

Semi-skilled and discretionary decision making 89 8 0 97 49 68 12 2 82 58 286

Unskilled and defined decision making 2 1 0 3 0 10 0 0 10 0 13

Contract (top management), 0 0 0 0 0 0 0 0 0 0 0

Contract (senior management) 1 0 0 1 0 0 0 0 0 1 2

Contract (professionally qualified) 0 0 1 1 1 1 0 0 1 0 3

Contract (skilled technical) 4 0 0 4 4 2 0 0 2 1 11

Contract (semi-skilled) 21 0 0 21 1 26 1 0 27 3 52

Total 160 12 3 175 92 142 14 3 159 88 514

81

Table 6.3 – Recruitment

Occupational bands

Male African

Male coloured

Male Indian

Male total blacks

Male white

Female African

Female coloured

Female Indian

Female total blacks

Femalewhite

Total

Top management

0 0 0 0 1 0 0 0 0 0 1

Senior management

0 0 0 0 0 1 0 0 1 0 1

Professionally qualified and experienced specialists and mid-management

0 0 1 1 0 0 0 0 0 0 1

Skilled technical and academically qualified workers, junior management, supervisors, foremen

1 0 1 2 2 0 0 0 0 0 4

Semi-skilled and discretionary decision making

8 0 0 8 0 16 0 0 16 0 24

Contract (senior management), permanent

1 0 0 1 0 0 0 0 0 1 2

Contract (skilled technical)

2 0 0 2 3 3 0 0 3 3 11

Contract (semi-skilled)

3 0 0 3 0 2 0 0 2 0 5

Total 15 0 2 17 6 22 0 0 22 4 49

Special project appointments, short term less than six months

Occupational bands

Male African

Male coloured

Male Indian

Male total blacks

Male white

Female African

Female coloured

Female Indian

Female total blacks

Femalewhite

Total


Total 34 1 0 35 2 43 2 0 45 2 84


Table 6.4 – Promotions

Occupational bands

Male African

Male coloured

Male Indian

Male total blacks

Male white

Female African

Female coloured

Female Indian

Female total blacks

Femalewhite

Total

Top management 0 0 0 0 1 0 0 0 0 0 1

Professionally qualified and experienced specialist 0 0 0 0 0 0 0 0 0 0 0

Skilled technical and academically qualified worker 0 0 0 0 0 2 0 0 2 0 2


Unskilled and defined decision making 0 0 0 0 0 0 0 0 0 0 0

Total 1 0 0 1 1 3 0 0 3 0 5

83

Table 6.5 – Terminations

Occupational bands

Male African

Male coloured

Male Indian

Male total blacks

Male white

Female African

Female coloured

Female Indian

Female total blacks

Femalewhite

Total

Professionally qualified and experienced specialists and mid-management 0 0 0 0 1 0 0 0 0 0 1

Skilled technical and academically qualified workers, junior management, supervisors, foremen 3 0 0 3 3 1 0 0 1 1 8


Contract (top management) 1 0 0 1 0 0 0 0 0 0 1

Contract (senior management) 0 0 0 0 2 0 0 0 0 0 2

Contract (professionally qualified) 0 0 0 0 2 1 0 0 1 0 3

Contract (skilled technical) 0 0 0 0 3 0 0 0 0 4 7


Total 10 2 0 12 12 12 0 0 12 11 47

Special project contract expiry, short term less than six months

Occupational bands

Male African

Male coloured

Male Indian

Male total blacks

Male white

Female African

Female coloured

Female Indian

Female total blacks

Femalewhite

Total


Total 34 1 0 35 2 43 2 0 45 2 84

Table 6.6 – Disciplinary action

Occupational bands

Male African

Male coloured

Male Indian

Male total blacks

Male white

Female African

Female coloured

Female Indian

Female total blacks

Femalewhite

Total

Total 6 1 0 7 6 6 0 0 6 1 20


Table 6.7 – Skills development

Occupational categories

Male African

Male coloured

Male Indian

Male total blacks

Male white

Female African

Female coloured

Female Indian

Female total blacks

Femalewhite

Total

Legislators, Senior officials and managers 2 0 0 2 1 1 0 0 1 2 6

Professionals 4 0 1 5 3 2 0 0 2 2 12

Technicians and associate professionals 13 0 1 14 6 11 0 1 12 3 35

Clerks 7 0 0 7 5 16 0 0 16 3 31

Elementary occupations 0 0 0 0 0 0 0 0 0 2 2

Total 26 0 2 28 15 30 0 1 31 12 86

7. PERFORMANCE

To encourage good performance, the department has granted the following performance rewards during the year in review. The information is presented in terms of race, gender and disability (Table 7.1), critical occupations (Table 7.3) and salary bands for SMS (Table 7.4).

Table 7.1 – Performance rewards by race, gender and disability

Description Number of beneficiaries Total employment Percentage of

total employment Cost (R’000) Average cost per beneficiary (R)

African, female 27 142 19.0 204 7,573

African, male 38 159 23.9 309 8,121

Asian, female 2 3 66.7 17 8,265

Asian, male 0 3 0.0 0 0

Coloured, female 9 14 64.3 60 6,633

Coloured, male 4 12 33.3 36 8,943

Total blacks, female 38 159 23.9 281 7,387

Total blacks, male 42 173 24.3 344 8,200

White, female 39 88 44.3 348 8,919

White, male 27 92 29.3 291 10,779

Employees with a disability 1 1 100.0 6 5,887

Total 147 514 28.6 1,270 8,638

85

Table 7.2 – Performance rewards by salary band for personnel below senior management service

Salary bandNumber of beneficiaries

Total employment

Percentage of total

employmentCost (R’000)

Average cost per beneficiary

(R)

Lower skilled (levels 1-2) 6 13 46.2 25 4,167

Skilled (levels 3-5) 91 286 31.8 615 6,758

Highly skilled production (levels 6-8) 43 123 35.0 486 11,302

Highly skilled supervision (levels 9-12) 7 18 38.9 144 20,571

Contract (levels 3-5) 0 52 0.0 0 0



Periodical remuneration 0 2 0.0 0 0

Total 147 508 28.9 1,270 8,639

Table 7.3 – Performance rewards by critical occupation

Critical occupationsNumber of beneficiaries

Total employment

Percentage of total


Average cost per beneficiary

(R)

Binding and related workers 6 14 42.9 65 10,833

Bookbinding and related machine operators 5 7 71.4 47 9,400

Printing management and supervisory personnel 10 27 37.0 169 16,900

Compositors typesetters & related printing workers 6 39 15.4 69 11,500

Printing planners and production controllers 1 7 14.3 24 24,000

Printing, management and supervisory personnel 2 6 33.3 35 17,500

Total 30 100 30.0 409 13,633


Table 7.4 – Performance related rewards (cash bonus) by salary band for senior management service

SMS bandNumber of beneficiaries

Total employment

Percentage of total


Average Cost per

beneficiary (R)

% of SMS Wage Bill

Personnel cost SMS (R’000)

Band A 0 3 0 0 0 0 0

Band B 0 1 0 0 0 0 0

Band C 0 2 0 0 0 0 0

Total 0 6 0 0 0 0 0

8. FOREIGN WORKERS

The tables below summarised the employment of foreign nationals in the Government Printing Works in terms of salary bands and major occupations. The tables also summarise changes in the total number of foreign workers in each salary band and by each major occupation.

Table 8.1 – Foreign workers by salary band

Major occupation

Employment at beginning of period

Percentage of total

Employment at end of period

Percentage of total

Change in employment

Percentage of total

Total employment at beginning of period

Total employment

at end of period

Total change in

employment

Total 0 0 0 0 0 0 0 0 0

Table 8.2 – Foreign workers by major occupation

Major occupation

Employment at beginning of period

Percentage of total

Employment at end of period

Percentage of total

Change in employment

Percentage of total

Total employment at beginning of period

Total employment

at end of period

Total change in

employment

Total 0 0 0 0 0 0 0 0 0

87

9. LEAVE UTILISATION FOR THE PERIOD 1 JANUARY 2010 TO 31 DECEMBER 2010

The Public Service Commission identified the need for careful monitoring of sick leave within the public service. The following tables provide an indication of the use of sick leave (Table 9.1) and disability leave (Table 9.2). In both cases, the estimated cost of the leave is also provided.

Table 9.1 – Sick leave 1 January 2010 to 31 December 2010

Salary band Total days% Days with

medical certification

Number of employees using sick

leave

% of total employees using sick

leave

Average days per employee

Estimated cost (R’000)

Total number of employees

using sick leave

Total number of days with

medical certificates

Lower skilled (levels 1-2) 224 89.3 13 2.5 17 51 513 200

Skilled (levels 3-5) 3582 89.0 273 53.2 13 1,096 513 3188

Highly skilled production (levels 6-8) 1468 84.6 122 23.8 12 778 513 1242

Highly skilled supervision (levels 9-12) 130 85.4 14 2.7 9 158 513 111

Senior management (levels 13-16) 5 100.0 3 0.6 2 13 513 5

Contract (levels 3-5) 332 83.7 69 13.5 5 111 513 278

Contract (levels 6-8) 77 54.5 13 2.5 6 37 513 42

Contract (levels 9-12) 21 76.2 4 0.8 5 31 513 16

Contract (levels 13-16) 10 80.0 2 0.4 5 28 513 8

Total 5849 87.0 513 100.0 11 2,303 513 5090

Table 9.2 – Disability leave (temporary and permanent) 1 January 2010 to 31 December 2010

Salary band Total days% days with


Number of employees

using disability

leave

% of total employees

using disability

leave

Average days per employee

Estimated cost

(R’000)

Total number of days with


Total number of employees

using disability

leave

Skilled (levels 3-5) 168 100.0 4 40.0 42 50 168 10

Highly skilled production (levels 6-8) 37 100.0 5 50.0 7 21 37 10

Contract (levels 6-8) 16 100.0 1 10.0 16 7 16 10

Total 221 100.0 10 100.0 22 78 221 10


Table 9.3 – Annual leave 1 January 2010 to 31 December 2010

Salary band Total days taken Average per employee employment

Lower skilled (levels 1-2) 272 21 13

Skilled (levels 3-5) 6659 23 292

Highly skilled production (levels 6-8) 2925 22 132

Highly skilled supervision (levels 9-12) 465 26 18

Senior management (levels 13-16) 47 16 3

Contract (levels 3-5) 708 7 102




Total 11303 19 581

Table 9.4 – Capped leave, 1 January 2010 to 31 December 2010

Salary Band Total days of capped leave taken Average number of days taken per employee

Skilled (levels 3-5) 51 3

Highly skilled production (levels 6-8) 81 12

Highly skilled supervision (levels 9-12) 8 8

Total 140 6

Table 9.5 – Leave pay-outs for the period 1 April 2010 to 31 March 2011

Reason Total amount (R’000) Number of employeesAverage payment per

employee (R)

Leave payout for 2010/11 due to non-utilisation of leave for the previous cycle 8 2 4,000

Capped leave payouts on termination of service for 2010/11 65 18 3,611

Current leave payout on termination of service for 2010/11 1 1 1,000

Total 74 21 3,524

89

10. HIV/AIDS & HEALTH PROMOTION PROGRAMMES

Table 10.1 - Steps taken to reduce the risk of occupational exposure

Government Printing Works participated in several initiatives to address these issues.

Table 10.2 – Details of Health Promotion and HIV/AIDS Programmes [tick Yes/No and provide required information]

Question Yes No Details, if yes

Has the Government Printing Works designated a member of the SMS to implement the provisions contained in Part VI E of Chapter 1 of the Public Service Regulations, 2001?

Executive Director Human Resources

Does the Government Printing Works have a dedicated unit or have you designated specific staff members to promote health and well-being of your employees?

Specific staff members have been delegated.

Has the Government Printing Works established committees as contemplated in Part VI E 5(e)of Chapter 1 of the Public Service Regulations, 2001?

Health & safety committee

11. LABOUR RELATIONS

Table 11.1 - Collective agreements, 1 April 2010 to 31 March 2011

None

Table 11.2 – Misconduct and disciplinary hearings finalised

Outcomes of disciplinary hearings Number Percentage of total

Corrective counselling 0 0.0

Final written warning 0 0.0

Suspended without pay 3 60.0

Dismissal 2 40.0

Total 5 100.0

Table 11.3 – Types of misconduct addressed and disciplinary hearings

Type of misconduct Number Percentage of total

Unacceptable behaviour 3 60.0

Unauthorised absenteeism 2 40.0

Total 5 100.0


Table 11.4 – Grievances lodged

Number of grievances addressed Number % of total

Resolved 14 51.9

Not resolved 13 48.1

Total 27 100.0

Table 11.5 – Disputes lodged

Number of disputes addressed Number % of total

Upheld 1 33.3

Dismissed 2 66.7

Total 3 100.0

Table 11.6 – Strike actions

Strike actions 0

Total number of person working days lost 546

Total cost (R’000) of working days lost 146

Amount (R’000) recovered as a result of no work no pay 146

Table 11.7 – Precautionary suspensions

Precautionary suspensions 0

Number of people suspended 3

Number of people whose suspension exceeded 30 days 2

Average number of days suspended 50

Cost (R’000) of suspensions 55

91

12. SKILLS DEVELOPMENT

Table 12.1 – Training needs identified 1 April 2010 to 31 March 2011

Occupational categories GenderNumber of

employees as at 1 April 2010

Training needs identified at start of reporting period

LearnershipsSkills programmes and other short

courses

Other forms of training

Total

Legislators, senior officials and managers

FemaleMale

1634

00

29

310

519

Clerks and lower skilled FemaleMale

222242

00

4521

3834

8355

Total 514 0 77 85 162

Table 12.2 – Training provided 1 April 2010 to 31 March 2011

Occupational categories GenderNumber of

employees as at 1 April 2010

Training needs identified at start of reporting period

LearnershipsSkills programmes and other short

courses

Other forms of training

Total

Legislators, senior officials and managers

FemaleMale

1634

00

28

514

722

Clerks and lower skilled FemaleMale

222242

00

1411

2210

3621

Total 514 0 35 51 86

Table 12.3 – Internship programme 1 April 2010 to 31 March 2011

Government Printing Works Internship programme details are as follows

Occupational categoriesNumber of interns

Male Female Total

Total 0 0 0


Table 12.4 - Study bursaries granted 1 April 2010 to 31 March 2011

Occupational categoriesNumber of interns

Male Female Total

Legislators, senior officials

and managers 2 1 3

Clerks and lower skilled 3 8 11

Total 5 9 14

13. INJURY ON DUTY

The following table provides basic information on injury on duty.

Table 13.1 – Injury on duty

Nature of injury on duty Number % of total

Required basic medical attention only 58 83.0

Temporary total disablement 12 17.0

Permanent disablement 0 0.0

Fatal 0 0.0

Total 70 100.0

14. UTILISATION OF CONSULTANTS

Table 14.1 – Report on consultant appointments

Project titleTotal number of consultants

that worked on the projectDuration: workdays

Contract value in Rand

R’000

Information technology

advisor 1 6 months 409

Total 1 6 months 409

93

Nature of business and principal activities: The Government Printing Works is tasked with the rendering of printing and related services to government departments, provincial institutions and local authoritie

Legal form of entity: In accordance with Schedule 3 of the Public Service Act – Section 7(5)(c), the Government Printing Works is classified as a government component

Registered office: 149 Bosman StreetPretoria0001

Business address: 149 Bosman StreetPretoria0001

Postal address: Private Bag X 85Pretoria0001

Auditors: The Auditor-General of South Africa

Bankers: ABSAReserve Bank

Accounting Officer: JP Engelbrecht

RP: 239/2011

ISBN: 978-0-621-40386-2

Design and layout by www.studio112.co.za

Private Bag X 85Pretoria

0001

Private Bag X85, PRETORIA, 0001Government Printing Works, 149 Bosman Street, Pretoria

Tel: 012 334 4500 / 4508 / 4509 / 4510Fax: 012 323 0009

REPUBLIC OF SOUTH AFRICA - Government Printing Works

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