PUBLIC ENTERPRISES

PROGRAMME 4: MANUFACTURING

2008-2011 STRATEGIC PLAN AND

FINANCIAL OVERVIEW

27-29 FEBRUARY 2008

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PROGRAMME 4CONTENTS

Purpose and measurable objectives

Planned activities

Budget

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PROGRAMME 4PURPOSE & MEASURABLE OBJECTIVES

The Purpose of the Manufacturing Division is to: Analyse SOE strategies against Government’s strategic intent.

Develop proposals around how the SOE can play a catalytic role in the development of the manufacturing cluster.

Monitor and advise on SOE financial and operational performance.

Measurable objective:

Strategies and structures for SOE and the industries in which they operate that will ensure delivery on the government’s economic growth objectives

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KEY ACTIVITIES FOR THE YEAR SUB-PROGRAMME: DEFENCE

Sub-Programme Activity / Project Critical Path Activities Time Required Due Date Output

INVESTMENT MANAGEMENT

Shareholder’s Compact 2008/09

Strategic Intent Statement and KPI’s

Closure on compact

4 weeks 23 April 08 MemoInput to CompactBoard signature

Monthly Report Analysis of group: Financial performance Strategy implementation Operations

2 weeks 2 weeks after receipt

Monthly report memo

Quarterly Report (Q1) Analysis of group and divisions: Financial performance Strategy implementation Operations 1 page investor advisory to

Board

2 weeks 29/08/2008 Quarterly Report Memo (note as a quarter report and monthly report are often combined).

Quarterly Report (Q2) As above 2 weeks 28/11/2008 Memo

Quarterly Report (Q3) As above 2 weeks 28/02/2009 Memo

Quarterly Report (Q4) As above 2 weeks 29/05/2009 Memo

DPE Board Presentation Presentation to DPE Board 1 week A week after receipt

Presentation to the DPE Board

Dashboard Populating and updating data Quarterly Updated Dashboard

AGM Annual review: Input into AGM agenda Review board composition Review of:

o Financial performanceo Strategy implementationo Operations

3 weeks August 2008 Memo

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KEY ACTIVITIES FOR THE YEAR SUB-PROGRAMME: DEFENCE (CONTD.)

Sub-Programme Activity / Project Critical Path Activities Time Required Due Date Output

Corporate Plan Analysis of: Financial forecasts Strategy Plan

1 month 23 March 2009 Memorandum on Corporate Plan

Input into assessment of PFMA

section 54 applications Economic/business assessment 3 weeks Unknown Section 54 (2) memo

INDUSTRY IMPACT

Determine Denel end-state Convene Task Team Cabinet Memo

2 months 31 March 08 Cabinet Memo

NCACC Bill Write-up enhancements to the Bill

2 months 15 April 2008 Bill

Assist with establishing DERI Assist with the Bill Assistance with

Governance Facilitate transfer of OTB

to DERI

12 months 31 March 2009 BillDERI established

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KEY ACTIVITIES FOR THE YEAR SUB-PROGRAMME: DEFENCE (CONTD.)

Sub-Programme Activity / Project Critical Path Activities Time Required Due Date Output

Missiles Strategy Develop strategy Presentation to Ministers

4 months for research

and strategy development

31 March 2009 Strategy documents and increased export sales

Sector strategy Review acquisition policy (see above)

Regulatory review (see above)

DoD supplier forums Establish export council

4 months for research

3 months to establish fora

31 March 2009 DoD supplier forums and export council established

AD-HOC

Referrals from Minister and DG

Drafting of briefing and letter On-going Agreed dates Decision or briefing memo as required

Parliamentary questions

Draft/review response 2 days: oral5 days: written

Agreed dates Answer to parliamentary question

Review of Cab Memos Research topicWrite-up memo

1 week Agreed dates Decision or briefing memo, as required

Articles Article on economic/key issues 2 weeks 1 per annum Article

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KEY ACTIVITIES FOR THE YEAR SUB-PROGRAMME: FORESTRY

Sub-Programme Activity / Project Critical Path Activities Time Required

Due Date Output

INVESTMENT MANAGEMENT

Shareholder’s Compact Preparation of Shareholders Compact Strategic Intent Statement and KPI’s Closure of Compact

4 weeks 23 April 2008 MemoInput to CompactBoard signature

Quarterly Report (Q1) Analysis of Quarterly Reports Financial performance Sustainable forestry management Maintenance of shareholder value 1 page investor advisory to Board

2 weeks 29/08/2008 Memo

Quarterly Report (Q2) As above 2 weeks 28/11/2008 Memo

Quarterly Report (Q3) As above 2 weeks 28/02/2009 Memo

Quarterly Report (Q4) As above 2 weeks 29/05/2009 Memo

DPE Board presentation Financial performance Maintenance of shareholder value

1 week Quarterly Board pack

Dashboard Populating and updating data Quarterly Updated Dashboard

AGM Annual Review: Input into AGM Agenda Review board composition Review of:

o Financial performanceo Sustainable forestry managemento Maintenance of shareholder value

3 weeks August 2008 Approval of decision memo by DG and Minister

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KEY ACTIVITIES FOR THE YEAR SUB-PROGRAMME: FORESTRY (CONTD.)

Sub-Programme Activity / Project Critical Path Activities Time Require

Due Date for Output

Corporate Plan Analysis of financial targetsSustainable forestry managementMaintenance of shareholder value

3 weeks 23 March 2009 Endorsement of SAFCOL’s Corporate Plan by the Minister

Input into assessment of PFMA Section 54 applications

Economic/business assessment 3 weeks Unknown Section 54 (2) memo

AD-HOC/SECTOR SUPPORT TO KLF TRANSACTION

Input into effective sale of KLF

Input to Land Claims issue Provide economic inputs to LGRT on the transaction structure Input in assessing transaction implementation

End of FY 08/09, as per Cabinet approval

Time line under review

Completed decision memos at the completion of each phase as contained in the transaction guidelines

Input into SAFCOL residual activities and projects

Make strategic inputs to LGRT on oversight over the KLF Lease

To be determined

To be determined

Signed Lease Agreement

Oversight over the implementation of KLF’s new sawlog marketing policy

On-going June 2008 Increased sector competition

Input into the orderly wind-down of SAFCOL

Make input on the closure of SAFCOL

On-going Time line under review

SAFCOL discharged of all residual responsibilities, and closed down

Referrals from Minister and DG

Drafting of briefing and letter On-going Agreed dates Decision or briefing memo as required

Parliamentary questions Draft/review response 2 days: oral5 days: written

Agreed dates Answer to parliamentary question

Review of Cab Memos Research topicWrite-up memo

1 week Agreed dates Decision or briefing memo as required

Articles Article on economic/key issues 2 weeks 1 per annum Article

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PROGRAMME 4BUDGET

There is no significant increase in the operational budget for this Programme. The substantial decrease reflected over the period is due to Denel having received a transfer payment amounting to R 1.155 billion in 2007/08, with no further transfers allocated over the MTEF period.

ITEMS

R thousand

BUDGET 07/08

BUDGET 08/09

BUDGET 09/10

BUDGET 10/11

COMPENSATION OF EMPLOYEES 5 041 5 788 6 224 6 694

GOODS AND SERVICES 5 316 5 853 5 629 5910

TRANSFERS 1 155 000 - - -

OTHER - - - -

CAPITAL 16 - - -

TOTAL 1 165 373 11 641 11 853 12 604

THANK YOU

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PROGRAMME 4BUDGET

Manufacturing Enterprises1

Adjusted Appropriation

R thousand 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2009/10Management 4,233 2,426 2,331 1,936 1,925 2,025 2,155 Forestry sector 1,122 2,788 4,917 2,222 1,384 923 990 Defence Sector 1,075 2,002,698 571,224 1,161,215 8,332 8,905 9,459 Total 6,430 2,007,912 578,472 1,165,373 11,641 11,853 12,604

Change to 2007 Budget estimate 221,895 2,871 928 573

Economic classificationCurrent payments 6,201 7,861 11,426 10,357 11,641 11,853 12,604 Compensation of employees 4,721 5,800 6,902 5,041 5,788 6,224 6,694 Goods and services2 1,480 2,061 4,524 5,316 5,853 5,629 5,910 of which:Communications 73 35 65 91 162 165 173

Consultants, contractors and special services 3 853 125 2,941 3,225 4,600 4,162 4,370 Inventory - - - 1 - - - Operating leases - - - 43 - - - Travel and subsistence 187 54 180 1,024 862 880 924 Transfers and subsidies 34 2,000,026 567,007 1,155,000 - - - Provinces and municipalities 34 26 7 - - - - Public corporations and private enterprises 4 - 2,000,000 567,000 1,155,000 Payments for capital assets 195 25 39 16 - - - Machinery and equipment 195 25 39 16 - - -

Total 6,430 2,007,912 578,472 1,165,373 11,641 11,853 12,604

Audited OutcomeMedium-Term Expenditure

Estimates

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PROGRAMME 4BUDGET

Notes to the budget

1. There is no significant increase in the operational budget for this Programme.

2. Other expenditure under goods and services is made up of venues and facilities, entertainment and catering.

3. Total budget for consultants, budgets and special services is going to be expended on the following:

• Technical support to management

• Contractor: financial

• Sector strategy implementation

• Missiles strategy

• Technical support - forestry

4. The substantial decrease reflected over the period is due to Denel having received a transfer payment amounting to R 1.155 billion in 2007/08, with no further transfers allocated over the MTEF period.