11 December 2018

THIS COMMUNICATION HAS BEEN SENT TO MANDATED PRINCIPALS ON LY

CESA BI-ANNUAL ECONOMIC AND CAPACITY REPORT (BECS) – July to December 2018

You are once again urged to complete the abovementioned bi-annual questionnaire electronically by clicking on the following link: http://www.cesa.co.za/becs.php. Should you wish to complete the hard copy, kindly scan the completed form and forward electronically to Ann-Marie Kelly, email ann-marie@cesa.co.za, or fax to (011) 463-7383. The deadline for submissions is Friday, 25th

January 2019.

Kindly also ensure that the information you are capturing is correct before submitting in order to alleviate errors. Please also note that the questionnaire has been divided into categories, i.e. Financial/Economic, Human Resource, Business Cycle Indicators, Professional Indemnity, Quality of Service from CESA and General Comment, in order for you to allocate the different sections of the questionnaire to the relevant Departments or individuals within your firm.

In the previous survey which was for the period January to June 2018, submissions were used in the sample to ensure consistency in the results. CESA’S current membership stands at over 550 firms.

WE CANNOT OVER-EMPHASISE HOW IMPORTANT THE SURVEY IS TO CESA IN MANAGING THE WELLBEING OF THE INDUSTRY AND ULTIMATELY TO YOURSELVES, OUR MEMBER FIRMS. WE URGE YOU THEREFORE TO KINDLY ASSIST US BY INCREASING OUR NUMBERS OF COMPREHENSIVE AND TIMEOUS RESPONSES BY ENSURING YOUR PARTICIPATION IN THIS INVALUABLE EXERCISE.

You are reminded that the figures submitted should exclude VAT and that the data required under the item “income distribution per province” is in respect of the geographic location of the project and not where your office might be situated. In addition, your gross fee income should include any foreign income for the period, but should exclude any payments to sub-consultants.

Please see the explanatory note on the economic sectors you are required to report on (Annexure A). This is to simplify reporting and assisting in compiling a more accurate return.

We urge respondents to ensure that the unique identity code appears at the top of the questionnaire as failure to do this will render the response invalid since the data cannot be compared to previous data from the same respondent and the data cannot be categorised and processed in terms of firm size and other criteria etc. We are confident that the data analyst producing our BECS report is a trustworthy person whose professionalism in protecting the confidentiality of your information, is beyond reproach. There is also a formal Confidentiality Agreement in place.

The service enabling those firms which have responded to the survey over an extended period of time, to request an analysis of their response series against the industry as a whole is still available at a cost of R9 887.00 excluding VAT. CESA has also now made available a more concise and relevant financial dashboard (Annexure B) to each firm wishing to benchmark themselves against the total sample representing all firms in our industry. This report is available at an additional cost of R1 982.00 excluding VAT. You will simply be provided with an analysis of your own responses, against the universal response of all the participants. Should you be interested in carrying out either one, or both of these surveys, please send your request to Ann-Marie Kelly, ann-marie@cesa.co.za who will make the necessary arrangements with our Service Provider.

We look forward to your invaluable support as our members attach a high value to the Bi-Annual Economic and Capacity reports.

CJ Campbell Pr. EngChief Executive Officer

FIRM ID ____________

SECTION A: FINANCIAL/ECONOMIC QUESTIONS

(Please note that all financials should exclude VAT!!!)

A1 SALARIES, FEE INCOME

A1.1 What was the firm’s gross salary bill for the past 6 months (July – Dec 2018) (including directors’ fees, monthly partners’ drawings, as well as foreign staff)?

NOTE: Gross Salary Bill includes all remuneration and associated benefits including bonuses, 13th cheques, interest costs on shareholders loans or equity, directors fees, monthly partners drawings etc, all (local and foreign) full time, part time and contract staff, technical and support staff. Gross Fee Income includes foreign income, but excludes sub-consultants’ fees and excludes income from other sources such as interest, sales of equipment etc.

A1.2 What was the total value of the firms’ gross fee income for the past 6 months (July – Dec 2018) (including foreign transaction income, but excluding sub-consultant’s fees and reasonable disbursements)?

A1.3 What is the projected gross fee income for the next 6 months (Jan – June2019) (including foreign income, but excluding sub-consultant’s fees)?

A1.4 What % of your total turnover for consulting services only (gross fee income plus sub-consultant fees) was outsourced to:

external enterprises or individuals including sub-consultants, joint ventures and contract workers?

satisfy procurement / transformational requirements as laid down by public sector clients?

black owned enterprises?

A1.5 Indicate your Return on Working Capital by giving Annual Profit after interest and tax, as a % of Net Working Capital (current assets – current liabilities) for the last completed financial year.

R

R

R

%

%

%

%

A1.6 What is the value of outstanding (not yet invoiced) fee income for confirmed appointments in your firms’ order book, excluding sub-consultants or JV partners?

A1.7 What was your profit margin during the past six months (July – Dec 2018) where

Total Income – (direct cost + indirect cost) Total Fees earned

A1.8 What was your ROCE (Return on Capital Expenditure) during the past six months (July – Dec 2018)

A1.9 What was your EBITA (Earnings before Interest and Taxation and Amortisation) during the past six months (July – Dec 2018)

A1.10 Indicate your Work in Progress (WIP) (days) for the past six months (July – Dec 2018) by using the following formula:-

WIP as at date of reporting Direct cost + Indirect Cost

NOTE: Direct Costs = Total client project salary cost + extern project expenses.Indirect Cost = all non-chargeable costs incl. non-productive time employment costs, outsourcing costs, group overhead charges etc. but excluding finance charges.

R

%

Profit Margin =

%

%

x reporting daysWork in progress (days) = =

days

A1.11 Income distribution per province, during the past 6 months (%)

Province % of IncomeA Gauteng %B Kwazulu Natal %C Western Cape %D Eastern Cape %E Northern Cape %F Mpumalanga %G Free State %H Limpopo %I North West %J African countries (Outside RSA) %K International : Other (excl African countries) %

Total (MUST ADD UP TO 100%) 100%

NOTE: The location of the project defines where the income is earned.

A1.12 Local (SA) Income distribution per fee paying client type, during the past 6 months

Client Type % of IncomeA Central government %

B Provincial government %C District and Local government / Metropolitan council %

D Parastatals (Eskom, Telkom, water boards etc) %

E Private sector %Total (MUST ADD UP TO 100%) 100%

A1.13 Income distribution per economic sector Economic Sector % of Income

A Water (full water cycle) %B Transportation (land, air, road, rail, ports) %C Energy (electricity, gas, hydro) %D Mining/Quarrying %E Education %F Health %G Tourism/Leisure %H Housing (residential incl land) %I Commercial (manufacturing, industrial, buildings,

communication, financial, facilities management etc. %

J Agriculture/Forestry/Fishing %K Other: Specify %

Total (MUST ADD UP TO 100%) 100%

NOTE: The above economic sectors include all infrastructure associated within that sector including expenditure related to soft issues, feasibility studies etc.

A.2 TYPE OF WORK

What type of work did your company engage in during the past 6 months? (%) (Refer Annexure A for definitions and clarification)

Description % of IncomeA Agriculture %B Architecture %C Mechanical Building Services %D Civil %E Electrical/Electronic %F Environmental %G Facilities Management %H Geotechnical %I Industrial Process/Chemical %J GIS %K Hydraulic %L Information Systems/Technology %M Marine %N Mechanical %O Mining %P Project Management (not engineering management) %Q Quantity Surveying %R Structural %S Town Planning %

Total (MUST ADD UP TO 100%) 100%

A.3 DELAYED PAYMENT OF ACCOUNTS BY CLIENTS

ClientPeriod Outstanding

61- 90 days More than 90 days

Central government R R

Provincial government R R

District and Local government / Metropolitan councils R R

Parastatals R R

Private Sector

R What is the total Rand value (please note: no percentages) of outstanding fees payable by the client for work already completed and invoiced? The period outstanding is measured from when payment for services rendered is due.

R

Foreign Clients R R

A.4 MARKETING

A4.1 Indicate the hours (time) spent on marketing (including bidding and preparation of proposals) as a % of total hours worked

Marketing or proposal time booked Standard hours – non project time*

* non project time = leave + public holidays

A4.2 What is your forecast of pipeline work in terms of the following formula?

Fee value of secured appointments at the end of the reporting period Fee value of secured appointments at the start of the reporting period

SECTION B: HUMAN RESOURCE QUESTIONS B1 EMPLOYMENT

B1.1 What is your total number of employees (including seconded foreign staff) broken down by:

%

X 100

%

B1.1(a) All full-time employees (including Executive/Partners/Directors/Principals

B1.1(b) Other employees (eg part time/contract based)

B1.2 Employment Breakdown

Please complete the tables given below regarding a further breakdown of employees, by race and gender. Please note the purpose of this question is to monitor industry performance

i.r.o. BEE legislation and also compliance with the CESA Constitution in very broad terms.

Table 1: Employment Breakdown (office and site staff)

DescriptionBlack Coloured Asian White Total

M F M F M F M F M F

Professional Engineer Pr.Eng

Professional Architects

Professional Quantity Surveyors

Professional Other eg SciNat, CA etc

Technologists PrTechEng

Technicians PrTechniEng

UnregisteredTechnical staff:

EngineerTechnologistTechnician

Unregistered Technical staff:Other

Technical Assistants

Draughtspersons/CAD operators

Laboratory / Survey Assistants

Administration / Support staff (ie accounting, secretarial, marketing, maintenance)

Totals

Grand Total (= total number of employees given in question B1.1(a) and B1.1(b)

Table 2 : Employment Breakdown (executive staff)

Com

pany

Ty

pe OwnerCategory

ProfessionalCategory

Black Coloured Asian White Total

M F M F M F M F M F

(Pty

) Ltd

ExecutiveDirectors(Salaried employees)

PrEng

PrTechEng

Other

Non-Executive Directors (External appointments)

PrEng

PrTechEng

Other

CC

Members(ie of the Close

Corporation)

PrEng

PrTechEng

Other

Part

ners

hip

Partners

PrEng

PrTechEng

Other

Totals

B1.3 Do you see employment demand changing in the following categories over the next 6 months?

Type of personnel Decrease Static IncreaseA EngineersB TechnologistsC TechniciansD Other Technical staffE Support staff

Note: Technical staff in each category includes registered and unregistered persons

B1.4 Do you experience problems recruiting the right people? (Mark with X)

Type of personnel YES NOM F M F

A EngineersB TechnologistsC Technicians D Other technical staffE Support staffF Previously disadvantaged EngineersG Previously disadvantaged TechnologistsH Previously disadvantaged Technicians

B2 EDUCATION AND TRAINING

B2.1 What was your firms’ total actual expenditure (salaries of trainees and direct training cost ie cost to company), excluding the 1% CETA levy (to be in accordance with the Construction Industry Charter), on “IN-HOUSE” and “EXTERNAL” training for the last 6 months?

Category Salaries R Direct Costs RM F M F

Expenditure on Black people Expenditure on White people

Total

Note: Black includes Asians and Coloureds

B2.2 What was your firm’s total actual expenditure on BURSARIES for the last 6 months?

Recipients Number Value RM F M F

A Expenditure on Black people

B Expenditure on White people

Total

B3 CAPACITY UTILISATION

B3.1 Capacity utilisation of existing technical staff during the past 6 months?

0% 25% 50% 75% 100% 110% 120%

B3.2 How will your capacity utilisation of technical staff change over the next 6 months? (Mark with X)

Increase Static Decrease

>100% = overtime

SECTION C: BUSINESS CYCLE INDICATORSC1 During July – Dec 2018, the tempo of consulting activity within your firm was: (Mark with X)

Very quiet Quiet Satisfactory Quite busy Very busy

C2 During Jan – June 2019, (the next 6 months), the tempo of consulting activity within

your firm, is expected to be: (Mark with X)

Very quiet Quiet Satisfactory Quite busy Very busy

C3 During July – Dec 2019, (the following 6 months), the tempo of consulting activity within your firm, is expected to be: (Mark with X)

Very quiet Quiet Satisfactory Quite busy Very busy

C4. During July – Dec 2018 competition for work was: (Mark with X)

Very low Low Keen Very keen Fierce

C5. During July – Dec 2018 the developing trend of profit margins were: (Mark with X)

Receding Static Improving

C6 During July – Dec 2018, profit margins were: (Mark with X)

Unsatisfactory Satisfactory Good Exceptional

C7 Net profit (before tax) as a % of total turnover over the past 6 months (July – Dec 2018) was: (Mark with X)

0% 5% 10% 15% 20% 25% 30%

C8 Anticipated Net Profit (before tax) as a % total turnover for the next 6 months (Jan – June 2019): (Mark with an X)

0% 5% 10% 15% 20% 25% 30%

C9 What is the prevailing discount being offered in a tendering situation to clients by your firm, benchmarked against the ECSA Guideline Fee Scales? (Mark with an X)

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100%

SECTION D: PROFESSIONAL INDEMNITY INSURANCE

D1 What is your annual premium as a % of gross fee income for the 1 year period of insurance?

D2 What would you consider your firms risk exposure to be?

D3 Over the last 5 years what is the total value of claims paid by your insurers on your behalf as a % of premium paid over the same period?

D4 How many claims have you notified your insurers of over the past 5 years?

D5 Over the past 5 years what % of the claims notified were not funded by your Insurer?

D6 What is your limit of indemnity as a % of gross fee income for the 1 year period of insurance?

D7 What is your current deductible (on PI only), in Rand terms, as a % of your limit of indemnity?

%

%

%

%

%

No:

Low Medium High

SECTION E: QUALITY MANAGEMENT

E1 Have you implemented and do you maintain an effective Quality Management System.

E2 Is your firm ISO 9001:2008 / 2015 certified?

SECTION F: QUALITY OF SERVICE FROM CESA

F1 Do you consider the overall service you receive from CESA as a body to be: (Mark with X)

F2 In particular, do you consider the service you receive from the Directorate and its personnel to be: (Mark with X)

F3 Does CESA focus on addressing the needs and issues pertinent to your sector of the industry: (Mark with X)

and in a manner which is: (Mark with X)

Unsatisfactory Satisfactory Good Exceptional

F4 Are you aware of the benefits of being a CESA member?

Yes No

Yes No

Unsatisfactory Satisfactory Good Exceptional

Unsatisfactory Satisfactory Good Exceptional

Yes No

Yes No

Any suggestions for improvement to the CESA offering?____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

____________________________________________________________________

SECTION G: GENERAL COMMENT

Do you have any observations or comments, if so please indicate below:

THANK YOU FOR COMPLETING THE SURVEY!

ENGINEERING DISCIPLINES – EXPLANATORY NOTE (ANNEXURE A)

Engineering Discipline Definitions

A Agricultural Work undertaken in the agricultural sector of the economy including any structural, civil, hydraulic work etc.

B Architecture Any work reserved for the Architectural profession.

C Mechanical Building Services Mechanical and wet services in respect of any buildings.

D Civil All Civil Engineering infrastructure including transportation and traffic engineering. Not included is work related to structural building design and services.

E Electrical/Electronic Any work low, medium or high voltage distribution systems and reticulation including Electrical installations in building and any work involving light current. Security and IT Systems associated with building are included.

F Environmental Work related to EIA’s and associated with the requirements of environmental legislation such as EIA’s.

G Facilities Management

H Geotechnical Any work associated with the properties of soils, but excluding the structures thereon.

I Industrial Process/Chemical Industrial/Process engineering and chemical processes.

J GIS Geographic Information Systems.

K Hydraulic

L Information Systems/Technology This relates to hardware and software support, design and maintenance.

M Marine Any structures etc undertaken in a marine environment.

N Mechanical Mechanical services in a non-building environment.

O Mining Work undertaken within the mining discipline including any related structures and processes.

P Project Management Any work falling within the ambit of the SA Council of the Project and Construction Management Professions (SACPCMP).

Q Quantity Surveying Any work reserved for the Quantity Surveying profession.

R Structural Structural work associated with buildings, but not those related to the Civil discipline such as roads and bridges.

S Town Planning Any work reserved for the Town Planning Profession.