1 SUPPORTED EMPLOYMENT ENTERPRISES (SEE) (formerly known as Sheltered Employment Factories) Presentation on the Budgetary Review and Recommendation Report (BRRR) to the PORTFOLIO COMMITTEE ON LABOUR, 12 October 2016 2 Contents 3 Presenter:
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1 SUPPORTED EMPLOYMENT ENTERPRISES (SEE)
(formerly known as Sheltered Employment Factories)
Presentation on the Budgetary Review and Recommendation Report (BRRR) to the PORTFOLIO COMMITTEE ON LABOUR, 12 October 2016<br>
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2 Contents<br>
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3 Presenter: Silumko Nondwangu
CEO: SEE<br>
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2015/16 Strategic Plan and APP Performance Indicators.
Strategic Risks monitored in line with the Risk Appetite Model/ Framework.
Expansion consultations conducted for the expansion of the SEF into Limpopo and Mpumalanga.
Increased sales of goods and services in SEF.
Increased gross profit margin
SEF Marketing strategy reviewed and approved for implementation in line with the market, the Business Case and the Employment Services Act 4 of 2014.
Production Standards developed and implemented in SEF.
Financial security and sustainability achieved in line with the Financial Management Strategy.
Procurements done in line with the SCM Policy.
Increased sustainable work opportunities created for persons with disabilities, increased SEF capacity to 998 persons with disabilities employed in the SEF.<br>
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Annual Performance Reports (2015/2016 and 2016/17)<br>
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Annual Performance Reports (2015/2016 and 2016/17)<br>
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Annual Performance Reports (2015/2016 and 2016/17)<br>
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8 Achievement in terms of targets on the performance information is at 63%, 5 out of 8 targets were achieved in the first quarter of 2016/17.
We are on a journey to stabilise and re-energise our entity for long term sustainability and growth.
We have approached the current year with optimism and are setting aggressive goals for progress.
Success for SEE means a better life for people with disabilities in South Africa. Annual Performance Reports (2015/2016 and 2016/17)<br>
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9 Presenter: Spheni Ngcongo
CFO: SEE<br>
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10 Financial Performance Overview for 2015/16 Financial Year Supported Employment Enterprises (SEE) is on an improved financial footing compared to a year ago.
The entity achieved a net profit of R36,2 million for the year ended 31 March 2016 ( March 2015: R21,9 million).
The findings that led to the qualified audit opinion: Cost of Sales/Inventory; and the receivables not recognised which emanated from the 2013/14 Financial year audit.
These findings will be resolved as part of the implementation of the Audit Action Plan.
It should be noted that AG expressed that they were satisfied with our costing model , which in the past, has been the basis for a qualified audit opinion. The entity has fully adopted GRAP 12 on inventories and the standard requires all direct and indirect manufacturing costs to be recognised as cost of sales, hence the high cost of sales as a result. The reported gross loss of R75,7 million ( March 2015: R56,6 million).
A strong focus on inventory management is required and the entity is currently reviewing and developing inventory management procedures and will be providing additional training to all store men.
We are on a journey to stabilise and re-energise our entity for long term sustainability and growth. We have approached the current year with optimism and are setting aggressive goals for progress.<br>
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11 Key elements of the statement of comprehensive income Note
The cost of sales includes raw materials used, wages and salaries for labour, manufacturing overheads (normal operating costs for running the factories)
SEE implemented GRAP 12 on inventories which recognises all manufacturing costs under costs of sales<br>
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12 Key elements of the statement of comprehensive income<br>
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13 Key Highlights and Lowlights<br>
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14 Key Highlights and Lowlights (number of findings)<br>
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15 Key Financial ratios<br>
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2016 – 2017 Audit Action Plan 16<br>
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Quarter 1 Financial Performance (30 June 2016 YtD) 17<br>
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Conclusion Although we have made some strides in the costing model, inventory management still remains a challenge. Policies and procedures are being reviewed and all factory storemen will be trained at the National School of Government as well as internally.
The entity remains positive about the business outlook, SEE is currently manufacturing the school furniture order of R 115m which have been partially delivered.
Amongst others, a further order on the textile division worth R22m has been received from the Western Cape Department of Health. A contract for the supply of textile raw material has been awarded. 18<br>
