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Presentation to the Parliamentary Portfolio Committee on Energy SANEDI Annual Report 2012/13 MR KM NASSIEP CEO 17 OCTOBER 2013. CONTENTS. Production / Costs Reducing the Carbon Footprint Corporate Information SANEDI’s Assets – its People
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Presentation to the Parliamentary Portfolio Committee on Energy SANEDI Annual Report 2012/13 MR KM NASSIEP CEO 17 OCTOBER 2013
CONTENTS • Production / Costs • Reducing the Carbon Footprint • Corporate Information • SANEDI’s Assets – its People • Management of Income , expenditure , transfers , cash and assets • Inputs to different sections of the Financial Statements • Report on Financial Misconduct • Highlights • Achievements as per the APP • Audit and Risk Committee • Audit Findings and Action Plan
PRODUCTION/COSTS • Production • 100 hard copies • 400 copied to USB • Costs of Production • Hard copy – R425.00 each • USB – R95.00 each
REDUCING THE CARBON FOOTPRINT • Environmental responsibility • Collective responsibility • Recycled paper • Benefits of using recycled paper • Other initiatives too to reduce company’s carbon footprint • Actions of today will save the environment tomorrow • Using e- annual reports reduces company overheads – savings could be utilised elsewhere in the organisation
CORPORATE INFO Vision To serve as a catalyst for sustainable energy innovation, transformation and technology diffusion in support of South Africa’s sustainable development that benefits our nation. Mission Advance innovation of clean energy solutions and rational energy use that effectively supports SA’s national energy objectives and the transition towards a sustainable , low carbon energy future Values Innovation, Accountability, Transparency, Integrity, Professionalism, National Interest , Batho Pele
SANEDI’s ASSETS – IT’s PEOPLE ....continued • Permanent staff = 8 • Contract staff = 14 • HDI representation = 75% • Female representation = 53% • Total staff compliment = 42
Management of income, expenditure, transfers, cash and assets • Application in terms of section 53(3) was made to National Treasury for R16,558 surplus for the year. • SANEDI is currently busy with implementation of its own ERP system; expected roll-out of the new system is November 2013. • Processes used during the implementation is based on best practice; including PFMA, Treasury Regulations for Schedule 3A and all GRAP reporting requirements.
Inputs to different sections of financial statements Commitments: • SANEDI has entered into various contracts with service providers for the achievement of its key deliverables • Working for Energy programme (R19.6 m) • Centre for Energy Systems Research (R2.2 m) • Hub for Energy Efficiency & Demand Side Management (R4.2 m) • Clean Energy programme (R1.6 m).
Inputs to different sections of financial statements…cont… Irregular expenditure: • SANEDI incurred R12.6 m irregular expenditure as a result of Procurement processes not being followed which are detailed below: • R3.3 m – no notification for deviations from procurement process above R1m. The procurement decision enacted while SANEDI was still a Schedule 2 public entity within the CEF Group; • R0.3 m – three responsive quotes were not obtained in all instances; • R7.6 m – procurement of goods and services above R30,000.00 from 8 December 2012 were not evaluated as per PPPFA legislation; and • R1.4 m – no approval of application in terms of Treasury Regulation 16A 6.4 to deviate from the standard procurement process.
Report on financial misconduct • There was no financial misconduct
Highlights : SACCCS • Core Parties • SANEDI • SASOL • Norwegian Embassy • Eskom • DoE • Participants • Anglo American • Xstrata Coal • Total Coal • PetroSA • Exarro • Alstom
Highlights : Carbon capture and storage globally and in South Africa • Large-scale carbon capture and storage (CCS) plants have been operating globally since 1996 • South African has been looking at CCS since 2002 • CCS may enable South Africa to continue utilising local, abundant coal reserves while reducing CO2 emissions • In 2009, the South African Centre for CCS was established • In 2010, the Atlas on Geological Storage of CO2 in South Africa was released • The next step in the South African CCS Roadmap (endorsed by cabinet in 2013) is the Pilot CO2 Storage Project
Highlights : The Pilot CO2 Storage Project • The Pilot CO2 Storage Project (PCSP) aims to store 10 – 50,000tCO2 in South Africa • Work is underway by SACCCS to identify a site for the PCSP with KZN and EC showing potential • SACCCS is currently analysing existing geological data while planning further data acquisition • The Department of Energy has committed R197 million to the PCSP with the World Bank allocating another USD25 million • Legal and regulatory clarity as well as positive public engagement are crucial for the success of the PCSP
A soft-credit facility to finance sustainable energy initiatives in South Africa, with the purpose of alleviating the current energy situation and addressing future supply concerns. The AFD credit line will finance small and medium-sized investments in the field of energy efficiency and renewable energy made by private South African companies in the industrial and commercial sectors, through 3 participating banks, (namely ABSA Bank Ltd, IDC Ltd and Nedbank Ltd). Projects qualify for Energy Efficiency funding to retrofit existing installations, including on-site cogeneration, rehabilitation of boilers, regenerative burners, commercial energy efficient building construction and design, such as energy efficient heating and ventilation systems, construction materials, as well as combined heat and power generation. Renewable Energy investments, including power generation for own consumption or for sale to the national grid, also qualify. Highlights : French-funded Technical Advisory Facility, (TAF)
The implementation of this form of financing requires a Technical Assistance Facility (TAF), to support the emergence of targeted investments and the evaluation of their technical eligibility for the credit line. SANEDIwill provide the required technical assistance in support of the sustainable energy credit line in South Africa and together with a consortium of local and international expertise, we will offer the service to the broader public, including educational, technical and communications support to the South African public. AFD (AgenceFrançaise de Developement), is a French public bi-lateral development finance institution, acting on behalf of the French government in various countries throughout the world. Key strategic objectives of the AFD include poverty reduction, economic growth and combating climate change. Highlights : Technical Advisory Facility, (TAF) ..cont….
SANEDIbelieves that in-line with international trends, ‘limited offer/ duration’ tax incentives should be offered on specified energy efficient household appliances, including SWH’s. This can be aligned to the imminent compulsory implementation of the Energy Efficient Appliance Labelling Programme by the DoE and dti, in South Africa. SANEDI will submit a proposal to National Treasury, via the DoE, in the 1st quarter of the 2014/15 business cycle, to consider such an option, ie. to first assess the implementation of the 12-L Tax Rebate system, as well as progress with the finalisation of the National Appliance Labelling roll-out. Residential Sector - ‘Limited Offer’ Tax Incentives
Highlights : Corporate Social Responsibility • Children of Fire • Under privileged children who have been burnt • Staff contributed • Company contributed
Audit and Risk Committee • The Audit and Risk Committee currently consists of two independent non-executive members. • The Chairperson is a CA(SA) and a CIA (Certified ) Internal Auditor) – Mr Viren Magan • Other member is a registered CA(SA) – Ms Mizeria Nyathi • Regarding independence - Members sign declaration of interests. They are also not involved in daily activities of SANEDI nor do they have any business with SANEDI
Audit and Risk Committee ..cont… • The audit committee has noted that the system of internal controls that is in place needs to be reviewed and improved to ensure that it is appropriate in all material respects to: ‑ reduce risks to an acceptable level; ‑ meet the business objectives; ‑ ensure all assets are adequately safeguarded; and ‑ ensure that transactions undertaken are recorded in the accounting records.
Audit and Risk Committee ...cont… • Internal and external audit provides the audit committee with reasonable assurance that the majority of internal controls are appropriate and effective. This is achieved by means of the risk management process, as well as the identification of corrective actions and suggested enhancements to the controls and processes. From the various reports of the internal and external auditors, the Audit Committee noted that matters which indicated any deficiencies in the system of internal control have been brought under management's attention and corrective measures are being implemented.
Audit and Risk Committee …..cont… • The company implemented a risk management strategy which includes the fraud prevention plan. A formal risk assessment was undertaken for the year ended 31 March 2013 with quarterly reviews, updates and reports. Consequently, internal audit used this data to prepare the 3 year rolling strategic plan and the annual operating audit plan. The risk committee monitored the significant risks faced by the company through reviewing risk reporting and participation in the risk assessment workshop. The Committee is satisfied that significant risks were managed to an acceptable level.
Audit and Risk Committee …..cont… • The Committee acknowledge that the company continues to strive towards complying sound principles of corporate governance. As per our discussions with management, management confirms that the content and quality of monthly and quarterly reports prepared and issued by the Chief Executive Officer during the year under review were properly formulated and have complied with the PFMA in this regard.
Audit and Risk Committee ….cont… • The Committee have: • Reviewed and discussed the audited annual financial statements to be included in the annual report, with the Auditor‑General of South Africa and the Accounting Officer; • Reviewed the entity's compliance with legal and regulatory provisions; • Reviewed the Auditor‑General of South Africa's management report and management's responses thereto; • Reviewed changes in accounting policies and practices; and • Reviewed significant adjustments resulting from the audit. • The Committee concurs and accepts the Auditor‑General of South Africa's (AGSA) report on the annual financial statements, and is of the opinion that the audited financial statements be accepted and read together with the report of the AGSA.
Audit and Risk Committee…..cont… • The following major findings were discussed at the Audit and Risk Committee meeting held on 30 July 2013: • Irregular expenditure on Procurement; this resulted in disclosure in the annual financial statements of R12.6 million. • Fruitless and wasteful expenditure of R0.02 million. A penalty of 5%, amounting to R2,090.18, was raised for late payment of a previous supplier invoices. • Restating of prior year figures due to error identified.
Audit and Risk Committee ..cont… The Audit and Risk Committee concluded the following : • Proper Procurement processes need to be put in place. The procurement policy needs to be aligned to prevent; detect and mitigate any fruitless and wasteful; unauthorised and irregular expenditure. • The revised procurement policy and procedure should also include all recommendations made by AG. • All staff to undergo training on Procurement process for Schedule 3A public entity. • The Board will need to condone the irregular expenditure incurred in 2012/13.
