PURCO SA Annual Report 2014

+R1billion+R1billion

Page 1

Annual Report2014 PURCHASING CONSORTIUM SOUTHERN AFRICA

ISO 9001:2008 certi�ed company

Members

PURCO SA members include all 24 South African public universities, Monash South Africa, the University and Polytechnic of Namibia as well as 14 allied institutions including the Council for Scientifi c and Industrial Research (CSIR), National Research Foundation, and the Council of Higher Education, among others. Three Technical and Vocational Education and Training Colleges are members.

Suppliers and contracts

PURCO SA is an accomplished contracts negotiator that manages 315 contracts with 255 approved suppliers. These carefully vetted companies include many SMMEs and previously disadvantaged businesses that have benefi ted from PURCO SA’s guidance and expertise.

Contents

@purcosa | facebook.com/purcosa ISO 9001:2008 certified company Page 1

Corporate Profi le ............................................3Chairman’s Report .........................................4CEO’s Report .....................................................6Team and Offi ce-bearers ............................8Executive Summary .....................................10Operational Review ..................................... 11Building a Quality Organisation ...........16Learning and Development ....................18Engagement and Communication ...... 20Technology ......................................................22Vibrant Membership .................................. 24Supplier Partnerships ............................... 30Partner Organisations .............................. 29Annual Financial Report ...........................32

Mission

PURCO SA is committed to the principles of collaboration with its members to save time and money through professional and focused collaborative procurement whilst strengthening partnerships with all stakeholders in the Higher Education and allied sector in Southern Africa.

Vision

PURCO SA shall strive to be a leading centre of excellence in procurement, using best practices in an ethical, open and transparent manner to support Higher Education in Southern Africa.

B-BBEE

PURCO SA is a level 2 B-BBEE contributor with 125% recognition.

ISO 9001:2008

PURCO SA is an ISO-certifi ed company.

PURCO SA Annual Report 2014 purcosa.co.zapurcosa.co.za13

315 CONTRACTSacross a comprehensive range

of contract categories

SAVINGSR126million

TOTAL SPEND+R1billion

Page 2

255 SUPPLIERS

44 MEMBERS27 higher education institutions14 allied organisations & 3 TVETs

PURCO SA Annual Report 2014

@purcosa | facebook.com/purcosa ISO 9001:2008 certified company

Purchasing Consortium Southern Africa (PURCO SA) operates as a not-for-profit purchasing consortium in the higher education sector.

We have served our members since 1978 by issuing tenders and negotiating contracts for all of South Africa’s public universities and the Universities of Namibia, Swaziland and Lesotho.

Membership is open to all higher educational institutes, be they public or private, so we also serve members including Monash South Africa, Milpark Education and the newly categorised Technical and Vocational Education and Training (TVET) Colleges.

Bodies including the CSIR, National Research Foundation, SABS and the Council of Higher Education also find value in joining PURCO SA.

Our core offering is our ability to streamline tender processes and negotiate generous bulk discounts by issuing group purchasing tenders that carry the buying power of a large consortium.

We streamline the purchasing activities of our members by pre-approving a select number of quality suppliers, which provides a more efficient alternative to the ‘three quote system’ typically used for repetitive buying.

We focus on contracts that are common to the majority of our members and ensure that objective, transparent and legally defensible tender processes are used.

We are also venturing into a broader spectrum of goods and services required by our members, including laptops and tablet devices for students, waste management services and more recently, student accommodation leasing agreements.

To make selecting a product and supplier more convenient we publish a user-friendly Source Guide in both physical and online formats.

PURCO SA also provides many value

added services essential to the higher education sector that go beyond the scope of purchasing power.

We are launching training for procurement officers to make purchasing more professional and, through our partnership with CIPS, making professional qualifications acccessible for individual practitioners.

Another key goal is to encourage greater communications between our members to share ideas and discuss new developments that affect the sector.

PURCO SA is an ISO accredited organisation, verifying that we are an extremely competent and trustworthy organisation. That is also confirmed by the amount of money that members channel through our contracts, which breached the R1billion level in the past year.

We currently manage 315 contracts with 255 approved suppliers. These suppliers are carefully vetted and include SMME and previously disadvantaged businesses that have benefited from PURCO SA’s nurturing and guidance.

PURCO SA is a level 2 B-BBEE contributor.

LeadershipPURCO SA is headed by a Chief Executive

Officer under the leadership and direction of the Board of Directors and Chairman. The Board comprises of senior executives from member institutions. It is the custodian of corporate governance and ensures that our strategy is aligned with the legitimate interests and expectations of stakeholders.

The CEO bears full operational responsibility for PURCO SA, providing executive leadership and managerial control to the PURCO SA National Office and staff based in Midrand.

The National Office is assisted by four regional committees under the direction of Regional Chairpersons.

Corporate Profile

Page 3

PURCO SA Annual Report 2014 purcosa.co.zaPage 4

PURCO SA has, quite rightly, moved from being all about saving money to becoming a champion for professionalism and collaboration.

Our education system and the country as a whole need more of the pillars that PURCO SA is working hard to cement: quality, professionalism, technology, good governance and integrity.

The organisation’s own quality and good governance has once again been confi rmed by the re-awarding of ISO 9001:2008 certifi cation. This proves it is living the principles of continuous quality improvement, and confi rms the practical value of the services it offers to members and suppliers.

Extending membership

I am also pleased to see PURCO SA extending membership benefi ts beyond the public sector to private higher education institutions and TVETs. Our universities cannot produce suffi cient graduates to serve the needs of the country, and TVETs must play a large role in training the next generation with the tools that our growing economy needs. Equipping our youngsters with practical skills is crucial for our future and we hope these new members will use PURCO SA’s services to spend their budgets wisely.

Public spending is always a controversial issue with many more institutions demanding cash than the amount of frunding available. Again that makes good governance crucial, and PURCO SA is doing a fi ne job as a custodian of public money.

Skill survey highlights expertise defi cits

However, its recent skills survey showed that the level of professionalism within many of its member organisations is lacking. Instead of choosing to ignore those results for fear of upsetting the individuals or universities involved, PURCO SA is working to develop and facilitate training programmes to upskill

procurement professionals in the higher education sector. I urge you to embrace those efforts, because only by acknowledging a problem can we begin to resolve it.

The results will be individuals who take more pride in and gain more satisfaction from their job, and institutions that benefi t from their greater skills and experience in their procurement processes. In time, we hope that will help to inculcate an appreciation for considered, careful and prudent spending coupled with quality of service.

Multiply that by the number of members PURCO SA has, and the impact will be seen across the higher education sector as a whole.

PURCO SA can play a vital role in encouraging the higher education community to take a more responsible attitude to the careful spending of public money. It can do that partly by leading through example, and partly by its goal of spreading the skills and espousing the values of good governance, transparency and equitability.

Driving collaboration

PURCO SA plays a major role in driving better communications between our members and encouraging collaboration on other issues of concern to the sector. The growth in collaboration we are seeing between members is a real refl ection of the organisation’s status as a trusted resource and collaborations hub for the sector.

Our CEO, Selvan Govender, is also taking a leading role in establishing the International Association of University Purchasing Consortia, which we anticipate will be launched in the coming year. This development will benefi t our members by enabling them to share with and learn from consortia around the world.

Breaching the Billion Rand level

Those ambitions do not disguise the fact that PURCO SA’s core competency still lies in saving money, and

What has struck me most about PURCO SA this year is how the organisation is playing an increasingly important role in the higher education sector.

Chris Liebenberg, Chairman’s Report


those savings are rising every year. More than R1billion was channeled by our member institutions through contracted suppliers in the past fi nancial year.

The next R1billion should not take anywhere near as long to achieve, partly because the advent of the PURCO SA Online eProcurement and Travel initiative will have a signifi cant impact and be a real driver of more collaborative, better managed spending across a wider range of product categories.

Extending benefi ts to Students

I am especially pleased to see the success of initiatives that broaden the impact PURCO SA has from simply aiding higher education institutions to helping the students they serve. Initiatives such as the Student Technology Programme, in collaboration with ASAUDIT, bring our skill at collective buying to bear on helping our youth access quality, task-appropriate laptops and tablets at affordable prices.

Thank you

Finally I would like to thank everyone at PURCO SA for their efforts to become an increasingly useful ally for our members.

I thank our members for your trust and participation, and for channeling more of your budgets through the organisation. I thank our supplier partners too, for always being open to negotiating good prices and improved service levels.

I also welcome our new members – please allow us to support you as you help to shape the youth that will take our country forward.

Chris LiebenbergPURCO SA ChairmanSenior Director of FinanceUniversity of the Free State.


PURCO SA is going through such an evolution now. We have cemented our place in the higher education sector by streamlining procurement processes and added fi nancial value by negotiating deep discounts with reliable and professional suppliers. Our large membership base is evidence of the respect we have gained from providing those services.

Financially speaking, our biggest achievement in the past year was to channel more than R1billion of spending through our tenders, up 17% on the previous year. A billion rand is a gratifyingly clear demonstration of the value our members see in collaborative buying.

We also achieved a R9m surplus , which we distributed back to our members as additional back-end savings.

Now that our services and value are well established, we are fi ne-tuning our professionalism and looking at other areas where we should be a role player.

We are achieving that by adhering closely to our three pillars of success – technology, quality, and training and professional development.

The technology aspect has seen several initiatives taking place, including implementations of our PURCO SA Online and PURCO SA Travel e-procurement platforms. More and more of our members are signing participation agreements and the systems are already being integrated into some of their own information technology infrastructure.

Electronic procurement is a no-brainer in terms of speed, effi ciency, economy, the ability to store all the relevant documentation safely and have instant access to searchable catalogues of information.

Yet paper will never leave our lives completely, which is why the latest edition of the Source Guide will again be produced in a printed format as well as online.

Technology is also helping to make our services more effi cient through video conferencing. The video conferencing centre in our new offi ce in Midrand is saving us time and money when we engage with our members across the country.

Tender discussions with members in Cape Town once involved fl ights and took all day, but can now be wrapped up in an hour. We plan to make much greater use of video conferencing and we hope our members will also enjoy the convenience of being able to schedule meetings with us quickly and get down to business straight away.

Personal contact still remains very important, however, which is why we will continue with our scheduled member visits, regional and national meetings and put great emphasis on the PURCO SA Annual Conference. Our 2013 Conference in Port Elizabeth was another valuable chance to network and discuss problems and best practices with colleagues.

As we strive to improve our communication channels and bring our community closer together we have invested in a social media strategy. PURCO SA now has a presence on Twitter, Facebook and YouTube and we are assessing how these and other channels can be integrated into our operations.

Our third pillar is quality, and to achieve that we are making our well established services and offerings more professional. We once again conducted a Customer Satisfaction Survey and the results were encouragingly positive.

We have also successfully been recertifi ed as ISO 9001:2008 compliant, verifying that our processes and structures are impeccably documented and effi cient. ISO certifi cation defi nitely validates the work we are doing and rightly instills more confi dence in our outputs.

As part of our effort to increase our value we are introducing a wider range of items and services into our tenders. Construction services are a new area where we are gaining tendering expertise, as well as negotiating to lease student accommodation. Our ultimate goal is to develop the skills to negotiate tenders to deliver whatever goods or services our members require. To do that requires us to hone our internal skills, which we are doing through our third

As an organisation gains stature and maturity, it must evolve and set new targets to remain relevant in an ever-changing world.

Selvan Govender, CEO’s Report

pillar of training and professional development.

Our in-house training centre also offers training to benefi t our members. To assess the needs we recently conducted a skills audit for 178 procurement employees within various universities in partnership with the Chartered Institute of Purchasing and Supply (CIPS). The survey highlighted areas where additional training is needed and we will address that by facilitating relevant training courses.

I believe PURCO SA has a great opportunity to use our knowledge and resources to train university procurement staff in internationally recognised best practices. The result will be happier, more fulfi lled staff achieving better effi ciencies and greater cost savings for our member organisations through smarter buying.

As much as we encourage our members to collaborate not only on buying, but also on discussing issues that affect the sector, we at PURCO SA can also benefi t from collaboration.

We are one of several similar organisations around the world and there are welcome moves to establish a global fellowship. With the world becoming smaller and suppliers going global it is important to understand what is happening globally in terms of higher education procurement, technology, pricing and industry suppliers. A global forum would help us exchange such information, and it is high on our To Do list in the coming year.

Finally it is my privilege to thank PURCO SA staff, the Board and our Regional Chairs for your dedicated work during the past year. I thank our members and suppliers for your increased participation and support for our services. I would also like to welcome our new members, and hope you will soon start to enjoy the numerous benefi ts and support that our organisation exists to deliver.

Selvan GovenderPURCO SAChief Executive Offi cer

ISO 9001:2008 certified company@purcosa | facebook.com/purcosa Page 7

We hire people, not just resumes. We are not only looking for a set of

qualifications that match a job description


Front L-R: Stephen Preston, Contracts Manager; Gabo Makatu, (resigned); Selvan Govender (CEO), Ndweleni Mphaphuli-Mukhawa, Contracts Manager; Marius Pieterse, Contracts Manager.

Back L-R: Jasnime Carrim, Contract Administrator; Nomsa Mahlangu, Contract Administrator; Beauty Pongoma, Financial Administrator; Meshal Moonsamy, Contracts Manager; Engela Goss, Personal Assistant to CEO; Amantha Naidoo, Contract Administrator; Tshepo Mampuru, Projects Co-ordinator; Pauline Matshoba, Financial Controller; Nyiko Sithole, Contract Administrator; Lisa Gerber, Contract Administrator.

Our team and office-bearers Our Directors and Regional Chairs are senior industry executives with deep levels of expertise and insight into higher education finance and procurement.

Office BearersBoard of Directors and Regional Chairpersons

Buggy PillayDirector University of Johannesburg

Hennie van der WesthuizenDirector

University of the Witwatersrand

Chris LiebenbergChairman

University of the Free State

Morgan ThambiranDirector & Chair: kwaZulu-Natal

Durban University of Technology

Selvan GovenderCEO: PURCO SA

Vuyo Memani-SedileVice Chair

UNISA

Gladman James Director

University of Fort Hare

David Tsieane Director Vaal University of Technology

Naeem MoollaDirector

University of Pretoria

Trevor AdamsDirector & Chair: Western Cape

University of Cape Town

Errol EarleDirector

North West University

Gerhardt MattheeDirector

Tshwane University of Technology

Riaan Basson Director Stellenbosch University

Joel Nkuna Director University of Limpopo

Eschéll Boshoff Chair: Central Region

UNISA

Jakes Jacobs Chair: Eastern Cape

Nelson Mandela Metropolitan University

Precious DubeDirector

University of kwaZulu-Natal

Johan WassermanDirector


ISO 9001:2008 certified company Page 9@purcosa | facebook.com/purcosa

purcosa.co.za

Executive SummaryThe past year has been a time of solid growth for PURCO SA in its key areas of fi nancial performance, membership numbers and the amount of money members channel through our contracts.

For the fi rst time ever we hit more than R1billion in spending, showing the enormous power and appeal of collaborative purchasing. The amount of savings our members achieved by using our contracts also topped R126-million, a very healthy rise.

Our suppliers handed back to us a total rebate of R9-million, which was distributed among our members.

The number of contracts under management or negotiated by PURCO SA also rose from 296 in 2013 to 315 in 2014. This was partly as a result of our efforts to broaden the range and scope of contracts that we negotiate and to enter into new fi elds. Our overall aim is to be able to contract for whatever goods or services our members require.

On the balance sheet, our revenue, total income and gross profi t all refl ected positive gains, while our expenses were carefully contained despite the effects of moving into brand new premises last year.

We expect another year of steady growth in membership as more Technical and Vocational Education and Training (TVET) colleges join our ranks. New TVETs are being created and existing colleges expanded, so their procurement requirements will be huge and their budgets will need to be spent wisely, which is where PURCO SA’s expertise lies.

Our push towards a greater use of technology continues, with efforts to encourage members to implement e-procurement and online travel services. Savings in time and money can be signifi cant, but the national launch of PURCO SA Online has been delayed as we work to perfect the implementation processes.

We also believe that social media has a role to play, not as a frivolous chat tool but as a way of sending information to our members and alerting suppliers to new tenders. Our annual conference, hosted successfully by our Gauteng branch this year, was themed around social media, and revealed that university staff may be lagging behind their students in terms of online profi ciency.

eProcurement and social media are the way of the world, as four of our members representing PURCO SA and their institutions can confi rm after being exposed to global best practices at an international purchasing conference held in Australia this year.

We fi nd such international alliances and collaboration very valuable, and PURCO SA is playing a leading role in establishing the International Association of University Purchasing Consortia, which we hope to successfully launch in the coming year.

Page 10 PURCO SA Annual Report 2014


Operational Review

2014

Great success was achieved in the implementation of turnaround strategies and SCM policy development at a number of our member institutions.

One exciting move is to facilitate training courses for procurement staff working for our members. This will give the individuals more pride in their work, help them become more professional and generate increased efficiencies and cost savings for their organisations.

We are also exploring opportunities to serve as a communications hub to drive discussion and collaboration on any issues affecting the sector, not just on where to find the cheapest stationery.

Thirdly, we are broadening our range of tenders to include construction services and the leasing of student accommodation, which will both become increasingly important as the number of student enrolments rise.

Below is a summary of our activities in the past year and an overview of some of the initiatives we are taking to enhance the value of PURCO SA and make us a trusted ally and united voice for the higher education sector:

Financial Figures:

More than R1billion of spending has been channeled through our tenders this year.

That is a figure to be proud of, and it has been

achieved because members are choosing to trust us with more of their budgets, not because prices are rising or membership numbers have increased. The spending was up by 17% from R872 million a year ago.

Members can speed up their purchasing decisions and gain hefty discounts by participating in bulk-purchasing deals or by having individual tenders drawn up and suppliers vetted for them.

Rebates to members increased to R9million, up from R8.5 million, while direct procurement savings exceeded R126 million - an impressive 19% growth. We are aiming for a 15% growth in spending for the coming year and a 10% growth in the surplus.

Another noteworthy figure was a rise in membership to 43, with 26 full and 17 associate members. New members include the newly opened Sol Plaatje University and the University of Mpumalanga, along with Tshwane North College and Joburg Central College.

Broader Expertise:

Last year PURCO SA extended its tender and procurement services to cover new services such as waste management, recycling, debt collectors, multifunction devices and laptops for students. The Student Technology Programme, offering students an online portal to purchase laptops and

Inside:

Financial results

Broader expertise

Training opportunities

Internship programme

E-procurement

Source Guide

ISO Certification

International affiliation

Social media

Member satisfaction

The past twelve months have seen PURCO SA pursuing a strategy that will allow it to play a far more valuable role in the higher education sector.

The year under review

Drawing up tenders, vetting suppliers and negotiating meaningful discounts will always remain the key reason for our existence. But we are in a unique position to move beyond our focus on procurement services to offer additional value and support to our members.


tablets was successfully completed in collaboration and with the technical expertise of ASAUDIT. We are continuing to enhance our expertise in information technology as education becomes increasingly digital. Whilst ASAUDIT sets the specification for IT and does the assessment and testing against preset criteria, PURCO SA compliments the process in the management of the commercial aspects of the tender .

This year we entered the areas of construction services and leases for student accommodation. Our ultimate goal is to develop the skills to negotiate tenders for any goods or services that our members require from their discretionary spending.

Training Opportunities

Our new headquarters in Midrand has an in-house training centre with the facilities to host courses leading to professional purchasing qualifications for our members. The Training Academy will facilitate courses including those of

The Chartered Institute of Purchasing and Supply (CIPS).

This year we worked in conjunction with CIPS to conduct a skills audit on 178 procurement employees within various universities, using an internationally recognised tool to assess competencies in nine different areas.

The survey highlighted areas where additional training is needed, which we will address by facilitating relevant training courses. The training interventions may well take the form of regional or national based training.

PURCO SA has the knowledge and resources to train procurement staff in best practices and to achieve CIPS accreditation through an 18-month long course. Wits and TUT Universities have already enrolled some procurement staff on these courses, and we hope many more will follow suit.

We also invite procurement officers to visit our offices to receive training in internationally recognised best

procurement practices.

Internship Programme:

Another aspect of our commitment to skills development is our small but valuable internship programme. Each year we will recruit at least two graduates for six to 12 months of employment with PURCO SA to gain practical experience of supply chain management or finance. One intern has been employed here permanently, while the others have left with valuable experience that makes them ideal candidates when any of our member organisations need to recruit staff for their procurement departments.

eProcurement

eProcurement is undeniably the way of the future, with instant access to information databases, the ability to complete and send documents instantaneously and to safely and cheaply store all relevant documentation.

To work successful our e-procurement software must be fully integrated with a


255contracted suppliers

315product & service contracts

+R1billionSpend on PURCO SA contracts

exceeded One Billion Rand.1

PURCO SA Annual Report 2014 purcosa.co.za

university’s core computing systems, and some of our members are currently going through that process. The University of Cape Town is well advanced and will go live with e-procurement in early 2015.

Being able to order equipment and supplies online builds on our previous efforts to turn travel procurement electronic, an initiative that has achieved considerable success with many of our members.

Source Guide

The Source Guide is currently being refreshed for a 2015 edition. This handy directory listing a full range of suppliers and the goods and services they offer will be available as a traditional hard copy, but also as a searchable online version.

ISO Certifi cation

PURCO SA became the fi rst organisation of its kind in the world to achieve ISO 9001: 2008 certifi cation two years ago. The internationally recognised mark of quality was renewed for the third time this year after rigorous reassessments to confi rm we are maintaining those exacting standards.

ISO accreditation is only bestowed on organisations that achieve world-class standards with regards to leadership, management, customer focus and supplier relationships and that strive for continuous improvements.

Social media

Social media was strongly integrated into our 2014 Annual Conference, in an effort to improve our communication channels and bring our community closer together. We now have a presence on Twitter, Facebook and YouTube. University students are highly au fait with such technology and we believe it is important to be up there with them.

We are already alerting suppliers to tenders through social media and are assessing how these channels can be further integrated into our operations.

Social media could also become a key part of our efforts to encourage greater discussion and collaboration between our members about the broader issues and concerns affecting the higher education sector.

Member satisfaction

Our annual customer satisfaction survey brought many pleasing results this year, but also showed

two areas where we may be able to do better.

This year 86% agree that our tender processes are fair, open, objective and transparent, and 88% feel that PURCO SA meets their expectations, up from 84% last year. However, the number of members who believe they receive the most competitive prices fell from 84% to 78%. While that could be a result of higher prices in general and more awareness of budgetary constraints, we will investigate to ensure that we continue to deliver on our core mandate of saving you money.

The only other area where members were less satisfi ed than last year is with our development of suppliers, with 70% feeling we are doing good work here compared to 76% last year. It is essential for PURCO SA to encourage and nurture fresh new suppliers and grow suppliers with black empowerment credentials. We thank you for raising these concerns and assure you that they will receive renewed attention.

International Affi liation

PURCO SA is one of several organisations around the world serving as a central purchasing body for the higher education sector.

We believe there is much to be gained by joining forces to share ideas and experiences, particularly as many of the suppliers we use are global conglomerates. Accordingly we are one of the bodies championing the creation of an International Association of University Purchasing Consortia (IAUPC).

For the same reason we are always proud to sponsor a member from each of our four regions to attend an international procurement conference. This year four of our delegates attended a conference in Australia, gaining valuable exposure to international trends and thinking.

Page 14


IN 2013

+R1 billion WAS SPENT BY MEMBERS VIA PURCO SA CONTRACTS

Collaborative

spending increased

from

R872m in 2013 to a

breakthrough

R1 019m

in the 2014 f inancial year

R126 million

savings achieved by members via PURCO SA contracts

COLL ABOR ATIVE MEMBER SPEND

HAS GROWN

40%PER ANNUM SINCE 2008

SPEND GROWTH OF

17%ACHIEVED YEAR ON YEAR


ISO 9001:2008PURCO SA has been recertified by the South African Bureau of Standards for the ISO 9001:2008 quality standard for 2015.

The SABS conducted an external audit of PURCO SA policies and procedures, which included verifying the document control, sequence of corrective and preventive action, measurement of customer satisfaction and internal organisational audits of processes.

The ISO 9001:2008 certification is just one of many reasons why the services provided by PURCO SA are of a high standard and improving on a continual basis.

Measuring supplier conformance

In order to ensure that PURCO SA contracted suppliers provide the best service and meet the requirements of the PURCO SA Membership, non-conformances are raised against suppliers that do not comply with the terms and conditions of the contract and fail to meet pre-set expectations.

Non-conformances are raised for problems related to the quality of the service provided, improper invoicing, incorrect products being delivered and so forth.

Over twenty non-conformances were raised against suppliers in the past financial year.

A record of all non-conformances is kept and recorded making it easier to keep track of the service delivery of suppliers. This also includes the corrective action taken by the supplier to address the problem and the preventative action taken to ensure that re-occurrence is prevented.

Quality Management System

The Quality Management System (QMS) implemented at PURCO SA has undergone various amendments in an effort to keep improving the system. Regular changes have been made to the tender process to align PURCO SA with best practice.

The biggest improvement to the QMS was the integration of the Human Resources and Finance Department into the QMS.

This resulted in the SABS including both departments in its external audit and approving the policies and procedures implemented in both departments.

SAQI partnershipPURCO SA continued its partnership with the South African Quality Institute (SAQI) and regularly receives newsletters on current topics on quality nationally and internationally.

The information is shared with members via a dedicated Quality Management section on the PURCO SA website.

Quality information is also shared with staff at monthly meetings that encourage staff to continually look to improve the quality of their work.

At the monthly meetings potential risks to the organisation are also discussed. This ensures that the organisation identifies potential problems or gaps in processes before they occur and the appropriate action to prevent such risks is implemented.

ISO 9001:2008

SAQI partnership

Member Satisfaction Index

Building a quality organisationA structured, multi-faceted programme is in place to enhance organisational professionalism, and entrench a culture of ongoing quality improvement.

76% 88%Tender process is fair, open, objective and transparentMembers receive the most competitive pricesDevelopment of suppliersInformation is reliable, accurate, correct, up to dateInformation is easily understoodInformation is received on timeEffectiveness of channel of communicationSpeed of response to Member requestsMembers receive quality on-time feedbackContact and communication on follow-up supportResolving complaints about suppliers from Members

86%78%

70%

84% 82% 84%88% 86%

80% 82% 80%

Overall member satisfaction increased to 88% since last year

PURCO SA serviceQuality of informationResponsiveness and follow-throughMember satisfactionPrevious Satisfaction Index (October 2013)

80% 82%

78% 82% 82%88%

82%82% 78% 78%84%

80%

Member satisfaction increased to 82% from October 2013.


PURCO SA undertakes biannual Member Satisfaction Index studies to measure and benchmark service levels. The twice-yearly Member Satisfaction Index Study collates research responses from a representative group of PURCO SA members against eleven indices.

The purpose of the survey is for Members to rate the service provided by PURCO SA and highlight areas for improvement.

PURCO SA has set itself a satisfaction level target of 80% or better, and is showing positive progress towards reaching and

exceeding this objective.

Since the certification of PURCO SA as an ISO 9001:2008 organisation, the Member Survey has been conducted at the two JPPF meetings held each year.

In the past financial year there has been a significant improvement in the satisfaction rating achieved, which can be directly attributed to the quality of work and service provided by PURCO SA staff.

This also means that members have confidence in PURCO SA processes, evident from the increase institution specific tenders which PURCO SA facilitated over the past year.

The Member Satisfaction Index improved from 80% recorded at the JPPF held in October of 2013, to 82% at the JPPF held in March 2014. The survey has become a critical aspect of the QMS and is used to find ways to improve the service being given to the PURCO SA Membership.

Quality has become a way of life for staff at PURCO SA and will continue to form an integral part of the organisation’s operations.

Member Satisfaction Index


To raise the levels of procurement professionalism within higher education, PURCO SA undertook a skills assessment study to benchmark existing skill levels in order to know what we have to build on, and where the deficiencies lie.

In conjunction with the Chartered Institute of Purchasing and Supply (CIPS) 171 delegates from a range of member organisations were assessed. They each participated in an online Sourcing Knowledge Questionnaire. 167 delegates also completed a Negotiation Profile.

The overall results have been compared to a global database of more than 12 000 procurement professionals around the world working in different sectors and with different levels of job responsibility.

A score of above 40 out of 45 (88.9%) is a real strength, below 32.5 (72.2%) shows a development need, and below 22.5 (50%) flags a significant development need.

Our participants in the Sourcing Knowledge Questionnaire averaged just 58.2% and on average scored lower than all but one of the sectors we compared against (public sector).

The group average is below the global benchmark of 63.8% and below the existing South Africa benchmark of 60.7%.

Forty of the 171 individuals scored better than the global benchmark, but there was an enormously wide range in scores from 75.6% to 30.2%.

The group average was above the South African benchmark in one of the nine competencies evaluated, and below the

global benchmark in the other eight skills areas. None of the competency averages for the group reached best-in-class levels.

More than half the delegates scored below 72.2%, flagging a development need in seven of the core competencies.

Serious development needs were discovered in the areas of Compromise and Accept, where the scores of our participating members were well below standard.

In the skill known as Finance for Procurement, 151 individuals scored below 72.2%.

Negotiation Skills also saw a very disappointing group average with 149 individuals scoring below 72.2%.

The results were no better in the remaining areas of Contract Selection & Legal, Supply Base Analysis, Risk Analysis, Customer Client Management, Contract Management and Supply Chain Analysis.

The results show a significant need for training and coaching so that our members institutions can be confident that their procurement officers are able to identify the needs of the organisations, negotiate competently and successfully with suppliers and do so with transparency and efficiency.

At the moment this is not the case, and PURCO SA will be focusing hard on establishing ways to address the skills gaps in the higher education sector.

Facilitating learning & developmentRaising the level of professionalism in the procurement industry is one of PURCO SA’s goals for the coming years.

Skills Survey


Negotiation skills

Procurement process management Risk analysis Customer client management

Contract selection and legal

Finance for procurement

Supply chain analysisContract management

58.2%60.7%

63.8%

PURCO SA members

South Africa

Globalaverage

AVERAGE SCORE

49%

53.3%

59.8%

Percentage achievement (score out of 45)

PURCO SA membersSouth African averageGlobal average

61.6%

60%

67.3%

74.9% 78.2%80%

70.9% 74.7%

72.4%

66.7%

69.3%

69.8%

65.1% 75.8%

78.4%

54.7%

58%

64.4%

68.2%

73.6%66.9%

Page 19


One might expect that staring at a screen instead of having a physical conversation diminishes the quality of interactions, but experience shows that technology offers both convenience and immediacy, leading to more regular and ironically more meaningful engagement.

PURCO SA is actively seeking to embrace social media, but with the aim of enhancing, not replacing, other forms of interaction with our members and suppliers.

We previously used Twitter to announce tenders, and have extended our presence and activity significantly. We launched a managed social media strategy in the lead up and during our 2014 Annual Conference in Gauteng, and now use Facebook and Twitter to announce tenders, events, activities and news.

We have uploaded photographs from all previous conferences, have invested in daily posts on Facebook and Twitter and share content on YouTube.

Over time these and other business social media channels will become the ‘go to’ place for instant information.

Levels of engagement have not been as high as expected, suggesting that members are less knowledgeable about the business aspects of social media. Not surprisingly our members show a preference for Facebook over Twitter.

This skills gap was addressed at the 2014 Conference when every delegate was given a free tablet computer and encouraged to download an app containing information about the conference, and to Tweet about the daily activities.

There has since been an increase in Likes and Followers on our social media pages and a noticeable increase in Twitter postings.

Business pages on social media platforms often take time to gain traction, but as the audience grows the content can spread virally.

We currently have 514 Twitter followers and will continue with daily posts, interacting with our followers and posting procurement related content.

At the moment we are using YouTube to share procurement related and other video clips through links posted on Twitter and Facebook. YouTube provides a valuable mechanism to share learning, and we will investigate the viability of developing original content to set up our own YouTube channel.

One option is to upload edited versions of conference and meeting presentations: we have an extensive library of videos from our annual conferences, as well as 650GB of unedited footage - about 15 hours of material - from the 2014 event. Posting that online would extend the conference value to members who were unable to attend, while driving people to our social media pages.

Once we have some original PURCO SA content for YouTube we can drive people to it through our website, Facebook and Twitter. We are posting all conference photos on Facebook and will encourage followers to tag their friends and colleagues to drive interaction and create a larger audience.

We will gain an insight into our Facebook audience demographics when we reach 1000 ‘likes’, which should not take long as we were on 775 at the time of publication. Once that analysis is available we will see who is visiting the site, what time they are online, what devices they use, what their interests are, where they work and where they live. This will help us hone our content and post it at the optimal time of day.

Follow us on:

Twitter: @PURCOSA

Facebook: facebook.com/PURCOSA

YouTube: youtube.com/PURCOSA

Enhancing engagement & communicationBusiness social media is having an enormous impact on how people, including businesspeople, interact and engage. But it cannot be used to the exclusion of face-to-face contact and networking.

Fresh Perspectives

Ahead

The 30th Annual PURCO SA Conference, hosted in the friendly city of Port Elizabeth in October 2013, was very successful with strong attendance and participation.

Themed “Procurement, A Fresh Perspective”, the conference offered a comprehensive programme of educational and value-adding topics, including presentations such as Sustainable Procurement, Streamlining Travel Procurement Processes, Supplier Selection Criteria, Spend Analysis and others. The sessions were presented by educators with the focus on effective techniques that delegates could apply when returning to work.

The event enjoyed strong support from suppliers who participated as exhibitors and sponsors.

The learning programme was well supported by a range of networking and business-social events, where delegates were encouraged to build team spirit, network and strengthen partnerships with each other, suppliers and exhibitors.

The programme complemented and supported PURCO SA’s drive to implement best practices using the latest procurement tools and technology. In this regard the Conference also saw the launch of the PURCO SA Online and PURCO SA Travel e-procurement platforms.

PURCO SA is grateful for and appreciates the tremendous support that the Conference receives from our Board of Directors, Member Institutions, and Suppliers, Sponsors and Exhibitors.

A Conference of this magnitude takes months of careful planning and dedicated effort by a committed team. The Eastern Cape Regional Conference Committee, under the able leadership of Mr Jakes Jacobs, must be applauded and heartily congratulated for their outstanding work in preparing and hosting such a successful event.

Conference Committee

• Jakes Jacobs (Chairman), NMMU• Athol Muller, NMMU• Ramani Somiah, NMMU• Dean Wasserfall, NMMU• Corky van Rooyen, Rhodes University• Rodney Bridger, Rhodes University• Cheryl Jewnarain, NMMU• Yolandi Kock, NMMU• Luyanda Mema, University of Fort Hare• Thina Balakistnen, NMMU• Cedric Strydom, NMMU• Fikiswa Sifanele, NMMU• Bernard Booysen, NMMU

ANNUAL CONFERENCEPort Elizabeth 2013

Fresh Perspectives

Ahead

The 30th Annual PURCO SA Conference, hosted in the friendly city of Port Elizabeth in October 2013, was very successful with strong attendance and participation.

Themed “Procurement, A Fresh Perspective”, the conference offered a comprehensive programme of educational and value-adding topics, including presentations such as Sustainable Procurement, Streamlining Travel Procurement Processes, Supplier Selection Criteria, Spend Analysis and others. The sessions were presented by educators with the focus on effective techniques that delegates could apply when returning to work.

The event enjoyed strong support from suppliers who participated as exhibitors and sponsors.

The learning programme was well supported by a range of networking and business-social events, where delegates were encouraged to build team spirit, network and strengthen partnerships with each other, suppliers and exhibitors.

The programme complemented and supported PURCO SA’s drive to implement best practices using the latest procurement tools and technology. In this regard the Conference also saw the launch of the PURCO SA Online and PURCO SA Travel e-procurement platforms.

PURCO SA is grateful for and appreciates the tremendous support that the Conference receives from our Board of Directors, Member Institutions, and Suppliers, Sponsors and Exhibitors.

A Conference of this magnitude takes months of careful planning and dedicated effort by a committed team. The Eastern Cape Regional Conference Committee, under the able leadership of Mr Jakes Jacobs, must be applauded and heartily congratulated for their outstanding work in preparing and hosting such a successful event.

Conference Committee

• Jakes Jacobs (Chairman), NMMU• Athol Muller, NMMU• Ramani Somiah, NMMU• Dean Wasserfall, NMMU• Corky van Rooyen, Rhodes University• Rodney Bridger, Rhodes University• Cheryl Jewnarain, NMMU• Yolandi Kock, NMMU• Luyanda Mema, University of Fort Hare• Thina Balakistnen, NMMU• Cedric Strydom, NMMU• Fikiswa Sifanele, NMMU• Bernard Booysen, NMMU

ANNUAL CONFERENCEPort Elizabeth 2013


Enhancing engagement & communication

Page 21

PURCO SA Online and PURCO SA TravelThe PURCO SA Online and PURCO SA Travel platforms are being adopted in increasing numbers by member institutions. Launched in October 2013, PURCO SA and mymarket.com are making solid progress.

Implemented

Milpark Education is using the underlying system, as is Nelson Mandela Metropolitan University which has integrated the platform with its ITS ERP System.

Integration Phase

One of the earliest adopters, the University of Cape Town, is currently integrating the eProcurement and Travel modules into its existing SAP systems.

Scoping Phase

The Universities of Pretoria, Stellenbosch, Wits, UNISA and Zululand are in the scoping process that precedes implementation.

Signing up Phase

Institutions that have signed up or are in the process of doing so include Boland College, Tshwane University of Technology, University of Johannesburg and the University of the Western Cape.

Discussion Phase

Discussions have been held with CAPRISA; the Cape Peninsula University of Technology; Central University of Technology, Free State; Durban University of Technology; Rhodes University, and the Universities of Free State; KwaZulu-Natal; Stellenbosch and Venda.

Introducing an electronic purchasing system robust enough to present thousands of different goods and services from hundreds

of suppliers to thousands of buyers is a complicated mission.

The technology has to be integrated into the existing IT infrastructures of each institution, which requires a detailed consultation and evaluation process followed by a comprehensive implementation plan.

Each institution runs their own enterprise resource planning (ERP) system and has different requirements for fi nancial reporting and different hierarchical reporting processes. At the same time procedural processes vary from one institution to another. For example some institions want to originate requisitions in their ERP systems while others want to work directly in the PURCO SA Online system.

Regardless of the complexities involved, there is an overwhelmng recognition that the PURCO SA Online and PURCO SA Travel platforms offer members signifi cant benefi ts, including cost savings and process enhancements.

Student Technology Programme The Student Technology Programme was negotiated with vendors by PURCO SA and ASAUDIT (the Association of South African University Directors of Information Technology).

The national initiative offers affordable deals on tablet and laptop devices to university staff and students. Since the programme was implemented in 2012 devices to the value of almost R50 million have been sold to students and staff.

The value of devices sold in the period August 2013 to end July 2014 amounted to R20 859 273.

PURCO SA Online

PURCO SA Travel

Student Technology Programme

Leveraging technology to add valueTechnology adoption by PURCO SA is increasingly benefi ting members and suppliers, and now even students can reap the advantages of collaborative technology procurement.

purcosa.co.zaPURCO SA Annual Report 2014Page 22

Leveraging technology to add value


According to a study by the Aberdeen Group price savings of up to 75% can be achieved with e-procurement.

Procurement process costs are typlcally 50% lower

Incremental supplier discounts of 4.75% are achievable.

75% Requisition to Order costs

are reduced by 62%

Growing a vibrant membershipPURCO SA represents all 24 South African public universities, Monash South Africa, the University and Polytechnic of Namibia, as well as 14 allied institutions that include the CSIR, National Research Foundation, SABS and the Council of Higher Education, among others. Three Technical and Vocational Education and Training Colleges are members.

PURCO SA Annual Report 2014 purcosa.co.za

Eastern CapeChair: Jakes Jacobs,


Treasurer: Thina Balakistnen, Nelson Mandela Metropolitan University

Secretary: Yolandi Kock, Nelson Mandela Metropolitan University

Central RegionChair: Eschéll Boshoff, UNISAVice: Stephené Carr,

Tshwane University of Technology

Treasurer: Joel Nkhuna, Sefako Makgatho Health Sciences University

Secretary: Zarina Hassim, University of the Witwatersrand

KwaZulu-NatalChair: Morgan Thambiran,

Durban University of Technology

Treasurer: Patrick Pather, University of KwaZulu-Natal

Secretary: Bongumusa Mabika, University of Zululand

Western CapeChair: Trevor Adams,

University of Cape Town

Treasurer: Riaan Basson, Stellenbosch University

Secretary: Howard Christians, Stellenbosch University

Page 24

Chair: Trevor Adams, University of Cape

Treasurer: Riaan Basson, Stellenbosch University

Secretary: Howard Christians, Stellenbosch University

1-2

3 4-21 22

24-25 26-32

33-36

37-42

2343-44


Member organisationsInstitution Name PURCO SA Region #

Boland College Western Cape 37

Cape Peninsula University of Technology Western Cape 38

CAPRISA: Centre for the AIDS Programme of Research in South Africa KwaZulu-Natal 26

Central University of Technology, Free State Central 24

Council for Scientific and Industrial Research Central 4

Council on Higher Education Central 5

Durban University of Technology KwaZulu-Natal 27

Engineering Council of South Africa Central 6

Independent Institute of Education Central 7

K-RITH: KwaZulu-Natal Research Institute for Tuberculosis and HIV KwaZulu-Natal 28

Mangosuthu University of Technology KwaZulu-Natal 29

Milpark Education Western Cape 39

MINTEK Central 9

Monash University Central 10

National Research Foundation Central 11

Nelson Mandela Metropolitan University Eastern Cape 33

North West University Central 3

Polytechnic of Namibia Central 43

QCTO: Quality Council of Trades and Occupations Central 12

Rhodes University Eastern Cape 34

SABS: South African Bureau of Standards Central 13

Santrust KwaZulu-Natal 30

Sefako Makgatho Health Sciences University Central 8

Sol Plaatje University Central 23

Stellenbosch University Western Cape 40

Tshwane North College Central 14

Tshwane University of Technology Central 15

Umalusi: Council for Quality Assurance in General and Further Education and Training Central 16

University of Cape Town Western Cape 41

University of Fort Hare Eastern Cape 35

University of Johannesburg Central 17

University of KwaZulu-Natal KwaZulu-Natal 31

University of Limpopo Central 1

University of Mpumalanga Central 22

University of Namibia Central 44

University of Pretoria Central 18

University of South Africa Central 19

University of the Free State Central 25

University of the Western Cape Western Cape 42

University of the Witwatersrand Central 20

University of Venda Central 2

University of Zululand KwaZulu-Natal 32

Vaal University of Technology Central 21

Walter Sisulu University Eastern Cape 36


Members by Spend

Member Total Spend 2013

Total Spend 2014

% increase

Tshwane University of Technology 80 270 475 124 580 722 55.20University of South Africa 68 943 915 84 514 499 22.58University of Pretoria 62 358 319 81 711 691 31.04Vaal University of Technology 18 333 792 79 879 133 335.69North-West University 81 841 992 75 829 347 -7.35University of KwaZulu-Natal 71 161 011 60 621 988 -14.81University of Zululand 50 030 837 55 169 877 10.27PURCO SA * 82 355 692 48 790 625 -40.76University of the Free State 42 119 860 47 039 596 11.68Stellenbosch University 27 342 897 36 765 617 34.46University of Johannesburg 29 536 237 31 695 040 7.31University of Cape Town 24 198 852 30 349 480 25.42CSIR 28 542 400 30 075 819 5.37University of the Witwatersrand 25 022 219 29 013 744 15.95University of Venda 18 195 703 23 301 226 28.06University of Fort Hare 20 905 231 23 237 135 11.15University of Namibia 10 758 305 20 115 164 86.97Nelson Mandela Metropolitan University 15 352 722 16 841 637 9.70University of Limpopo 11 885 277 13 904 637 16.99Rhodes University 15 631 642 11 968 319 -23.44Cape Peninsula University of Technology 22 488 769 11 757 291 -47.72Mangosuthu University of Technology 21 415 269 11 734 542 -45.20National Research Foundation 7 831 966 10 022 914 27.97Central University of Technology - Free State 5 524 919 9 642 957 74.54University of the Western Cape 8 626 274 9 583 789 11.10Durban University of Technology 7 122 102 9 365 153 31.49Walter Sisulu University of Technology 2 479 961 7 261 935 192.82South African Bureau of Standards 5 716 457 6 435 160 12.57Umalusi 500 037 4 811 769 862.28MINTEK 2 506 943 4 721 507 88.34Caprisa 1 348 396 1 819 166 34.91Engineering Council of South Africa 678 103 1 703 726 151.25Boland College 0 1 557 703Monash University 760 946 1 508 010 98.18Council on Higher Education 400 331 1 254 262 213.31Quality Council for Trades & Occupations 0 458 311Milpark Education 0 267 919Santrust 140 708 256 481 82.28Independent Institute of Education 0 6 408K-Rith (spend included with UKZN)Polytechnic of Namibia (new)

Total of all member spend 872 328 555 1 019 574 297 16.88%

* Unallocated spend to individual Members


Members by Growth in Spend

Member Total Spend 2013

Total Spend 2014

% increase

Umalusi 500 037 4 811 769 862.28Vaal University of Technology 18 333 792 78 879 133 335.69Council on Higher Education 400 331 1 254 262 213.31Walter Sisulu University of Technology 2 479 961 7 261 935 192.82Engineering Council of South Africa 678 103 1 703 726 151.25Boland College 0 1 557 703 100Independent Institute of Education 0 6 408 100Milpark Education 0 267 919 100Quality council for Traders & Occupations 0 458 311 100Monash University 760 946 1 508 010 98.18MINTEK 2 506 943 4 721 507 88.34University of Namibia 10 758 305 20 115 164 86.97Santrust 140 708 256 481 82.28Central University of Technology - Free State 5 524 919 9 642 957 74.54Tshwane University of Technology 80 270 475 124 580 722 55.20Caprisa 1 348 396 1 819 166 34.91Stellenbosch University 27 342 897 36 765 617 34.46Durban University of Technology 7 122 102 9 365 153 31.49University of Pretoria 62 358 319 81 711 691 31.04University of Venda 18 195 703 23 301 226 28.06National Research Foundation 7 831 966 10 022 914 27.97University of Cape Town 24 198 852 30 349 480 25.42University of South Africa 68 943 915 84 514 499 22.58University of Limpopo 11 885 277 13 904 637 16.99University of the Witwatersrand 25 022 219 29 013 744 15.95SABS 5 716 457 6 435 160 12.57University of the Free State 42 119 860 47 039 596 11.68University of Fort Hare 20 905 231 23 237 135 11.15University of the Western Cape 8 626 274 9 583 789 11.10University of Zululand 50 030 837 55 169 877 10.27Nelson Mandela Metropolitan University 15 352 722 16 841 637 9.70University of Johannesburg 29 536 237 31 695 040 7.31CSIR 28 542 400 30 075 819 5.37North-West University 81 841 992 75 829 347 -7.35University of KwaZulu-Natal 71 161 011 60 621 988 -14.81Rhodes University 15 631 642 11 968 319 -23.44PURCO SA * 82 355 692 48 790 625 -40.76Mangosuthu University of Technology 21 415 264 11 734 542 -45.20Cape Peninsula University of Technology 22 488 769 11 757 291 -47.72K-Rith (spend included with UKZN)Polytechnic of Namibia (new)

Total of all member spend 872 328 555 1 019 574 297 16.88

* Unallocated spend to individual Members


0

100 000 000

200 000 000

300 000 000

400 000 000

500 000 000

600 000 000

700 000 000

800 000 000

Central Region Western Cape KwaZulu-Natal Eastern Cape Total

Total Spend 2012 Total Spend 2013

430

576

872

670

83 129 153

35 54

76

Regional spend for the year ended 31 July 2014

Surplus due to members for the year ended 31 July 2014

Total Spend 2014 (Rand Million)

731

90 139

59

1019

0

2 000 000

3 000 000

4 000 000

5 000 000

6 000 000

7 000 000

8 000 000

9 000 000

1 000 000

2008 2009 2010 2011 2012

Total Rebate (R million)

8.00

7.60

7.02

1.70

1.20

2013

9.00

8.53

2014


Asset Management Forum Southern Africa (AMF SA)

AMF SA is a non-profit organisation which brings public university asset managers together to discuss and find solutions to common asset management problems.

This is primarily achieved through the hosting of conferences to which AMF SA invites auditors, legal practitioners and other guests to inform university asset managers about latest industry trends and to advise them on best methods of practice. Besides providing good networking opportunities, the ultimate aim of these conferences is to support university asset managers by gathering valuable knowledge and using it to standardise the practice of asset management.

Higher Education South Africa (HESA)

HESA represents the leadership of public universities and facilitates informed public policy on higher education as well as cooperation among universities and government, industry and other sectors of society in South Africa.

PURCO SA has a close relationship with the HESA Finance Executive Forum which provides opportunities for Executive Directors of Finance to collaborate, network and share knowledge on issues of common interest and to facilitate alignment on financial initiatives, policy and practices.

Tertiary Education and Research Network of South Africa (TENET)

TENET is a vehicle for collaborative inter-networking by universities, science councils and associated support institutions.

TENET holds electronic communications licenses from ICASA that permit TENET to build and operate electronic communications networks. Currently TENET provides Internet and related services to 140 campuses of 54 institutions.

Association of South African University Directors of Information Technology (ASAUDIT)

PURCO SA and ASAUDIT have a strong, beneficial relationship and have made significant strides in implementing the Student Technology Programme.

ASAUDIT promotes and advances computing and information technology at South African universities, and promotes professional skills and conduct in university ICT management and to serve as a unitary voice for the South African Higher Education IT profession. It encourages development and application of standards and best practices through the sharing of expertise among members and colleagues in organising informative events.

Association of College and University Housing Officers (ACUHO-I Southern Africa Chapter)

The Association of College and University Housing Officers - International (ACUHO-I) believes in developing exceptional residential experiences at colleges, universities and other post-secondary institutions around the world.

The ACUHO-I Southern Africa chapter is the first of its kind for the association. Formed to address the needs of student housing and student affairs professionals on campuses throughout Southern Africa, its work has been well-received and has resulted in improved services for students.

Higher Education Facilities Management Association of Southern Africa (HEFMA)

HEFMA develops and maintains standards in the management, maintenance, operation, planning, utilisation and development of the physical infrastructure of higher education campuses.

It promotes professional ideals and standards that assure the best academic environment and engages in related activities that fulfill the objectives of the organisation.

PURCO SA manages a range of facilities maintenance contracts and consequently shares common ground with HEFMA.

Partner OrganisationsPURCO SA acknowledges the following organisations that contribute to the ongoing success of public higher education. We look forward to strengthening our relationship with these organisations in the year ahead.

Strong supplier partnerships PURCO SA manages 315 contracts with 255 approved suppliers. A stringent process of selecting and monitoring suppliers aims to ensure the best levels of product quality, service standards and pricing.

Page 30 purcosa.co.zaPURCO SA Annual Report 2014

Sales growth (R million)

20092008 2010 2011 2012

300

2014

402

515 549

670

872

Top 20 Suppliers Supplier Spend 2013 Spend 2014 Increase %

SAA 91 766 238 99 657 551 8.60

Mafoko Security Patrols 41 864 403 45 775 803 9.34

Budget Rent a Car 31 791 416 35 887 589 12.88

Introstat 24 195 773 28 752 382 18.83

Property Consultants 0 27 415 400 -

Bidvest Food Services Gauteng 23 912 027 24 644 971 3.07

Steiner Hygeine 16 376 915 22 953 360 40.16

SA Express 0 22 695 477 -

Nationwide Security 20 708 436 22 328 133 7.82

Pinnacle Micro 25 485 860 21 956 940 -13.85

Peters Papers 17 092 323 21 190 695 23.98

Neo Technologies 8 405 504 19 902 267 136.78

Fidelity Security Services 17 120 172 19 471 726 13.74

Waltons Stationery 24 115 738 18 468 713 -23.42

Bidvest Foodservice Multitemp KZN 11 623 171 16 683 898 43.54

Afrox 15 065 001 16 406 989 8.91

City Lodge Hotels 13 006 455 15 078 842 15.93

PC Palace 24 103 425 14 701 882 -39.01

Tsebo Cleaning Services 14 345 928 14 345 928 0.00

Air France/KLM 15 100 008 13 761 697 -8.86

Total Top 20 suppliers (58.41% of total spend) 436 078 791 522 080 242 19.72%

Total of all suppliers 872 328 555 1 019 574 297 16.88%

1019

m

2013

237

255

296

315

ContractsSuppliers

R872m

R1.02bn

2013

2014

2013

2014

2013

2014

Spend


Top 20 Contracts Contract Description Total Spend 2013 Total Spend 2014 % Increase

Security Services 123 079 365 122 946 767 -0.11

SAA Flights 91 766 238 99 657 551 8.60

Cleaning Services 69 643 984 81 753 085 17.39

Catering Supplies & Small Equipment 82 806 231 81 473 915 -1.61

HP Cartridges & Peripherals 58 392 610 57 582 888 -1.39

Vehicle Rental 52 978 482 52 896 264 -0.16

Stationery 39 946 918 36 898 475 -7.63

Student Accommodation 0 33 560 670 100.00

Furniture 24 636 136 33 274 719 35.06

Meat & Frozen Products 23 030 243 29 549 818 28.31

Student Laptop Initiative 17 859 960 25 177 250 40.97

A4 Printing Paper 23 868 769 25 164 261 5.43

Hygiene 17 338 183 23 974 776 38.28

Courier Services 19 631 680 23 198 071 18.17

SA Express Flights 0 22 695 477 100.00

Computers and Office Equipment 15 928 281 22 641 653 42.15

Printing Paper and Board 17 215 348 21 845 549 26.90

Gases in Cylinders 16 165 009 17 687 792 9.42

Paper Products 17 432 795 16 191 965 -7.12

City Lodge Hotels 13 006 455 15 078 842 15.93

Top 20 Contracts (80.49% of 2014 spend)

724 726 688 843 249 788 16.35%

Total of all Contracts 872 328 555 1 019 574 297 16.88%

Annual Financial StatementsFor the year ended 31 July 2014


Country of incorporation and domicile South Africa

Nature of business and principle activities Negotiating and concluding contracts as agent and/or facilitator on behalf of inter alia tertiary institutions and other educational institutions and organisations to enable them to purchase at competitive prices.

Registered office Rosen Office Park8 Invicta RoadErand Gardens X49Midrand1682

Business address Rosen Office Park8 Invicta RoadErand gardens X49Midrand1682

Postal address PO Box 32116Kyalami1684

Auditors Mazars (Gauteng) IncorporatedRegistered AuditorChartered Accountants (S.A)

Company registration number 1999/023736/08

GENERAL INFORMATION


Page

Directors’ Responsibility and Approval 34

Independent Auditor’s Report 35

Director’s Report 36

Statement of Financial Position 37

Statement of Comprehensive Income 38

Statement of Changes in Equity 38

Statement of Cash Flows 39

Accounting Policies 40

Notes to the Financial Statements 44

The following supplementary information of the financial statements:

Detailed Income Statement 51

INDEX


STATEMENT OF DIRECTORS’RESPONSIBILITIES AND APPROVAL

The annual financial statements are prepared in accordance with International Financial Reporting Standards and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.

The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the company and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the board of directors set standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the company and all employees are required to maintain the highest ethical standards in ensuring the company’s business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the company is on identifying, assessing, managing and monitoring all known forms of risk across the company. While operating risk cannot be fully eliminated, the company endeavours to minimise it by ensuring that appropriate infrastructure, controls, syslems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The directors are 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 directors have reviewed the company’s cash flow forecast for the year to 31 July 2015 and, in the light of this review and the current flnancial position, they are satisfied that the company has or has access to adequate resources to continue in operational existence for the foreseeable future.

The external auditors are responsible for independently auditing and reporting on the company’s annual tinancial statements. The annual financial statements have been examined by the company’s external auditors and their report is presented herein.

The annual financial statements set out herein, which have been prepared on the going concern basis, were approved by the directors on 26 September 2014 and were signed on its behalf by:

Chairman Chief Executive Officer

The directors are required in terms of the Companies Act 71 of 2008 to maintain adequate accounting records and are responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is their responsibility to ensure that the annual financial statements fairly present the state of affairs of the company as at the end of the financial year and the results of its operations and cash flows for the period then ended, in conformity with International Financial Reporting Standards. The external auditors are engaged to express an independent opinion on the annual financial statements.


INDEPENDENT AUDITORS REPORTto the Members of Purchasing Consortium Southern Africa NPC

Directors’ Responsibility for the Financial Statements

The company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, and in the manner required by the Companies Act of South Africa. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

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 judgment, 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of Purchasing Consortium Southern Africa NPC as of 31 July 2014, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa.

As part of our audit of the financial statements for the year ended 31 July 2014, we have read the Directors’ Report for the purpose of identifying whether there are material inconsistencies between this report and the audited financial statements. This report is the responsibility of the respective preparers. Based on reading this report we have not identified material inconsistencies between this report and the audited financial statements. However, we have not audited this report and accordingly do not express an opinion on this report.

Mazars (Gauteng) Incorporated Registered Auditors Chartered Accountants (SA)

Director: Manoj Manilal

Report on the financial statementsWe have audited the financial statements of Purchasing Consortium Southern Africa NPC which comprise the Statement of Financial Position as at 31 July 2O14, and the Statement of Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 8 to 25.


DIRECTORS’ REPORT

The directors have pleasure in submitting their report on the annual financial statements of Purchasing Consortium Southern Africa NPC for the year ended 31 July 2014.

1. Review of activities

The company is engaged in negotiating and concluding contracts as agent and/or facilitator on behalf of inter alia tertiary institutions, other educational institutions and organisations to enable them to purchase at competitive prices.

The operations are principally in South Africa. The operating results and state of affairs of the company are fully set out in the financial statements and do not in our opinion require any further comment.The company recorded a net profit after tax for the year ended 31 July 2014 of R83 039 (2013: R78 095).

2. Directorate

The directors in office at the date of this report are as follows:

Directors:Pillay, BAdams, TTsieane, D FVan der Westhuizen, H Wasserman, J Memani-Sedile, V F Liebenberg, CBasson, R James, G V Thambiran, M P Moolla, N Matthee, G Earle, E Nkhuna, J

3. Property, plant and equipment

There was no change in the nature of the property, plant and equipment of the company or in the policy regarding their use.

At 31 July 2014 the company’s investment in property, plant and equipment amounted to R7 768 913 (2013: R157 535; 2012: R173 642), of which R7 854 973 (2013: R60 129, 2012: R110 253) was added in the current year through additions.

4. Events after the reporting period

The directors are not aware of any material reportable event which occurred after the reporting date and up to the date of this report.

5. Going concern

The directors believe that the company has adequate financial resources to continue in operation for the foreseeable future and accordingly the annual financial statements have been prepared on a going concern basis.

The directors have satisfied themselves that the company is in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements. The directors are not aware of any new material changes that may adversely impact the company. The directors are also not aware of any material non- compliance with statutory or regulatory requirements or of any pending changes to legislation which may affect the company.

6. Auditors

The directors recommend that Mazars (Gauteng) Inc. continue in office as the auditors in accordance with section 90 of the Companies Act 71 of 2008, as amended.


Statement of Financial Positionas at 31 July 2014

2014 2013 Note(s) R R

ASSETS

Non-current assetsProperty, plant and equipment 3 7 768 913 157 535Deferred taxation 4 275 570 173 007 8 044 483 330 542Current assetsTrade and other receivables 5 11 951 918 10 818 336Cash and cash equivalents 6 19 026 177 21 606 326 30 978 095 32 424 662

Total assets 39 022 578 32 755 204

EQUITY AND LIABILITIES

Equity Reserves 778 961 778 961Retained income 976 856 893 744 1 755 817 1 672 705

LIABILITIES

Non-current liabilitiesOther financial liabilities 7 22 852 502 18 750 013Retirement benefit obligation 8 2 289 476 134 525 25 141 978 18 884 538

Current liabilitiesOther financial liabilities 4 922 485 5 904 677Current tax payable 131 151 313 793Trade and other payables 9 7 071 147 5 979 491

12 124 783 12 197 961

Total liabilities 37 266 761 31 082 499

Total equity and liabilities 39 022 578 32 755 204


2014 2013 Note(s) R R

Revenue 12 31 884 105 28 303 482Cost of sales 13 (14 325 902) (13 108 741)

Gross profit 17 558 203 15 194 741

Other income 1 614 0288 1 376 762

Operating expenses (20 548 580) (17 559 004)

Operating loss 14 (1 376 349 (987 501)Investment revenue 15 1 515 359 1 110 452

Profit before taxation 139 010 122 951

Taxation 16 (55 971) (44 857)

Profit for the year 83 039 78 095

Other Retained Total NDR income equity R R R

Balance at 01 August 2012 778 961 815 722 1 594 683

Profit for the year - 78 095 78 095Balance at 01 August 2013 778 961 893 817 1 672 778Profit for the year - 83 039 83 039Balance at 31 July 2014 778 961 976 856 1 755 817

Statement of Comprehensive Incomeas at 31 July 2014

Statement of Changes in Equityas at 31 July 2014


2014 2013 Note(s) R R

Cash flows from operating activitiesCash receipts from customers 30 539 126 28 016 167Cash paid to suppliers and employees (29 558 781) (30 406 270)

Cash generated (used in) from operations 17 980 345 (2 390 103)Interest income 1 515 359 1 110 452Finance costs - - Taxation (received)/refund 18 (341 176) -

Net cash from operating activities 2 154 528 (1 279 651)

Cash flows from investing activitiesPurchase of property, plant and equipment 3 (7 854 973) (60 129)

Cash flows from financing activitiesMovement in financial liabilities 3 120 296 7 682 513Movement in other liabilities 1 184 802

Net cash from financing activities 3 120 296 8 867 315

Total cash movement for the year (2 580 149) 7 527 5359Cash at the beginning of the year 21 606 326 14 078 7912

Total cash at end of the year 6 19 026 177 21 606 326

Statement of Cash Flowsas at 31 July 2014


ACCOUNTING POLICIES

1. Presentation of Annual Financial Statements

The annual financial statements have been prepared in accordance with International Financial Reporting Standards, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and the Companies Act 71 of 2008. The annual financial statements have been prepared on the historical cost basis, except as indicated, and incorporate the principal accounting policies set out below. They are presented in South African Rands.

These accounting policies are consistent with the previous period.

1.1 Significant judgements and sources of estimation uncertainty

In preparing the annual financial statements, managemenl 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:

Fair value estimation

The fair value of financial instruments traded in active markets (such as trading and available-for-sale securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the company is the current bid price.

The fair value of financial instruments that are not traded in an active market (for example, over the counter derivatives) is determined by using valuation techniques. The company uses a variety of methods and makes assumptions that are based on market conditions existing at the end of each reporting period. Quoted market prices or dealer quotes for similar instruments are used for longterm debt. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The fair value of forward foreign exchange contracts is determined using quoted forward exchange rates at the end of the reporting period.

The carrying value less impairment provision of trade

receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the company for similar financial instruments.

Provisions

Provisions were raised and management determined an estimate based on the information available.

Taxation

Judgement is required in determining the provision for income taxes due to the complexity of legislation. There are many transactions and calculations for which the ultimate lax determination is uncertain during the ordinary course of business. The company recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The company recognises the net future tax benefit related to deferred income tax assets to the extent that it is probable that the deductible temporary differences will reverse in lhe foreseeable future. Assessing the recoverability of deferred income tax assets requires the company to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the company to realise the net deferred tax assets recorded at the end of the reporting period could be impacted.

1.2 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 company; and

• the cost of the item can be measured reliably.

Cost includes those initially to acquire or construct the item as well as borrowing costs for long-term construction projects if the recognition criteria are


met. When significant parts of property, plant and equipment are required to be replaced at intervals, the company recognises such parts as individual assets with specific useful lives and depreciation. When a major inspection is performed, its cost is also recognised in the carrying amount of property, plant and equipmenl as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are expensed as incurred.

Major spare parts, standby equipment and servicing equipment which are expected to be used for more than one period are included in property, plant and equipment. In addition, spare parts, standby equipment and servicing equipment which can only be used in connection with an item of property, plant and equipment are accounted for as property, plant and equipment.

Major inspection costs which are a condition of continuing use of an item of property, plant and equipment and which meet the recognition criteria above are included as a replacement in the cost of the item of property, plant and equipment. Any remaining inspection costs from the previous inspection are derecognised.

Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses.

The revaluation surplus in equity related to a specific item of property, plant and equipment is transferred directly to retained earnings as the asset is used. The amount transferred is equal to the difference between depreciation based on the revalued carrying amount and depreciation based on the original cost of the asset.

The useful lives of items of property, plant and equipment have been assessed as follows:

Item Average useful life

Buildings 20 years

Furniture and fixtures 10 years

Office equipment 7 years

lT 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 is depreciated separately.

The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset.

The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any,

and the carrying amount of the item.

1.3 Financial instruments

Classification

The company classifies financial assets and financial liabilities into the following categories:

Initial recognition and measurement

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

The company 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 are measured initially at fair value, including transaction costs for those that are not at fair value through profit or loss.

Transaction costs on financial instruments at fair value through profit or loss are recognised immediately in profit or loss.

Subsequent measurement

Loans and receivables are subsequenlly measured at amortised cost, using the effective interest method, less accumulated impairment losses.

Financial liabilities at amortised cost are subsequently measured at amortised cost, using the effective interest method.

Derecognition

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the company has transferred substantially all risks and rewards of ownership. Any interest in such transferred financial assets that is created or retained by the company is recognised as a separate asset or liability.

Trade and other receivables

Trade receivables are measured at initial recognition at fair value, plus any transaction costs using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

The amount of the loss is recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in profit or loss.


Trade and other payables

Trade payables are initially measured at fair value, less any transaction costs and are subsequently measured at amortised cost, using the effective interest rate method.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and other short term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially recorded at fair value plus any transaction costs and subsequently measured at fair value.

1.4 Tax

Current tax assets and liabilities

Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset.

Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax assets and liabilities

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

A deferred tax liability is recognised for all taxable temporary differences, except lo the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaclion which at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss).

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses

can be utilised, except when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

1.5 Leases

A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. All other leases are classified as operating leases.

Operating leases - lessee

Operating lease paymenls are recognised as an expense on a straightline basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset. This liability is not discounted.

Any contingent rents are expensed in the period they are incurred.

1.6 Employee benefits

Short-term employee benefits

The cost of short term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave and sick leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted.

The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absence occurs.

The expected cost of profit sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance.

Defined benefit plans

For defined benefit plans the cost of providing the benefits is determined using the projected unit credit method.

Actuarial valuations are conducted on an annual basis by independent actuaries separately for each plan.

Past service costs are recognised immediately to the extent that the benefits are already vested, and are otherwise amortised on a straight line basis over the


average period until the amended benefits become vested.

To the extent that, at the beginning of the financial year, any cumulative unrecognised actuarial gain or loss exceeds ten percent of the greater of the present value of the projected benefit obligation and the fair value of the plan assets (the corridor), that portion is recognised in profit or loss over the expected average remaining service lives of participating employees. Actuarial gains or losses within the corridor are not recognised.

Actuarial gains and losses are recognised in the year in which they arise, in other comprehensive income profit or loss.

Gains or losses on the curtailment or settlement of a defined benefit plan is recognised when the company is demonstrably committed to curtailment or settlement.

When it is virtually certain that another party will reimburse some or all of the expenditure required to settle a defined benefit obligation, the right to reimbursement is recognised as a separate asset. The asset is measured at fair value. In all other respects, the asset is treated in the same way as plan assets. In profit or loss, the expense relating to a defined benefit plan is presented as the net of the amount recognised for a reimbursement.

The amount recognised in the statement of financial position represents the present value of the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past service costs, and reduces by the fair value of plan assets.

Any asset is limited to unrecognised actuarial losses and past service costs, plus the present value of available refunds limited to the change in the present value of those available funds.

1.7 Provisions and contingencies

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

Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset. The amount recognised for the reimbursement shall not exceed the amount of the provision.

Provisions are not recognised for future operating losses.

lf an entity has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision.

A constructive obligation to restructure arises only when an entity:

• has a detailed formal plan for the restructuring, identifying at least: - the business or part of a business concerned; - the principal locations affected; - the location, function, and approximate number of employees who will be compensated for terminating their services; - the expenditures that will be undertaken; and - when the plan will be implemented; and

• has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected by it.

After their initial recognition contingent liabilities recognised in business combinations that are recognised separately are subsequently measured at the higher of:

• the amount that would be recognised as a provision; and

• The amount initially recognised less cumulative amortisation.

Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note .

1.8 Revenue

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.

Interest is recognised, in profit or loss, using the effective interest rate method.

Royalties are recognised on the accrual basis in accordance with the substance of the relevant agreements. Dividends are recognised, in profit or loss, when the company’s right to receive payment has been established.

Service fees included in the price of the product are recognised as revenue over the period during which the service is performed.


Notes to the Financial Statements2. New Standards and Interpretations

2.1 Standards and interpretations not yet effective

The company has chosen not to early adopt the following standards and interpretations, which have been published and are mandatory for the companys accounting periods beginning on or after 01 August 2014 or later periods:• IFRS 9 Financial Instruments 01 January 2015• Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) 01 January 2014 • IAS 36 - Recoverable Amount Disclosures for Non-Financial Assets 01 January 2014• IFRIC 21 Levies 01 January 2014 • IAS 39 - Novation of Derivatives and Continuation of Hedge Accounting 01 January 2014• IFRS 10, IFRS 12 and IAS 27 - Investment Entities 01 January 2014

3. Property, plant and equipment

2014 2013

Cost/ Accumulated Carrying Cost/ Accumulated Carrying Valuation Depreciation Value Valuation Depreciation Value Land 3 606 434 - 3 606 434 - - -Buildings 3 973 177 (165 114) 3 808 063 - - -Furniture and fixtures 283 304 (124 364) 158 940 178 626 (112 586) 66 040Office equipment 58 065 (41 949) 16 116 52 977 (37 980) 14 997 IT equipment 518 300 (338 940) 179 360 352 705 276 207 76 498Total 8 439 280 (670 367) 7 768 913 584 308 (426 773) 157 535

Reconciliation of property, plant and equipment - 2014

Opening Additions Depreciation Total Balance Land - 3 606 434 - 3 606 434Buildings - 3 973 177 (165 114) 3 808 063 Furniture and fixtures 66 040 104 679 (11 779) 158 940Office equipment 14 997 5 088 (3 969) 16 116IT equipment 76 498 165 595 (62 7333) 179 360

157 535 7 854 973 (243 595) 7 768 913

Reconciliation of property, plant and equipment - 2013

Opening Additions Disposals Depreciation Total Balance Furniture and fixtures 42 440 29 280 - (5 680) 66 040Office equipment 19 333 - - (4 336) 14 997IT equipment 111 869 30 849 (6 942) (59 278) 76 498 173 642 60 129 (6 942) (69 294) 157 535

Details of properties 2014 2014Land and buildingsErf 788 Erand Gardens Ext 49 - Purchase price: 1 September 2013 7 403 977 - - Improvements 176 204 - 7 580 181 -


4. Deferred taxationDeferred tax assetAccelerated allowances for tax purposes 275 570 173 007

Deferred tax asset 275 570 173 007

5. Trade and other receivablesTrade receivables 11 506 069 10 161 091 Deposits 2 4000 422 549 Accrued income 443 449 234 696

11 951 918 10 818 336

Credit quality of trade and other receivablesThe credit quality of trade and other receivables that are neither past due nor impaired are determined to be fully recoverable.The credit quality of trade and other receivables that are neither pasl nor due nor impaired are assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates:

Trade and other receivables past due but not impairedAt 31 July 2014, trade and other receivables amounting to R3 248 933 (2013: R 2 814 150) were past due but not impaired.

The aging of amounts past due but not impaired is as follows:

90 days 280 331 535 195120 days 428 636 2 278 955180 days 2 539 966 -

Trade and other receivables impairedThe amount of the provision was R310 000 as of 31 July 2014 (2013: R310 000)

6. Cash and cash equivalents Cash and cash equivalents consist of:

Cash on hand 224 224Bank balances 6 071 242 10 169 339Short term deposits 12 954 711 11 436 763

19 026 177 21 606 3267. Other Financial Liabilities

Held at amortised costSAA and Comair rebates 1 504 880 2 021 583E waste Recycling Payments 5 844 5 844Waste Paper Recycling Payment 3 411 761 3 877 251Membership Loans 22 852 502 18 750 013Tertiary institutions - these loans are unsecured, interest free and repayable by mutual agreement, subject to availability of funds 27 774 987 24 654 691

Figures in Rand 2014 2013


Non-current liabilitiesAt amortised cost 22 852 502 18 750 013

Current liabilitiesAt amortised cost 4 922 485 5 904 678

27 774 987 24 654 691

8. Retirement benefits

Defined benefit plan The actuarial valuation determined that the retirement plan was in a sound financial position. The valuation was done as at 31 July 2014. The Actuarial valuation was updated by the actuary in order to reflect actual balances in the current year.

The retirement benefit was, in the prior year, linked to investments held in a financial institution (ABSA). The investment has since been utilised and as a result no investment was linked to the retirement benefit in the current year.

Carrying value

Present value of the defined benefit obligation-wholly unfunded (2 317 063) (2 317 063)Fair value of plan assets 27 587 2 182 538

(2 289 476) (134 525)

The fair value of plan assets includes:ABSA BankABSA Bank - 2 182 538

Movements for the year

Opening balance 2 317 062 2 114 453One year service cost 21 534 47 953 Settlements (119 775) (105 778) Interest Cost 179 167 166 843Actuarial (Gain)/Loss (108 512) 93 591

Fair value of asssets 2 289 476 2 317 062 9. Trade and other payables Trade payables 2 643 588 2 407 066Value added taxation 362 915 381 084 Accrued leave pay 998 763 774 030Accrued bonus 579 067 436 6108Accrued expense 2 174 652 1 851 248Other payables 312 162 129 453

7 071 147 5 979 491



10. Financial assets by category

The accounting policies for financial instruments have been applied to the line items below:

2014 Loans and Held to Total receivables maturity investments Trade and other receivables 11 816 069 - 11 816 069Cash and cash equivalents 6 071 242 12 954 711 19 025 953

17 887 311 12 954 711 30 842 022

2013 Loans and Held to Total receivables maturity investmentsTrade and other receivables 9 516 666 - 9 516 666Cash and cash equivalents 10 169 339 11 436 763 21 606 102

19 686 005 11 436 763 31 122 768

11. Financial liabilities by category

The accounting policies for financial instruments have been applied to the line items below:

2014 Financial liabilities Total at amortised cost Other financial Liabilities 4 922 485 4 922 485Trade payables 7 071 147 7 071 147

34 846 134 34 846 134

2013 Financial Total liabilities at amortisedOther financial liabilities 5 904 678 5904 678Trade payables 5 979 417 5 979 417Membership loans 18 750 013 18 750 013

30 634 108 30 634 108



12. Revenue

Sale of goods - Diaries 1 967 755 1 834 934Rendering of services 25 867 632 21 994 397Exhibition Stand 1 956 123 871 316Waste Paper 974 784 1 483 830Delegate Fee 790 193 903 214Source Guide 307 018 300 186Sponsorships 20 000 18 680Vendor 600 1 628Sundry - 7 594Cisco Wireless - 875 640Catering User - 12 062 31 884 105 28 303 481

The amount included in revenue arising from rendering of services are asfollows:Lifts & Escalators 9 683 099 8 303 088Service Fee 14 728 983 13 326 859Tenders 855 212 214 501AS Audit 583 671 137 688Workshops 16 667 6 111E Waste - 6 151 25 867 632 21 994 398

13. Cost of sales

Sales of goods Diaries 1 352 470 1 256 218Lift & Escalators 9 197 363 7 739 675Conference Fees 2 766 316 1 793 210Waste paper removal 874 864 1 364 586Assoc. Audit 115 521 74 568 Other (Wireless equipment and E waste) 19 368 880 484 14 325 902 13 108 741

14. Operating profit /(loss) Operating profit / (loss) for the year is stated after accounting for the following

Operating lease chargesPremises• Lease rental 33 056 369 709Equipment• Lease rental 92 536 91 493 125 592 461 202

Loss on disposal of property, plant and equipment - (6 942)Depreciation on property, plant and equipment 243 595 69 295Employee costs 7 141 817 6 106 019 15. Investment revenue

Interest revenueBank 1 515 359 1 110 452



16. Taxation

Major components of the tax expense

Current TaxLocal income tax - current period 158 534 162 821

Deferred TaxDeferred tax expense (102 563) (117 964) 55 971 44 857

Reconciliation of the tax expenseReconciliation between accounting profit and tax expense.Accounting profit 139 010 122 952Tax at the applicable tax rale of 28% (2013:28%) 38 923 34 427

Tax effect of adjustments on taxable incomeDonations 14 209 -Fines and penalties 2 839 8 487Loss due to theft, fraud and embezzelment - 1 944 55 971 44 858

Deductible temporary differences. 102 563 117 964

17. Cash (used in) generated from operations

Profit before taxation 139 010 122 952Adjustments for:Depreciation and amortisation 243 595 69 295Loss on sale of assets - 6 942Interest received - investment (1 515 359) (1 110 452)Movements in retirement benefit assets and liabilities 2 154 051 99 810Changes in working capital:Trade and other receivables (1 133 582) (1 322 743)Trade and other payables 1 091 730 (255 907) 980 345 (2 390 103)

18. Taxation refunded (paid)

Balance at beginning of the year (313 793) (150 972)Current tax for the year recognised in profit or loss (158 534) (162 821)Balance at end of the year 131 151 313 792 (341 176) -

19. Directors’ emoluments

There were no emoluments paid to the directors during the year.



20. Risk management

Capital risk management

The company’s objectives when managing capital are to safeguard the company’s ability to continue as agoing concern in order to provide returns for members and benefits for other stakeholders and to maintainan optimal capital structure to reduce the cost of capital.

There are no externally imposed capital requirements.

There have been no changes to what the entity manages as capital, the strategy for capital maintenance or externally imposed capital requirements from the previous year.

Financial risk management

The company’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.

The company’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the company’s financial performance. The company uses derivative financial instruments to hedge certain risk exposures. Risk management is carried out by a central treasury department (company treasury) under policies approved by the board of directors. Company treasury identifies, evaluates and hedges financial risks in close co-operation with the company’s operating units. The board of directors provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

Liquidity risk

The company’s risk to liquidity is a result of the funds available to cover future commitments. The company manages liquidity risk through an ongoing review of future commitments.

The table below analyses the company’s financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Credit risk

Credit risk consists mainly of cash deposits, cash equivalents, derivative financial instruments and trade debtors. The company only deposits cash with major banks with high quality credit standing and limits exposure to any one counter-party.

Trade receivables comprise a widespread customer base. Management evaluated credit risk relating to customers on an ongoing basis. lf customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, risk control assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the board. The utilisation of credit limits is regularly monitored.

Financial assets exoosed to credit risk at vear end were as follows:

Financial instrument 2014 2013Trade and other receivables 11 565 339 10 818 336Cash and cash equivalents 19 026 177 21 606 326


Revenue 12 31 884 105 28 303 481Cost of sales 13 (14 325 902) (13 108 741)

Gross profit 17 558 203 15 194 740

Other income 3 129 387 2 487 214Expenses (see below) (20 548 580) (17 559 002)Profit before taxation 139 010 122 952Taxation 16 55 971 44 857

Profit for the year 83 039 78 095

Detailed Income Statement

Operating Expenses

Advertising 174 274 104 947Annual report publication 0 50 000Auditors remuneration 58 698 70 292Bad debts provision - 250 000Bad debt written off - 132 529Bank charges 22 296 21 004Cleaning 55 136 -Computer expenses 36 190 18 789Conference & Seminars 164 882 354 694Consulting and professional fees 134 834 149 929Depreciation, amortisation and impairments 243 595 69 295Donations 50 747 42 744E Procurement development 514 172 79 192Employee costs 7 141 817 6 106 019Enternainment 63 941 66 750IT expenses 326 629 277 783Insurance 61 950 30 893Lease rentals on operating lease 125 592 461 202Legal expenses 18 708 -Levies 86 284 -Marketing Expenses 140 876 58 175Municipal expenses 61 778 -Office Supplies 103 395 38 555Placement fees 154 900 21 600Postage 38 480 6 339Printing and stationery 64 310 45 111Profit and loss on sale of assets and liabilities - 6 942Quality Management Services 13 443 10 504Rebates to Tertiary Institutions 8 953 941 8 407 930Repairs and maintenance 16 964 -Rosen park relocation 36 371 -Security 31 997 -Skills audit 500 000 -Subscriptions 27 938 16 675Telephone and fax 129 515 120 413Training 32 971 65 815Travel – local 678 744 464 210Travel – overseas 283 212 10 671

20 548 580 17 559 002

The supplementary information presented does nol form part of the annual financial statements and is unaudited.

Figures in Rand Notes 2014 2013


Notes

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