Armscor’s sterling corporate governance pays off

The Portfolio Committee on Defence and Military Veterans has commended Armscor on its prudency and good corporate governance.

Armscor, the acquisition agency of the Department of Defence, presented its annual report for the 2015/16 financial year to the Portfolio Committee on Wednesday.

Armscor once again attained a clean audit opinion with no qualifications from the Auditor-General.

Thanking the Board of Directors led by Vice Admiral (retired) Mudimu for providing strategic direction in fulfilling Armscor’s mandate, Kevin Wakeford, the CEO of Armscor, said: “The ‘On Time, In Time – Towards A Sustainable Future’ strategy does not only seek to meet SANDF requirements but to reduce reliance on the fiscus, increase employment and grow the SA economy — all within the principles of good corporate governance.”

Armscor has achieved all its goals set in the service level agreement with the Department of Defence (DOD) for the 2015/16 financial year. These include the acquisition of defence materiel, systems support and management and execution of defence technology, research, test and evaluation. While most of the strategic objectives have been achieved, Armscor is determined to improve its revenue streams beyond South African borders.

“We have already set the foundation and strategic plans in the last financial year, Armscor has registered as a strategic supplier to the UN. We are confident we will reap the rewards this financial year and in the future, as we have started providing our services to some countries in the continent.

This creates further opportunities for our defence industry to grow and contribute to economic growth, including the participation and development of SMMEs, thus reinforcing South African defence expertise in the global defence environment,” Wakeford said.

Armscor achieved a net surplus of R200.1 million in 2015/16 compared to R84.2 million in 2014/15 due to gains from the revaluation of fixed and investment properties.

Faced with declining revenues, Wakeford reported that 40% of Armscor’s operating expenses are covered from revenue generated outside of the government allocation and believes that this portion will increase in the future.

Armscor recorded a healthy liquidity and solvency position for the 2015/16 financial year.

Armscor remains committed to contributing positively to socio-economic development initiatives and skills development programmes through its Corporate Social Investment and Learning and Development initiatives.

In the year under review, these initiatives saw the establishment of the Women Military Veterans of South Africa (WOMVASA) entity; the appointment of 77 apprentices and achievement of the transformation target in relation to the employment equity plan.

The Department of Planning, Monitoring & Evaluation in the Presidency has rated DoD/Armscor as the best for strategic planning and performance evaluation.

Source: South African Government News Agency