House Chair, the audit that the hon member is referring to was commissioned in 2009. In February 2010, I released the summary of the report together with its findings. Some of the outcomes of the audit report include the following: Firstly, the task team found that Sentech was in urgent need of a turnaround strategy and that its current position was caused by, amongst other things, a new legal and regulatory framework that had opened up the markets; secondly, a misaligned business strategy in support of the national service delivery agenda; and thirdly, the absence of a clear and comprehensive information and communications technology, ICT, industry framework.
The task team also found that the definition of Sentech's role lies at the heart of the problem along with the strategies it pursued and its failure to break into the telecommunications market. In an endeavour to find a solution, the task team considered four options. The first option was to reposition Sentech in terms of its core competence as the broadcasting signal distributor. Secondly, Sentech was to leverage its core competence to look for opportunities on the continent where it is already doing business. The third option was for Sentech to continue with its diversification strategy of growing the telecommunications business. The fourth option was for Sentech to transfer its nonbroadcasting electronic communications network services, ECNS, and nonbroadcasting energy and combustion services, ECS, business to Infosat.
As a measure to stabilise Sentech, I have appointed a new board and a new chairperson. Further, I hold monthly bilateral meetings with the board where its strategic interventions to turn Sentech around are discussed.
Sentech has developed and submitted its corporate plan to the department. The proposed corporate plan highlights the following: Firstly, the identification of products or services that are not profitable and a consideration to either modify or discontinue services or products; secondly, the identification of product enhancement to increase profitability; thirdly, the identification of new products through research and development to fully utilise the group's licences; and fourthly, the reduction of nonessential cost expenditure and development of business cases to support all capital expenditure.
The board has also instituted measures to restrict cash outflow by implementing emergency controls such as additional supply-chain management controls. The expenditure and turnaround committees have also been established. Additional control and supply-chain management include, among other things, database clean-up, updating the policy regarding supplier criteria and negotiating directly with suppliers instead of using supplier agents.
The expenditure committee's role is to ensure that all commitments and current expenditure are supported by valid contracts and provide value for money services or goods. It also ensures that supply-chain management processes have been followed and expenditure is matched by revenue. Daily own cash balances are monitored to ensure sufficient cash availability. The turnaround committee's role is to assist with initiatives to update all relevant policies, procedures and processes to alleviate cash flow strain.
Furthermore, the board ... [Time expired.]