1. Annual Financial Statements Briefing to Portfolio Committee Parliament of the Republic of SA 24 October 2012

2. FINANCIAL STATEMENTS Statement of Financial Performance Statement of Financial Position Statement of Cashflow Financial Management 2012 Allocation and Spending variance: An analytical review Audit Outcomes The Opinion by AGSA on 2012 AFS Matters of Emphasis Audit Issues Compliance with laws and regulations Internal Controls OUTLINE 2

3. Financial Performance Summary RevenueR55,6 m ExpensesR50,7 m Surplus/under-spendingR 4,9 m Mainly attributable to : Under-spending on personnel costs R 3,9 m Under-spending on CAPEX R1.2 m 3

4. Financial Position Total assets were R13, 4 m compared to R12, 3 in prior period –Cash held grew by R2.4 m from R8, 9 m in 2011 to 11, 3 m by end of 2011/12 –PPE were R1, 9 m ( R3.2 m – 2010/11) All liabilities are current and stood at R4,9 m at March 2012 compared to R8, 7 m at the end of 2010/11 financial year –Exchange payables and provisions decreased mainly due timely payment of creditors Net result : A favourable and improved Net assets position –Due to Surplus recorded for the past 3 financial years –Going concern, liquidity and solvency improvements 4

5. Statement of Cash flow Cash inflows: R55 m received from Treasury Cash outflows: R53 m was spent on COE and G&S An immaterial (R111, 040) was invested in PPE A net increase of R2.4 m was recorded to bring a cash balances to R11, 3 m at reporting date compared to R8,9 m in 2011 5

6. Annual allocations from National Treasury Key Change DriversYear on Year Allocation Increase of 6% from 2010/11 allocation Key driver remain Personnel Costs remain major contributor at 70% of total 6

7. Spending by program and economic classification Actual spending for the year Programme Economic Classification COMMISSIONERS: GOVERNANCE & SUPPORT CORPORATE SUPPORT SERVICES SERVICE DELIVERY PROGRAM Total - Operating Expenditure As % of total Compensation of Employees 4 791 157 8 886 131 20 571 925 34 249 21367.5% Depreciation & Amortisation 1 355 927 2.7% Goods & Services 1 333 504 9 203 360 4 491 006 15 027 86929.6% Profit on Sale Disposed Assets 74 968 0.1% Purchase of assets under R5000 1 439 0.0% Total -Operating Expenditure 6 124 661 19 521 824 25 062 931 50 709 416 100.0% % by program 12%38%49%100% Total Capital Expenditure for the period 111 040 Total Spending : OPEX + CAPEX 50 820 457 8

8. Key Drivers - Spending analysis during 2011/12 Financial Year Total spending realized for the year was R50. 7 million of which: –R15, 1 m was on Goods and Services, where the main expenditure Drivers were: Travel and accommodation : R3.7 million, reduced spending compared to R5.1 m spent in the prior period Professional Services : R3.9 million and includes expenses such as Audit fees, legal costs, etc Printing & stationery : R1, 1million Telecommunications : R2,5 million Computer expenses (R783, 209), Office maintenance + other admin & operating expenses(R3.1 m) –R34, 3 m on Compensation of Employees, split per program as follows: Main Core program : R 20.6 m (60% of total salary bill) Corporate Support: R8, 9m (26%) Commissioners: R4, 8 m (14%) –R111, 040 on Capital Expenditure, for purchase of assets as follows: Office Equipment : R26, 076 Office Furniture and Computer Equipment respectively for R79, 956and R5,008 8

9. AGSA opinion on AFS 2011/12 Unqualified audit opinion Emphasis on –Uncertainties regarding a law suit and office space liability (DPW but disclosed in AFS as a Contingency) –Asset management – Physical Losses – Receivables that are long overdue Management is implementing corrective action 9

10. Other Audit findings – Compliance to laws and regulations Matters emphasized in this regard which are been dealt with by management are: –Irregular, Fruitless & wasteful expenditure: Regularization process underway with National Treasury. Recurrence stemmed by management : SCM unit created with the Finance Department –Compliance in terms of reporting: PFMA, GRAP & other standards, the situation is materially improving because of appropriate staffing choices as well as development –Procurement : the Commission has created the SCM unit since January 2011 and already the intervention is yielding results that includes procedures to avoid irregular spending and procure competitively in terms with the regulations –Internal controls are been improved in line with Dashboard/Key Control commitments to the AGSA 10

11. AGSA opinion on Performance information AGSA recommendation –Need to improve on explanations for variances –Consistency between planned and reported targets (Usefulness of information) –All targets not met Management will continue to improve in this regard 11

12. end »Thank you 12