1. 1 SARCC Portfolio Committee on Transport Budget Presentation 18 MARCH 2005

2. 2 Presentation Outline Introduction – Eddie Lekota - CEO SARCC Overview Business Focus Finance Budgets Conclusion

3. 3 Business Focus Service Rolling Stock Safety & Security Focused Projects Service Extension Funding

4. 4 CAPEX Allocation

5. 5 Table 1 ROLLING STOCK PER REGION - 65,50% - 60,50% - 67,50% - 66,90% % Utilized 56053210441113 Coaches req. for min. Service 5544858731112 Available coaches for service 84680112941661 Contractual Allocation (coaches) TshwaneDurbanW-CapeWitsREGION

6. 6 2003/4 AUDIT REPORT Property Plant and Equipment Rolling Stock Classification Impairment Depreciation AUDIT QUALIFICATION

7. 7 PROGRESS TO DATE 1. POLICIES IN PLACE Investment Materiality Framework Capitalisation and Maintenance Research and Development PPE –Accounting Policy

8. 8 COMPLIANCE TO GAAP - PPE 1.Items of Assets (PPE) not carried at fair value, retrospective application of AC123 (revised) will be conducted. 2.A detailed analysis of ensuring that our fixed asset system has all the functionalities to calculate all the requirements of AC123 is underway. 3.All assets are to be split into components. A guideline is being prepared for the identification of minimum components. 4.The Residual values and useful lives will be evaluated every year. 5.SARCC’s Group Policy and Procedure Manual will be updated regularly to comply with the requirements. Annual Report 2004/5 Qualification

9. 9 2003-2005 Budget Allocations R'million Actual Budget 2002/20032003/20042004/2005 AOPERATIONAL SUBSIDY: Income1,8472,0342,172 Subsidy 1,546 1,6791,874 Rental of assets 60 Property Development 184 214 238 Net interest 57 81 BLess: Expenditure1,806 2,021 2,172 Commuter services1,216 1,291 1,414 Asset rental/Spoornet station maintenance 48 47 48 Heavy repairs/Operational 185282 216 Property expenses 189200 247 Insurance 111 144 158 Head Office & other 57 89 (A-B) Operational Subsidy Surplus 41 13 0 CAPITAL SUBSIDY: Capital 555 565 555 Rolling Stock 100 Additional Capital 663 665 655

10. 10 2006 – 2008 Budget Allocation R'million Budget 2005/20062006/20072007/2008 AOPERATIONAL SUBSIDY: Income2,0692,1942,310 Subsidy 1,7801,887 1,982 Rental of assets 60 Property Development 229 247268 BLess: Expenditure2,2642,3992,525 Commuter services1,4841,5741,656 Asset rental/Spoornet station maintenance 48 Heavy repairs/Operational 227238250 Property expenses 246265284 Insurance 164171178 Head Office & other 95100106 Khayelitsha extension operational requirements 3 3 Operational Subsidy (shortfall)/surplus (195)(205)(215) (A-B) CAPITAL SUBSIDY: Capital588630666 Rolling Stock100 Additional Capital100250 688830 1,016 VAT(85)(102)(125) 603728891

11. 11 Subsidy Allocation

12. 12 CONCLUSION Budget Vs Strategy Implications of the Consolidation