DEPARTMENT OF DEFENCE: FINANCIAL YEAR 2011/12: FINANCIAL PERFORMANCE 1ST AND 2ND QUARTERS PCD 1st 2nd QR 2011 Fin Perf

AIM To inform the Portfolio Committee on Defence and Military Veterans on Defence’s 1st and 2nd quarter financial performance for the 2011/12 financial year. 2 PCD 1st 2nd QR 2011 Fin Perf

FY 2011/12 1st QUARTER FINANCIAL PERFORMANCE PCD 1st 2nd QR 2011 Fin Perf

FY 2011/12: 1ST QUARTER EXPENDITURE COMPARISON PER PROGRAMME 4 PCD 1st 2nd QR 2011 Fin Perf

FY 2011/12: 1ST QUARTER EXPENDITURE COMPARISON PER SCOA CLASSIFICATION 5 PCD 1st 2nd QR 2011 Fin Perf

FY 2011/12: 1ST QUARTER REVENUE COLLECTION COMPARISON PER SCOA CLASSIFICATION 6 PCD 1st 2nd QR 2011 Fin Perf

FY 2011/12: 1st QUARTER SPECIAL DEFENCE ACCOUNT FINANCIAL PERFORMANCE SN CATEGORIES FA % 2011 ORDER % PAID % 2010 a b c d e 1 SDPs 50 48 15 2 Largest Projects 68 66 6 5 3 Capital 63 57 10 4 Operating 77 62 9 13 Sensitive 87 14 Total 67 7 Excluding SDPS 72 8 7 PCD 1st 2nd QR 2011 Fin Perf

FY 2011/12 MID YEAR ADJUSTMENTS PCD 1st 2nd QR 2011 Fin Perf

ADJUSTED ESTIMATES OF NATIONAL EXPENDITURE (AENE): 2011 Sn Item Requested Received Deviation   a b c d RM 1. Unforeseeable and Unavoidable 170.9,7 81,4 (89,5) i. OP COPPER 81.4 ii. OP CORONA 59,2 (59,2) iii. Defence Force Service Commission 30,3 (30,3) 2. Self-Financing 62,7 i. SDA 54,1 ii. GDA 8,6 3. Unforeseeable Economic Events – Salary Increase Additional 1,3%. 342,9 200,0 (142,9) 4. Total Adjustments 576,5 344,1 (232,4) 5. Other – The Warburg Dillon Read Planning Module used for the management of the SDPs and controlled by NT were reduced by RM600 in the current financial year due to delays. It is to be noted that the outer years will be adjusted ito revised cash flow requirements. PCD 1st 2nd QR 2011 Fin Perf

MID YEAR ADJUSTMENTS: REVENUE SCOA Description Reason for Change  REVENUE: FINANCIAL ASSETS Decrease: Penalties Imposed on Contracts and Exchange Rate Profits are not as high as expected. Discussions with Armscor is currently underway to enhance the accuracy of projections and reporting. Recovery of Study Loans has been adjusted upwards from R 16,400 to Rm4,4 based on current recoveries. FINES Increase: The admin fee charged on Garnishee orders has increased with 420% from Rm 3,5 in 2010 to a projected Rm 10,5. This amount represents 5 % of the amount paid by members according to court orders. SALES OF GOODS & SERVICES PRODUCED BY DEPT Decrease: Services rendered to Private Institutions has not realised as planned and were reduced from Rm 91 to a projected Rm 10,5 based on current trends. Line items adjusted upwards are increases in house rent, duty busses, etc as a direct consequence of salary increases. SALES OF SCRAP, WASTE & OTHER GOODS Increase: From Rm 18,7 to Rm 21,1 based on current collection trends relating to Sale of DoD waste products and redundant equipment. SALES OF CAPITAL ASSETS Decrease: Sale of Main Equipment has not realised as planned. Discussions with Armscor is currently underway to enhance the accuracy of projections and reporting. TOTAL Decrease: Total revenue estimate has been reduced from RM 803 to Rm 561 for the 2011/12 FY. PCD 1st 2nd QR 2011 Fin Perf

FY 2011/12 2nd QUARTER FINANCIAL PERFORMANCE PCD 1st 2nd QR 2011 Fin Perf

FY 2011/12: MID YEAR EXPENDITURE COMPARISON: PER PROGRAMME AS AT 30 SEPTEMBER 2011 Note: SANDF salary increases not yet implemented. 12 PCD 1st 2nd QR 2011 Fin Perf

FY 2011/12: MID YEAR EXPENDITURE COMPARISON PER SCOA AS AT 30 SEPTEMBER 2011 13 PCD 1st 2nd QR 2011 Fin Perf

FY 2011/12: MID YEAR COMPARISON: REVENUE AS AT 30 SEPTEMBER 2011 14 PCD 1st 2nd QR 2011 Fin Perf

FY 2011/12: SPECIAL DEFENCE ACCOUNT MID YEAR COMPARISON SN CATEGORIES FA % 2011 ORDER % PAID % 2010 a b c d e 1 SDPs 52 50 3 17 2 Largest Projects 67 65 13 14 Capital 75 70 26 23 4 Operating 84 77 27 28 5 Sensitive 87 35 21 6 Total 66 18 7 Excluding SDPS 71 19 15 PCD 1st 2nd QR 2011 Fin Perf

ABRIDGED REPORT ON STATE OF EXPENDITURE AS AT 30 SEPTEMBER 2011 SN EXP END OF SEP 2011 PROJ TO END MAR 2012 TOTAL AENE DEV RM a b c d e 1 15 770,7 18 810,7 34 581,4 34 349,0 (232,4) 45,9% OF AENE Note: Deviation mainly due to unforeseeable and unavoidable expenditure not received through the AENE: Treasury Memoranda Submitted – RM89,5. Improvement in Conditions of Service – RM142,9. 16 PCD 1st 2nd QR 2011 Fin Perf 16

CUMULATIVE STATE OF EXPENDITURE PCD 1st 2nd QR 2011 Fin Perf 17

Discussions Thank You 18 PCD 1st 2nd QR 2011 Fin Perf