PORTFOLIO COMMITTEE ON SPORT AND RECREATION Financial Presentation 23 May 2017 For information on applying this template onto existing presentations, refer to the notes on slide 2 of this presentation. The Input area of the Beam can be customized to reflect the content of the presentation. The Input area is an AutoShape with a picture fill. To change this, ensure you have the image you wish to use (ideally a .jpg or a .png file) in an accessible folder. The image should have a ratio of 1:1 to ensure it does not appear distorted. Acceptable images for importing into the Input area of the Beam are the three approved graphics (lines), and black and white photography or illustrations which follow the principles laid out on The Branding Zone. Color images should never be imported into this area. To create a thank you slide with a picture in the Input area of the Beam, duplicate this master slide and create a new master slide. If using the graphic on the title slide the same should be used on the thank you slide. If using a picture in the Input area of the Beam in the title slide, the same or different but related picture can be used on the thank you slide. Customize the Input area of the Beam as described below. Click on the View tab from the menu bar and select Master>Slide Master Right-click on the Input graphic and select Format AutoShape From the Fill menu, under the Color and Lines tab, click on the drop-down arrow next to Color and select the Fill Effects menu From the Picture tab, click on Select Picture. Navigate to the folder containing the image you wish to insert in the Input area. Highlight the image and tick the Lock picture aspect ratio box. Click on OK. You can now preview the image before continuing. If you are happy with how it looks, click Ok to continue. Otherwise, repeat the process until you are happy with your selected image To exit from Master View, click on View>Normal. The change you made to the Input graphic should now be visible on the title slide

INTRODUCTION Our Audited Group Annual Financial Statements cover the period 1 July 2015 to 30 June 2016. The Group includes the following entities: SAFA – “the Association” Africa Cup of Nations 2013 Local Organising Committee South Africa NPC The South African Football Association Development Agency SA Infrastructure Development Foundation

2016 Income Statement (R million) Revenue Expenses Loss/ Surplus It is possible to apply this template to exiting presentations. Have the latest presentation template open Click on the View tab and select Normal Delete all unwanted slides Click on the Insert tab from the menu bar and select Slides from Files Click on Browse. Navigate to the presentation you wish to update with the new template. Highlight the presentation and click Open Wait for the slides from the presentation to load and click on Insert All. Then click Close Check the inserted slides to ensure that the most appropriate master slide has been used on each slide To change the master applied to a slide select the slide you wish to apply a different master to then click on the Format tab from the menu bar and select Slide Design From the Used in This Presentation section choose the master you wish to apply to the slide and hover over it to reveal a drop-down arrow. Click on the arrow and select Apply to Selected Slides It is important to thoroughly check the presentation to ensure that no further formatting is needed.

Reserves - (R million)

Expense Comparison (R million)

Development costs Comparison to prior year (R million)

Other administrative costs

Balance Sheet (R million) SOUTH AFRICAN FOOTBALL ASSOCIATION   BALANCE SHEET AS AT 30 JUNE 2016 (ZAR MILLION) Assets 191 Liabilities and reserves Current assets 60 Current Liabilities 183 Non-current assets 131 Non Current Liabilities 2 Reserves 6

FINANCIAL RECOVERY STRATEGY – YEAR ENDING JUNE 2017 Click to edit Master title style FINANCIAL RECOVERY STRATEGY – YEAR ENDING JUNE 2017 Click to edit Master text styles Second level Third level Fourth level Fifth level 2018/11/14

1. NEW SPONSORSHIP AGENCY We appointed Grinsport (Pty) Ltd to raise sponsorships for us. Grinsport (Pty) Ltd has got a huge amount of experience in sports sponsorships. We have a significant amount of unsold inventory which include Under 23, Under 20 Women and Under 17 Boys and Girls and Referees. We also have a number of products / competitions that are under sponsored and Grinsport (Pty) Ltd will look for co-sponsors to fill up the gap. Grinsport (Pty) Ltd guarantees a minimum of R10m within the first 365 days. 2018/11/14

2. LICENSING AND MERCHANDISING PROGRAMME FIFA approved our seed funding, US $300,000 (R4.2 million) for our Licensing and Merchandising Programme. The various commercial opportunities related to introducing a merchandise range are quite wide, and is reflected in the below elements, though not limited hereto : National Team Jersey National Team Tracksuits Various casual wear clothing (golf shirts, t shirts, caps etc) Various formal wear clothing accessories (ties, ladies scarves etc) Various supporter accessories (scarves etc) Various accessories (cups, pens, key rings, balls etc) 2018/11/14

2. LICENSING AND MERCHANDISING PROGRAMME We will use three traditional distribution channels: our own stores (SAFA House / Fun Valley / Regional Members / Match Venues) independent fashion houses department stores / sports stores Profitability Projections Year 1 – Break-even (FIFA funding will cover development costs) Year 2 – R1 million Year 3 – R4.1 million Thereafter growth continues as our programme gets more established 2018/11/14

3. SAFA DIGITAL We have established SAFA Digital which will be responsible for the digitisation of our members’ data and commercial exploitation of this members’ database. The commercial opportunities associated with SAFA Digital are as follows: Telco partnership that will benefit both SAFA and it’s members (Regions) Advertising served on both the Registration and Competition systems, as well as associated apps Big data marketing, that is partnering with an agency to direct market to our members 2018/11/14

Membership registration fees 3. SAFA DIGITAL Presenting sponsors for apps, competition website, talent identification Membership registration fees SAFA Digital is expected to be profitable from year 2. Thereafter it will be achieving exponential profit growths 2018/11/14

4. FIFA FORWARD PROGRAMME FIFA announced a much improved financial support programme for its members. Each member (federation) will be eligible for a total amount of US $1.25 million (R17.5 million) per annum. US $0.5 million (R7 million) of these funds should be used to cover member association’s operational costs. The balance, US $0.75 million (R10.5 million) should be utilised towards projects. These projects may be related to Strategic areas, Organisational areas, Sporting areas and Football infrastructure. 2018/11/14

5. IMPROVED CAF TV RIGHTS In July 2016, CAF advised us that due to its improved commercial arrangements, its members associations will now receive bigger shares of the CAF TV rights. Member Associations are now guaranteed share of TV revenue by participating in any of the CAF competitions. 2018/11/14

Round Stages - US$ 120,000 (R1.68 million) 5. IMPROVED CAF TV RIGHTS For an example, the available prizes / rewards for our participation in the 2018 FIFA World Cup Qualifiers are: Round Stages - US$ 120,000 (R1.68 million) Market Maturity - US$0.84 million (R11.8 million) Group Matches Position 4 - US$0.2 million (R2.8 million) Position 3 - US$0.3 million (R4.2 million) Position 2 - US$0.5 million (R7 million) Position 1 - US$1 million (R14 million) 2018/11/14

6. NATIONAL TECHNICAL CENTRE (inc. Fun Valley) The Fun Valley business is a profitable one which contributes a minimum R3.5 million profit per year to the SAFA Group. The use of Fun Valley by our teams for accommodation and also for our courses is achieving significant cost savings. More cost savings will be achieved as the development and upgrade of the National Technical Centre takes place. The savings will include accommodation, training fields and venue hire, etc. The minimum annual savings will be R5 million. There is also potential of getting other funders to support the development of the football mother body’s National Technical Centre. 2018/11/14

6. NATIONAL TECHNICAL CENTRE (inc. Fun Valley) The developments at our National Technical Centre will also strengthen our Balance Sheet by increasing both our Asset Base and our Reserves The current projects are: Construction of a boundary wall and guard house (funded by the 2010 FIFA World Cup Legacy Trust) Construction of an artificial football pitch (funded by FIFA) Finalisation of Tender process for construction of 2 natural grass football pitches (funded by the 2010 FIFA World Cup Legacy Trust) 2018/11/14

6. NATIONAL TECHNICAL CENTRE (inc. Fun Valley) The current projects are: We have applied for funding from the Gauteng Provincial Government for the construction of a 2nd artificial football pitch 2018/11/14

7. 2016/17 BUDGETS AND COST MANAGEMENT Our 2016/17 budget reflects an accounting surplus of R1.2m and a net cash inflows of R16.8m Cost management is a continuous process with the Association. We constantly check for opportunities to save costs and maximise on efficiencies. 2018/11/14

8. 30 JUNE 2017 FINANCIAL PROJECTIONS We are almost a month away from our financial year-end – 30 June 2017 We are projecting a break-even position or a small surplus when we report on the financial year-ending 30 June 2017 2018/11/14

THANK YOU 2018/11/14