Corporate Plan 2006 P resentation to the Portfolio Committee on Trade & Industry 10 March 2006 Xola Sithole Managing Director

OUTLINE Our Mandate Strategic Objectives Progress Report Operational Statistics Financial Sustainability Concluding Remarks

STRATEGIC OBJECTIVES

STRATEGIC INITIATIVES What we said we would do

OPERATIONAL STATISTICS

FINANCIAL SUSTAINABILITY

KHULA ENTERPRISE FINANCE Ltd Income Statement Budget – 2006/ /7 R Operating Income 67,370,570 Investment Income 36,116,450 TOTAL INCOME 103,487,020 TOTAL COSTS 79,791,450 Operating Expenditure 48,511,150 Technical Reserves & Bad Debts 31,280,300 PROFIT ATTRIBUTABLE TO COMMERCIAL ACTIVITIES 23,695,570 DEVELOPMENTAL ACTIVITIES 41,602,420 Subsidized indemnity fee 19,692,400 Indemnity risk premium 1,225,000 Subsidized business loan rate 942,120 Start-up Fund losses 8,882,950 Loss making properties 4,331,300 Loss of income on Oceana shares 1,376,800 Employee costs 5,151,850 BUDGETED LOSS (17,906,850)

KHULA ENTERPRISE FINANCE LIMITED Income Statement Budget – 2006/ /7 – R’ /5 – R’ /4 - R’000 Budget Forecast Budget Actual Operating income41,905 36,420 40,034 43,474 Operating expenditure(53,663) (46,547) (50,33 4) (43,12 3) Operating investment (losses)/income (5,150) (1,147) OPERATING LOSS BEFORE RESERVES AND BAD DEBTS (11,758) (10,127) (10,300) 351 Technical reserves & bad debts 32,505 25,531 30,700 20,476 NET OPERATING LOSS BEFORE INVESTMENT INCOME (49,413) (36,805) (40,586) (19,969) Investment income 31,507 41,866 40,788 45,431 (LOSS)/PROFIT BEFORE TAX (17,906) 5, ,462

KHULA INSTITUTIONAL SUPPORT SERVICES Income Statement Budget – 2006/07 R' /72005/62004/5 BudgetForecastActual Operational & Regional expenditure 10,379 9,199 8,109 Capacity building ,203 Mentorship 11,664 10,857 10,824 Loans 11,485 23,135 25,389 KhulaStart 8,115 33,834 44,025 55,640 Funded by: Government grant Funded by Khula – awaiting Government grant- - 28,433 Income generated 1,744 1,470 2,207 33,834 44,025 55,640 32,090 42,025 25,000

Decrease from actual 2004/5 and forecast 2005/6 R6.5m non-recurring fee earned on Danida donor funds Increased marketing costs Additional rental costs due to move Increased staff costs – staff numbers up with 24% Increase in indemnity claims & reserves Start-Up Fund losses of ±R7m R25m loss in interest as result of declining interest rates R16.4m turn around from loss to gain in fair value of Oceana shares Less dividend income BUDGET 2006/07 – SUMMARY

KHULA ENTERPRISE FINANCE LIMITED Budget 2006/07 – SUMMARY Funding requirements Once-off recapitalization R650m OR Annual grants R' /72007/8 2008/9 Budgeted loss 17,907 21,783 23,526 Add: Potential under provision for indemnity claims and bad debt write offs 14,785 17,985 19,425 32,692 39,768 42,951

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