1. S t a t e I n f o r m a t i o n T e c h n o l o g y A g e n c y Presentation to the Portfolio Committee on Public Service and Administration, PARLIAMENT 9 June 2006 by Sol Ngubane BUDGET CONSIDERATION FY2006/07

2. 2 AGENDA  Financial highlights for FY2005/06  Budget for FY2006/07  Salient Features of the Budget  The SITA Operating Model  Conclusion

3. 3 Financial Highlights for FY2005/06  Revenue exceeded target of R2.6b  Net Profit after Tax exceeded R100m  Tighter financial controls  Savings on Marketing expenses  Savings on depreciation due to deferment of capital items  Performance Bonus were severely reduced  Debtors collection continued to be a challenge  No cases of fruitless or wasteful expenditure reported  Customer satisfaction levels improved  Savings for government on procurement achieved through SMS

4. 4 Budget for FY2006/07  Business Plan developed based Business Strategy  Board Approved Business Plan  Budget developed in accordance with Business Plan  Budget is highest ever at R2,9b  Financials are currently with auditors  To be submitted to Auditor General by 7 July 2006

5. 5 Salient Features of the Budget R’000 000 Turnover2,921 Cost of Sales2,233 Gross Profit 688 Other Income 12 Operating Expenses 529 Financing Income 16 Net Profit Before Tax 186 Gross Profit %23.5% Expenses as % of turnover18.1% Operating Margin 5.8% Net margin 6.4%

6. 6 The SITA Operating Model  Self-sustaining and use of own profits for growth  Schedule 3A classification has implications  Have to embark on non revenue generating activities, e.g. R&D  Youth Internship Programme aimed at contributing to skills development in ICT sector  Financial & Costing Model is complex  Walk-in Training Centres are a Ministerial Project funded from profits  Women Executive Development Programme with GIBS School of business  Executive Development Programme for GM’s

7. S t a t e I n f o r m a t i o n T e c h n o l o g y A g e n c y Thank You