1. An Overview of Financial Performance
<logo> -
An Overview of Financial Performance

2. Highlights 2004 2003 Total Income (Rmillions) 507.8 516.6
Total Expenses (Rmillions)
501.4
479.2
Debtors Collection period (days) 80 77
Current ratio
1.11 : 1
1.48 : 1
Total Assets (Rmillions)
546.7
542.0
Employees (number)
2525
2652
Debtors Collection period: The debtors collection period has remained stable and is reasonable for the agricultural industry which is seasonal.
Current ratio: This is an indication of the ARC liquidity, and shows that our current assets cover the current liabilities 1.11 (2003: 1.48) times.

3. Report of the Auditor-General for the year ended 31 March 2004
Audit Opinion
Audit of financial statements – Unqualified
Audit of performance information – Qualified - the measure of performance against predetermined objectives.
The Balanced Scorecard was finalised too late in the financial year to be audited. (extract attached)

4. Balanced Scorecard Extract
Agricultural Research Council
Balanced Scorecard
MANAGING OUR FINANCES TO MEET OUR MANDATES
Measurable Objective
Critical Success Factor
KPI
Benchmark OR 2003/4 projected actual if greater
Target
F1-F5
To ensure that the ARC is sustainable
Contract Income funding (Key target # 6.2.a)
Amount of Contract income generated
R222million
R 253million F6
% coverage of the Total Costs through contract income
41%
42% F8
Continued financial support from the government
% Allocation of funds to projects in support of national priorities
Not measured
70% F7
Grant funding
Amount of unencumbered grants attracted to ARC
Not Measured
R25 million F9
Collection of fees and grants due to the ARC
% not transferred or not paid 5%

5. Income 2004 2003 Parliamentary Grant 276.140 267.552 External earnings
(Rmillions)
2003
Parliamentary Grant
External earnings
Deferred income
5.170
5.607
Interest received
13.955
9.568
Profit on sale of property, plant and equipment
0.267
0.461
TOTAL INCOME

6. Expenses Total Salary cost Other operating costs Depreciation
2004
(Rmillions) %
2003
Total Salary cost
7.8
Other operating costs
2.2
Depreciation
18.193
-13.1
20.957
TOTAL EXPENSES
4.6

7. Income Sources

8. Parliamentary grant vs External earnings 2004

9. Parliamentary grant vs External earnings 2003

10. Balance Sheet 2004 2003 Assets Total Assets Liabilities
Non-Current
Current
376.5
170.1
386.0
156.0
Total Assets
546.6
542.0
Liabilities
215.3
152.8
264.5
105.4
Total Liabilities
368.1
369.9
Capital and Reserves
178.5
172.1
Total Equity and Liabilities

11. Assets The ARC Asset base consists of: Land and Buildings R354 790 827
Plant and Equipment R
Motor vehicles R
Computer Equipment R
The limitation of funds has unfortunately had a negative impact on our capital expenditure planning with a result that the majority of our assets are past their useful lives and the maintenance costs are putting our maintenance planning under strain.

12. Application of Financial Resources to the ARC goals
Parliamentary Allocation
R million
External Income
ARC Total
Actual
2004
2003
Natural Resource Use and Management 71 62 56 49
127
111
Quality of life 42 44 33 39 75 83
Competitiveness 95 96 80 93
175
189
Informed Society 23 25 15 38
Integrated Rural Development 45 41 28 29 73 69
Total
276
268
212
234
488
502

13. Total Income vs Infrastructure
Use of infrastructure
2004
Actual
R million
2003
2002
2001
2000
Total Income (excluding deferred income)
503
511
477
451
432
Productive infrastructure
463
466
468
544
545
Land and buildings at cost
442
439
512
510
Moveable assets at book value 21 24 29 32 35
Relationship
108.6%
109.6%
101.9%
83.9%
79.3%
The relationship between income and infrastructure shows how the infrastructure invested has not shown any growth and is steadily declining as the infrastructure is aging. This poses a problem as it is becoming progressively more difficult to utilise the old infrastructure to generate and grow our income.

14. Audit Report Performance
Review of the matters raised in the Auditor-General Reports
from 1999 till 2004
Matters emphasised in the Auditor-General report
Legislative compliance x
Forensic investigations
Internal control
Provision for post-retirement medical aid benefits
Pension fund contributions
Transfer of land and buildings from the state
Going concern
Depreciation and impairment of land and buildings
Performance information
Financial statements - unqualified opinion
yes

15. <logo>
Thank You