1. Introducing the Industrial Development Corporation (IDC) Presentation by:
Raisibe Morathi
Chief Investment Officer
Industrial Development Corporation of South Africa
Introducing the IDC
Johannesburg
May 2004

2. Corporate profile…
Established in 1940, the IDC is a self-financing, state-owned development finance institution
Provides financing to entrepreneurs engaged in competitive industries
Follows normal company policy and procedures in its operations
Pays income tax at corporate rates and dividends to the shareholder
Independent Board of Directors
Reports on a fully consolidated basis, with its Annual Report freely available to the public
IDC Head Office in Sandton, South Africa

3. IDC’s Operational Structure…
CEO / President
Khaya Ngqula
23 Supporting departments
Professional Services
Trevor Mashabane
HR Division
Lesé Matlhape
Marketing & Corporate Affairs
Division
Neo Sowazi
Legal Services & General Counsel Division
Tony Tshivhase
CIO
Raisibe Morathi
CFO
Geoffrey Qhena
COO
Gert Gouws
Projects
Division
Jaco Kriek
Industrial Sectors Division
Ufikile
Khumalo
Services Sectors Division
Gerrit van Wyk
14 Strategic Business Units (SBUs), each focussed on specific economic sectors

4. IDC Objectives Create employment opportunities
Improve the real standards of living of all South Africans:
Poor provinces
Rural areas
Foster entrepreneurship
Small and medium enterprises
Economic empowerment of the historically disadvantaged, including broad based
Development of industrial capacity in Africa

5. IDC financing trend (1940s - 2000s)…
Total Value of financing approvals 15 30 45 60 75 90
1940s
1950s
1960s
1970s
1980s
1990s
*2000s 1 2 3 4 5 6 7
Rand billion at 2002 prices
As a % of Gross Fixed Capital Formation (GFCF) in SA
83.5
16.7
% of GFCF
Rand billion
IDC financing to reach over R80 billion in
Projected IDC Financing
low economic activity

6. Investing in the Economy…
Financial year 2002/2003…
IDC’s investment approvals amounted to R 6.2 billion involving 345 deals
IDC’s investments as percentage of private sector investment activity amounted to 4.7% of GFCF
IDC awarded an investment grade rating of Baa2 from Moody’s Investor’s Service

7. Financial track record to June 2003…
Income
-500
500
1 000
1 500
2 000 98 99 00 01 02
R million
Net attributable income
Operating income 03
2002/2003 produced a net attributable income of R 787 million;
Balance sheet remains strong. Capital and reserves grew at an average rate of 11.6% per annum over the past five years to reach R 22.1 billion at the end of the 2002/2003 financial year.
Loan book value stood at R 6.5 billion
Investments stood at R 16.6 billion
The Debt:Equity ratio was 28%
Total assets value was R 29.8 billion
Capital and Reserves 5 10 15 20 25 30 98 99 00 01 02
R billion 03

8. Development Impact… Financial year 2002/2003…
Assisted in the creation of over new job opportunities
Additional export earnings worth R million facilitated
Finance to empowerment companies represented 46% of the total number of approvals and 33% of total value

9. Development Impact… Financial year 2002/2003…
Assisted in the creation of over new job opportunities
Additional export earnings worth R million facilitated
Finance to empowerment companies represented 46% of the total number of approvals and 33% of total value
A significant portion of number of approvals (74%) went towards medium-sized enterprises (R1 010 million)

10. Challenges Creating sustainable jobs
Economic environment particularly in manufacturing sectors
Inflexible labour market
Capital bias in manufacturing
Addressing the challenge through labour intensive sectors
Tourism
Franchising

11. Challenges cont…. Rural development and penetration of poor provinces
Structure of the SA economy (bias towards big cities)
Industrial infrastructure (transport, telecommunication )
Labour migration
Formation of a development agencies unit (R30m)
Development Funding of R50m as a subsidy
Need for grant funding
Linkages with established businesses

12. Challenges cont…. Black Economic Empowerment Concentration
Demographics
Skills
Market gap (capital)
Acquisitions of existing businesses
Desire to take risk on the economy
Broad based participation and ownership
Need for more entrepreneurial support
Transformation charters
Funds (Mining, Women, NEF)
2,5% contribution by BEE

13. Challenges cont…. Small and Medium Enterprise
Legislation
Cost of doing business
Market access
Skills
Rigidity of financiers
Portfolio approach to risk management
Hand-holding and mentorship required
Concessional funding required

14. Prospects… Play a leading role in facilitating empowerment deals.
Continue to seek local and international co-financing opportunities.
Increased human resource development within the IDC.
Entrench IDC’s financial sustainability through improved internal systems.

15. In conclusion… IDC will continue to ….
Invest on economic merit based on sound business principles
Utilise resources to achieve development by addressing market failures
Focus on Government’s policy objectives
Align with the dti strategy
Be flexible to quickly respond to change
Be a leading DFI’s
Achieve our goal of prosperity for all

16. Thank You