IDC Results 200405

1
IDC Results 2004/05

• Geoffrey Qhena
• Chief Executive Officer
• 26 October 2005

2
Mission
To be the primary driving force of commercially
sustainable industrial development and innovation
to the benefit of South Africa and the rest of
the African continent

• Contribute to the generation of balanced,
  sustainable economic growth in South Africa and
  Africa
• Economically empower the South African population
• Promote entrepreneurship through the building of
  competitive industries and enterprises based on
  sound business principles

3
2004/05 Highlights

• For the 9-month period up to 31 March 2005
• Anticipated creation of more than 16 700 jobs
• Further investments of R3,8 billion approved
• 70 of the number and 83 of the value of
  financing approvals towards black economic
  empowerment, up from 53 and 35 respectively in
  2004
• More than 100 approvals for finance to small and
  medium enterprises
• Numerous awards for the IDC-funded films and
• Top Development Financier at the 2005 BusinessMap
  Business Report Black Economic Empowerment awards.

Transition from Strategy for Growth to
Leadership in Development
4
IDCs Investment Activity
Net Value and Number of Approvals
Mozal II
Mozal I

• Approvals of more than R46 billion over the 10
  year period, involving more than 3 300 deals

9 month period Shaded areas indicate annualised
figures
5
Development - SMEs
Number of Approvals to SMEs
Distribution of number of approvals to SMEs by
province July 1995 - March 2005

• SMEs represented more than 88 of the number of
  approvals over the period from 1996 to 2005

• 9 month period
• Shaded areas indicate annualised figures
• Businesses are classified by IDC as SMEs if they
  meet any 2 of
• Less than 200 employees
• Less than R36m turnover
• Less than R39m in assets

6
Development - SMEs
Sectoral Distribution of Approvals to SMEs - July
1995 - March 2005
Agriculture, forestry fishing
Chemicals other mineral products
Food, beverages tobacco
Machinery metals products
Clothing, textiles leather products
Wholesale retail trade
Furniture, jewellery and other manufacturing
Wood, paper printing
Mining quarrying
Financial, insurance and business services
Electrical electronic products
Healthcare, education, media, etc
Transport, storage communication
of Total Value
Hotels restaurants etc
of Total Number
Construction
Electricity, gas water supply
0
2
4
6
8
10
12
14
16
18
20
of Total

• The agricultural sector and non-metallic minerals
  sectors received the largest portion of IDC funds
  in terms of number of approvals.

7
Investment Examples

• Supported franchisees in townships such as
  Soweto, Tembisa, Taung, Mabopane, Vryburg,
  Lusikisiki, Mtubatuba, etc
• With support of European Union funds, invested in
  the development of cherry production in the Free
  State
• Supported the production of Kenaf fibre in
  Winterton in KwaZulu-Natal, for use in the global
  automotive industry
• Supported a call centre operation in the Eastern
  Cape
• Financed a new hospital in Lebowakgomo in
  Limpopo
• Supported a timber harvesting service provider in
  Mpumalanga
• Invested in an abalone aquaculture business in
  Hawston in the Western Cape.

8
Development - Regional
Total Value of Approvals (July 95 to March 05)
per Million Rand GDP
Average

• Relative to its GDP, approvals for finance over
  the past 10 years were the highest in the Eastern
  Cape.

9
Provincial engagement initiatives

• Initiated process of provincial engagement to
  support Provincial Growth and Development
  Strategies
• Started with Limpopo Province
• Investment Conference and
• Memorandum of Understanding with LimDev
• Following-up in current year
• Investment conferences in, and MOUs with, North
  West, Free State and Mpumalanga (planned)
• Meetings with Premiers and Executive Councils of
  Eastern Cape and Northern Cape (planned)

10
Local Development Agencies

• Continued roll-out and support for Local
  Development Agencies
• Existing Agencies cover all provinces
• - 7 in Eastern Cape - 1 in Northern Cape
• - 1 in Gauteng - 3 in KwaZulu-Natal
• - 2 in Western Cape - 1 in Free State
• - 1 in Mpumalanga - 1 in Limpopo
• - 1 in North West
• Typical potential projects
• Boschberg Tourism Development project in Karoo
• Security and cleanliness plan for Mandela Bay
  (100 jobs)
• Mandela Statue project and ICC in Port Elizabeth
• East London Beachfront renewal plan
• Urban Renewal Zone management status for Port
  Elizabeth and East London (management by
  agencies)
• Hibuscus Coast waterfront development plan
• Citrus projects in Nkonkobe (EC), Northern Cape,
  Mkhanyakude/Makhatini (KZN)
• Kabeljous tourism node plan for Kouga
• Community flower project at Somerset East

11
Development - BEE
Approvals for Black Economic Empowerment
Distribution of value of approvals to BEE by
province July 1995 - March 2005

• 2004/05 saw a significant increase in the value
  of BEE deals, with 83 of the value and 70 of
  the number of approvals directed to empowered
  companies
• Involvement in major empowerment transactions
  such as FirstRand, Aspen and Afrox contributed to
  this performance.

9 month period Shaded areas indicate annualised
figures
12
Development - Job Creation
Number of Jobs Expected to be Created through
IDC Financing
Distribution of Job Creation by Province July
1995 - March 2005

• Expected job creation improved significantly from
  the previous two years, indicating success in the
  renewed focus on development.

9 month period Shaded areas indicate annualised
figures
13
Development - Job Creation
Number of IDC related jobs created per 1 000
people employed in each province (July 95 to
March 05)
Average

• Job creation in the Northern Cape benefited
  significantly over the past 10 years, through the
  implementation of high value added agricultural
  projects.

14
Involvement in Africa
Net Value of Approvals

• Approvals for investments in Africa vary
  depending on opportunities with large
  transactions such as Mozal and infrastructure
  related investments leading to higher investments
  in 2001 and 2003

9 month period Shaded areas indicate annualised
figures
15
Leadership in Development

• Job creation in priority areas through
• Active identification and development of
  investment opportunities in targeted areas
• Sectoral development strategies
• Targeted pricing discounts
• Focused service delivery
• Supporting expansionary and broad-based BEE
• Providing support for entrepreneurs
• Providing support for community groups
• Expanding IDCs reach/presence
• Leveraging outside resources
• Identification of opportunities arising from
  the Soccer World Cup 2010
• Expanding the role of the IDC Training Academy
  outside IDC

16
IDCs Goals for the Future

• By 2011
• To play a leading role in ensuring that
  unemployment is halved through accelerating
  economic growth
• To support equity through increasingly targeting
  provinces with lower economic activity
• To continue supporting historically disadvantaged
  persons
• To continue supporting the development of the
  African continents industrial capacity in
  support of Nepad
• To increase IDC total investment significantly in
  support of the above.

17
Thank You
18
2004/2005Financial Results

• Gert Gouws
• Chief Financial Officer

19
Abridged Group Income Statementfor the Nine
Months Ended 31 March 2005
Year Ended 30 June 2004
R millions
2005
Revenue
2 806 3
961 Net operating income/(loss)
61 (803)
Net capital gains on investments
1 260 628

Impairment of Property, Plant and Equipment
(300) - Income before equity
accounted investments 1 021
(175)
20
Analysis of Income Statement Itemsfor the Nine
Months Ended 31 March 2005

Year Ended 30 June 2004
2005
R millions
1 260 1 372 174 2 806
1 564 2 053 344 3 961
Revenue Financing Activities Foskor Other
subsidiaries
7 (11) (33) (6)
21
Analysis of Income Statement Itemsfor the Nine
Months Ended 31 March 2005
Year ended 30 June 2004

2005
R millions
408 (803) (395) (410) 2 (803)
52 57 NMF 57 NMF
474
Net Operating Income Financing Activities -
Before Impairment Provisions
(256) 218

• Net movement in Impairments
• After Impairment Provisions

Foskor Other Subsidiaries
(132) (25) 61
22
Analysis of Net Attributable Income/(Loss)
(Rmil)
1 831
1 172
822
787
666
697
(258)
23
Abridged Group Balance Sheetas at 31 March 2005
30 June 2004
R millions
24
Thank You