SABS 201011 Annual Report Presentation to Portfolio Committee

SABS 2010/11 Annual Report Presentation to Portfolio Committee on Trade and Industry 12 October 2011 1

Outline • Legislative framework • Strategic Plan Objectives • Highlights • Performance scores against business plan targets • Summary income statements for the year ended 31 March 2011 • Statements of financial position as at 31 March 2011 • Things we are busy with • Conclusion 2

The Legislative Framework • Established by the Standards Act of 1945 (Act No. 24 of 1945) • Continues to operate under Standards Act of 2008 (Act No. 8 of 2008) 3

The Legislative Framework • Act stipulates the following objectives for SABS: (a) develop, promote and maintain South African National Standards; (b) promote quality in connection with commodities, products and services; (c) render conformity assessment services and matters connected therewith. 4

The Legislative Framework • SABS is a schedule 3 B Entity in accordance with PFMA – Received R 156. 8 m core funding from DTI – Generated total R 394. 5 m external revenue 5

Our rich history • Standardisation activities in South Africa date back to early 1900 s • SABS formally established in 1945 • Original SABS offerings included: – Development of national standards – Testing – Certification (SABS Mark) – Regulatory functions (compulsory specs) – Training 6

Strategic Plan Objectives • To gain trust in our value-added standardization and conformity assessment services by equivalent peer organizations, and by both domestic and foreign markets • Broader participation in and access to the national standardization process and services • Standards that support industrial policy action plan, e. g. IPAP • Growth to support the sustainability of SABS services • Pool of competent staff for SABS needs 7

Highlights • Embarked on implementation of SABS five-year strategy for 2011 -2016 last year • Early fruits of the new five-year strategy include critical mass of new management capabilities to drive service delivery 8

Highlights continued • Specific programmes include: – The establishment of the SABS Academy – Socio-impacts standards development operating model – Implementation of the Enterprise Project Management Office (EPMO) – Centralised customer service interface, specifically • customer relationship management (CRM) • laboratory implementation management system (LIMS) 9

Performance scores against business plan numerical targets Performance parameters Annual Target Actual Performance Reasons for variance from targets Standards South African National 650 593 Standards (SANS) produced Focus shifted from quantity to focus on relevance. However, IPAP requirements for standards were still met SANS alignment with 75% 80% Target exceeded international standards Sales of standards R 19, 263, 000 R 16, 750, 000 Web-based IT tools to help with numbers were not delivered on time 10

Performance scores continued Performance parameters Annual Target Actual Performance Reasons for variance from targets R 218, 797, 511 R 197, 255, 000 On-going impact of 2008 recession; Conformity Assessments Investigations, tests & services revenue some of the new labs not functioning optimally due to failing equipment & lab conditions Product & system certification R 188, 285, 870 R 180, 548, 000 Target exceeded No. of accredited labs 67 67 On-going impact of 2008 recession No. of certification schemes 19 24 Target exceeded (6 accredited) 575, 000 412, 539 revenue No. of test reports Impacted by lower demand for the services 11

Summary Income statements for the year ended 31 March 2011 R’ 000 2010 R’ 000 Commercial revenue 394, 553 390, 743 Government grant 156, 881 134, 852 Expenditure 529, 275 516, 577 54, 518 46, 818 Profit for the year 12

Statements of financial position as at 31 March 2011 R’ 000 Property, plant and equipment 2010 R’ 000 253, 825 169, 901 10, 896 11, 337 9, 845 17, 542 293, 553 203, 359 Deferred tax 21, 116 23, 905 Current assets excluding cash 56, 180 52, 968 Cash and cash equivalents 190, 447 122, 162 Total assets 835, 862 601, 174 Capital and reserves 445, 246 384, 679 14, 914 15, 703 Other liabilities 253, 437 100, 204 Current liabilities 122, 265 100, 588 Total equity and liabilities 835, 862 601, 174 Investment properties Intangibles Total available-for-sale investments Interest bearing borrowings 13

Things we are busy with • New building for laboratories is almost complete • Modernisation of the organisation – Board has released R 100 m capex for new equipment • Improved engagement with industry bodies • Role of the SABS Mark reinforced in industry; confirmation that South Africa still wants SABS services 14

Conclusion • SABS performed well in 2010/11 financial year • Maintained our clean audit status • Made higher profit than expected • The strategic direction for the next five years is now established to better service the public and industry 15

The end • Thank you. Dr. B. Mehlomakulu, CEO SABS Tel. 012 428 6002 Ms Elis Lefteris, Acting CFO SABS Tel. 012 428 6354 16