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Armscor's Quarterly Performance Report Q1 2006/2007

Detailed financial analysis and operational review of Armscor's performance for the first quarter of the 2006/2007 financial year. Includes income statements, acquisition activities, goal achievements, and budget analysis.

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Armscor's Quarterly Performance Report Q1 2006/2007

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  1. ARMSCOR’S PERFORMANCE REPORTFIRST QUARTER: 2006 / 2007 FINANCIAL YEAR PRESENTED TO THE PORTFOLIO COMMITTEE ON DEFENCE ON 29 AUGUST 2006 AUGUST 2006

  2. CONTENTS 1. ARMSCOR GROUP CONSOLIDATED INCOME STATEMENT FOR THE PERIOD 1 APRIL 2006 TO 30 JUNE 2006 2. ACQUISITION ACTIVITIES: DEPARTMENT OF DEFENCE 3. ARMSCOR’S QUARTERLY PERFORMANCE REPORT FOR THE PERIOD 1 APRIL 2006 TO 30 JUNE 2006 4. ARMSCOR BUSINESS QUARTERLY PERFORMANCE REPORT FOR THE PERIOD 1 APRIL 2006 TO 30 JUNE 2006 5. CONCLUSION AUGUST 2006

  3. 1. GROUP FINANCIAL STATEMENTS FOR THE PERIOD1 APRIL 2006 TO 30 JUNE 2006 ARMSCOR GROUP CONSOLIDATED INCOME STATEMENT FOR THE PERIOD 1 APRIL 2006 TO 30 JUNE 2006 AUGUST 2006

  4. 2. ACQUISITION ACTIVITIES: DEPARTMENT OF DEFENCE 12 245 Revised Baseline 8 736 Revised Planned Cash Flow 7 897 Orders placed 1 755 Cumulative paid 9 002 First Revision 8 352 Original Projected Cash Flow Funds allocated to Armscor are R12 245m. Planned cash flow as at the end of June 2006 is R8 736m. The difference of R3 509m relates to requirements not yet received from the DOD. Armscor Acquisition Department together with DOD review the funds allocated to Armscor regularly. AUGUST 2006

  5. 3. ARMSCOR’S PERFORMANCE REPORT FOR THE PERIOD 1 APRIL 2006 TO 30 JUNE 2006 AUGUST 2006

  6. GOAL 1 ACQUISITION OF CAT 1 DEFENCE MATÉRIELEXLUDING STRATEGIC DEFENCE ACQUISITION ARMSCOR FUNDING FOR GOAL 1 ALLOCATION OF ARMSCOR RESOURCES REGARDING ACQUISITION, PROCUREMENT AND PRODUCT SYSTEM MANAGEMENT ARE CONTINUOUSLY REVIEWED TO BEST MEET THE NEEDS OF THE DOD AUGUST 2006

  7. GOAL 2 ACQUISITION OF PRODUCT SYSTEMS UNDER GOVERNMENT STRATEGIC DEFENCE PACKAGE PROGRAMME ARMSCOR FUNDING FOR GOAL 2 AUGUST 2006

  8. GOAL 3 PROCUREMENT AND PRODUCT SYSTEM MANAGEMENT / SUPPORT ARMSCOR FUNDING FOR GOAL 3 AUGUST 2006

  9. GOAL 4 MANAGE DEFENCE INDUSTRIAL PARTICIPATION (DIP) ARMSCOR FUNDING FOR GOAL 4 AUGUST 2006

  10. GOAL 5: The management, maintenance and funding of the defence technology, research, development, analysis, test and evaluation requirements of the Department of Defence effectively, efficiently and economically AUGUST 2006

  11. 5. CONCLUSION • ARMSCOR’S EXPENDITURE FOR THE FIRST QUARTER OF THE 2006 / 2007 FINANCIAL YEAR IS WITHIN THE PROJECTED CASH FLOW AND THE OPERATIONAL BUDGET AS APPROVED BY THE ARMSCOR BOARD OF DIRECTORS • SERVICES ARE DELIVERED AS REQUIRED BY THE DOD, HOWEVER A SHORTAGE OF OPERATIONAL FUNDING IS IMPACTING ON ARMSCOR’S CAPACITY TO PERFORM ITS ACQUISITION AND SUPPORT FUNCTIONS TO THE DEPTH AS DICTATED BY THE DOD’s ACQUISITION POLICY • ARMSCOR’S SYSTEMS ARE CONSIDERED ROBUST, EFFECTIVE AND EFFICIENT AS INDICATED BY THE AUDITOR GENERAL’S REPORT WHICH ONLY RECORDED ONE MATTER OF EMPHASIS FOR THE PAST FINANCIAL YEAR • ARMSCOR BUSINESS INCOME IS NOT ACCORDING TO PLAN / ESTIMATE DUE TO EXTERNAL FACTORS SUCH AS: • SDP LOGISTIC SERVICES REQUIRED LATER THAN PLANNED • LATE CONTRACTING OF DOD SERVICE REQUIREMENTS • DELAY IN APPROVAL OF NCACC PERMITS ON STOCK SALES • DELAYS IN TRANSFER OF REDUNDANT EQUIPMENT TO ARMSCOR BUSINESS FOR DISPOSAL AUGUST 2006

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