ANNUAL REPORT 2010

Morgan Pillay

14 OCTOBER 2010

CONTENT

1. The mandate

2. The year in perspective

3. Development performance 2009/10

4. Financial performance 2009/10

5. Breakdown of reasons for poor performance

6. Key strategic issues

7. Conclusion

THE MANDATE

NURCHA ensures the availability of bridging

finance to small, medium and established

contractors building low and moderate income

housing and related community facilities and

infrastructure

THE YEAR IN PERSPECTIVE

Poor economic trading conditions Slow growth in business

Contracts signed reduced by 14%

Houses built improved by 7%

Value of loans increased 26%

Infrastructure projects completed increased by 71%

Mobilized private sector funding R135m High cost of financing

Persistent non-payment from government departments

THE YEAR IN PERSPECTIVE (cont)

Government recapitalisation of R250m did

not materialise

Expanding geographical footprint and

coverage improved

Alignment with intermediaries

strengthened and 30 % shareholding

finalised

HOUSES IN APPROVED LOANS AND COMPLETED HOUSES

LOAN AND PROJECT VALUES(R MILLIONS)

COMPLETED HOUSES/SITES

NUMBER OF HOUSES/SITES IN APPROVED LOANS

NUMBER OF PROJECT LOANS APPROVED BY PROVINCES

VALUE OF LOANS FINANCED(R MILLIONS)

VALUE OF PROJECTS FINANCED(R MILLIONS)

ANNUAL EMPOWERMENT STATUS

Apr 08-Mar 09 Apr 09-Mar 10

Value of loans (Actual)

Value of loans (Actual)

Number of contractors 111 98

Number of 1st time applicants 59 70

Black owned 86% 301,474,724.16 80.5% 268,655,382.11

Non BEE 14% 111,435,775.10 19.5% 286,158,888.34

TOTAL 100% 412,910,499.26 100% 554,814,270.45

Male owned 97% 400,267,815.26 78.3% 484,791,495.84

Female owned 3% 12,642,684.00 21.7% 70,022,774.61

TOTAL 100% 412,910,499.26 100% 554,814,270.45

Emerging 80% 288,654,088.21 73% 231,476,772.11

Established 20% 124,256,411.05 27% 323,337,498.34

TOTAL 100% 412,910,499.26 100% 554,814,270.45

KEY STATISTICAL INFORMATION YEAR ENDED 31 MARCH 2010

2010 2009 % INCREASE/

(DECREASE)

R’000 R’000

Income from operations 43,012 49,259 -12.7

Administration expenses 40,058 36,089 11.0

(Deficit)/surplus for the year -18,826 3,149 -697.8

Loans for construction projects 403,527 402,076 0.4

Provision for losses 51,384 36,774 39.7

Bank loans to finance projects 152,406 106,211 43.5

CAPACITY REPORT per programmeAS AT 31 MARCH 2010

CONSOLIDATED NURCHA EMERGING INFRA-

STRUCTURE

ESTABLISHED SUBSIDY &

AFFORDABLE

EMERGING SUBSIDY

Consolidated capacity

544,464 361,766 7,118 80,877 94,704

Loans granted & committed

(334,395) (111,000) (55,051) (82,380) (85,963)

Pending loans (84,454) (19,850) 0 (64,604) 0

FMO loan repayment

(30,400) 0 (30,400) 0 0

Top-up by NURCHA

0 (144,440) 78,333 66,107 0

95,215 86,476 0 0 8,741

BREAKDOWN OF REASONS FOR POOR PERFORMANCE

Failure by employers to allocate tenders

Late payments by employers especially state

organs (government departments and SOE)

Reliance on final accounts and retention money

to settle the debt

Budgetary constraints by employer departments

General state of the economy. Commercial

banks not willing to grant loans to end users

BREAKDOWN OF REASONS FOR POOR PERFORMANCE (cont)

Lack of loan facilities at concessionary

rates

Continued decrease of own funds which

would be used to leverage loans from the

private financiers

KEY STRATEGIC ISSUES

Alignment to Outcome 8

Need to raise additional funding from the State

Non-payment from government departments

hampering business growth

Leverage regional footprint and capacity

Technical assistance window must be considered to

foster integrated human settlement planning

CONCLUSION R 10 BILLION

VALUE OF PROJECTS SUPPORTED SINCE INCEPTION

NURCHA

“GOING BEYOND FINANCE”