Chapter 2 - P rogramme 1 - Department of Defence

| Financial Performance |
Annual Report FY 2007 - 2008 344
| Department of Defence | Vote 20 |
SPECIAL DEFENCE ACCOUNT
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 March 2008 (continued)
2007/08 2006/07
R’000 R’000
10. Future expenditure approved by Armscor 18 816 492 17 494 992
Strategic Defence Procurement Programme capital
commitment
4 268 881 5 808 452
Commitments 14 547 611 11 686 540
Commitments in respect of contracts entered into 8 775 087 5 713 157
Commitments approved, but contracts not yet entered
into
5 772 524 5 973 383
10.1 The amount relating to the Strategic Defence Procurement Programme capital commitment represents the
capital amount at prevailing exchange rates at year end, but excludes escalation and other additional costs
(eg. Finance costs). Included in the amount of R4 268 881 051 (2006/2007: R5 808 452 433) is a foreign
component of EUR 5 311 450, USD 115 970 293, GBP 76 678 567 and SEK 1 414 398 749 (2006/2007: EUR
20 079 008, USD 178 024 317, GBP 137 028 078 and SEK 1 972 250 865). No forward cover was utilised.
10.2 It is intended to finance expenditure from future Department of Defence transfer payment funds and from
working capital generated within the Special Defence Account.
11. Contingent liability
Claims against the state 2 530 910 139 872
11.1 Included in claims against the state is a claim of EUR 192 000 000 relating to a commission claim. The claim
will be defended in a civil court in Lisbon, Portugal.
11.2 An amount of R113 000 000 was erroneously disclosed in 2006/2007. The figures for 2006/2007 have been
adjusted accordingly.
12. Defence Industrial Participation (DIP)
12.1 DIP credits awarded and planned for current year
DIP credits awarded 1 407 770 2 206 548
DIP credits awarded - SDPP 1 088 118 2 134 671
DIP credits awarded - Non-SDPP 319 652 71 877
DIP credits planned 1 381 942 1 587 450
DIP credits planned - SDPP 1 037 250 1 570 200
DIP credits planned - Non-SDPP 344 692 17 250