SENTECH Q3 Financial Performance Review – March 2015

1. 3rd QUARTER REPORT FOR YEAR ENDING MARCH 31 2015 PORTFOLIO COMMITTEE ON TELECOMMUNICATIONS AND POSTAL SERVICES 17 MARCH 2015

2. CONTENTS PERFORMANCE OVERVIEW PRE-DETERMINED OBJECTIVES PROFITABILITY PER SERVICE FINANCIAL STATEMENTS CAPITAL EXPENDITURE HUMAN RESOURCES CORPORATE GOVERNANCE

3. Performance Overview SENTECH is pleased to present the results for the Q3 that ended December 2014 to the Department of Telecommunications and Postal Services. Overall Performance

4. Pre-Determined Objectives SENTECH is pleased to present the results for the Q3 that ended December 2014 to the Department of Telecommunications and Postal Services. Overall Performance

5. Pre-Determined Objectives (Non-performance)

6. Profitability Per Service (Year-to-date) Television • There was positive growth of 2% above budget: • Establishment revenue of 2 Low Power sites namely Makgaung and Ga Mafefe. • Successful DTT rate card negotiations with MNET, e.tv and TBN. Radio • FM, MW & SW have realised revenues above budget for the YTD. • However, as reported in previous quarters, FM is experiencing challenges on 3rd Party site acquisition and has impacted the delivery schedules for community broadcasters. DTH • There has been an improvement on DTH with the following customers launched in Q3: • Multichoicecontracted 70 Mbs, Teach Every Nation (TEN) and Enlightened Christian Gathering (ECG) TVlaunched their new services. Rental • Revenue is 22% below budget on a YTD basis. • A new facility rentals’ tariff was approved and discussed with Cell C, Vodacom, Comsol and Netstar. VSAT • VSAT is slightly above budget with less than budgeted losses reported due to the following: • Mainly the budgeted cancellation of the KZN DoE did not materialise.

7. Financial Statements Statement of Comprehensive Income and Ratio Analysis Statement of Comprehensive Income (R’000) summarised: • Variance Analysis • The positive performance on EBIT was driven by: • Once-off recoveries of Mandela funeral costs and DTT Dual illumination costs; and • lower than expected operational expenditure primarily driven by: • lower spend on discretionary cost items, such as professional and consulting, corporate communication. • As a result of the improved EBIT, the annualised Return on Net Assets (RONA) as at Q3 FY2015 is projected at 12.82% against a target of 6%.

8. GRANT Funds - CAPEX Report • DTT sites launched during Q3: • Kuruman Hills – 14 October 2014 • Springbok – 30 October 2014 • Garies – 31 October 2014 • Upington – 18 November 2014 • Upington Town – 5 December 2014 • Piet Retief – 12 December 2014 • De Aar – 18 December 2014 • Pomfret – 18 December 2014 83.62% Population covered 53.89% Geography covered

9. DTT Project Status Report – 27 February 2015

10. HUMAN RESOURCES Headcount and Resourcing The graph reflects staff complement against the approved • 17 appointments were made (internally and externally) of which 88% are black and 41% were black females. Staff Turnover Sentech’s turnover rate for Q3 was 1.9%, comprising 0.9% resignations and 1% involuntary terminations (death/retire). Only 1 black female resigned during the quarter. Skills development Cumulative achievement of 50.5% of the annual target of 1664 planned interventions was achieved compared to the 38% achievement in the previous quarter.

11. Corporate Governance – Audit Outcome & Progress Audit Outcome Bilateral meeting with the Minister Progress on administrative matters in FY2014 • Management developed an Audit Action Plan addressing all admin issues. • EXCO monitors Audit Action Plans – Monthly basis. • Audit Committee monitors progress on a quarterly basis.

12. SENTECH SOC Limited