ANNUAL REPORT FINANCIAL PERIOD ENDING 31 MARCH 2010

1. ANNUAL REPORTFINANCIAL PERIOD ENDING31 MARCH 2010

2. Content • Performance overview • Employment Equity • Investment to date • Annual Financial Statements • Events subsequent to balance sheet date

3. Engineering Performance Overview

4. Key Initiatives 1. Nuclear Engineering Developments 2. Test Facilities 3. Fuel Developments 4. Technology Results 5. Reactor Pressure Vessel (RPV) 6. Human Capital Building

5. 1. Nuclear Engineering Developments Next Generation Nuclear Plant (NGNP) Nuclear Engineering Nuclear Manufacturing Industry and Supply Chain Technology Transfer Nuclear Compliance and Assurance Fuel Design

6. 2. Test Facilities Helium Test Facility (HTF) • Core Unloading Device (CUD) arrival at the Helium Test Facility • Pressure test of complete Fuel Handling System (FHS) • Various other tests conducted • Proposal for care and maintenance / host Test Facilities at North West University (NWU) • High Temperature Test Unit (HTTU) and High Pressure Test Unit (HPTU) • Proposal on the table to transfer the facilities to NWU subject to DPE approval

7. HTTU & HPTU

8. 3. Fuel Developments • Fuel Development Lab (FDL) Facility • Fuel qualification • Particles sent to USA for testing • Spheres sent to Russia for irradiation testing • Particle size analyser • Fuel characterisation • Fuel Femto-chemistry • Silicon (Si) isotope • Silver migration • PBMR Technology Programme Focus Areas • Advanced Control and Instrumentation • Nuclear Waste Minimisation System • Reactor Safety • Efficiency Improvement • Advanced Materials • Graphite Improvement • Fuel Optimisation • PBMR Fuel Plant

9. 4. Technology Results • Development • 6 South African universities and Necsa participate in various research activities to further the technologies required to keep PBMR at the forefront of nuclear reactor development • Technology Development Programme • Results: • Number of scientific papers published since 2006: 160 • Number of baccalaureus degrees since 2006: 2 (B. Eng) • Number of honours degrees since 2006: 28 (B. Sc Hons) • Number of master's degrees since 2006: 54 (M. Eng and M. Sc) • Number of doctorates since 2006: 34 (PhD) • Number of post-doctoral fellows: 3 • One of the largest and most efficient programmes by any company in South Africa • Large Nuclear International Network established / International Collaboration

10. 5. Reactor Pressure Vessel (RPV) RPV Transported to Saldanha

11. 5. Reactor Pressure Vessel (RPV)RPV as stored at SaldanhaNo funds to transport to NECSA

12. 6. Human Capital Building • PBMR sponsored the following in 2009/10: • 29 undergraduate students bursary scheme • 26 Research and Development (post-graduate) students linked to specific initiatives at five local universities. • 7 full-time PhD students both local and internationally. • 6 newly graduate candidate engineers in-training in 2009. • 7 Scientists in-training. • Due to the financial constraints, the PBMR bursary scheme was transferred to NECSA.

13. Employment Equity

14. Employment Equity: Genderas at 31 March 2010

15. Employment Equity: Raceas at 31 March 2010

16. Investment to date

17. Investment sources to date(R9,246 million)

18. Spending to date(R9,397 million)

19. Annual Financial StatementsMarch 2010

20. Independent Auditors’ Report • In KPMG Inc’s opinion, the financial statements present fairly, in all material respects, the financial position of PBMR at 31 March 2010 and its financial performance and cash flows for the year. • Unqualified Audit report signed on 2 September 2010

21. Financial Positionas at 31 March 2010

22. Comprehensive Income Summaryfor the year ended 31 March 2010

23. Events subsequent to balance sheet date

24. Rationalization • PBMR has not received any funding since 1 April 2010 • In Feb 2010 the initial rationalization was approved to retrench a contemplated 75% of employees (from the 830) • Employees were afforded several opportunities to apply for Voluntary Severance Packages. This reduced the employee complement to its current level of 245. • Further rationalization, which will ensure that PBMR can continue as a going concern till March 2013, was approved on 2 September 2010 to further reduce the complement to 9 • All employees were retrenched in accordance with Section 189 of the Labour Relations Act by 31 October 2010.

25. Transition to Care and Maintenance OrganizationPhases and objectives • Finalization of Rationalization process phase • 31 October 2010 • Reduce employee complement from 245 to 9 • Preparation for Care & Maintenance program phase • Until 31 March 2011 • Implement Transition Management and Governance structure • Select C&M host • Close-out contracts and finalize commercial contracts • Place information into safe keeping, package IP • PBMR handover to host • Care & Maintenance program phase • 1 April 2011 to 31 March 2013 • Preserve PBMR as a legal entity • Preserve IP, HTR license and assets

26. Directors March 2009November 2010 • Chairman DR AP Ruiters - • CEO Mr JM Kriek # - • Other directors: Ms L Milne # - Mr CS Neethling - Dr A Tsela * # - Mr SA Molepo - Ms E Johnson - Mr PH Readile - Mr GS Gouws Mr GS Gouws Dr R Matzie Dr R Matzie Mr R Pearce Mr R Pearce Dr R Adam Dr R Adam Dr X Mkhwanazi Dr X Mkhwanazi - Mr L Dlamini * Acting CEO 6 March 2010 till 31 October 2010 # Executive director

27. Thank you