Parliamentary Committee Presentation

19 March 2010

CONTENTS

Slide 2

• Performance Management

• Vacancies & Employee Turn Over

• Executive Remuneration Structure

• Board Remuneration Structure & Performance

• Employment Equity

Performance Management

Slide 3

• Performance Management System

- Corporate Plan is concluded with Key Performance Areas, Indicators and Targets

cascaded to Executives/Business Units and then to lower levels in the company.

- Personal Development Plans are completed aligned with Individual Scorecard

- The Scorecard Performance Areas are based on business strategic goals and

objectives

• Performance Management Reviews

- Performance Management cycle starts with planning on 01 April.

- Ongoing performance monitoring by conducting quarterly reviews

- Final performance review conducted at the end of the financial year

Current Executive Positions & Vacancies

Position Occupied Vacant

Chief Executive Officer X

Chief Finance Officer X

Chief Technical Officer X

Chief Operating Officer X

Executive: Sales & Marketing X

Executive: Capital Program X

Executive: Business Support X

Executive: Special Projects X

Slide 4

Vacancies & Employee Turn Over

Slide 5

• Newly Established Executive Positions

- Chief Operations Officer

- Sales & Marketing Executive

• Recruitment & Approval Process

- Candidates (COO & Sales and Marketing Executive) have been

identified

- Approval of appointments by Board is underway

• Employee Turn over

- The position for Chief Technical Officer became vacant as from 1

March 2010

Key Performance Areas

Slide 6

Key Performance

AreaKey Performance Indicator Description

Strategic(40%)

Reduced Telecommunications Prices Once off 10% of price reduction from the Wholesale STM-1 pricing as measured against the 2010 Pricing Benchmark.

Broadband Connectivity Access

Expand the availability of broadband connectivity to a minimum of 5 (five) Broadband Infraco independent POPs in addition to POPs in 6 cities (available via Neotel). Ability to provide backhaul connectivity to USALs in 1 (one) previously underserviced area as per license terms and conditions.

Financial(30%)

Revenue R412 M

EBITDA (R98 M)

Net Profit/LossAccording to the Broadband Infraco’s business plan the company will become profitable after five years of operation.

Debt FundingDrawdown from existing debt facility from financial institutions during the financial year is R142 M.

Key Performance Areas

Slide 7

Key Performance Area Key Performance Indicator Description

Operations, Customer and Capital Program

(30%)

Actual Time to restore Core Network Faults

Actual time to restore a core network (fibre network and associated electronics) fault on 80% of all reported faults per month (within 8 hours).Actual time to restore a core network (fibre network and associated electronics) fault on 20% of all reported faults per month (within 10 hours).

Actual Time to restore facilities related faults

Actual time to restore a facilities related (support systems such as batteries and fire control systems) faults which is service affecting (within 4 hours).

Availability of Network at Customer Service Level Agreement

Availability calculated as a percentage of the uptime to the downtime of a customer service

Increased Customer BaseInfraco must achieve a market share of 12%

Percentage of Projects put into Commercial against approved plan

All projects to be completed and put into commercial operation to earn revenue, against approved annual plan

Project Cost Variance against approved budget

A 5% variance in final expenditure from the approved project budget

Remuneration Structure: Executives

Slide 8

• The Total Cost To Company remuneration elements

include:

- Annual Pensionable Remuneration

- Car Allowance

- Performance bonus of 30% (maximum) of Total

Cost To Company based on company & individual

performance

Board Remuneration & Performance

Slide 9

• Remuneration Structure

- Broadband Infraco falls under SOE size B ( Revenue between R243m –

R2,5bn)

- Chairpersons and Non Executive Directors annual retainers fees are

determined according to the remuneration model developed by the DPE

- Board remuneration is effected on quarterly basis and disclosed in the

annual report at the end of the financial year

• Performance Evaluation

- The Board’s performance evaluation is conducted annually

- The latest evaluation was conducted in 2008/9 financial year

- The outcome of the evaluation indicated good governance with regards

to the Board’s operations and effectiveness

Employment Equity Status

Slide 10

Male Female

African Coloured Indian White Total African Coloured Indian White Total

Executives 0 0 3 1 4 1 0 0 0 1

Thank You

Slide 11