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SENTECH SOC LIMITED

Corporate Plan 2015-2018

Presentation to the PPC on

Telecommunications and Postal Services

14 April 2015

SENTECH SOC LTD Corporate

Plan 2015-20181

1 FOREWORD

2

3

COMPANY PURPOSE

ALIGNMENT TO SHAREHOLDER PRIORITIES

5 MARKET OUTLOOK

6 BUSINESS STRATEGY: MTEF 2015 - 2018

7 STRATEGIC PROGRAMS AND PROJECTS

CORPORATE PLAN

8 FINANCIAL PLAN

9 KEY PERFORMANCE INDICATORS

SENTECH SOC LTD Corporate Plan 2015-2018 2

4 PERFORMANCE REVIEW

FOREWORD

• SENTECH hereby presents the Company’s Corporate Plan for the Medium Term Expenditure Framework

(MTEF) for 2015 – 2018 which was tabled to Parliament by the Honorable Minister of Telecommunications

and Postal Services.

• The Corporate Plan was also submitted to National Treasury as required in terms of Section 52 of the

PFMA and Treasury Regulation 29.

• As one of the primary enablers of Government interventions in the Information Communication and

Technology (“ICT”) sector, SENTECH’s business strategy is informed by and aligned to the Shareholder’s

Medium Term Strategy Focus (“MTSF”) objectives, the Strategic Goals of the Department of

Telecommunications and Postal Services (“DTPS”) for the same period, as well as the Company’s internal

objectives as adopted by the Board of Directors from time to time.

• For this MTEF period, the Board is re-committing SENTECH to a singular business strategy theme:

“To provide and operate communications network services that enable all broadcasting and

content services to be accessible by all South Africans”

3SENTECH SOC LTD Corporate Plan 2015-2018

FOREWORD:

SENTECH of the Future

• In order to ensure that the Company employs the required focus into the execution of the expanded

business strategy, the Company has resolved to operate along a business unit structure and specifically,

through four (4) distinct business units that will separately manage Broadcasting Signal Distribution

Services, Digital Media Services, Connectivity Services and Public Safety Services.

• For the broader communications industry, the Company will consolidate its current capabilities in the

management of transmitter networks and network facilities, to offer specialized and focused third party

networks and facilities management services.

• The Company believes that given the current rapid development of technologies to enable machine-to-

machine communications, it can facilitate adoption of such technologies in South Africa through the

deployment and operation of open-access Internet-based machine-to-machine networks. The Company

envisages that application of such interventions in the public sector will result in significant value being

added to the efficiency of certain public sector operations.

• Finally, the Company has reflected on the skills sets required to efficiently operate certain public safety

network services. In this regard, the Company believes that the skills it uses in the management of its

broadcasting signal distribution transmitter networks for television, FM, MW and SW radio services and

also in the management of the related network facilities are unique and applicable in the operation of

some public safety services. During the MTEF period, the Company will therefore pursue opportunities to

deploy these skills in specific public safety network services.


1 FOREWORD

2

3

COMPANY PURPOSE


5 MARKET OUTLOOK



CORPORATE PLAN

8 FINANCIAL PLAN


SENTECH SOC LTD Corporate Plan 2015-2018

5


COMPANY PURPOSE:

Vision, Mission And Values Statements

6

VALUES

• Integrity: We act with honesty, fairness and

openness;

• Quality Customer Service: We are committed

to proactively ensuring high values of customer

satisfaction and building a relationship based on

trust;

• Innovation: We endeavour to develop and

support creativity and responsible risk-taking;

• Accountability: We deliver on our promises

and take responsibility for our actions; and

• Social Responsibility: We endeavour to fulfill

our mandate in a manner that benefits our

employees, customers, suppliers, communities

and the environment in all the areas that the

Company operates in.


VISION

To be a world-class provider of sustainable

communications platform services in South

Africa and the rest of the African Continent.

MISSION

To provide and operate communications

network services that enable all broadcasting

and content services to be accessible by all

South Africans.

COMPANY PURPOSE:

Public Service Mandate Context

• To date, SENTECH’s Public Service mandate is primarily provided for in:

o The SENTECH Act (No. 63 of 1996), as amended: Communications Services

“... to provide electronic communications services and electronic communications network services in

accordance with the Electronic Communications Act.”; and

o The Electronic Communications Act (No. 36 of 2005): Broadcasting Signal Distribution Services

“...to construct, maintain and operate an electronic communications network for the provision of

electronic communications services, electronic communications network services and broadcasting

signal distribution services as a common carrier … to broadcasting licensees upon their request on an

equitable, reasonable, non-preferential and non-discriminatory basis”.

• In addition, the Company’s public service remit is also informed, guided and governed by a range of

Legislations and Regulations, including, but not limited to the Constitution of the Republic, the Companies

Act, the Public Finance Management Act and Treasury Regulations.


COMPANY PURPOSE:

Our Customers

• The Corporate Plan is also informed by the current and future needs of our primary stakeholders – our

Customers.

• The Board has committed the Company to work closely with its customers in exploiting new ICT

technologies to find solutions that will ensure that South Africa’s broadcasting and content distribution

industry stays at the cutting-edge improving connected experiences for our customer’s content

consumers.


1 FOREWORD

2

3

COMPANY PURPOSE


5 MARKET OUTLOOK



CORPORATE PLAN

8 FINANCIAL PLAN






SHAREHOLDER STRATEGIC GOALS AND OBJECTIVES_MTSF 2015 -

2020SENTECH STRATEGIC PLAN

ALIGNMENTSTRATEGIC GOALS STRATEGIC OBJECTIVES

SG 1: Enable the

maximization of investment in

the ICT sector and create new

competitive business

opportunities for the growth of

the ICT industry for socio-

economic development.

SO 1.1: Inclusive economic growth

through the development and

implementation of ICT policies,

legislations and strategies.

Provide input into the development of

the policies, regulations and

programs that enhance the viability

community broadcasting and the

digital content sector based on

operational insight into various

regulatory, technical and business

interactions in the communications

industry and strategic insights into

the future of digital content systems.

SG 2: Ensure that ICT

infrastructure is accessible,

robust, reliable, affordable and

secure to meet the needs of

the country and its people.

SO 2.1: Increased Broadband coverage

and affordable access to government

services for all households by 2020.

Sentech will actively participate in the

DTPS development of the SA

Connect implementation plan.



SHAREHOLDER STRATEGIC GOALS AND

OBJECTIVES_MTSF 2015 - 2020SENTECH STRATEGIC PLAN


SG 3: Accelerate the socio-

economic development of

South Africans and facilitate

the building of an inclusive

Information Society through

partnerships with business

and civil society and the 3

spheres of Government.

SO 3.1: Growth and the development of

SMMEs to improve their sustainability

through the use of ICTs.

Implement an Enterprise Development

strategy that supports Local ICT SMME

Procurement and develops the

entrepreneurship capabilities for the

content industry and in particular, the

digital media content sector.

SO 3.3: An inclusive information society

through partnerships with business, civil

society and the 3 spheres of

government.

Ensure that the Company’s Digital

Multimedia platform services are

provided on open access principles to

enable access to all stakeholders in the

broadcasting and content distribution

value-chain.



SHAREHOLDER STRATEGIC GOALS AND

OBJECTIVES_MTSF 2015 - 2020SENTECH STRATEGIC PLAN


SG 4: Improve Departmental

performance and enhance the

role of ICT SOE’s as the

delivery arms of Government.

SO 4.1: Efficient and effective oversight to

SOCs.

Ensure that SENTECH has the

appropriate corporate governance

structures and policies to enable

effective Shareholder oversight.

SG 5: Contribute to the global

ICT Agenda prioritizing Africa’s

development.

SO 5.1: South Africa’s active participation

in bilateral and other African International

Forums to advance the SA ICT Agenda.

Ensure that SENTECH submissions

on policy and regulatory

development processes are informed

by global benchmarks, with particular

focus on Africa and developmental

states.

Ensure that SENTECH’s stakeholder

engagement model support

Shareholder’s African and Global

initiatives.

SO 5.2: Trade and Investment

opportunities for the ICT sector in South

Africa.

1 FOREWORD

2

3

COMPANY PURPOSE


5 MARKET OUTLOOK



CORPORATE PLAN

8 FINANCIAL PLAN




PERFORMANCE REVIEW :

2011 -2014

14

SENTECH has in the past number of years presented a Corporate Plan which was financially focused due to

the nature of the Company’s historical challenges. This position has now changed with the Company not only

having improved its corporate governance systems but also having improved its financial position significantly.

The Company has nonetheless still managed to perform significantly well in respect of its other objectives, as

set out in the strategic framework of 2011-2012.

The performance review highlights this performance under the headings

• Public Service Mandate

• Operations

• Financial Performance

• Corporate Governance

• Human Capital


SENTECH has been instrumental in expanding the Public and Commercial FM radio stations services over the last 4

years. Between the end of 2010/2011 and the 3rd quarter of 2014/2015:

• For Public FM, the population coverage had increased by 1 329 490 and geographical coverage by 57 632 square

km.

• For Commercial FM, the population coverage had increased by 15 617 383 and geographical coverage by 100

055 square km.


0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2010/2011 2011/2012 2012/2013 2013/2014 2014/2015G

eo

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(km

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Incremental Expansion of Public FM Radio Coverage: 2010-2014

Population Geographic (km²)


Public Service Mandate – FM Radio Coverage expansion

0

20,000

40,000

60,000

80,000

100,000

120,000

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

20,000,000

2010/20112011/20122012/20132013/20142014/2015

Ge

pg

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(km

sq

)

Po

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Incremental Expansion of Commercial FM Radio Coverage: 2010-2014


Between the end of 2010/2011 to 3rd quarter of 2014/2015 the population coverage had increased by 4

692 254 and geographical coverage by 129 369 square km.



Public Service Mandate – Community FM Radio Expansion

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

2010/2011 2011/2012 2012/2013 2013/2014 2014/2015

Geo

gra

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(K

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Po

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Incremental Expansion of Community FM Radio Coverage: 2010-2014


SENTECH has now completed all 178 migration sites which provide population coverage of 84.23%

and a geographical coverage of 57.99%. The 15.77% of the population that will not be covered by DTT

will be covered by the DTH satellite gap filler solution which is complete.


17


Public Service Mandate – DTT Network Implementation

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0

20

40

60

80

100

120

140

160

180

200

2011-2012 2012-2013 2013-2014 2014-2015

Po

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Nu

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DTT Network Implementation 2011-2015

Number of Sites Population Coverage Geographic Coverage


18


Public Service Mandate – DTT Network Implementation

ProvinceNumber of Completed

Migration Sites

Free State 13

Gauteng 12

Kwazulu Natal 29

Limpopo 10

Mpumalanga 13

North West 16

Eastern Cape 33

Northern Cape 17

Western Cape 35

TOTAL 178

The table above shows the site rollout per province and the map above the national coverage

population and geographical coverage after completion of the migration sites.

.


19


Operations – OC Coverage

SENTECH operates approximately 330 terrestrial distribution sites and a satellite platform where the

networks are operated on a 24 hour 7days a week basis. The networks are continually maintained to sustain

reliability, as well as to ensure the availability of services and long-term operations continuity.

• There was a downward trend between 2011/2012 to 2013/2014, during the financial year 2014/2015,

the downward trend was reversed for all services other than VSAT and Shortwave Radio.

Improvement in network availability was due to replacement of unreliable network solutions and

concerted effort in preventative maintenance.


PERFORMANCE REVIEW:

Operations – Network Availability

98.2

98.4

98.6

98.8

99

99.2

99.4

99.6

99.8

100

100.2

2010-2011 2011-2012 2012-2013 2013-2014 2014-2015

Avail

ab

ilit

yNetwork Availability Per Service

Television

FM Radio

MW Radio

SW Radio

Satellite DTH

VSAT

• The Company’s revenues increased by 16% from R 794m in 2010/2011 financial year to R925m in

2013/2014 resulting, after considerations of costs and other items, in an increase of 48% in

Shareholder equity from R745m to R1.1bn for the same period.


21

PERFORMANCE REVIEW:

Financial Performance

0

200000

400000

600000

800000

1000000

1200000

1400000

700000

750000

800000

850000

900000

950000

2010-2011 2011-2012 2012-2013 2013-2014

Eq

uit

y

Reven

ue

Financial Performance

Revenue Equity

• Since 2010/2011 SENTECH has seen a definite improvement in corporate governance, with

significant decrease in irregular expenditure and material audit findings.


22

PERFORMANCE REVIEW:

Corporate Governance

0

2

4

6

8

10

12

14

16

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

2010/2011 2011/2012 2012/2013 2013/2014

Nu

mb

er

of

AR

Fin

din

gs

Irre

gu

lar

Exp

en

dit

ure

(R

'000)

Irregular Expenditure & Audit Findings Trend 2010-2014

Irregular Expenditure Number of AR Findings

PERFORMANCE REVIEW:

Human Capital

23

• During 2012, SENTECH embarked on a journey of going back to basics through implementation of

people-centered systems and processes aimed at embedding operational excellence and performance.

Project Sakhumtu has helped transform human capital from being administratively focused to being a

strategic partner to business. To date we have implemented the following key people programs:

o Talent Management - to create an aspirational employee value proposition linked to performance management,

development and succession management

o Human Capital Policies - Review and development of all Human capital policies

o Competency Framework - Development of leadership and organizational competency framework

o Evaluation of Jobs - Competency based job profiles and grading of jobs to enable internal and external equity

o Leadership Development Program - to build leadership capability and effectiveness for our leaders

o Skills Audit - to identify and address current development gaps

o Performance and development Management system - to entrench a culture of high performance and development

o Reward and Recognition Strategy - to implement comprehensive performance based reward system to attract and

retain best talent.

o Employee Engagement Strategy- to foster sound employee relations


1 FOREWORD

2

3

COMPANY PURPOSE


5 MARKET OUTLOOK



CORPORATE PLAN

8 FINANCIAL PLAN


24



MARKET OUTLOOK:

Introduction

• Over the past decade, numerous studies have highlighted the inherent potential for countries in

developing economies to leapfrog some of the 1st world economy countries through the adoption and

implementation of digital technologies focused on the specific needs of each country.

• We believe that the 2013 BDM and Broadband Policy amendments provide the strategic foundation for the

South African ICT industry to begin its roadmap towards digital inclusiveness for all citizens.

• In the short-to-medium term, SENTECH has to contend with and respond to a challenging external market

environment informed by the following:

o Policy Environment,

o Regulatory Environment and

o Entertainment & Media Market Outlook.


MARKET OUTLOOK:

Regulatory Environment: Radio Broadcasting

• In the 2014 calendar year, the Regulator continued to make significant progress in enabling diversity of

voice and programming in the Radio market, largely through the licensing of new Commercial Radio

Services for FM and MW.

o New FM Commercial Sound Broadcasting Licences in the Secondary Markets

• In February 2014, ICASA announced that the regulator will grant individual licences to the following entities;

Histotrim (Pty) Ltd in the Free State Province and Histoprox (Pty) Ltd in the Eastern Cape Province.

o New MW Commercial Sound Broadcasting Licences in the Primary Markets

• In April 2014, ICASA announced that the regulator will grant individual licenses to the following entities;

Mainstreet 1035 (Pty) Ltd (“TalkSport Radio”) and Extriserve (Pty) Ltd (“LM Radio”) in Gauteng Province, as

well as Altius Trading 460 (Pty) Ltd (“Magic 828”) in Cape Town

• Despite these achievements, a number of Regulatory challenges for the Radio market remains as the

radio broadcasting industry seeks to drive public discourse on digital radio, particularly DAB+ and DRM.


MARKET OUTLOOK:

Regulatory Environment – Television Broadcasting

• The Television market regulatory regime remains a challenge for all industry players, including SENTECH

as uncertainty on the commercial launch of DTT services persist. Despite the ongoing Policy vacuum on

the DTT STB Control System, there has been movement in the Regulatory Framework in 2014.

• On 22 August 2014 ICASA gazetted the Promotion of Diversity and Competition on Digital Terrestrial

Television Regulations. New community broadcasters will be licensed on the allocated DTT multiplex 1

capacity and commercial FTA and subscription broadcasters will be licensed on DTT multiplex 3

(previously mobile multiplex 2).

• Despite the publication of the Promotion of Diversity and Competition on Digital Terrestrial Television

Regulations, ICASA is still not clear whether the moratorium on licensing of new community broadcasters

has indeed been lifted.

• On 29 August 2014 ICASA gazetted an ITA for commercial FTA terrestrial services requesting interested

parties to apply. The ITA is in line with the Promotion of Diversity and Competition on Digital Terrestrial

Television Regulations.


MARKET OUTLOOK:

Regulatory Environment – Spectrum

• On 14 November 2014, ICASA published the second draft of the IMT Roadmap document for further

public consultation, with the submission date for January 2015. The first draft was published on 27 August

2014, with public hearings held two days after the closing of the submission date, 9 October 2014.

• On 14 November 2014, ICASA also published draft spectrum assignment plans for IMT services in the

band 694 – 862 MHz These draft assignments will impact on the studio-to-transmitter links (STLs)

operated by SENTECH. ICASA has proposed the 2.2 GHz band as the designated band for STLs, it is not

clear what factors were considered by the Authority particularly since SENTECH proposed the L-band and

provided justification for its choice.


MARKET OUTLOOK:

Entertainment & Media Industry Ecosystem

• The South African Entertainment and Media (“E&M”) Market is buoyant, and continues to offer significant

potential for ICT operators geared for this latent market opportunity despite the prevailing Policy and

Regulatory challenges.

• In developing the strategy roadmap for the MTEF 2014 – 2017 period, SENTECH considered the E&M

market outlook and its implications on the future sustainability of the Company.

• On current trends, Radio and Television will remain the most ubiquitous media and entertainment

mediums for the majority of South Africans for the foreseeable future. However, the concentration of fixed

broadband penetration in the middle-to-upper income households means that the digital divide amongst

citizens is likely to widen without a universal access plan for basic broadband services to all households.

• During the MTEF it is projected that there will be a shift from the current E&M revenues by share of market

away from the traditional segments to the Internet which will have an overall share of the market of 37% in

2018 from a base of 21.6% in 2013. For the same period, the market share of television and radio are

expected to shrink respectively from 26.3% and 3.4% to 20.5% and 3.1%


MARKET OUTLOOK:

Entertainment & Media Industry Ecosystem

30

• On current trends, Radio and Television will remain the most ubiquitous media and entertainment

mediums for the majority of South Africans for the foreseeable future. However, the concentration of fixed

broadband penetration in the middle-to-upper income households means that the digital divide amongst

citizens is likely to widen without a universal access plan for basic broadband services to all households.

• Within this context, SENTECH hopes that the ICT Policy Review will provide the framework for sustainable

funding of Public and Community Radio services that is less dependent on Advertising Revenue.

• South Africa needs to develop a competitive policy framework to regulate the Advertising Revenue market

and to encourage the entry of new Subscription Operators. Simultaneously, FTA broadcasters need to

accelerate their digital multichannel television strategies in order to contain the increasing Advertising

Revenue share growth of Subscription Television operators.

• South Africa, as most territories in the world, is experiencing an unprecedented surge in the OnDemand

and Over-The-Top (“OTT”) Content distribution and consumption segments.


1 FOREWORD

2

3

COMPANY PURPOSE


5 MARKET OUTLOOK



CORPORATE PLAN

8 FINANCIAL PLAN



31


BUSINESS STRATEGY:

Business Unit Model


BUSINESS STRATEGY:

Broadcasting Signal Distribution Services

33

• Broadcasting Signal Distribution Services will remain central to the operational activities of SENTECH in

the 2016 financial year, and it is projected that this area will contribute 70.2% to the Company’s total

revenues of R847m in the 2015 financial year.

• Broadcasting Signal Distribution Services is made up of the following products:

o Analogue Services,

o Terrestrial television

o FM

o MW

o SW

o Digital Services, including activities related to DTT rollout, Digital-to-Digital Migration, Roll out of

future multiplexers and Digital radio trials


BUSINESS STRATEGY:


34

Terrestrial Television

Terrestrial television has over the last number of years been the major revenue contributor to the business and

will continue to be so over the MTEF 2015-2018. The analogue television (ATV) revenue projection will remain

linked to inflation tariff increase until the implementation of DTT. The major activities that will be undertaking in

respect of terrestrial television are discussed in detail in the next sub-sections.

Analogue Switch-Off

The Company has completed a phased ASO plan that considers and prioritizes the requirements of the SKA

area in the Northern Cape and the geographies that may be affected if neighboring countries were to start

phasing out their analogue services and operating their DTT services under ITU protections. Thereafter, the

plan assumes that the switch off of the rest of the network will be phased and based on provinces. In order to

assist broadcasters with their migration requirements, the Company will implement an ASO tariff model that will

have components of both analogue and digital tariffs based on the extent of the phased ASO.


BUSINESS STRATEGY:


35

Analogue Network Maintenance

• SENTECH currently operates a total of 620 transmitter network sites to provide SABC, e.tv, M-net and

community Broadcasters television broadcasting services. During the past three years SENTECH has

focused on maintaining the Analogue network in order that it is able to meet the Service Level Agreement

terrestrial television platform performance targets of 99.7% availability across the network SENTECH

continued to replace analogue end of life solutions in the previous MTEF to ensure compliance with SLA’s

Digital Terrestrial Television

• Since 2008 SENTECH has been involved in a journey to take South Africa from the Analogue to the Digital

environment. SENTECH has completed the migration of all the 178 analogue sites by 6 March 2015.

Within the first year of the MTEF itself, the Company will add an additional four (4) greenfield digital sites.


BUSINESS STRATEGY:

Broadcasting Signal Distribution Services: DTT

36

Digital Multiplex 3

• The Company anticipates that the regulatory processes to enable the licensing of broadcasters on the

third multiplexor will be initiated and even completed within the financial year 2015/2016. As a result, the

Company plans to begin discussions with potential users of this multiplexor within the same financial year

in order to enable the build program to be completed within the financial year 2016/2017 and commercial

operations to start no later than the beginning of the last year of the MTEF. Based on the current

legislation the coverage will be as indicated in the diagram below.


BUSINESS STRATEGY:

Broadcasting Signal Distribution Services: FM

37

FM Radio

• FM radio is the second largest contributor to the Revenue of the company. SENTECH Operates a total of

823 transmitter network sites to provide FM radio signal distribution services to the public, commercial and

community broadcasters using radio frequency spectrum between 88Mhz and 108Mhz.

• This transmitter network supports 18 Public Radio Services, 18 Commercial Radio Services and 89

Community Radio Services.


BUSINESS STRATEGY:


38

Community Broadcasters

• For the MTEF period 2015-2018, the Company will intensify its interventions in the community radio

broadcasting industry, encouraging additional self-providing broadcasters into its network, enabling new

broadcasters to enter the market as quickly as possible, enabling network expansions in line with the

regulatory framework, and introducing value-added services that will enable the sector to be financially

self-reliant.


BUSINESS STRATEGY:


39

Public Broadcaster

For the Public Broadcaster, the Company completed the plans for the FM expansion project whose main

intention is to normalize the coverage of all of SABC’s radio services. For the MTEF period, SENTECH will not

only make all the necessary efforts to implement the expansion project as shown below, but the Company will

also prepare and offer network access redundancy options to the Public Broadcaster.


BUSINESS STRATEGY:


40

Commercial Broadcasters

• For commercial broadcasters, the Company has been proactive in highlighting potential areas for

expansion based on the underlying business drivers and also availability of spectrum. For the MTEF

period 2015-2018, SENTECH will continue to work with the commercial broadcasters and the Regulator to

assess further opportunities for coverage expansion. Furthermore, the Company will introduce an initiative

to provide redundancy options in network access services and standby power. This will allow the

broadcasters to determine appropriate differentiated service levels in line with their business objectives.


BUSINESS STRATEGY:

Broadcasting Signal Distribution Services: FM VAS

41

• Value added services such as distributed Dynamic RDS and Internet audio streaming platform services

will be developed over the MTEF period. Digital technology DAB+, once commercially available (after

ASO), will offer further opportunities for growth.


BUSINESS STRATEGY:

Broadcasting Signal Distribution Services: MW

42

• SENTECH provides medium wave radio broadcasting signal distribution services over 8 transmitter sites

using radio frequency spectrum between 535.5 kHz and 1606.5 kHz. This transmitter network supports 2

Public Broadcaster Radio Services, 1 Commercial Radio Service and 5 Community Radio Services. The

MAP below shows the current MW radio coverage.


BUSINESS STRATEGY:

Broadcasting Signal Distribution Services: MW

43

• Growth projections for MW are informed by the 2 commercial and 2 community MW licenses issued by

ICASA in the previous years. Further growth is dependent on additional MW licenses issued and the

evolution of MW from analogue to digital standard DRM MW. Radio Digital broadcasting will serve as

spectrum efficient high quality option for broadcasting and SENTECH has completed a DRM MW trial for

Radio Pulpit that showcases the technology with the intention of commercially providing this service once

the licensing framework has been established. No previous trials on DRM have been conducted in South

Africa. SENTECH will engage industry further in a drive to rollout affordable digital receivers for this

market


BUSINESS STRATEGY:

Broadcasting Signal Distribution Services: SW

44

• Shortwave radio broadcasting offers the opportunity to target remote areas with the use of very high power

transmitters and high gain antenna systems. The SW transmitter product is offered on 3 different

transmitter power configurations. Customers broadcast for designated hours and tariffs are payable per

hour.

• SENTECH is the only provider of SW services in South Africa. It has not been possible to operate the SW

business profitably over the past years due to the shrinking market and rapidly rising operating costs. The

4-year business turn-around plan that started in April 2013 is showing encouraging signs with a 60%

improvement in profitability to budget by end October 2014. Should the SW product not become profitable

by end March 2016, the current services will be further rationalized to only cater for the current public

services (Channel Africa and RSG). Currently SENTECH provides Broadcasting Services to 2 Public

Radio Stations and 6 internationally-based Radio Stations


BUSINESS STRATEGY:

Broadcasting Signal Distribution Services: Digital Radio

45

DAB+

• SENTECH, in conjunction with the National Association of Broadcasters (“NAB”) and the Southern African

Digital Broadcasting Association (“SADIBA”), has launched the DAB+ Digital Radio Trial Transmission in

Gauteng in November 2014. The trial will continue into the third quarter of the 2015/16 financial year, with

SENTECH funding the CAPEX for the broadcast infrastructure.

• SENTECH, together with the radio industry, will be actively engaging the policy makers and the regulator

on the finalization of the policy and regulatory framework for digital radio services.

• SENTECH believes DAB+ to be a key growth area for the Radio business as it unlocks numerous

opportunities for new and existing broadcasters. It is envisaged that DAB+ will exist alongside analogue

FM radio for the next 10 to 15 years.

DRM

• SENTECH will also work closely with industry partners to review other emerging technologies such as

DRM+, to be evaluated in terms of feasibility to deliver digital services within the existing FM spectrum

capacity


BUSINESS STRATEGY:

Digital Media Services

46

• The Digital Media Services solution portfolio is a new portfolio and will include a set of digital platform

services that enable linear and non-linear content to be stored, processed and prepared for distribution

across any number of content distribution platforms and in support of complex solution requirements and

business models.

• SENTECH has started on the roadmap to adapt from a traditional signal distribution service provider

towards offering an integrated platform supporting open access provision of content across all digital

media platforms (Terrestrial, Satellite and IP content distribution). This mixed platform, incorporating

wholesale open-access content management systems, will culminate in the launch of a wide range of

value-added and innovative services to meet the evolving needs of Broadcasters and Content Providers.

• For the MTEF period 2015-2016, SENTECH will focus on providing its customers with the following

services within this portfolio:

– Wholesale DTH-S platform and auxiliary services;

– Hybrid broadcasting distribution and content management platform services;

– Over the Top (OTT) solutions.


BUSINESS STRATEGY:

Digital Media Services: Wholesale DTH-S

47

• The Company’s DTH strategy recognizes that future growth in the DTH market is likely to be driven by

customers that operate multi-channel bouquets as opposed to individual channels. These types of

customers have traditionally been categorized as Content Aggregators as they require bulk capacity to

carry the individual channels they aggregate under a common consumer offering. The Content

Aggregators differ in their nature and type of business model.

• This new approach is to focus on the Super Program Aggregators on a common ‘open access and

‘interoperable’ DTH Platform. This approach incorporates the business models of Content Aggregators

and extends this business model to allow for one or more Content Aggregators to operate under one

consumer brand and one logistics operation in respect of the distribution and management of consumer

devices. To date SENTECH has successfully concluded DTH Super Program Aggregator distribution

agreements with OpenViewHD and Multichoice and is in discussion with other new potential operators to

carry their service offerings.


BUSINESS STRATEGY:

Digital Media Services: OTT

48

• SENTECH’s traditional customer market is also undergoing changes. For more than seven decades,

traditional television has been dominated by network broadcasters. In recent years, however, a range of

new market participants, such as web players and telecom operators, have entered the landscape with

ground-breaking platforms and innovative formats that utilize evolving technologies, and are impacting

viewer consumption behavior.

• Consequently, both the overall TV value chain and existing revenue models are being destabilized. The

huge growth in the internet markets has afforded the consumer much more freedom in how they access

their entertainment. The old model of push television channels deciding what the consumer should watch

is no longer valid. The consumer is free to choose what they want, when they want.

• This freedom also leads to a point of entertainment overload for the consumer. What the media world is

settling on is a model with a reasonable mix of both push and pull television. Channel providers will

aggregate content onto the push medium and the consumer will use the pull medium to get time flexibility

and to get more of a specific content. This is the new pull television model.


BUSINESS STRATEGY:

Digital Media Services – Business Radio and Television

49

• SENTECH’s Business Television and Radio services currently operate in a linear environment. The

evolution of the product will be to create a multi-platform environment, where Business communications

services at a store level are available on multiple devices for consumers to interact with their retailer of

choice. Services on offer will be traditional satellite broadcasting, push VOD, live streaming and IPTV.

• Preparatory development will be conducted during the financial year 2015/2016 with services and

solutions deployed to customers in subsequent financial years.


BUSINESS STRATEGY:

Connectivity Services

50

• Connectivity Services remains a strategic opportunity for SENTECH to leverage the public investment in

the Company’s communications network infrastructure.

• In the short-to-medium term, SENTECH’s Connectivity Services Solutions Portfolio offering will retain its

focus on connectivity solutions using a variety of applicable technologies and targeted at a broader

segment of the communications industry and public sector applications.

• Solutions will include

– Data Connectivity

– Internet-of-things

– Third party managed networks

– Facilities Property rental

– Facilities Leasing


BUSINESS STRATEGY:

Connectivity Services – Data Connectivity

51

• At a specific product level, the turnaround strategy for VSAT entails repackaging the platform to allow a

hybrid of technologies to deliver connectivity services.

• Transactional solutions using the Ku-band platform were launched during financial year 2014/2015. These

solutions will be presented to the market through electronic communications services providers. In addition

to Ku-band platform services, SENTECH has piloted the Ka-band services which enable the Company to

provide current and prospective customers with improved broadband services.

• From a point of view of applications, during the MTEF period SENTECH will focus on creating solutions

that combine VSAT Ka-band services and the components of service units from the digital media service

portfolio. The company will provide these service through mandated service providers such SITA. On a

trial basis, SENTECH is currently connecting one FET and selected schools and is expecting to grow the

number of learning institutions using the SENTECH connectivity solution during this MTEF.


BUSINESS STRATEGY:

Connectivity Services - IOT

52

• During the MTEF period SENTECH will exploit its existing signal distribution facilities to develop

capabilities to build and operate low power long range narrowband machine-to-machine network platform

services that will enable a number of exciting services for both the public and private sector such as Smart

Metering, Smart Traffic Management and Smart Energy Management. The actual machine-to-machine

applications and services will be provided by independent application and electronic communications

service providers who will in turn be wholesale customers of SENTECH.


BUSINESS STRATEGY:

Connectivity Services – Third Party Managed Network Services

53

• With its vast experience in managing a plurality of different types of networks from broadcasting to

telecommunications, SENTECH has built up a strong capability in network design, deployment, operation

and maintenance. These skills and technical capabilities are the ideal foundation to offer managed

network services to other owners of similar networks. Within South Africa there are many organizations

that own and utilize communications networks for their communications needs

• These range from Municipalities that operate Two Way Radio networks, telecoms companies that operate

fixed and mobile networks to Emergency Services Operators that operate Tetra networks. SENTECH aims

to productize its skills, resources and services into a Managed Network Services offering. Customers will

be able to contract SENTECH to manage their networks depending on their own resources and

communications support needs. This will allow the customer to focus on their core business whilst they

rely on a world class network operator to manage their communications needs.

• The Managed Network Services will include various capabilities such as a 24/7 Service Desk, network

monitoring and fault reporting, network performance reporting, maintenance support, preventative

inspections and diagnostics and repair services to ensure the best levels of network availability.


BUSINESS STRATEGY:

Connectivity Services – Facilities Property Management

54

• Facilities Property Management is a new SENTECH service which comprises comprehensive Site

Management and Maintenance services. As part of the Facilities Management network growth and

diversification strategy, SENTECH will develop a Business Case for a Facilities Management and

Maintenance Product for national strategic terrestrial infrastructure sites owned and operated by other tiers

of Government, with specific focus on Municipal- and Metro owned infrastructure.

• Significant progress has been made in reaching agreement with operators of Broadcasting Self-Help Sites

with regards to providing end-to-end Site Management and Maintenance services. This model may now be

expanded into other strategic Communications Network Infrastructure Sites, in particular those that are

owned by the different tiers of Government – especially where these are strategically aligned to

SENTECH’s Public Service Mandate and Business Model.


BUSINESS STRATEGY:

Connectivity Services – Facilities Leasing

55

• The Facilities Leasing service is the business in which SENTECH provides site-sharing facilities to public

and private companies on more than 220 of its transmitter high sites for various communication services.

Historically there has always been a strong demand for use of SENTECH’s high sites, due to their ideal

location and coverage reach, however, there was a lengthy timeframe for processing site-sharing

requests. In the 2013/2014 year was a concerted effort to streamline these policies which resulted in an

increase in revenue and utilization.

• A market study was conducted on the product nature and pricing structures in the market and a new rate

card had been adopted for Facility Leasing. The new rates will provide current customers with the option to

keep their equipment on the SENTECH sites. During the MTEF period a web portal will be developed and

implemented which will significantly shorten the application process for Facilities Leasing customers.

• Site audits will be conducted to determine the condition of our towers and additional capacity that can be

loaded. A panel of service providers will be appointed by end of Q2 FY2016 to conduct the site audits. It is

anticipated that the audits will be completed by Q2 FY2017.


BUSINESS STRATEGY:

Public Safety Services

56

• This new portfolio will comprise of managed network services to improve the efficiency of public safety

services and also specific network platform services and solutions for targeted public sector applications.

• SENTECH has been conducting benchmarking of similar operators internationally such as Arqiva in the

UK and Abertis Telecom in Spain. The benchmarking has helped the Company identify new areas of

diversifying its services portfolio that leverage the core skills, resources and infrastructure that the

Company currently has. The Public Safety portfolio is a new strategic area that leverages the Company’s

Digital Network and core Engineering Skills to provide solutions to the Public Sector for more effective,

secure communications platforms. This includes solutions specifically designed for Emergency Services,

Maritime Safety, Policing, Defence and other Security related arms of Government

• SENTECH currently has skilled human resources that are distributed across the country to manage the

traditional broadcasting signal distribution networks and that typically, the skills and experience required to

build and operate the network components of public safety services are indeed, the skills that are required

to build and operate the broadcasting signal distribution network. SENTECH believes that by creating this

portfolio and offering the related services to the public sector across the country, the Company will

contribute significantly in improving the quality of certain critical public services


1 FOREWORD

2

3

COMPANY PURPOSE


5 MARKET OUTLOOK



CORPORATE PLAN

8 FINANCIAL PLAN



57


STRATEGIC PROGRAMS AND PROJECTS

58

The following are the strategic programs and projects for the MTEF period:

• Organisational efficiency and effectiveness

– The Board of SENTECH has approved a new operating structure with 4 operating business units. SENTECH will combine various strategic

initiatives into a strategic program which deals specifically with the transforming of the SENTECH of today to a SENTECH ready for the digital

tomorrow.

• Human capital strategy implementation

– As the Company moves towards building the new organization, the next phase of Project Sakhumtu will focus on implementing programs that

are aimed at embedding a culture of excellence, innovation and customer centricity. The detailed themes are included in the foreword

• Enterprise and Supplier development

– SENTECH is of the belief that in order to advance supplier and customer development and inclusion in the ICT sector there is need for

interventions. To this end SENTECH has identified certain interventions as part of this strategy to achieve this. These interventions are

included in detail in the Corporate Plan


STRATEGIC PROGRAMS AND PROJECTS

59

• SENTECH Foundation

– SENTECH being the industry leader – and equally of importance, an SOC– recognises that ours is a highly specialised sector which has

traditionally not been accessible to most South Africans. Regrettably not a great deal has changed over the years – industry-wide. This status

quo is by no means ideal considering that the sector’s core purpose is to drive the social agenda thereby impacting on society and culture at

large. In order to address these matters SENTECH has decided to set up the SENTECH Foundation. As this is such a critical requirement

this has been earmarked a strategic project.


1 FOREWORD

2

3

COMPANY PURPOSE


5 MARKET OUTLOOK



CORPORATE PLAN

8 FINANCIAL PLAN



60



FY2014 ActualFY2015

Budget

FY2015

Forecast

FY2016

Budget

FY2017

Budget

FY2018

Budget

R'000 R'000 R'000 R'000 R'000 R'000 R'000 %

Terrestrial Broadcasting Services 750,088 782,905 807,602 846,945 897,761 951,627 39,343 5%

Digital Media Services 71,420 127,970 94,290 187,628 198,886 210,819 93,338 99%

Connectivity Services 59,672 85,304 63,834 76,161 80,730 85,574 12,327 19%

Other

Extra-ordinary - 16,363 - - - (16,363) (100%)

Dual Illumination 89,349 30,000 104,702 95,614 - - (9,088) (9%)

Other Revenue 46,168 4,150 - - - - -

Revenue 1,016,697 1,030,329 1,086,791 1,206,348 1,177,377 1,248,020 119,556 11%

Less : expenditure (815,279) (926,173) (879,717) (1,010,618) (1,071,255) (1,135,530) (130,901) (15%)

COS (23,549) (3,783) (9,207) (13,385) (14,188) (15,040) (4,178) (45%)

Line Rental (9,732) (8,548) (8,434) (13,621) (14,438) (15,304) (5,187) (62%)

Satellite Rental (161,531) (205,375) (206,696) (240,379) (254,802) (270,090) (33,683) (16%)

Energy Costs (90,020) (99,323) (93,772) (113,966) (120,804) (128,053) (20,195) (22%)

Preventative Maintainance (5,153) (20,710) (15,288) (35,732) (37,876) (40,148) (20,444) (134%)

Corrective Maintainance (34,359) (29,043) (17,706) (18,652) (19,771) (20,957) (946) (5%)

Personnel Remuneration (311,371) (350,188) (355,554) (374,707) (397,190) (421,021) (19,153) (5%)

Depreciation (48,374) (58,763) (53,586) (60,576) (64,210) (68,063) (6,990) (13%)

Cost of Sales (684,088) (775,733) (760,242) (871,018) (923,279) (978,675) (110,775) (15%)

Services and Levies (1,121) (1,914) (1,183) (1,739) (1,844) (1,954) (556) (47%)

Licences (4,838) (4,836) (7,954) (6,970) (7,389) (7,832) 984 12%

Insurance & Security costs (5,866) (11,571) (10,495) (10,608) (11,245) (11,920) (113) (1%)

Stationery & Printing (921) (1,052) (800) (925) (981) (1,039) (125) (16%)

Communication Costs (7,537) (8,064) (7,795) (7,872) (8,344) (8,845) (77) (1%)

Other Office costs (814) (972) (390) (368) (390) (413) 22 6%

Financial & Write-off Charges (15,111) (2,713) (3,072) (1,308) (1,387) (1,470) 1,764 57%

Computer Services (7,339) (13,700) (8,914) (13,495) (14,305) (15,163) (4,581) (51%)

Administrative expenses (43,548) (44,823) (40,603) (43,286) (45,884) (48,637) (2,683) (7%)

Hiring Charges (12,988) (14,585) (12,664) (15,173) (16,083) (17,048) (2,508) (20%)

Transport Costs (21,585) (17,508) (20,528) (17,298) (18,336) (19,436) 3,230 16%

Travel & Subsistence (20,415) (22,574) (20,974) (21,073) (22,338) (23,678) (99) (0%)

Audit fees (3,605) (4,300) (3,800) (5,500) (5,830) (6,180) (1,700) (45%)

Board fees (2,042) (3,649) (2,114) (3,241) (3,435) (3,641) (1,126) (53%)

Professional & Consulting Charges (9,180) (17,911) (6,859) (21,314) (22,593) (23,948) (14,455) (211%)

Legal fees (3,111) (3,800) (1,084) (2,500) (2,650) (2,809) (1,416) (131%)

Marketing Costs (14,718) (21,291) (10,847) (10,215) (10,828) (11,478) 632 6%

Operating expenses (87,644) (105,617) (78,871) (96,314) (102,092) (108,218) (17,442) (22%)

Operating Profit 201,418 104,156 207,074 195,730 106,123 112,490 (11,344) (5%)

Less : Net Finance Cost 23,100 24,347 46,149 20,840 8,168 22,922 (25,309) (55%)

Interest Received 46,202 24,447 48,049 21,340 8,168 22,922 (26,709) (56%)

Interest Paid (23,102) (100) (1,899) (500) - - 1,399 74%

Profit / (loss) before taxation 224,517 128,503 253,223 216,570 114,291 135,412 (36,653) (14%)

Income Tax Expense (11,511) (54,257) (85,907) (60,640) (32,001) (37,915) 25,267 29%

Profit / (loss) after taxation 213,006 74,246 167,317 155,930 82,289 97,497 (11,386) (7%)

Revenue

FY2015 vs FY2016

FINANCIAL PLAN:COMPREHENSIVE INCOME STATEMENT

• Overall, SENTECH is projecting

an EBIT of R195.7million and

Earnings after Tax of R155.9

million for the 2016 financial year,

an earnings decrease of 5% and

7% respectively, compared to the

year-end forecast for 2015

financial year

• The projected FY2016 Revenues

are based on the analysis of the

market environment and estimated

earnings to be derived from new

licensees. Estimates for FY2016

and FY2017 are based on

projected FY2015 figures

increased by the October 2014

CPI of 5.9%.

• Dual illumination is only funded for

FY2016.

FINANCIAL PLAN:

STATEMENT OF FINANCIAL POSITION


Forecast MTEF

FY2014 FY2015 FY2016 FY2017 FY2018

R'000 R'000 R'000 R'000 R'000

Assets

Non-current assets 602,409 693,253 931,369 1,165,772 1,246,240

Property, plant and equipment 602,409 693,253 931,369 1,165,772 1,246,240

Current assets 1,239,329 971,545 739,828 579,006 591,550

Inventory 71,666 83,169 83,169 83,169 83,169

Tax Receivable 50,401 50,401 - - -

Trade & other receivables 39,832 62,727 66,491 70,480 74,709

Cash and cash equivalents 1,077,430 775,249 590,169 425,357 433,672

Total assets 1,841,738 1,664,798 1,671,197 1,744,778 1,837,790

Equity and Liabilities

Capital and reserves 1,166,201 1,384,064 1,539,995 1,622,777 1,722,145

Share capital and premium 586,655 586,655 586,655 586,655 586,655

Retained earnings 579,546 797,409 953,339 1,036,122 1,135,490

Non-current liabilities 138,540 38,207 38,207 38,207 38,207

Retirement benefit obligations 100,333 - - - -

Deferred taxation 38,207 38,207 38,207 38,207 38,207

Current liabilities 536,998 242,528 92,996 83,795 77,438

Trade & other payables 155,162 132,770 68,821 62,426 57,426

Government grant 366,020 80,822 - - -

Short term portion of LTL 15,816 - - - -

Tax liability - 28,936 24,175 21,368 20,012

Total liabilities 675,537 280,734 131,203 122,001 115,644

Total equity and liabilities 1,841,738 1,664,799 1,671,197 1,744,778 1,837,790

FINANCIAL PLAN

CASH FLOW STATEMENT


FORECAST

FY2014 FY2015 FY2016 FY2017 FY2018

R'000 R'000 R'000 R'000 R'000

Note

CASH FLOW FROM OPERATING ACTIVITIES 47,609 187,377 195,742 135,188 158,316

Cash generated from Operations 1 39,378 199,900 189,902 161,336 172,794

Finance income received 38,720 47,900 21,340 8,853 25,521

Dividends paid 7,482 -

Finance costs (4,582) (2,032) (500) - -

Taxation paid (33,389) (58,391) (15,000) (35,000) (40,000)

CASH FLOW FROM INVESTING ACTIVITIES (290,493) (362,057) (300,000) (300,000) (150,000)

Property, Plant and Equipment acquired (290,493) (362,057) (300,000) (300,000) (150,000)

CASH FLOW FROM FINANCING ACTIVITIES (239,824) (127,494) (80,822) - -

Government Grant received 469,565 66,143 95,614 - -

Repayment of financial liabilities (38,530) (10,943) - - -

Treasury -Broadband funds paid (622,441) - - - -

Interest earned on government grants payable 15,625 - - - -

Interest on government grant 15,541 5,313 - - -

Government grant utilisation (5,140) (69,674) (176,436) - -

Settlement of post retirement pension benefit (74,443) (118,333) - - -

NET INCREASE/(DECREASE) IN CASH (482,708) (302,175) (185,080) (164,812) 8,316

Cash and cash equivalents at beginning of period 1,560,131 1,077,424 775,249 590,169 425,357

Cash and cash equivalents at end of period 1,077,424 775,249 590,169 425,357 433,672

- - 0 - -

NOTES TO THE CASH FLOW STATEMENT

1. CASH GENERATED FROM OPERATIONS

Profit per the income statement 201,385 259,367 195,730 106,123 112,490

Adjustments for non-cash flow items :

Depreciation and Amortisation 48,373 52,516 60,576 64,210 68,063

Impairment of assets 5,901 1,398 1,308 1,387 1,470

Transfer to Post Retirement Medical Fund (41,410) - - - -

DTT Dual illumination (89,349) (69,674) - - -

Movement in retirement benefit assets and liabilities (558) 18,000 - - -

Decrease in provisions (198) - - - -

DBSA interest (1,166) - - - -

Changes in working capital :

(Increase) / Decrease in Inventory (7,371) (11,503) - - -

(Increase) / Decrease in Trade and Other Receivables 20,663 (22,895) (3,764) (3,989) (4,229)

Increase / (Decrease) in Accounts Payable (96,892) (27,309) (63,949) (6,395) (5,000)

Cash Generated from Operations 39,378 199,900 189,902 161,336 172,794

MTEF

1 FOREWORD

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3

COMPANY PURPOSE


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64


KEY PERFORMANCE INDICATORS:

MTEF 2015-2018


65

STRATEGIC GOAL

(What We Want To Achieve)

STRATEGIC OBJECTIVES

(How We Will Achieve It)

KEY PERFORMANCE INDICATOR

(How We Will Measure

Performance)

PERFORMANCE TARGETS

FY15/16 FY16/17 FY17/18

SG 1: Ensure that ICT

infrastructure is accessible,

robust, reliable, affordable and

secure to meet the needs of the

country and its people.

Ensure universal access to connectivity

network services

Number of data connectivity

terminals installed300 300 300

Number of Smart City Solutions

Implemented1 2 5

Ensure secure and reliable internal ICT

infrastructure and services

Disaster Recovery (DR) and

Business Continuity (BC) Centre

established

Approved

Business

Continuity Plan

Build and

Commission all

Disaster Recovery

capability sites

Deployment of the BCP to

all Business Units

Ensure universal access to digital

broadcasting signal distribution network

services

Number of Digital Terrestrial

Television sites completed

4 Greenfield sites

completed0 0

FM services implemented

33 community

radio broadcasters

connected

33 community

radio broadcasters

connected

33 community radio

broadcasters connected

31 transmitters for

SABC Expansion

connected

31 transmitters for

SABC Expansion

connected

0

Ensure universal access to digital

multimedia servicesDigital Media solutions implemented

1 new customer on

the Hybrid

Broadcasting

Platform

connected

2 new customer on

the Hybrid

Broadcasting

Platform

connected

4 new customer on the

Hybrid Broadcasting

Platform connected


MTEF 2015-2018


66

STRATEGIC GOAL






Performance)

PERFORMANCE TARGETS

FY15/16 FY16/17 FY17/18

SG 2: Ensure high levels of Customer

and Stakeholder satisfaction by

meeting their needs all the time.

Ensure Network Availability meets

SLA requirements across all platforms

Weighted average availability based

on product revenues achieved

Weighted average

availability based

on product

revenues of 99.80%

Weighted average

availability based

on product

revenues of 99.80%

Weighted average

availability based on

product revenues of

99.80%

Improve Customer and Stakeholder

satisfaction

Customer and Stakeholder service

index rating achieved69% Baseline +15% Baseline +18%

SG 3: Drive organizational

performance in order to improve

organizational effectiveness.

Effective Management of Talent

Performance ratings achieved

Non-Bargaining

Unit 100% of

performance

contracts signed

and reviewed.

Bargaining Unit -

90% of

performance

contracts signed

and reviewed.

Average employee

performance score

of 3.2

Average employee

performance score of

3.5

Cover Ratio for Succession achieved

25% cover ratio for

Critical and Core

Skills

50% cover ratio for

Critical and Core

Skills

90% cover ratio for

Critical and Core Skills

Redesigning and alignment of

organizational structure to the new

operating model in order to develop

organizational capacity and capability.

Approved organizational design and

implementation of macro and

functional structures

Implement new

Organizational

structure for the

Top three

management layers

Implement new

organizational

structure for Middle

Management and

finalization of

functional structure

design.

Implementation of new

organizational

structure for

bargaining levels



MTEF 2015-2018

STRATEGIC GOAL






Performance)

PERFORMANCE TARGETS

FY15/16 FY16/17 FY17/18

SG 4: Ensure that the Company

is financially sustainable.

Implement SENTECH Foundation

Funds set aside for the

implementation of the SENTECH

Foundation

2% of NPAT 2.5% of NPAT 3% of NPAT

Develop and implement Supplier

Development Strategy

Funds invested in the implementation

of the Enterprise and Supplier

Development Strategy

3% of NPAT 3.2% of NPAT 3.5% of NPAT

Maintain sustainable Return on Net

Assets (RONA)

Return on Net Assets from continuing

operations8% 6.0% 6.0%

Maintain a healthy Earnings before

Interest and Tax (EBIT)

Earnings before Interest and Tax

achievedR195.7m R106.1m R112.4m

Implement effective internal control

system and compliance with

applicable legislation

Clean audit achieved Clean Audit Clean Audit Clean Audit

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