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  • Annual and Sustainability Report for the year ended 31 March 2009

  • Annual Report for the year ended 31 March 2009� Sustainability Report Our Stakeholders Lettter from the chairman

    1. Corporate administration �. Sentech group business activities 3. Corporate social responsibility 4. Financial and economic information

  • v

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    Contents About Sentech 4 - 5

    Board of Directors 6 - 7

    Chairperson’s Report 8 - 11

    Chief Executive Officer’s Report 12 - 16

    Sustainability Report 17 - 57

    Financial Review 58 - 65

    Corporate Governance 66 - 72

    Risk Management and Internal Audit 73 - 74

    Annual Financial Statements 76 - 137

    Glossary 138 - 139

  • 4

    Sentech is a State-owned, fully commercial national enterprise providing broadcasting signal distribution and telecommunications services.

    During the past few years, Sentech has reinvented itself, transforming from the technical and broadcasting arm of the South African Broadcasting Corporation (SABC) into a leader in converging

    communication technologies. Sentech connects its stakeholders to their world and connects the world to them through a wide range of communication solutions. It provides the sounds of radio and the pictures of television, and offers internet connectivity from anywhere, connecting customers to those overseas and providing virtual private networks for businesses. The Company’s plan is to

    provide communication solutions such as voice, data and video on one integrated network.

    Whilst its core business remains Broadcasting Signal Distribution, the broadband business is envisaged as a major element of the product mix in future.

    About Sentech

    About Us

    1. About Sentech �. Board of Directors 3. Chairperson’s Report 4. Chief Executive Officer’s Report 5. Sustainability Report 6. Financial Review 7. Corporate Governance 8. Risk Management and Internal Audit 9. Annual Financial Statements

    Annual Report for the year ended 31 March 2009 About Sentech

  • 5

    Vision

    Purpose

    Sentech will be a leader in providing broadband communications.

    Sentech is a broadband network business accommodating narrowband functionality on a common platform, supplying communication solutions and services to wholesale customers in chosen markets in South Africa and on the rest of the continent.

    Values • Integrity, honesty and fairness in dealings with all stakeholders; • Quality customer service is the cornerstone of the Company’s success and every customer contact should be a pleasant experience;

    and • Opportunities for Sentech people to develop to their fullest potential by ensuring quality leadership, rewarding excellent performance

    and encouraging innovation.

    About Us

    1. About Sentech �. Board of Directors 3. Chairperson’s Report 4. Chief Executive Officer’s Report 5. Sustainability Report 6. Financial Review 7. Corporate Governance 8. Risk Management and Internal Audit 9. Annual Financial Statements

    Annual Report for the year ended 31 March 2009 About Sentech (CONTINUED)

  • Annual Report for the year ended 31 March 20096

    Dr Sebiletso Mokone- Matabane Chief Executive Officer

    Dr Mokone- Matabane holds a PhD in educational administration and degrees in television, radio and political science. She has extensive experience in broadcasting, film and telecommunications sectors gained in the USA and South Africa.

    Ms Beverley Ngwenya Chief Operations Officer

    Ms Ngwenya holds a BSc in electrical engineering. She has extensive experience in the telecommunications sector gained from South Africa’s leading ICT companies.

    Ms Nandi Sihlali Non-Executive Director

    Ms Sihlali holds a BSc in electrical engineering (light current) and is a member of the South African Institute of Electrical Engineers. She has extensive experience in business management and electricial engineering. She also has experience in the telecommunications sector.

    Mr Mohammed Siddique Cassim Chief Financial Officer

    Mr Cassim is a chartered accountant, with an electricity pricing certificate and a certificate in regulation and strategy of utilities. He has extensive experience in finance and corporate governance having participated in the drafting of both King II and III reports.

    Mr Colin Hickling Chairperson

    Mr Hickling is the Chairperson of the Public Trustees and Trust Corporation. He has extensive experience in and knowledge of the broadcasting sector having served as the deputy chairperson of the SABC and being on the Sentech Board since 1995.

    Board of Directors

    1. About Sentech �. Board of Directors 3. Chairperson’s Report 4. Chief Executive Officer’s Report 5. Sustainability Report 6. Financial Review 7. Corporate Governance 8. Risk Management and Internal Audit 9. Annual Financial Statements

  • Annual Report for the year ended 31 March 20097

    Dr Len Konar Non-Executive Director

    Dr Konar is a chartered accountant with a BCom and postgraduate diploma in accounting, a masters of accounting sciences degree, a certificate in tax law as well as a doctorate in commerce (accounting). He has extensive experience in accounting and auditing, risk management, internal auditing and corporate governance. He also participated in the drafting of King II and III.

    Mr Thabo Leeuw Non-Executive Director

    Mr Leeuw holds an honours bachelor of accounting sciences degree and a management advancement qualification. He has extensive experience in corporate finance.

    Adv Nonkumbulo Tshombe Non-Executive Director

    Adv. Tshombe is an admitted advocate of the High Court of South Africa, with an LLB degree and a higher diploma in taxation. She has extensive legal experience, having paractised as an advocate at the Pretoria Bar.

    Dr Yvonne Muthien Non-Executive Director (New Appointment)

    Dr Muthien holds a B.A. (Hons) , an M.A. and a D. Phil. She has extensive experience in the ICT sector having worked for one of South Africa’s leading telecommunications companies and served on the SABC Board. She also has extensive experience in strategic management, marketing and corporate communications gained from leading companies both locally and internationally.

    Mr Tau Mashigo Non-Executive Director (New Appointment)

    Mr Mashigo holds a Bachelor of Business Administration degree and several certificates in the fields of Information Technology (IT), business leadership and strategy development. He has extensive experience in the private and public sector, locally and internationally in the implementation of IT enabled business solutions and the management of the respective operational environments.

    Board of Directors (CONTINUED)

    1. About Sentech �. Board of Directors 3. Chairperson’s Report 4. Chief Executive Officer’s Report 5. Sustainability Report 6. Financial Review 7. Corporate Governance 8. Risk Management and Internal Audit 9. Annual Financial Statements

  • Annual Report for the year ended 31 March 20098

    The year ahead will no doubt be dominated by our ongoing preparations for the 2010 FIFA World Cup. Sentech has been mandated to provide the backup satellite infrastructure as part of the Government Telecommunications Guarantees. At the time of writing Sentech had successfully provided and operated the satellite infrastructure at four stadia hosting the 2009 FIFA Confederations Cup for transmission of the soccer matches both locally and internationally.

    Our satelite infrastructure was also used to provide the international feed to FIFA on a commercial basis.

    This event has again showcased Sentech’s position as a world class broadcast signal distributor. We look forward to a successful transmission of the 2010 FIFA World Cup.

    One of our key priorities and responsibilities is to maximise on the performance of our considerable sunk investment in Broadcasting Signal Distribution.

    In this regard, it is worth noting that the South African Broadcasting Corporation (SABC), accounts for 54% of our revenue and we therefore continue to monitor developments at the public broadcaster with great interest. The SABC remains a valued partner in our quest to ensure universal access to television and radio signals, a critical component of the information society we want to build.

    The successful “switch-on” of the Digital Terrestrial Television (DTT) network in October 2008 placed Sentech in a strong technical position to meet the analogue swich-off target date of 1 November 2011.

    Whilst we welcomed the announcement in the 2009 Budget Speech of a three- year funding allocation of R480 million towards the capital cost of the DTT network, and a further R330 million to cover the operating costs of the Dual Illumination period, there remains a capital expenditure shortfall (including VAT) of R252 million and a further R734 million to cover the operating costs of the Dual Illumination period.

    The Minister of Communications in his address at the launch of the Digital Dzonga in July 2009 confirmed that the switch-off date remains “non-negotiable” and urged all stakeholders to work together to ensure that the deadline is met.

    Sentech is confident that the analogue switch-off date could be met with the timeous allocation and payment of the capital expenditure shortfall, finalisat