Broadband Infraco Annual Report 2013
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Table Of Contents About this Report........................................................................2 Embedding Governance.......................................................................................................................36 Project Implementation........................................................................................................................37 Technology Evolution...........................................................................................................................37 BI Section 1: 3 Customer Engagement........................................................................................................................37 Who We Are and What We Do......................................................3 Who We are...................................……………………………………...........................................................……..3 Section 5: 41 What We Do..............................................................................................................................................5 Sustainability and Governance.................................................41 Flow of Original Funding and its Developmental Impact...............................................................10 Human Capital Management.............................................................................................................41 Our Shareholders and Leadership............................................................................................………11 Supply Chain Management.................................................................................................................46 Board of Directors..................................................................................................................………12 Legal and Regulatory............................................................................................................................47 Executive Committee............................................................................................................………13 Socio-Economic Development..........................................................................................................50 Executive Functional Structure...........................................................................................………14 Stakeholder Management...................................................................................................................52 Corporate Governance.........................................................................................................................54 Section 2: 17 Directors’ Reports.....................................................................17 Section 6: 67 Report from the Chairman.................................................................................................................17 Annual Financial Statements....................................................67 Report from the Chief Executive Officer.......................................................................................22 Report of the Audit and Risk Committee.........................................................................................68 Company Secretary’s Statement ......................................................................................................70 Section 3: 27 Directors’ Report...................................................................................................................................71 Our Performance......................................................................27 Independent Auditor’s Report............................................................................................................75 Statement of Financial Position.........................................................................................................78 Highlights................................................................................................................................................27 Statement of Comprehensive Income..............................................................................................79 Challenges...............................................................................................................................................27 Statement of Changes in Equity..........................................................................................................80 Performance against the Shareholder Compact...........................................................................28 Statement of Cash Flows....................................................................................................................81 Future Outlook.......................................................................................................................................32 Notes to the Financial Statements.....................................................................................................82 Section 4: 35 Section 7: 123 Core Business Overview...........................................................35 Information Service................................................................123 Delivering on our Mandate.................................................................................................................35 Abbreviations and Acronyms..........................................................................................................123 Operational Excellence.........................................................................................................................36 General Company Information........................................................................................................125 Connect. Growth, UNLOCKED. ABOUT THIS REPORT This reporting period marks the first full anniversary of the end of the Rights of Use (RoU) This fifth Annual Report of Broadband Infraco SOC Limited (’’Broadband Infraco”) provides a concise Agreement between Broadband Infraco and Neotel. This report thus reflects the major internal overview of the organisation and its activities, a reflection of its business model describing the reorganisation Broadband Infraco underwent in terms of complete self-management of service manner in which it currently creates value and an overview of its governance structures. Broadband provisioning, maintenance and related operational work. Infraco reports on its activities and performance to the shareholders, namely, the Minister of Public Enterprises in his capacity as shareholder representative on behalf of the Government of This report also comes at a time when Broadband Infraco remains the Government and people of South Africa, and to the Industrial Development Corporation of South Africa. The Company’s main South Africa’s most strategic response to addressing long-standing Information and Communication accountability instruments are the Corporate Plan, Annual Report, Quarterly Reports (Investor Technology (ICT) market inefficiencies in terms of persistent gaps across the majority of provinces, Briefs) and any other information that may be requested from time to time. The Annual Report is districts and metropolitan cities. tabled annually in the National Assembly in compliance with the requirements of the Public Finance Management Act (PFMA) of 1999 as ammended, the National Treasury Regulations issued in Broadband Infraco has in the financial year embarked on a very intense business process re-design terms of the PFMA and the Companies Act No. 71 of 2008. programme to ensure tasks are performed better and more rapidly. This has been a journey to return and apply fundamental basic commercial and engineering principles to the work. This theme The Company is working towards an inclusive approach to provide a holistic and forward looking is unpacked throughout this report. reporting framework to its stakeholders who are impacted by and who in turn impact the Company. In light of this, the Company has performed an assessment on compliance with the King Report on The report focuses on enhanced content, exemplifying how the Company is positioned for growth, Governance for South Africa (King III) with the focus on integrated reporting. The King III core and highlights the imperative matters identified with its engagement with stakeholders. principles are: strategy, risk, performance and sustainability, which are inseparable, and those which The Company will continue improving its reporting processes to align with integrated the Company complie with. standards requirements. This will lead to improved governance, high standards in sustainability, accountability, transparency and integration of the internal and external business practices. This report therefore demonstrates how Broadband Infraco gives effect to its mandate through its business model, strategy, governance, financial, economic, social and environmental performance. Minister Malusi Gigaba, MP and Mandla Ngcobo, Chairman of the Board at the 2012 AGM The framework beneath is the pillar for how Broadband Infraco conducts its operations: Framework Discussion Papers Public Companies King III Code Protocol on International issued by Finance Act 71 of on Corporate Corporate Financial the South Management 2008 Governance Governance Reporting African Act 1 of Principles in the Public Standards Integrated 1999 Sector Reporting Committee 2 Connect. Growth, UNLOCKED. 1 Who We Are and What We Do WHO WE ARE Execution in a simple and flexible manner Our Vision Broadband