DENEL BUSINESS DEVELOPMENT FOCUS AREAS - 2010 2010 Objectives Key Activities and Milestones Deliverables Ensure that Business Development is: Aligned to the Denel Growth Strategy Meets the needs of the different equity/ownership structures Optimising the Group effort/synergy Aligned to the Group Strategy Management process Potential market identification and analysis - Complete Group Business Development Portfolio – Developed Stakeholder Relationship Mapping - Complete Vertical and horizontal information flow – Process installed Senior leadership symposium alignment - Completed Engagement with external stakeholders on ‘rules of the game’ - Completed Implemented Group-wide Business Development Portfolio, aligned to the changing business and market landscape A tracking system to monitor and validate Business Development success across the Group An energised business aiming for Growth opportunities in the appropriate markets To achieve significant turnover growth Benefits Case Improved market intelligence Optimising existing markets and new market penetration Improved communications between all levels of Business Development and across Entities Improved relationships with our key stakeholders Improved collaboration between DCO and entity requirements to pursue revenue growth Profitable turnover growth

CONSOLIDATED ORDER BOOK as at end August 2010

2009/2010 TURNOVER PER REGION FOR DENEL & ASSOCIATED COMPANIES

FINANCE HIGHLIGHTS

FINANCIAL TRENDS: 31 MARCH 2010 * Including associates

FINANCIAL TRENDS: 31 MARCH 2010

IMPACT OF DENEL ON SA

IMPACT OF DENEL ON SA KEY AREAS IMPACT National security Strategic military independence of the RSA Full life cycle support Reduced cost of ownership Foreign exchange savings Integrity of South Africa’s defence stature - African Union and G20 Support for border protection Peacekeeping & civilian campaigns Products uniquely suited to the African theatre MRO support 2010 FIFA World Cup and Rhino Poaching campaign Crime prevention initiatives Industrial strategy and competitiveness: High tech. manufacturing High value added exports Skills development Technology incubators R1,4bn in export earnings in 2009/10 IP/knowledge creation and cross-leveraging in other industries eg: Rail safety SALT telescope Telecoms Automotive Crime fighting Total (R&D) investment in 2009/10: R1bn (2008/09: R1,2bn) Major Capex spend in TMA, DSA, CZO and RDM 8 8

IMPACT OF DENEL ON SA (cont) KEY AREAS IMPACT Skills development: Supplier base Technical skills JIPSA ASGISA Quality jobs: sustainable livelihoods 30 000 jobs supported in industry CIRCA 70% of procurement from local suppliers Stable skills pipeline Denel Technical Academy: youth and artisan training Engineering bursary, internship, Saturday Schools Programme and mentorship programmes Environment: Kyoto Protocol ISO 14001 certification and compliance High tech industries: clean air production Advanced materials (composites) - reduction of carbon emissions by aircraft 9 9

DENEL’S HIGHLIGHTS Improvement in financial performance Transformation Net loss reduced from R1.4bn in 2006 to R246m in 2010 Defence and security business generated profit of R200m from loss of R1.3bn in 2006 Cash burden reduced from R1bn to R416m in 2010 Transformation Level 4 BBBEE rating Living of values through CEO Forums, Top 100 SLS, and SLF’s Improvement in programme management Achieved 91.5% of technical milestones on DoD orders Exemplary performance on A-Darter and Hoefyster programmes International accreditations Improvement in governance and compliance Strengthened risk management and compliance Effective internal audit and clean external audit Introduce high performance culture Management development programme 1400 people trained