1. Annual Report 2006/7 bridging the divide
Presentation to the Parliamentary Portfolio Committee: Trade and Industry 10 October 2007 1

2. Presenters Mr. Andrew Wright Mr. Frencel Gillion Mr. Moemise Motsepe
Chief Operations Officer (COO)
Mr. Frencel Gillion
Chief Investment Officer (CIO)
Mr. Moemise Motsepe
Manager: Marketing & Communications 2

3. Mission Statement Empowerment in South Africa.
“The National Empowerment Fund (NEF)
is the catalyst of broad-based Black Economic
Empowerment in South Africa.
We enable, develop, promote and implement innovative investment and transformation solutions to advance sustainable Black economic participation.” 3

4. NEF Mandate Main objective Driven by Development focus
To be a catalyst in facilitating economic equality and transformation
Driven by
Current market needs
Broad-based empowerment charters
Government policy and sectoral charters (Industrial Policy)
Addressing past failures of BEE structures
BB BEE Codes of Good Practice
Development focus
Maximise the empowerment dividend 4

5. BEE RETAIL INVESTMENTS
Organisational Structure
BOARD OF TRUSTEES
MANAGER: OFFICE OF THE CEO
AUDIT COMMITTEE
RISK MANAGEMENT COMMITTEE
HUMAN CAPITAL & REMUNERATION COMMITTEE
BOARD INVESTMENT COMMITTEE
LEGAL COUNSEL
COMPLIANCE & RISK
INTERNAL AUDIT
SECRETARIAT
CHAIRMAN
CHIEF EXECUTIVE OFFICER
CHIEF EXECUTIVE OFFICER
EXECUTIVE COMMITTEE
CORE DIVISIONS
CHIEF INVESTMENT OFFICER
FUND MANAGEMENT
IMBEWU FUND
PRE-INVESTMENT BUSINESS
SUPPORT
LEGAL SERVICES
CORPORATE FUND
POST-INVESTMENT BUSINESS
EXECUTIVE:
ASSET MANAGEMENT
BEE RETAIL INVESTMENTS
MANAGEMENT OF SAIs
RETAIL PRODUCT ISSUES
CHIEF FINANCIAL OFFICER
FINANCE
PROCUREMENT
TREASURY
CHIEF OPERATING OFFICER
STRATEGY & PLANNING
MARKETING & COMMUNICATION
SYSTEMS & IT
EXECUTIVE: HUMAN RESOURCES
HUMAN RESOURCES
SUPPORT SERVICES
Executive (member of Exco)
Senior manager
Manager 5

6. Strategic Initiatives
NEF, IN 2006/7, reaches two significant and
strategic milestones in its history since its establishment:
On-going track record achieved in the Fund Management Division,
with approvals to date now exceeding R500m;
Asset Management Division was able to obtain the overall approval for the NEF’s
first BEE Retail Product, Asonge, subsequently launched on 25 June 2007. 6

7. to promote a culture of saving & investment among Black people
Launched the successful
Asonge Share Scheme
to promote a culture of saving & investment among Black people 7

8. What did we intend to achieve through Asonge?8

9. Asset Management Division
Through its Asset Management Division, the NEF:
Promotes the understanding of equity ownership among black people
Provides black people with direct and indirect opportunities to acquire shares in State Owned and private business enterprises
Encourages and promote investments, savings and meaningful economic participation amongst black people
It is specifically to address the above objectives that the NEF Asonge Share Scheme was conceived, designed, launched, implemented, subscribed for and now allocated to its beneficiaries. 9

10. To promote the understanding of equity ownership among black people
Rollout, Education and Mobilisation
64 mobilisers were educated around the country
Mobilisers touched groups and individuals by one-on-one education efforts
Collaboration with Stokvel associations
Ongoing monitoring of education process by NEF before closure on 16 August
Further education around investing and financial markets was done through TV and radio, features and drama
A dedicated Call Centre assisted with all queries in all languages
Mass groups were reached by 9 regional road-shows; TV, local radio and print advertising; commuter activity, and activity at Post Offices nationally 10

11. State Allocated Investments: Recap
Provide black people with direct and indirect opportunities to acquire shares in State Owned and private business enterprises
State Allocated Investments: Recap
In November 2000, the Government provided for State Allocated Investments to be housed under custody of the NEF
The intention was for these to be eventually transferred to Black people
As a result the NEF since held 1,5% of the MTN Group’s shareholding
Asset Management Division developed a retail product known as the Asonge Share Scheme
Asonge was the NEF’s vehicle of fulfilling Government’s original intention of transferring State investments to Black people 11

12. “The NEF ASONGE Share Scheme”
Encourage and promote investments, savings and meaningful economic participation amongst black people
“The NEF ASONGE Share Scheme”
50% of the offer was aimed at black individuals (half had to be women)
50% of the offer was aimed at black savings and investment groups
Predetermined allocation to the target audiences across all provinces
Applications were facilitated by the SA Post Office, ensuring wide distribution through their infrastructure
Offer opened on 23rd July and closed on 16th August
The Offer Price was set at R73,84 based on the market closing price
… and as at today, this translated into a 47% appreciation on investment for subscribers at current market value based on:
- the upfront 20% discount offered plus
- market price of R107 per share on allocation
day (currently R114) 12

13. Who was Eligible?
Allocation planned to be 50% for individuals and 50% for savings and investment groupings across South Africa.
Black individuals:
At least 18 years of age
With a valid South African ID
Bank account
Half had to be women
Minimum subscription was R2 000, maximum R50 000
Black savings and investment groups
E.g. Stokvels, burial services, trusts, co-ops, church savings groups
Minimum subscription was R2 000, max R 13

14. Subscription & Allocation Results14

15. Applications By Number
“The NEF Asonge Share Scheme”
Subscriptions Received
Allocation planned to be 50% for individuals and 50% for investment groupings across South Africa.
Of black individuals, 50% thereof was allocated to women.
Applications By Number
Group
3,296 4%
Male
40,364
47%
Female
41,659
49% 15

16. Shares Allocated by value
“The NEF Asonge Share Scheme”
Subscriptions Received: Interpretations
By number, more women than men subscribed, nearly meeting the 50% allocation
By value, women subscribed for 39% of the 50% allocation
What does this indicate regarding the relative wealth and investment appetite of women?
Shares Allocated by value
(12m shares)
Female
39%
Group 9%
Male
52% 16

17. Number of Applications by Province
“The NEF Asonge Share Scheme”
Subscriptions by Province
Allocations by province were planned in accordance with population statistics
Actual subscriptions indicate significantly more personal investment capacity in Gauteng
Number of Applications by Province 4%
47%
16% 7% 6% 1% 9%
Eastern Cape
Free State
Gauteng
Kwazulu Natal
Limpopo
Mpumalanga
North West Province
Northern Cape
Western Cape 17

18. “The NEF Asonge Share Scheme”
Subscriptions by Province
Western Cape
North West
Northern Cape
Mpumalanga
Limpopo
KwaZulu-Natal
Gauteng
Free State
Eastern Cape
Province
100.0%
9.8%
7.5%
2.2%
7.3%
10.5%
21.4%
21.5%
6.3%
13.5%
Allocation %
R 889,233,857
R 91,594,913
R 29,947,841
R 7,495,183
R 33,205,804
R 44,372,407
R 191,039,774
R 434,221,613
R 22,073,204
R 35,283,118
Subscriptions
4.0%
100.0%
10.3%
3.4%
0.8%
3.7%
5.0%
21.5%
48.8%
2.5%
Subscriptions % 5%
-55%
-62%
-49%
-52% 1%
127%
-60%
-71%
Over / Under Subs (-)
Allocations from undersubscribed provinces were transferred to oversubscribed provinces
Due to overwhelming interest shown in Asonge, the NEF has approved a further
1,376,058 shares for the share scheme worth R103 million to match the
13% oversubscription level. 18

19. Consolidated Allocation Results
MTN shares, currently worth R1,14bn, were offered to qualifying investors plus one bonus share for every 10 held after 24 months
A further shares, currently worth R147m, were allocated to accommodate oversubscriptions plus one bonus share for every 10 held after 24 months
Over applications were received in total
Value of allocations = R890m vs.. R1,3bn current market value
All valid applications within the allocation value thresholds will receive the full allocation. 19

20. Consolidated Allocation Results
Groups allocated 9% of total value vs.. 50% target
It appears that investors preferred to invest as individuals as opposed to within groups who may have a limited investment horizon.
Of individual subscription by value, Female = 43% and Male = 57%
Geographical spread
6 Under-subscribing provinces at between 49% - 71% of initial allocation
KZN and WC allocated 101% and 105% of initial allocation respectively 20

21. Exceptions
As with all subscription processes, certain applications were not valid or were rejected
The subscription value of such rejections was R2,508,463
We also have many potential duplicate applications, potentially to the value of R7,216,166
Each will have to be further analyzed on merit and a decision made to include or exclude them from the offer
These have been EXCLUDED from the share allocation model together with the SAPO rejections of R11,7 million 21

22. An Overall Success!
Asonge oversubscribed by 13% – meets existing public demand and sets an historic landmark for future share offers
Over Black investors now own shares in a blue-chip company
Contributed to a growing culture of Savings and Investment amongst Black people
Women shareholders = 49% by number, 39% by value (overall), 51% by number and 43% by value (within individuals)
In excess of targets set by BB BEE Codes of Good Practice
All provinces were allocated shares and involved in the marketing campaign to enable participation to their full capacity
Unencumbered economic benefit is fully vested in Black hands
Government fulfilling a critical national imperative through NEF 22

23. Fund Management Division
On-going track record achieved in the Fund Management Division, with approvals to date now exceeding R500m. 23

24. Deal Pipeline Approx. 24,685 4,780 38 worth R471m 29 worth R265m 16
ENQUIRIES
APPLICATIONS
NEW DEALS
ACCEPTED
DUE DILIGENCE
APPROVED
DISBURSED
(INCLUDING
UNDRAWN CAPITAL)
Approx.
24,685
4,780 38
worth
R471m 29
worth
R265m 16
worth
R196m 86
worth
R496m 24

25. NEF INVESTED PROCESS REPORT 31ST MARCH 2007
Fund Management Division
TOTAL
DISBURSED
APPROVED
DUE DILIGENCE
NEW DEALS ACCEPTED
NEF INVESTED PROCESS REPORT 31ST MARCH 2007
169
worth
R1,428m 86
R496m 16
R196m 29
R265m 38
R471m
Since Inception
to 31st March 2007
113
worth
R400m 58
R97m 8
R34m 23
R143m 24
R126m
iMbewu Fund 56
worth
R1,028m 28
R399m 8
R162m 16
R122m 14
R345m
Corporate Fund 25

26. NEF INVESTED PORTFOLIO BY SIZE OF TRANSACTION
Fund Management Division
% BY NUMBER
BY NUMBER
% BY VALUE
(R) VALUE
NEF INVESTED PORTFOLIO BY SIZE OF TRANSACTION
31ST MARCH 2007
79.1% 68
25%
R124m
20.9% 18
75%
R372m
Less than R5m
Greater than R5m
100% 86
R496m 26

27. NEF INVESTED PORTFOLIO BY FUNDING PROJECT
Fund Management Division
% BY NUMBER
BY NUMBER
% BY VALUE
NEF INVESTED PORTFOLIO BY FUNDING PROJECT
31ST MARCH 2007
14%
4.7%
48.8%
3.5%
20.9% 7%
1.1% 12 4 42 3 18 6 1
47.7%
14.9%
12.9%
12.1%
8.1% 4%
0.3%
R237m
R74m
R4m
R60m
R40m
R20m
R1m
Acquisition Funding
Capital Market
Start-Up
Liquidity & Warehousing
Expansion
Contracts
Rural & Community
100% 86
R496m 27

28. Fund Management Division
NEF – Invested portfolio by funding product by value 31st March 2007
Start-up 12.9%
Acquisition Funding 47.7%
Rural & Community 0.3%
Liquidity &
Warehousing 12.1%
Expansion 8.1%
Contracts 4%
Capital Market 14.9% 28

29. Fund Management Division
NEF – Invested portfolio by funding product by number 31st March 2007
Rural &
Community 1.3%
Liquidity &
Warehousing 3.5%
Start-up 48.8%
Expansion 20.9%
Contracts 7%
Capital Market 4.7%
Acquisition Funding 14% 29

30. Rural & Community Development30

31. A Sweet Deal! AMAJUBA R37m CCT IDC NEF R19,4m CR R14,8m TECHNICAL
PARTNER
R19,4m CR
R14,8m
AMAJUBA
R37m
60 HA raspberry farm in Amajuba district, KZN
Farm established on land secured through restitution process
Community beneficiaries with CCT governed by 11 trustees
Project taps into ha worldwide market
SA production only 100 ha currently
Project will be leading local supplier at full capacity
Supply local and export markets (70% of production)
Tap into growing popularity of raspberries 31

32. Compliance with R&CD product criteria
Broad based community ownership
Sustainable projects with strong social benefits
Strong technical partners
Skills transfer
Poverty alleviation
Strong empowerment dividend
Broad based economic ownership (1100 beneficiaries)
Job creation (795 jobs including 91 permanent)
Women empowerment ( 60% of workforce)
Project location – rural KZN area
Local Economic benefits
Contribution of R9.8 m pa in salaries to local economy
Electrification of houses
Provision of land for new houses
Partnership with IDC
Leveraging IDC sector knowledge
Contributing NEF know-how in financing rural communities 32

33. Fund Management Division
NEW
JOBS
EXISTING
NUMBER
OF JOBS
JOB CREATION 31ST MARCH 2007
RAND
PER JOB
INVESTED
814
505
1,027
290 12
100
180 3
279
1,492
210
3,830
362
817
784
2,519
500
3,930
542
R64,2m
R40,1m
R236,7m
R19,8m
R1,4m
R73,8m
R60m
Start-Up
Expansion
Acquisition Funding
Contracts
Rural & Community
Capital Market
Liquidity & Warehousing
R78,5k
R51,2k
R93,9k
R39,6k
R120,8k
R18,8k
R110,7k
2928
6,176
9,104
R496m
R54,5k
TOTAL PORTFOLIO:
32%
68%
Average 33

34. Fund Management Division
NEF – Invested portfolio by sector by value 31st March 2007
Wood & Paper
Industry 2.9%
Chemicals & Pharmaceuticals 6.7%
Other 0.5%
Transportation 1.3%
Construction 23.1%
Tourism & Entertainment 9.4%
Textile Industry 2.3%
Engineering 2%
Printing Services 3.1%
Financial
Services 1.5%
Motor Industry 2.2%
Food & Agro
Processing 11%
Mining Services 9.2%
Financial Services 1.5%
Manufacturing 9.1%
ICT & Media 15.2% 34

35. NEF INVESTED PORTFOLIO BY REGION 31ST MARCH 2007
Fund Management Division %
BY NUMBER BY
NUMBER
BY VALUE
NEF INVESTED PORTFOLIO BY REGION 31ST MARCH 2007
% VALUE
PROVINCE
CONTRIBUTION
TO GDP
(R)
VALUE
58.1%
9.3%
16.3%
2.3%
3.5%
1.2% 0% 50 8 14 2 3 1
54.9%
21.8%
19.3% 7%
5.4%
0.6%
0.1%
R227,6m
R108,2m
R95,5m
R34,9m
R26,7m
R2,8m
R0,3m -
Gauteng
Eastern Cape
Western Cape
Kwa-Zulu Natal
Mpumalanga
Limpopo
Free State
Northern Cape
North West
33.7%
7.9%
14.7%
6.7%
5.5%
2.2%
6.3%
100% 86
R496m 35

36. Provincial Roundtables
With effect from October 2007, NEF to launch Provincial Roundtables with stakeholders in the
following provinces:
KZN
North West
Limpopo
Objective is to optimise regional invested portfolio through intensive local interaction and
communication
Stakeholders will include:
MECs for Finance & Economic Affairs, as well as MECs for Agriculture, to encourage rural
and community development
Constituency Members of Parliament
Local Development Finance Institutions (DFIs)
Local entrepreneurs and co-operatives
Mass Media
Mpumalanga
Northern Cape
Free State 36

37. Annual Financial
Statements 37

38. Consolidated Statement of Financial Position
as at 31st March 2007
R’ 000s
Consolidated
2006
2007
Non-current Assets
Property & Equipment
Intangible Assets
Investment in Joint Venture
Investment in Associates
Investments available-for-sale
Originated Loans
Investments held-to-maturity
Capital & Reserves
Trust Capital
Fair Value Reserves
Accumulated Surplus
2,669,406
2,296
125 -
24,317
2,303,924
338,744
3,551,018
1,233,903
2,219,908
187,207
1,615,442
2,777
194 -
5,407
1,444,022
15,042
10,000
2,087,339
740,600
1,270,006
76,732 38

39. Consolidated Statement of Financial Performance
as at 31st March 2007
R’ 000s
2006
2007
Consolidated
Revenue
Grants Received to fund Operations
Grants Received for Retail Prod. Development
Dividends from Investments
Interest Received from Banks
Interest Received from Original Loans
Other Revenue
Other Income
Fair Value Gains/Losses
Held-for-trade Investments
Investments in Associates
Total Income
Administration Expenses
Impairment of Originated Loans
Impairment – Held-to-maturity Investments
Surplus for the Year
170,785
66,.24
1,800
30,411
43,643
27,152
1,755 -
30,666
12,352
17,714
200,851
(62,385)
(26,491)
(14,936)
(11,555)
111,975
105,370
40,000 -
38,405
23,197
3,501
267 6
16,882
21,476
(4,594)
122,258
(40,633)
(38,151)
43,474 39

40. We thank you for your attention. 40