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MCOM Sadimba and the SCC is contributing to this marked pace at MCOM Sadimba. The slow
pace outside Sadimba may reflect the underlying resistance from those markets who have

always been against the SSC project for cutting back on jobs in their markets.

COST VARIANCE

Overall, we are over-running our costs by 33% largely due to overrun at Sadimba of 176%. It
may seem Sadimba is justified to over-run its cost given that it is also ahead of schedule but a

close look at EAC shows if no interventions are made or if the current rate of progress is
maintained, MCOM Sadimba will not only miss cost saving targets for this year but will close the
4 year period at $S2,462 million meanwhile the budgeted cost of processing transactions

escalated from Sadimba (BAC) was set at S$2,320 million. Even the slight under-runs for
processing transactions escalated from outside Sadimba is not enough to prevent us from

failing to realise the envisaged savings for not only 2016 but over the 4 year period. Instead of
spending S$7,685 million at SSC Sadimba to handle all escalated transactions, we would have
spent S$7,792 million.

RECOMMENDATION
Investigate the slow pace of escalation of transactions from MCOM Nakolia and MCOM (All

others) and take steps to implement corrective action based on the findings. It is imperative that
the stakeholder backlash we experienced against our decision to establish the SSC in Sadimba
in the first place has not remained to undermine our good standing in those markets.

ACTION

The CFO should instruct internal audit to carry out an investigation into the schedule and cost
variations at the SCC and report back to the next board meeting.

Due Diligence for M/A Deal in Chininsia.

The Board seeks to acquire CloudNet as a first step to enter Chininsia and a Due Diligence is
required. This offer was first tabled on January 1, 2016 in relation to a new mobile operator

license opportunity due to come up in 2018. We have noted a few changes in relation to our
share price since then and their revised call for a 25% premium given the lapse in time and the
many bidders who are now interested. We also need to recommend a suitable share offer for

the deal:

Developed by The CharterQuest Institute for 'The CFO Case Study Competition 2016'
www.charterquest.co.za | Email: thecfo@charterquest.co.za