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					Air Traffic & Navigation Services Company Limited
ANNUAL REPORT 2007




         Unlocking partnerships for change
         Managing 800 000 aircraft movements by 2010
                             the space between
                                what we do




Pilanesberg International Airport
What we do                                                > Lectures and general ATS awareness training to
                                                            pilots; and
ATNS, the Air Traffic and Navigation Services             > The African Indian Ocean (AFI) Regional Monitoring
Company of South Africa is the sole provider of air         Agency (ARMA), acting on behalf of the International
traffic, navigation, training and associated services       Civil Aviation Organisation (ICAO), is delegated to
within South Africa and is also responsible for a           South Africa and hosted by ATNS.
further ten percent of the world's airspace.
                                                          ATNS is also very closely involved in the work of the
Operating at 21 aerodromes within the country,            Civil Air Navigation Services Organisation (CANSO).
including OR Tambo, Cape Town and Durban                  CANSO has been a prime force in the promotion of
International Airports, ATNS is internationally           the separation between ANS regulators and service
recognised as one of the top air navigation service       provision, and is recognised as the principal exponent
providers (ANSP's) on the globe and is currently safely   of customer focused Air Navigation Services.
and efficiently managing about 650 000 aircraft                                                                       03
arrival and departure movements per year.                 A clear vision
                                                          To be the preferred supplier of air traffic, navigation,
ATNS’ services extend beyond the familiar Air Traffic     training and associated services to the African continent
Control (ATC) service and include the following:          and surrounding regions.
> Alert, search and rescue co-ordination services;
> Management of the flexible use of airspace through      An unambiguous mission
  the Central Airspace Management Unit (CAMU);            To provide safe, orderly, expeditious and efficient air
> National slot co-ordination;                            traffic, navigation, training and associated services.
> Support for special events and special requirements
  such as test flights, demonstration flights;            ATNS strategic imperatives
> Pre-flight information services;                        Five imperatives inform and drive everything we do:
> The implementation and maintenance of a terrestrial-    > To deliver continuous improvement of our safety
  based air navigation infrastructure;                       performance;
> Radar services for aircraft in distress;                > To position ATNS as a globally competitive employer
> A flight information service outside of controlled         of choice;
  airspace;                                               > To be a performance-based service provider;
> ATC service at appropriate levels, depending on         > To maintain long-term financial sustainability; and
  the airspace of operation;                              > To position ATNS to secure a continued role in the
> A flight co-ordination service with adjacent Air           changing global air traffic management system.
  Traffic Service (ATS) providers;
   the space
between growth
          Contents


               01 Chairman’s review p07


                    02 Chief Executive Officer's review p13




                                03 Ensuring your safety in our hands p21


                                   04 Prioritising the people who make it happen p27                                                05



                               05 Delivering the highest standards in air navigation p35
                                                                                             11 Key Performance Indicators p67


                                                                                               12 Annual financial statements p73

06 Economic regulation p41
                                                                                                13 Board of Directors p131

07 Furthering a global cause p47
                                                                                                14 Executive Committee p135

 08 Position in global civil aviation p53
                                                                                              15 Extended management team p139


     09 Corporate governance p57
                                                                                           16 Abbreviations and acronyms p143

          10 Performance at a glance - Financial p63
                                                                                   17 Company directory p147
  the space
between focus
                     10
                          NM




                               Chairman’s review
             006 ˚
186 ˚


        Min a
         6500
              lt
01 Chairman’s review                                       The ATNS Board has its eyes solidly focused on the
                                                           future. Together with our stakeholders, we are now
It is always exciting and rewarding to report on           preparing the South African skies for the 2010 World
ATNS’ performance and achievements. The past               Cup and beyond. We are directing all our efforts
financial year is no exception. ATNS has grown             and resources in order to prepare for the world’s
appreciably over the past four years and our outlook       soccer showpiece. We are interacting with our
for the future remains optimistic.                         partners in the industry to prepare for the next
                                                           generation of aircraft so that manned or unmanned
Eyes on the future                                         aircraft can fly safely in our skies. This project and
The year under review brought with it new challenges       many others are already well underway. Through
for us at a number of levels. Despite no tariff increase   our permission, we have committed a capex spend
permitted by the Economic Regulator, our tariff revenue    of R912 million over the next five years.
increased by 6.2%*. We saw a total revenue growth
of 5.8% during the past financial year. Despite this
                                                           In the recent past, ATNS has renewed the majority
growth, our operating profit decreased by 17.1% from
                                                           of the national communication, navigation,
R134.4million the previous year to R111million during
                                                           surveillance and air traffic management
2007. This reduction is in line with our commitment
                                                           infrastructure. In doing so, we have met the demands
to our Shareholder that we will reduce the cost of
                                                           placed on us by the traffic growth experienced over
doing business for our clients, while not compromising
                                                           the years, while achieving an excellent safety record.
safety and service provision.

                                                           Having recorded these successes, it is again necessary
On the balance sheet, total assets increased by 5.3%
                                                           to focus on the future specifically the period 2008
from R891.9million in 2006 to R939.3million in 2007
                                                           to 2017. During this period, traffic growth,
as projects move towards finalisation stage. In 2007
                                                           operational demands and environmental issues will
we have spent R218.7 million to upgrade and maintain
                                                           require innovation - involving new concepts and
most of our equipment. Our gearing has improved
                                                           technologies that have been under development
from 40.4% from the previous financial year to 26.4%
                                                           for many years - will progressively be put into
in the current financial year.
                                                           operational use.



* Volume Growth
Our plans are not limited to South Africa. Later this        at the ATNS Training Academy (ATA), training as Air
year, we will launch SADC -VSAT II and NAFISAT–VSAT          Traffic Control Assistants.
Network, which are satellite communication systems.
When SADC VSAT I was launched, only 16 countries
                                                             There has been a meaningful investment at the ATA,
were covered. The coverage has now increased from
                                                             not only in terms of increasing the number of
16 to 28 African countries. We are very proud of this
                                                             instructors and introducing new technologies; but also
achievement because it cements our commitment to
                                                             in respect of enhancing the learning culture. A new
our neighbours and the rest of the African continent.
                                                             computerised self-study centre has been opened at
                                                             the ATA. Streamlined courses focussing on our
Air Traffic Controllers are still a target for recruitment   aerodrome control course have been implemented.
by a number of foreign companies, particularly in the        In the coming year we envisage higher pass rates
Middle East and in the Asia Pacific region. Our Human        and validations at the centre.
                                                                                                                          09
Capital Plan will ensure continued availability of
competent, aligned staff to service our country and
                                                             We have made good progress in our human resources
all its air traffic and navigation needs.
                                                             capacity and plan to continue to keep the training at
                                                             the appropriate level to ensure that we have a clear
During the year under review, the Board approved a           career path.
R105million retention scheme over a period of five
years. This scheme is designed to retain some of our
                                                             Clearly the 2007 financial year has been very good for
skilled staff and enable continued availability of
                                                             ATNS overall. We have a solid long-term strategy, which
competent and functional air traffic controllers while
                                                             is closely monitored to ensure that our management
ensuring that the development of air traffic control
                                                             team remains focused on key priority areas.
trainees is fast tracked.

                                                             Our relationship with our Shareholder, the Minister of
The commitment and focus on employment and
                                                             Transport, Mr. Jeff Radebe is strong and unyielding.
development of employees from disadvantaged groups
                                                             His guidance and leadership is an asset to ATNS, the
remains high on the agenda and our efforts in this
                                                             aviation industry and the transport fraternity as a whole.
regard continued during the past year. This includes
the 50 students from disadvantaged groups currently
A special word of thanks to the ATNS management
team and staff for their unfailing commitment to
achieving our goals and particular thanks and
appreciation to my fellow Directors for their continued
support and mentorship. This calibre of leadership
confirms that our eyes are indeed firmly on the future
success of ATNS.




A pula e re nele …




Mike M. Mabasa
Chairman: ATNS
VSAT terminal at Cape Town International Airport




                  the space
               between vision
Chief Executive Officer’s
review
01 Chief Executive Officer’s review                         Prioritising the people who make it happen
                                                            I am delighted to report that we increased our air
I am pleased with the significant progress that has         traffic service staff complement by 10.5% over the
been made during the 2007 financial year and am             past 12 months and have seen an 83% uptake of
confident that we will continue to deliver air traffic      our newly implemented retention scheme.
services in a safe and efficient manner in the build-
up to the 2010 Soccer World Cup.                            The retention scheme ensures that ATNS is able to
                                                            respond safely to a planned 5.4% annual increase
Ensuring your safety in our hands                           in air traffic in South Africa, as well as to compete
Much work has been done to engender a strong safety         for a scarce, global commodity in an environment
culture in the organization over the last financial year.   where there is currently a 13% shortage. Investment
I am pleased to report that despite a 6.7% growth in        in our people and in safety remains our key focus!
air traffic movements*, we have achieved a
stabilization of the incident rate at 3.54 incidents per    During the 2007 financial year ATNS spent R32
100 000 aircraft movements.                                 million on training a total of 1461 people in various
                                                            aspects of air traffic control, and other technical
Apart from measuring and reporting on safety as a           disciplines.
strategic imperative, we have successfully built up a
visible safety oversight capacity within ATNS and have      The ATNS Training Academy (ATA) offers a suite of
seen a dramatic change in the way that we conduct           international programmes. In the last financial year
occurrence investigations. The investigations are more      ATNS trained delegates from Tanzania, Mozambique,
holistic, thus bringing us more in line with the global     Namibia, Ghana, Uganda, Botswana, Rwanda, DRC,
trend of promoting a “just culture.”                        Sudan and Nigeria in various air navigation related
                                                            disciplines.
ATNS remains active in the Civil Air Navigation Service
Organisation’s (CANSO) safety standing committee            Over the last year we have focused intensively on
and has participated actively in shaping the Global         improving the success of new candidates within
Aviation Safety Plan and Roadmap, developing a              the air traffic control discipline. NATS, our United
practical guide to implementing a Safety Management         Kingdom peers, completed a full audit of the ATNS
System, as well as developing global safety metrics         Training Academy. To date we have implemented
amongst others.                                             all of the NATS recommendations

* Air traffic movement growth
including two achievements of which I am truly proud,       Delays attributable to ATC were marginal and
namely the launch of the self study centre, and the         equipment serviceability was in line with the global
VSAT training facility. We are indeed very pleased that     targets set.
this investment has seen a marked improvement in            I am also pleased that this year we increased the
delegate success rates at the ATA.                          number of aircraft movements per hour at OR Tambo
                                                            International Airport from 52 movements an hour to
48% of all staff within ATNS are black and 37% are          56 and have successfully taken over the management
women.                                                      of the slot allocation system, which was delegated
                                                            to ATNS by the Minister of Transport.
ATNS participated in the Deloittes’ Best Company to
work for survey and ranked 97th out of 121 companies.       Capital expenditure for the financial year ended March
The results will serve as a benchmark for all future        2007 amounted to R218.7 million. This investment in
interventions in making ATNS a globally competitive         infrastructure will ensure increased airspace capacity,   15
employer of choice.                                         the further enhancement of our air traffic management
                                                            systems, and the continued maintenance of the
ATNS actively participated in the CANSO Human               highest safety standards.
Resources Workgroup and participated in a number
of initiatives including a global ATC remuneration          32% of discretionary capex spend was spent with
survey.                                                     Black Economic Empowerment companies.

Delivering the highest standards in air                     ATNS participates actively in the CANSO benchmarking
navigation                                                  workgroup. Substantial progress has been made with
Over the last financial year we developed a set of          respect to developing performance criteria, measuring
indicators to enable us to measure the performance          performance and comparing our performance with
of the business in relation to our strategic imperatives.   that of our global peers.
We have measured and refined these imperatives
over the last financial year and have communicated          Maintaining long-term financial sustainability
them to our staff during centre visits.                     We have completed a very rigorous year-end financial
                                                            audit and I am pleased that the company’s financial
The last year has also seen consistent performance          position is solid and sustainable
in the service delivery environment.
Much work has gone into the development of our            I would like to express my appreciation and thanks
five-year business plan for 2008-2012. Apart from the     to the ATNS board of directors, executive team, line
capital investment plan, we also developed a five-        management, as well as our staff for the continuing
year human capital plan, which included a R105            efforts they make towards the achievement of our
million allocation for the newly introduced retention     strategic imperatives.
scheme for scarce, critical skills.

Despite the fact that tariffs did not increase during
the year, the revenue achieved of R576.9m was 5.8%
higher than the prior year, mainly due to the volume
growth of 6.2%.                                           Wrenelle Stander
                                                          Chief Executive Officer
Operating profit decreased by 17.1%. This is mainly
attributable to employee benefit expenses which
increased and an increase in depreciation and
amortization on intangible assets.

Furthering a global cause
I am indeed proud that the commissioning of the new
SADC VSAT network and the Nafisat VSAT network, is
on short finals.

The new integrated system will interconnect 28 African
states, with 2 states in the Middle East, and a planned
site in India and will be operational in September and
October 2007 respectively.
ATNS in South Africa




                                                                 Polokwane

                                                             Pilanesberg     Kruger Mpumalanga
                                                                      Wonderboom International
                                                                        Grand
                                            Mafikeng      Lanseria      Central
                                                             Rand     OR Tambo
                                                                      International
                                                                                      Richards
                                                           Pietermaritzburg           Bay
                          Upington Kimberley
                                      Bloemfontein                                  Virginia
 Alexander
       Bay                                                                     Durban
                                                                               International


                                                                      East London

                                       George
                                                          Port Elizabeth
          Cape Town
          International


                          Statutory service provision
                          Contractual service provision
Managing ten percent of the world’s airspace
                              2
ATNS manages 22 000 000km of airspace extending
all the way down to the South Pole, and approximately
half way to both South America and Australia.




20º
                                                                                                         19
      18S
      010W

                                                                26.5S
                                                                040E           Madagascar

30º                                                                           30S
                                                                              057E
                                                        30S
                                  South Africa          040E



                                                                35S                               35S
                                                                075E                              075E
40º




             0º    10º      20º      30º      40º         50º           60º          70º    75º
50º




                           South Pole
                   the space
                between safety




  the space
between drive
Ensuring your
safety in our hands
(Focusing on the strategic imperative: To deliver continuous improvement of our safety performance)
03 Ensuring your safety in our hands                        areas of South African airspace, were met with no
                                                            compromise to safety.
Strategic imperative: To deliver continuous
improvement of our safety performance                       Improving our safety ratio
                                                            During the period under review, ATNS recorded an
The environment in which we operate                         increase in the number of air traffic movements from
Safety remains, and will always remain, a key focus         608 930 in 2006 to 649 539 arrival and departure
within ATNS.                                                movements in 2007, up by 6.7%.

Our people have internalised the importance of the          ATNS closed the financial year with an average incident
safety function. In order to ensure that safety is never    rate of 3.54 incidents per 100 000 movements, slightly
compromised, ATNS:                                          improved from the 3.61 recorded at the end of 2006.
> Operates a highly effective safety and standards
   management system;                                       Incident rate per 100 000 aircraft departure
> Continuously investigates ways of improving the           and arrival movements
   risk mitigation process, keeps a watchful eye on         Per 100 000
   identified risks facing the business and proactively     movements
                                                                   7
   implements the necessary solutions as appropriate;
> Maintains a mature quality management system,                    6
   certified to the ISO 9001:2000 standard; and
                                                                   5
> Utilises a fully resourced internal safety and security
   oversight capacity.                                             4


                                                                   3
In addition, the South African Civil Aviation Authority
(SACAA) provides a crucial safety performance                      2

oversight function, regulating all aspects of the ATNS             1
business from this perspective.
                                                                   0

The year under review                                                     2003    2004       2005   2006   2007   Period

We are pleased to report that the air traffic demand
                                                                             Incident Rate
increases for the 2007 financial period, within all
Improving the management of safety                         and working environment factors that are contributing
A safety management system was put in place at all         to incidents, as well as ensure optimal workplace
ATNS units during the year to promote safety at station    ergonomics, is beginning to add significant value to
level.                                                     the business.

The scope of the safety management system was              ATNS has intensified its focus on 'across the board'
expanded to include a technical services standards         safety. To this end, all units have appointed trained
oversight and auditing programme - this process is         fire wardens for their respective stations, not only in
still under development.                                   the event of a fire emergency but to react to any
                                                           other areas of concern, including the availability of
A pilot Team Resource Management continuation              optimum first aid supplies and trained personnel.
training course for all operational staff was completed.
The course was aimed at addressing the causal factors                                                                23
behind incidents and equips staff to manage the
human factor element and its role in incidents.

The ATC Instruction Manual (ATCI's) was reviewed by
ATNS for publication by the South African Civil Aviation
Authority as a legislative document.

Quality and safety audits, which comprised a single
audit, were divided into two separate audits so as to
better identify safety risks and performance
requirements pertaining to safety and capacity.

An internal safety survey, investigating the safety
culture of the company, was carried out in order to
improve the strategic decision-making process.

The recent appointment of a 'human factors' specialist,
whose fundamental role is to investigate situational
Stringent Risk, Security and Quality Management            ATNS ensures commitment to the Quality Management
Much attention was afforded to the risk and security       System through continual review, on-going awareness
management processes within ATNS during the year.          training to all our employees, regular internal audits
                                                           undertaken by our Quality Section and management
Regular risk management meetings comprising the            support and involvement.
ATNS executive team and senior managers were held
monthly. The top ten risks were identified, managed
and reported to the Board together with mitigation
controls pertaining to critical identified risks on a
quarterly basis.

ATNS developed a Security Policy, in compliance with
the National Intelligence Agency recommendations
outlining security requirements specifically relating
to the organisation and pertaining to security controls
of processes, documentation, access and critical
business continuity.

Quality audits continue to be conducted regularly,
with ATNS maintaining its ISO certification at all units
country-wide. Through these audits, the highest
standards are being maintained by all units across all
business operations.

The last external SGS surveillance audits were
conducted during February 2007.
Looking forward                                           > Complete a feasibility study, which is to be
During the 2008 financial year we are planning to:          commissioned for the establishment of a new area
> Reduce the safety ratio from 3.54 to 3 incidents          control centre for OR Tambo International Airport;
  per 100 000 movements;                                  > The finalisation of an ATM/cns roadmap for 2015
> Implement and encourage the full utilisation of an        and beyond;
  internal hazard reporting system, so as to improve      > The finalisation of planning for the newly proposed
  data collection of safety significant events;             International airport in Kwazulu Natal;
> Launch a safety newsletter;                             > Planning for the next capital expenditure permission
> Review and improve the safety management                  will be initiated; and
  system;                                                 > The introduction of a computer-generated, no risk
> Enhance and oversee all risk, security and quality        environment to allow for more efficient airspace
  systems;                                                  design.
> The Team resource management continuation                                                                        25
  training course will be rolled out at all stations in
  the coming year;
> Invite a reputable international organisation to
  conduct an independent safety best-practice audit;
     the space
between development
Prioritising the people
who make it happen
(Focusing on the strategic imperative: To position ATNS as globally competitive employer of choice)
04 Prioritising the people who                             The five year Human Capital Plan was approved by
   make it happen                                          the Board and industry. Financing for the HCP was
                                                           also secured, which included R105m over five years
Strategic imperative: To position ATNS as a globally       for the retention of Principal Air Traffic Controllers
competitive employer of choice                             (PATC's).

The environment in which we operate                        The retention scheme was developed, and following
ATNS operates from 21 airports around the country.         approval by the Board, was implemented.
Statutory service is provided at nine of these airports,
all of which are owned by the Airports Company of          An increase in the number of licenced Air Traffic
South Africa. The remaining 12 airports are under          Controllers
contractual service delivery terms.                        Staffing remained a key risk for the ATNS business.
                                                           We increased our air traffic service staff complement
Specialists from an array of disciplines are required
to provide a holistic, effective and efficient service -
which requires some stations to operate on a 24 hour       Licensed ATC staff complement has increased
basis. Specialists range from administrative personnel     10.4% over the last 12 months
through to operational air traffic services (ATS)
                                                              300
personnel, engineering disciplines and a strong                                           +38
                                                                                                               254
technical services component.                                 250              230                   -14


The ATNS Training Academy (ATA) serves as a very              200    188

important link in providing for the educational and
practical development of our staff complement within          150
                                                                     PATC
the ATS and technical disciplines.                                  & SATC
                                                              100

The year under review                                         50
The implementation of the Human Capital Plan (HCP)                   ATC

Achieving an optimum ATC staffing mix continued to             0
be a key strategic challenge throughout the 2007                    Mar 03    Mar 06   Additional Resignations Mar 07   Period
                                                                                       Controllers
financial year.
                                                                        Air Traffic Controller
                                                                        Principal & Senior Air Traffic Controller
by 10.5% over the past 12 months and have seen an           Employee Assistance Programme (EAP)
83% uptake of our newly implemented retention               An outsourced Employee Assistance Programme,
scheme.                                                     available to all ATNS staff and their immediate families,
                                                            was implemented during 2007.
The retention scheme ensures that ATNS is able to
respond safely to a planned 5.4% annual increase in         The programme offers practical and professional
air traffic in South Africa, and to compete for a scarce,   advice in helping staff to deal with everyday situations,
global commodity in an environment where there is           as well as more serious concerns. The service, which
currently a 13% shortage.                                   is free of charge to staff, is available on a 24 hour
                                                            basis and is confidential. In light of the inherently
Investment in our people and in safety remains our          high job-related stress in the aviation industry, this
key focus.                                                  service is an integral support mechanism for our teams.
                                                                                                                        29
The retention of ATC's improves                             During 2007 road shows to all ATNS units were
The attrition of ATC's has reduced slightly to 6% in        conducted to promote the EAP service and to present
2007 representing the loss of 14 operational air traffic    stress management techniques.
controllers, as opposed to 8% in 2006 representing
the loss of 20 air traffic controllers.                     Development of ATNS leaders
                                                            During the year, 90% of line managers received
Joining other companies in the 'Best Company to Work        training on industrial relations matters and the
For' Survey                                                 implementation of the disciplinary and grievance
ATNS participated in the Deloittes 'Best Company to         procedures, while executive managers were exposed
Work For' survey.                                           to an Executive Coaching Leadership programme. The
                                                            coaching programme aims to help leaders grow their
The results saw ATNS rank 97th out of 121 participating     strategic mindset and develop their leadership style
companies, whilst being placed in the 7th position          and effectiveness.
out of 8 within the logistics and transport industry.
                                                            In addition, two extended management meetings
ATNS will participate again in the coming year.             were held during the financial year where managers
                                                            from around the country come together to further
                                                            refine the ATNS business strategy for the future.
        Total
                                                              All courses achieved a success rate of over 90%, aside
        2000                                                  from the exceptionally complex Aerodrome course
                                                              which saw a 57% success rate in 2007, up from 28%
                                                              in 2006.
        1500

                                                              Ensuring a sufficient flow of trainees
                                                              This year saw the separation of the career paths for
        1000
                                                              Air Traffic Service Assistants and Air Traffic Controller
                                                              Trainees.
         500
                                                              Those candidates selected as Air Traffic Controller
                                                              trainees are now being offered a fully paid bursary
                                                              as ATC trainees and move through the ATC career path
           0
                2004       2005    2006       2007   Period
                                                              as quickly and effectively as possible.

                   Total          Fail                        The recruitment and training strategies for ATC trainees
                   Pass           Pass Rate                   were refocused to improve, in particular, the pre-
                                                              aerodrome course exposure.
ATNS Training Academy success rates
The ATNS Training Academy enjoyed a highly successful         The increased intake numbers have been planned to
year and is showing excellent results from all initiatives    maximize the training capacities, both in the field
implemented.                                                  and at the Training Academy.

The total number of students trained by the ATA               Changes to the training plan for all ATS delegates
increased from 846 in year 2004 to 1461 in 2007, of           were made. This revised plan is estimated to show
which 513 were local students and 948 were                    results from the 2008 financial year.
international students.

A very low student failure rate was noted on all
courses throughout the year i.e. only 7% of local
students and 4% of international students were
unsuccessful.
In addition, ATNS has enhanced existing courseware          Training Accreditation
and undertaken a review of current practical exercises.     The ATA upheld its accreditation with:
This has resulted in the revision and re-design of          > the SACAA;
courses, thereby enhancing the training solution in         > the University of Technology in Johannesburg;
line with international best practice/benchmarking.         > the ICAO Trainair programme;
                                                            > the Namibian Department of Civil Aviation;
                                                            > TETA; and
Additional electives are also now being offered to
                                                            > is an IATA regional training centre for Africa, as well
ATSA personnel and ATC trainees, creating opportunities
                                                               as an ICAO Government Safety Inspector (GSI)
for career growth and exposure to new technologies             endorsed centre.
and trends.
                                                            The Academy is also pleased to report its continued,
The introduction of exposure flights with participating     strong alliance with both IATA and ICAO.
airlines and general aviation to students on our Air                                                                    31
Traffic Management/ Aeronautical Information                Investment in our instructors
Management (ATM/AIM) Core Content Course allows             Successful and effective training is largely dependent
for a full understanding of cockpit dynamics, thereby       on the quality of the instructor presenting the subject
providing airline experiential learning to students.        material. In order to achieve greater success rates, and
                                                            to foster a far more accessible and supportive
                                                            environment for learners, the following important
ATNS Engineering Learnerships
                                                            changes regarding the scheduling of courses and
ATNS continues to offer Engineering Learnerships to
                                                            instructors have been made:
suitable candidates, with a view to employing these         > The amount of contact time between learner and
candidates following the successful completion thereof         instructor has been increased;
and in accordance with market demand for these              > Courses have now been structured around the
professionals. Significantly, there has been an increase       availability of instructors so as to ensure that no
in the number of learners during the year, from five           courses lack available instruction resources at any
in 2006 to ten in 2007. Interest from across the African       time;
continent has escalated with regard to the provision
by ATNS, for similar training interventions to colleagues
within their respective ANSP's.
> The maintenance of the highest levels of proficiency   The two-dimensional aerodrome simulator, used for
  amongst our instructors has also received strong       initial aerodrome control training, has also been
  focus. In January, proficiency checks were conducted   enhanced so as to increase its utilisation.
  with all our instructors to ensure compliance with
  the highest standards; and                             The ATA has changed its orientation and philosophy
> Assessor training for instructors was conducted,       with regard to systems/equipment available for
  thereby enhancing the focus for an outcomes-based      training. With this in mind, the ATA will receive all
  education.                                             the latest systems/equipment to be deployed first,
                                                         so as to assure seamless training. With the newest
Investment in our training equipment                     systems/equipment installed, the ATA will be in a
A full review of technical as well as ATS training       position to change course content at the onset, thereby
equipment was carried out during the period. This        meeting the requirements of ATNS Engineering training
included a complete benchmarking exercise on             requirements.
equipment used as part of the training solution for
learners on various courses.                             Expanding our service offering through training
                                                         > Certificate in Aviation Management Programme
The ATA commenced implementation of the                    ATNS carried out investigations into the introduction
recommendations flowing from this process over three       of an aviation management programme, in
phases, of which the first phase has already been          conjunction with University of Pretoria during 2007.
completed:
> Phase 1 - The existing 3D aerodrome simulator            This programme, to be implemented in the new
   software has been upgraded, with the installation       financial year, will see a group of managers from
   of additional new software and other enhancements       within the South African aviation industry attend
   to the simulator having been carried out;               a management programme that will provide them
> Phase 2 - This phase will allow for the existing 3D      with a fully accredited aviation management
   aerodrome simulator to be reconfigured which will       certificate.
   contribute to increased capacity; and
> Phase 3 - The third phase will focus on the
   acquisition of two additional miniature versions of
   the 3D simulator, to be added to the stable of
   simulator equipment which is to be used for
   aerodrome training purposes.
> Sensitizing the aviation industry to Aviation English   Investment in ATA administration
  language proficiency                                    > An advanced student registration and training
  ATNS is assisting the SACAA with a workshop to             information system, which incorporates electronic
  sensitize the industry as to how the rating and            registration, learner feedback reports and training
  assessing of Aviation English language can be done.        reports was implemented;
  Two ATNS Instructors are now eligible to conduct        > The year saw an increase in the utilisation of black
  the interviewing and rating of Aviation English            economic empowerment (BEE) service
  Language Proficiency. Accreditation for conducting         providers; and
  of this activity has been received from the SACAA.      > A fully comprehensive access and security system
                                                             was implemented at the Training Academy.
> Launch of the ATA Study Centre Project
  This project allows students the opportunity to         Looking forward
  learn more during their own time, thereby increasing    ATNS will, in the next financial year, continue its focus   33
  their knowledge levels of subject matter before         on our people. We will:
  entering the classroom.                                 > Continue programmes such as 'bring a girl child to
                                                            work', our mathematics winter school, airshows,
  The resource will also give students exposure to          ATC bursaries and engineering technician
  various ATNS projects, research on ICAO documents         learnerships;
  and Part Task Simulation in a real-time learning        > Demystify air navigation and promote careers
  environment.                                              within ATNS;
                                                          > Continue our excellence in training through the
Other courses                                               introduction of new technology; improved course
> A Radio telephony course, resulting in a Base             design, improved practical components, providing
  Operators Radio License, was offered to and               our instructors with the best tools and knowledge;
  completed by South African Express airlines;            > Realise full staffing at the ATA and within the
> A Notice to Airmen (NOTAM) course was offered             Strategic Human Resources department;
  to ACSA in Cape Town;                                   > Realign Strategic Human Resources to become a
> The design and development of the Polokwane               one-stop service point for our employees.
  Airspace was carried out so as to allow for site
  specific training of its staff; and
> Various IATA courses were presented.
                                      the space
                                  between partnership




Cape Town International Airport
Delivering the
highest standards
in air navigation
(Focusing on the strategic imperative: To be a performance-based service provider)
                                                                                                               Growth
                                                             Movements                                         Rate

05 Delivering the highest standards
   in air navigation                                           660 000                                         7%

                                                               640 000                                         6%
Strategic imperative: To be a performance based
                                                               620 000
service provider                                                                                               5%

                                                               600 000
                                                                                                               4%
The environment in which we operate                            580 000
                                                                                                               3%
Air traffic movements continued to increase across             560 000
the country.                                                                                                   2%
                                                               540 000

                                                                                                               1%
During the last financial year we focused on improving         520 000

our performance levels to ensure a continually                 500 000                                         0%

improving service to our customers.                                      2003     2004   2005    2006   2007   Year



ATNS' stakeholders, including ICAO, Airports Company                            Annual Movements
of South Africa (ACSA), the South African Department                            Annual % growth in traffic
of Transport (DoT) and the SA Civil Aviation Authority
work integrally with ATNS contributing to critical
market intelligence and input within an industry that    A third approach sector has been opened in order to
is consistently evolving.                                increase TMA capacity and ensure optimum spacing
                                                         on final approach at OR Tambo International airport.
The year under review
Steady growth in air traffic movements                   Improving Operational Efficiency
During the period under review, ATNS recorded an         During the year, air traffic procedures were further
increase in the number of air traffic movements to       refined to help reduce aircraft fuel-burn between city
649 539 arrival and departure movements, up by           pairs.
6.7%.
                                                         ATNS implemented both the Johannesburg and Cape
Increase in sector capacity                              Town sequencing tool, Maestro, to assist air traffic
We increased the number of aircraft movements per        controllers to sequence air traffic optimally, while
hour at OR Tambo International Airport from 52           simultaneously reducing their workload and ensuring
movements an hour to 56.                                 predictability and standardisation.
Automated clearance delivery trials and procedure           Equipment availability stable despite
development is still in progress.                           national upgrades
                                                            While equipment availability decreased over the
A further development also underway and still in the        period as a result of equipment upgrades and cable
finalisation stages, is that of the AIDC Mauritius and      theft, neither safety nor service level standards were
Australia procedure development. Protocol issues            compromised.
between the South African and Australian processing
systems are currently being negotiated, with                Communications              99.60%       (SLA:99.64%)
operational procedures also in the development phase.       Navigation                  99.88%       (SLA:98.49%)
                                                            Surveillance                98.95%       (SLA:99.77%)
In order to meet demand through the reduction of
air traffic controller (ATC) workload, ATNS has finalised   Information Technology (IT)
changes in the Southern South African Region lower          IT is at the core of ATNS' efficiency levels and as such   37
airspace:                                                   is an integral focus for management.
> A new George Terminal Area (TMA) and Visual
   Flight Rules (VFR) routes have been implemented;         The ATNS wide area network (WAN) has been
   and                                                      upgraded to ensure that centres remain connected
> Significantly, the safety case, which has been            using the latest technology.
   completed for a VFR coastwise routing through the
   Control Zone (CTR), is now awaiting approval.            In line with our objective to attract and retain highly
                                                            skilled staff, a human resources (HR) Information
ATNS has also completed the installation of its             System has been signed off, following the completion
secondary radar system in Cape Town.                        of ATNS' user requirement specifications.

Staff validations improved                                  Investing in Safety, Efficiency and Increased capacity
Service delivery achieved an increase in the annual         Capital expenditure for the financial year 2007
validations, up from 55 in 2006, to 88 in 2007.             amounted to R218.7 million. This investment in
                                                            infrastructure will ensure increased airspace capacity,
                                                            the further enhancement of our air traffic management
                                                            systems, as well as the continued maintenance of
                                                            the highest safety standards.
Historically ATNS has followed a replacement              increase during the 2010 permission, which has been
philosophy of 10 years for communication and              discussed with our industry stakeholders.
navigation equipment and 12 years for surveillance
equipment based on historic component obsolescence        Looking forward
and end of design life. During the user consultation      Service delivery remains a key component to the
sessions it was agreed that ATNS will investigate the     business. ATNS is planning:
extension of the design life to 15 years, even on the     > A 7% increase in licensed ATS staff as per human
existing CNS equipment.                                     capital plan (HCP) over the next five years;

After a careful assessment of the risks associated with
the possible extension of the operational life of the
major communication, navigation and surveillance
                                                          ATC Staff
systems, and in consultation with the OEM suppliers,
                                                          400
ATNS has identified numerous interventions to achieve
this target for the existing equipment.
                                                          300

ATNS subsequently incorporated the extension of the
operational life of the major systems to 15 years in
                                                          200
this permission, as well as the cost associated with
the various interventions which include:
> purchasing additional spares;
                                                          100
> replacing obsolete modules and components;
> refurbishing mechanical units;
> expanding ATNS stores; and                                0
> increasing maintenance staff and costs at the end                   HCP
                                                                      Target    Actual
   of equipment life.                                                 2007       2007     2008   2009     2010   2011   2012   Period



This change in the replacement philosophy has resulted                    ATC                    ATC

in a deferment of R406 million of CAPEX expenditure                       Senior ATC             Senior ATC
                                                                          Principal ATC          Principal ATC
to the permission period beginning 2010. The impact
of this deferment will be an unavoidable expenditure
> Increased runway throughput capacity: from 56 to
  60 movements per hour at FAJS and from 28 to 30
  at FADN;
> Implementation of a flow management system;
> Introduction of the service recovery strategy;
> Spend the full, budgeted R227 million on capital
  investment programmes;
> Increase the BEE capex spend from 32% to 40%;
> Upgrade and expand the voice communication
  control system network to accommodate planned
  growth in air traffic movement;
> Implement the upgraded VSAT platform for inter-
  centre communication on the continent, in order       39
  to enable improved centre-to-centre communication;
> Implement the Airport Surface Movement Guidance
  and Control System;
> Exceed ICAO equipment availability targets and to
  achieve systems availability levels of 99.69% for
  communication, 99.27% for navigation and 99.39%
  for surveillance equipment; and
> Introduce multilateration as an alternative to SSR.
     the space
between sustainability
O3R
LNK053 M
085>15025
JN




            Economic regulation
            (Focusing on the strategic imperative: To maintain long-term financial sustainability)
06 Economic Regulation                                      In estimating a reasonable rate of return for the
                                                            Company, the Committee has taken into consideration
Strategic imperative: To maintain long-term financial       the various economic and market indicators, including
sustainability                                              bond yields, market risk premiums, the industry risk
                                                            profile, cost of debt and ideal gearing levels, as well
The environment in which we operate                         as factors specifically applicable to the Company.
The Regulating Committee regulates ATNS from an
economic perspective. This includes the capping of          Based on the above, the Committee estimates that
the company's tariffs and prescribing the minimum           a reasonable rate of return for the Company should
service standards.                                          approximate a 1.9% premium to the risk free rate.

In setting these price caps (CPI-X) and standards, the      The year under review
Regulating Committee considers the air traffic              The financial performance for 2007 has produced
movements, capital expenditure, safety, capacity, value     better-than expected performances from core
for money, interests of clients and the long term           operations. The major reason is the higher air traffic
viability of the company.                                   growth, primarily due to volumes generated by the
                                                            low cost domestic carriers and continued competition
Economic regulation is recorded in a permission which       on the international routes to and from both
contains conditions within which ATNS must operate.         Johannesburg and Cape Town.
A permission lasts 5 years with a review and re-issue
in the third year. The last two years of a permission
overlaps with the first two years of the next permission.   Due to the over recovery in 2006, ATNS did not increase
                                                            their 2007 tariffs which resulted in lower profits in
The Regulating Committee has issued the permission          2007 compared to 2006. During the period under
for the 5 years ending 31 March 2012. In setting the        review ATNS’s operating profit decreased by 17.1%
tariffs the Regulating Committee uses CPI-X, where X        to R111 million in 2007 compared to R134.4 million
is for the year ending:                                     from the previous year, while net profit after tax
> 31 March 2008 : 5.4%                                      decreased by 21.9%, from R97.9 million (2006) to
> 31 March 2009 : 1.5%                                      R76.5 million (2007). As a result, the return on capital
> 31 March 2010 : 1.0%                                      employed declined from 16.4% (2006) to 12.8%
> 31 March 2011 : 1.0%                                      (2007), but still exceeded the permission target of
> 31 March 2012 : 0.5%
11.3% stipulated by the Economic Regulator. The              assets. The decrease specifically in cash and cash
return on capital employed is calculated as follows:         equivalents was the internal financing of R212 million
(profit after tax less net funding cost after tax) divided   of capital expenditure. The total capital expenditure
by (average equity plus average borrowing cost less          for 2007 is R218.7 million.
average cash and cash equivalents).
                                                             Notably, in comparison to the previous financial year,
Despite the fact that tariffs did not increase during        long term borrowings decreased by R67.7 million
the year, revenue grew by R31.5 million (5.8%) while         (39.2%) from (2006: R173 million to 2007: R105.3
the total cost increased by R54.6 million which resulted     million). Current liabilities have on the other hand
in the R23.4 million decrease in operating profits. The      increased by R42.5 million to R174.2 million (2006:
growth in revenue is due to:                                 R131.7 million). The increase was mainly due to the
                                                             R45 million, capital expenditure accrual at March
                                                             2007.                                                      43
> En-route approach fees
> Training to third parties                                  Total liabilities have decreased by 8.9% from R327,2
                                                             million (2006) to R298.2 million (2007). The decrease is
Staff cost increased by 14.8% in 2007 as compared            mainly attributable to the use of internally generated
to the prior year. ATNS increased its air traffic service    funds for the capital projects while repayments were
staff complement by 10.5% over the past 12 months.           made towards the interest bearing borrowings.

Other expenses increased by 10.7%. This is due to an         Due to increase in revenue, cash flows generated
increase of telecommunication expenses which include         from operations increased from R197.2 million (2006)
additional IT network costs, spectrum costs for VSAT         to R239.8 million (2007). The net increase in cash is
and multi-lateration radar costs.                            therefore, R42.5 million (21.6%).

The total assets of ATNS increased by R47 million            In terms of the working capital ratio analysis, ATNS
(5.3%) in 2007 in comparison to 2006 (2006: R891.9           has a working capital ratio of 0.89:1, which implies
million to 2007: R939.3 million). The increase in total      a slight deficiency in short-term assets to adequately
assets was made up of R136.0 million increase in             cover its short-term liabilities. The deficiency was due
fixed assets and a R88.7 million decrease in current         to the accrual of R45 million, capital expenditure.
                                                                                                            Capital Expenditure
Twenty-eight million of the R45 million accrual was
                                                                                                            250
financed from additional loans withdrawn in April
2007. Excluding the R28 million accrual, the working




                                                                                                                    228,354,163
capital ratio is 1.1:1 and therefore adequate.
                                                                                                            200




                                                                                                                                                               202,512,651



                                                                                                                                                                              197,810,212
Retained earning increased by R76.4 million which
increased total equity in the company to R641.2




                                                                                                 millions
                                                                                                            150
million (2006: R 564.7 million).




                                                                                                                                   145,436,275



                                                                                                                                                 137,712,355
The gearing ratio decreased from 40.4% in 2006 to                                                           100
26.4% in 2007.This is due to ATNS internally funding
the capital projects and re-paying the long-term loans
as per the agreements.                                                                                      50
                                                                                                                   2008           2009           2010          2011           2012           Period
Looking forward


           Tariff Revenue
                                                                                                            Profits after tax
           1000
                                                                                                            140
            900

                                                                                                            120
                                                                          860,853,588




            800
                                                            789,192,906




                                                                                                                                                                116,562,596



                                                                                                                                                                               115,538,401
            700                                                                                             100
                                              711,639,862




                                                                                                 millions




            600
                                640,653,913




                                                                                                                                                  90,109,948

                                                                                                             80
millions




                  580,508,609




            500
                                                                                                                                  75,996,631
                                                                                                                     71,300,315




                                                                                                             60
            400


            300                                                                                              40


            200
                                                                                                             20

            100                                                                                                    2008           2009           2010          2011           2012           Period

                  2008          2009          2010          2011          2012          Period
Gearing
45%
          41%



40%                 37%


35%
                             30%

30%

                                       26%



                                                 23%
25%


20%


15%


10%


5%
      2008         2009      2010      2011      2012      Period
                                                                    45




Return on Capital Employed
14%
                                        12.43%
          11.99%




                                                  11.29%
                              10.50%
                    10.24%




12%


10%


8%


 6%


4%


2%
      2008         2009      2010      2011      2012      Period
    the space
between positioning
Furthering a global cause
(Focusing on the strategic imperative: To position ATNS to secure a continued role in the
changing global air traffic management system)
07 Furthering a Global Cause                                    The year under review
                                                                The final year of the SADC VSAT 1 network life cycle
Strategic imperative: To position ATNS to secure a              The year under review marks the final year of the
continued role in the changing global air traffic               SADC VSAT 1 operation since the network entered
management system.                                              operation in 1998.

The environment in which we operate                             The network has proved exceptionally useful in
While Africa is the smallest region for air traffic services,   providing for a communication interconnection of
accounting for about 4.1% of total world passenger              adjoining Flight Information Regions (FIR's) in the
traffic, air traffic has a vital role to play in economic       SADC region, including Rwanda and Burundi, as well
development and poverty reduction in Africa.                    as the AFISNET in West Africa.

The ATNS approach on the continent comprises:                   This network achieved an average availability of
> Finding win-win solutions together with our African           97.18% during the year due to extensive maintenance
  partners;                                                     required.
> Fighting the image of big-sibling;
> Accessing new markets through joint ventures with             Implementation of SADC VSAT II and the
  partners who have included ICAO, IATA, FAA and                Nafisat project
  the UN;                                                       Both projects will be operational by September and
> Identifying third party funding partners such as              October 2007 respectively. This network is significant
  IATA; and                                                     in that it will interconnect 13 SADC air traffic control
> Financing projects with a secure revenue stream.              centres, including Burundi and Rwanda, and will
                                                                facilitate in excess of two million data calls per annum.
A number of initiatives have been completed or are              It will also ensure that future demand GNSS, VHF and
  underway to:                                                  ATN demands are met.
> Facilitate regional service provision;
> Develop people in aviation management and the                 The implementation of the SADC VSAT II network
  technical skills; and                                         (which is the replacement network of the SADC VSAT I)
> Lead the introduction of new technologies to achieve          and the Nafisat has gained momentum.
  increases in capacity, efficiency and safety.
                                                                The tender process to appoint the equipment supplier
                                                                was completed in May 2006. INEO was appointed as
                                                                the equipment supplier of the two networks.
The SADC VSAT supervisory board and the NAFISAT
supervisory committee approved the tender process
and work is currently underway to implement the




                                                                                     Other African
                                                            1000
projects.
                                                             800




                                                                                                     DRC



                                                                                                                      Mozambique
Upper Air Space Control Centre (UACC)




                                                                                                           Tanzania
                                                             600




                                                                                                                                   Namibia




                                                                                                                                                              Botswana
                                                                                                                                                     Uganda
                                                                                                                                             Ghana
The SADC UACC steering committee, under the




                                                                                                                                                                         Rwanda

                                                                                                                                                                                  Algeria
                                                             400




                                                                                                                                                                                            Sudan
chairmanship of ATNS, is working tirelessly towards




                                                                                                                                                                                                    Nigeria
                                                             200
establishing a regional ATM/cns body that will operate
on a commercial basis.                                        0
                                                                   Total courses    Total courses taken by African delegates
                                                                   taken by
                                                                   non-ATNS staff
The UACC feasibility study that was completed in 2001
showed that the concept of a Regional UACC was                                                                                                                                                                49
                                                                         Non-African External SA
feasible, however there were concerns raised about
                                                                         African
the sustainability of the lower air airspace in the event
of the establishment of the UACC.

In January 2007 part one of the impact study on the
lower airspace, funded by the US Trade and
Development Agency, was completed. The results              Our commitment to human resource development is
have proved that the SADC UACC is indeed feasible           symbolic of our recognition that safety in our skies
and also sustainable.                                       cannot be solved exclusively through the availability
                                                            of highly advanced technical systems, but is also
Human capital development                                   dependent on having sufficient numbers of highly
In response to the lack of suitably qualified aviation      trained and motivated staff.
professionals, the ATNS Training Academy has
committed to play a role in transferring ATS and related    During the year, the ATA trained a total of 1461
skills to the African continent.                            candidates of which 948 were international candidates.
Involvement in CANSO                                         ATNS will further ensure appropriate benchmarking
ATNS has been actively involved in the various CANSO         on an ongoing basis, not only within similar Air
committees, including the safety, benchmarking,              Navigation Service providers and through our continued
human resources and customer relations committees            work with CANSO, but also within other leading
during the year.                                             organisations globally.

Of particular interest are the safety and benchmarking       Finally, due to our very strong people focus during
committees. ATNS has worked hard to achieve global           the year, ATNS has fully participated in the CANSO
agreement, and the formulation of global safety policy       human resource committee as it continued to work
during the period.                                           within this area of focus.

The aim to standardise and ensure global safety              Looking forward
harmony is a priority for the CANSO safety workgroup.        ATNS will, within the next period:
The inconsistent implementation of standards,                > Implement the new SADC VSAT network;
regulatory oversight, incident and accident investigation,   > Implement a new North East African network
and impediments to the reporting of errors and                 (Nafisat), which will connect Djibouti, Egypt, Ethiopia,
incidents have been flagged as barriers to improving           Kenya, Saudi Arabia, Somalia, Sudan, Tanzania,
safety on an international scale.                              Uganda and Yemen will go live by September 2007;
                                                             > Achieve satellite communication network revenue
For this reason, ATNS has dedicated time and resources         targets; and
to the support of the workgroup, in an effort to define      > Achieve our external training revenue target.
industry standards and achieve global harmony with
respect to ANS safety management. In addition to
this, CANSO is defining a set of global metrics for
safety standards, which ATNS supports fully.
                                                                                 51




Aeronautical surveying
Aeronautical documentation
Charting
Flight procedure design
Training
AIM
Other projects
Current SADC VSAT satellite communication direct speech interconnectivity
ASECNA region and SADC region VSAT direct speech connectivity via Antananarivo
Interconnectivity between SADC and ASECNA networks
  the space
between order
       Min alt
        6500




                        Position in Global
006˚



                 186˚




  10 NM
                        Civil Aviation
                                                           Commercial


                                                                                                              Department of Transport (DoT)
                                                                                                                  with minister as sole
      International Air Transport                                                                                     shareholder
          Association (IATA)




                                       Joint projects for provision of service                                                                  Regulating
                                        on the Africa continent e.g. SADC                                                                       Committee
                                                VSAT, ATDI training




                                                                                                                                          Economic regulation and
                                                                                                                                             service standards




          Airports Company                                          Collaboration on provision of
         South Africa (ACSA)                                             services at airports                             ATNS Service Delivery




                                                                                                                        Financial               Operations
                                                                                                                       Committee                Committee
                                                                                                                        (FINCOM)                 (OPSCOM)




                                                                                                                   Tariff consultation    Operational consultation



           Industry bodies                          Associations                                    Clients




•   International Federation of         •    Airlines Association of South               •    Airlines
    Airline Pilots Association               Africa (AASA)                               •    Commercial operators
    (IFALPA)                            •    Board of Airline                            •    General aviation (gliding,
•   Airline Pilots Association               Representatives (BARSA)                          parachuting etc.)
    (ALPA-SA)                           •    Commercial Aviation                         •    South African Air Force
•   International Federation of              Association (CAASA) and                          (SAAF)
    Air Traffic controllers                  its affiliates                              •    Cargo operators
    Associations (IFATCA)               •    Aero Club of South Africa                   •    Airports
•   Guild of Air Traffic Controllers    •    Aircraft Owners and Pilots                  •    African states
    (GATCSA)                                 Association (AOPA)
•   Solidarity                          •    General aviation action groups
                                                                       Regulatory

              Made up of states; determines
                 direction, standards and                                 International Civil
              recommended practices of civil                             Aviation Organisation
                  aviation on the globe.                                         (ICAO)




            Represents global, independent air
              navigation service providers;
               recommendations made to                                    Civil Air Navigation
                   members and ICAO.                                     Services Organisation
                                                                                (CANSO)




              Made up of ACSA, AASA, ATNS,
            SACAA, SAA, SA Airlink, Nationwide,                                                                   Global ATM/cns
              SA Express and Comair to make                                  South African
                  strategic infrastructure                                 aviation industry
                    recommendations.                                        strategic forum

                                                                                                                  Regional plans


            Regulates all service providers using
               standards and recommended
             practices (SARPS). Also regulates                          Civil Aviation Authority           South African National Airspace
             unit and personnel licensing and                                   (SACAA)                             Master Plan
                         standards.


                                                                                                                                             55

                                                                                                              ATNS’s future airspace
                                                                                                             management and service
                                                                                                                 delivery plans
                                                                    National              Civil Aviation
                 Designation of South                               Airspace               Regulation
                   African airspace                                Committee               Committee
                                                                   (NASCOM)                 (CARCOM)




CAA committees                                      ATNS committees

Regulation/regulatory bodies                        DoT parastatals

Independent organisations                           ATNS clients
                                  the space between
                                        control




Cape Town International Airport
Corporate governance
09 Corporate governance                                  Director resignation
                                                         Ms. Jacqueline Huntley resigned from the Board of
ATNS is committed to ensuring compliance with the        Directors on 1 August 2006.
provisions of the King II recommendations, the
Protocol on Corporate Governance in the Public Sector,   Committees
the Public Finance Management Act (PFMA) and the         Three committees assist the Board in the discharge
provisions of the ATNS Act, amongst other regulatory     of its responsibilities. These are the Audit and Risk
and supervisory corporate governance requirements.       Committee, the Human Resource Committee and the
                                                         Procurement Committee, each having formal terms
Board of Directors                                       of reference.
Governance at ATNS is managed and monitored by
the Board of Directors assisted by several Board         The continuing global changes in aviation as well as
committees. The Board is accountable and responsible     new financial disclosures have necessitated the review
for corporate governance. The framework for              of the terms of reference of these committees, a
compliance has been established through the formal       process conducted in the spirit of continuous
structures to ensure accurate reporting to the Board     improvement in Board and committee performance.
to enable decision making.
                                                         Audit and Risk
Board composition                                        This committee comprises three non-executive directors.
The Board is chaired by independent, non-executive       Meetings are held at least three times per year.
Director, Mr Mike Mabasa and comprises six non-          Members of executive management, internal and
executive directors, the names and credentials of        external auditors attend these meetings by invitation.
whom are to be found on page 133.
                                                         Risk Management
The Minister of Transport, who is the sole shareholder   The Board has developed and approved a risk
on behalf of the South African government, appoints      management strategy which includes a fraud
the Board of Directors. The composition of the Board     prevention plan. The Audit and Risk Committee assists
meets the requirements of King II in respect of          the Board to fulfil its responsibilities, which include
executive and non-executive directors. The skills mix    reviewing the risk management process and the
and demographic representation in terms of gender        significant risks facing the Board.
and race is adequate.
The Committee is satisfied that those risks were            company enables access to information for its
captured in a risk register and managed during the          stakeholders. The 2006 annual report was tabled in
year in order to mitigate those significant and             Parliament in September 2006.
identifiable risks to acceptable levels. The Board has
noted the business continuity plan which will ensure        Shareholders’ Compact
the continuity of critical business activities during a     ATNS operates in terms of a Shareholders' Compact
crisis period. A disaster recovery plan is in place.        between the government of South Africa, represented
                                                            by the Minister of Transport, and itself. In terms of
Internal control system                                     the compact, ATNS must on an annual basis agree
ATNS, in compliance with the Treasury regulations of        the key performance measures and indicators with
the PFMA, has outsourced the internal audit function        the Minister of Transport.
to KPMG and Gobodo. The internal audit function is
responsible for an independent and objective                Performance Agreement                                      59
evaluation of the organisation's systems of internal        A Performance Agreement commits ATNS to a clearly
controls at a detailed level. It must also bring any        defined set of objectives, with objective measures
significant business risks and exposures to the attention   and targets. An important part of this agreement
of management and the Audit and Risk Committee,             covers financial management, committing the
through the provision of comprehensive internal audit       company to operate within agreed budgets, with
reports.                                                    sound financial administration and with a targeted
                                                            return on capital.
A rolling three year audit plan was drawn up, approved
and implemented and internal audits for the financial       Human capital development
year ending 31 March 2007 were executed according           Critical to ATNS operations is the required staffing mix
to this plan.                                               in terms of skill, gender and race, and the retention
                                                            of those critical skills. The Board has addressed these
Compliance and legal requirements                           issues by adopting a strategic imperative to be an
Except as otherwise disclosed in the Directors report,      employer of choice. ATNS is committed to complying
ATNS has addressed all areas of integrated sustainability   with relevant labour legislation, and seeking to provide
management as required by the PFMA.                         a working environment and leadership that enables
                                                            staff to develop their potential and make a constructive
Stakeholder communication                                   contribution to achieving the ATNS performance
ATNS strives to foster co-operation and sound               objectives.
Board meeting dates and attendance
Board meetings are held quarterly, with additional meetings when necessary. All relevant information is timeously
supplied to directors. The Board is of the opinion that ATNS currently complies with all the significant requirements
incorporated in the Code of Corporate Practice and Conduct as set out in the King II Report.
     Meeting         Date       Mabasa       Hlahla      Martin       Naidoo         Shongwe          Gray     Huntley

      Board        23/06/06       C                                                                         
                   07/08/06       C                                                                      Resigned
                   29/11/06       C                                                               
                   23/02/07       C                                                               


   Special Board   11/09/06       C                                                               
                   19/09/06       C                                                               
                   14/12/06       C                                                               
                   20/12/06       C                                                               
                   27/01/07       C                                                               


       HRC         21/04/06       M                                                   C             M
                   17/07/06       M                                                   C             M
                   23/10/06       M                                                   C             M
                   06/02/07       C                                                   C             M


    Special HRC    02/06/06       M                                                   C             M
                   14/12/06       M                                                   C             M


       A&R         02/06/06       M          M           C          M
                   13/06/06                   M           C          M
                   24/11/06                   M           C          M
                   13/02/07                   M           C          M


     PROCOM        02/06/06       M                      M           C                                        M
                   24/11/06                               M           C                                      Resigned
                   13/02/07                               M           C


  Special PROCOM   11/04/06                               M           C                                        M
                   18/04/06                               M           C                                        M

                                                      Attended      Chairperson C          Absent/Apology    Member M
Sustainability reporting                                  representatives and conducted training for all safety
Employment equity                                         representatives in first aid and fire marshalling, amongst
During the 2007 financial year, the company achieved      other skills.
a staffing complement of 52% white and 48% black
employees.                                                In terms of OHAS, we have not had any reportable
                                                          incidents in the past financial year. We have also
ATNS has continued with its multi-faceted approach        upgraded the ATA security control measures so as to
for overcoming staffing and employment equity             align them with the provisions of the OHAS act.
challenges. This comprises:
> The development of a five-year human capital plan;      Black economic empowerment (BEE)
> Revision of the recruitment strategy and making         The company has targets for discretionary and non-
   line management accountable for recruitment, with      discretionary spending. ATNS achieved a spend of 20%
   Strategic Human Resources providing support and        on operational expenditure and 32% on capex. Forecast        61
   increasing its people capacity in the recruitment      targets for the next three years are:
   function;
> Further focusing the career marketing approach to       2008: 40%
   ensure that the majority of current vacancies are      2009: 46%
   filled by employees from designated groups. (at a      2010: 50%
   ratio of 90% black and 10% white); and
> Drastically improving the retention process with        Social responsibility
   particular inclusion of the revision of remuneration   ATNS has once again taken up its responsibilities on
   principles.                                            a number of different levels including;
                                                          > the running of the annual maths and science winter
Targets for the 2008 financial year has been set at          school with 60 students benefiting from the project;
51% black and 49% white employees.                        > learnerships being provided to 10 engineering
                                                             technicians and ATC bursaries being provided to 41
Health and safety                                            candidates;
Due to the increase in the number of staff within         > providing a safe air traffic control service at air
ATNS, we have had to revise the number of safety             shows throughout the year; and
representatives within the organization to align          > the employment of and passing on of skills to local
ourselves with the Occupational Health and Safety            people on engineering construction sites.
Act (OHAS). As a result, we have appointed additional
    the space
between connection
10
 NM




      Performance at
      a glance: Financial
                                                                                                           Earnings before tax, depreciation
       Revenue                                                                                             & amortization
               9




                                                                                                                                    37.90%
               8                                                                                           40%




                                                                                                                                             33.46%
                                                576,923,656
                                  545,337,286
               7                                                                                           35%




                                                                                                                           26.47%
               6                                                                                           30%
                   452,745,077
               5                                                                                           25%
100 millions




               4                                                                                           20%


               3                                                                                           15%


               2                                                                                           10%


               1                                                                                           5%


               0                                                                                           0%
                   2005          2006           2007             Period                                                   2005      2006     2007     Period




                                                                        Net profit
                                                                                              97,984,841




                                                                        120
                                                                                                             76,458,648




                                                                        100
                                                                                33,509,886




                                                                         80
                                                              million




                                                                         60


                                                                         40


                                                                         20
                                                                               2005          2006           2007          Period
Return on Capital Employment



                      16.76%
18%


16%


14%

                                        12.8%
                                                11.31%
                                                                            Capital Expenditure
                               10.05%


12%


10%
              8.05%




                                                                                                                  218,657,566
      6.49%




8%
                                                                            250




                                                                                                   131,974,155
6%                                                                                                                                       65
                                                                            200




                                                                                    105,433,887
                                                                  million
4%
                                                                            150

2%
                                                                            100

0%
                                                                             50
        2005            2006              2007           Period
                                                                                   2005           2006           2007           Period


              Actual
              Permission
     the space
between achievement
10
 NM




      Key Performance
      Indicators
No.   National objectives             Business objectives               Objective measures                      Targets                                             Achieved at 31 March 2007
 1    Management of Transport
      Costs to contribute to ASGISA

1.1                                   Safety as an enabler              Reduce the ATC incident rate            2.5 incidents per 100,000 air                       3.54 incidents per 100, 000 air traffic movements
                                                                                                                traffic movements over the
                                                                                                                next 3 years

1.2                                   Airspace Capacity                 Increase airspace capacity by           Increase FAJS (OR Tambo International) air          Air traffic movement of 56 achieved
                                                                        20% at FAJS, FACT & FADN                 traffic movements from 56 to 72 per hour



                                                                                                                FADN (Durban International) 24-36 movements         Air traffic movement of 24 achieved
                                                                                                                per hour

                                                                                                                FACT (Cape Town International) 30-40 movements      Air traffic movement of 30 achieved
                                                                                                                per hour

1.3                                   Regional Integration              Implement Africa wide                   Upgraded VSAT 2 network interconnecting 15 states   14 States have signed the bi-lateral
                                      (Safety and Expansion             satellite-based communication network                                                       agreement. Site Surveys have been completed.
                                      of ATNS scope)                                                                                                                The network will be commissioned in September 2007




                                                                                                                New Nafisat network interconnecting 11 states       10 States have signed the bi-lateral agreement and 10
                                                                                                                                                                    site surveys have been completed. The network
                                                                                                                                                                    will be commissioned in October 2007



 2    Overall government plans for    Safety, capacity and efficiency   Capital spend of R225m as               100% spend of Capex budget                          Capex spend is R 218.7m
      infrastructure spending, as                                       planned - new satellite
      indicated in the 2005 Budget                                      communication systems,
      review were R92 billion in                                        radars, DME, VORs
      2006, R108 billion in
      2007, and 122 billion in
      2008 Capital Investment
      Plans



 3    Operational Efficiency

3.1                                   Financial                         Reduce cost of ATS operations           Achieve R13m efficiency target, as                  The R13m efficiency target was taken into account in the
                                                                                                                set by the economic regulator                       tariff increases and ATNS achieved the required ROCE

3.2                                   Operational                       Reduce radar separation on              Separation reduced from 8nm to 6nm on final         Separation reduced from 8nm to 6nm behind heavy aircraft
                                                                        final approach                          approach                                             and 5nm behind all other aircrafts

                                                                        FAJS non-jet early turnout to           Implement Standard Instrument                       Approved by the airport enviromental committee.
                                                                        the East                                Departures

                                                                        Reduce cost of ATS operations           Removal of Flight Progress Strips                   Stripless at FACT only
                                                                        by 5%                                   at FAJS, FABL, FADN, FAPE and
                                                                                                                FACT by 2008

                                                                        Improve equipment availability          Revised equipment SLA's                             Target met for communication but below target for
                                                                        by 10%                                                                                      surveillance and navigation due to new radar VOR
                                                                                                                implementation resulted in downtime.
                                                                                                                                                                    Current availability is above 98%,
           Plans
    No.    National objectives          Business objectives           Objective measures                    Targets                                        Achieved at 31 March 2007

      3    Operational Efficiency

    3.1                                 Financial                     Reduce cost of ATS operations         Achieve R13m efficiency target, as             The R13m efficiency target was taken into account in the
                                                                                                            set by the economic regulator                  tariff increases and ATNS achieved the required ROCE

    3.2                                 Operational                   Reduce radar separation on            Separation reduced from 6nm to 5nm on final    Separation reduced from 8nm to 6nm behind heavy aircraft
                                                                      final approach                        approach                                        and 5nm behind all other aircraft

                                                                      FAJS non-jet early turnout to         Implement Standard Instrument                  Approved by the airport environmental committee.
                                                                      the East                              Departures

                                                                      Reduce cost of ATS operations         Removal of Flight Progress Strips              Stripless at FACT only
                                                                      by 5%                                 at FAJS, FABL, FADN, FAPE and
                                                                                                            FACT

                                                                      Improve equipment availability        Revised equipment SLA's                        Target met for communication but below target for
                                                                      by 10%                                                                               surveillance and navigation due to new radar VOR
                                                                                                                                                           implementation which resulted in downtime.
                                                                                                                                                           Current availability is above 98%


3.3                                    Optimise ATM training         Achieve the ATS staff plan            25% increase in ATM training                   Reached 80% of target
                                                                     requirements per Unit

                                                                     Employ contract ATC's to release      Employment of ATC contractors based            Achieved 254 of 274
                                                                     existing personnel for ATC training   on numbers required

                                                                     Improve capacity within the ATA       Employment of additional                       23 Instructors employed
                                                                     by 5%                                 instructors based on numbers
                                                                                                           required

                                                                     Improve our organisational            More enabling culture                          Coaching program for executives. Participation in "Best
                                                                     culture                                                                              Company to Work For" survey

                                                                     People development a line             Managers assume responsibility for             Spend R3.8m on external training
                                                                     function                              people development for all staff               and R11.1m on internal training

3.4                                    Enable technology for value   Enhancement to the aviation           Extract value from SAAATS                      Increased tower capacity at FAJS by 8% (4 movements
                                       chain support                 industry                                                                             per hour) due to less co-ordination between
                                                                                                                                                          tower and approach as a result of SAAATS implementation

4         Accelerated and shared
          economic growth and
          development to address the
          challenge of poverty and
          underdevelopment

4.1                                    Achieve BEE targets           35% of discretionary spend on BEE     100% of achievement                            20% Opex
                                                                     Total opex budgeted R267.8m                                                          32% Capex
                                                                     Total capex budgeted R76.7m
                                                                     include a % or number of black ATC
                                                                     to be trained.

4.2                                    Achieve Employment Equity     Employment equity targets             100% achievement of employment equity plan     48% Black 52% White
                                       targets                       (48% White and 52% Black)
    No.    National objectives    Business objectives             Objective measures                Targets                                Achieved at 31 March 2007

5         Capacity development

5.1                              Employ Internships              Development of an internship      Accepted internship programme          Internship program to be finalised by October 2007
                                                                 programme

5.2                              Improve Learnerships            Engineering learnership           6 people                               10 Engineering learnerships
                                                                 implemented

5.3                              Implement Bursars               ATSA bursary programme            40 people                              41 ATSA bursars awarded
                                                                 implemented

5.4                              Succession planning             Succession plans for identified   Key personnel are identified.          Succession plans for key personnel
                                                                 key personnel                     Succession plans are implemented.      will be implemented.

5.5                              Regional capacity development   Training of personnel             EUROCAT training of Sudan ATM          40 trained
                                                                                                   personnel (40)
                                                                                                   Algerian ATC training (68)             68 trained
                                                                                                   DRC ATC and technical training (111)   111 trained
                                                                                                   IATA training (180)                    245 trained
                                                                                                   ICAO training (215)                    35 trained

                                                                 General ATM/cns consultancy       When required as per agreement with    Namibia - General procedure design and Site acceptance
                                                                                                   a region.                              tests for Eros and Walvis Bay completed. Specifications
                                                                                                                                          for radar project provided.

                                                                                                   AIP/Document management                AIP amendments, supplements, AIC's and AIP CDs issued
                                                                                                                                          to Namibia and Cape Verde. AIP biders delivered to Uganda.
                                                                                                                                          AIP set delivered to Swaziland

                                                                                                   Procedure design                       Procedures for DRC reviewed. RNAV routes and obstacle
                                                                                                                                          assessments carried out for Namibia

                                                                                                   Airspace design/charting               Airspace design was done for the DRC

          Capacity development   Regional capacity development   100% implementation               Annex 14 obstacle evaluations          Namibia- One new A/P surveyed & 7 maintenance surveys.
                                                                                                                                          Cape Verde-3 maintenance surveys. DRC-10 maintenance
                                                                                                                                          surveys. RSA- 10 maintenance surveys.

                                                                 100% implementation               WGS-84 and obstacle surveys            Namibia- One new A/P surveyed & 7 maintenance surveys.
                                                                                                                                          Cape Verde-3 maintenance surveys. DRC-10 maintenance
                                                                                                                                          surveys. RSA- 10 maintenance surveys.
No.   National objectives   Business objectives              Objective measures                   Targets                                      Achieved at 31 March 2007

6     Administration

6.1                         Budget management                Budget                               10% variance of total budget                 Net Profit Budget R42m Actual R76m. 80.9% over budget

6.2                         Expenditure management           Expenditure                          10% variance of total expenditure            Budget R499m Actual R472m. 5.4% under budget

6.3                         Governance                       PFMA compliance                      100% of PFMA compliance                      ATNS did not fully comply with the PFMA as stated in directors report

6.4                         Performance based                Performance contract for all         100% performance contracts for total staff   All employees have performance contracts
                            management systems               employees

                                                             Company secretary                    Appointed                                    Company secretary was appointed in 2004
                                                             Executive risk committee             Established                                  An executive risk committee has been established
                                                             Relevant Board Committees            Established                                  Audit & Risk, Procurement and Human Capital Committees established

6.6                         Return on capital employed       Risk free rate + 1.3% risk premium   7.19% of ROCE                                ROCE for the year is 12.8%. The ROCE is calculated
                                                                                                                                               as follows ( profit after tax less-net funding cost after
                                                                                                                                               tax) divided by (average equity plus average borrowing
                                                                                                                                               cost less average cash equivilents)

6.7                         Increase in non-tariff revenue   8% of total revenue                  8% of total revenue                          Non tariff revenue is 6.3% of total revenue
    the space
between freedom
                     Annual financial
                     statements
                     for the year ended 31 March 2007
             006 ˚
186 ˚


        Min a
         6500
              lt




                     Contents

                     01 Independant Auditors’ Report       05 Income Statement p85
                        to the Minister of Transport p74
                                                           06 Statement of Changes
                     02 Statement of Responsibility           in Equity p86
                        by the Board of Directors’ p77
                                                           07 Cash Flow Statement p87
                     03 Directors’ Report p78
                                                           08 Notes to the Financial
                     04 Balance Sheet p84                     Statements p88
Independent Auditors' Report to the                       Auditors' Responsibility
Minister of Transport for Air Traffic and                 Our responsibility is to express an opinion on these
Navigation Services Company Limited                       financial statements based on our audit. We conducted
                                                          our audit in accordance with International Standards
We have audited the annual financial statements           on Auditing. Those standards require that we comply
of Air Traffic and Navigation Services Company            with ethical requirements and plan and perform the
Limited, which comprises the Directors’ report, the       audit to obtain reasonable assurance whether the
balance sheet as at 31 March 2007, the income             financial statements are free from material
statement, the statement of changes in equity and         misstatement.
cash flow statement for the year then ended, a
summary of significant accounting policies and other      An Audit involves performing procedures to obtain
explanatory notes, as set out on pages 77 to 129.         audit evidence about the amounts and disclosures in
                                                          the financial statements. The procedures selected
Directors’ Responsibility for the Financial               depend on the auditors' judgment, including the
Statements                                                assessment of the risks of material misstatement of
The company's Directors are responsible for the           the financial statements, whether due to fraud or
preparation and fair presentation of these financial      error. In making those risk assessments, the auditor
statements in accordance with International Financial     considers internal control relevant to the entity's
Reporting Standards, and in the manner required by        preparation and fair presentation of the financial
the Companies Act of South Africa and the Public          statements in order to design audit procedures that
Finance Management Act. This responsibility includes:     are appropriate in the circumstances, but not for the
designing, implementation and maintaining internal        purpose of expressing an opinion on the effectiveness
controls relevant to the preparation and fair             of the entity's internal control. An audit also includes
presentation of financial statements that are free        evaluating the appropriateness of accounting policies
from material misstatement, whether due to fraud          used and the reasonableness of accounting estimates
or error; selecting and applying appropriate accounting   made by the directors, as well as evaluating the
policies; and making accounting estimates that are        overall presentation of the financial statements. The
reasonable in the circumstances.                          audit was also planned and performed to obtain
                                                          reasonable assurance that our duties in terms of
                                                          Section 27 and 28 of the Public Audit Act (25) of 2004,
                                                          have been complied with.
We believe that the audit evidence we have obtained        Report on Factual Findings on Key
is sufficient and appropriate to provide a basis for our   Performance Indicators
audit opinion.
                                                           We have performed the procedures enumerated below
Opinion                                                    with respect to the key performance indicators (KPIs)
In our opinion, the financial statements present fairly,   of Air Traffic Navigation Services Company Limited
in all material respects, the financial position of the    for the year ended 31 March 2007, set forth on pages
Company as of 31 March 2007, and of the financial          68 to 71 of the annual report. The directors have
performance and its cash flows for the year then           responsibilities in terms of Section 55(2)a of the PFMA
ended in accordance with International Financial           to report on the performance against predetermined
Reporting Standards, and in the manner required by         objectives. Our engagement was undertaken in
the Companies Act of South Africa and the Public           accordance with the International Standards on Related
Finance Management Act.                                    Services applicable to agreed-upon procedures             75

                                                           engagements. The procedures were performed solely
Report on Other Legal and Regulatory                       to assist you in evaluating the validity of the report
Requirements                                               of the directors on the KPIs contracted and achieved
In accordance with our responsibilities in terms of        by the Air Traffic and Navigation Services Company
Section 44(2) and 44(3) of the Auditing Profession         Limited:
Act, we report that we have identified certain unlawful
acts committed by persons responsible for the              1. We read the KPIs submission to the Minister of
management of the Company which constitute                 Transport for the 2007 financial period to obtain an
reportable irregularities in terms of the Auditing         understanding of the KPIs agreed upon, and compared
Profession Act, and have reported such matters to the      these KPIs to those summarised in the KPI report.
Independent Regulatory Board for Auditors. The matters
pertaining to the reportable irregularities have been      2. We considered the performance reported against
described in note 8 of the directors’ report.              the results of our audit of the annual financial
                                                           statements to find any areas of inconsistency.

                                                           3. With regard to the financial information contained
                                                           in the KPI report, we recalculated the trends using
                                                           financial and other information derived from our audit
                                                           of the annual financial statements.
4. We held discussions with management regarding
KPI achievements where information was not directly
related to the audit of the annual financial statements
and where information was of a subjective nature          Ernst & Young Inc.
and also obtained their representations.                  Registered Auditor

We report our findings below:                             23 August 2007
                                                          Johannesburg
  (a) We found the KPIs on the report to be in
  agreement with KPI submission to the Minister
  of Transport.
                                                          Certificate by Company Secretary
  (b) We did not identify material inconsistencies        In my opinion as company secretary, I hereby confirm,
  between KPI report and the information that came        in terms of the Companies Act, 1973, that for the year
  to our attention during the audit.                      ended 31 March 2007, the company has lodged with
                                                          the Registrar of Companies all such returns as are
  (c) We found the financial information trends           required by a public company in terms of this Act and
  presented by the directors to have been calculated      that such returns are true, correct and up to date.
  correctly.

  (d) We found the progress reported in the KPI
  report to be consistent with representations made
  by management.                                          Solomon Mngomezulu
                                                          Company Secretary
Because the above procedures do not constitute either     23 August 2007
an audit or a review, we do not express any assurance
on the KPI report. Had we performed additional
procedures or had we performed an audit or review
of the KPI report in accordance with International
Standards on Auditing or International Standards on
Review Engagements, other matters might have come
to our attention that would have been reported to
you.
Statement of responsibility by the                        Therefore the Directors are satisfied that ATNS is a
                                                          going concern and have continued to adopt the going
Board of Directors                                        concern basis in preparing the financial statements.
The Directors hereby present their report and the
audited annual financial statements for the year ended    The external auditors are responsible for independently
31 March 2007.                                            auditing and reporting on the annual financial
                                                          statements. The report of independent auditors
The Directors are responsible for the preparation,        appears on page 74 to 76.
integrity and fair presentation of the annual financial
statements of Air Traffic and Navigation Services         During the year under review, the Board of Directors
Company Limited (ATNS Co Ltd).                            retained full and effective control over the Company
                                                          and monitored management in implementing Board
The annual financial statements presented on page         plans and strategies.
77 to 129 have been prepared in accordance with                                                                      77
International Financial Reporting Standards, the South    The Directors are of the opinion, based on the
African Companies Act No 61 of 1973 and the Public        information available to date, that the Company's
Finance Management Act No 1 of 1999. The guidelines       annual financial statements fairly present the financial
of the King Report on Corporate Governance, 2002          position of ATNS and the results of its operations and
have also been taken into account. These annual           cash flow for the year ended 31 March 2007, and that
financial statements have been prepared in accordance     the Code of Corporate Practices has been adhered to.
with appropriate accounting policies and include
amounts based on judgments and estimates made             The annual financial statements for the year ended
by management. The Directors have supervised the          31 March 2007, set out on pages 77 to 129 were
preparation of information included in the annual         approved by the Board of Directors on 23 August
report and are responsible for both its accuracy and      2007 in terms of the Public Finance Management Act
consistency.                                              and the Companies Act and are signed on their behalf
                                                          by:
The Directors considered the cash position of the
Company at 31st March 2007, the cash requirements
for at least twelve months from that date and
incremental borrowings facilities available.
                                                          Chairman                       Chief Executive Officer
The Directors have every reason to believe that the
Company has adequate resources in place to be able        Johannesburg
to continue in operation for the foreseeable future.      23 August 2007
Directors Report
1. Nature of the business
The Company is principally engaged in the supply of       > depreciation and amortization on intangible
air traffic and navigation services and the maintenance     assets increased by 12.1% as a result of:
of the air traffic and navigation infrastructure. Other   > revised useful life of plant and equipment;
operations in the company include the supply of           > purchases of plant, equipment and intangible
aeronautical information services, technical and            assets;
aerodrome services and the training of air traffic        > capitalization of plant, equipment and intangible
controllers.                                                assets from capital work in progress.

2. Financial results                                      2.3 Total assets
                                         Restated*        Total assets have increased by 5.3% from R892m in
                              2007         2006           2006 to R939m in 2007. This is mainly attributable to:
                                Rm          Rm
                                                          > property, plant and equipment increased by R73m
Revenue                        577         545
Operating profit               111         134               (18.2%) due to capital expansion;
Net profit                      76          98            > capital work in progress increased by R69m (39.5%)
Total assets                   939         892               due to capital expansion;
Total liabilities              298         327            > cash and cash equivalents decreased by R89m
Net working capital            (19)        112               (51.9%) due to the internal financing of the capital
* Refer to section 10                                        expenditure; and
                                                          > other assets decreased by R6m (3.7%).
2.1 Revenue
Despite the fact that tariffs did not increase during
                                                          2.4 Total liabilities
the year, revenue was 5.8% higher than prior year,
                                                          Total liabilities have decreased by 8.9% from R327m
mainly due to the volume growth in tariff revenue
                                                          in 2006 to R298m in 2007. This is mainly attributable
of 6.2% (i.e. growth in billable movements and change
                                                          to:
in aircraft mix)
                                                          > a net decrease of R59m (25.8%) in interest bearing
2.2 Operating profit                                          loans and borrowings as the Company financed
Operating profit decreased by 17.1%. This is mainly           the current year capital expenditure;
attributable to:                                          > other current liabilities increased by R34m (44.3%)
> employee benefit expenses increased by 14.6%                mainly due to the capital expenditure; and
   due to an annual salary increase of 9%, as well as     > deferred income tax liabilities reduced by R4m
   an increase in the head count; and                         (16.7%)
2.5 Net working capital                                   5. Share capital
In the current financial year the company is in a net     The sole shareholder of the company is the Minister
current liability of R19m. This is mainly due to an       of Transport, on behalf of the government of South
accrual of R45m for capital expenditure. Twenty eight     Africa, in terms of section 6(5) of the Air Traffic and
million rand of this accrual will be financed by a loan   Navigation Services Company Act 1993 (Act 45 of
approved by the Board of Directors in April 2007.         1993). During the year under review, no changes to
                                                          the authorized and issued share capital occurred.
In the prior year the company was in a net current
asset of R112m. This was mainly due to using long         6. Directors' interests in contracts
term loans to finance capital expenditure which           No contracts involving directors' interest were entered
resulted in surplus cash. The surplus cash was used       into in the current year.
to self finance the current year capital expenditure.
                                                          7. Public Finance Management Act (PFMA)                    79
The company will be using long term loans to finance      The PFMA contains certain onerous requirements that
its capital expenditure for the 2008 financial year and   the Company is obliged to comply with. Although
therefore will have an adequate cash flow for its         substantial progress has been made towards
operational expenses.                                     compliance with the legislation, there are certain
                                                          sections in which the Company is not yet fully
3. Dividends                                              compliant and are detailed below:
There were no dividends declared for the current or
previous financial year.                                  7.1 No formal conclusion of the compact
                                                          Treasury Regulation states: “The Accounting Authority
4. Events subsequent to balance sheet date                for a public entity listed in Schedule 2, 3B or 3D must,
The directors are not aware of any matter or              in consultation with its executive authority, annually
circumstances arising since the end of the financial      conclude a shareholder's compact.”
year, not otherwise dealt with in the annual financial
                                                          The shareholder's compact for the 2006 financial year
statements, which significantly affect the financial
                                                          indicated that the compact does not require to be
position of the company or the results of operations.     concluded on annual basis, but the Performance
                                                          Targets must be agreed on an annual basis. The
                                                          Minister of Transport and ATNS had not formally
                                                          concluded on 2007 Performance Targets.
7.2 Materiality and Significance Framework omissions            the affairs of the public entity for the following
Treasury Regulation 28.3 which states: “For purposes            three financial years.” Treasury Regulation 29.1
of material (55(2) of the Act) and significant (section         states that the Corporate Plan must include,
54(2) of the Act), the Accounting Authority must                amongst others:
develop and agree a framework of acceptable levels          >   a risk management plan
of materiality and significance with the relevant           >   a fraud prevention plan
executive authority”.                                       >   materiality framework
                                                            >   a financial plan addressing
The materiality and significance framework has been         >   asset and liability management
developed for the 2007 financial year. However no           >   dividend policies
evidence could be provided that the materiality and
significance framework has been approved by the             Furthermore, Section 7 of the Air Traffic and Navigation
Minister. ATNS, therefore, may not have a Materiality       Services Company, No 45 of 1993, requires that the
Framework in place for the entire period under review.      company shall not later than three months prior to
Furthermore, the framework does not cater for               the commencement of any financial year, submit to
significant transactions in terms of Section 54(2) of       the Minister of Transport a business plan.
the PFMA.
                                                            Section 51(1) (h) requires that ATNS must comply
7.3 Corporate Plan                                          with any legislation applicable to the entity.
a) Documentation and submission                             National Treasury was informed that the Company
   Section 52 of the PFMA states “The Accounting            will submit the Corporate Plan for the 2008 financial
   Authority for a public entity listed in schedule 2       year on 9 March 2007. However no record was
   must submit to the accounting officer for a              available that the delegated approval required from
   department designated by the executive authority         National Treasury was ever received.
   responsible for that public entity and to the relevant
   treasury, at least one month, or another period          The Corporate Plan for 2008 was silent on the following:
   agreed with the National Treasury, before the start      > Risk Management Plan
   of its financial year:                                   > Fraud Prevention Plan
> projection of revenue, expenditure and borrowings         > Materiality and Significance Framework
   in the prescribed format; and                            > Asset and Liability Management
> a Corporate Plan in the prescribed format covering        > Dividend Policy
The Corporate Plan for 2008 financial year has been        appropriate steps to prevent irregular expenditure,
revised to include the above items and has been            fruitless and wasteful expenditure, losses not
submitted to the Minister of Transport and National        complying with the operational policies of the public
Treasury.                                                  entity.

b) Borrowing Programme                                     An interest provision of R1m has been raised for the
   Treasury Regulation 29.1.3(a) requires that public      underpayment of employee's tax between the 31
   entities must submit a Borrowing Programme with         July 2002 and 30 November 2006. The underpayment
   its Corporate Plan to National Treasury. The            relates to an Employee Incentive Scheme paid by
   Programme should contain the following                  ATNS on behalf of the employees. No employees' tax
   requirements:                                           was deducted for the policy payments. It was the
> terms & conditions on which money is borrowed            employer's initial tax interpretation that the policy
> information on proposed domestic borrowing               proceeds would only be subjected to tax on maturity.        81
> information on proposed foreign borrowing                This was incorrect and a subsequent tax interpretation
> short and long term borrowing                            has been determined - employee's tax is to be
> borrowing in relation to the pre-approved Corporate      deducted in terms of Schedule 10 of the 7th Schedule
   Plan                                                    of the Income Tax Act.
> the maturity profile of debt
> debts guaranteed by government                           This interest provision raised, constitutes fruitless and
> motivation for government guarantees                     wasteful expenditure as defined in the PFMA.
> the executive authorities approval of the borrowing
   plan                                                    8. Reportable Irregularities
                                                           8.1 Breach of fiduciary duties
A Borrowing Programme that meets the requirements          The Chairman of the Board was issued with a Company
of the Regulation for the 2007 financial year was not      credit card to be utilized for business purposes. He
submitted. The 2008 Borrowing Programme has been           was unable to provide the Company with adequate
drafted and submitted to National Treasury for approval.   supporting documentation to the value of R49 361 in
                                                           respect of the use of the Company’s credit card. This
7.4 SARS interest provision                                act represents a breach of his fiduciary duties to the
Section 51(1) (b) of the PFMA states that the              Company.
Accounting Authority should take effective and
 This matter was reported to the Shareholding Minister      The Company has during April 2007 obtained a loan
 as he appoints the Chairman of the Board.                  facility from Nedbank. This loan facility is in addition
                                                            to existing facilities currently in place. Management
 The amount was subsequently repaid to the Company.         obtained approval for this and other facilties currently
                                                            in place from the board of directors as required by
 Accordingly, our auditors have issued a reportable         the PFMA.
 irregularity report to Independant Regulatory Board
 for Auditors in terms of section 44(2) and 44(3) of        No approval for this loan facility and other loan
 the Auditing Profession Act.                               agreements in place was obtained from either the
                                                            Minister of Transport or the Minister of Finance as
 8.2 Ministerial approval for borrowings undertaken         required by the ATNS Act.
 by ATNS
 Section 5 (3) of the Air Traffic and Navigation Services   Prior to obtaining these loan facilities management
 Company Limited Act no 45 of 1993 states the               obtained legal opinion that approval from the Minister
 following: the company may, in order to perform its        of Transport and the Minister of Finance was not
 functions or attain any of its objects, raise money        required.
 from time to time with the approval of the
 Shareholding Minister and the Minister of Finance by       This legal opinion was based on the fact that where
 way of loans from any source”.                             an inconsistency exists between the PFMA and any
 Section 51(1) (h) of the PFMA states that the public       other statutory legislation the requirements of the
 entity should comply with any legislation applicable       PFMA shall prevail.
 to the public entity including the PFMA.
 Section 66(1) of the PFMA states the following:            Our auditors have, after obtaining legal advice
“An institution to which this Act applies may not borrow    disagreed with management's interpretation of this
 money or issue a guarantee, indemnity or security,         aspect of the PFMA. Accordingly, they have issued a
 or enter into any other transaction that binds or may      reportable irregularity report to the Independent
 bind that institution…to any future financial              Regulatory Board for Auditors in terms of section
 commitment, unless that borrowing, guarantee,              44(2) and 44(3) of the Auditing Profession Act.
 indemnity, security or other transaction -
 > is supported by the Act; and
 > in the case of public entities, is also authorised by
    other legislation not in conflict with this Act…”
All loan facilities have subsequently been ratified by    12. Directors and Secretary
both the Minister of Transport and the Minister of        The following are the directors of the company at the
Finance in accordance with the ATNS act.                  date of this Report;

9. Capital Commitment                                     Mike Mabasa, Chairman, Non-Executive
The capital commitments of the Company are set out        Wrenelle Stander, Chief Executive Officer
in note 26 to the annual financial statements.            Jennifer Gray, Non-Executive
                                                          Monhla Hlahla, Non-Executive
10. Change in accounting policy                           Alwyn Martin, Non-Executive
In the current year, the Company has changed its          Devan Naidoo, Non-Executive
accounting policy with regard to embedded derivatives,    Bheki Shongwe, Non-Executive
as it considers the US Dollar to be a common currency
used in the transactions the Company enters into. As      Directors have been appointed for a period of three     83
a result of this decision, embedded derivatives are       years.
no longer separated from their host contracts where
the US Dollar is the transacting currency.                The secretary of the company is Solomon Mngomezulu.
                                                          His registered office and postal address is:
The impact of the change in accounting policy is
contained in note 4 to the annual financial statements.   13. Registered office
                                                          Block H4
11. Key Performance Indicators                            Isando Industrial Park
Key Performance Indicators were agreed with the           Gewel Street
Minister of Transport as required in terms of the         Isando
Shareholders Compact. The Achievement of the key          1600
performance indicators are included on pages 68 to 71.
                                                          14. Postal address
                                                          Private Bag X15
                                                          Kempton Park
                                                          1620
Balance Sheet
as at 31 March 2007
                                                                                                Restated
                                                                       notes       2007          2006
                                                                                     R             R
  Assets
  Non-current assets
  Property, plant and equipment                                         14     472,554,844    399,817,671
  Intangible assets                                                     15      56,168,063     63,412,373
  Capital work in progress                                              16     243,996,917    174,879,791
  Loans and receivables                                                 17      11,942,539     10,468,198
                                                                               784,662,363    648,578,033
  Current assets
  Trade and other receivables                                           18       71,710,581    71,418,227
  Inventories                                                           19          733,554       649,033
  Cash and cash equivalents                                             20      82,233,339    171,279,495
                                                                               154,677,474    243,346,755

  Total Assets                                                                 939,339,837    891,924,788

  Equity And Liabilities
  Capital and reserves attributable to equity holders of the company
  Share capital                                                         21     190,646,000     190,646,000
  Retained earnings                                                            450,520,758     374,062,110

  Total equity                                                                 641,166,758    564,708,110

  Non current liabilities
  Interest bearing loans and borrowings                                 22     105,275,877    173,017,008
  Deferred income tax liabilities                                       23      18,727,568     22,486,983
                                                                               124,003,445    195,503,991
  Current liabilities
  Trade and other payables                                              24      73,218,701      24,148,350
  Current income tax liabilities                                        33       6,194,519      19,158,996
  Interest bearing loans and borrowings                                 22      63,892,421      55,072,110
  Provisions for other liabilities and charges                          25      30,863,993     33,333,231
                                                                               174,169,634     131,712,687

  Total liabilities                                                            298,173,079    327,216,678

  Total Equity And Liabilities                                                 939,339,837    891,924,788
Income Statement
for the year ended 31 March 2007
                                                                Restated
                                      notes      2007             2006
                                                   R                R

  Revenue                               6     576,923,656      545,337,286

  Other income                          7        5,123,517       6,241,781

  Other gains/(losses) - net            8        1,020,881        334,845

  Depreciation costs                   14      (69,252,236)    (62,680,826)

  Amortisation on intangible assets    15      (14,511,860)    (12,053,701)

  Staff costs                           9     (251,311,049)   (219,003,774)

  Other expenses                       10     (137,003,853)   (123,741,349)
                                                                              85


  Operating profit                            110,989,056     134,434,261

  Finance revenue                      11        9,602,856       6,965,196

  Finance cost                         12      (12,095,617)     (6,241,426)

  Profit before tax                           108,496,295     135,158,031

  Income tax expense                   13      (32,037,647)    (37,173,191)



  PROFIT FOR THE YEAR                           76,458,648      97,984,840
Statement Of Changes In Equity
for the year ended 31 March 2007
                                                        notes   Share Capital   Retained Earnings    Total Equity
                                                                     R                  R                 R

  Balance as at 1 April 2005                             21     190,646,000       267,817,215       458,463,215

  Effect of transition to IFRS                                                      8,260,055          8,260,055

  Balance as at 1 April 2005 after transition to IFRS           190,646,000       276,077,270       466,723,270

  Profit for the year                                                              95,854,035        95,854,035

  Change in accounting policy                                                       2,130,805         2,130,805

  Balance as at 31 March 2006 - Restated                        190,646,000       374,062,110       564,708,110

  Profit for the year                                                              76,458,648        76,458,648

  Balance as at 31 March 2007                                   190,646,000       450,520,758       641,166,758

  Refer to note 4 for details on change in accounting policy
Cash Flow Statement
for the year ended 31 March 2007
                                                                                    Restated
                                                        notes         2007            2006
                                                                        R               R

  Cash flows from operating activities
  Cash receipts from customers                                   581,565,671     544,681,142
  Cash paid to customers and suppliers                          (341,798,310)   (347,416,903)

  Cash generated from operations                         30     239,767,361     197,264,239
  Finance revenue                                        11       9,602,856       6,965,196
  Finance cost                                           12     (12,095,617)     (6,241,426)
  Borrowing costs capitalised                            12      (6,470,526)     (7,111,415)
  Income tax paid                                        33     (48,761,539)    (39,294,500)

  Cash inflow from operating activities                         182,042,535     151,582,094

  Cash flows from investing activities
  Purchase of property, plant and equipment              31     (142,272,890)     (5,104,314)   87

  Additions to capital work in progress                  32      (62,646,600)   (123,592,851)
  Purchase of intangible assets                                   (7,267,550)     (4,760,940)
  Proceeds from sale of property, plant and equipment    34           19,169         166,944

  Cash outflow in investing activities                          (212,167,871)   (133,291,161)

  Cash flows from financing activities
  Proceeds from borrowings                                         3,329,302    120,697,211
  Repayments of borrowings                                       (62,250,122)   (48,947,331)


  Cash (outflow)/inflow from financing activities                (58,920,820)     71,749,880

  (Decrease)/Increase in cash and cash equivalents              (89,046,156)      90,040,813
  Cash and cash equivalents at beginning of year                171,279,495        81,238,682

  Cash and cash equivalents at end of year               20       82,233,339     171,279,495
Notes to the Financial Statements
for the year ended 31 March 2007




1. CORPORATE INFORMATION
  Air Traffic and Navigation Services Company Limited is a limited company incorporated in South Africa. The
  address of its registered office and principal place of business is Block H4, Isando Industrial Park, Gewel
  Street, Isando, Johannesburg, South Africa. The Company is principally engaged in the supply of air traffic
  and navigation services.

  The financial statements of the Company for the year ended 31 March 2007 were authorised for issue in
  accordance with a resolution of the directors on 23 August 2007.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  The principle accounting policies applied in the preparation of these financial statements are set out below.
  These policies have been consistently applied to all the years presented, unless otherwise stated.

  2.1 Basis of preparation
  The financial statements of ATNS Company Limited have been prepared in accordance with International
  Financial Reporting Standards ("IFRS"). The financial statements have been prepared under the historical
  cost convention.

  The preparation of the financial statements in conformity with ("IFRS") requires the use of certain critical
  accounting estimates. It also requires management to exercise its judgment in the process of applying the
  Company's accounting policies.

  2.2 Foreign currency translation
  The financial statements are presented in Rands, which is the Company's functional and presentation
  currency.

  In preparing the financial statements of the Company, transactions in currencies other than the entity’s
  functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of
  the transactions. At each balance sheet date, monetary items denominated in foreign currencies are
  translated at the rates prevailing on the balance sheet date.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007




  Exchange differences arising on the settlement of monetary items, and on the translation of monetary
  items, are included in profit or loss for the period.

  In order to hedge its exposure to certain foreign exchange risks, the Company evaluates each material
  transaction separately, to determine whether it is necessary for the company enters into a foreign currency
  forward contract.

  2.3 Property, plant and equipment
  Land is shown at cost less accumulated impairment. Buildings are shown at cost less accumulated depreciation
  and accumulated impairment.

  Plant and equipment is shown at cost less accumulated depreciation and accumulated impairment. Cost                89
  includes all costs directly attributable to bringing the assets to working condition for their intended use.

  Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate,
  only when it is probable that future economic benefits associated with the item will flow to the company
  and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the
  income statement during the financial period in which they are incurred.

  Depreciation on assets is calculated using the straight line method to allocate their cost or revalued amounts
  to it's residual value over it's estimated useful life, as follows:
  > Buildings                                                                              50 years
  > Communication, Navigation, Radar and ATC Display Systems Equipment                     7-12 years
  > Electrical and Mechanical Equipment, Test Equipment and Tools                          5-10 years
  > Furniture, Computer's and Motor Vehicles                                               3-6 years

  Major renovations are depreciated over the remaining useful life of the related asset or to the date of the
  next major renovation, whichever is sooner.

  The assets' residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate,
  at each balance sheet date.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007




  An assets' carrying amount is written down immediately to its recoverable amount if the asset's carrying
  amount is greater than its estimated recoverable amount (see note 2.6).

  An item of property, plant and equipment is derecognised upon disposal or when no future economic
  benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset (calculated
  as the difference between the net disposal proceeds and the carrying amount of the asset) is included in
  the income statement in the year the asset is derecognised.

  Assets held under finance leases are depreciated over their expected useful lives on the same basis as
  owned assets or, where shorter, the term of the relevant lease.

  2.4 Capital work in progress
  On major property, plant, equipment and intangible projects which are commissioned over a period of are
  reflected as capital work in progress on the balance sheet. Capital work in progress is transferred to property,
  plant, equipment and intangibles on the formal commissioning date of the asset.

  Expenditure on future repairs and maintenance contracts, included in payments made, is capitalised to
  capital work in progress to the extent that it will not be consumed within the next financial year. The
  portion of this expenditure which will be consumed in the next financial year is transferred to prepayments,
  included in trade and other receivables in the balance sheet.

  Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,
  which are assets that necessarily take a substantial period of time to commission, are added to the cost
  of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment
  income earned on the temporary investment of specific borrowings pending their expenditure on qualifying
  assets is deducted from the borrowing costs eligible for capitalisation.

  All other borrowing costs are recognised in the income statement in the period in which they are incurred.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007




  2.5 Intangible assets
  Computer software
  Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring
  to use the specific software. These costs are amortised over their estimated useful lives (3 - 7 years) and
  assessed for impairment whenever there is an indication that the intangible asset may be impaired. The
  amortisation period and amortisation method for an intangible asset with a finite useful life are reviewed
  at least at each balance sheet date.

  Changes in expected useful life or the expected pattern of consumption of the future economic benefits
  embodied in the asset is accounted for by changing the amortisation period or method, as appropriate,
  and treated as changes in accounting estimates.
                                                                                                                      91
  The amortisation expense on intangible assets with finite lives is recognised in the income statement in
  the expense category consistent with the function of the intangible asset.

  Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and
  any accumulated impairment losses.

  Costs associated with developing or maintaining computer software programs are recognised as an expense
  as incurred.

  Gains or losses arising from derecognition of an intangible asset are measured as the difference between
  the net disposal proceeds and the carrying amount of the asset and are recognised in the income statement
  when the asset is derecognised.

  2.6 Impairment of tangible and intangible assets
  At each balance sheet date, the Company reviews the carrying amounts of its tangible and intangible assets
  to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount
  of the asset is estimated in order to determine the extent of the impairment loss (if any).
Notes to the Financial Statements (continued)
for the year ended 31 March 2007




  Recoverable amount is the higher of an asset or cash-generating unit's fair value less costs to sell and
  value in use. In assessing value in use, the estimated future cash flows are discounted to their present
  value using a pre-tax discount rate that reflects current market assessments of the time value of money
  and the risks specific to the asset.

  If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount
  of the asset is reduced to its recoverable amount. An impairment loss is recognised immediately in the
  income statement

  Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the
  revised estimate of its recoverable amount. The revised carrying amount does not exceed the carrying
  amount that would have been determined had no impairment loss been recognised for the asset in prior
  years. A reversal of an impairment loss is recognised immediately in the income statement.

  2.7 Trade receivables
  Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using
  the effective interest method, less provision for impairment. A provision for impairment of trade receivables
  is established when there is objective evidence that the company will not be able to collect all amounts
  due according to the original terms of the receivables. The amount of the provision is the difference
  between the asset's carrying amount and the present value of estimated future cash flows, discounted
  at the effective interest rate. The amount of the provision is recognised in the income statement.

  2.8 Inventories
  Inventories consist of spares and consumables and are stated at lower of cost or net realisable value. Cost
  is calculated using the average method.

  2.9 Cash and cash equivalents
  Cash and cash equivalents comprises cash on hand and demand deposits, and other short-term highly liquid
  investments that are readily convertible to a known amount of cash and are subject to an insignificant risk
  of changes in value. These are initially recorded at fair value, and subsequently recorded at amortised cost.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007




  2.10 Share capital
  Ordinary shares are classified as equity. Equity instruments issued by the company are recorded as the
  proceeds received, net of direct issue costs.

  2.11 Borrowings
  Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently
  stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption
  value is recognised over the period of the borrowing, using the effective interest method.

  Borrowings are classified as current liabilities unless the company has an unconditional right to defer
  settlement of the liability for at least 12 months after the balance sheet date.
                                                                                                                      93
  Gains and losses are recognised in the income statement when the liabilities are derecognised as well as
  through the amortisation process.

  2.12 Trade payables
  Trade payables are carried at the fair market value of the consideration to be paid in the future for goods
  and services that have been received or supplied and invoiced or formally agreed with the supplier.

  Trade payables are generally paid 30 days from statement.

  2.13 Taxes
  (a) Current income tax
  Current income tax assets and liabilities for the current and prior periods are measured at the amount
  expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to
  compute the amount are those that are enacted or substantively enacted by the balance sheet date.

  Current income tax relating to items recognised directly in equity is recognised in equity and not in the
  income statement.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007




  (b) Deferred income tax
  Deferred income tax is provided in full, using the liability method on temporary difference arising between
  the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred
  income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by
  the balance sheet date and are expected to apply when the related deferred income tax asset is realised
  or the deferred income tax liability is settled. Deferred income tax assets are recognised to the extent that
  it is probable that future taxable profit will be available against which the temporary difference can be
  utilised.

  (c) Value added tax
  Revenues, expenses and assets are recognised net of the amount of value added tax except:
  (1) where the value added tax incurred on a purchase of assets or services is not recoverable from taxation
      authority, in which case the value added tax is recognised as part of the cost of acquisition of the asset
      or as part of the expense item as applicable; and
  (2) receivables and payables that are stated with the amount of value added tax included.

  The net amount of value added tax recoverable from, or payable to, the taxation authority is included as
  part of receivables or payables in the balance sheet.

  2.14 Provisions
  Provisions are recognised when the company has a present legal or constructive obligation as a result of
  past events, when it is probable that an outflow of resources embodying economic benefits will be required
  to settle the obligation, and when a reliable estimate of the amount of the obligation can be made.
  Provisions are measured at the present value of management's best estimate of the expenditure required
  to settle the present obligation at the balance sheet date. The discount rate used to determine the present
  value reflects current market assessments of the time value of money and the increases specific to the
  liability.

  2.15 Financial assets
  The Company classifies its financial assets in the following categories: loans and receivables, and available-
  for-sale assets. The classification depends on the purpose for which the financial assets were acquired.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007




  Directors determine the classification of its financial assets at initial recognition and re-evaluates this
  designation at every reporting date.

  a) Loans and receivables
  Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
  not quoted in an active market. They are included in current assets, except for maturities greater than 12
  months after the balance sheet date. These are classified as non-current assets. Loans and receivables are
  classified as 'trade and other receivables' in current assets and as 'loans and receivables' in non-current
  assets in the balance sheet. Loans and receivables are initially recognised at fair value and subsequently
  amortised using the effective interest method less any allowance for impairment.

  b) Available-for-sale financial assets                                                                           95
  Available-for-sale financial assets are non-derivative that are either designated in this category or not
  classified in the above category. They are included in non-current assets unless management intends
  disposing of the investment within 12 months of the balance sheet date. Available-for-sale financial assets
  and financial assets at fair value through profit and loss are subsequently carried at fair value. Interest on
  available-for-sale securities calculated using the effective interest method is recognised in the income
  statement. The fair value of the derivative is classified as a non-current asset or liability. Changes in the
  fair value are recognised immediately in the income statement within "other gains/(losses) - net".

  2.16 Leases
  The determination of whether an arrangement is, or contains a lease is based on the substance of the
  arrangement at inception date of whether the fulfillment of the arrangement is dependent on the use of
  a specific asset or assets or arrangement conveys a right to use the asset. A reassessment is made after
  inception of the lease only if one of the following applies:
  (1) There is a change in contractual terms, other than a renewal or extension of the arrangement.
  (2) A renewal option is exercised or extension granted, unless the term of the renewal or extension was
      initially included in the lease term;
  (3) There is a change in the determination of whether fulfillment is dependent on a specified asset; or
  (4) There is a substantial change to the asset.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007




  Where a reassessment is made, lease accounting shall commence or cease from the date when the change
  in circumstances gave rise to the reassessment for scenarios (1), (3) or (4) and at the date of renewal or
  extension period for scenario (2).

  For arrangements entered into prior to 1 January 2005, the date of inception is deemed to be 1 January
  2005 in accordance with the transitional requirements of IFRIC 4.

  Company as a lessee
  Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks
  and rewards of ownership to the lessee. All other leases are classified as operating leases.

  Finance leases are capitalised at the inception of the lease at the fair value of the leased asset or, if lower,
  at the present value of the minimum lease payments. Lease payments are apportioned between the
  finance charges and reduction of the leased liability so as to achieve a constant rate of interest on the
  remaining balance of the liability. Finance charges related to the finance lease are reflected in the income
  statement.

  Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the
  lease term, if there is no reasonable certainty that the Company will obtain ownership by the end of the
  lease term.

  Company as lessor
  Leases in which a significant portion of the risk and rewards of ownership are retained by the lessor are
  classified as operating leases (net of any incentives received from the lessor) are charged to the income
  statement on a straight-line basis over the lease term.

  2.17 Retirement benefit costs
  The Company operates a defined contribution scheme, the assets of which are held in a separate trustee-
  administered fund. The defined contribution fund is a pension plan under which the company pays fixed
  contributions into a separate entity. The Company has no legal or constructive obligation to pay further
Notes to the Financial Statements (continued)
for the year ended 31 March 2007




  contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to
  employee service in the current and prior periods.

  The scheme is funded by contributions from the employees and the company, taking into account the
  recommendations of independent qualified actuaries. The company's contributions to the defined contribution
  scheme are charged to the income statement in the year to which they relate.

  2.18 Revenue recognition
  Revenue comprises the fair value of the sale of services, net of value-added-tax, rebates and discounts.
  Revenue includes en-route, aerodrome and approach fees, small aerodrome services, technical maintenance
  services, aeronautical information services, VSAT fees and aviation training fees. Sales of services are
  recognised in the accounting period in which the services are rendered, by reference to the completion             97
  of the specific transaction, assessed on the basis of the actual service provided as a proportion of the total
  services to be provided.

3. FINANCIAL RISK MANAGEMENT
  3.1 Financial risk factors
  The Company's activities expose it to a variety of financial risks: market risk (including foreign exchange
  risk), credit risk, liquidity risk, cash flow risk and fair value interest rate risk. The Company's overall risk
  management programme focuses on the unpredictability of financial markets and seeks to minimize
  potential adverse effects on the Company's financial performance. The Company uses financial instruments
  to hedge certain risk exposures.

  (a) Market risk - Foreign exchange risk
  The Company operates internationally and is exposed to foreign exchange risk arising from various currency
  exposures, primarily with respect to the US Dollar and Euro's. Foreign exchange risk arises from future
  commercial transactions and recognised assets and liabilities.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007




  (b) Credit risk
  The Company has no significant concentration of credit risk. It has policies in place to ensure that sales of
  services are made to customers with an appropriate credit history. Trade receivables comprise a large
  number of customers. Of these the top three customers comprise approximately 44% of the core revenue.
  Ongoing credit evaluations are performed on the financial position of these debtors. In addition, exposure
  is reduced by deposits and bank guarantees held on behalf of customers.

  Derivative counterparties and cash transactions are limited to high-credit-quality financial institutions. The
  Company has policies that limit the amount of credit exposure to any financial institution.

  (c) Liquidity risk
  Prudent liquidity management implies maintaining sufficient cash and the availability of funding through
  an adequate amount of committed credit facilities. The Company aims to maintain flexibility in funding
  by keeping committed credit lines available.

  (d) Cash flow and fair value interest rate risk
  The Company's income and operating cash flows are substantially independent of changes in market
  interest rates. The interest rates of finance leases to which the Company is lessee are fixed at inception
  of the lease. These leases expose the Company to fair value interest rate risk. The Company's cash flow
  interest rate risk arises from long term borrowings. Borrowings issued at variable rates expose the company
  to cash flow interest rate risk.

3.2 Derivative financial instruments and hedging
   The Company uses derivative financial instruments such as forward currency contracts and interest rates
   swaps to hedge its risks associated with interest rate and foreign currency fluctuation. Such derivative
   financial instruments are initially recognised at fair value on the date on which a derivative contract is
   entered into and are subsequently remeasured at fair value. Derivatives are carried as assets when the
   fair value is positive and as liabilities when the fair value is negative.

  Any gains or losses arising from changes in fair value on derivatives during the year that do not qualify
  for hedge accounting are taken directly to the income statement.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007




  The fair value of forward currency contracts is calculated by reference to current forward exchange rates
  for contracts with similar maturity profiles. The fair value of interest rates swap contracts is determined
  by reference to market values for similar instruments.

  For the purpose of hedge accounting, hedges are classified as:
  (1) fair value hedges when hedging the exposure to changes in the fair value of a recognised assets or
      liability or an unrecognised firm commitment (except for foreing currency risk);or
  (2) cash flow hedges when hedging exposure to variability in cash flows that is either attributable to a
      particular risk associated with a recognised asset or liability or a highly probable forecast transaction
      or the foreign currency risk in an unrecognised firm commitment;or
  (3) hedges of a net investment in a foreign operation.
                                                                                                                  99
  At the inception of a hedge relationship, the Company formally designates and documents the hedge
  relationship to which the Company wishes to apply hedge accounting and the risk management objective
  and strategy for undertaking the hedge. The documentation includes identification of the hedging instruments,
  the hedged item or transaction, the nature of the risk being in off-setting the exposure to changes in the
  hedged item's fair value or cash flows attributable to the hedged risk. Such hedges are expected to be
  highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an onging
  basis to determine that they actually have been highly effective throughout the financial reporting periods
  for which they were designated.

  Hedges which meet the strict criteria for hedge accounting are accounted for as follows:

  Fair value hedges
  The change in the fair value of a hedging derivative is recognized in the income statement. The change
  in the fair value of the hedged item attributable to the risk hedged is recorded as a part of the carrying
  value of the hedged item and is also recognised in profit and loss.

  For fair value hedges relating to items at amortised cost, the adjustment to carrying value is amortised
  through the income statement over the remaining term to maturity. Any adjustment to the carrying amount
  of a hedge financial instrument for which the effective interest rate method is amortised through the
  income statement.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007




  If the hedge item is de-recognised , the unamortised fair value is recognised immediately in the income
  statement.

  When an unrecognised firm commitment is designated as a hedge item, the subsequent cumulative change
  in the fair value of the firm commitment attributable to the hedged risk is recognised as an asset or liability
  with a corresponding gain or loss recognised in the income statement. The changes in the fair value of
  the hedging instrument are also recognised in the income statement.

  Cash flow hedges
  The effective portion of the gain and loss on the hedging instrument is recognized directly in equity, while
  any in-effective portion is recognised immediatley in the income statement.

  Amounts taken to equity are transferred to the income statement when the hedge transaction affects the
  income statement, such as when the hedged financial income or financial expense is recognised or when
  a forecast sale occurs. Where the hedged item is the cost of a non-financial asset or non-financial liability,the
  amounts taken to the equity are transferred to the initial carrying amount of the non-financial asset or
  liability.

  If the forecast transaction or firm commitment is no longer expected to occur, amounts previously recognised
  in equity are transferred to the income statement. If the hedging instrument expires or is sold, terminated
  or exercised without replacement or rollover, or if it’s designation as a hedge is revoked, amounts previously
  recognised in equity remain in equity until the forecast transaction or firm commitment occurs.

  Hedges of a net investment
  Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted
  for as part of the net investment, are accounted for in a way similar to the cash flow hedges. Gains or
  losses on the hedging instruments relating to the effective portion of the hedge are recognised in the
  income statement. On disposal of the foreign operation, the cumulative value of any such gains or losses
  recognised directly in equity is transferred to the income statement.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007




4. CHANGE IN ACCOUNTING POLICY
  In the past, it was the Company's policy to separate tri-currency embedded derivatives from their host
  contracts, even where fairly liquid and stable currencies such as the US Dollar were used as the transacting
  currencies. This resulted in the recognition of embedded derivatives, which were marked to market in order
  for a fair value to be obtained and accounted for.

  In the current year, the Company has changed its policy in this regard, as it considers the US Dollar to be
  a common currency used in the transactions the Company enters into. As a result of this decision, embedded
  derivatives are no longer seperated from their host contracts where the US Dollar is the transacting currency.
  IAS 8 Accounting Policies, Change in Accounting Estimates and Errors requires that a change in accounting
  policy be applied retrospectively. This change in policy results in the financial statements providing reliable
  and more relevant information about the effects of such transactions.                                             101


  The following adjustments have been made to the prior year figures:
                                                                                    2006
                                                                                      R
  > Opening retained income                                                      371,931,305
  > Reversal of embedded derivative                                                3,001,135
  > Increase in deferred tax charged to income statement                           (870,330)

  > Restated retained earnings                                                   374,062,110


  > The prior figures have been re-stated
Notes to the Financial Statements (continued)
for the year ended 31 March 2007




5. STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE
  During the year, the IASB and IFRIC have issued the following standards and interpretations with an effective
  date after 1st April 2006.

  IAS/IFRS
  Number              Description                                              Effective Date          Impact
  IFRS 7 (AC 144)     Financial Instruments: Disclosure                        1 January 2007          Yes
  IFRS 8 (AC 145)     Operating Segments                                       1 January 2009          No
  IAS 1 (AC 101)      Amendment - Capital Disclosure                           1 January 2007          Yes
  AC 503              Accounting for Black Empowerment (BEE) Transactions      1 May 2006              No

  IFRIC
  Number              Description                                              Effective Date          Impact
  IFRIC 8 (AC 441)    Scope of IFRS 2                                          1 May 2006              Yes
  IFRIC 9 (AC 441)    Reassessment of Embedded Derivatives                     1 June 2006             Yes
  IFRIC 10 (AC 443)   Interim Reporting and Impairment                         1 November 2006         No
  IFRIC 12 (AC 444)   Service Concession Arrangements                          1 January 2008          No

  The directors do not anticipate that the adoption of these statements and interpretations will have a
  material impact on the financial statements in the period of initial application.

  Upon adoption of IFRS 7 (Financial Instruments: Disclosure) the Company will have to disclose additional
  information about its financial instruments, their significance and the nature and extent of risks that they
  give rise to. More specifically the Company will need to disclose the fair value of its financial instruments
  and its risks exposure in greater detail. There will be no effect on reported income or net assets.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                                                                          Restated
                                                                                                  2007                      2006
                                                                                                    R                         R
6. REVENUE
  En-route and approach fees                                                                546,531,412               514,617,531
  Technical maintenance                                                                       2,287,651                 2,032,206
  Training to third parties                                                                  13,794,507                 8,045,256
  VSAT revenue                                                                               12,535,199                11,834,083
  Aeronautical information services                                                           1,774,887                 8,808,210


                                                                                            576,923,656               545,337,286

7. OTHER INCOME
  RVSM fees received                                                                                   -                 2,138,835
  SA weather services                                                                            493,150                   345,745
  Sundry revenue                                                                               2,028,200                  1,506,591
  Extended hours                                                                               1,131,929                   953,206
                                                                                                                                       103
  Rental received sites                                                                        1,470,238                 1,297,404


                                                                                               5,123,517                 6,241,781

8. OTHER GAINS/(LOSSES) - NET
  (Loss)/profit on exchange realised                                                          (2,103,061)                  (45,466)
  Loss/(profit) on exchange unrealised                                                         3,123,942                    836,065
  Fair value (loss)/profit on embedded derivatives                                                      -                 (455,754)


                                                                                               1,020,881                   334,845

  The 2006 annual report disclosed loss/(profit) on sale of property, plant and equipment in other gains/(losses) - net. It has been
  re-classified under other expenses (refer to note 10)
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                              Restated
                                                                 2007           2006
                                                                   R              R
9. STAFF COSTS
  Wages and salaries                                        202,455,852    176,914,688
  Incentives                                                 18,817,145     18,266,370
  Staff retention scheme                                      2,441,483      2,816,276
  Termination costs                                             365,402      1,261,192
  Pension costs - defined contribution scheme                19,033,572     16,148,519
  Training and development                                    3,814,618      2,317,182
  Recruitment costs                                           2,523,533        620,214
  Relocation costs                                            1,859,444        659,335


                                                            251,311,049    219,003,774

  Average monthly number of persons employed by the
  company during the year:
   - Permanent                                                     701            691
   - Fixed term contract                                            35             25


                                                                   736            716

10. OTHER EXPENSES
   Administration expenses                                    9,748,909      8,999,619
   Auditors remuneration                                      1,927,450        666,755
    - External audit fees and expenses                        1,418,783              -
    - Internal audit fees                                       353,292        489,045
    - Taxation                                                   107,133
    - Other services                                             48,242        177,710
   Bad debts                                                  2,805,025    (1,517,589)
   Insurance                                                  7,532,057      6,954,007
   Loss/(profit) on sale of property, plant and equipment       264,312       (11,613)
   Management consulting services                            10,615,759     12,850,394
   Marketing expenses                                         5,543,206      3,338,928
   Motor vehicle expenses                                     2,587,282      3,139,733
   Municipal expenses, rates and taxes                        3,375,953      3,634,234
   Other                                                     10,536,560      7,506,318
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                                                                          Restated
                                                                                                 2007                       2006
                                                                                                   R                          R

10. OTHER EXPENSES (continued)
    Rentals in respect of operating leases                                                    3,402,430                 4,588,151
     - Land and buildings                                                                     1,823,372                 2,730,098
     - Equipment                                                                              1,579,058                 1,858,053
    Repairs and maintenance expenses                                                         31,486,651                36,245,859
    Telecommunications expenses                                                              29,461,735                21,363,894
    Travel expenses                                                                          17,716,524                15,982,659


                                                                                            137,003,853               123,741,349

  The 2006 annual report disclosed loss/(profit) on sale of property, plant and equipment in other gains/(losses) - net. It has been
  re-classified under other expenses (refer to note 8)


                                                                                                                                       105
11. FINANCE REVENUE
    Investment income
    Interest on bank deposits                                                                 9,602,856                  2,163,790
    Investments (received and accrued)                                                                -                  4,801,406


                                                                                              9,602,856                  6,965,196

12. FINANCE COST
    Interest on finance leases borrowings                                                       475,182                 2,336,007
    Interest on loan liability borrowings                                                    17,716,263                10,996,766
    Other interest paid                                                                         374,698                    20,068
    Total borrowing costs                                                                    18,566,143                 13,352,84
    Less: amount included in capital work in progress                                        (6,470,526)               (7,111,415)


                                                                                             12,095,617                  6,241,426
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                                        Restated
                                                                            2007          2006
                                                                              R             R

13. INCOME TAX EXPENSE

    Current tax
     - current year                                                     34,752,622    46,532,563
     - prior year under-provision                                         1,044,440
    Deferred tax
     - current year                                                     (2,673,757)   (6,622,369)
     - prior year under-provision                                       (1,085,658)   (1,733,232)
     - rate change                                                                -   (1,003,771)


                                                                        32,037,647    37,173,191

    Current year deferred tax movements relates to the following:

    Fixed assets                                                        (3,569,652)    3,677,143
    Finance lease deferred for tax purposes                              1,355,546      (274,295)
    Provisions deferred for tax purposes                                  (553,683)    3,070,179
    Operating lease deferred for tax purposes                              (64,004)       15,080
    Doubtful debts allowance                                               158,036        134,262


                                                                        (2,673,757)    6,622,369

    Prior year deferred tax under-provision relates to the following:

    Fixed assets                                                            83,204    (1,733,232)
    Finance lease deferred for tax purposes                              1,356,839              -
    Provisions deferred for tax purposes                                (2,525,701)             -


                                                                        (1,085,658)   (1,733,232)
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                         Restated
                                                                 2007      2006
                                                                   R         R
13. INCOME TAX EXPENSE (continued)

     The tax on the Company's profit before tax differs
     from the South African standard rate of tax as follows:

                                                                 %          %
    Standard rate of tax
                                                               29.00       29.00
    Disallowed expenditure
                                                                0.59        0.54
    Prior year adjustment - normal tax
                                                                0.94          -
    Prior year adjustment - deferred tax
                                                               (1.00)      (1.28)
                                                                                    107
    Rate change
                                                                     -     (0.76)



  Effective rate of tax                                        29.53       27.50
Notes to the Financial Statements (continued)
for the year ended 31 March 2007




14. PROPERTY, PLANT AND EQUIPMENT

                                                                           Radar        ATC Display    Communication    Navigational
Year ended 31 March 2007                    Land        Buildings        equipment        systems        equipment          aids

Opening net book amount at 1 April 2006    10,681,800    84,282,699       81,036,914     94,495,876       68,017,551      18,424,369
Cost                                       10,681,800    94,063,491      200,563,668    111,295,759      139,747,377      46,280,112
Accumulated depreciation                           -     (9,780,792)    (119,526,754)   (16,799,883)     (71,729,826)    (27,855,743)

Additions and transfer                      3,600,000     7,127,396       97,851,063        699,942        3,120,674      21,650,270
Other assets                                3,600,000        21,000               -         464,125        1,180,032              -
Projects Capitalized                               -      7,106,396       97,851,063        235,817        1,940,642      21,650,270

Disposals at net book value                        -                -       (118,654)             -               -         (163,908)
Disposal at Cost                                   -                -    (18,859,060)             -         (138,586)     (2,658,302)
Acc Depr on disposal                               -                -     18,740,406              -          138,586       2,494,394

Depreciation charge                                -     (2,120,479)     (26,293,971)   (10,963,437)     (13,857,034)     (4,935,474)

Closing net book amount at 31 March 2007   14,281,800    89,289,616      152,475,352     84,232,381       57,281,191      34,975,257
Cost                                       14,281,800   101,190,887      279,555,671    111,995,701      142,729,465      65,272,080
Accumulated depreciation                           -    (11,901,271)    (127,080,319)   (27,763,320)     (85,448,274)    (30,296,823)




Year ended 31 March 2006 - Restated

Opening net book amount at 1 April 2005    10,681,800    86,245,453      103,630,150    103,630,977       82,107,455      22,389,101
Cost                                       10,681,800    94,052,012      322,828,128    111,295,759      139,606,167      46,579,324
Accumulated depreciation                           -     (7,806,559)    (219,197,978)    (7,664,782)     (57,498,712)    (24,190,223)

Additions and transfer                             -         11,479               -               -         537,686          143,826

Disposals at net book value                        -                -         (1,230)             -          (16,270)        (80,942)
Disposal at Cost                                                        (122,264,460)                       (396,476)       (443,038)
Acc Depr on disposal                                                     122,263,230                         380,206         362,096

Depreciation charge                                -     (1,974,233)     (22,592,006)    (9,135,101)     (14,611,320)     (4,027,616)

Closing net book amount at 31 March 2006   10,681,800    84,282,699       81,036,914     94,495,876       68,017,551      18,424,369
Cost                                       10,681,800    94,063,491      200,563,668    111,295,759      139,747,377      46,280,112
Accumulated depreciation                           -     (9,780,792)    (119,526,754)   (16,799,883)     (71,729,826)    (27,855,743)
         Notes to the Financial Statements (continued)
         for the year ended 31 March 2007




                                                              Office
  Electrical and       Tools and Test     Simulator         Furniture       Computer       Motor
Mechanical equipment     equipment       equipment        and equipment    equipment      Vehicles          Total

     16,398,194             2,539,443       9,387,003         9,023,702      5,511,620       18,500       399,817,671
     27,532,379             6,627,911      17,255,521        15,805,990     12,169,187      336,517       682,359,712
    (11,134,185)           (4,088,468)     (7,868,518)       (6,782,288)    (6,657,567)    (318,017)     (282,542,041)

        276,823             3,035,149                 -         633,238      4,278,335               -   142,272,890
        276,823             3,035,149                 -         633,238      4,278,335               -    13,488,702
                                                                                                         128,784,188

               -                   -                  -              -            (919)          -           (283,481)
               -              (83,906)                -          (3,747)        (5,919)     (40,398)      (21,789,918)
               -               83,906                 -           3,747          5,000       40,398        21,506,437    109

     (3,060,963)            (853,335)      (1,655,996)       (1,972,352)    (3,535,345)      (3,850)      (69,252,236)

     13,614,054             4,721,257       7,731,007         7,684,588      6,253,691       14,650       472,554,844
     27,809,202             9,579,154      17,255,521        16,435,481     16,441,603      296,119       802,842,684
    (14,195,148)           (4,857,897)     (9,524,514)       (8,750,893)   (10,187,912)    (281,469)     (330,287,840)




     19,345,455             2,037,113      11,043,533         9,874,006      6,564,471           -        457,549,514
     27,425,016             5,684,519      17,255,521        15,860,641     11,218,466      318,017       802,805,370
     (8,079,561)           (3,647,406)     (6,211,988)       (5,986,635)    (4,653,995)    (318,017)     (345,255,856)

        111,264             1,004,792                 -         723,044      2,553,723       18,500         5,104,314

               -                   -                  -            (645)       (56,244)              -       (155,331)
                              (61,400)                         (777,693)    (1,603,004)                  (125,546,071)
                               61,400                           777,048      1,546,760                    125,390,740

     (3,058,525)            (502,462)      (1,656,530)       (1,572,703)    (3,550,330)              -    (62,680,826)

     16,398,194             2,539,443       9,387,003         9,023,702      5,511,620       18,500       399,817,671
     27,536,280             6,627,911      17,255,521        15,805,992     12,169,185      336,517       682,363,613
    (11,138,086)           (4,088,468)     (7,868,518)       (6,782,290)    (6,657,565)    (318,017)     (282,545,942)
Notes to the Financial Statements (continued)
for the year ended 31 March 2007


14. PROPERTY, PLANT AND EQUIPMENT (continued)
    The carrying amount of the Company's simulator equipment includes an amount of R7,731,007
    (2006 : R9,387,003) in respect of assets held as security under Rand Merchant Bank borrowings.

    The carrying amount of the Company's ATC display hardware includes an amount of R84,232,381
    (2006 : R94,495,876) in respect of assets held as security under the Nedbank loan liability.

    The carrying amount of the Company's Radar equipment includes an amount of R152,475,35
    (2006 : R81,036,915) and navigational aids includes an amount of R34,975,257 (2006 : R18,424,369)
    in respect of assets held as security under the Standard Bank loan liability.
                                                                                                                     Restated
                                                                                              2007                     2006
                                                                                                R                        R
15. INTANGIBLE ASSETS
    Opening net book amount                                                               63,412,373              70,705,134


    Cost                                                                                  81,145,580              76,384,640
    Accumulated amortisation                                                             (17,733,207)             (5,679,506)


    Transferred from capital work in progress                                               4,930,730                      -
    Additions                                                                               2,336,820              4,760,940
    Amortisation charge                                                                  (14,511,860)            (12,053,701)


    Closing net book amount                                                               56,168,063              63,412,373


    Cost                                                                                  88,413,130              81,145,580
    Accumulated amortisation                                                             (32,245,067)            (17,733,207)



    There has been no impairment of intangible assets in the current year. The carrying amount of the company's software includes
    an amount of R38,660,070 (2006: R57,987,206) in respect of assets held as security under finance lease.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                                                                Restated
                                                                                                2007              2006
                                                                                                  R                 R

16. CAPITAL WORK IN PROGRESS
    The balance consists of the following categories of property, plant, equipment and intangible assets:



    Opening net book amount                                                                 174,879,791      44,175,527
    Additions                                                                              196,361,518      126,463,218
    Borrowing cost capitalised                                                                6,470,526       7,111,415
    Transferred to intangible assets                                                         (4,930,730)             -
    Transferred to property, plant and equipment                                          (128,784,188)      (2,870,369)


                                                                                            243,996,917     174,879,791

                                                                                                                           111

    The balance consists of the following categories of property, plant, equipment and intangible assets:


    Radar equipment                                                                        122,051,406      103,695,353
    Communication equipment                                                                  63,480,081      10,169,947
    Navigational aids                                                                        56,931,120      59,107,819
    Other                                                                                       480,326
    Intangible assets                                                                         1,053,984       1,906,672


                                                                                           243,996,917      174,879,791
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                                                                            Restated
                                                                                                   2007                       2006
                                                                                                     R                          R
17. LOANS AND RECEIVABLES
    Contingency insurance policy                                                               11,942,539               10,468,198


                                                                                               11,942,539               10,468,198


    The policy underwritten includes a self-insurance component. The policy also provides cover for ATNS on certain insurance risks
    that are either too expensive or not available in the conventional insurance market.



18. TRADE AND OTHER RECEIVABLES
    Trade receivables                                                                          74,178,816               66,761,891
    Less impairment of receivables                                                             (3,466,849)              (1,287,041)
    Trade receivables - net                                                                    70,711,967               65,474,850
    Prepayments                                                                                           -              5,040,636
    Other receivables                                                                             998,614                   902,741


    At carrying value and fair value                                                           71,710,581               71,418,227

    The Company has no significant concentration of credit risk. It has policies in place to ensure that sales of services are made to
    customers with an appropriate credit history. Trade receivables comprise a large number of customers. Of these the top three
    customers comprise 43.64% (2006:43.57%) of the core revenue. Ongoing credit evaluations are performed on the financial position
    of these debtors. In addition, exposure is reduced by deposits of R1,983,694 (2006: R2,316,754) held on behalf of customers, as
    well as bank guarantees of R34,661,000 (2006: R35,161,000) from customers in the name of the Company.Trade receivables
    generally have 30 days terms and no interest charged on over due amounts.


    Refer to note 29 for related party information.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                                                                Restated
                                                                                                 2007             2006
                                                                                                   R                R

19. INVENTORIES
    Spares and consumables                                                                       733,554       649,033



20. CASH AND CASH EQUIVALENTS
    Cash at bank                                                                            72,934,476       35,378,121
    Cash at bank - US Dollar denominated                                                     9,256,363       20,866,874
    Petty cash and cash on hand                                                                   42,500         34,500


                                                                                            82,233,339       56,279,495


    Cash and bank overdrafts include the following for the purpose of the cash flow statement:
                                                                                                                           113

    Cash and cash equivalents                                                              82,233,339        56,279,495
    Short-term deposits                                                                                 -   115,000,000


                                                                                            82,233,339      171,279,495

21. SHARE CAPITAL
    Authorised:
    500 million ordinary shares with a par value of R 1 each                              500,000,000       500,000,000


    Issued and fully paid:
    190 646 000 ordinary shares with a par value of R 1 each                              190,646,000       190,646,000
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                   Restated
                                                    2007             2006
                                                      R                R

22. INTEREST BEARING LOANS AND BORROWINGS
    Non-current
    Finance lease liabilities-RMB                          -     2,903,474
    Loan liability-Nedbank                       16,626,718     47,870,176
    Loan liability-Standard                      88,649,159    122,243,358
                                                105,275,877    173,017,008



    Current
    Finance lease liabilities-RMB                 2,907,932      4,678,756
    Loan liability-Nedbank                       31,392,887     29,883,352
    Loan liability-Standard                      29,591,602     20,510,002
                                                 63,892,421     55,072,110


    Total borrowings                            169,168,298    228,089,118
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                                                                            Restated
                                                                                                   2007                       2006
                                                                                                     R                          R
22. INTEREST BEARING LOANS AND BORROWINGS
    (continued)
    (a) Finance lease liabilities
    The simulator equipment liability is repayable in bi-annual installments over a 5 year lease period, ending on 30 September 2007.
    This liability bears interest at a variable rate of 8.87% (2006:8.02%). The Company’s obligations under this finance lease is secured
    by the lessors’ title to the leased assets, simulator equipment, with a book value of R7,731,007 (2006: R9,387,003).


    The maturity of finance lease borrowings can be analysed as follows:



    Minimum lease payments
    Not later than 1 year                                                                        3,083,408                5,132,508
    Later than 1 year and not later than 5 years                                                          -               3,027,236         115


                                                                                                 3,083,408                8,159,744


    Future finance charges on finance lease
    Not later than 1 year                                                                         175,476                   453,752
    Later than 1 year and not later than 5 years                                                          -                 123,762


                                                                                                  175,476                   577,514


    Fair value of finance lease
    Not later than 1 year                                                                        2,907,932                4,678,756
    Later than 1 year and not later than 5 years                                                          -               2,903,474


                                                                                                 2,907,932                7,582,230
Notes to the Financial Statements (continued)
for the year ended 31 March 2007



22. INTEREST BEARING LOANS AND BORROWINGS
    (continued)
    (b) Loan liability
    The Nedbank loan liability is repayable in bi-annual installments, over a 5 year period, ending 30 September 2008. This liability
    bears interest at variable rates, linked to the one month JIBAR rate, currently 7.70% (2006:7.65%).


    The loan liability is secured by SAAATS equipment - ATC display systems, with a book value of R84,232,381 (2006: R94,495,876).


    Certain covenants exist with respect to this loan liability utilised to obtain funding for the South African Advanced Air Traffic System
    (SAAATS). These require that:
   - No further encumbrances over the company's assets can be created (without written consent of the lender);
   - No loans or guarantees can be granted or assumed (without written consent of the lender);
   - No dividends can be paid (without written consent of the lender);
   - An interest bearing debt: equity ratio of 60% must be maintained.
   - An interest cover of at least 2 must be maintained.


    The above conditions have been complied with in the current year and no future breaches of the covenants are anticipated.


    The Standard Bank loan liability for radar and navigational aids is repayable in bi-annual installments, over a 5 year loan period,
    ending 30 November 2012. This liability bears interest at a variable rate of 9.65% (2006:7.65%). The Company's obligations under
    this loan liability is secured by the radar equipment, with a book value of R152,475,352 (2006: R81,036,915) and navigational
    aids, with a book value of R34,975,257 (2006: R18,424,369).
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                                                Restated
                                                                                  2007            2006
                                                                                    R               R
22. INTEREST BEARING LOANS AND BORROWINGS
    (continued)
    Banking Facilities
    The Company has the following banking facilities available at year-end:



    Multi option                                                               15,000,000    15,000,000
    Term loan                                                                 257,000,000   257,000,000


    The maturity of the loan liability can be analysed as follows:


    Minimum loan payments
    Not later than 1 year                                                      74,897,382    61,390,465    117
    Later than 1 year and not later than 5 years                              119,408,451   260,131,042


                                                                              194,305,833   321,521,507


    Future finance charges on loan liability
    Not later than 1 year                                                      13,912,893    10,997,111
    Later than 1 year and not later than 5 years                               14,132,574    90,017,509


                                                                               28,045,467   101,014,620
    Fair value of loan liability
    Not later than 1 year                                                      60,984,489    50,393,354
    Later than 1 year and not later than 5 years                              105,275,877   170,113,533


                                                                              166,260,366   220,506,887
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                                                                         Restated
                                                                                                2007                       2006
                                                                                                  R                          R

23. DEFERRED INCOME TAX LIABILITIES
    Deferred income taxes are calculated on all temporary differences under the liability method using a principal tax rate of 29%.


    The movement on the deferred income tax account is as follows:


    At beginning of year                                                                    22,486,983               31,846,355
    Income statement credit                                                                  (2,673,757)             (7,626,141)
    Over-provision prior year                                                                (1,085,658)             (1,733,231)


    At end of year                                                                          18,727,568               22,486,983

    Deferred income tax liability relates to the following:


    Accelerated depreciation for tax purposes                                              (27,604,815)             (32,840,998)
    Finance lease deferred for tax purposes                                                   (906,436)               3,555,687
    Provisions deferred for tax purposes                                                      9,955,944               6,876,559
    Doubtful debts allowance                                                                  (251,347)                 (93,311)
    Operating leases deferred for tax purposes                                                   79,086                  15,080


                                                                                           (18,727,568)             (22,486,983)


24. TRADE AND OTHER PAYABLES
    Trade payables                                                                          11,592,370               11,143,083
    Accrued expenses                                                                        58,870,231               10,688,513
    Other payables                                                                            2,756,100               2,316,754


                                                                                            73,218,701               24,148,350


    Refer to note 28 for related party information.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007



25. PROVISIONS FOR OTHER LIABILITIES AND CHARGES

                                        External Audit      Leave pay         Incentives              Other          Total
                                            fees
    At 1 April 2006                          -               9,067,119       18,453,729            5,812,383    33,333,231
    Charged in the income statement      2,168,783           9,009,093       18,815,655             460,958    30,454,489
    Utilised during the year             (1,418,783)       (9,625,712)      (17,218,770)      (4,660,462)      (32,923,727)


    At 31 March 2007                      750,000           8,450,500        20,050,614            1,612,879   30,863,993



                                                                                                                Restated
                                                                                                    2007         2006
    Analysis of total provisions                                                                     R             R                      119
   - Current                                                                                   30,863,993       33,333,231



   (a) Leave Pay
      Leave pay is raised on the unutilised leave days owing to employees at balance sheet date.


   (b) Incentives
      The Incentive bonus provision is calculated based on the performance of the company as well as the individual performance ratings
      for the financial year end.


   (c) Other
      Includes provision for workmen's compensation and interest payable to SARS for late payment of PAYE on the loyalty incentive
      scheme.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                                                                          Restated
                                                                                                            2007            2006
                                                                                                              R               R
26. COMMITMENTS
    (a) Capital commitments
        Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:


    Property, plant and equipment                                                                  124,327,059       106,365,568


    The capital expenditure budget for the year ending 31 March 2008 is R226,800,000



    (b) Operating lease commitments
       The future minimum lease payments for buildings, copiers and motor vehicles under operating leases are as follows:


    Not later than 1 year                                                                             2,609,361         2,981,475
    Later than 1 year and no later than 5 years                                                       2,240,539        4,335,536


                                                                                                      4,849,900        7,317,011



27. CONTINGENCIES
    Contingent liabilities
    The Company has contingent liabilities in respect of bank guarantees and sessions and other matters arising in the ordinary course
    of business. It is not anticipated that any liabilities will arise from these contingent liabilities.


28. RETIREMENT BENEFIT INFORMATION
    Substantially all employees are members of the ATNS retirement fund. The fund is a defined contribution fund and is governed
    by the Pension Funds Act of 1956 which requires an actuarial valuation to be carried out every 3 years.


    Liability for pension benefits up to 31 March 1994 vested in the state. On 1 April 1994 a new fund, the ATNS retirement fund,
    was established.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                                                                         Restated
                                                                                                 2007                      2006
                                                                                                   R                         R
28. RETIREMENT BENEFIT INFORMATION (continued)
    The latest actuarial valuation of the ATNS Retirement Fund was at 31 March 2007. At that time, the ATNS retirement fund was
    certified by the reporting actuaries to be in a sound financial position. The Company contributions to the ATNS Retirement Fund
    amounted to R18,658,571 (2006:R15,507,033).


    The Company does not provide any post retirement benefits to employees and has no exposure to any post-retirement benefit
    obligations.



29. RELATED PARTY TRANSACTIONS
    The sole shareholder of the company is the Minister of Transport, on behalf of the South African government, in terms of section
    6(5) of the Air Traffic and Navigation Services Company Act 1993.
                                                                                                                                       121
    The following transactions were carried out with related parties:


    (a) Sales of services
    - Airports Company of South Africa                                                        5,410,771               6,524,695
    - Department of Transport                                                                 1,809,861               1,769,209
    - South African Airforce                                                                  1,671,038               1,623,980
    - South African Airways                                                                178,488,899              174,611,257
    - South African Express                                                                  43,984,772              35,955,875
    - South African Police                                                                       77,721                 178,611
    - South African Weather Services                                                            493,150                 492,606
    - Tulca (Pty) Ltd - Mango Airlines                                                        9,770,579                        -


                                                                                           241,706,791              221,156,233
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                                                                      Restated
                                                                                              2007                      2006
                                                                                                R                         R
29. RELATED PARTY TRANSACTIONS (continued)
    (b) Purchases of goods and services
    - Airports Company of South Africa                                                     3,718,840               1,813,530
    - Alexander Forbes - pension fund                                                     18,658,571              15,507,033
    - Denel                                                                                    20,705                 14,577
    - Eskom                                                                                2,687,458               2,620,876
    - Sentech                                                                                221,708                 249,261
    - South African Civil Aviation Authority                                               6,013,786               4,429,883
    - South African Revenue Services                                                     136,788,294             136,917,559
    - Telkom                                                                              20,880,126              19,852,329
    - Transnet                                                                                 26,620                 24,200


                                                                                         189,016,108             181,429,248


    These transactions are carried out on commercial terms and conditions.


    (c) Year end balances arising from sales/purchases of goods/services


    Receivables from related parties
    - Airports Company of South Africa                                                       849,575                 799,124
    - Department of Transport                                                                322,401                 221,836
    - South African Airforce                                                                 274,739                 831,565
    - South African Airways                                                               17,767,137              16,933,991
    - South African Expresst                                                               4,461,089               4,170,481
    - South African Police                                                                      6,352                 20,096
    - South African Weather Services                                                         183,140                 182,484
    - Tulca (Pty) Ltd - Mango Airlines                                                     2,722,483                       -


                                                                                          26,586,916              23,159,577

    No expense has been recognised in the period for bad or doubtful debts in respect of the amounts owed by related parties.
Notes to the Financial Statement (continued)
for the year ended 31 March 2007
                                                                                                                       Restated
                                                                                              2007                       2006
                                                                                                R                          R
29. RELATED PARTY TRANSACTIONS (continued)


    Payables to related parties
   - Airports Company of South Africa                                                         152,490                 121,402
   - Denel                                                                                      1,661                       -
   - Eskom                                                                                    350,609                1,146,516
   - Sentech                                                                                   35,115                  24,554
   - South African Civil Aviation Authority                                                   232,540                 323,550
   - South African Revenue Services                                                         8,304,257               39,951,875
   - Telkom                                                                                 1,967,311                1,696,006
   - Transnet                                                                                        -                      -
                                                                                                                                     123

                                                                                           11,043,983               43,263,903


    The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received.


    Excluding Alexander Forbes all the companies listed above, report to the various ministerial departments of the government and
    hence are considered related parties.


    (d ) Key management compensation
        PC Marais
        Salary                                                                              1,058,751                 948,101


                                                                                            1,058,751                 948,101


        DP Majozi
        Salary                                                                                258,165                 898,962


                                                                                              258,165                 898,962
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                  Restated
                                                     2007           2006
                                                       R              R
    (d ) Key management compensation (continued)
       S Boomgaard
       Salary                                               -     540,120


                                                            -     540,120


       TJ Musandiwa
       Salary                                       869,363       803,028


                                                    869,363       803,028


       FTP Maponyane
       Salary                                               -     423,792


                                                            -     423,792


       JS Van Vollenhoven
       Salary                                               -     710,840
       Termination benefit                                  -   2,053,354


                                                            -   2,764,194


       BPB Dibate
       Salary                                      1,355,224    1,309,540


                                                   1,355,224    1,309,540
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                                                                     Restated
                                                                                             2007                      2006
                                                                                               R                         R
    (d ) Key management compensation-continued
        SG Mthombeni
        Salary                                                                               229,470              1,045,091


                                                                                             229,470              1,045,091


        MA Mayat
        Salary                                                                               966,300                379,306


                                                                                             966,300                379,306


        S Mngomezulu
        Salary                                                                               823,150                770,480        125


                                                                                             823,150                770,480


        N Morufane
        Salary                                                                               271,508                       -


                                                                                             271,508                       -


        JK Lubbe
        Salary                                                                               597,102


                                                                                             597,102                       -


    The executive management team is eligible for an annual performance related bonus payment linked to appropriate business
    sector targets. The structure of the bonus plan and award is recommended by the Human Resources Committee and in accordance
    with the bonus scheme rules. The performance related bonus is limited from 30% to 35% for the Executive Manager's individual
    cost to Company.


    For the directors remuneration refer to note 35.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                                  Restated
                                                                   2007             2006
                                                                     R                R
30. CASH GENERATED FROM OPERATIONS
    Operating profit                                           110,989,056    134,434,261
    Adjustments for:
    - depreciation                                              69,252,236     62,680,826
    - amortisation                                              14,511,860     12,053,701
    - other non-cash items                                      (2,469,238)     6,293,163
    - loss/(profit) on sale of property, plant and equipment      264,312         (11,613)
    Changes in working capital
    - inventories                                                  (84,521)     (454,412)
    - trade and other receivables                               (1,766,695)    (5,548,640)
    - trade and other payables                                  49,070,351    (12,183,047)


    Cash generated from operations                             239,767,361    197,264,239


31. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT
    To expand operations                                       142,272,890      5,104,314


32. ADDITIONS TO CAPITAL WORK IN PROGRESS
    To expand operations                                        62,646,600    123,592,851


33. TAX PAID
    Opening balance                                             19,158,996     11,920,935
    Current tax charge                                          35,797,062     46,532,563
    Closing balance                                             (6,194,519)   (19,158,996)


    Amount paid during the year                                 48,761,539     39,294,500
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                                                                                          Restated
                                                                                                 2007                       2006
                                                                                                   R                          R

34. PROCEEDS ON DISPOSAL OF PROPERTY,
    PLANT AND EQUIPMENT
    Book value of property, plant and equipment disposed of                                     283,481                   155,331
    (Loss)/profit on sale of assets                                                            (264,312)                   11,613


                                                                                                  19,169                 166,944



35. DIRECTORS REMUNERATION
    The remuneration of directors during the year was as follows:


    Executive director
                                                                                                                                         127

    Salary                                                                                     1,070,973                 887,158
    Bonus and incentive                                                                         469,942                  431,025
    Fringe benefit                                                                                45,000                  10,404
    Pension cost                                                                                  60,000                 180,000


                                                                                               1,645,915               1,508,587


    The Chief Executive Officer's prime function is to lead the Company and its people to achieve and exceed the strategic plans
    submitted and approved by the board of the Company.


    The Chief Executive Officer is eligible for an annual performance-related bonus payment linked to appropriate company and business
    sector targets. The structure of the individual bonus plans and awards is recommended by the Human Resource Committee and
    in accordance with the bonus scheme rules. The performance related bonus islimited to 40% of the director's cost to company.
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                          Restated
                                                2007        2006
                                                  R           R
35. DIRECTORS REMUNERATION (continued)
    Non-executive directors


    MM Mabasa
    Fees                                        259,189   247,700
    Travel claims                                16,320    18,188


                                                275,509   265,888


    J Gray
    Fees                                        117,814   124,020
    Travel claims                                 5,280     2,160


                                                123,094   126,180


    MW Hlahla
    Fees                                            -         -
    Travel claims                                   -         -


                                                    -         -


    RJ Huntley ( Resigned 1 August 2006)
    Fees                                         37,453   102,820
    Travel claims                                           2,160


                                                 37,453   104,980
Notes to the Financial Statements (continued)
for the year ended 31 March 2007
                                                          Restated
                                                2007        2006
                                                  R           R
35. DIRECTORS REMUNERATION (continued)
    AR Martin
    Fees                                        151,122   145,220
    Travel claims                                 9,120     5,520


                                                160,242   150,740


    DK Naidoo
    Fees                                        152,247   149,460
    Travel claims                                17,280    11,040


                                                169,527   160,500
                                                                     129

    BJT Shongwe
    Fees                                        122,472   122,960
    Travel claims                                 3,840     1,680


                                                126,312   124,640
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                             between formation




Picture courtesy of Airbus
Board of Directors
13 Board of Directors
          02
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01 Mike Mabasa                                                                    05 Alwyn Martin
Chairman                                                                          Chairman of the Audit and Risk Committee and Member of the
Mike is currently a Corporate Affairs Manager for JT International South Africa   Procurement Committee
(Pty) Limited. He also serves on the Board of RedCarpet Food Services (Pty)       Alwyn, B.Com.,CA (SA), is a director of Santam Ltd, Trans Hex Group Ltd, Medi
Ltd. Before that he was the CEO of Vutleketli Interventions, a corporate          Clinic Corporation Ltd, Credit Guarantee Insurance Corporation of Africa Ltd,
communications consultancy. He also worked as head of media liaison and           Barnard Jacobs Mellet Holdings Ltd and Datacentrix Holdings Ltd.
corporate communication at the National Department of Transport, and was
with the secretariat for public safety and security and Statistics SA.
                                                                                  06 Monhla Hlahla
                                                                                  Member of the Audit and Risk Committee
02 Wrenelle Stander                                                               Monhla has been CEO of Airports Company South Africa (ACSA) since November
Chief Executive Officer and Executive Director                                    2001. Prior to that she was with Old Mutual and the Development Bank of
Wrenelle has held a number of senior executive positions within the South         Southern Africa. She is currently also the 2nd Vice-Chairperson and Special
African civil aviation industry, including the positions of General Manager:      Advisor to the Chairperson of the Airports Council International World Governing
Aviation and Maritime Regulation (Department of Transport); Deputy Chief          Body, and holds non-executive director positions at ABSA Bank limited and
Executive Officer, (South African Civil Aviation Authority); General Manager:     the IDC (Industrial Development Corporation). In 2005 she received the Business
Business Development (ATNS); as well as Director General (Department of           Women Association's Businesswoman of the Year award and was Black Business
Transport). She holds a BA (Hons) degree from the University of Cape Town,        Quarterly's Woman of the Year. She completed Bachelor & Honours degrees
as well as a Masters degree in Business Administration from Oxford Brookes        (Economics) and a Masters (Urban and Regional Planning) in the US.                 133
University in the UK. Wrenelle currently serves as an elected member of the
CANSO executive committee.
                                                                                  07 Devan Naidoo
                                                                                  Chairman of the Procurement Committee, and a member of the
03 Bheki Shongwe                                                                  Audit and Risk Committee
Chairman of the Human Resource Committee                                          Devan is currently the Executive Manager of Spoornet. Previously, he was
Bheki is currently Managing Director of Metrobus (Pty) Limited and previously     General Manager of the Department of Communications, and Policy Analyst
was Deputy Managing Director of Fleet Africa (Pty) Ltd. He has extensive          for the Development Bank of SA. He holds a MPhil from the University of
operational experience at senior management level in a variety of sectors         London.
and was previously an executive director of Primedia. He holds non-executive
directorships in Highveld Steel and Vanadium Corporation, Sabvest Ltd, Air
Traffic and Navigation Services Ltd, Remchannel (Pty) Ltd and is the founding
Chairman of Matsamo Global Investment Holdings (Pty) Limited. Bheki holds
a BA (Econ), MBA, ACIS, and FCIBM.


04 Jennifer Gray
Member of the Human Resource Committee
Jennifer has been CEO of the Johannesburg Zoo since November 2003. Her
career has seen her in both the public and the private sectors, working for
organisations as diverse as the Johannesburg City Council's City Engineers
Department, the Durban City Council, SA Airlink and First National Bank. She
holds a B.Sc. in civil engineering, a M.Sc. in transportation engineering, an
MBA, and a graduate Diploma in engineering, and has started on a Masters
Degree in Ethics at the University of the Witwatersrand. She is registered with
the South African Council for Professional Engineers as a Professional Engineer
and is a member of the South African Institute of Civil Engineers.
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14 Executive Committee
    01                                                                  08
                   03      04                06
            02                         05                07




01 Joseph Musandiwa                                                               05 Solomon Mngomezulu
Executive Manager: Business Development                                           Company Secretary
A chartered Marketer, Joseph holds a Diploma in Marketing Management              Solomon is a non-practicing attorney. He has extensive experience in commercial
(Institute of Marketing Management), B.Business Administration (Andrews           law, with a focus on corporate and contract law. He holds a BA LLB from the
University) and M.Com (Rand Afrikaans University). Prior to joining ATNS, he      University of Durban-Westville and a Diploma in Dispute Resolution from the
was an Executive Manager for Marketing at Autopax Passenger Services (Pty)        Arbitration Foundation of Southern Africa. Solomon also recently obtained a
Ltd.                                                                              Diploma in Company Direction with GIMT, endorsed by the Institute of Directors.
                                                                                  Solomon is a member of the Institute of Directors of Southern Africa.
02 Jean Lubbe
Executive Manager: Training                                                       06 Nkokeng Morufane
Jean joined ATNS as the Training Academy Executive Manager in May of 2006.        Executive Manager: Strategic Human Resources
Her previous experience was as Executive Manager of the Human Resources           Nkokeng holds an Honours Degree in International Politics from the University
department of South African Airlink, South Africa's regional domestic feeder      of Limpopo. He has worked for the Government, Coopers & Lybrand, and
airline. Her qualifications include a Bachelor of Arts in Human Sciences and      Polokwane International Airport serving in a number of management positions.
a Diploma in Travel and Tourism.                                                  He also lectured part-time at Tshwane University of Technology (Polokwane
                                                                                  Campus). Before joining ATNS, he worked for Eskom for eight and half years
                                                                                  as Human Resources Manager.
03 Peter Marais                                                                                                                                                         137
Executive Manager ATM/cns (Planning / R&D)
Peter is a graduate electronics engineer and registered with the Engineering      07 Boni Dibate
Council of South Africa. He was previously the principal radar engineer at the    Executive Manager: Service Delivery
National Department of Transport, engineering manager for ATNS, general           Boni is a clinical psychologist by profession, holding an M.Sc from Medunsa.
manager technical services for ATNS and executive manager training for ATNS.      She also holds Senior Executive certificates from Harvard University in partnership
He is the chairperson of the South African Development Community's upper          with Wits Business School and Singapore University. Boni is a council member
airspace control centre steering committee and represents ATNS in regional        of both the Business Women's Association and the University of Pretoria.
and international bodies responsible for planning communication, navigation       Before joining ATNS, Boni served as the HR Executive Manager at Transwerk,
and surveillance infrastructure in the region. Most recently he chaired the cns   was CEO of both Esselenpark Centre of Excellence and South African Express
committee of the ICAO 11th Air Navigation Conference. He has completed the        Airways, and also served as Group Executive Support Services at Transtel.
UNISA Business School's advanced executive management programme.                  Whilst with ATNS, Boni also served as the Chief Operating Officer for a period
                                                                                  of time.
04 Wrenelle Stander
Chief Executive Officer and Executive Director                                    08 Mohammed Mayat
Wrenelle has held a number of senior executive positions within the South         Executive Manager: Finance
African civil aviation industry, including the positions of General Manager:      Mohammed obtained his Chartered Accountant (CA) qualification in 1987 and
Aviation and Maritime Regulation (Department of Transport); Deputy Chief          completed a higher diploma in tax law in 1990. Prior to joining ATNS,
Executive Officer, (South African Civil Aviation Authority); General Manager:     Mohammed was with Transwerk, Tiger Brands and Arthur Andersen.
Business Development (ATNS); as well as Director General (Department of
Transport). She holds a BA (Hons) degree from the University of Cape Town,
as well as a Masters degree in Business Administration from Oxford Brookes
University in the UK. Wrenelle currently serves as an elected member of the
CANSO executive committee.
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Cape Town International Airport
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Unlocking partnerships for change
Managing 800 000 aircraft movements by 2010
15 Extended management team
                    Cape Town International Airport




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Abbreviations
and acronyms
16 Abbreviations and acronyms
                                                          ATSA      Air Traffic Services Assistant

ACAS     Airborne Collision Avoidance System              ATSU      Air Traffic Services Unit

ACSA      Airports Company South Africa                   ATS/DS    Air Traffic Service/Direct Speech

ADSB      Automatic Dependent Surveillance Broadcast      CAMU      Central Airspace Management Unit

ADS       Automatic Dependent Surveillance                CANSO     Civil Air Navigation Services Organisation

AFI       African Indian Ocean                            CAPEX     Capital Expenditure

AFIS      Aeronautical Flight Information Service         CAR       Civil Aviation Regulation

AFTN      Aeronautical Fixed Telecommunications Network   CAT       Civil Aviation Technical Standard

AIM       Aeronautical Information Management             CDM       Collaborative Decision Making

AIP       Aeronautical Information Publication            CDU       Curriculum Development Unit

AIROPS    Airspace User Operations                        cns       Communication, Navigation And Surveillance

ANSP      Air Navigation Service Provider                 CPDLC     Controller-pilot Data Link Communication

AORRA     Atlantic Ocean Random Routing Area              CRA       Collision Risk Assessment

ARMA      AFI Regional Monitoring Agency                  DoT       Department of Transport

ASECNA    L'Agence pour la Sécurité de la Navigation      DRC       Democratic Republic of the Congo
          Aérienne en Afrique et à Madagascar
                                                          DVOR/DME Doppler VOR/Distance-measuring Equipment
ATA       ATNS Training Academy
                                                          EGNOS     European Geostationary Overlay System
ATC       Air Traffic Control/ler
                                                          FAA       Federal Aviation Administration
ATM       Air Traffic Management
                                                          FAME      Future Airspace Management Efficiency
ATS       Air Traffic Services
FHA       Funtional Hazard Assessment                     r4sa     Radar for South Africa

FIR       Flight Information Region                       RNAV     Area Navigation

FUA       Flexible Use Of Airspace                        RNP      Required Navigational Performance

GA        General Aviation                                RVSM     Reduced Vertical Separation Minima

GATCSA    Guild of Air Traffic Controllers South Africa   SAAATS   South African Advanced Air Traffic System

GMU       Global Positioning System Monitoring Unit       SAAF     South African Air Force

GNSS      Global Navigational Satellite System            SACAA    South African Civil Aviation Authority

GSI       Government Safety Inspection                    SADC     Southern African Development Community

TeRNS     Terrestrial Radio Navigation System             SARPS    Standards and Recommended Practices                 145

IATA      International Air Transport Association         SAT      South Atlantic Group

ICAO      International Civil Aviation Organisation       SBAS     Space Based Augmentation System

ICAS      Independent Counselling and Advisory Service    SID      Standard Instrument Departure

IFRS      International Financial Reporting Standards     STAR     Standard Terminal Arrival Route

ISO       International Standards Organisation            TMA      Terminal Area

MIDVSAT   Middle East Communication Network               UACC     Upper Airspace Control Centre

MOU       Memorandum Of Understanding                     UN       United Nations

MSSR      Mono-pulse Secondary Surveillance Radar         VHF      Very High Frequency

NAFISAT   North East African Communication Network        VOR      VHF Omnidirectional Radio Range

Nepad     New Partnership for Africa's Development        VSAT     Very Small Aperture Terminal
                                                                   (satellite communication system)
OIC       Officer in Charge
                                                          WGS-84   World Geodetic System
                                                                   (1984 reference frame for aeronautical surveying)
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Company directory
17 Company directory
ATNS Head office                                                        Southern region
Postal address                                                          Cape Town International Airport
Private Bag x 15                                                        Private Bag x 17
Kempton Park                                                            Cape Town International Airport
1620                                                                    7525


Street address                                                          Air traffic management
Block H4                                                                Tel: +27 21 937-1122
Isando Industrial Park                                                  Fax: +27 21 934-5530
Gewel Street
Isando                                                                  Technical services
1600                                                                    Te: +27 21 937-1153
                                                                        Fax: +27 21 937-1181
Contact details
Tel: +27 11 961-0100                                                    Northern region
Fax: +27 11 392-3968                                                    Johannesburg International Airport
Website:www.atns.co.za                                                  Private Bag x 1
                                                                        Bonaero Park
ATNS Training Academy                                                   1622
Private Bag x 1
Bonaero Park                                                            Air traffic management
1622                                                                    Tel: +27 11 928-6439
Tel: +27 11 570-0400                                                    Fax: +27 11 395-1045
Fax: +27 11 395-3347
                                                                        Technical services
                                                                        Tel: +27 11 928-6469
                                                                        Fax: +27 11 395-1049




                         A comprehensive list of contact details can be found online at
                                                www.atns.co.za

				
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