Directors’ report

for the year ended 31 December 2006

Nature of business

MTN Group Limited (the “Group” or the “company”) carries on the business of investing in the telecommunications industry through its subsidiary companies, joint ventures and associate companies.

Subsidiary companies

Details of entities in which MTN Group Limited has a direct or indirect interest are set out in Annexures 1 and 2 of the financial statements from pages 272 to 277.

Directorate and group secretary

The composition and profiles of the board of directors of MTN Group appear on pages 18 and 19.

The Group Secretary is Ms SB Mtshali, whose business and postal addresses are set out below:

Interests of directors and officers

During the year under review, no contracts were entered into in which directors and officers of the company had an interest which significantly affected the business of the Group. The directors had no interest in any third party or company responsible for managing any of the business activities of the Group. The emoluments and perquisites of executive directors are determined by the Group Nominations, remuneration, human resources and corporate governance committee and approved by the board. No long-term service contracts exist between executive directors and the company, with the exception of the contract of service between the Group President and CEO and the company, which commenced on 1 July 2002 and terminates on 30 June 2007. As the Group operates in a highly dynamic and specialised industry which requires strong and insightful leadership the board has extended the contract of service of the Group president and CEO to 30 June 2010.

The financial statements on pages 173 to 277 set out fully the financial position, results of operations and cash flows of the Group. Note 1 to the financial statements provides an analysis of the financial results by geographic segment.

Review of financial results and activities

Reviews of financial results and the activities of MTN Group are contained in the reports of the Chairman, the Group President and CEO, the Group Finance Director, the Group chief operating officer’s report and the annual financial statements.

Share capital

Authorised share capital

There was no change in the authorised share capital of the company during the year under review. The authorised ordinary share capital of MTN Group is 2,5 billion shares of 0,01 cents each. The following are the movements in the issued and unissued ordinary share capital from the beginning of the accounting period to the date of this report:

Issued share capital

The issued share capital of the company was increased during the year by the allotment and issue of shares to employees who exercised share options in terms of the MTN Group Limited Share Option Scheme. The allotments were as follows:

The issued share capital of the company was further increased by the allotments and issue of shares as follows:

Accordingly, at 31 December 2006, the issued share capital of the company was R186 027 (December 2005: R166 532) comprising 1 860 268 283 (December 2005: 1 665 317 425) ordinary shares of 0,01 cent each. No treasury stock was held at the date of this report.

Control of unissued share capital

The unissued ordinary shares are the subject of a general authority granted to the directors in terms of section 221 of the Companies Act, 1973 (Act 61 of 1973), as amended, (the Companies Act). As this general authority remains valid only until the next annual general meeting, which is to be held on Wednesday, 13 June 2007, members will be asked at that meeting to consider an ordinary resolution placing the said unissued ordinary shares up to a maximum of 10% of the company’s issued share capital under the control of the directors until the next annual general meeting.

Further details of the authorised and issued shares as well as the share premium for the period ended 31 December 2006 appears in note 17 to the MTN Group financial statements.

Acquisition of the company’s own shares

At the last annual general meeting held on Wednesday, 13 June 2006, shareholders gave the company or any of its subsidiaries, a general approval in terms of sections 85 and 89 of the Companies Act, by way of special resolution, for the acquisition of its own shares. As this general approval remains valid only until the next annual general meeting, to be held on Wednesday, 13 June 2007, members will be asked at that meeting to consider a special resolution to renew this general approval until the next annual general meeting.

Distribution to shareholders

A dividend of 90 cents per share (December 2005: 65 cents) amounting to R1,674 million (December 2005: R1,082 million) was declared in respect of the 31 December 2006 financial year on Wednesday, 28 March 2007, payable to shareholders registered on Friday, 20 April 2007. The payments of future dividends will depend on the board’s ongoing assessment of MTN Group’s earnings and financial position, including its cash needs, future earnings prospects and other factors.

Shareholders on the South African register who dematerialised their ordinary shares receive payment of their dividends electronically, as provided for by STRATE. For those shareholders who have not yet dematerialised their shareholding in the company in certificated form, the company operates an electronic funds transmission service, whereby dividends may be electronically transferred to shareholders’ bank accounts. These shareholders are encouraged to mandate this method of payment for all future dividends.

Shareholders’ interest

Major shareholders

The following information was extracted from the company’s share register at 31 December 2006:

Disclosures in accordance with section 140A (8) (a) of the Companies Act, and paragraph 8.63 of the JSE Limited Listings Requirements

According to information received by the directors, the following shareholders held shares in excess of 5% of the issued ordinary share capital of the company:

* Although Newshelf 664 has an economic interest in 309 million MTN Group Limited shares, it currently only has voting rights over 243,5 million MTN Group Limited shares. Further details of the Newshelf 664 shareholding are provided on page 185.

Certain of these shareholdings are partially or wholly included in the nominee companies mentioned in the tables above. Apart from this, the company is not aware of any other party who has a shareholding of 5% or more in the company.

The MTN Group share option and share appreciation rights schemes

The company operates share option and share appreciation rights schemes (“the schemes”) and eligible employees, including executive directors are able to participate in accordance with the scheme’s rules. The schemes are designed to recognise the contributions of executive directors and eligible staff and to provide additional incentives to contribute to the company’s continued growth.

In terms of the company’s schemes, the total number of shares which may be allocated for the purposes of the schemes shall not exceed 5% of the total issued ordinary share capital of the company from time to time, being 81 799 691 shares approved by shareholders in 2001.

MTN Group Limited Share Option Scheme (“the option scheme”)

The following information is provided in accordance with the provisions of the option scheme:

Accounting policy

The Group issues equity-settled share-based payment to employees. Equity-settled share-based payments are measured at fair value (excluding the effect of non-market-based vesting conditions) at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straightline basis over the vesting period, based on the Group’s estimate of the shares that will eventually vest and adjusted for the effect of non-market-based vesting conditions. Fair value is measured using the stochastic model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

Share-based payments

The vesting periods under the share option and share appreciation rights schemes are as follows: 20%, 20%, 30% and 30% on the anniversary of the second, third, fourth and fifth years respectively after the grant date. The strike price is determined as the closing market price for MTN Group Limited shares on the day prior to date of issue.

If the options or appreciation rights remain unexercised after a period of 10 years from the date of grant, they expire. Options or appreciation rights are forfeited if the employee leaves the Group before they vest. Details of the share options outstanding at the period end are as follows:

The market weighted average share price on the dates that share options were exercised during the year was R61,82.

The options outstanding at the end of the year have a weighted average remaining contractual life of seven years (December 2005: eight years). During the year to 31 December 2006, no options were granted. These fair values were calculated using the stochastic model. The inputs into the model were as follows:

Expected volatility was determined by calculating the historical volatility of the company’s share price over the previous seven years. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The expected dividend yield was determined based on historical data.

Options exercised during the year yielded the following proceeds, after transaction costs:

*Amount less than R1 million

Share options outstanding at the end of the year have the following terms:

MTN Group Share Appreciation Rights Scheme (“the rights scheme”)

On 31 May 2006, the board of directors approved a share appreciation rights scheme to supersede the existing share option scheme. Details of grants made during the year and rights in issue at 31 December 2006 are outlined below:

Equity compensation benefits for executive directors, officers and directors of major subsidiaries

MTN Group Limited share option and appreciation rights schemes for the year ended 31 December 2006