SA Post Office Performance for Quarter 4 As at 31 March 2018

Performance Overview The financial results are preliminary for the 2017/18 financial year and would be considered final once the Auditor General Year-end audit is completed. SAPO continues to operate in a highly constrained financial climate which restricts revenue retention and growth. The headcount is 18 119 as at 31 March 2018 and decreased by 175 employees during Quarter 4. Critical positions have been prioritized whilst other recruitment has been put on hold. The DTT Project has seen an uptick in results with the total STB registrations processed. A total of 686 150 qualifying applicants have been registered to date and 356 402 STB kits have been issued up to 31 March 2018. Postbank is in engagements with the Department of Telecommunication and Postal services (DTPS) regarding the critical legislative change requirements in the Banks Act and finalisation of the Bank Controlling Company (BCC) structure. SAPO and SASSA integrated project team are fully operational and the project is on track. 10 KPIs (34.5%) of the performance measures were achieved during Q4 due to program/project implementation delays. The preliminary performance for the year shows an achievement of 17 of the 37 KPI’s performing at 45.9%, and will be finalized once the audit is completed. SA Post Office - Restricted

Performance Overview - Financial Although a net profit of R121m was planned for Q4, the revenue shortfall remains a key contributor for the net loss of R72m posted for Q4 in the current year. Revenue missed the target by R193m. Overall revenue retention and growth remains a challenge with a decline of 2% from the prior year and R510m (29%) performance below the budget for Q4 in the current year. Cost containment has yielded positive results with a decline in expenditure of 8% from the prior year and R284m (18%) performance below the budget. Although some of the expenditure reduction is due to deferment of spending. The SAPO Group posted a net loss of R1 062bn for the preliminary period ended 31 March 2018, which is R 84m higher compared to R978m net loss in the previous year. The loss is attributed to revenues performing R1 945bn below the year target. The revenue shortfall has increased the monthly deficit to meet operational expenses which placed additional pressure on the constrained cash position of the organisation. SAPO has secured a term loan facility of R400m, of which part of the funds have been utilised to pay critical suppliers to sustain operations. SA Post Office - Restricted Detail on Q4 & YTD financial performance included on slides 11 to 20

KPI Performance Overview for Q4 at 31 March 2018 Strategic Themes Number of KPIs measured Number of KPIs Achieved Q1 Q2 Q3 Q4 Year 1. Revenue Growth 11 13 12 9 3 4 5 2. Optimise the Cost Base 3. Operational Efficiency 8 7 6 2 1 4. Be a Performance driven Organisation 5. Governance and Compliance 6. Stakeholder Engagement Total number of KPIs 34 36 29 37 14 10 17 % of KPIs Achieved 38.2% 36.1% 41.1% 34.5% 45.9% Only 10 KPIs (34.5%) of the performance measures were achieved during Q4 The performance for Q4 shows an achievement of 10 of the 29 KPI’s performing at 34.5% From the non-achieved, 6 KPI’s performed above 70% (20.7%) Detail on KPI’s included on slides 21 to 33 SA Post Office - Restricted

Revenue Growth Overview – Quarter 4 3 of 9 KPI’s achieved (33%) R510m below the Q4 target with achievement of 71% Reasons for variances Loss of customers and volumes and declines in mail revenues Delay in the activation of growth initiatives No e-commerce offering Lack of funding for marketing and investment into systems Planned actions going forward Drive efforts to secure funding for revenue growth initiatives Partnership strategies will be implemented and Initiatives to be undertaken in new products and channels: Internet & mobile banking, ATM/POS devices, e-commerce Continued performance and consequence management to drive accountability Continued customer engagements to create growth opportunities through solution selling Detail on KPI’s included on slides 21 to 24 SA Post Office - Restricted

Optimise the Cost Base Overview – Quarter 4 3 of 3 KPI’s achieved (100%) R284m above the Q4 target with achievement of 117% Reasons for variances Cost containment measures realizing benefits IT costs performed below budget by R80m due to the delays in revenue projects and the IT Network project. Decline in the number of staff – 175 employees left SAPO in Q4 Drop in fuel usage which linked to the changes in transport schedules Planned actions going forward Continue with cost saving measures to optimise cost base Repairs to sorting machines through funding prioritisation Detail on KPI’s included on slide 25 SA Post Office - Restricted

Operational Efficiency Overview – Quarter 4 0 of 6 KPI’s achieved (0%) Reasons for variances The delivery standard for mail has performed at 88.5% in Q4, down 3.5% from the target due to non operational machines, high inflow of international items, and shortage of bicycles Delay in the upgrade of IT Business systems due to lack of funds Scope change in considering the operations blue print strategy and alignment before the final implementation of business continuity plan Decrease in the number of oversight visits by Area managers due to financial constraints to enable travel Planned actions going forward Prioritise the funding for machine repairs and procurement of bicycles Fastrack the available upgrades for IT Business systems Catch-up of Area Manager branch visits during new financial year Detail on KPI’s included on slides 26 to 28 SA Post Office - Restricted

Performance driven Organisation Overview – Quarter 4 Be a Performance driven Organisation 2 of 7 KPI’s achieved (29%) Reasons for variances Delay in training programs due to funding constraints 25% below target in retention of critical skills because of culture and lack of engagement Lack of incentives and recognition for great performance due to the financial situation Planned actions going forward Follow-up on performance reviews with line managers Enforcement of performance contract and 6 month review in place The filling of the four Postbank Executive positions are in process Due to the SASSA project the Retail vacancies (Branch Manager and Teller) have been identified as critical and are in the process of being filled Enforcement of the process should yield tangible results in the new financial year. Detail on KPI’s included on slides 30 to 31 SA Post Office - Restricted

Governance and Compliance Overview – Quarter 4 0 of 2 KPI’s achieved (0%) Reasons for variances Total overall number of outstanding Audit matters is 379 The control framework is generally adequate, but is ineffective in areas that have suffered a depletion of skills and resources. Planned actions going forward A back to basic project has started within the Finance/Accountings unit (with some good results), and will also be launched across many of the other key functional processes Improvement of audit outcomes is receiving priority focus in the new financial year and receiving ongoing focus by Management and Board oversight structures. Detail on KPI’s included on slide 32 SA Post Office - Restricted

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Financial Performance Overview – Quarter 4 No Detail Prior Year Q4 Quarter 4 - 31 March 2018 (R’m) Budget Actual Variance % Variance % Change 1 Revenue 1,267 1,756 1,246 -510 -29% -2% 2 Expenses 1,443 1,614 1,330 284 18% 8% 3 Net Profit / (Loss) 36 121 -72 -193 -100% Overall revenue retention and growth remains a challenge with a decline of 2% from the prior year and 29% performance below the budget for Q4 in the current year. Cost containment has yielded positive results with a decline in expenditure of 8% from the prior year and 18% performance below the budget for Q4 in the current year. Although a net profit of R121m was planned for Q4 the revenue shortfall remains a key contributor for the net loss of R72m posted for Q4 in the current year. SA Post Office - Restricted

Revenue Performance Overview – Quarter 4 No Detail Prior Year Q4 Quarter 4 - 31 March 2018 (R’m) Budget Actual Variance % Variance % Change 1 Mail revenue (post & hybrid) 812 982 816 -166 -17% 0% 2 Mail parcel revenue 46 179 41 -138 -77% -11% 3 Logistics revenue (CFG & Docex) 18 10 -45% 4 Retail revenue 117 218 125 -92 -42% 7% 5 Digital revenue 9 104 -101 -97% -66% 6 Postbank revenue 52 59 -13 -23% -12% 7 Interest revenue 154 172 162 -10 -6% 5% 8 Property revenue 12 30 33 13% 100% Sundry revenue 47 11 -73% Total Revenue 1,267 1,756 1,246 -510 -29% -2% Cost containment has yielded positive results with a decline in expenditure of 1% from Q2 in the prior year and 7% performance below the budget for Q2 in the current year. Although a net loss of R52m was planned the revenue shortfall remains a key contributor for the net loss of R370m posted for Q2 in the current year. Overall revenue performance during Q4 is closer to the prior year despite missing the budget for key revenue streams. SA Post Office - Restricted

Expense Performance Overview – Quarter 4 No Detail Prior Year Q4 Quarter 4 - 31 March 2018 (R’m) Budget Actual Variance % Variance % Change 1 Staff expenses 857 890 866 24 3% 1% 2 Transport expenses 88 89 73 16 18% 17% 3 Property expenses 147 151 96 55 36% 35% 4 IT costs 76 67 80 55% 12% 5 Interest and Bank charges 116 129 71 58 45% 39% 6 Other expenses 159 208 157 51 24% 7 Total Expenses 1,443 1,614 1,330 284 8% Staff expenses below budget for Q4 due to staff exits of 175 employees. The substantive negotiations on salary and benefits have reached a deadlock due to the continued weak financial position of SAPO. IT costs performed below budget by R80m due to the delays in revenue projects and the IT Network project. The R51m performance below budget for other expenses include Material & Services – R15m, International Charges – R11m, Marketing costs – R18m, Depreciation – R51m and Consultants & Travel costs – R6m. Prudent cost management continues. SA Post Office - Restricted

Financial Performance Overview – Quarter 4 YTD No Detail Prior Year Q4 YTD Quarter 4 YTD - 31 March 2018 (R’m) Budget Actual Variance % Variance % Change 1 Revenue 4,818 6,621 4,675 -1,946 -29% -3% 2 Expenses 5,834 6,451 5,686 765 12% 3% 3 Net Profit / (Loss) -978 -87 -1,062 -1,149 -100% -9% The YTD revenue of R4.7bn performed 29% below the budget for the current year and 3% lower than the prior year due to the retention and growth challenges. The YTD expenditure of R5.7bn performed 12% below the budget in the current year and 3% below the prior year, due to cost containment measures. The YTD net loss position has increased to R1 062m due the monthly revenue shortfalls to meet operating expenses. SA Post Office - Restricted

Preliminary Financial performance – 31 March 2018 Revenue of R4 675m Below budget by R1 946m (29%) Year on year decline of R143m (3%) Bulk mail revenue of R1 744m – 16% volume decline to 508m items DTT project – R116m Expenditure of R5 686m Below budget by R766m (12%) Year on year decline of R148m (3%). SAPO Group net loss of R1 062m Post Office excl Postbank R1 392m net loss SA Post Office – Restricted

Preliminary Revenue performance – 31 March 2018 R1 946m (29%) below budget YoY decline of R143m (3%) SA Post Office – Restricted

Preliminary Expenditure performance – 31 March 2018 Below budget by R766m (12%) YoY decline of R148m (3%) SA Post Office – Restricted

SA Post Office excluding Postbank cash flows SA Post Office – Restricted

SA Post Office Creditors (preliminary) Statutory includes R35 million for Medipos , R50 million due to SARS and R5 million for UIF SA Post Office – Restricted

SA Post Office excluding Postbank cash reserves R400 million loan funding Fully utilised and R26 million ring fenced for interest payments Loan repayable in December 2018 SA Post Office – Restricted

Performance measures SA Post Office - Restricted Theme 1: Revenue Growth (SAPO Group) Goal KPI Ref Key Performance Indicator Q4 Target Performance Q4 Actual Variance Target Achieved/Not achieved Reasons for Variance Planned actions going forward Total Revenue 1.1 Achievement of CP targeted revenue from 2016/17FY baseline revenue R1.756bn R1.246bn -R510m Not Achieved The main reasons for not achieving the target are the continued loss of customers and volumes and the delayed implementation of the planned revenue initiatives. Performance against Base revenue has been mostly affected by a decline in mail revenues. Although this was anticipate, the extent of the decline has been reduced by continued customer engagements. A much focused and aggressive plan needs to be executed as was also highlighted in the Strategic Turnaround Plan, which will help achieve the development of additional revenue streams. These revenue streams will help mitigate against the decline in mail revenues and related services. Management of portfolios and accountability at individual level for all sales personnel. Ensure revenue recovery strategies are implemented and tracked. Overall performance and consequence management to drive accountability. Customer Focus 1.2 # of Marketing Programs to key customer segments 2 marketing programs launched 2 Achieved   1.3 % of Customer Complaints resolved within 7 calendar days 80% of customer complaints resolved within 7 days for the quarter 96.75% 16.75% E-Commerce 1.4 # of e-Commerce Solutions launched - N/A New Revenue 1.5 # of New Products Launched SA Post Office - Restricted

Performance measures SA Post Office - Restricted Theme 1: Revenue Growth (SAPO Group) Goal KPI Ref Key Performance Indicator Q4 Target Performance Q4 Actual Variance Target Achieved/Not achieved Reasons for Variance Planned actions going forward New Revenue 1.6 # of Digital Solutions Launched - N/A   Key Account Management 1.7 % Growth as per the CP for Baseline Revenue 2016/17FY from Key Accounts 4.32% -12% -16.30% Not Achieved The variance has been contributed by customer’s substitution on Mail products and weak or incomplete e-commerce offering. Continued engagements with customers to customise solution e.g. Home choice solution. Partnership strategies for growth will be implemented in the coming financial year. Appointment of permanent Key Account Managers in vacant positions and the appointment of Senior Manager in the corporate sales environment Revenue Protection 1.8 Revenue Leakage recovered (Including from Reserved Market) R25m R4.3m -R20.7m The variance has been contributed by customer’s improving the bulk lodgements in mail posted that decreases the non-conformance. Bulk of the revenue recovery target however relates to the engagements with ICASA to better police the reserved market. SAPO is waiting for an official communication from ICASA with regards to the date of the hearing at the Complaints and Compliance Committee (CCC). New Revenue - Government business 1.9 No. of New Business Segments 1 -1 There has been discussions with a few government entities, however no contractual agreements have been concluded as yet. Despite this the Bank continues to engage government for potential business and partnership. SA Post Office - Restricted

Performance measures SA Post Office - Restricted Theme 1: Revenue Growth (SAPO Group) Goal KPI Ref Key Performance Indicator Q4 Target Performance Q4 Actual Variance Target Achieved/Not achieved Reasons for Variance Planned actions going forward Increase and Diversify Revenues 1.10 Achieve Net Interest Revenue target from 2016/17FY Baseline Revenue R141m R124.80 -R16.3m Not Achieved The negative variance of R16.3m resulted from the lower interest rate market. The current budget was prepared using the FRA curve rates as there was an expectation that the interest rates would continue with the increasing trend, however this has not happened in the current month thus the decrease in the interest income when compared to the target. To optimise return on Postbank investments by ensuring fruitful investment deals are made. Postbank expect that the current partnerships will assist in increasing the investments thus increasing the interest earned. Postbank Growth Case Revenue 1.11 Achieve Non-Interest Revenue target from 2016/17FY Baseline Revenue R57m R45.9m -R11m The main reason for the underperformance in the base revenue is due to the following: Dropping trend in our transactions due to a non-compelling Customer Value Proposition (CVP) and Seasonal trends that show normally show a decrease in transactional income during this period. Initiatives to be undertaken in FY2019 are expected to increase non-interest revenue: • Increase Government business : Mzansi Y2 • New products; SASSA free tax account saving and investment. • New channels: Internet and mobile banking, ATM and POS devices. Postbank is currently revisiting its consumer value proposition with the aim of increasing customer base and maximising returns. SAPO has currently appointed GCIS to assist with the current marketing requirements and still hopes to appointment the Digital, Media, Creative and PR Agency that will assist in increasing brand awareness and improve consumer behaviour. SA Post Office - Restricted

Performance measures SA Post Office - Restricted Theme 1: Revenue Growth (SAPO Group) Goal KPI Ref Key Performance Indicator Q4 Target Performance Q4 Actual Variance Target Achieved/Not achieved Reasons for Variance Planned actions going forward Sustainable Delivery of Social Mandate - Increase financial inclusion of the mass market 1.12 Year on Year % increase in Depositor Accounts 0.75% 1.33% 0.58% Achieved   Implement e-Docex solution 1.13 % Implementation of e-Docex Platform and Solution - N/A SA Post Office - Restricted

Performance measures SA Post Office - Restricted Theme 2: Optimise the Cost Base Goal KPI Ref Key Performance Indicator Q4 Target Performance Q4 Actual Variance Target Achieved/Not achieved Reasons for Variance Planned actions going forward Remain within Operating Expenditure Budget 2.1 Expenditure of Operational Budget Less than or equal R1.61bn R1.33bn R284m Achieved   Rebalance the SAPO network 2.2 Finalise Retail Network Balancing Strategy - N/A Enhance mechanization/ digitization of Postal and Parcel operations 2.3 % of Mail and Parcels handled by Machines by target date 20% 28.50% 8.50% Energy and carbon emissions Reduction* 2.4 3% Reduction of Carbon Emissions -3% Reduction in Scope 1 (Direct emissions from fleet) - 3 percent reduction in Scope 2 (Indirect emissions from electricity use) 0.75% Reduction 11,322.63 tCO2eq 0.109% reduction 1,383.16 tCO2eq SA Post Office - Restricted

Performance measures SA Post Office - Restricted Theme 3: Operational Efficiency Goal KPI Ref Key Performance Indicator Q4 Target Performance Q4 Actual Variance Target Achieved/Not achieved Reasons for Variance Planned actions going forward Resilient Operations 3.1 Board Approved Business Continuity Plan - N/A   IT Optimisation 3.2 # of Core Operations IT Systems 2 1 -1 Not Achieved Projects were reprioritised during quarter 4 due to non-payment of outstanding suppliers. The outstanding systems will be reprioritised and implemented once funding is available. The Network project is still ongoing and intended completion is end of March 2019. This will alleviate the lack of skilled resources to manage the Network. SAPO needs to obtain funding to settle outstanding debts with service providers. Key dependencies are funding and skilled resources. SA Post Office - Restricted

Performance measures SA Post Office - Restricted Theme 3: Operational Efficiency Goal KPI Ref Key Performance Indicator Q4 Target Performance Q4 Actual Variance Target Achieved/Not achieved Reasons for Variance Planned actions going forward IT Optimisation 3.3 % of Enterprise Business Systems 100% 0% -100% Not Achieved There were various contributions to the non-achievement of the set target. • Webriposte (SAPO Retail Front End System) – the project was put on hold due to other priorities and dependencies on upgrading the hardware in the SAPO branches which will only take place in the second quarter of financial year 2018/19. • SAP (SAPO ERP) – Taking SAPO’s financial constraint into consideration the upgrade was too expensive. Hence the upgrade was cancelled. • EBDN (Electronic Bulk Delivery System) – this was linked to the SAP ERP upgrade. This upgrade will continue in the new financial year, once funding is allocated and skilled resources are employed. • IPMS (International Parcel Management System – Funding required • T&T (Project to upgrade existing or replace with IPS) - Funding required • Upgrade to Windows 10 on Desktop – was put on hold due to resource constraints SAPO is working to obtain funding to settle outstanding debts with service providers. Key dependencies are funding and skilled resources. Rebuild Operations 3.4 # of Oversight visits by Area Managers per Branch per Quarter 1 per quarter per branch 4 -1512 Area Managers could not visit all branches per set target due to financial constraints to enable travel. However, oversight visits are also done by the internal audit oversight team to the various branches during the year. Funds to be made available to enable Area Managers to visit all their branches SA Post Office - Restricted

Performance measures SA Post Office - Restricted Theme 3: Operational Efficiency Goal KPI Ref Key Performance Indicator Q4 Target Performance Q4 Actual Variance Target Achieved/Not achieved Reasons for Variance Planned actions going forward Rebuild Operations 3.5 # of Deviations from Standard Operating Procedure Not Achieved During the 2016/17 financial year, Internal Audit found itself fending –off serious challenges on the independent assurance function of the broad retail environment due to limited resources that could, at that stage, not be deployed by Internal Audit to perform retail surprise audits on a demanding and changing retail environment. A proposal was adopted in the 2016/17 financial year, whereby about 30 Quality and Oversight inspectors were used within the Internal Audit Unit and under its control on a secondment basis. The project period was split up into 2 X 6 months focus areas with the first 6 months concentrating on the performance of fully fledged financial audits at the branches and the next 6 months concentrating on following up on the management corrective action plans on the audit issues identified. It was purposefully designed in this way to measure the improvement levels, post audit. This process provided Internal Audit with the opportunity to be able to re-focus certain experienced Retail Branch Inspectors to provide independent and objective assurance to the Retail Business Unit as well as to OPSCO, EXCO and the Board. 3.6 Implementation of MIS - N/A   SA Post Office - Restricted

Performance measures SA Post Office - Restricted Theme 3: Operational Efficiency Goal KPI Ref Key Performance Indicator Q4 Target Performance Q4 Actual Variance Target Achieved/Not achieved Reasons for Variance Planned actions going forward Rebuild Operations 3.7 % of Service Delivery Standard achieved 92% 88,5% -3.50% Not Achieved There are still some key operational blockages that are not resolved, which are aggravated by lack of funding and non-payment of suppliers. The overall availability of machines is recorded at 53,8% and the position has declined, primarily due to the lack of funding for continued procurement of spare parts and the negative impact of non-payment of suppliers. Although the board approved the fleet proposal the contract has not yet been signed, impacting on efficiencies and effectiveness. Challenges are still being experienced with bicycles as a key resource for the delivery on the last mile. The international business environment is still challenged to a large extend primarily due to the high inflow of volumes and operational processes which are not aligned adequately to meet the demand. Challenges are experienced on the inbound parcels process in terms of performance and actions are underway to streamline the business processes further. The procurement process on forklifts are still in process. The signing of the redeployment framework and the shift framework between management and CWU can be seen as huge step forward, in order to execute on the operational initiatives and actions plans. Consultations with organized labour and implementation to continue in the first quarter of 2018/19. The installation of Fibre at JIMC has been completed and it is foreseen that the configuration will be concluded soon. The business case for the improvement of security, related to CCTV monitoring for JIMC and access control for various major processing centres, including JIMC, will be resubmitted for approval in the new financial year. It is envisaged that the proposal will gain traction in the new financial year, considering challenges with funding. 3.8 % Uptime for ATM and POS Transactions 98% 97.55% -0.45% The bank industry SLA for the 4th quarter was no achieved for both ATM and Debit card transactions. This is due to the following: • Database was done from the 04-05/02/2018; • Network connectivity - 16/02/2018 and • Power failure at 7 church and the generator did not kick in - 19/02/2018. • Postilion and UBS servers had to be restarted 5-6/03/2018; • DBA created table space with privileges which cause some tables not to be accessible 29/03/2018 • Slow network response 30/03/2018. • Dysfunctional port that was utilized on AA1 server (Postilion):31/03/2018.   SA Post Office - Restricted

Performance measures SA Post Office - Restricted Theme 4: Be a Performance Driven Organisation Goal KPI Ref Key Performance Indicator Q4 Target Performance Q4 Actual Variance Target Achieved/Not achieved Reasons for Variance Planned actions going forward Workforce Training 4.1 % of Key Employees trained per the As per plan 16746 8254 Achieved   Restructure the operating model 4.2 Approved Revised Organisational Structure - N/A 4.3 % of Revised Structure populated up to Management level by Target Date 70% of Managers in Support Level 64% -6% Not Achieved The lack of funding is the key reason that recruitment for non-critical positions are on hold. Due to the cash flow challenges a decision was made to place all other executive positions on hold until the funding situation improves. Capacitate critical positions 4.4 % of Critical Vacancies Filled 100% by 31 March 2018 68 Branch Manager & 582 Teller positions Due to the financial constraints in the organisation a decision was taken to only fill the executive vacancies and place all other critical vacancies on hold. Once the financial situation improves priority will be given to critical positions identified within the organisation. Currently employees within IT/Finance /Project Management with these skills have been identified within the company and are being seconded to these areas. Further to that development opportunities have been advertised within these areas and the intention is to attract and place employees that have these qualifications or busy studying towards it, on a development programme in these areas. The filling of the four Postbank Executive positions are in process. Due to the SASSA project the Retail vacancies (Branch Manager and Teller) have been identified as critical and are in the process of being filled. Critical skills retention 4.5 % of Critical Skills Retained 21.25% 0% -21.25% This process that has not been implemented within SAPO yet, because of the culture and the process that has to be followed before the process can be implemented. SA Post Office - Restricted

Performance measures SA Post Office - Restricted Theme 4: Be a Performance Driven Organisation Goal KPI Ref Key Performance Indicator Q4 Target Performance Q4 Actual Variance Target Achieved/Not achieved Reasons for Variance Planned actions going forward Revised Performance management framework 4.6 % of Management Employees enrolled onto Performance Management 100% 96% -4% Not Achieved The challenge is still the culture of lack of engagement within SAPO, as well as the lack of incentives and recognition for great performance due to the financial situation of the organization. Buy-in to the Corporate Plan, organisational objectives and targets. Culture of not taking Performance Management seriously. Only management level’s performance is measured. Lack of financial compensation for high performers. Lack of consequence management. Planned actions going forward are the follow-up on performance reviews with line managers, ongoing communication on reasons to do performance management, and follow-up with managers to start managing. The key issues however are the engagement of employees when formulating strategy goals, lack of finances to reward good performance, and the lack of accountability and responsibility of managers. Enforcement of Performance Management 4.7 % of Non-Performing employees leaving the Organisation after due process 0% -100% This process that has not been implemented within SAPO yet, because of the culture within SAPO and the process that has to be followed before the process can be implemented. Managers have been encouraged to follow up on employees who are performing below acceptable standards, discuss the development plans for corrective action. Enforcement of the process should yield tangible results in the new financial year. Change Organization Culture 4.8 % Completed of Implementation of a Change Management Program Per project plan Ethics Achieved   SA Post Office - Restricted

Performance measures SA Post Office - Restricted Theme 5: Compliance & Governance Goal KPI Ref Key Performance Indicator Q4 Target Performance Q4 Actual Variance Target Achieved/Not achieved Reasons for Variance Planned actions going forward Rebuild Operations 5.1 % of High Risk Quality & Operations Audit Findings resolved within 14 days (Governance) 100% 0% -100% Not Achieved In our view, there need to be an acknowledgement that due to the significant liquidity challenges over the last number of years, this had an impact on the general control environment of the SAPO (people, processes and resources). As audits are continuing, more of the same problems are identified and which will likely continue until adequate investment can be made regarding the latter. There is no systemic breakdown in the control framework of the SAPO – but rather, that such control framework is generally adequate, but that on a number of levels it remains ineffective. This can be attributed to, and this is not an exhaustive list of reasons: Staff vacancies at critical points in the various processes; poor skills and competencies at tactical level; inadequate management and supervision responsibilities. A back to basic project has started within the Finance/Accountings unit (with some good results), and should also be launched across many of the other key functional processes. This strategy is being formulated by Management to drive this aspiration of control improvement. This will receive ongoing focus in the new financial year by Management and oversight bodies.   5.2 % of Medium and Low risk Quality & Operations Audit Findings resolved within 30 days (Governance) 80% -80% SA Post Office - Restricted

Performance measures SA Post Office - Restricted Theme 6: Stakeholder Engagement Goal KPI Ref Key Performance Indicator Q4 Target Performance Q4 Actual Variance Target Achieved/Not achieved Reasons for Variance Planned actions going forward Improve External Stakeholder Relationships 6.1 % Implementation of External Stakeholder Management Programs 100% Achieved   Improve Internal Stakeholder Relationships 6.2 % Implementation of Internal Stakeholder Management Programs SA Post Office - Restricted

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