Integrated Reporting – A New Era

Page 2 About Nkonki ► 22-year history in South Africa ► 100% Black-owned JSE-accredited auditing and advisory firm ► 40 Directors and Registered Auditors and 400 staff country-wide ► Global affiliation ► Deep and committed relationships with clients ► Provide audit and advisory services 5 th Annual Audit Committee Conference

Page 3 Nkonki Thought Leadership track record 5 th Annual Audit Committee Conference 2011Launched inaugural Nkonki/FM Awards Top 40 | JSE and SRI companies 2012 Extended survey to include Schedule 2 entities | Top 100 JSE and SRI companies Annual surveys continued with Schedule 2 entities | Top 100 JSE and SRI companies Thought Leadership Publications IR Checklist based on King III Disclosure requirements Integrated Reporting – Rising to a new challenge Quick wins towards Integrated Reporting Annual Survey results reports for SOC’s and Top 100 Annual Financial Mail Corporate Report on Integrated reporting Most recent: - Nkonki Roadmap - Nkonki Maturity Chart - Nkonki Gap Analysis Top Thought Leadership and results – October 2015

Page 4 About the 2015 SOC Report 5 th Annual Audit Committee Conference 21 Schedule 2 State Owned Entities (in terms of PFMA) surveyed. 1 SOC report not available. < R1.2 trillion Asset base < R360 billion Revenue base International Framework was used to assess extent of compliance reflected in integrated reports focusing on: Interesting facts: Fundamental ConceptsGuiding PrincipalsContent Elements Value Creation Capitals Value Creation Process Strategic Focus & Future Orientation Connectivity Stakeholder Relationships Materiality Conciseness Reliability & Completeness Consistency & Comparability Organisational Overview Governance Business Model Risk & Opportunity Strategy & Resource Allocation Performance & Outlook Basis for Preparation The “Wow” Factor

Page 5 About the 2015 SOC Report 5 th Annual Audit Committee Conference Independent panel led by Professor Anton du Toit Ratings: GUIDE TO THE RATINGS

Page 6 Key Take-Away From The 2015 Survey 5 th Annual Audit Committee Conference Comparison of 2011, 2012, 2013 and 2014 SOC Integrated Reports In 2014, the overall reporting did show some signs of improvement with the average score improving by

Page 7 Key Take-Away From The 2015 Survey 5 th Annual Audit Committee Conference Most entities scored above 50% in more than 70% of the elements of Framework utilised in the report Areas of excellence – averages of 68% and above Excellence Consistency & Comparability Strategic Focus Reliability & Completeness 100% 71.7% 68.5%

Page 8 Key Take-Away From The 2015 Survey 5 th Annual Audit Committee Conference Most entities scored above 50% in more than 70% of the elements of Framework utilised in the report Areas where entities fared up - averages of 55% and above Nature of Dealings with Stakeholders 66.9% Materiality in Terms of Dealings with Stakeholders 66.9% Presentation &Design 61.0% Connectivity of Information 56.3% Content Elements 55.0% Average

Page 9 Key Take-Away From The 2015 Survey 5 th Annual Audit Committee Conference Improvement required in the following areas: Improvement Observations 41.3% 45% This is the most radical section in moving towards Framework with new concepts introduced - value creation process through the entity’s capitals and linkage to the business model Framework Elements Average length of reports surveyed was 181pages (excluding AFS and Sustainability reports).There is a clear link between guiding principal and materiality principal Fundamental Concepts – Business model, capitals, value creation The “Wow” Factor Conciseness Most entities are still struggling with making the reports easily readable by any user 11.7%

Page 10 Key Take-Away From The 2015 Survey 5 th Annual Audit Committee Conference Using the Nkonki Maturity Chart the following observations were made: No entities were classified as “Expert company” 15% entities were classified as “Proficient” 15% entities were classified as “Competent role player” 30% entities as “Advanced beginner” 40% entities as “Novice company”

Page 11 Global Trends 5 th Annual Audit Committee Conference ► IIRC’s Pubic Sector pioneer network was introduced in November 2014 ► Globally, entities have seen benefits of applying Framework as highlighted by Black Sun research in 2014 “Realizing the benefits: The impact of Integrated Reporting” ► Users of Framework seeing value and benefits in: Breakthroughs in understanding value creation Data Quality improved significantly Improving management information and decision making A new approach to stakeholder relations Connecting departments and broadening perspectives within the organisation ► IIRC’s Pubic Sector pioneer network was introduced in November 2014 ► Globally, entities have seen benefits of applying Framework as highlighted by Black Sun research in 2014 “Realizing the benefits: The impact of Integrated Reporting” ► Users of Framework seeing value and benefits in:

Page 12 Recommended Next steps 5 th Annual Audit Committee Conference ► Internal gap analysis assessment using Nkonki Gap Analysis tool ► Internal maturity assessment using Nkonki Maturity chart ► Using Nkonki roadmap to assist in project planning improvement to excellent Integrated Reporting

Page 13 Thank You

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