1. BRAND SOUTH AFRICA PRESENTATION TO PCOF ON AUDIT OUTCOMES 21 OCTOBER 2014 11

2. THE FUNDAMENTAL ‘WHY’ OF BRAND SA Vision To be the authority on national identity and reputation building for the benefit of South Africa and the continent. Mission To build confidence in the future of the nation by telling our inspiring South African story Purpose Ensure a sustainable future for our children Strategic Positioning Inspire and unify civil society, business, government and the media to build the reputation of South Africa, and contribute to its global competitiveness. 2

3. To contribute to the NDP OBJECTIVES on… OUR MANDATE by undertaking coordinated INITIATIVES to… Build South Africa’s Nation Brand reputation to contribute to South Africa’s global competitiveness and achieving the following OUTCOMES… 1.Brand and Message Alignment by key stakeholders. 2. Pride and Patriotism and Active Citizenship amongst South Africans. 3. Positive positioning of SA as a business destination amongst target international and domestic audiences. 1. Brand strategy development and management … through the following STRATEGIES 4. Insight and research management 4. A Sustainable Organisation 2. Reputation management 4. Strengthening & deepening Stakeholder & partner relationships 5. Organisational Development 6. Prudent financial management and control 1. Economic Growth & Employment 2. Position South Africa in the Region and the World 3. Nation Building and Social Cohesion Inspire and instil active citizenship amongst South Africans Increased Social Cohesion Improved International & Domestic Reputation Increased International Competitiveness and contribute to the following broader IMPACT… 3

4. AUDIT OUTCOMES 4

5. REASONSROOT CAUSECOMMITMENTSSTATUS Material misstatement subsequently corrected – understated payables accruals R4m Finance Manager position vacant (resigned October 2013) Accountant position vacant - 31 Marc 2014 Supply chain management no fully established. Inadequate accounting system Review of organisational structure addressing organisational resource requirements Fill the position Fill the position Develop an adequate structure Re-configuration and automation of the accounting system Review, approval and implementation of the OD Finance Manager was appointed 02 May 2014 A secondi was procured for a period of a year ending 31 March 2014 A permanent Accountant position recruitment is underway Services of a knowledgeable service provider has been procured to configure the system – automate contract management and alert management Reviewed OD structure approve by the Board July 2014 Implementation is underway 5 AUDIT REPORT 2013/2014 5

6. 6 BASELINE AND EXPENDITURE TRENDLINES 6

7. 2010/2011  Baseline increased due to funding of FIFA World Cup tournament  Expenditure decreased – awaiting approval of the payoff line 2011/2012  Baseline dropped to the normal level prior to FIFA World Cup tournament  “Inspiring New Ways” was approved in October 2010  All plans relating to the approved payoff line were executed – prior year accumulated surplus expended 2012/2013  Inflationary increase on the baseline  Expended prior year accumulated surplus 2013/2014  Inflationary increase on the baseline  Indications of insufficient funding/baseline  Recorded an accumulated loss of R4.7m 7 BASELINE AND EXPENDITURE TRENDS (CONT’d) 7

8. 8 IRREGULAR EXPENDITURE TREND 8

9. 2010/2011  Decentralised procurement  No SCM unit established  Chief Financial Officer dismissed  Procurement of FIFA 2010 world tickets – R3 275 586  Acting Chief Financial Officer 2011/2012  Decentralised procurement  Appointed Chief Financial Officer October 2011  No SCM unit established  No application of PPPFA and invalid tax clearance certificate – R6 676 948.  Pending forensic audit – identify fraud if any – condonation 2012/2013  Progressive establishment of SCM with contract employees  Condoned R370 000 irregular expenditure relating to prior year 2013/2014  SCM Manager appointed 01 August 2013 9 IRREGULAR EXPENDITURE (CONT’D) 9

10. 10 FRUITLESS AND WASTEFUL EXPENDITURE TREND 10

11. 2010/2011  Cancellation of an onerous copier contract – R678 841  Cancellation of event : poor turnout – R72 000 2011/2012  Cancellation of an onerous copier contract – R154 664  Cancellation of an event – R46 655 2012/2013  Labour settlements : domestic and UK – R342 601 2013/2014  SARS penalties iro prior years – R33 818  Cancellation of photocopier machines – R29 758 11 FRUITLESS AND WASTEFUL EXPENDITURE (CONT’D) 11

12. 12 AUDIT FINDINGS OVER THREE YEARS 12

13. Re a leboga! 13