QUARTER 2 BUSINESS PERFORMANCE REPORT

INTRODUCTION Overview of performance against corporate KPIs Financial Performance Product and Network Performance Governance Internal Audit Management Letter Points Risk Management Enterprise Development Human Capital Development

Performance against corporate KPIs

Performance against corporate KPIs Achieved/Not Achieved * In Quarter 2, eight KPIs are applicable and 6 out of 8 (75%) targets have been achieved Strategic Goal Strategic Objectives KPI Annual Target Q2 Target Actual Performance Achieved/Not Achieved Variance Explanation SG 2: Ensure high levels of customer and stakeholder satisfaction by meeting their needs at all times. Ensure network availability meets SLA requirements across all platforms Weighted average availability based on product revenues Weighted average availability based on product revenues of 99,80% Weighted average availability based on product revenues of 99,80% Weighted average availability based on product revenues of 99,89 Achieved This target has been over- achieved due to better management of SENTECH’s national network. Improve customer and stakeholder satisfaction Customer service index Baseline +5% Complete survey recommendatio n monitoring tool. Survey monitoring tool completed and issued Not applicable

Performance against corporate KPIs Achieved/Not Achieved Strategic Goal Strategic Objectives KPI Annual Target Q2 Target Actual Performance Achieved/Not Achieved Variance Explanation SG 3: Drive organisati onal performa nce in to improve organisati onal effectiven ess Effective talent management Performanc e ratings achieved Average employee performance score of 3,2 for the 2016/17 financial year Performance Reviews completed for all employees for Q2   0% performance reviews completed Not Achieved Disputes with the Union had ripple effects on signing of performance contracts. The performance reviews for bargaining employees were thus not done on time. % Training Plan implemente d 80% of the 2016/17 approved training plan interventions implemented 40% of the 2016/17 approved training plan interventions implemented 41.4% of approved training plan implemented. Achieved This target has been over-achieved by a marginal amount. This was due to the completion of additional training interventions than what was required during the quarter.

Performance against corporate KPIs Performance against corporate KPIs Strategic Goal Strategic Objectives KPI Annual Target Q2 Target Actual Performance Achieved/Not Achieved Variance Explanation SG 4: Ensure that the Company is financially sustainabl e. Revenue diversificatio n into international markets No of Pan- African customers contracted (customers outside the Republic of South Africa) Develop and implement Pan-African Strategy Complete market research Concept document developed and market research process initiated Not Achieved There have been delays in procuring a service provider to conduct the research. To be done by Q3. Implement ESD and SED initiatives % actual NPAT spent for the 2016/17 financial year 6% of actual NPAT spent for the 2016/17 financial year Achieve 50% of budgeted ESD and SED spend Actual spend is 183% for ESD & 72% SED   Achieved This target has been over- achieved due to an additional number of ESD and SED Activities during Q2

Performance against corporate KPIs Strategic Goal Strategic Objectives KPI Annual Target Q2 Target Actual Performance Achieved/Not Achieved Variance Explanation SG 4: Ensure that the Company is financially sustainabl e. Implement effective internal control system and compliance with applicable legislation Clean audit achieved Clean audit achieved Audit action monitoring tool completed Audit action monitoring tool completed and issued Achieved Not Applicable Maintain a healthy earnings before Interest and tax (EBIT) Earnings before interest and tax R5.22 million R2,08 million R17 million   This target has been over-achieved due mainly to dual illumination funds received as well as savings against budget for the following categories of expenditure: Operating, Selling and Administrative Expenditure.

Financial Performance

Financial Performance Q2 September 2016

Financial Performance Revenue Per Service  R’000 Quarter 1 FY2017   Quarter 2 FY2017 YTD FY2017 Service Actual Budget Variance R '000 % TV 146,528 156,434 (9,906) (6%) 146,278 154,291 (8,014) (5%) 292,805 310,725 (17,919) FM 69,231 71,085 (1,854) (3%) 74,378 73,757 620 1% 143,608 144,842 (1,234) (1%) MW 2,365 2,339 26 2,338 (1) (0%) 4,703 4,678 25 SW 6,582 8,186 (1,604) (20%) 6,105 (2,081) (25%) 12,687 16,372 (3,685) (23%) DTH 44,090 34,981 9,110 26% 45,891 38,666 7,226 19% 89,982 73,647 16,335 22% Facility Rentals 16,020 14,368 1,652 11% 14,816 14,397 419 3% 30,836 28,766 2,071 7% Continuing business 284,816 287,393 (2,577) 289,806 291,637 (1,831) 574,622 579,030 (4,407) Connectivity services 1,642 1,588 54 1,630 1,475 155 3,272 3,062 209 DTT: Dual Illumination 22,500 - 100% 45,000 Sundries 697 2 700 Total services 309,655 288,980 20,675 313,938 293,111 20,827 623,594 582,092 41,502 TV revenue is below budget mainly due to DTT revenue not materializing as a result of optimization of the network. SW revenue is below budget due to Radio Lead Africa suspension, contract termination of TWR and no new revenue realised per our projected 8hrs/day additional sales.

Product and Network Performance

Product and Network Performance Sentech Performance (%) Network Services SLA Target (%) Sentech Performance (%) Weighted Ave Terrestrial Television 99.7 99.88 53.13 FM Radio 27.01 Medium Wave Radio 99.5 99.96 0.85 Short Wave Radio 99.97 2.22 Satellite 99.8 99.94 16.68 Overall Network availability 99.80 99.89

Governance The priority activities for the Board during this quarter were: Annual General Meeting Recruitment of the CFO Board evaluation Consideration of the 2015/16 Annual Financial Statements and Annual Report Board and Board Committee meetings Compliance with statutory requirements SENTECH has achieved a clean audit for the fourth successive year.

Internal Audit Internal Audit is on track with the execution of its Annual Internal Audit Plan.

Management Letter Points (MLPs) SENTECH has enjoyed four years of unqualified audit opinion since 2012/2013. The following is a summary of progress against the 26 findings issued by the external auditors on 31 July 2016: Forty two percent (42%) of findings have been addressed, 31% are ongoing 27% are in progress.

Risk Management Developments and emerging risks associated with our big customers are being monitored and mitigation strategies on managing these emerging risks are in place. The revenue assurance risks are being managed to ensure that all revenue due to SENTECH is collected. Management will continue to double efforts in implementation of all activities related to KPIs to reduce the risk levels.

Enterprise Development SENTECH supported 13 SMMEs which in turn created 68 jobs and 5 internship programmes for young people. Four were offered grants to the value of R2.7 million that was used for equipment, IT systems, office infrastructure and training. Other SMMEs were in the Incubation programme amounting to R3.5 million. No Company name Jobs created Job opportunities Grant Funding 1 Batsha IT Solutions 2   Centrax 5 Internships 3 Fibretronics 40 4 Moagi Technologies Incubation Programme 5 Axol(Prt) Ltd 6 GeneAnthony IT & Projects Management Solutions 7 Bumba Technos 8 Pacesetter Network 9 2VP Electrical Services 10 MPowerIT 11 Simplified Intelligent Solutions 12 Imvana IT Solutions 13 Epiq IT Solutions TOTAL 68

Human Capital Development Attracting African talent remained a key driver of our recruitment process. At top management levels 100% are black, 87% at senior management and 72% at specialists and middle management levels are black; and 82% for skilled and technical levels Most of the human capital activities are on track, namely, overtime management, employee wellness, policy reviews, staff retention, employee relations, health and safety, and training. Performance management and succession planning are being addressed.

Human Capital Development… Building high performance teams through: Training : 40% of the 2016/17 approved training plan interventions implemented Bursaries : 35 of the 106 bursary applications for 2016/2017 were approved Changing the environment Office space : 30% of construction to be done in this financial year STP Canteen re-establishment : Estimated operational date before end of Q4 Appointment of new CFO This appointment completes the filling of vacancies at Executive Director level.

Thank You!