1 SA Post Office Group Annual results for year ended 31 March 2012 Presentation to the Parliamentary Portfolio Committee on Communications

Focus  Corporate Governance and Compliance  King III and Companies Act  Financial Services Regulatory Bodies  PFMA  Postbank Corporatisation  Long Term Sustainability Platform for the Last Mile  Financial Oversight within Economic Crisis  Human Resource Capacity  Service Improvement Drive  Environmental Programmes 2

Vision To be recognized among the leading providers of postal and related services in the world 3

Mission To enable the nation to efficiently connect with the world by distributing information, goods, financial and government services; leveraging our broad reach and embracing change, technology and innovation 4

Postal Environment - Global Trends The introduction of new products and services designed to respond to the needs of a demanding market Entering new lines of business through investment in new capabilities, partnerships and acquisitions Expanding and capturing business opportunities beyond local borders Maximizing the efficiency and effectiveness of existing processes, systems and networks performance 5

Trends 2011/12  Fourth consecutive year of decline in mail volumes, 3.7% in 2011/12.  Increased focus in governance and corporate citizenship  Sustainable development and Environmental impact  Commercialisation and regulation of financial services  Social transformation and delivering Universal Service  Robust Financial Management in a economically challenged environment. 6

Strategic Themes  Grow top line revenue at an acceptable cost  Deliver on our shareholder mandate and establish excellent stakeholder relationships  Improve efficiency and effectiveness in the way we conduct our business  Satisfy our customers by being consistent and innovative  Entrench a high performance culture in the organisation  Contribute positively to our communities and environment by embracing responsible business and social practice. 7

Government Mandate  To provide physical addresses to every household  million against a target of million  To make the postal and financial service available to all South Africans at an affordable price  1,572 branches conducting 95.1 million transactions  1,572 branches providing access to more than 8.5 million social grant recipients  2.7 million motor vehicle licences renewed, a 35% increase from last year  Provide a countrywide service  52 New and 29 Renovated outlets vs. 50 8

Customers and Performance  Satisfy our Customers by being consistent and innovative  E-fulfillment services  Extension of services in SADC – Logistics Business  ISO Accreditation Programme  Entrench a High Performance Culture  Skills Development and Training  Recognition of Prior Learning Programme  Review of the Staffing and Remuneration Models  Achievement of Equity targets  67% participation in Wellness program vs. 60% target 9

Environmental Plans  Carbon Emissions - Criteria and targets set  Carbon off-set at 7.4% emissions, exceeding target by 2.4%  Paper recycling Programme  687 tons of waste paper recycled against 137 tons recycled last year.  tones of paper used vs used last year  Electricity consumption reduced by 4.7% against target of 3% at pilot site Tshwane Mail  Participating in the Carbon Disclosure Project 10

11 Measurement of Economic Sustainability Long-term strategic objective Annual objective Improvement priority Target 2011/12 Achievement 2011/12 Achieved/ Not achieved Achieve growth (financial sustainability) Improve income statement Group revenue growth5%1.8%Not achieved Group operating profitR228mR253mAchieved Increase cost efficiency management Group staff cost % of total cost 51%49.8%Achieved Group total cost % of total income 96%95.7%Achieved Strengthen the balance sheet Postbank non-interest revenue growth R197mR292mAchieved Grow Postbank depositors’ book R394mR273mNot achieved ROA1.5% Achieved ROE6.1%5.9%Not achieved Total assetsR10.323bR10.375bAchieved Current ratio11.3Achieved Debtors days Mail Courier Achieved Capital investment in priority areas Total CapexR411mR120.8mNot achieved

12 Measurement of non-financial performance indicators Long-term strategic objective Annual objective Improvement priority Target 2011/12 Achievement 2011/12 Achieved/ Not achieved Achieving process efficiency Business restructuring Positioning of SA Postbank SOC Ltd Licence requirements Transition programmes Stakeholder management Banking licence application is in progress and is expected to be submitted during The designation of Postbank as a clearing participant was gazetted on 27 May SA Post Office’s (on behalf of Postbank) Visa application has been approved by Visa International. Two stakeholder engagement forums in place – the forum with DoC, which meets fortnightly and the forum that includes DoC and National Treasury, which meets once a month. The Ministerial oversight committee has been formed. Achieved Review and implementation of Shared Services Review current processes and SAP optimisation Two position papers delivered – process optimisation (SAP phase 2) and Labour brokers (time management analysis). Achieved Transport Complete formulation of new transport model Model formulated and consolidation was commenced with the national linehaul. Not achieved

13 Measurement of Social sustainability Long-term strategic objective Annual objective Improvement priority Target 2011/12 Achievement 2011/12 Achieved/ Not achieved Provide a stable, well trained and satisfied employee force Decent workplaces Workplace accidents and IODs 5% reduction on previous year’s actual 13.5% increaseNot achieved Improve intellectual capital Training expenditure as % of group staff budget 1.15% (R34m)1.25% (R36m)Achieved Talent management Succession planning to level 4 managers Not implemented. Completed for Exco members as well as all the GMs. Not achieved Performance management 100% TCTC evaluations 73.05%Not achieved Labour practices Management of HR liabilities Leave liability Housing liability Post-retirement medical aid cost 10% reduction on previous years’ actuals 10% reduction on previous years’ actuals 20% reduction on previous years’ actuals 24.5% increase 72% reduction 0.6% increase Not achieved Achieved Not achieved Employee relations Number of CCMA cases 66 cases heard at CCMA. 49 ruled in favour of SA Post Office Not achieved Health Wellness programme60%67%Achieved HIV/Aids Testing75%74%Not achieved

14 Measurement of Social sustainability (continued) Long-term strategic objective Annual objective Improvement priority Target 2011/12 Achievement 2011/12 Achieved/ Not achieved Satisfied customers Licence and mandate obligations Access to ICT services Achieve targets that will emanate from the BU plans to be finalised first quarter 2011 Final ECT Act audit completed. The Trust Centre is expected to be accredited by the South African Accreditation Authority in May or June 2012 Achieved Not achieved Address expansion 1,195,6901,199,273Achieved Additional points of presence 5052Achieved Delivery standard Mail Logistics 92% 98% 94.40% 94.60% Achieved Not achieved Queue waiting time Seven minutes 97% of offices compliedNot achieved Customer- centricity Develop intelligence Define data strategy during first six months Deferred until such time that the IT infrastructure refresh programme is completed Not achieved Conduct product and customer profitability study by March 2012 Product auditing and marketing metrics project are in progress Not achieved

15 Measurement of Social sustainability (continued) Long-term strategic objective Annual objective Improvement priority Target 2011/12 Achievement 2011/12 Achieved/ Not achieved Governance and compliance EthicsEthics procedures Quarterly meetings Baseline reporting Ethics committee finalised. Quarterly meetings and baseline reporting not done Achieved Anonymous crime reporting 10% increase on previous years’ actuals 3.5% increaseNot achieved Crime and fraud 10% reduction on previous years’ actuals 2.1% reductionNot achieved Governance Contract management 100% visibility on SAPAll available contracts captured on SAP Achieved Licence agreement Fulfilment of requirementsAnnual agreed targets are for: Retail outlet roll outs Address expansion and service delivery performance A revision of set targets has been requested from the Regulator but, in spite of this, SA Post Office is endeavouring to achieve General provisions of the Universal Service Obligation as per the Licence are being met Achieved Audit issues70% completion71% completedAchieved Transformation Employment equity- Gender Black female Race Disability 42% 29% 79% 4% 45% 35% 83% 0.44% Achieved Achieved Achieved Not achieved BBBEE60%61.3%Achieved

16 Measurement of Environmental sustainability Long-term strategic objective Annual objective Improvement priority Target 2011/12 Achievement 2011/12 Achieved/ Not achieved Corporate environmental Environmental sustainability Reduce carbon footprint Reduce by 2.5% 2.2%Not achieved Implement a carbon offset programme, and offset 5% of total emissions 7.41%Achieved Reduce fossil fuel consumption Reduce total fuel by 2.5% 3.17%Achieved Improve overall fuel efficiency of fleet by 2.5% 4.1%Achieved Reduce electricity consumption Reduce by 3% 4.7%Achieved Reduce water consumption Implement an effective water recycling programme Not doneNot achieved Reduce our total water consumption by 3% Baseline not yet set Not achieved Improve sustainability through recycling Reduce the total amount of paper used by 5% 42% increase in usage Not achieved Increase amount of paper recycled to 45% 27% recycledNot achieved

17 Measurement of Environmental sustainability (continued) Long-term strategic objective Annual objective Improvement priority Target 2011/12 Achievement 2011/12 Achieved/ Not achieved Corporate social Social investment HIV/AIDS/poverty alleviation Reach people SA Post Office engaged in the following formal CSI programmes: e-Rural access centres, reaching out to some people Humana People to People activities (computer skills; business skills; sewing classes and gardening classes) reaching out to some people Student to Government programme – in partnership with Development Bank of SA, Microsoft SA, SALGA and the local Government SETA Achieved Tree planting trees planted in 24 schools benefiting some educators and learners Achieved

Performance highlights  Group profit before tax up 32.6% to R251 million.  Group revenue up 1.8% to R5.9 billion.  Postbank deposits grew by 6.9% to R4.3 billion.  2.7 million motor licences renewed at post offices.  Distributed more than 41 million items for Census  Increased the post office footprint by 52 new access points.  Rolled out 1,199,273 addresses to first-time address owners.  SA Post Office won international stamp competition – The colourful rhythms of South African stamps.  Stamp launch for Chief Albert Luthuli.  Joint stamp issue with Indonesia. 18

Looking forward 2012/13  Declining mail volumes and loss of social grant payouts.  Phasing-out of funding from Government with high costs of servicing the universal service obligations.  Focus on diversification of revenue streams.  Delivering on our “customer promise”  Postbank corporatisation for financial inclusion.  Investment in our IT infrastructure is a key enabler for growth in our business.  Strong cost controls and continued improvements of process efficiencies. 19

SAPO Group Financial Overview 20

Performance highlights 21

Financial performance 22

23 SAPO Group financial overview

24 SAPO excluding subsidiaries

25 Courier & Freight Group

26 Docex

27 SAPO Group Revenue

28 SAPO Group Revenue

29 SAPO Group Expenditure

30 SAPO Group staff costs Excludes flexible labour costs

31 SAPO Group transport costs

32 Fuel prices - average (cents)

33 SAPO Group property costs

34 SAPO Group Profit before tax (R’000)

SAPO Group Balance sheet summary 35

36 Group key balance sheet items

37 SAPO Group Total Assets (R’000)

38 SAPO Group Depositor’s funds (R’000)

39 SAPO Group Net asset value (R’000)

40 SAPO Group Cash flow (R’000)

Subsidy utilisation – 2011/12 52 New points of presence 1,199,273 New addresses 1,199,273 New addresses 41

Decline in funding (R’000) 42

End of Presentation 43