SABS PRESENTATION TO THE SELECT COMMITTEE ON TRADE

SABS PRESENTATION TO THE SELECT COMMITTEE ON TRADE AND INTERNATIONAL RELATIONS 13 JUNE 2018 NCOP, ROOM M 314 Giving you the quality edge

Overview of the SABS Legislative Mandate SABS is the peak national standardisation institution in South Africa, established by the Standards Act, 1945 (Act 24 of 1945), and continues to exist as a commercialised public entity under the Standards Act, 2008 (Act 8 of 2008). The objectives of SABS are as follows: • Develop, promote and maintain South African National Standards (SANS) • Promote quality in connection to commodities, products and services • Render conformity assessment services and matters connected therewith 2. Vision To be the trusted standardisation and quality assurance service provider of choice 3. Mission The SABS provides standards and conformity assessment services to contribute towards the efficient functioning of the economy. 4. Values As the SABS transforms and moves towards a culture of high performance in delivering standardisation services, it is guided by the following values: • Impartiality • Innovation • Accountability • Integrity • Quality • Customer Centricity 1. 1

2 Statutory mandate Overview of the SABS Statutory Develop, promote and maintain South African National Standards (SANS) Grant funded 25% Funding sources Commercial mandate Certification Laboratory Services • SABS Mark – Product • Testing of products in line Certification • System Certification. • Conducts local content verification &Conducts inspections, calibrations, proficiency schemes, and tests against standards Accessibility Acoustics Adhesive and packaging Agrochemicals Automotive Building and construction Key sectors supported Growth Training/SMME • Training on Standards • Technical support to SMMES with ISO/IEC international protocols for laboratories • Chemicals Chromatography Civil engineering Clothing and protective wear Electronics appliances Energy efficiency Engineering Environment (EMS) Customer centricity Explosion prevention Fibre and polymers Food and beverages Industrial chemistry Lighting technology Mechanical and fluids Medical and health Productivity Strategic Themes and entrepreneurs on standardisation services Metrology Mining and minerals Paints and sealants Petrochemical Pharmaceutical Radiation protection Rotating machinery Funded from fees charged for services offered in a competitive market Rubber and plastics Safety and security Solar water heating Textiles and leather Timber Transportation Competent & empowered employees 75%

Our Value Offering to Society and Business What we do Benefit to Society Benefit to Industry Benefit to South Africa Development of national standards for processes, systems, services and products Support inclusive growth Fair and transparent process to set National Standards - Enable access to standards and conformity assessments that facilitate trade and protection of consumers and the environment - Fair competition Test, inspect, verify and certify processes, products and services against requirements in the standards - Quality assurance for consumers - Fairness in the market Enable producers and suppliers to compete fairly - Protect local employment - Enable local production - Fair competition - Safety to consumers Promote the use of standards for socioeconomic development Facilitation of access to to standards and related services Provide platform for support to access services by SMMEs - Increase production of intellectual capital - Improve speed to market - Facilitate new entrants to the market Provide training on standards and conformity related assessment services Correct implementation and use of standards Ensure compliance to standards proficiency in quality management Fair trade environment where standards are consistently applied in the procurement of products and services 3

Our National Footprint The SABS head office is in Groenkloof in the City of Tshwane. The organisation has seven other satellite facilities spread across South Africa. 4

Our Governance Structure Department of Trade and Industry Board of Directors Audit committee Human resources & remuneration committee Social & ethics committee Finance & investment committee Risk committee Director’s Name JEFF MOLOBELA Classification Independent non-executive chairman DR MICHAEL ELLMAN Independent non-executive director WEBSTER MASVIKWA Independent non-executive director ELEKANYANI NDLOVU Independent non-executive director NIVASHNEE NARAINDATH Independent non-executive director ZANELE MONNAKGOTLA Independent non-executive director GARTH STRACHAN DR BONI MEHLOMAKULU Shareholder representative Executive Director and CEO * One Independent non-executive director resigned in January 2018 Nominations committee 5

REFLECTING ON 2017/18 PERFORMANCE Giving you the quality edge

Developing National Standards 1. Legislative mandate Total number of standards published SABS continue to focus on the following: • Develop and maintain national standards for economic impact • Ensures broader participation in the development of standards through technical committees • Promotes and creates awareness about standards • Maintains South African voting presence on international standardisation bodies 600 498 470 500 370 400 314 300 218 200 100 0 2014 2015 2016 2017 2018 2. Highlights for 2017/18 New standards published per sector • Steady increase of home grown standards to support IPAP efforts, 314 standards published of which 147 were home-home grown 25 20 15 10 • Conducted three external stakeholder consultation workshops; namely: 2016 2017 2018 Other Textile and leather technology Telecomunications Services Mining and minerals Petroleum and related technologies Metrology and equipment Mathematics Manufacturing engeneering Information technology Image technology Health care technologies Generalities Fluid systems and components Environment and health protection Electronics Energy and heat transfering engineering Electrical engineering Domestic and commercial Civil engineering Construction materials and building Agriculture 5 0 6 o Energy Sector o Agro-processing Sector, and o Construction Sector.

Performance Key Highlights for 17/18 Key performance area Annual Target Q 4 YTD Actual Status R 563. 3 (m) 0% 2 R 520. 5 (m) 3. 00% 2 70 4 92 3 >80% 82% % of testing laboratories that are profitable >55% 61% Implementation of the Standards Action Plan 65% 75% 3 for 17/18 4 for 17/18 Growth Revenue from services Operating profit % New products/services offered Customer Centricity SMMEs supported Number of sector publications % of development projects completed as per IPAP Productivity Number of services automated Progress on implementation of Property Plan Complete Groenkloof property development plan Appointment of partner deferred Competent and empowered employees Number of technical employees trained Number of post graduates appointed in identified areas Performance Results are subject to verification by external audit 8 2 13 3 7

THE YEAR AHEAD 2018/19 Giving you the quality edge

SABS Strategic Objectives Growth Develop and retain a competent human resource that is Empowered Staff aligned with the organisation’s mandate Strategy Increase in the use of standardisation services by broadening the scope of service Customer Centricity Put the customer at the forefront of everything we do Productivity Improve the operational performance of the SABS to enable delivery of quality outputs for customers and the South African economy 8

Target 1: Growth 1. Increase in revenue from services 700 600 557. 3 544. 7 532. 5 500. 9 500 657. 8 601. 8 560. 4 2. New Products & Services 6 5 5 400 4 4 300 200 3 100 1 F 2 2 2017/18 2018/19 F /2 2 20 20 0 F /2 20 19 9 F 18 /1 8 Actual 20 /1 20 17 7 /1 16 20 6 /1 15 20 20 14 /1 5 0 1 Budget 0 2019/20 F 2020/21 9

Target 4: Competent and empowered employees 10 20 18 18 16 14 12 12 10 10 8 6 8 8 6 6 4 2 2 0 8. Number of technical employees that have completed 9. Number of Doctoral and Masters graduates recruited or specialist training with leading partners developed to support Testing and Standards Development 2016/17 2017/18 2018/19 F 2019/20 F 2020/21 F

SABS’ CONTRIBUTION TO IPAP 10 Giving you the quality edge

Alignment to IPAP Programme to development and revise 12 new Standards : • Enhances localisation of clothing, textile, leather and footwear - safety of products • Supports expansion of plastics, pharmaceuticals, chemicals and cosmetics - safety of products • Supports growth of agro-processing and ocean economy - food, fish and abalone • Enables management of energy demand efficiency - buildings, electrical cables • Contributes to sustainability of water supply - reuse of grey water • Helps to create regional supply chains and infrastructure - general and electrical supply Six projects in the Laboratories & Design Institute: • Enhances market access for SMMEs - support government and industry initiatives (e. g. Jobs Fund) • Supports commercialisation of Indigenous solutions - traditional medicines testing • Enables diversification sources and demand of electricity - investment to renew and modernise equipment 11

SABS’ INTERNAL DIGITISATION STRATEGY Giving you the quality edge

SABS’ Digitisation Transformation Imperative • 12 Based on recommendations from international accreditation bodies such as Rv. A and FSSC, the SABS has focussed its immediate digitisation implementation to its Certification business, and the following new systems have already yield improvement in the business divisions: Ø Ø Ø An online system that enables customers to process their new and re-certification applications electronically, with system generated statuses of their applications A backend Approvals Board system automated and digitised the certification approvals process with major efficiency gains in approval turn-around times An online tool to effectively monitor and report SABS Mark abuse incidents by real-time globally scanning marketplace websites and company websites. This was further enhanced with an automated IP infringement case tracking system • The SABS Business Intelligence Centre of Excellence was successfully established and is producing invaluable business performance dashboards and reporting that has, and will enable informed decision making, e. g. the actual status of expired certificates, such as root causes, aging analysis and heat maps • The Customer Dashboard solution has enabled the first deliverables towards a “Consolidated View of the Customer” to enable an improved customer handling experience for the customers • To enable its digitisation journey, the SABS data infrastructure is being upgraded, which will increase the Pretoria and Durban sites from a single 40 Mb and 3 Mb respectively to two 120 Mb lines at each site

SABS’ Digitisation Strategy and Roadmap 13 • The SABS Digitisation Strategy and Implementation Plan was approved at the SABS Board meeting held in November 2017. The plan is aligned with, and shall be executed in accordance with the 2018/19 to 2020/21 SABS Corporate Plan • Sustainable digital technologies and tools, such as Natural Interfaces, Internet of Things (Io. T), Cognitive Systems and Next Generation Security are the primary innovation enablers within this plan • The budgetary implications of the Digitisation Strategy is approximately R 300 million over a three year period • The SABS has adopted a holistic approach to digitising its business, which integrates its customers, people, business processes technology and key stakeholders • The immediate focus areas for 2018/19 are to radically improve customer engagements in the following manner: Ø Ø Ø A single view of the customer will be enabled through a new CRM tool Multi-channel customers engagements will be integrated with a comprehensive online portal for all customer engagements Customer engagement business processes will be optimised and effectively measured

SABS’ CONTRIBUTION TO THE 4 TH INDUSTRIAL REVOLUTION Giving you the quality edge

SABS’ Contribution to the 4 th Industrial Revolution 14 The SABS contributes to the 4 th Industrial Revolution on the following levels: • First Level - Facilitate the development of standards governing the various aspects of digitisation and smart concepts such as smart cities, smart industries, etc. within its legislative mandate through: Ø Participating in various international forums dealing with the development of standards for Industry 4. 0 / The 4 th Industrial Revolution and other digitisation initiatives Ø The IPAP commitments for 2018/19, which includes the development of three separate electro-technical standards. This is over and above the ongoing standards revision work and those standards already published in the current financial year Ø Participating in the work of the SDG 15 looking at networks, technologies and infrastructures for transport access and home, which amongst other things, is developing standards to enable the evolution towards intelligent transport networks including the support of smart-grid applications Ø Leveraging these global participations and best practices and apply thought leadership to its effective and efficient implementation to support the NDP, IPAP and the National e-Strategy • Second Level - Participate and add value in any dti coordinated or collaborative initiatives to execute on the 4 th Industrial Revolution initiatives • Third Level - Proactively implement the SABS digitisation plan and where possible, use learnings to inform points 1 and 2 above and provide consulting/implementation services to other dti/government/SMMEs

APPENDIX: FINANCIAL STATEMENTS Giving you the quality edge

Statement of Financial Performance 15

Statement of Financial Performance 16

Statement of Financial Performance 17

THANK YOU SIYABONGA Giving you the quality edge