AIR TRAFFIC & NAVIGATION SERVICES INTEGRATED …

1 11 TABLE OFCNSOFbLoFutNOLheInAIR TRAFFIC & NAVIGATION SERVICESINTEGRATED report 201611 TABLE OFCNSOFbLoFutNOLheInTABLE OF CONTENTSA bout the INTEGRATED Report3 Scope and boundary of report3 Approach to INTEGRATED reporting3 Sustainability statement3 Assurance5 Statement of precautionary approach7 Board Approval Statement7 Organisational profile8 Nature of business8 Principal activities8 Structure of ATNS s operations11 Contextualising our operations17 Commitments to external initiatives23 Letter from the Chairperson25 Letter from the Chief Executive Officer28 Abridged governance and assurance34 Application of King III34 Ethical leadership and corporate citizenship34 Board of Directors34 ATNS Board43 ATNS Executive Committee56 ATNS control framework64 Remuneration71 Code of ethics76 Material issues77 Clustering and prioritising ATNS material issues79 Stakeholder engagement81 Creating sustainable value82 How ATNS defines value84 Strategic review84 Performance through the capitals88 Financial capital89 Manufactured capital99 Intellectual capital110 Human capital114 Social and Relationship capital123 Natural capital132 Review of

2 Performance against key performance indicators139 Outlook143 Ensure long term financial stability143 Enhance operational efficiencies in line with global ATM standards143 Develop leadership capability in the ATM space144 Create a transformative organisation144 Build a culture of safety145 Build a skilled and capable employee resource base145 Manage the organisation s contribution to climate change145 Manage and preserve scarce and vulnerable resources145 Develop enterprise-wide awareness for environmental impacts145 Consolidated five-year review146 Permission against actual performance from 2011/12 to 2016 /17146 Annexure A: Remuneration Report148 Annexure B: Global report Initiative151 Abbreviations and Acronyms157 Company Information16121 TABLE OFCNSOFbLoFutNOLheInPERFORMANCE HIGHLIGHTS FOR 2015/16 Strategic objectives Indicator2014/152015/16 Ensure long-term financial sustainability.

3 TurnoverR1,412 billionR1,509 billionOperating costsR1,078 billionR1,254 billionNet profitR284 millionR243 millionEnhance operational efficiencies in line with global ATM capital expenditureR137 million(with additionalR29 millioncommitted)R230 million(with additional R491 million committed)Average systems availability Communication N/A99,61% NAVIGATION N/A96,15%SurveillanceN/A100%Create a transformative EE representation69,56%66,67%Build a culture of safety. Safety events per 100,000 air TRAFFIC movements 3,10 safety eventsper 100,000 airtraffic movements2,73 safety eventsper 100,000 airtraffic movementsBuild a skilled and capable employee resource number of ATS bursars 8074 Total number of engineering learnerships 126 Training investment as percentage of a salary bill 3,68%7,57%Develop enterprise-wide awareness for environmental number of employees trained on environmental training programmes 312 535 Total spend on environmental training R506,610R135.

4 320 SUSTAINABLE AVIATION AFRICAM anage the organisation s contribution to Climate carbon inventory 19, tonsCO2e 25, tonsCO2eManage and preserve scarce and vulnerable annual electricity usage 18,320,612 kWh 20,154, kWhOverall annual fuel usage102,782 litres 95,965 litresEnsure constructive and collaborative stakeholder relationshipsCSI spendR1,730,000R1,426, 576 Engineering Learnerships12631 TABLE OFCNSOFbLoFutNOLheInABOUT THE INTEGRATED REPORTS cope and boundary of reportThis is our fourth consecutive INTEGRATED report and covers the financial reporting period from 1 April 2015 to 31 March 2016 .

5 The 2015/16 INTEGRATED report combines financial and non-financial performance in a single, INTEGRATED reporting format. All references to forward-looking information and targets in the ATNS-IR are extracted from the 2016 /17 ATNS Corporate Plan approved by the Board of boundary of this report is largely the ATNS legal entity. There may be instances for some of the material aspects where reporting has extended to other entities outside of the Company, as ATNS s operations are located at different previous INTEGRATED report was approved by the ATNS Board on 16 August 2015 and published for the period 1 April 2014 to 31 March 2015.

6 The 2014/15 suite of reports combined performance content, sustainability content and our annual Financial Statements across three reporting volumes. A printed version of the three-volume suite of reports was published and a web-based version of each report was made available in PDF format. Approach to INTEGRATED reportingThe 2015/16 INTEGRATED report offers a comprehensive account of the Company s performance in terms of its ability to create value through the six capitals , as defined by the International INTEGRATED Reporting Council (IIRC). According to the IIRC: The are: financial capital, manufactured capital, intellectual capital, human capital, social and relationship capital, and natural capital.

7 Together they represent stores of value that are the basis of an organization s value creation. 1 Further: INTEGRATED Reporting is an approach to corporate reporting that demonstrates the linkages between an organisation s strategy, governance and financial performance and the social, environmental and economic context within which it operates .2 ATNS harnesses the principle of materiality to link disclosures on ATNS s financial, social and environmental performance to its strategic objectives and to the six capitals. Performance is also linked to the Company s developmental context, regulatory context, commercial context and its global business context.

8 Materiality has been determined by the ATNS Board and Executive management through a process of extensive consultation within the organisation and with ATNS s stakeholders. The process further considered ATNS s strategic objectives whilst taking into account the Company s material risks, strategic opportunities and the ATNS value chain. It accompanies the Company s stand-alone annual Financial statementAs a signatory to multiple global conventions including the Chicago Convention, which established the International Civil Aviation Organization (ICAO) as a specialised agency of the United Nations - South Africa s vision for sustainable development is embodied in the relationship between social systems, ecosystems and economic systems.

9 These systems are not simply interlinked but also embedded within each other and underpinned by governance systems as described in the National Framework on Sustainable Development (2008). As a State- Owned Company - and national provider of air TRAFFIC management (ATM) SERVICES - we have a significant role to play in contributing to the sustainability agenda of the country. Our mandate from our Shareholder, represented by the Minister of Transport and the entire Department of Transport, directs us to contribute to both departmental and national outcomes by balancing the safe development of civil aviation, with the responsible consideration of our impacts on the economy, society and the our 2015/16 INTEGRATED reporting process, we disclose both financial and qualitative (non-financial)

10 Performance information as it relates to ATNS s business outcomes and the Company s contributions to the country s overall economic efficiency and ATM competitiveness. Our INTEGRATED report includes Standard Disclosures from the GRI Sustainability Reporting Capitals Background Paper for <IR>; p1, March The Roadmap to Excellent INTEGRATED Reporting; (2013a) , OFCNSOFbLoFutNOLheInReferencing content onlineThe 2015/16 INTEGRATED report , and ATNS s annual Financial Statements are available on our website as downloadable documents: FeedbackWe welcome feedback on our INTEGRATED reporting to ensure that we continue to disclose information that is pertinent to all our stakeholders.