2019

Priority goals:

2019 has been a disruptive year for our people. Nurturing a high performing, diverse and talented culture will require responsible, ethical and motivational leadership that builds purpose around our evolving operating model.

Managing our evolution

2019 has been a disruptive year for our people, who have been impacted by both restructuring and the reputational damage that we have sustained as a business. Our headcount has reduced from over 11 000 employees to 10 578, with further restructuring on our roadmap. In this context, where we are working to futureproof EOH by lifting ethical standards, we need to be highly cognisant of the fact that only 16 employees have been found guilty of wrongdoing, and that the majority of our people are innocent.

Our people require high morale to be their productive, creative and innovative best. In 2020, being a responsible employer means that we will focus on building purpose, motivation, and kindness – as we lead further change.

High performance culture

Nurturing a high performance culture is intrinsic to the sustained success of EOH. We are, essentially, a human capital business, with our revenue depending upon the quality of the skills that we bring to bear. With the rapidly evolving nature of technology, we need to retain and attract top talent, while also investing in the nurture of skills and career pathways, as well as ensuring quality of life. Employee wellbeing is critical due to the often pressurised environment in which we operate, where we need to give our customers our best, every single day. We offer challenging work, met with recognition, organisational support, skills development opportunities, health and wellness programmes, in order to empower our people to be the best.

Embracing our diversity

The diversity of our business is met by the exceptional diversity of our people. We are a company with zero tolerance for unfair discrimination, and with an authentic commitment to sustainable transformation and the reflection of the demographics of the society in which we live. We have an inclusive workplace that works continuously to employ, upskill and empower those who were previously economically marginalised or disadvantaged through discriminatory practices, by offering training, empowerment forums and further financial assistance to those who want to learn and better themselves. Our work is ongoing to bring forward our youth; a next generation of leaders who are inspired to become the ethical and effective drivers of value-add technology services.

THE EOH HUMAN CAPITAL MANAGEMENT FRAMEWORK

TRANSFORMATION (B-BBEE, diversity and inclusion)

Building capability – support current and future business goals (Right people, right roles, right time)

Attract and retain exceptional talent

• Quality hires
• Attractive employee value proposition
  • impactful work
  • interesting career opportunities
  • holistic rewards

Develop critical skills and competencies

• Business strategy-led learning and development
• Robust individual development plans
• Strategic talent management

Build future
talent pipeline

• Succession planning
• Strategic workforce plans
• Skills pipeline for future business needs

Performance, reward and recognition

Drive high
performance

• Quality performance measures, with balance between short-term and long-term focus
• Performance-linked rewards/incentives and recognition

Culture (Purpose, philosophy, values)

Workplace culture characterised by...

• Values-based leadership
• Engaged workforce
• Capable and empowered frontline
• Innovation and winning mindset
• Customer centricity

OPERATIONAL EXCELLENCE/EFFICIENCIES/GOVERNANCE (enabling systems, processes, policies and procedures)

Building People Capabilities

Attract and retain exceptional talent

Overview

In 2019 our focus has been on building human resource capabilities to ensure that we are able to support current and future business goals. This entails ensuring that we have the right people, in the right roles, at the right time. EOH has worked to build a high performance culture that gives holistic reward as follows:

Quality hires

Over the course of the last year there has been considerable recruitment of talent into key roles that were identified by new executive appointments and for new capabilities and functions recommended by an independent human capital capability assessment. There are further key roles that are still being filled as a part of this process.

Employee value proposition

Ensuring that we attract and retain exceptional talent requires an attractive employee value proposition. EOH is committed to providing impactful work with interesting career opportunities and holistic rewards. The restructuring process will bring a more corporatised structure and approach to EOH. It will be a key objective in 2020 to ensure that this process galvanises human resource management capabilities and seizes the opportunity to create enterprise-wide career possibilities.

Performance management

Our performance management programme, EOH Connect, focuses on what has been achieved, how it was achieved and the setting of future goals. The programme aligns individual goals with EOH's overall objectives, enabling employees to maximise their potential and drive achievement of Group strategy.

Remuneration and benefits

EOH's approach to remuneration and benefits supports the business strategy to attract, retain, motivate and reward employees to deliver our long and short-term strategic objectives.

This is achieved through a combination of guaranteed annual salaries (with benefits commensurate with the marketplace), profit share incentives that reward short-term operational performance and share-based incentives that promote retention and drive performance.

Our remuneration packages include:

• guaranteed remuneration aligned to the relevant market data with an annual salary review;
• a short-term incentive plan that is performance-based and recognises individual performance and the achievement of strategic business objectives; and
• a long-term incentive plan that focuses on long-term sustainability and shareholder value creation by retaining key and critical people.

Benefits

EOH offers access to competitive market-related employee benefits such as risk cover, retirement benefits and medical aid. Employee benefits are reviewed annually to ensure that the best market-related benefits are offered to employees.

Each employee has access to a team of professional employee benefit advisers who provide relevant information to help employees make informed decisions based on their personal circumstances.

Employee wellness

We recognise that employee mental and physical health and an appropriate work-life balance are essential for excellent service delivery and superior performance. EOH's executive health programme includes comprehensive medical assessments and personalised preventive strategies for executive staff to identify and manage risk factors that impact wellness and quality of life. Employees also have access to the MyWellness@work programme, which provides confidential support for employees and their families and includes financial and legal assistance, nutrition and exercise programmes, wellness coaching and programmes to address their psycho-social needs.

EOH facilitates national Wellness Day events for its employees, which provide health risk assessments and supports health-related initiatives such as blood drives for the South African National Blood Service ('SANBS').

Health and safety

EOH aims to maintain a safe work environment to ensure the safety of employees and visitors, and comply with the requirements of the Occupational Health and Safety Act. We provide the required rules and guidelines to employees as well as the necessary training and supervision to achieve this. Health and safety committees with trained health and safety representatives are in place in each region. The EOH Health and Safety Manager is responsible for ensuring that the Group remains compliant with the relevant health, safety and environmental legislation and regulations. Operational health and safety is managed at a regional level across the Group's locations.

Developing Talent

Develop critical skills and competencies

Overview

Our policy is to ensure business strategy-led learning and development, supported by robust individual development plans, and coupled with strategic talent management. During 2019 training needs were identified for suppliers and employees to enable participation in refreshed governance, risk and control frameworks, and to enable ethical and effective leadership.

Training and development

Overall training spend reduced in 2019 from R52 million to R46,3 million, in line with a 5,8% reduction in the number of our employees. Average spend per employee reduced slightly (5,5%) from R4 635 per person, to R4 378 per person. The EOH Learning Hub provides short learning courses, skills programmes and national qualification offerings that build business-relevant competencies. Training and certification is delivered through the EOH Academy. The go live of a new EOH Group learning platform to land CODE educational programmes is in process. Further training is delivered with Group businesses, as per the learning needs of each company.

EOH Graduate programme

As the largest technology partner in Africa, EOH invests in youth to accelerate the pipeline of young talent in ICT. To that end, we continue to invest in our collaboration with Belgium Campus, a pioneering ITversity in Pretoria that helps to raise the bar through its graduates in the ICT industry. The programme focuses on learners from previously disadvantaged schools who wish to study information technology. EOH provides bursaries, including full programme costs, stipends and accommodation, and is on track to produce over 80 graduates between 2018 and 2020, with six African women graduating in 2018 as a part of the Infor Global Alliance programme.

Build future talent pipeline

Attracting the best talent

There is material work taking place to build new and strengthened EOH capabilities. This work will deliver a revitalised business model, able to drive value creation. This creates the need and opportunity for internal and external candidates who have leadership, technical and other professional delivery skill sets. Leadership will play a critical role in succession planning and building the skills' pipeline needed by EOH, communicating the opportunity it presents for challenging and exciting career pathways, backed by strategic workforce plans that are fit for the future.

Drive high performance

Performance, reward and recognition

Considerable effort is set to be invested in operational excellence in 2020. There will be a focus on enabling systems, processes, policies and procedures that will redefine performance in line with freshly corporatised, consistent and transparent standards. Performance will be linked to individual reward and recognition incentives to motivate a high performing culture that delivers a world-class technology service. Quality service measures will be set to optimise a balance between short-term and long-term goals and objectives.

Organisational culture

Building purpose, philosophy and values

EOH is a workplace defined by values-based leadership and five philosophies that give a clear, ethical purpose to enable people through technology. In the repair of reputational damage done in 2019, there will be a strong effort to motivate the EOH workforce, galvanising a capable and empowered frontline, and engaged workforce, with a customer centric organisational culture that values a winning mindset and the innovation that is needed in our ever evolving digital ecosystem.

Transformation and Diversity

Diversity, transformation and inclusion (B-BBEE)

The value in diversity

The ICT sector is disruptive and rapidly evolving. EOH knows that the best innovation comes through celebrating diversity. EOH embraces and values diversity and recognises that it stimulates productivity, creativity and innovation that drive growth and competitiveness and helps us to maintain our competitive edge. We are committed to creating a diverse, inclusive, and bias-free environment where different perspectives are embraced. Our goal is an organisation that our employees are proud to be associated with, where they can grow, contribute and succeed regardless of race, gender, ethnic or social origin, religion, culture, language and disability.

The need for transformation

We are committed to sustainable transformation and the empowerment of those who were previously economically marginalised or disadvantaged through discriminatory practices. Digital skills are critical to our economy and warrant exceptional effort and investment, contributing to the generation of jobs and a reduction of unemployment. EOH's transformation plan aligns with the Employment Equity Act to improve representation of historically disadvantaged South Africans in the workforce. Our Social and Ethics Committee provides clear direction to motivate EOH performance on transformation.

Zero tolerance of discrimination

EOH has zero tolerance for any form of unfair discrimination and is committed to a work environment that promotes equal opportunities for all. We believe in an environment that reflects the demographics of the society in which we live.

Broad-based black economic empowerment (B-BBEE)

EOH is committed to contributing to the sustainable development and transformation of South Africa. EOH is a Level 1 contributor to B-BBEE, the highest rating of its peers on the JSE. We measure our transformation progress against the Department of Trade and Industry Codes of Good Practice.

Transformation is managed at an operational level and reported and monitored at Group level through EOH's reporting structures. Initiatives that support transformation are wide ranging and include employment equity programmes, skills training and development, diversity and inclusion training, enterprise and supplier development, preferential procurement and increasing black ownership.

Further to this, EOH has a full suite of economic empowerment plans and forums to enable employee co-determination. Our latest B-BBEE certificate is available on www.eoh.co.za.

Gender distribution by category (%)

Gender distribution by category (%)

Gender equality

EOH is a champion of gender equality and has increased the number of female employees in executive and senior management roles in the last year.

Employee gender diversity

8% increase in female employees in executive and management roles since last year

People with disabilities

EOH employed 164 youth with disabilities during the year through various programmes and is committed to increasing the number of disabled individuals as a percentage of overall headcount. Currently, 23 disabled employees are participating in a work integrated learning programme in our managed services division after completing their National Certificate in System Support. Various skills programmes, such as emotional intelligence and workplace readiness, have been introduced to assist the group with integration into business.

Ethnic group per category (%)*

* South African workforce.

Gender distribution by category (%)

AT EOH WE BELIEVE IN OUR YOUNG LEADERS

At EOH our next generation of leaders is fully supported to grow and take action to create a better world. Meet our finalists for the One Young World competition 2019. This is a platform where 196 countries participated, with 352 scholarships awarded.

Vandana Satagoor*

My work with impoverished communities in Johannesburg, to educate them outside of the classroom on agroecology principles, helped people to build and sustain their own food systems. I am so inspired to meet other young leaders and see what they achieved.

Thandeka Mbokazi

Understanding the importance of proper education, and the consequences that arise when there is a lack of such, including high employment and skills shortages allowed me to believe that if the system changed at grassroots level the difference at the top would be notable.

Sindiswa Sibeko

Through my involvement with tertiary educational organisations I had the chance to interact with people at a personal level. I had the chance to change lives, and I had the chance to grow future leaders.

Matthew Rosenberg*

By volunteering my time on the ambulance services I had the opportunity to serve those in need of emergency medical care. This work with some of the poorest communities has given me empathy and understanding of grassroots issues and the need for sustainable innovation.

* Vandana and Matthew attended the One Young World Summit.

https://www.youtube.com/watch?v=VYY2unZKJI0

Priority goals:

EOH plays a pivotal role in driving an innovative and growing digital sector within South Africa and the wider world. We do this by playing a vibrant role in stimulating innovation and new collaborative partnerships that bring the best blend of technical skills to bear, to evolve the solutions that our customers need, now and in the future.

Strategic partnerships

Over recent years we have grown aggressively through acquisition. This strategy coupled with the delivery of services to our customers has yielded businesses that own valuable intellectual property and capabilities, ready to scale. Strategic partnerships are now able to provide access to customers on the global stage, driving revenue and growth.

It is our intention to leverage this opportunity to take EOH to the next level as a technology service provider that delivers beyond Africa, in our wider world. Our roots remain firmly South African; however, contribution to a global economy can bring global returns on investment.

We believe that by collaborating with major international players, we can develop a sustainable presence as a player that is deeply involved with making a contribution to the evolution of the fourth industrial revolution, ensuring wider innovation for all our customers and wider stakeholders.

We partner for life.

Enterprise development

EOH has an entrepreneurial philosophy that naturally supports innovation and investment in new enterprise. Over the course of 2019, we have learnt hard lessons about the level of oversight and support that enterprise partners need to ensure an ethical and sustainable growth. Our enterprise development partnerships have now been fully scrutinised, not only to ensure ethical practice, but for the best opportunities for future value creation.

In 2019 our efforts will be to redefine the balance between our spirit of innovative entrepreneurialism, and the strategic enterprise management needed to nurture and optimise value.

At EOH we have been a Level 1 B-BBEE player because we believe in investing in emerging enterprises and incubating next generation technologies. This activity is an important contribution to the transformation of our ICT sector, building a vibrant ecosystem of technology players that can support the public and private sector needs for modern technology now and in the future.

Best practice oversight can play a valuable leadership role in ensuring the best opportunity for emerging players. Given our new capabilities and the lessons we have learnt, EOH is committed to continuing to work with emerging enterprises.

We have learnt our lessons.

IT innovation

EOH is passionate about innovation and creating sustainable value for all of our stakeholders. We are committed to leading a next generation of technology that is sustainable and enables a better world.

Our iOCO business offers our customers the opportunity to innovate with industry specific solutions that demystify technology developments such as artificial intelligence and robotics, enabling evolution.

Our NEXTEC organisational pillar contains valuable technology products and service opportunities that offer solutions that can evolve both the world of work and daily life.

Our IP organisational pillar presents the opportunity for strategic collaboration with some of the best technology companies in the world.

Our commitment to leadership entails being at the coal face of IT innovation, engaging in the courageous conversations that are needed to ensure the ethical and effective guidance needed to enable and protect business, government and wider society.

We lead and grow, sustainably.

Priority goals:

EOH believes that the integration of young people into the digital economy is essential in order to futureproof a thriving and prosperous South Africa, that has the skills needed to fuel the modern world of work.

An investment in society

EOH's corporate social investment ('CSI') activities prioritise the support of programmes and initiatives focused on youth development in the mathematics, science and technology space. South Africa's population reached 58,78 million in 2019, with nearly a third falling into the youth (18 to 34 years) category. It is critical that our youth is enabled with the skills that they need to take on opportunities that enable fulfilling careers in digital industries, where there is a critical skills shortage. We partner with key organisations to deliver equitable solutions to quality education, which we see as one of South Africa's most important needs.

Aligning to national priorities

One of the nine central challenges identified by the National Development Plan is that too few people work and youth unemployment statistics currently sit at 38%. Skills and enterprise development is critical in preparing the youth for career and entrepreneurial opportunities that will help break the cycle of poverty. We need help in providing young adults with the necessary job skills training and guidance so that they can become contributing individuals in the economy and in their communities.

Collaborating on our shared future.

The EOH stand at the maths "Maps and Mirrors" event at Katlehong Technical High School where 10 different schools from the Ekurhuleni South District received insights into career opportunities in the technology sector.

EOH has been supporting Afrika Tikkun for more than 10 years. The aim of the programme we support is to provide a sustainable future for township youths, through digital skills that support career development, breaking the cycle of poverty in poor communities.

Sharing our passion

EOH is passionate about sharing its digital skill through youth development and to that end has introduced IT programmes (basic coding) to enhance the scope of offering to the youth through Afrika Tikkun.

An ICT foundation

The majority of the young people in the Child and Youth Development programme (aimed at young people between the ages of seven and 18 years) have never used a computer before, so as a starting point, every grade in the programme is introduced to the basic components of a computer and is taught about hardware, software and typing skills.

Web and coding skills

In 2018, young people in the Career Development programme (aimed at young people between the ages of 19 and 25 years). completed a three-month web design course. This training gave coding and programming skills to increase chances of employment in the information technology industry. The course included theory and practical work and covered the following key skills:

• Website fundamentals
• Photoshop and graphic manipulation
• Coding, including CSS, JavaScript and HTML
• Webpage design in WordPress

ICT skills for entry to jobs

In the first six months of 2019, a further 885 people were registered in the Career Development programme, with 589 young people being placed into subsequent employment opportunities. These learners were prepared specifically for the workplace, with the focus being:

• Microsoft (Word, PowerPoint and Excel);
• email (Setup, send, receive and etiquette);
• leveraging the internet for research; and
• online application to tertiary institutions (grade 11 and 12 students)

The Career Development programme delivers a full lifecycle of ICT training, first delivering PC Basics, and then progressing learners through coding stages, often using gamification to enhance problem solving and critical thinking skills.

About Afrika Tikkun:

Founded in 1994, the organisation has a Cradle to Career 360° model that aims to provide education, health and social services to young people and their families through centres of excellence in South African townships. The Career Development Programme provides career guidance, job readiness training, job placement and bursaries for further learning targeted at young adults.

Website: https://afrikatikkun.org

Supporting students, teachers and parents to get an ICT foundation and skill set, which when embedded early contributes to a future generation that is more employable, by building opportunity in townships, and for the hard of hearing in rural communities.

Lifting matric results

EOH strategically partners with the Maths Centre, supporting the roll-out of the programme to 10 high schools, including two special needs schools, in the East Rand Johannesburg area.

Over the past five years, over 2 800 students between grades 8 and 12 have benefited from the programme. Prior to the project, the majority of schools were performing below the national average. Assessment and a gap analysis was acted upon, supported by an advocacy campaign to support parents and teachers. So far, key academic achievements have included:

• 20 maths distinctions;
• overall 80% mathematics pass rate;
• 25 physical science distinctions; and
• 100% physical science pass rate at three schools

The EOH bridge to jobs

In 2019, EOH is supporting a further 100 students and for whom we are eagerly awaiting their results. Upon graduation, all matriculants are given the opportunity to enrol in the EOH Youth Job Creation initiative, which will enable them to significantly improve their chances of future employment. This ensures continuous care and support for learners on their developmental journey.

About the Maths Centre:

The Maths Centre incorporating sciences, popularly known as the Maths Centre, is a non-profit organisation for excellence in mathematics, science, technology and entrepreneurship. It works across South Africa, with the primary objective being to equip teachers, learners and parents with the learning materials and programmes needed to develop a higher competency and performance in these learning areas, from reception to grade 12.

Class of 2018 matric results for project schools

2018 subject performance: mathematics (% achieved)

2018 subject performance: physical science (% achieved)

Source: Stats SA 2019 mid-year population estimate www.statssa.gov.za/?p=12362

Website: www.mcis.org.za

Enabling the deaf with ICT skills

EOH supports the deaf community and last year we assisted e-Deaf to establish a training centre for 50 deaf students in rural Mthatha in the Eastern Cape. The centre aims to enhance formal basic written language and writing skills through Adult Education and Training ('AET'). The programme will be developed into further formal qualifications after all AET levels have been successfully completed. EOH is also supporting 91 students with hearing disabilities in other parts of the country to obtain AET and other qualifications. Information technology is identified as a core competency across all business sectors and is a critical and scarce skill in these communities.

Website: www.edeaf.co.za/

Priority goals:

EOH now knows firsthand the devastating impact of corruption. We, and our wider stakeholders, have collectively paid a high price for the wrongdoing of a few. We are committed to futureproofing ourselves, and to sharing the lessons we have learnt to support others in their ability to protect themselves from this scourge.

A principles-based approach

EOH has taken the decision to adopt the Ten Principles of the United Nations Global Compact. These principles are designed to help business to act responsibly and sustainably, giving an ethical moral code for employees, an accountability measure, presenting a foundation for building trust with stakeholders across the board. The principles are designed to be embedded into day-to-day business operations, giving a universal set of rules and a common language for establishing a culture of integrity. The principles are about more than compliance. They set the stage for long-term success and sustainability for people and for the planet.

Stakeholder engagement

We believe that we need to take accountability for our situation and engage with our stakeholders, giving independently verified transparency into our forensic analysis of wrongdoing. Honest and real engagement is the critical first step toward rebuilding trust, giving assurance that we are futureproofing ourselves effectively to ensure that we never face the scourge of corruption again. The action we are taking to embed oversight is extensive and will be a process that takes time. We want to share the lessons that we have learnt and the best practices that we are embedding to fight corruption, both within and beyond our organisation.

Best practice governance

Extensive information is given elsewhere in this report to outline our new and best practice framework for delivering best practice governance, risks and controls. Beyond corporate leadership at the top level of our organisation, we are committed to CODE. This is our initiative for sharing our role as a responsible corporate citizenship with our wider employees and all the partners that we work with in our digital ecosystem. Everyone at EOH is responsible for ethical and high integrity conduct and blowing the whistle if needed to prevent wrongdoing.

We are all responsible for being a living part of the EOH force for the good.

Priority goals:

Environmental responsibility

As a provider of professional services, EOH has a relatively low environmental footprint, but we believe that effective environmental stewardship is an important aspect of an organisation's licence to operate. We have a role to play in tackling the challenges that climate change presents to South Africa and the global economy in the areas where we can.

The most impactful way for EOH to support environmental sustainability is to apply our expertise, resources, research and innovation to provide solutions to our customers that provide them with the technology to address environmental challenges. NEXTEC's solutions include technologies that support smart, safe, healthy and secure environments. These include energy control systems, building management and intelligent green building design. Implementing NEXTEC energy and water technology solutions can significantly reduce energy and water consumption.

We aim to minimise our direct impact on the environment by operating our facilities in a way that reduces energy and water consumption, and minimises waste.

We apply our expertise, resources, research and innovation to provide solutions to some of the world's most challenging environmental problems. More than ever, organisations are applying new technologies to transform their operations, products and services to become more efficient, innovative and sustainable. We recognise that our greatest opportunity for building a more sustainable planet is to assist our customers by providing them with the technology to do so.

NEXTEC combines state-of-the-art technology and best practice to create smart, safe, healthy and secure environments. We have the right skills and expertise to deliver practical intelligent infrastructure solutions. From integrated and converged networks, to full turnkey data centres, biometric identity management, energy control systems, building management, and intelligent green building design, our solutions are proven and world class. By encouraging our customers to change energy management practices and by implementing NEXTEC energy and water technology solutions, customers can dramatically reduce their energy and water consumption.

EOH's carbon footprint

As part of our corporate commitment to environmental sustainability, we measure the direct and indirect greenhouse gas (GHG) emissions from our operations and products.

All fossil fuel consumption, purchased electricity and various other sources of emissions are included in the environmental data. Every new business that joins EOH automatically becomes part of the data-recording process.

The following environmental management principles are incorporated in EOH's business operations:

• Support and comply with, or exceed the requirements of current environmental legislation and codes of practice associated with industry best practices;
• Minimise waste and reuse or recycle as much as possible;
• Minimise energy and water consumption;
• Operate and maintain EOH vehicles with due regard to environmental issues;
• Apply the principles of continuous improvement in respect of air, water, noise and light pollution from EOH premises; and
• As far as possible purchase products and services that minimise damage to the environment.

PLANET G4-9

EOH conducts business in an ethical manner that respects and protects the environment, paying attention to:

• energy saving;
• water resource optimisation; and
• reduced travelling.

Scope 1, 2 and 3 emissions for 2019 and 2018 (tCO₂e)

Carbon emissions

The following graph shows a comparison of emissions (tCO₂e) measured since 2012.

Comparison of emissions (tCO₂e)

Main indicators

¹ Scope 1 emissions are direct emissions from sources that a company directly owns or has control over.

² Scope 2 emissions are from purchased electricity, heat or steam.

³ Scope 3 emissions are a consequence of a company's activities, but occur at sources owned or controlled by another company.