The Board believes that BBBEE is a social, political and economic imperative and it supports and encourages the Company’s subsidiaries, associates and joint venture initiatives in this regard. To the extent that Remgro’s subsidiaries, joint ventures and associates implemented BBBEE, Remgro’s shareholders effectively participate in BBBEE initiatives and the associated costs and benefits thereof.
Remgro measures its BBBEE status against the generic scorecard criteria set by the Department of Trade and Industry. In terms of the latest assessment of Remgro’s BBBEE status performed during September 2017, Remgro obtained a score of 55.19 (2016: 55.11), thereby obtaining a level 8 contributor status. The details of the assessment are fully set out in Figure 1 and includes the BBBEE initiatives of Remgro’s main independent operating subsidiaries, RCL Foods and Wispeco.
Verification of BBBEE ownership is governed by the amended Codes of Good Practice on BBBEE (the Code) which were gazetted on 11 October 2013 in terms of Section 9(1) of the Broad-Based Black Economic Empowerment Act (No. 53 of 2003). The methodology followed for the verification and certification of Remgro’s contributions to BBBEE ownership was taken from the provisions of Code Series 100, Statement 102 – Recognition of Sale of Assets.
It should be noted that, in addition to the above, there is also black ownership included in the shareholdings in Remgro held by institutional investors (refer here in the Integrated Annual Report where Remgro’s major shareholders are disclosed). During the year under review, an exercise was done to determine and accordingly include the indirect black ownership through these mandated investments.
Although Remgro’s BBBEE score includes the initiatives of RCL Foods and Wispeco, the discussion below regarding the other elements of the generic scorecard criteria only relate to the activities at Remgro’s head office in Stellenbosch. For more detail regarding the BBBEE initiatives at investee company level, refer to the section “BBBEE at investee companies” on the next page.
|Equity ownership||Percentage share of economic benefits||25||8.61|
|Management and control||Percentage black persons in executive management and/or executive board committees||19||6.71|
|Skills development||Skills development expenditure as a proportion of total payroll||20||9.18|
|Enterprise and supplier development||Procurement from black-owned and empowered enterprises as a proportion of total assets, as well as the average value of supplier development and enterprise development contributions as a percentage of net profit after tax||40||25.69|
|Socio-economic development||Corporate social investment for the benefit of black persons||5||5.00|
The Board transformed considerably during the past years, with five of the ten non-executive directors (50%) being black. On Management Board level, one of the six members is black.
Employment equity represents Remgro’s most significant transformation challenge. An annual labour plan is submitted to the Department of Labour where Remgro’s transformation objectives are set out in detail. Although efforts are focused on improving the Company’s black representation at management level, low staff turnover and limited organic growth remain limiting factors. More detail regarding employment equity is presented here.
Remgro’s summarised employment equity report as at 31 August 2017 is presented in Figure 2 and sets out the distribution by race of permanent employees per occupation level.
Remgro complies with the requirements of the Skills Development Act in terms of which a fixed percentage of its payroll is paid as a training levy to the South African Revenue Service. An annual report concerning all the training which has taken place in the Company is also submitted to the relevant SETA.
As Remgro is not an operating company it has a small procurement function and its procurement profile is characterised by a high service component as opposed to materials purchased. Remgro purchases more than half of its goods and services from BBBEE accredited vendors. The improvement of the preferential procurement score remains a focus area for Remgro.
ENTERPRISE AND SOCIO-ECONOMIC DEVELOPMENT
A considerable amount of time and resources are spent internally on business development and corporate social investment (CSI) initiatives. Further details regarding the Company’s CSI initiatives are provided here.
BBBEE at investee companies
Remgro monitors and contributes to its investees’ BBBEE performance through its board representation and participation and facilitation of corporate actions in these investee companies. The BBBEE status of Remgro’s investee companies is presented in the “Investment reviews” section here in the Integrated Annual Report.
Further details regarding the BBBEE status of Remgro’s operating subsidiaries are provided in the section dealing with “Sustainability at operating subsidiaries” in the detailed Sustainable Development Report.