|Equity ownership||Percentage share of economic benefits||25||16.76|
|Management control||Percentage black persons in executive management and/or executive board committees||19||7.17|
|Skills development||Skills development expenditure as a proportion of total payroll||20||20.03|
|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||23.99|
|Socio-economic development||Corporate social investment for the benefit of black persons||5||5.00|
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 implement BBBEE, Remgro’s shareholders effectively participate in BBBEE initiatives and the associated benefits and costs 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 2019, Remgro obtained a score of 72.95 (2018: 66.48), thereby obtaining a level 7 contributor status. The details of the assessment are fully set out in the figure above and includes the BBBEE initiatives of Remgro’s main independent operating subsidiaries, RCL Foods Limited (RCL Foods), Distell Group Holdings Limited (Distell), Siqalo Foods Proprietary Limited (Siqalo Foods) and Wispeco Holdings Proprietary Limited (Wispeco).
Verification of BBBEE ownership is governed by the amended Codes of Good Practice on BBBEE, 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).
It should be noted that there is black ownership included in the shareholdings in Remgro held by institutional investors, (where Remgro’s major shareholders are disclosed). An annual exercise is undertaken to determine and accordingly include the indirect black ownership through these mandated investments. Furthermore, the provisions of Code Series 100, Statement 102 – Recognition of Sale of Assets, as well as the exclusion of foreign operations, are also taken into account.
Remgro’s equity ownership score is as follows:
|Verified equity ownership score||Target
|Voting rights black people||4.00||2.85||2.93|
|Voting rights black women||2.00||1.65||1.72|
|Economic interest black people||4.00||2.82||2.98|
|Economic interest black women||2.00||1.74||1.84|
|Economic interest of black designated groups||3.00||3.00||3.00|
|Black new entrants||2.00||–||–|
Although Remgro’s BBBEE score includes the initiatives of RCL Foods, Distell, Siqalo Foods and Wispeco, the discussion below regarding the other elements of the generic scorecard criteria only relates 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” below.
The Board transformed over time, with five of the eleven non-executive directors (45%) being black persons. On Management Board level, two of the six members are black persons.
Employment equity represents Remgro’s most significant transformation challenge. A five-year Employment Equity plan is submitted to the Department of Employment and Labour where Remgro’s transformation objectives are set out in detail. Progress against this five-year plan is reported on annually to the Department of Employment and Labour. 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 below.
Remgro’s summarised employment equity as at 30 June 2019 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, No. 97 of 1998 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.
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.