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 July 2015, Remgro obtained a score of 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.
It should be noted that the code system (BBBEE points) was amended by the Department of Trade and Industry – the amendments, which became effective on 11 October 2014, significantly change the manner in which a firm’s BBBEE status (or level) is calculated, as the number of BBBEE points required to achieve a particular BBBEE level has been increased. These changes materially affected Remgro’s BBBEE rating and status for the 2016 reporting year. If Remgro had been measured against the same scorecard as in the previous year, the 55.11 points would have been a level 5, which was the same level achieved in 2015.
Verification of BBBEE ownership is governed by the Codes of Good Practice on BBBEE (the Code) which were gazetted on 9 February 2007 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) where Remgro’s major shareholders are disclosed. Due to the fact that the records of the ultimate beneficiaries of these shareholdings are not readily available by race and gender, it was not quantified.
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” below.
|Equity ownership||Percentage share of economic benefits||25||11.79|
|Management and control||Percentage black persons in executive management and/or
executive board committees
|Skills development||Skills development expenditure as a proportion of total payroll||20||10.57|
|Enterprise and supplier
|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
|Socio-economic development||Corporate social investment for the benefit of black persons||5||5.00|
The composition of Remgro’s Board is structured in such a way as to ensure that the collective skills and experience of directors are suitable to carry out its responsibilities and to achieve the Company’s objectives. The Board transformed considerably during the past years, with five of the eleven non-executive directors (45%) being black. On Management Board level, one of the five members is also 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 2016 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.
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.
SUMMARISED EMPLOYMENT EQUITY REPORT (as at 31 August 2016)
|Occupational levels||Male||Female||Foreign nationals|
|Professionally qualified and
|Skilled technical and academically qualified
workers, junior management, supervisors, foremen, and superintendents
|Semi-skilled and discretionary decision-making||18||22||0||1||7||9||0||0||0||0||57|
|Unskilled and defined decision-making||0||0||0||0||0||0||0||0||0||0||0|
|A = African C = Coloured I = Indian W = White|