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Transformation

Imperial is committed to playing a role in bringing about meaningful transformation through broad-based black economic empowerment. We embrace a multi-faceted approach to transformation that includes skills development, employment equity, preferential procurement, enterprise development, socioeconomic development, management control and ownership.

Management and measurement

Black economic empowerment is a strategic imperative in the group, managed and coordinated at executive board level. Transformation forms part of the agenda of the social, ethics and sustainability committee.

We seek to address the legacy of inequality in South Africa by providing designated groups – which includes employees who are disabled and women, or employees classified as African, Asian or Coloured who have South African citizenship – with empowerment opportunities.

Our transformation policy outlines on the following principles:

  • Imperial accepts the economic contribution of individual entrepreneurship, given the socio-economic make-up of South African society, and believes black economic empowerment should be broad-based and as inclusive as possible to ensure previously disadvantaged communities benefit as widely as possible from these initiatives.
  • Imperial prioritises the empowerment of its own HDSA employees and their families and accepts its role in the empowerment and social upliftment of the broader community as a responsible corporate citizen.
  • Imperial accepts that real empowerment can only be achieved through increased economic growth, and the continued growth of its business therefore remains a priority. Without sufficient growth, black economic empowerment will be relegated to mere wealth redistribution.
  • Human resource development and skills transfer is a critical component of black economic empowerment and underpins the successful implementation of any empowerment programme.
  • Imperial recognises its responsibility to its shareholders to continually provide an attractive return on their investment and empowerment initiatives must consider the interests of shareholders as stakeholders in the business.
  • Imperial supports the system of industry charters developed by government. Group companies strive to achieve charter targets where these have been developed for their industries.

All businesses within the group are B-BBEE audited and a number of them have attained good B-BBEE rating. For example, Imperial Logistics, Europcar and Midas are Level 3 accredited while Tempest Car Hire is a Level 2 B-BBEE contributor.

Transformation performance and initiatives

Equity ownership

The South African government has set certain targets for equity ownership by black people through industry charters as well as the empowerment scorecard issued by the Department of Trade and Industry. Imperial recognises that a substantial increase in the number of black people with ownership and control of enterprises is a critical factor in the successful implementation of black economic empowerment.

In March 2004 Imperial concluded a transaction with Ukhamba Holdings, a black-owned company established by Imperial some years ago, through which Ukhamba acquired a stake of 10,1% in Imperial.

In June 2005 Imperial concluded a transaction with Lereko Mobility (Pty) Limited which initially owned some 2,7% of Imperial’s equity. Lereko has appointed one representative on the Imperial board of directors.

CASE STUDY

Imperial employees benefit from Ukhamba Trust payouts

Ukhamba Holdings was founded in 1998 with an initial seed capital of R15 million provided by Imperial as an enterprise development business partnership to generate wealth and facilitate skills transfer for Imperial’s historically disadvantaged employees.

In 2004, Ukhamba was offered a 10,1% share in Imperial to create the Ukhamba Trust, for the group’s previously disadvantaged employees, and the Imperial and Ukhamba Community Development Trust for the benefit of some of the communities where our staff reside.

Around 15 000 historically disadvantaged employees in Imperial companies were given units, depending on their length of service with the group – two units for less than three years, three units for three to ten years; four units for 10 to 20 years and six units for more than 20 years.

In December 2011 a total of approximately R350 million was distributed to 15 000 current and former Imperial employees, who each received between R16 600 and R49 800. Even those who have left the company have retained these units and will continue to receive future payouts.

The Imperial and Ukhamba Community Development Trust received R56 million. While this trust currently supports seven schools with substantial financial and human resources, its reach will be vastly extended through this payout.

These payouts are only part of the value which members hold in the scheme. In addition to its stake in Imperial, Ukhamba owns 31% of Distribution and Warehousing Network (Dawn), a listed company operating in the building supplies industry, as well as a few smaller investments. When sufficient liquid funds become available further payouts will be made, and at current estimates these should exceed the value of the first payout.

Including the direct black ownership of held by Ukhamba and Lereko, Imperial’s aggregate direct and indirect BEE shareholdings meet the requirements of government charters.

Third-party debt for the Lereko BEE transaction was settled on 1 October 2010. Lereko Mobility sold sufficient Imperial and Eqstra shares to settle this debt, leaving some 5,9 million Imperial and Eqstra shares in Lereko until 2015 These shares will then be delivered to Imperial and Eqstra in part settlement of the vendor finance. Dividends will be generated from the debt settlement date to the vendor finance settlement date, benefiting Lereko shareholders. A dividend income of R34 million was received by Lereko during the current financial year.

Management control

To date our representation of designated groups among our permanent employees in management positions is 47,7% compared to last year’s 44%. Management development programmes seek to identify and fast-track high-potential HDSA candidates to build a strong and diverse management team.

Employment equity

It is the company’s policy that employees be appointed and promoted on the grounds of their ability and potential to meet the requirements of the position. At the same time, Imperial recognises that due to past socio-political factors certain groups within our economy have been denied access to opportunities for education, employment, promotion and wealth creation.

We further accept that we have a responsibility to implement measures that ensure that our employees – irrespective of race, gender, and disability – have equal employment opportunities and are equitably represented at all levels and occupational categories in the organisation.

For more information, please see the dedicated “Employment equity” section of this chapter on page 35.

Skills development

Our considerable people development initiatives favour HDSAs and play a critical role in building a diverse skills pipeline. For more information, please see the dedicated section on “Skills Development” in this chapter on page 35.

Thamage Occupational Health Solutions is one
of the small enterprises that have received
support from Imperial companies.

Enterprise development

Each of our divisions contributes to small, medium and microenterprise development through dedicated programmes that focus on identifying, establishing and fostering these businesses.

Preferential procurement

Imperial has an active programme to increase procurement from B-BBEE providers, and good progress is being made with accreditation at divisional level. In some divisions preferential procurement exceeds 50% of the total discretionary procurement expenditure.

 

 

Socio-economic development

Each operating division has a corporate social investment programme which is managed at business unit level and is relevant to the business and communities in which it operates. In addition to these programmes, all divisions contribute a portion of the CSI budget to a central fund, the Imperial and Ukhamba Community Development Trust (see case study on page 41).

For more information on individual community investment programmes, please see the dedicated “Investing in communities” section of this chapter on page 40.

CSI spend per division (%)
CSI spend per division (%)

For the 12 months to 30 June 2012:

CSI spend per division (R) 2012  
Imperial Logistics SA 5 155 460  
Car Rental and Tourism 3 870 112  
Distributorships 7 716 509  
Automotive Retail 2 210 662  
Financial Services 7 332 773  
Imperial Holdings (iPledge) 19 238 826  
Total 45 524 342  

 

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