| Home | | | Integrated Report 2013 | | | Annual Financial Statements 2013 | | |
|
| | Search |
 |
Transformation and skills development
We recognise black economic empowerment as a strategic imperative and embrace the opportunity to be part of the economic transformation of South Africa. This issue is managed and coordinated at executive board level and forms part of the agenda of the social, ethics and sustainability committee.
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. |
We report on all pillars of Broad-based Black Economic Empowerment. Equity ownership, management control, employment equity and socio-economic development are covered below, while enterprise development, preferential procurement and skills development are dealt with on pages 30 and 49 respectively.
In its 2013 B-BBEE rating, Imperial maintained its level-3 contributor status. This level provides for 110% of customers’ spend to be regarded as B-BBEE spend. The target for 2013 is to maintain a level-3 contributor status. The certification is provided by the independent rating agency, AQRATE.
Equity ownership
Broad-based Black Economic Empowerment seeks to increase the equity ownership in businesses by black people. We recognise that this forms a critical part of economic transformation and put in place a number of vehicles to extend equity ownership to black South Africans.
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 15 575 historically disadvantaged employees in Imperial companies were given units, depending on their length of service with the group.
In December 2011 a total of approximately R350 million was distributed to 15 575 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.
In June 2005 Imperial concluded a transaction with Lereko Mobility (Pty) Limited which own 2,8% of Imperial’s equity. Lereko has appointed one representative on the Imperial board of directors.
Including the direct black ownership held by Ukhamba and Lereko, Imperial’s aggregate direct and indirect BEE shareholdings meet the requirements of Broad-Based Black Economic Empowerment Codes of Good Practice.
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, which will be held 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. Lereko received a dividend payout of R32,8 million during the year under review.
Management control
We reached an important milestone during the year when black employees in management positions exceeded 50%. This is due in large part to our skills and management development initiatives, which favour the development of young black talent. While these programmes take time to reach fruition, we are pleased to see their success coming through in the business. This is underpinned by a strong Imperial culture of promoting from within.