Social and ethics
committee report

The Social and Ethics Committee ("the Committee") is pleased to present its report for the financial year ended 30 June 2020.

The Board, together with the Chief Executive Officer, continue to ensure complete oversight and accountability for the ethical culture of the Group and have seen improvements post the incorporation of the Ceramics business. Although the business as a whole straddles both the retail and manufacturing sectors – our dedicated management and executive teams are fully committed to ensuring complete compliance on all fronts.

As a sub-committee of the Board, consisting of two non-executive directors and the relevant executive management representatives, the Committee has met three times this year and has ensured that our deliverables are in line with our charter as required by the Companies Act. The Group Company Secretary, our Human Resources representative as well as the Group's Citizenship Manager have been present at all meetings to ensure that the Committee has its finger on the pulse of what is happening within the Company in these two very important areas.

ROLES AND RESPONSIBILITIES

The Committee's role and responsibilities include its statutory duties as per the Companies Act, and the principles of King IV, which includes:

  • monitoring the Group's activities with regard to matters relating to:
    • social and economic development;
    • good corporate citizenship, including the Group's promotion of equality, prevention of unfair discrimination, reduction of corruption, contribution to development of the communities in which its activities are predominantly conducted or within which its products or services are predominantly marketed, and record of sponsorship, donations and charitable giving;
    • the environment, health and public safety;
    • consumer relationships, including the Group's advertising, public relations and compliance with consumer protection laws; and
    • labour and employment;
  • monitoring the Group's performance and interaction with its stakeholders and ensuring that this interaction is guided by the Constitution, Bill of Rights, the UN Global Compact and the UN Sustainable Development Goals ("SDGs");
  • determining clearly articulated ethical standards and ensuring that the Group takes measures to achieve adherence to these in all aspects of the business, thus achieving a sustainable ethical corporate culture within the Group; and
  • providing effective leadership based on an ethical foundation and ensure that the Company is and is seen to be a responsible corporate citizen.

SUSTAINABLE DEVELOPMENT STRATEGY and UN GLOBAL COMPACT COMPLIANCE

The Committee has adjusted its strategy to align with the UN SDGs and has ensured that environmental, social and governance matters are measured and reported on regularly and accurately across the Group. The ethos of the Company has always been to act with sensitivity and awareness around employee remuneration while being cognisant to responding and contributing meaningfully to environmental matters such as the Stop Rhino Poaching Project to which the Company has already donated over R3 million to date. Other corporate responsibility projects link to supporting school projects within the communities in which we operate.

The Manufacturing business has continued to complying with the carbon footprint and Carbon Tax requirements while ensuring that the use of solar is being rolled out at store and factory levels. A five year roll-out strategy is being followed and an outsourced model is currently being piloted as the preferred model going forward.

STAFF DEVELOPMENT, WELLNESS, SAFETY and Training

With the advent of COVID-19, e-learning has taken centre-stage to ensure that training takes place within a safe and productive environment. A strong emphasis has been made on coaching and mentoring particularly within the retail business to ensure that the necessary succession planning is taking place while growing our employees skills and knowledge of the business. All training expenditure is aligned to the BBBEE scorecard as a minimum while ensuring that the business is supported with reference to the required knowledge and skilling.

The COVID-19 pandemic has bolstered some innovation within the Group with our Ezee Tile business manufacturing hand and surface sanitiser for use and distribution within the Group and beyond. To date all travel has been limited and meetings are being held electronically in line with regulations.

Our Employee Wellness Programme is in place and the business anticipates that more widespread use of the facility will ensue as the pandemic continues and its related stresses on employees and their families remains unchanged. Presently, awareness of the programme is being highlighted and our staff are encouraged to engage with the programme as necessary.

Employees safety is an ongoing concern and regular inspections led by the various OHS committees and Internal Audit are taking place at store and factory levels. The required inspection registers are regularly updated and are available at all times on the Company intranet for easy access by all brands and sites. All safety training on first aid, forklift driving, racking, stacking and fire-fighting is taking place regularly and internal audits are done annually. No serious injuries on duty have been experienced or reported during this reporting period.

COVID-19 STATUS

The Group has been particularly diligent in the implementation of the COVID-19 requirements across the business from the end of March through levels 5 to 2 as stipulated and gazetted by the government disaster management regulations. The impact on operations has been manageable and the organisation is pleased to confirm that we have had no fatalities as a direct result of the pandemic.

BBBEE STATUS

The Group has in the last reporting year achieved a level 4 rating in line with our current Company strategy and will be paying particular attention to skills development going forward. This has been given the necessary impetus with regards to the development of female store operators within the retail space. Significant targets are being pursued and regular reporting to the Department of Labour as per labour legislation is ongoing.

LEGISLATIVE COMPLIANCE

Group risk and compliance remains important and our legal advisory team are consulted to conduct, review and assure the Group that the necessary legislations are being complied with and this effort is led by our CFO.

ENGAGEMENT WITH STAKEHOLDERS

Our shareholders have been kept abreast of the Company's performance, governance, compliance and ethical standards and conduct during the past financial year. Ongoing reporting through our CEO has ensured that the Company's performance is communicated effectively with the general public and in particular in line with the Listings Requirements of the JSE.

Our customer complaints handling process is in place and operates via various channels and complies with consumer protection practices at all times. All channels are advertised and availed to all our customers.

Marketing and public relations are ongoing and the final months of the year have centered around the COVID-19 pandemic awareness. All marketing messaging is being done through various channels including an added emphasis on our digital platforms.

ACCOUNTABILITY OF THE COMMITTEE

The Committee is accountable to the Board and provides feedback to the Board of its meetings. The Committee makes the recommendations to the Board that it deems appropriate on any area within the ambit of its terms of reference where action or improvement is required.

AUTHORITY

The Committee conducts its affairs in compliance with its charter and has reasonable access to the Company's records, facilities and any other resources necessary to discharge its duties and responsibilities. The Committee is authorised to take such independent professional advice as it considers necessary, the costs of which shall be for the account of the Company. Save for its duties provided for in the Companies Act, the Committee shall have no executive powers with regard to its findings and recommendations.

CONCLUSION

The Committee believes the Group has continued to maintain an acceptable balance between its financial performance and its social, economic, governance, employment and environmental responsibilities. Based on all available detailed reporting and registers, the Committee is satisfied that it has, in all material respects, achieved its objectives for the financial year ended 30 June 2020.

N P Khoza

Social and Ethics Committee Chairman

23 September 2020