Integrated Annual Report
2025
The Social and Ethics Committee ("the Committee") is pleased to present its report for the financial year ended 30 June 2025.
It is a privilege to have the opportunity to serve as the Chairperson of the Social and Ethics Committee. Ms Nkateko Khoza stepped down as Chairperson of the Committee effective from 11 June 2025, and I wish to express my appreciation for her leadership and valuable contribution in steering the Committee over the years.
In this report, the Committee, together with the executive management team, provides feedback on behalf of both Italtile Retail and Ceramics with respect to their performance in relation to social and ethics, as well as the Group's ESG imperatives.
The 2025 financial year saw a particular focus on customer relations, energy, water and waste management initiatives, as well as health and safety in our factories. Our commitment to developing our staff and ensuring the wellness of our employees continues.
The Committee is a sub-committee of the Board and is constituted of two non-executive directors and the relevant executive management representatives. The Committee met three times this year and has ensured that our deliverables are in line with our revised Charter as required by the Companies Act. The CEO, CFO, Group Company Secretary and Citizenship Manager continue to focus on the Group's overall compliance and reporting.
The Committee's roles and responsibilities cover all statutory duties under the Companies Act and King IV, addressing the following:
During the 2025 financial year, the sustainable development principles and their impact on the retail and manufacturing divisions remained top of mind for the Group as we continued to adhere to relevant UN SDGs and Global Compact principles within our business.
The Group collected and processed the data required to calculate and submit our National Greenhouse Gas ("GHG") emissions reporting and carbon tax obligations to the Department of Forestry, Fisheries and the Environment at the end of March 2025. The overall observation was that in 2024, the Group reported lower total GHG emissions than in 2023. The decrease of 18,07% seen for the carbon tax liability in 2024 was attributed to lower GHG emissions and the carbon credit allocation.
Ceramics' tile factories use natural gas in the manufacturing process. During the 2024 calendar year there was a significant 10,13% reduction in fuel usage compared to calendar year 2023. This equates to a 10,19% reduction in GHG emissions and a 9,52% reduction in carbon tax emissions (tCO2e).
Ezee Tile also recorded a decrease in fuel usage of 29% and an increase in GHG emissions (tCO2) of 28%, as a result of the inclusion of data for Silica Quartz for the full-year 2024.
Boreholes have been installed on 42% of Company-owned properties, in line with our strategy to expand our overall water management initiatives to reduce water consumption and limit our reliance on municipal water in light of the country's water challenges.
In terms of waste management, in the 2025 financial year 89% of CTM stores in Gauteng and 100% of Italtile Retail stores recycled cardboard and plastic. In addition, Ceramics provided training for all CTM and TopT stores on pallet recycling and implemented a project to collect all pallets for reuse. A total of 15 610 pallets were collected and 31 000 kg of cardboard were recycled.
On the energy front, 17,63% of the total energy consumed by our retail stores was supplied by solar technology, installed at 49 sites including one totally off-grid store. Furthermore, eight stores have hybrid battery energy storage systems.
For completeness, ESG content has been integrated into the employee induction and training programme across the Group. In addition, Ceramics' factories conduct training on environmental compliance, as part of the Company's workplace skills plans. This training content covers the handling of hazardous chemicals at Betta Baths and Vitro, a waste management toolbox talk at Vitro, and air quality, water conservation and housekeeping toolbox talks at all factories.
Our employment equity focus remains on increasing and aligning our recruitment process to the employment equity plans and sector targets, goals and objectives through holding managers accountable for achieving these targets by:
Our employee wellness and assistance programmes conducted through the Ask Nelson and Stratum Primary Healthcare programmes are well-received by our staff. Given the prevailing challenging economic environment, our employees receive stress management support and guidance on an ongoing basis via site visits, as well as online platforms, which afford greater reach and more regular access. Ceramics has experienced a 71% participation uptake during our planned wellness days, and we continue to undertake periodic medical and occupational wellness surveys.
Our 2025 results show an improvement in our Disabling Injury Frequency Rates ("DIFR"), largely underpinned by the downward trend at Ceramics and Ezee Tile. Our Group target is to maintain the rate as close to zero as possible; we are pleased that the Group's DIFR rate is currently at 1,02%, compared to the 2024 rate of 1,16, owing to a concerted effort by management to adhere to consistent safety protocols, training and standard operating procedures.
The Group's annual health and safety audits were completed in 2025. A 94% rating achieved by the retail business verifies that we display a "mature and resilient culture" – a clear indication that our workforce and management teams are committed to a culture of continuous improvement, managing and resolving risks, enforcing security protocols and implementing ongoing safety and compliance training. Ceramics achieved 89%, displaying a proactive culture and Ezee Tile achieved 81%. It is imperative that we make further improvements in training and compliance in the year ahead in order to progress these divisions from being classified as having a "proactive culture" to a "mature culture", in line with the retail business.
The Group has retained its Level 2 rating.
A high-level Group risk compliance review was completed by our legal advisory team and no material findings were noted.
In line with the JSE Listings Requirements, our key stakeholders were once again engaged regarding the Company's performance, governance, compliance, ethical standards and conduct during the past financial year. Our CEO has effectively and consistently communicated openly with shareholders, investors, financial media, analysts and the general public. He has ensured that the Company's investment proposition is communicated accurately and honestly and his disclosure around all areas of concern was transparent. These engagements are supported by the audited and validated financial and legislated reports.
Our marketing, public relations and customer complaints-handling are consistently being improved and updated and we strive to ensure speedy customer complaint turnaround and feedback. We continue to use and improve on various traditional, digital, social and online platforms to communicate and provide information and feedback to our customers, suppliers and service providers.
The Committee is accountable to the Board and provides feedback to the Board on its meetings. The Committee makes the recommendations to the Board that it deems appropriate in any area within the ambit of its terms of reference where action or improvement is required.
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.
The Committee is satisfied that the Group has maintained an acceptable balance between its financial performance and its social, environmental, governance and employment responsibilities.
Based on all available detailed reporting and registers, the Committee deems that it has, in all material respects, achieved its objectives for the financial year ended 30 June 2025.
A M Mathole
Social and Ethics Committee Chairperson
