Employment Equity and B-BBEE - 2015 update

EE AND TRANSFORMATION

The AECI Employment Equity Plan, as approved by the Department of Labour (“DOL”), applies to the period from September 2014 to August 2017.

The 2014/2015 EE report was submitted timeously to the DOL and confirmation of successful submission was received. The Group submits one consolidated report which covers all its operating businesses in South Africa.

The table below indicates targeted and actual representation (in percentage terms), by race and gender, for the combined four top occupational levels in AECI’s South African businesses as at 30 August 2015, the date of the DOL submission.

RACE   AFRICAN   COLOURED   INDIAN   WHITE   FOREIGN NATIONAL
GENDER   Male   Female   Male   Female   Male   Female   Male   Female   Male   Female
Target (%)   26   10   4   2   8   4   29   15   2  
Achieved (%)   29   11   3   2   7   4   28   13   2   1


Progress was made in addressing the under-representation of designated groups although not all targets were met. Senior and Middle Management remain the occupational levels where progress is slow (see graphics below). The AECI Executive Committee has approved interventions aimed at addressing representation at these levels specifically, and at all levels generally. Plans include:

the selection of candidates predominantly from designated groups for the management development programmes;

Talent Board meetings at business and AECI Head Office levels to identify scarce and critical skills and talented employees with high potential for associated appointments;

robust succession plans with an emphasis on the development of identified individuals, with timelines that will accelerate their advancement; and

focused bursary schemes and learnership programmes that strengthen the pipeline of designated group representatives for future leadership roles.

EMPLOYMENT EQUITY STATISTICS

 
The percentages accompanying the graphics indicate the combined representation by Black people and White females at each employment level in AECI’s South African operations.

EMPLOYMENT EQUITY STATISTICS

* Indicates limited assurance.

B-BBEE

AECI, a Level 4 B-BBEE Contributor, supports the South African’s government’s B-BBEE initiatives and recognises the importance of achieving a sustainable economic and political environment through the meaningful participation of Black people in the mainstream economy.

The Company is committed to the implementation and success of broad-based empowerment throughout its businesses in South Africa. For consistency and to optimise resources, compliance with the B-BBEE Amended Codes of Good Practice (the “Amended Codes”) is driven by and coordinated at AECI Head Office level.

A summary of key initiatives, per Element of the Amended Codes, to achieve substantive transformation is presented here.

Ownership

At 31 December 2015, beneficial shareholdings of AECI’s ordinary shares in the Black Economic Empowerment category were 9 105 271 shares, or 7,39% of the Company’s issued ordinary share capital. In addition the AECI Employees Share Trust, established as part of AECI’s B-BBEE transactions in 2012, held 10 117 951 unlisted convertible B ordinary shares. These shares have the same voting rights as AECI ordinary shares.

AECI’s B-BBEE Scorecard indicated Black Ownership of 33,69% and Black Female Ownership of 9,13% on 18 May 2015, the certificate issue date.

AECI Employees Share Trust (“EST” or “Trust”)

In 2015, AECI sustained its in transformation efforts through the empowerment of its employees. The EST contributes to the overall Ownership Pillar of the Group’s B-BBEE Scorecard as summarised above. The EST is governed by principles of transparency, integrity, equity and fairness. It demonstrates the Company’s contribution to South Africa’s B-BBEE imperatives and enables the Company to:

align the interests of its employees and those of its shareholders;

recognise and reward employees who contribute to its ongoing success; and

improve its ability to incentivise Black managers.

The EST has 4 878 beneficiaries. During 2015 these beneficiaries received a dividend payment of 32 cents per B ordinary share.

Further efforts were made to enhance the good governance and overall success of the EST. Interventions implemented included:

the appointment of a specialist task team to manage key functions of the Trust;

consultation with experts on the Amended Codes, to ensure compliance;

the development of a risk register and Board of Trustees charter; and

finalisation of a marketing and communications plan to enhance awareness of the Trust among employees.

Beneficiaries were well represented at the General Meeting to mandate the Chairman to vote on the EST’s behalf at AECI’s AGM held on 1 June 2015.

Management control and skills development

Work remains to be done to improve demographic diversity at all occupational levels, using the Economically Active Population statistics as a framework. Annual targets are set and initiatives in support of achieving them are in place .

Enterprise development (“ED”) and supplier development (“SD”)

Early in 2016, AECI launched a Group-wide strategic initiative to better align ED and SD programmes with the Amended Codes. The main thrusts include:

ED: support will be provided so as to assist or accelerate the development, sustainability and ultimate financial independence of beneficiaries. To secure a return on investment, AECI intends using ED programmes as part of an integrated approach to developing a pipeline of Exempt Micro Enterprise and Qualifying Small Enterprise entrepreneurs for inclusion in corporate supply chains.

In SD the key objectives are:

» increasing supplier diversity by adding new Black-owned suppliers to the Group’s supply chain;

» addressing the challenge of working with these suppliers by assisting them in enhancing their underlying operations; and/or

» improving suppliers’ capability in a way that benefits their sustainability and robustness.

Well-designed ED and SD programmes should not only gain compliance points for Scorecard purposes but should also address operational and supply chain challenges. Ultimately, they should assist in achieving targets in the Procurement Element of the Scorecard while contributing to the development and growth of small businesses.

Socio-economic development (“SED”)

As a socially responsible corporate citizen, the Group invests in effective community-focused organisations and initiatives that develop and uplift vulnerable communities neighbouring its operations. SED programmes are driven by principles of strategic social investment, community empowerment, meaningful partnerships and good governance so as to promote sustainable development by “teaching people to fish rather than giving them a fish”.

 

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