GOVERNANCE

Social, Ethics and Transformation Committee's report

Dear Stakeholders,

I am pleased to report on the activities of the Committee for the financial year ended 31 May 2020.

The Committee was formed in February 2012 in accordance with section 72(4) of the Act and operates under Board-approved terms of reference, which include holding at least three meetings per financial year.

As prescribed by the Act, the role of the Committee is to monitor the Group’s activities in respect of:

This year the Committee met three times in line with its terms of reference. The Committee engaged with management on transformation across the Group’s workplace focusing on continuous improvement in meeting the Company’s transformation objectives and regulatory compliance. Key focus areas for FY20 included:

The Committee ensured that the Group published its consolidated B-BBEE rating in respect of the 2020 financial year as required by the JSE of all listed entities and published a consolidated B-BBEE scorecard on its website, issued a SENS announcement and submitted a report to the B-BBEE commissioner.

In addition to monitoring and reporting on progress to date, the Company continued to explore implementation strategies to increase its B-BBEE compliance levels in line with our good corporate citizenship commitments. The Committee reviewed the impact of the revised and implemented Department of Trade and Industry codes of good practice to the Group and satisfied itself that management is ensuring a rigorous process to ensure compliance at individual subsidiary levels and that divisional management incorporates the Company’s transformation objectives as an integral part of their day-to-day performance scorecards.

The Committee interacted with Senior Management and the Group’s joint CEOs to ensure inculcation of the guidance and recommendations of the Committee into both strategic and operational plans within the Group and its subsidiaries.

The Committee continues to monitor progress of the roadmap to address the Company’s equity targets and B-BBEE shortfalls. We will continue to review current initiatives and their effectiveness and make appropriate recommendations to the Board.

The following items were also considered and implemented during the year:

The Committee continued to monitor Group compliance with the 10 principles of the UNGC. We are glad to report that the Group has implemented measures for the prevention and combating of all forms of corruption in line with all applicable local legislation and the 10th principle of the UNGC. Monitoring of the ethics statement and the implementation of the Whistleblowing Policy of the Group remained a key monitoring tool for the Committee.

The Committee further noted that all health and safety policies and procedures continue to be well managed and co-ordinated via the Health and Safety Committee.

Key focus areas for 2021

The Committee believes that the Group complies with the statutory duties, save for issues being addressed by management with regard to employment equity and aspects of procurement as the Group purchases mainly from the networks and power utilities. In addition, work continues to be undertaken to improve on the Group’s B-BBEE equity scorecard.

I look forward to reporting on our progress next year.

SJ Vilakazi

Chairman

23 September 2020