Our approach to sustainability
At Mvelaphanda Group, sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.
Sustainability has three pillars – the needs of people, the ability to fulfil these needs in the future and ensuring that these are not in conflict with economic growth (profit). These three pillars are not of equal standing. The needs of people are clearly at the core of the definition, and in this respect economic growth can only be seen as a means to this end. Mvelaphanda Group therefore does not promote business practices which give preference to short-term gain at the expense of future generations’ well-being.
The Group’s sustainability reporting focuses on the activities of Mvelaphanda Group and its whollyowned subsidiaries. Detailed sustainability information for the companies in which Mvelaphanda Group holds investments (strategic investments) can be obtained from their own annual reports or that of the companies concerned.
The Group has identified the following major groups as stakeholders in the Group:
- Our shareholders.
- Our community.
- Our customers.
- Our suppliers.
- Our people.
Value added statement
The value added statement measures performance in terms of value added by the Group through the collective efforts of management, employees, and the providers of capital. The statement shows how added value has been distributed to those contributing to its creation. |
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| at 30 June |
2009
R’000 |
2008
R’000 |
|
| Revenue |
3 745 662 |
3 538 918 |
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| Cost of materials, services and other expenses |
(1 260 626) |
(1 405 123) |
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| Value added |
2 485 036 |
2 133 795 |
|
| Investment income |
393 753 |
(2 049 315) |
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| BEE costs |
(16 175) |
(16 175) |
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| Goodwill impaired |
— |
(11 486) |
|
| Wealth created |
2 862 614 |
56 819 |
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| Applied as follows: |
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|
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| Employees (excluding employee taxes) |
1 660 680 |
1 295 953 |
|
| Providers of capital |
234 754 |
53 934 |
|
| Providers of debt |
204 792 |
23 918 |
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| Providers of equity |
29 962 |
30 016 |
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| Government: |
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|
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| Taxation |
642 644 |
274 702 |
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| Reinvested in the Group |
63 471 |
463 177 |
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| Depreciation, amortisation and impairment |
118 399 |
147 439 |
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| Minority interest |
57 512 |
(182 420) |
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| Net (loss)/profit attributable to equity holders before fair value adjustments and impairment losses |
(112 440) |
498 158 |
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| Fair value adjustments and impairment losses (net of tax and minority interest) |
261 065 |
(2 030 947) |
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| Wealth distribution |
2 862 614 |
56 819 |
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| Money exchanges with the government: |
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|
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| Taxation on profit/(loss) |
253 539 |
(184 960) |
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| PAYE |
140 379 |
191 203 |
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| VAT |
194 805 |
214 724 |
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| RSC levies |
160 |
160 |
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| Rates and licences |
2 215 |
1 892 |
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| Skills and development levy |
12 981 |
13 014 |
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| UIF and WCA |
38 565 |
38 669 |
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| |
642 644 |
274 702 |
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Our shareholders
The major shareholders in Mvelaphanda Group comprise Mvelaphanda Holdings, the BEE trusts, large financial institutions, asset managers in South Africa and overseas, pension funds, public investment bodies and the general public. Details of the composition of these shareholders are set out here.
Regular presentations are made to institutional shareholders and other members of the investment community, particularly following the publication of the Group’s interim and year-end financial results, and as might otherwise be required in the context of corporate actions or other developments within the Group.
On 19 June 2007 Mvelaphanda Group implemented a broad-based BEE ownership initiative to secure Mvelaphanda Group’s black shareholding in the medium term. In terms of the BEE transaction,
124 425 055 redeemable option-holding shares (BEE shares) were issued, in equal proportions, to the BEE trusts. Details on the BEE shares are set out in the financial report.
The BEE transaction has achieved the following objectives:
- Securing Mvelaphanda Group’s BEE shareholding as a competitive advantage in attracting BEE deal flow, acting as a consolidator of BEE transactions and participating in the “secondary trade” in BEE transactions.
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- Ensuring that the level of Mvelaphanda Group’s BEE shareholding is maintained above 50% in the short to medium term, in line with the requirements of certain of Mvelaphanda Group’s investment mandates.
- Minimising the impact of the dilution of Mvelaphanda Group’s BEE credentials as a result of the conversion of the Mvelaphanda Group preference shares into Mvelaphanda Group ordinary shares.
- Maximising the BBBEE scorecard points achieved by Mvelaphanda Group for equity ownership in terms of the BEE Codes.
- Facilitating further participation in Mvelaphanda Group’s share capital by broad-based BEE participants.
- Allowing employees and management of the Group to become shareholders in Mvelaphanda Group and participate in the anticipated continued growth of Mvelaphanda Group.
The profile of the beneficiaries of the BEE trusts demonstrates Mvelaphanda Group’s commitment to ensuring that grassroot communities benefit from its assets and investments and reflects a broad base of historically disadvantaged South Africans, including women’s groups and broad-based non-profit, community-orientated and charitable organisations.
Mvelaphanda Group believes that these organisations can improve their income by participating directly in the investment and other opportunities obtained by Mvelaphanda Group. In this manner, these organisations and the communities they serve benefit directly from the investment gains achieved by Mvelaphanda Group, rather than only from the charitable donations which may be made to them from time to time. This direct participation improves the sustainability of these organisations and should provide greater benefits than if they were solely dependent on donations.
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