IN THIS SECTION

›	Overview
›	Strategy
›	Quality
›	Risk Management
›	Corporate Governance
›	Code of Ethics
›	Legal, Regulatory and Compliance
›	Safety, Health and Environmental Management
›	Human Capital
›	Broad-Based Black Economic Empowerment
›	Socio-Economic Development (SED)

Broad-Based Black Economic Empowerment

Group Five is a Level 2 BBBEE contributor, which is the best rating in our sector. We have also been rated as the 9th most empowered company in South Africa and the winner in the basic industrials sector by the Financial Mail Top Empowerment Companies Survey.

BBBEE Scorecard (Group Five Limited)

			Construction	Construction
			Charter	Charter
			scorecard	scorecard
		Weighting	F2010	F2009
Core components	BBBEE elements	points	%⁽¹⁾	%⁽¹⁾
Direct empowerment	Ownership	25	17.1	19.55
	Management control	10	6.12	6.97
Human resource empowerment	Employment equity	10	9.22	5.91
	Skills development	15	14.41	12.8
Indirect empowerment	Preferential procurement	20	18.43	15.68
	Enterprise development	15	15.00	15.00
	Socio-economic development	5	5.00	2.90
Total		100	85.77	78.77
Empowerment level			2	3

⁽¹⁾ As audited by BEE Verification Agency cc for the year ended 30 June 2010.
⁽²⁾ As audited by BEE Verification Agency cc for the year ended 30 June 2009.

Ownership

25.67% of the group’s shares are held by black, Asian and coloured shareholders.

Group Five concluded a broad-based black economic empowerment (BBBEE) transaction in September 2005 that resulted in 26.1% of its enlarged share capital being made available to black South Africans.

The offer constituted three key elements, namely:

›	Broad-based employee scheme (0.48%): This scheme benefited both black and white employees, with 3 969 employees being eligible. 90% of the recipients were black. This was a once-off issue of shares with no consideration required and no vesting period. The shares are held in trust until the anniversary date in October 2010

›	Black managers’ scheme (1.94%): This benefits black managers in senior roles. These shares are held in a share trust and are awarded to black managers annually. The full allocation of shares is due to be concluded during F2011. To date, we have had 163 managers benefiting from the scheme, which 17.79% is female, iLima consortium and the Mvelaphanda

›	iLima consortium and the Mvelaphanda Group Limited (9.62%): The largest part of the transaction was the issuing of 21.6% of share capital equally to the two parties. As announced on the stock exchange news service (SENS) in June 2009, due to certain contractual defaults, Group Five is in the process of unwinding the iLima ownership transaction. Upon completion, these shares will be returned to Group Five and will then be cancelled. As a result, Ilima ownership was not included in the ownership review

Management

The board is led by a black female, with four of the eight board members being women. The group also has a female chief financial officer. 2 of these women are black South Africans

Employment equity

Group Five is committed to promoting equity and diversity throughout the group. Our approach over the past few years has centred on the following principles:

Building a culture that is consistent with our values
° Development and promotion of talent from within the group
° Striving to achieve our employee value proposition
Quality of management and management development
Continuous development
Competitive recognition and rewards
Providing development opportunities

The proportional representation of black, coloured and Asian employees in our senior management category is currently 33.68%. In the middle management category, it is currently 40.75%. The junior management category is currently 75.72% black, coloured and Asian. Of the total permanent South African workforce, 86.37% is black, coloured or Asian.

Of the total women workforce at Group Five 78.60% is black, asian coloured, total in the men workforce is 87.83% is black, african, coloured.

Skills development

Skills development is a core part of Group Five’s strategy. The group therefore has an internal college, the Group Five Academy. During last year, the group’s spend on skills development amounted to R31,5 million, resulting in us achieving the third position in the Financial Mail Top 100 companies list in terms of our skills development.

Sustainability indicator		2010	2009
a)	Annual value spent on training and development
	programmes	R31,5 million	R37,8 million
	i) Total number of training interventions*	14 941	8 933
	ii) Total number of training interventions
	– semi-skilled and unskilled*	5 846	3 729
b)	Annual value incurred on bursary expenditure	R6 million	R9,3 million
	i) Number of bursary students	171	258
	ii) Number of female bursary students	40	55
c)	Annual value spent on learnerships and
	apprenticeships	R3,9 million	R3,6 million
	i) Learners on learnerships and apprenticeships
	programmes	214	231
	ii) Unemployed learners registered on learnerships
	and apprenticeships programmes	163	149
d)	Number of students on the Group Five
	Programme in Management Development (PMD)
	in partnership with the Gordon Institute of
	Business Sciences (GIBS)	23	25
e)	Total annual training spend – black employees	R14,7 million	R20,2 million

* For employees.

Preferential procurement

During 2010 the group spent R3,8 billion of its total procurement spend of R5,8 billion on empowered suppliers. Of this, 5% was with black women owned enterprises.

Preferential Procurement Scorecard (Group Five Limited)

		Target per
		Construction	Group Five
		Charter	F2010	Actual	Actual
Measurement principle	Points	2013 target	target	F2010***	F2009**
Preferential spend with all suppliers	12	50%	45%	49.1%	45.1%
Preferential spend with qualifying
small and emerging micro enterprises	3	10%	7.5%	11.42%	6.3%
Preferential spend with enterprises
that are more than 50% black owned	3	9%	5%	9.2%	7.9%
Preferential spend with enterprises
that are more than 30% black
women owned	2	6%	1.5%	1.93%	0.1%
Weighted score	20	–****	–****	18.43%	15.68%

	**		As audited by BEE Verification Agency cc in October 2009 (Group Five).
	***		Unaudited, as audited period has been changed to September.
	****		A weighted score is not done for targets.

Enterprise development

The group has embraced enterprise development with a view to:

Develop our supplier base in support of our preferential procurement initiatives
Develop black construction companies wanting to expand their capability and their businesses
Develop our capacity to deliver on contracts, with reduced reliance on conventional joint venture partners.

The group currently has a number of enterprise development partners, as well as a significant number of other joint ventures with black owned companies.

	Black	Women		BBBEE
Enterprise development partners	ownership	ownership	CIDB level	contributor level
BL Williams (Pty) Ltd	100%	–	6 GB – PE	2
ENZA Construction (Pty) Ltd	100%	17%	7 GB	2
Enzani Technologies (Pty) Ltd	100%	67%	4 EE – PE	1
Inkanyeli Projects (Pty) Ltd	74%	19%	4 GB – PE	5
Pan African Development (Pty) Ltd	100%	–	7 GB – PE	2
Siyakhula Engineering (CC)	100%	–	Pending	3
UMSO Construction (Pty) Ltd	89%	–	7 CE – PE	3

Enterprise Development Scorecard

Sustainability indicator	2010	2009⁽¹⁾
Annual value of total direct costs incurred by the group	R0,6 million	–
Value of funding provided by the group
Total capital due to the group as at 30 June	R12 million**	R97 million
Financial institution guarantees issued from the group’s facilities as at 30 June***	R54 million	R75 million
Number of black owned entities with which the group
is engaging in significant joint venture partnerships	18	22
Number of formal enterprise development partnerships	7	8
Total value of contracts being executed with
black owned joint venture partners*	R7,8 billion	R8,6 billion

⁽¹⁾		As audited by BEE Verification Agency cc for the year ended 30 June 2009.
	*	Although not specifically qualifying for enterprise development in terms of the Construction Charter, Group
		Five has entered into a number of joint venture contracts with black owned companies.
	**	Excludes all previous spend on iLima Projects (R118 million) and represents spend on new enterprise
		development partners.
	***	Guarantees in issue with respect to iLima Projects.

SED spend per business unit (R million)

SED

	SED spend per business unit		R’000
	Corporate		3 088
	Investments and concessions		302
	– Intertoll		51
	– Property Developments		251
	Manufacturing		356
	– Fibre Cement		356
	Construction materials		435
	– Quarry Cats		428
	– Sky Sands		7
	– Afrimix		-
	Construction		3 795
	– Building and Housing		1 256
	– Civil Engineering		1 441
	– Engineering Projects		1 098
	Total		7 976