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Financial highlights and results
Our Group in brief
Consolidated segmental analysis
Performance at a glance
External appraisals
Global footprint
Chairman’s statement
Chief executive’s report
Financial director’s report
Review of operations
Summarised sustainability report
Corporate governance
Financial statements
Management directory
Shareholders’ diary
AGM notice and proxy
Summarised sustainability report  continued
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Bidvest is making consistent progress in promoting black economic empowerment and driving socio-economic transformation throughout the South African businesses. The majority of Bidvest’s activities and workforce are in South Africa, where socio-economic transformation and BEE are an integral part of creating sustainable businesses and communities. By virtue of its size and diversification across numerous industries, Bidvest is making a farreaching contribution to the communities in which it operates and in providing employment Bidvest’s empowerment partners in the Dinatla consortium play an important role in these achievements as do our commercial directors who drive the process on the ground.

Bidvest, a level five contributor with an unconstrained operational capacity, has a “BBB” empowerment rating from Empowerdex. The “BBB” rating relative to our “A” rating achieved previously is largely due to the changes in the codes of good practice.

The finalised codes of good practice announced by the South African government early in 2007, will bring much needed clarity to the process and will facilitate further transformation.

Bidvest is one of only 11 winners of the inaugural Community Growth Funds Unity Awards, backed by major trade unions, reinforcing its credentials as an empowered, socially responsible employer.
Effective empowerment holdings
Bidvest has a significant empowerment shareholding. Economic BEE ownership calculated in terms of the codes is 26,7% effective BEE control, thereby giving the Group the maximum points on the generic scorecard. The Dinatla BEE consortium owns 8,9%.

Bidvest’s empowerment partners in the Dinatla consortium play an important role in Bidvest’s transformation achievements. The Bidvest facilitated refinancing of the Dinatla investment has cemented this collaborative and mutually beneficial partnership for a further five years.
Managing transformation
Bidvest’s well-structured and entrenched approach enables it to confidently advance along an ambitious path of transformation. The Group’s transformation committee is responsible for driving socio-economic transformation within the Group. Bidvest’s transformation strategy focuses on progressing skills development and employment equity at all levels, increasing levels of procurement of goods and services from HDIs and promoting the development of small, micro and medium-sized black owned enterprises.

Business units subscribe to the Bidvest Charter and BEE scorecard, which guide the Group’s transformation strategy, as systems to measure and monitor BEE performance. These have been aligned with the revised methodology prescribed in the codes. The codes are more prescriptive than the previous generic scorecard and place more emphasis on the need to appoint, employ, promote and develop black women in the workplace. The latest audit indicates that practices are on track and a few discrepancies had to be addressed to meet the regulatory requirements.

The codes provide a framework for the regulation of BEE verification agencies. The provision of this regulatory framework requires that all verification agencies be accredited by the independent accreditation body South African National Accreditation System. This will resolve previously problematic inconsistencies in the assessment of companies’ empowerment status.

Transformation is the responsibility of each business unit and every Bidvest subsidiary will be required to obtain individual empowerment ratings. Business units have held workshops for staff to ensure familiarity and comprehension of the codes and revised Bidvest Charter and scorecard.

An electronic system has been developed to enhance the process of collating scorecard data and ensure the highest standards. The data is confirmed annually by third-party assurance providers and the scores are determined and verified by an independent empowerment rating agency.

The Bidvest intranet provides an effective resource for improving levels of BEE awareness, understanding and knowledge among employees.

Bidvest is refining its measuring of socio-economic transformation with a major drive to track performance across all aspects of the scorecard, at a provincial level.
Employment equity and skills development
Bidvest’s emphasis on investment in the skills and leadership development of HDIs and women is increasingly bearing fruit, with greater representation across management, technical and professional categories. A number of divisions appointed HDIs to senior levels, yet retention remains an ongoing challenge in view of the industry-wide skills shortages.

Integrated employment equity and skills development programmes with targets for black representation at all levels are rolled out across the divisions and at each business unit. Succession planning strategies are implemented to ensure the movement of black candidates into management positions and retention strategies and mentorship programmes for black employees are in place.

Annual training spend in South Africa increased to R118,1 million (2006: R83,0 million).
Indirect empowerment: preferential procurement and enterprise development
Operations are committed to pursuing policies that promote the use of black-owned and empowered enterprises. Preferential procurement has increased, as more suppliers become empowered and more opportunities are identified. Bidvest spent 16,7% of total procurement, excluding monopolistic suppliers and foreign spend, on external BEE suppliers of goods and services.

Given the timing of the release of the codes and the collection and collation of procurement data, there is an interim transitional period where suppliers will still be rated under the old codes, leading to a significant degree of under-reporting of our preferential procurement spend.

Business units use an electronic supplier database which serves as a consistent point of reference for supplier empowerment credentials, facilitating the identification of opportunities for business units and suppliers to work together.

Bidvest increased its investment in enterprise development. Promoting enterprise development involves engaging with financial institutions to negotiate favourable financing terms for small BEE suppliers, providing BEE suppliers with favourable credit and payment terms, and offering mentorship and advice to small BEE suppliers to ensure effective skills transfer and sustainability. An assessment of enterprise development at a provincial level is in progress with the aim of managing initiatives at a provincial level in the future, to encourage more co-ordinated and targeted efforts.
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