Group Five

Group Five has achieved 25 points out of a target of 25 for the ownership element in 2016.

The group 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%), Black managers’ scheme (1.94%) and the iLima consortium and the Mvelaphanda Group Limited. The largest part of the transaction was the issuing of 21.6% of share capital equally to the two parties. The Broad-Based Employee Scheme and the Black Management Share Scheme have reached their natural conclusion having achieved their intended objectives. The remaining elements of this transaction were concluded with the unbundling of Mvelaphanda.

The Group Five Black Professionals Staff Trust was launched in 2013 making up 9.23% of the Group Five issued share capital as at the end of 30 June 2016. Izakhiwo Imfundo Trust was officially launched on the 30th of June 2016 and made up 1.78% of the Group Five issued share capital as at the end of 30 June 2016.

Group Five BBBEE ownership transaction current status:

	30 June 2016		30 June 2015		30 June 2014
	Number of shares	Shareholding	Number of shares	Shareholding	Number of shares	Shareholding
Black Management Scheme	583 631	0.52%	698 394	0.62%	893 249	0.8%
Black Professionals Staff Trust	10 356 865	9.23%	12 356 865	11.02%	12 356 865	11.02%
Izakhiwo Imfundo Trust	2 000 000	1.78%	-	-	-	-
Total	12 940 496	11.53%	13 055 259	11.64%	13 250 114	11.82%

 

Executive management remained constant at 25%; Senior and Middle management levels improved. Senior management improved from 28% to 31%; middle management from 30% to 32%. However, junior management reduced from 78% to 74% mainly due to retrenchments.

The table below shows the profile of black management by empowerment category F2016 and F2015:

	Total South African  workforce F2016				Total South African  workforce F2015
Level	White	AIC*	Total	AIC % of total	White	AIC*	Total	AIC % of total
Executive management	6	2	8	25	6	2	8	25.00
Senior management	22	10	32	31	23	9	32	28.13
Middle management	282	130	412	32	326	140	466	30.04
Junior management	503	1 399	1 902	74	698	2 495	3 193	78.14

*African, Indian and Coloured

Sustainability indicator	F2016	F2015	F2014	F2013
Total employee headcount (all employees)	9 313	9 778	14 485	13 659
Number of unionized employees	1 442	2 115	2 494	2 120
% of permanent employees on medical schemes	43	54	46	49
% of employees over-border	24	24	24	25
% of black employees within the South African permanent workforce	88	88,5	89	89
% of black employees in Peromnes grades 1 – 3 (executive and senior management)	30	28	21	19
Number of black male bursary students	61	66	63	42
As a % of total bursary students	52	59	57	55
Number of black female bursary students	39	46	22	12
As a % of total bursary students	33	41	20	16

Group Five is committed to continuing its efforts to promote equity and diversity. 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
• Quality of management and management development
• Continuous development
• Competitive recognition and rewards
• Providing development opportunities

Total South African Workforce

The table below reflects the racial demographics of our South African workforce by occupational level, as defined in the Employment Equity Act. As can be seen, the numbers have remained fairly consistent over the last two years within the management level.

	Total South African  workforce F2016				Total South African  workforce F2015
Level	White	AIC*	Total	AIC % of total	White	AIC*	Total	AIC % of total
Executive management	6	2	8	25	6	2	8	25.00
Senior management	22	10	32	31	23	9	32	28.13
Middle management	282	130	412	32	326	140	466	30.04
Junior management	503	1 399	1 902	74	698	2 495	3 193	78.14
Semi-skilled	31	2 506	2 537	99	61	3 352	3 413	98.12
Lower skilled	17	2 184	2 201	99	6	2 660	2 666	99.78
Total	861	6 231	7 092	88	1 120	8 658	9 778	89

* African, Indian and Coloured.

Demographic distribution – South African employees:

Sustainability indicator	F2016	F2015	F2014	F2013
White	12%	11%	1 215	1 154
African	74%	76%	8 778	7 702
Coloured	10%	9%	1 362	1 031
Indian	4%	4%	408	397
Total	100%	100%	11 763	10 284

NB: Numbers above have been converted to percentage, not quantum as at 2014 and 2013.

The Group Five Academy (The Academy) was launched in August 2006. It is responsible for the planning and delivery of learning and development across the group, as well as maintaining support systems to track and manage all learning.

The Academy’s activities are structured around four areas:

• Bursary programme and learnerships
• Organisational development
• Leadership and management development
• Technical skills development

During the year, although overall training expenditure decreased due to economic conditions, we increased the number of employees trained.

Sustainability indicator	F2016	F2015	F2014	F2013
a) Annual value spent on training and development programmes – (R million)	31,8	40,2	45,1	37,1
i) Total number of training interventions*	16,698	13 133	14 928	9 125
ii) Total number of training interventions – semi-skilled and unskilled*	8,898	5 754	6 029	4 007
b) Annual value incurred on bursary expenditure – (R million)	7,9	8,4	7,2	5,1
i) Number of bursary students	118	136	111	76
ii) Number of female bursary students	42	50	26	15
c) Annual value spent on learnerships and apprenticeships – (R million)	5,4	7,2	5,1	3,6
i) Learners on learnership and apprenticeship programmes	170	186	174	90
ii) Unemployed learners registered on learnership and apprenticeship programmes	140	130	120	66
d) Number of students on the Group Five Programme in Management Development (PMD)	96	28	8	21
e) Total annual training spend – black employees – (R million)	13,5	15,5	19,3	15,4

* For employees.

Very pleasingly, all preferential procurement targets set for the year were exceeded. The challenge remains with Black Woman Owned enterprises. This is currently being addressed.

Achievement against Construction Charter principles:

Measurement principle	Points (F2016)	Targets (F2016)	Actual F2016(3)	Actual F2015(2)	Actual F2014(1)
Preferential spend with all suppliers	5	80%	87.4%	71%	72.2%
Preferential spend with qualifying small (and emerging micro enterprises)	3	15%	21.3%	24%	29.8%
Preferential spend with qualifying small (and emerging micro enterprises)	4	15%	13.7%
Preferential spend with 50% black enterprises that are more than	9	40%	28.5%	21%	18.2%
Preferential spend with 30% black enterprises that are more than women owned	4	12%	10.4%		4.4%
Bonus Points Preferential Spend From Designated Group enterprises that are at least 51% Black owned	2	2%	2.1%	6%
Weighted score (points)*	25		23.5%	19.4	19.1%

⁽¹⁾ As audited by BEE Verification Agency cc for the year ended 30 June 2014.
⁽²⁾ As audited by BEE Verification Agency cc for the year ended 30 June 2015.
⁽³⁾ As audited by BEE Verification Agency cc for the year ended 30 June 2016.

^*A weighted score is not done for targets.

The group met the full enterprise development requirement in terms of the Construction Sector BBBEE Scorecard for the sixth year in a row. Six of our current partners improved their Construction Industry Development Board (CIDB) registration during the period and four reached the targeted CIDB level 8. Since inception of the group’s enterprise development programme in 2008, four partners have increased their CIDB rating to level 8.

Group Five enterprise development partners:

ED Partners	Black Ownership	Women Ownership	Date joined	Initial CIDB Level	Current CIDB Level	BBBEE Level
BL Williams	95%	48%	2008	6 GB – PE	8 GB – PE	3
Enzani Technologies	80%	54%	2009	5 EP – PE	7 EP  PE 1 ME – PE	1
Inkanyeli Projects	100%	19%	2009	4 GB – PE	7 GB  PE	2
Pan African Development	100%	40%	2009	6 GB – PE	7 GB  PE 7 CE  PE	3
Siyakhula Engineering	100%	-	2009	1 EB - EP	1EB - EP	3
UMSO Construction	89%	-	2008	6 CE – PE	8 CE – PE 6 GB PE	2
ENM Trading CC	100%	-	2010	6 GB	8 GB	3
Uvuko Civils	100%	100%	2013	7 GB,5 CE	8 GB PE 7 CE PE	3
Tsima Construction	91%	21%	2015	7 GB,8 CE	8 GB, 8 CE	3

 

F2016 NEW PARTNERSHIPS

ED Partners	Black Ownership	Women Ownership	Date joined	Initial CIDB Level	Current CIDB Level	BBBEE Level
Bhungu Trading Projects CC	100%	-	2016	*	*	3
Thukuhlo Suppliers, Recycling & Projects (Pty) Ltd	100%	100%	2016	*	*	3
Keabetswe Business Enterprises CC	100%	-	2016	*	*	1
Tanguliza Construction	100%	100%	2016	*	*	1
Bafokeng Plumbing,  Engineering Construction & Trading (Pty) Ltd	100%	-	2016	1 SO  PE	1 SO  PE	3
WillpowerWorx	100%	-	2016	*	*	1

CE – Civil engineering
EP – Electrical engineering works (infrastructure)
GB – General building works
ME – Mechanical engineering works
PE – Potential emerging
* - Not CIDB graded

The Group’s SED program has three key focus areas:

• Education and training: with a particular focus on mathematics, science, environmental and technology education.
• Social development: through donations made towards community development initiatives mainly through nonprofit/non-governmental organizations for various cause related programs and disaster relief.
• Economic development: with particular emphasis on the promotion of sustainable employment for marginalized and unskilled groups such as women and the youth.

Sustainability indicator	F2016	F2015	F2014	F2013	F2012
Targeted SED spend as a % of SA operations’ net profit after tax	1	1%	1	1	1
Actual SED spend as a % of SA operations’ net profit after tax	1.07	0.9%	1.52	1.15	2.4
Total annual spend on SED programmes – (R million)	3.2	2,6	3.8		3,9
Number of unemployed people trained as part of the People at the Gate programme	34	118	536	524	43
% of unemployed people securing positions after training	100	70	90	80	100
Number of non-profit organisations benefiting from the group’s SED programmes	48	55	35	26	32