Social, Ethics and Transformation Committee's report

I am pleased to present this report to all stakeholders which gives comprehensive details on our socio-economic development initiatives. This Committee was formed in line with section 72(4) of the Companies Act and operates under Board-approved terms of reference, which include holding at least three meetings per financial year. The Committee performed its oversight functions without any hindrance and can report on its activities for the financial year ended 31 May 2022.

As prescribed by the Act, the role of the Committee is to monitor and support the Group's initiatives and programmes regarding:

social and economic development, including the Group's compliance with the Broad-Based Black Economic Empowerment Act and the Employment Equity Act;
consumer relations and the Group's compliance with consumer protection laws;
the Group's standing in terms of the ILO protocol on decent work and working conditions, the Group's employment relationships and its contribution to the educational development of its employees;
good corporate citizenship, including the Group's promotion of equality, prevention of unfair discrimination and reduction of corruption, contribution to development of the communities in which the Group operates, and its record of sponsorships, donations and charitable giving;
the environment, health and public safety and the impact thereon of the Group's activities; and
the 10 principles of the United Nations Global Compact (UNGC).

The Committee continued to engage with management on transformation across the Group focusing on continuous improvement in meeting the Group's transformation objectives and regulatory compliance both at Group and subsidiary levels.

The past year saw progress being made with the Trust Blu Foundation appointing a Managing Director and implementing institutional policies and controls for the distribution of funds and support to our CSI beneficiaries. To improve the impact of its initiatives on communities, the Group has in the past year partnered with other organisations and industry players with shared socio-economic values to pull together resources for high impact.

Our programmes continued to impact community and youth development through initiatives aimed at developing entrepreneurs and SMMEs within communities in line with our focus areas announced in the 2021 integrated annual report. In order to ensure long-term sustainability of beneficiary organisations and communities, the Group has formed long-term partnerships with selected organisations with proven track records working with grassroot communities on the ground.

Coming out of the difficult period of Covid-19, the Group has continued to support and implement initiatives to enhance the quality of health for employees and their families.

A comprehensive review of the Group's ESG philosophy and policy has resulted in the formulation of critical indicators and measures that are being implemented by the Remco in the scorecards of the executive. Noting the challenges of climate change, the Group has partnered with players in the renewable energy space to create awareness in very poor communities and implement renewable energy sources such as in one of our prime CSI projects in Orange Farm in Gauteng.

Key focus areas for 2023

Continue to drive an internal mindset of performance with purpose through the Blue Label business by:
- focusing on the chosen project in Orange Farm as our primary target community for driving sustainability through the creation of new jobs and growing at least six new SMMEs;
- focusing on critical skills needed and building a capability map that will enable us to leverage these new skills in the business and achieve our skills spend points; and
- driving impactful objective-setting processes to enable the promotion of fair labour practices, decent work and economic growth.
Continue driving a growth mindset culture within the business.
Drive long-term employee development for succession planning and meeting the skills needs of the business.
Monitor and measure the success and impact of our socio-economic projects through the Ubelong and Wozza channels.
Design and implement a parity plan for all subsidiaries to start processes to eliminate all forms of inequality.
Continue supporting the Group's flagship initiatives to help reduce poverty in the communities we serve.
Identify a new economic development project that will improve the lives of targeted beneficiaries in the community where we operate.
Continue to focus on improving the environmental and health and safety performance of the Group.
Support and monitor the success of the solar project initiative as part of our overall initiative in Orange Farm aimed at creating awareness of renewable energy and reduction of dependency on fossil fuel energy at community level in line with the Group's ESG ambitions in support of the country's commitment and response to climate change.
Focus on monitoring the use of electricity and water across the business.
Focus on improving the Group's B-BBEE scorecard as a means of achieving our socio-economic transformation objectives.
Conduct a detailed analysis on our ESG objectives and put in place a three-year measurable plan.

The Committee is pleased to report to all stakeholders of the Group that it has fulfilled its mandate as prescribed in its terms of reference and applicable legislation, in particular, the Companies Act and that the Company has no instances of material non-compliance to disclose, other than the fraud case which was disclosed to all stakeholders.

The Group has continued to uphold its ethical code and conduct its business in line with acceptable standards of ethical behaviour. Management has continued to address and prioritise the Group's B-BBEE objectives notwithstanding the challenges of certain aspects of procurement as the Group purchases mainly from the networks and power utilities.

The Committee looks forward to reporting on our critical milestones next year.

SJ Vilakazi

Chairman

30 September 2022