Transformation

 
SCORE CARD
       
        LEVEL  
        2010   2009  
 
  Equity ownership 2   2  
    Management control 4   4  
    Employment equity 6   5  
    Skills development 4   4  
    Preferential procurement 1   3  
    Enterprise development 3   3  
      Socioeconomic development 1   1  


Transformation

To date 1 944 employees have been allocated shares as part of the Akani broad-based shares scheme.

As is required, WBHO was audited to verify the level the group had achieved on the Broad Based Black Empowerment Construction Charter. This year the group maintained its level 3 status. Significant improvements included an improvement from level 3 to level 1 in respect of preferential procurement as well as an improvement from 5 to level 6 in respect of employment equity. It is our intention to maintain a level 3 score in 2011 while concentrating on improving ratings for employment equity and management control.

1. EQUITY OWNERSHIP
  Equity ownership has been achieved through Akani Investment Holdings (Proprietary) Limited, a special purpose BEE vehicle whose shares are linked on a one-for-one basis with WBHO shares. Using this vehicle the group has allocated shares to our black partners and employees. To date approximately 15,6% of Wilson Bayly Holmes-Ovcon Limited’s equity has been set aside for previously disadvantaged persons which, when applied to South African based operations equates to approximately 31% black ownership, a level 2 scorecard equivalent.
   
2. MANAGEMENT CONTROL
  Steady progress has been made with this section of the scorecard and our rating has improved from level 6 to level 4 over the past 2 years. Through ongoing training programmes, the group is able to accelerate the career paths of identified black individuals to the higher levels of management.
   
3. EMPLOYMENT EQUITY
  The group is of the opinion that employment equity is key to facilitating true transformation. In conjunction with the Department of Labour, WBHO has developed targets to achieve a similar demographic structure within the group as that which is reflected in the economically active population of South Africa. Having established employee equity forums on all sites and with greater emphasis now being placed on achieving these targets the group believes further improvements can be made.
   
4. SKILLS DEVELOPMENT
  In light of depressed economic conditions resulting from the global recession the group has held skills development spending at current levels until activity in the construction sector improves. An amount of R33 million was spent on both direct and indirect training during the year.
   
5. PREFERENTIAL PROCUREMENT
  Having developed its own software to monitor and report on all aspects of preferential procurement, control systems have been implemented throughout the group. The benefit of these controls is evident in the preferential procurement score achieved this year. The score has increased from 15,79 to 20,0 where the most significant improvement in procurement spend has been on black women-owned and black-owned companies. WBHO now has a score for preferential procurement of level 1.
   
6. ENTERPRISE DEVELOPMENT
 

This year WBHO supported eleven construction related businesses through its Enterprise Development programme; seven in the Roads and Earthworks division and four in the Building and Civil Engineering division. Support for three of the businesses is in its infancy and hence only eight entities were submitted for assessment.

With revenue being at its highest levels, achieving combined enterprise development revenue of 5% of the group total South African revenue is proving to be challenging for the group. This year combined enterprise development revenue of R483 million was necessary to do well on the scorecard and only R150 million was achieved. The current economic conditions prevalent within the construction environment mean that enterprise development companies will be under pressure to sustain current revenue levels, as such this challenge is likely to continue into the next financial year.

   
7. SOCIOECONOMIC DEVELOPMENT
  Due to the diverse nature of its operations the group is able to assist a numerous of communities on an ongoing basis. The group engages in site specific community projects as well as corporate initiatives. This year the group contributed R15,6 million toward these projects.