EMPOWERMENT

That South Africa is saddled with a legacy of severe socioeconomic imbalance between predominantly white and black citizens is not a matter of dispute. The challenge lies in how to remedy this imbalance. In the private sector, the challenge has been to help remedy this imbalance through a policy and process of broad-based black economic empowerment (BBBEE).

BBBEE operates on seven levels: Shareholding; Management Control; Employment Equity; Skills Development; Procurement; Enterprise Development and Socio-economic Development.

Government has indicated that it intends to move away from a compulsory to an enabling policy of BBBEE. This places an enormous responsibility and obligation on companies such as Adcorp.

The Adcorp Group has for the last two years been recognised as the most empowered listed company in South Africa

The Group has a proud history of empowerment dating back as far as 1990. At a shareholding level, a Group-wide transaction was announced in 2007 that has significantly bolstered the empowerment credentials of the Group while also creating an opportunity for all Adcorp employees to share in the Group's financial fortunes. In terms of this BBBEE transaction, a consortium comprising women's grouping, Women Investment Portfolio Holdings (Wiphold), Simeka Group (Pty) Limited and an Adcorp employee share incentive trust own an effective 25,1% shareholding in Adcorp Holdings Limited. The Group's overall black ownership in terms of the BEE scorecard has been certified by Empowerdex to be 33,33%. Direct black female ownership in Adcorp Holdings is calculated to be 9,12%, using the modified flow-through principle. For the purposes of the scorecard, black female ownership is deemed to be 15,25% after the exclusion of the 40% shareholding that is classified as a Mandated Investment.

Because BBBEE has been a real part of who we are and what we do, we have incorporated it into every part of our business. This is why the Adcorp Group has for the last two years been recognised as the most empowered listed company in South Africa in terms of the Financial Mail/Empowerdex Survey. Furthermore, we have been rated as the most empowered company in our sector for the last four years. We are the only listed group in South Africa that has been rated as a level 2 BBBEE contributor in terms of the Department of Trade and Industry's BBBEE Code of Lead Practice. Something we are truly proud of.