05-2 IDC Integrated Report 2019

2 0 1 9 Integrated Report The IDC is a state-owned development finance institution primarily mandated to provide funding for the development of industry in South Africa and the rest of Africa. INDUSTRIES THAT WE FUND METALS AND MINING AGRO-PROCESSING AND VALUE CHAIN AGRICULTURE VALUE Industrial CHAIN capacity development CHEMICALS AND INDUSTRIAL PHARMACEUTICALS INFRASTRUCTURE VALUE CHAIN CLOTHING, NEW INDUSTRIES TEXTILES, LEATHER AND FOOTWEAR OTHER MANUFACTURING TOURISM, AND RELATED MEDIA AND ICT INDUSTRIES Value approved: share of total value approved (2015 to 2019) Number approved: share of total number of transactions approved (2015 to 2019) Portfolio: share of the IDC’s exposure to the industry relative to total exposure - total portfolio valued at cost as at 31 March 2019 Jobs: share of total jobs expected to be created and saved (2015 to 2019) TABLE OF CONTENTS PERFORMANCE About this Report .....................................................................................................2 Minister’s Foreword .................................................................................................4 OVERVIEW Chairperson’s Statement ........................................................................................6 Company Overview .................................................................................................8 Regional Footprint ...................................................................................................9 192 TRANSACTIONS APPROVED Business Model .........................................................................................................10 Key Stakeholders ......................................................................................................12 22% Making Trade-offs ....................................................................................................14 R13.1 billion Strategic Business Risks ..........................................................................................15 Selected Performance Indicators .......................................................................16 TOTAL FUNDING DISBURSED Material Matters and Materiality .........................................................................17 Our Strategy ...............................................................................................................18 23% Our Development Outcomes and their Contributions to SDGs, R11.8 billion the NDP and the NGP .............................................................................................19 Operational Structure .............................................................................................20 2019 Performance Trends......................................................................................22 NUMBER OF JOBS EXPECTED TO BE CREATED AND Our Board of Directors ............................................................................................24 SAVED (CREATED: 14 620; SAVED: 4 558) Chief Executive Officer’s Statement ...................................................................26 Our Executive Management Team .....................................................................28 36% Leading Industrial Capacity Development .....................................................30 19 178 Addressing the Marginalised ...............................................................................52 Our B-BBEE Rating ....................................................................................................54 APPROVED FOR THE MANUFACTURING SECTOR Committed to Good Governance .......................................................................55 Ensuring Financial Sustainability ........................................................................82 Assurance Report .....................................................................................................88 R7.4 billion 8% Glossary........................................................................................................................91 Contact Information ................................................................................................92 Administration...........................................................................................................94 APPROVED FOR BLACK INDUSTRIALISTS 24% R6.0 billion ADDITIONAL ONLINE INFORMATION APPROVED FOR BLACK EMPOWERED COMPANIES Group Structure Procurement Board Directorships Special Funding Schemes 14% Carbon Footprint Memberships R8.3 billion Corporate Social Investment King IV Checklist Human Capital GRI Table APPROVED FOR BUSINESSES WITH WOMEN OWNER- SHIP OF MORE THAN 25% R3.0 billion 37% Navigating this report Financial Capital Intellectual Capital APPROVED FOR BUSINESSES WITH YOUTH OWNERSHIP OF MORE THAN 25% R823 million 15% Social Capital Manufactured Capital NET PROFIT AFTER TAX (EXCLUDING CAPITAL PROFITS) Human Capital Natural Capital R720 million 14% Icons denoting assurance TOTAL ASSETS Denotes Limited Denotes Reasonable R145 billion 6% Assurance Assurance Icons denoting availability of additional information Additional information available at www.idc.co.za Additional information available elsewhere in this report ABOUT THIS REPORT Various reporting frameworks, principles, benchmarks and IDC’s objectives and its regional, industry, Environmental, Social, standards have been developed to drive the relevance and and Governance (ESG) and socio-political contexts. quality of reporting content and encourage better corporate decision-making, long-term value creation and transparency. The IDC uses the most widely regarded reporting frameworks in While the frameworks generally share common objectives, each pursuit of the objectives listed in the table below. one has a purpose, approach or area of focus that relates to the How IDC uses selected reporting frameworks to achieve the objectives of integrated reporting Framework is highly relevant Framework has some relevance IR Framework King IV GHG Protocol (Carbon) Sustainable Development Goals National Development Plan Management Finance ActPublic Standards GRI To guide the development of strategy and report content Development outcomes To guide the reporting approach alignment with NDP and SDGs To guide the structure and presentation of information As a benchmark (or standard) against which to align report content To comply with regulations To establish credibility The Corporation’s approach regarding the frameworks that we reporting frameworks and other guiding documents interact to use or reference in our integrated reporting process was informed shape the IDC’s reporting and communication, governance and by generally accepted best practices in the South African strategy. business area, investor and other key stakeholder expectations, our operating context, internal knowledge and capacity and the King IV extent to which each framework is currently relevant and could IDC subscribes to the principles of good governance as espoused wholly or partially contribute to the objectives of integrated in King IV. King IV reporting. checklist GHG Protocol The focus is on our means of creating value and we have been IDC uses the GHG Protocol to identify and quantify our CO2e guided by the Integrated Reporting Framework issued by the (carbon dioxide equivalent) emissions. Carbon International Integrated Reporting Council (IIRC). This report is footprint further aligned with selected principles of King IV, the Greenhouse Sustainable Development Goals Gas (GHG) Protocol, the Sustainable Development Goals (SDGs), IDC contributes toward the realisation of the SDGs through our the National Development Plan (NDP), the Public Finance activities. Our material issues and the way in which these align Management Act (PFMA) and the Global Reporting Initiative with the SDGs are shown on page 17. (GRI). The diagram on page 3 provides an overview of how 2 Interaction between IDC’s strategy, governance and Governing principles and standards reporting and SDGs The report is further informed by the following legislation and standards: REPORTING AND COMMUNICATIONS • The Public Finance Management Act, 1 of 1999, as amended GOVERNANCE (PFMA) • The Companies Act, 71 of 2008, as amended STRATEGY • The International Financial Reporting Standards (IFRS) NDP • The Industrial Development Corporation Act, 22 of 1940, as amended PFMA IDC ACT SDGs • Internally-developed guidelines and policies. GRI STANDARDS <IR> FRAMEWORK Reporting principles, assurance and approval KING IV Our combined assurance framework brings together all assurance activities, identifies internal and external assurance providers and ensures that actual assurance takes place and is reported within our governance structures. Scope and boundary of reporting This Integrated Report covers our strategies and performance for A combined assurance team from SNG Grant Thornton (JHB) and Ngubane & Company (JHB) Inc., supported by our internal audit the period 1 April 2018 to 31 March 2019. Assurance team, provided assurance for the report. The IDC Board Audit report The report extends beyond financial reporting to include Committee verified the independence of the external assurance information about non-financial performance, strategies, providers. The IDC Board approved the report as recommended activities, risks and outcomes attributable to or associated with by the Board Audit Committee. Selected performance those of our key stakeholders who have a significant influence on information was assured at a limited assurance level

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