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Engen Limited Integrated Annual Report 2014
Engen Limited Integrated Annual Report 2014 1 Contents
ABOUT THIS REPORT 4 HUMAN CAPITAL 44 Our Total Workforce 44 CHAIRman’s review 5 Developing Talent 44 Employment Equity 46 CEO’s Statement 7 Our Employment Equity Performance 48 Collective Bargaining 49 ENGEN AT A GLANCE 11 Organisational Health 49 Company Ownership 11 Occupational Health Programme 49 Our African Presence and Number of Retail Outlets and Terminals 11 Employee Wellness Programme 51 The Engen Brand 12 Safety 52 Our Operational Divisions 14 Behavioural Safety 52 Refinery 14 Visible Felt Leadership 53 Supply, Trading and Optimisation (STO) 14 Capability Development 53 Engen Sales and Marketing (ESM) 14 Safety Performance 53 International Business Division (IBD) 14 Engen Value Chain 16 SOCIAL AND RELATIONSHIP CAPITAL 54 Stakeholder Engagement 54 BUSINESS CONTEXT 18 Engaging our Stakeholders 55 Global Environment 18 Involvement in External Initiatives 56 Sub-Saharan Africa (SSA) Environment 19 Corporate Social Investment (CSI) 57 RSA Environment 19 Educational Support to External Stakeholders 57 Environment Management Support to External Stakeholders 58 GOVERNANCE AND ETHICS 21 Health and Safety Support to External Stakeholders 58 Engen’s Approach to Governance 21 Engen Employee and Dealer Outreach Initiatives 59 Engen Limited Board 22 Engen in Sub-Saharan Africa and the Indian Ocean Islands 61 Board Committees 22 Engen Management Committee 24 NATURAL CAPITAL 63 Compliance 26 Environmental Management 63 Health, Safety and Environment Management System (HSE-MS) 27 Fresh Water Management 63 Groundwater 65 RISK MANAGEMENT 29 Energy Management 65 Our Approach 29 Climate Change and Greenhouse Gas Emissions 66 Our Risk Governance Framework 29 Atmospheric Emissions 68 HSEQ Risk Management 29 Waste Management 69 Engen’s Top Risks 30 Loss of Primary Containment (LOPC) and Spill Management 70
SUSTAINABILITY IN CONTEXT 31 TRANSFORMATION 71 The Process to Determine Materiality 32 Our B-BBEE Performance 71 Material Issues 33 New B-BBEE Codes of Good Practice 73
FINANCIAL CAPITAL 36 GRI Content Index 74 Financial Performance Overview 36 Key Financial Indicators 36 Independent Assurance Report on Selected Capital Investment 36 Environmental Information 76 Value added statement 37 Summarised flow of capital between stakeholders (Rm) 38
MANUFACTURED CAPITAL 41 The Refining Process 41 Sales and Logistics 42 ESM 42 IBD 43
2 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 3 About this report Chairman’s Review
This report constitutes another important milestone in our efforts to deliver sustainable value to stakeholders. It builds on our 2012- 2013 Integrated Report and begins to include elements of the Global Reporting Initiative (GRI) guidelines for Sustainability Reporting GRI G4. It is also based on the principles and framework as presented in the International Integrated Reporting Framework (December 2013).
The approach taken in preparing this report focusses on the value chain of the business and how the business manages the process of value creation across five of the six sustainability capitals as guided by the
The scope of reporting covers our performance in the 18 countries Engen is committed to being the oil company of choice in Sub- Engen did however have encouraging successes. The Engen Refinery where we have retail presence, and all business concerns where Saharan Africa and the Indian Ocean Islands. Engen is driven by this in Durban experienced improved operating performance making we have operational control (see the map on page 11). We report strategic objective and reflecting on our sustainable development 2014 the best year for the plant since 2004. Part of the credit for fully on key sustainability performance indicators regardless of performance of 2014, I am pleased to share this journey with you. this outstanding accomplishment must be given to the exceptional percentage share ownership. In the event that there are material execution of the annual Turnaround. Well done to the entire Engen deviations from these reporting parameters, they will be clearly Maintaining the position as industry market leader in South Africa, Refinery team for completing and delivering superb results. stated in the report. as well as expanding Engen’s presence into Africa and the Indian Ocean Islands, has remained our focus. Operational Excellence and With noteworthy capital investments across the supply chain, focus The focus of this report is our performance for the period starting effective HSEQ and Risk Management, along with the continuous remained on providing the best service and convenience offerings. 01 January 2014 to 31 December 2014. In addition, we have efforts to optimise the supply chain, has been critical in ensuring Engen is proud to have once again been awarded with the Sunday provided relevant historical information and we make references to the reality of our vision. Engen remains steadfast in engaging Times Top brands award in the Top Petrol Station category and to past events in order to maintain historical context of the key issues stakeholders and providing customers with high quality products. have also been named the “Coolest Petroleum Brand” by young discussed. South Africans in the Sunday Times Generation Next survey. These However, 2014 proved to be a challenging year amidst a volatile prestigious awards reaffirm Engen’s position as the industry market As part of the wider Petroliam Nasional Berhad (PETRONAS) Group, global economic landscape. In this time, five of the countries in leader in South Africa. please consult the PETRONAS Sustainability Report 2014 for which Engen has an affiliate presence experienced economic additional information and context. contraction. With growth in the other 13 countries, it is expected the As we strive towards becoming the oil company of choice in Sub- GDP in Sub-Saharan Africa will continue growing over the next five Saharan Africa and the Indian Ocean Islands, we are mindful For this report, Ernst & Young provided the financial assurance years. This will however be at a rate below 4%, which is largely due to continue building and maintaining influential and effective and KPMG provided the non-financial assurance for selected to the subdued global economic landscape. relationships with all stakeholders. In 2014 we developed and sustainability information. The latter is indicated by the abbreviation adopted a Stakeholder Engagement Policy, which provides guidance “RA” for reasonably assured next to the figures quoted. The CPI index in most of Engen’s affiliate countries decreased in 2014, on stakeholder engagement at Engen with clear role definition, indicative of the tough market conditions as well as the associated terminology and scope. Engen Limited Sustainability Manager market slowdown. In addition, high pump prices decelerated Engen Court, Thibault Square. Cape Town, 8001 product demand. Supply constraints, along with the non-compliance Engen’s commitment to South Africa and the African continent PO Box 35, Cape Town, 8000 of Broad-Based Black Economic Empowerment (B-BBEE) in South is embodied in our corporate social investment activities, which E mail: [email protected] Africa were also contributing factors impacting profits. continued to be focused on the delivery of a nation-building Tel: +27 21 403 5258 agenda. In the year under review, Engen moved forward with Fax: +27 21 403 4384 Refining margins were under pressure but the sharp decline in projects focusing on education, environment, and health and safety. Web: www.engenoil.com global crude oil prices had a significant impact on improving these These projects were all aligned to the business and our operating margins towards the tail end of 2014. This was not unique to environment as well as being in line with national social priorities. Engen, affecting refineries across the globe with the entire industry displaying negative growth in the retail gasoline market.
4 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 5 CEO’s Statement
We believe that through our activities, we have made substantial progress in achieving our objectives in order to meet customer needs, thus enabling an increase in our business interests and profit share across Sub Saharan Africa and the Indian Ocean Islands, delivering more value, at lower costs than our competitors.
In closing, I would like to thank our shareholders, PETRONAS and Pembani, for their support and guidance. We serve Engen at their request and therefore hold our fiduciary and statutory obligations in the utmost regard. To my fellow Board members, thank you for your commitment in guiding the organisation through a turbulent global economic period. DATUK AHMAD NIZAM SALLEH MANAGING DIRECTOR AND CEO Finally, on behalf of the Engen Limited Board, I would like to extend my gratitude to the Engen Management Committee and all Engen employees for their loyalty, commitment and perseverance. Engen experienced a challenging year in 2014. The turbulent global performance, Overall Equipment Effectiveness (OEE) reached 97.4%, They have made Engen’s success possible, and they continue to economic landscape and continued high crude prices put severe far surpassing the plan of 90.3%. This is without doubt due to the make GREAT happen. pressure on profits. great effort, collaboration and commitment from the entire Refinery team. As we begin to reap the benefits of the significant strategic Consumers also felt the pinch with the continuous fuel price innovations that were implemented in 2014, I remain optimistic increases throughout the year. This had a negative impact on local The SAFOR lube refinery was shutdown as planned in mid-2014 about the future. These investments are certain to deliver impressive sales volumes, with disposable consumer income also being affected which was followed with the crude diet and process operations results and improved performance, which I look forward to sharing by increases in the interest rate in our largest market, South Africa. being optimised for the new fuels-only configuration. The Alkylation with you soon. Consumers only experienced some relief in December 2014 when unit reliability and utilization also achieved the best performance fuel prices dropped on the back of decreasing crude costs. for more than a decade, with 98.5% and 61.6% respectively. DATUK WAN ZULKIFLEE WAN ARIFFIN In addition, a successful regeneration of the Reformer catalyst has We were however able to increase our turnover compared to the delivered octane capability not seen in previous recent cycles. previous year despite these challenges. This is because we remained focused on delivering on the strategy, proving our resilience through The Refinery’s successful year, illustrates the effect of allocating these tough economic conditions. financial resources for capital expenditure as well as for the intensified training of employees. Product volumes improved in our markets outside South Africa, with good sales growth in Reunion, Mozambique, Gabon, Zambia In addition, capital expenditure at the Refinery has been invested and Mauritius. However, overall company expenses increased in in environmental improvements, maintenance and reliability, the 2014 financial year, which resulted from higher staff costs and infrastructure, future fuels and other profit generating interventions. higher depreciation due to a capital expansion programme in our International Business Division and to a lesser extent in Engen Sales Engen has also made significant capital investments across the and Marketing (ESM). This also includes the Refinery depreciation value chain. One of these is the recent building and commissioning charge on stay-in-business capital. of the Beira Terminal in Mozambique.
The Engen Refinery achieved outstanding performance in 2014. Amidst a continued focus to always deliver the best service to our A safe, reliable and stable operating plant resulted in the best customers, signature convenience offerings continued to be rolled refinery operating performance of the last 10 years. This is attributed out across the Engen service station network. Notable achievements to, amongst others, a successfully executed Turnaround and record include more fast food and restaurant partnerships, franchise mechanical availability. The culture of chronic unease drove excellent bakeries and a coffee offering, alternate payment solutions and a results not only in plant operations but also in personnel and process range of other innovations. This includes an innovative partnership safety, as well as in environmental and regulatory compliance. with logistics group UTi, which is seeing Engen roll out the first UTi ByBox delivery terminals. The persistent focus delivered the best reliability performance over the last five years with the refinery achieving 98.1% reliability versus a plan of 94.6%. In tandem with this outstanding
6 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 7 Providing superior service and convenience, coupled with high The strategic recruitment of critical positions improved in 2014 when quality products, is Engen’s priority. As part of our efforts to enhance comparatively measured against 2013. Engen continues to believe customer experience and improve service offerings, we have also that continued investment in employee training and competency is partnered with Butcher’s Best Biltong Bar. The first Biltong Bar was critical for the realisation of the Engen vision. launched at the Engen Vineyard Convenience Centre in Cape Town, South Africa and plans for further roll-out to other sites in 2015 are With transformation being high on the agenda for Engen, since currently underway. 2012 we have improved our B-BBEE status from a Level 4 B-BBEE Contributor to a Level 3 B-BBEE Contributor. Achieved through the Other innovations include solar-equipped retail sites, with the second deliberate in depth analysis and verification of different elements one being launched at the Engen All Africa Convenience Centre in of the codes, the review of the business strategic objectives, as Alexandra. The installation allows for an impressive average energy expressed in the revised Engen strategy, has yielded improvements yield of up to 170 kWh per day. And while the site generates solar in our transformation campaign. energy, it also has various energy saving installations, including LED lighting. This project is assurance to Engen’s commitment to energy It is with deep regret that we report a fatality during the year under efficiency. As a company, we are also on a journey to strategically review. This was due to a road transfer related incident at our Head reduce transport emissions through replacement of our trucks. In Office in Cape Town. We extend our condolences to the family and 2014 we purchased six Euro 5 specification product delivery trucks. friends of the deceased. We remain focussed on striving to ensure the safety of all our people. An investigation into the incident has The main focus in the Southern African market of South Africa, been conducted and corrective action implemented to prevent future Lesotho and Swaziland, was the roll-out of service stations recurrence. including 1-Plus sites, in previously disadvantaged areas. This saw the upgrade and rebranding of five sites in these areas. Engen now I would like to extend a sincere thank you to the Engen Board for boasts a total of 1 057 retail sites in the region. In 2014, we rolled their guidance, support and encouragement throughout 2014. out eight new Corner Bakeries to bring our total to 497. Engen also I would especially like to thank the members of my management opened seven new Woolworths Foodstops. committee and all Engen’s employees for their commitment and hard work during an exciting and challenging year. In IBD, Engen continued to drive the growth strategy in the retail network. This has resulted in a significant increase in the number of As we continue our journey to being the oil company of choice retail sites in Kenya and Zimbabwe. Overall, IBD now has a total of in Sub-Saharan Africa and the Indian Ocean Islands, we remain 447 retail sites. As we cement our presence in Africa, we continue optimistic about the future. Although the year ahead won’t be easy, to explore opportunities to expand our markets. In addition to the 18 I remain confident that Engen will continue to progress in building affiliate operations, Engen started to market and distribute lubricants our business base and profitability. Engen’s key strength remains a to a further seven countries while exporting a variety of products proficient, dedicated and passionate workforce, who will propel the to more than 20 other countries across the continent. Engen’s IBD company forward towards our goals. volumes improved with healthy sales growth in five markets. DATUK AHMAD NIZAM SALLEH Constantly looking at ways in which to improve our health, safety, environment and quality (HSEQ) management, Engen made great strides in enhancing practices. Following the implementation of the PETRONAS Mandatory Control Framework (MCF), we have conducted a number of internal audits to improve compliance levels. The MFC is aimed at improving the manner in which we manage our HSEQ systems and forms a high level framework for the management of related risks.
Furthermore, to identify, assess, monitor, report and mitigate against the ever changing business risks associated with value creation processes in a globalised economy, Engen adopted an effective Enterprise Risk Management system in 2014. The goal is to protect and create value through our business activities. Supporting these activities will drive us to objectively manage exposure and risks in all areas of our value chain.
8 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 9 Engen at a Glance
2014 Highlights Now in its 11th year, it has touched the lives of some 20 000 Engen is an African company that operates in the Oil and Gas sector. Our logistics network is supported by 50 main depot terminals across participants across South Africa and has proved highly successful Our focus is in the downstream business of refined petroleum and Sub-Saharan Africa and the Indian Ocean Islands. We also have • Engen Beira Terminal in Mozambique completed to full in helping young soccer hopefuls further their football aspirations. related products. We do this through our integrated value chain access to storage infrastructure through collaboration with partners. operational status Previous participants who have taken this positive step, include: comprising a refinery, a network of storage facilities, distribution • Refinery Turnaround – Successfully completed ahead of schedule Thulani Serero, Ronwen Williams and Keegan Dolly to facilities, blending facilities and a retail network. All these are Company Ownership with no spills, fires and LTIs mention a few. supported by marketing and trading expertise. We have operations The Malaysian national oil company Petroliam Nasional Berhad • Refinery Performance – Plant reliability was at across 18 countries in Sub Saharan African and the Indian Oceans 98.1% and Overall Equipment Effectiveness at 97.4%. We have also developed the Engen Champ of Champs, which Islands where we offer product and convenience services to our (PETRONAS), holds 80% of Engen equity. Pembani Group (Pty) Ltd complements the Engen Knockout Challenge. The Champ of Champs stakeholders. owns 20% equity. • An effective 36% reduction in major LOPC. see the regional Knockout Challenge Champions from each region • Strategic recruitment of critical positions, improvement of 13% join in battle to establish the best of the best and walk away with Our refinery, located in Durban near the port facilities, has a Our African presence and number of on the 2013 baseline. the coveted title of being crowned the national under-17 Engen nameplate capacity of 135 000 barrels of crude per day. Refinery retail outlets and terminals Champion of Champions. finished products together with imported refined products are Recognition sold through our distribution network which includes commercial We operate in 18 countries and distribute lubricants into a further Regional Champions who qualified for the 2014 Engen Champ of facilities and 1504 retail outlets of which 1057 are located in 7 countries. Our range of products includes: fuels, lubricants, • Awarded the 2014 Aviation Service Provider of the Year by Champs were: South Africa, Lesotho and Swaziland. A further 447 retail sites solvents, polymers, chemicals and bitumen. AFRAA (African Airlines Association). are in our International Business Division affiliate operations. • Sunday Times Top Brands award in the Top Petrol Station category. • PE Sundowns Eastern Cape Champions • Engen Petroleum was crowned the “Coolest Petroleum Brand” • Harmony Academy Free State Champions by South African youth, in the coveted Sunday Times Generation Next survey (8-22 age group). • Amazulu FC KwaZulu-Natal Champions • Standard Bank People’s Wheels award for South Africa’s • Bidvest Wits Gauteng Champions Favourite Fuel Brand • ASD Cape Town Cape Town Champions • TruckX awards for Best Fuel/ Lubricant Brand and Best Truck Stop. • Supersport United FC The host club of the event and the winner of the 2014 Sponsorships Engen Champ of Champs
In 2014 we launched Engen Cycle in the City events in Pretoria, Durban and Cape Town. This is the first of its kind in the country and it is a blend of short circuit racing, family participation and promotion of road safety.
Engen sponsored Premier Soccer League team, Supersport United, won the Telkom Knockout Cup.
The regional Engen Knockout Challenge under-17 youth football tournament ran from June through to August 2014 in Port Elizabeth, Bloemfontein, Durban, Johannesburg and Cape Town. 1) BOTSWANA 2) BURUNDI 3) DRC 14 4) Gabon 5) GHANA 6) KENYA 7) SOUTH AFRICA, 15 LESOTHO & Swaziland 16 8) MALAWI 9) MAURITIUS 10) MOZAMBIQUE 11) NAMIBIA 12) RÉUNION 13) RWANDA 14) TANZANIA 15) ZAMBIA 16) ZIMBABWE
10 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 11 1-Stop Fluidlink The Engen 1-Stop network specifically meets the needs of the long Fluidlink is a complete lubrication and fuels solution for industrial The Engen Brand distance traveller. It includes a Quickshop, public bathrooms, multi- and mining customers. It is designed to reduce downtime and We continue strengthening our brand and introducing new value-adding branded products to meet key market demand. Engen has developed branded fast food takeaways and/or restaurant facilities, play areas increase the life of equipment. strength in our strong leadership and we have developed strong brand leadership and governance at the highest level of the business. for children, tourist information, telephones and diesel trucking facilities.
Primax Quickshop 1-Card Engen Primax Unleaded is the branded petrol that balances Quickshop is the convenience store located at many Engen service Engen 1-Card is a fleet solution for safe, secure transactions that performance and fuel economy. It includes a new generation stations, open 24 hours a day, 7 days a week. helps owners control fleet expenses. detergent that cleans and improves engines. 1-Plus Engen 1-Plus are differentiated service stations in urban areas that have selected convenience partner outlets, including a Quickshop, Corner Bakery, rotisserie chicken or fast food brand, coffee offering, Woolworths or convenience meals, and an ATM. TruckStop Dynamic Diesel Engen Truck Stops are service stations spread across South Africa Engen IPS Engen Dynamic Diesel cleans and restores dirty engines and protects dedicated to the needs of truck drivers and include rest and Innovative Packaging Solution (IPS) fluid bags are designed to and maintains new engines to increase performance and lifespan. ablution facilities. reduce cost-to-serve to customers with intermediate bulk lubricants. The Oil Centre The Oil Centre is an approved distributor of Engen and Mobil branded lubricants, located in metropolitan areas to service small and medium-sized lubricant customers. Laurel Paraffin Engen’s Laurel Paraffin is kerosene used for lighting, cooking and heating. Hydrokin ESF Hydrokin ESF is a hydraulic fluid with energy-saving properties.
Oil-on-Tap Oil-on-Tap is an innovative oil-dispensing unit for small- and medium-sized automotive and engineering companies.
12 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 13 Our Operational Divisions
Engen is organised into four operational divisions, namely: The Refinery, Supply Trading and Optimisation (STO), International Business Division (IBD) and Engen Sales and Marketing (ESM).
Sourcing of Crude Crude Processing and finished product
Supply, Trading and Optimisation Refinery (STO)
Engen Sales and International Marketing (ESM) Business Division • South Africa (IBD) • Lesotho • Storage • Bulk transport All infrastructure in our • Swaziland affiliate operations • Commercial Fuels (e.g.: storage, retail, bulk • Retail transport) • Chemicals • Lubricant plants & Distribution centres
Refinery Engen Sales and Marketing (ESM) The Refinery manufactures a range of products required to meet The Engen Sales and Marketing (ESM) division is responsible for the customer requirements. We have coupled 60 years of refining promotion, sales and distribution of our products in South Africa, experience with continual investment in technology to maintain Swaziland and Lesotho. This includes all our service offerings refinery competitiveness and international certification such as ISO through our convenience retail centres. 9001 and 14001 certifications. We are currently working towards the implementation of ISO 17025. ESM also manages the supply of lubricants designed for specific customer needs. This is done in partnership with parent company Supply, Trading and Optimisation (STO) PETRONAS International Lubricants (PLI) through the trading arm The key role of the Supply, Trading and Optimisation (STO) Division of PLI Africa, which is responsible for all PETRONAS lubricants is to support the growth of ESM and IBD with the supply of operations on the African continent and in Australia. Engen operates optimal petroleum products. In carrying out that role, STO has the two lubricants blending facilities, the Engen Lube Oil Blend Plant responsibility to plan for maximum supply efficiency and coordinate (LOBP) and the Zenex Blend Plant (ZBP) both located near the port strategies and operations to balance supply and demand for fuel facilities in Durban. There are also four distribution centres that are in the system. Trading is the activity undertaken to close the gap part of the South African supply system. between supply and demand in the system and carried out within the context of optimisation. International Business Division (IBD) The rest of our operations throughout Sub Saharan Africa and the Indian Ocean Islands are managed by International Business Division (IBD), who provides petroleum products and convenience services to our customers.
14 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 15 Engen Value Chain
Fuels, lubricants Storage facilities, and petrochemical rail, pipeline, ships Product, tailored product Crude and finished Inbound Crude and finished Processing / Outbound Sales and products produced and road transport & Convenience services Sourcing product sourced Logistic product shipped refining Logistic Marketing to local storage from crude at our used to take product marketed to customers Durban refinery to customers
Inbound Logistics Processing Outbound Logistics Customer
Aviation Retail Pipeline Transfer Convenience Centres
Shipping Tanker Local Crude Storage Road Transfer Mining Crude Source Depot Terminal
Refinery
Rail Transfer Import Industry Shipping Tanker
Product Depot Terminal Shipping Transfer Customer Storage
16 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 17 Business Context
Global Environment Sub-Saharan Africa (SSA) Environment RSA Environment
The two themes that characterised 2014’s global economic environment during 2014 was the weak economic recovery and the drop in In 2014, five countries within which we have affiliate presence South Africa is our largest market in the region based on sales as commodity prices - both iron ore and oil registered historic drops. The latter gained prominence in the last quarter of 2014 as shown in the experienced economic contraction. The other 13 countries all well as assets. The sharp drop in oil prices is estimated to have graph. experienced economic growth with the economy of Reunion provided a saving of about R92.2 billion in a full year. On a GDP expanding by 1.03% compared to 0,19% in 2013. of R3.8 Trillion, that’s about 2.5% of GDP (compared to a current 125 account deficit earlier in the year of about 6.5% of GDP annualised). 115 In 2014, the 10 most traded currencies in the region lost 10% to The country’s trade deficit between October and November 2014 14% against the US dollar, with Ghana, South Africa, Botswana and narrowed from R21 billion to R5 billion. 105 Gold Mauritius currencies incurring the most losses during the second 95 and third quarters. The ZAR weakened against the US dollar in Unfortunately, this drop in oil price and resulting improvement in Platinum September 2014. balance of payment in 2014 came too late to have an impact on the 85 GDP as it grew at 1.5%. This is the weakest performance since the Copper The CPI of most countries in which we have affiliate presence 2009 recession. 75 decreased during 2014. This is indicative of the tough market
Commodity Prices US$ 65 conditions and the associated market slowdown. The country also experienced managed electricity blackouts towards the end of 2014. The GDP growth rates are lower than the 5% (from 55 The growth rates of petroleum demand and GDP in Sub-Saharan the National Development Plan), considered to be the growth rate Iron Core Africa grew by 5.6% and 4.2% respectively throughout the year. required to make significant impact on reducing unemployment, 45 Brent Crude poverty and gross income inequalities. 35 The outbreak of the Ebola virus in the region had a mild negative Dec “13 Mar “14 May “14 July “14 Oct ‘14 Dec “14 impact on the business due to travel restrictions and reduced tourism. As a precautionary measure following a risk assessment, According to the International Monatary Fund (IMF), the world economy is delicately balanced. The recovery of the US economy has shown travel to our Western African affiliate operations was restricted for considerable improvement compared to the EU and other developed and emerging economies. Developing nations’ 2014 GDP growth rate four months in 2014. showed a sharp decrease to 4.4% with China and India recording 7.4% and 5.8% respectively, significantly lower than expected.
Real GDP growth
8
6
4
2
y-o-y % change 0
-2
-4 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 source: SARB
18 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 19 Governance and Ethics
South Africa experienced a modest rise in inflation for 2014 with the inflation rate of 5.3% by December 2014 (5.4% December 2013). Engen’s Approach to Governance However, factors such as rising electricity prices, possible recovery of oil prices, and further weakening of the currency can increase inflation. In today’s connected and globalised economy, good financial performance is no longer enough to build stakeholder confidence in the The petrol price fell by R1.10 per litre in 2014. Further price drops are expected until the full effect of the oil price drop is reflected in pump prices. company’s business model and strategy. The manner in which the business manages itself, the structure, the policies and procedures, and the company’s views on critical global issues such as human rights and climate change, all play a role in defining stakeholder perception and The rand’s volatility remained a concern for investors and it continued to weaken against major currencies during 2014. the manner in which the business is able to amplify its value creation process through strong relationships.
ZAR to the USD (2014 At Engen, governance starts with the Engen Board of Directors, composed in accordance with the King Code of Good Governance. The Board ensures that the manner in which we conduct our business meets the highest standards applicable to a company such as Engen. Through 11,4 strict governance principles the board optimises business performance while maintaining compliance with all relevant regulations.
11,2 The Board 11 The responsibilities of the board are outlined in the Board Charter and they cover all key aspects including the board’s involvement in directing the business strategy that creates value for our shareholders in an ethical and socially responsible manner. 10,8 The Board Charter is reviewed and adopted by the board annually. All the board committees operate under board-approved mandates and 10,6 terms of reference, which are also reviewed annually to keep them aligned with current best practice. In 2013, we adopted a Memorandum South African Rand of Incorporation which further addresses the responsibilities of the directors. 10,4 Composition 10,2 Our board members at the end of the financial year comprised;
10 five non-executive directors J F M A M J J A S O N D
• Datuk Wan Zulkiflee Wan Ariffin (PETRONAS – Executive Vice President Downstream Business) (chair) Following the fifth democratic elections on May 7, 2014, the Department of Energy (DoE) named Minister Tina Joemat-Pettersson as the new minister. The key discussions currently taking place between industry and government include the proposed tightening of fuels product • Mr. Amir Hamzah Azizan (VP Downstream Marketing and Group MD/CEO of PETRONAS Lubricants International Sdn. Bhd) specification earmarked for 2017 and the introduction of biofuels into the South African fuel mix. • Mr. Mohd Farid Mohd Adnan (PETRONAS – Vice President Refining and Trading) • Mr. Joe Makobe (MD of Pembani Group until 1 April 2014) Overall 2014 global refining margins ended the year on a much improved level compared to 2013 except the USA (especially in the Gulf Coast). • Ms. Zellah Fuphe (Non-Executive Director) Benchmarking: Global Cracking Margins and RSA National Margin three independent non-executive directors NWE Singapore USWC USGC based on WTI USGC based on LLS Mediterranean • Mr. David de Beer • Ms. Dawn Mokhobo Average SA National • Ms. Nosipho Molope 30,0 three executive directors
• Datuk Nizam Salleh (MD/CEO) 25,0 • Mr. Andrew Bryce (Financial Director) 20,0 • Mr. Vukile Zondani (Director: Special Projects)
Ms Fiona Gumede is the Company Secretary. 15,0
Board Committees 10,0 There are three board committees, namely the Board Audit Risk and Compliance Committee (BARCC), the Remuneration and Nomination Committee and the Social and Ethics Committee. 5,0
0,0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 -5,0
20 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 21 Composition Engen Limited Board Our board members at year end comprised; Non-executive directors
Remuneration and Nomination Committee Social and Ethics Committee Board Audit, Risk • Dawn Mokhobo (Chairperson) • Zellah Fuphe (Chairperson), and Compliance Committee • Nosipho Molope • David de Beer • Nosipho Molope (Chairperson) • Amir Hamzah Azizan • Lungile Dumse (GM: HCD) • David de Beer • Shirley Moroka-Mosia (GM: HSEQ) • Dawn Mokhobo • Tasneem Sulaiman-Bray (GM: Corporate Affairs)
Datuk Wan Zulkiflee Wan Ariffin Mr. Amir Hamzah Azizan Mr. Mohd Farid Mohd Adnan (PETRONAS – Executive Vice (VP Downstream Marketing & Group (PETRONAS – Vice President Board Audit Risk and President Downstream Business) (chair) MD/CEO of Petronas Lubricants Refining and Trading) Remuneration and Nomination Committee Social and Ethics Committee Compliance Committee (BARCC) International Sdn. Bhd)
Meetings Meetings Meetings • Minimum of 4 meetings per year • Minimum of 2 meetings per year • Minimum of 4 meetings per year • Additional meetings may be held • Additional meetings may be held • Additional meetings may be held Key focus Key focus Key focus • Assists the board by ensuring that Engen’s • Assists the board with the oversight of social • Reviews and oversees: directors and executives are remunerated fairly and ethical matters relating to the Engen Group. - Engen group’s finances and responsibly and that their remuneration is It performs an oversight and monitoring role in - Integrated reporting aligned with shareholders’ interest terms of: - System of financial controls • Ensures that Engen’s remuneration strategies - Embedding a culture of ethical behaviour in - The governance of risk and policies are designed to attract, motivate Engen - Compliance with legal and regulatory Mr. Joe Makobe Ms. Zellah Fuphe and retain quality employees, directors and - Activities with regard to any relevant requirments (MD Pembani Group) (Non - Executive Director) senior management, committed to achieving legislation or codes of best practice - Oversees the internl audit function Independent non-executive directors the overall goals of the company - Good corporate citizenship - Oversees the effectiveness of the combined • Makes recommendations to the board and - Performance in terms of the environment, assurance plan and outcomes shareholders for their consideration and final health and public safety, including the - Reviews all audit findings (internal and approval regarding remuneration strategy and impact of company’s activities on its external) policy products and services • Benchmarks Engen’s remuneration against Consumer relations Composition competitor companies • Promotion of equality, prevention of unfair • All independent non-executive directors • Ensures that Engen’s leadership is discrimination, reduction of corruption, • Standing invitees with no vote: representative of all race groups and is in transformation policies and strategies and • The CEO accordance with the spirit and targets set out in social responsibility policies and strategies - General Manager: Finance the Department of Trade and Industry’s (DTI) Composition - General Manager: Enterprise Risk Mr. David de Beer Ms. Dawn Mokhobo Ms Nosipho Molope Codes of Good Practice • The committee is chaired by a non-executive and Assurance • Ensures that the appointment of Engen’s director - Senior Manager: Enterprise Risk directors is transparent and governed by formal • The other members of the committee are:- and Assurance Executive directors procedures set out in the committee’s terms of - An independent non-executive director • External auditor, by invitation reference and Board Charter - General Manager HSEQ Composition - General Manager Corporate Affairs • Majority of members of the committee are - General Manager HCD independent non-executive directors. • The CEO and General Manager: Human Capital Division are standing invitees to any committee meetings, but have no vote.
Datuk Ahmad Nizam Salleh Mr. Andrew Bryce Mr. Vukile Zondani Ms. Fiona Gumede (Managing Director & CEO) (Financial Director) (Director: Special Projects) Company Secretary
22 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 23 Internal Audit Through integration of information technology and modern tools, the The internal audit function is a pillar through which the organisation organisation is engaged in continuous efforts to improve the control can strengthen governance and make incremental improvements systems. where necessary. The internal audit goes beyond what would typically be covered by the external audit. It includes critical items Engen Management Committee such as the organisation’s impact on social capital (reputation and brand strength), human capital (organizational culture) and natural The management committee comprises of: capital (environmental impacts and liabilities). • Datuk Ahmad Nizam Salleh – Managing Director & CEO
This is done through our enterprise risk and assurance department • Adnan Adams – GM: Corporate Planning based on a BARCC approved audit plan. Any critical issues identified • Andrew Bryce – GM: Financial Services Ms. Fiona Gumede Mr. Drikus Kotze Mr. Joe Mahlo through this process can be referred to the BARCC. GM: Corporate Legal GM: International Business Division GM: Engen Sales and Marketing • Hilmi Daud – GM: Supply, Trading and Optimisation and Company Secretary Statement of Internal Control • Lungile Dumse: GM: Human Capital Division The audit committee must ensure the integrity of integrated • Fiona Gumede – GM: Corporate Legal and Company Secretary reporting and internal financial controls. The Engen board continually • Drikus Kotze – GM: International Business Division reviews the effectiveness, adequacy and integrity of this control environment. • Joe Mahlo – GM: Engen Sales and Marketing • Shirley Moroka-Mosia – GM: Health Safety Environment and Quality The internal controls system in place is designed to identify and • Ivershini Reddy – GM: Enterprise Risk and Assurance categorise risk according to its potential impact on our ability to create and maintain value. Integrated into that system is the business • Tasneem Sulaiman-Bray – GM: Corporate Affairs response to risk. We have a system that proactively manages and • Jehan Zaib – GM: Refinery (From 7 April 2014) responds to our key risks, insuring business sustainability. • Vukile Zondani – Director: Special Projects Mr. Jehan Zaib Ms. Ivershini Reddy Mr. Lungile Dumse Accordingly, the system can only provide reasonable and not GM: Refinery (from 8 April 2014) GM: Enterprise Risk and Assurance GM: Human Capital Division Outgoing members absolute assurance against the occurrence of any material misstatement or loss. It is therefore supplemented by a business continuity system • Kamal Bahrin Ahmad – GM: Refinery (until 7 April 2014) to ensure continued business resilience during times of unavoidable • Dave Wright – Special Advisor to the MD/CEO (until 31 July 2014) significant events.
Ms. Tasneem Sulaiman-Bray GM: Corporate Affairs
Datuk Ahmad Nizam Salleh Mr. Andrew Bryce Mr. Vukile Zondani Managing Director & CEO GM: Financial Services Director: Special Projects
Mr. Dave Wright Mr. Kamal Bahrin Ahmad Special Advisor to the MD/CEO GM: Refinery (until 7 April 2014) Mr. Adnan Adams Mr. Hilmi Daud Ms. Shirley Moroka-Mosia (until 31st July 2014) GM: Corporate Planning GM: Supply, Trade and Optimisation GM: Health Safety Environment and Quality
24 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 25 Compliance
In conducting its business operations, Engen is committed to to ensure compliance with all relevant legislation in each country. Health, Safety and Environment Management System (HSE-MS) complying with legal requirements, including all applicable We have recently started to conduct a risk-based approach towards regulatory requirements in the jurisdictions in which it operates. compliance. Individual affiliates manage and track all regulations The HSE-MS consists of eight key elements that require management aspects including competence, assurance, incident and contractor that are relevant to them. In addition, head office tracks and management to be in place. In addition, the HSE Mandatory Control Framework (MCF), based on operational experience in PETRONAS, The Engen Compliance Framework aims to provide and outline manages regulations that pose a high risk to the business. This dual focusses on the 50 most significant HSE risks for which prevention and mitigation measures are mandatory. The main objective of the our entire regulatory universe, particularly legislation with a system of semi-centralised compliance management allows us to framework is to strengthen HSE governance. material impact on business and operations. For each legislative ensure compliance with regulatory requirements. requirement identified, there is clarification of the implications of In 2012 we started the implementation of the MCF. Progress with the implementation of the requirements was tracked throughout Engen and non-compliance. We have continued with Competition Law training for all staff, and the reported compliance is subject to internal audits. additional training as it applies to collaborative industry initiatives To further enhance and fine tune compliance, the roles played by (e.g. participation within industry bodies). We conduct proactive all internal stakeholders are identified to ensure that responsible Competition Law compliance audits to identify areas where we can The HSE Management System and MFC Interface parties are appropriately informed and have the ability to take the strengthen our system. necessary steps to maintain business compliance with legislation. In the case of new laws and amendments to existing laws, During the reporting period we completed migrating environmental Leadership and responsible and accountable people are able to take the necessary legislation compliance tracking from a paper-based system to Commitment steps to practically move the business towards compliance within an on-line system. This has enhanced our ability to follow and Policy and Strategic required timeframes. manage compliance. Continual improvements of this system are Objectives in progress on an ongoing basis. We have also been active in Organisation, Responsibilities By adopting and implementing this framework we continue increasing internal awareness of environmental legislation and and Documentation to enhance our tradition of transparency with regard to legal have produced brochures to provide clarity on new legislation and compliance. It will also empower our relevant personnel with encourage internal discussions to improve compliance. We are also the appropriate accountability to ensure compliance with relevant at an advanced stage of phasing out polychlorinated biphenyls from pieces of legislation. our operations and any areas where they may still be present are managed as per regulatory requirements. The compliance framework has enhanced our reaction time to Capability intervene where necessary and contributed in raising awareness at We continue to apply more than 20 Group Environmental Standards Health divisional level. It achieves this by bringing perspective to legislation in all of our activities and facilities and we are subject to internal Environment that is material to that particular operation and understanding the audits as well as independent external audit and inspections to Safety & Transportation compliance risk it carries. confirm compliance and continual improvement. Process, Safety & Asset Integrity Assurance Management of Change Hazards and Effects Compliance in IBD operations, spread across 15 affiliates with a The Engen Refinery, Durban Terminal, Engen Lubricating Oil Blend Management Review Safe Operations Management Process diverse legislative environment in different languages, constitutes Plant (LOBP) and Richards Bay Bunkering Services retained their ISO Contractor HSE Management both a challenge and opportunity for Engen. A lot has been done 14001 environmental management system certification in 2014. Design, Engineering & Construction Incident Management & Emergency Response
Plans and Procedures MCF Elements Implementation and Monitoring HSEQ-MS Elements
26 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 27 Risk Management
Our Approach Our key risks are monitored through a well-established and entrenched risk management system and process. Significant effort Engen has adopted an effective Enterprise Risk Management has gone into fine-tuning the system to fit our business model and system to identify, assess, monitor, report on and mitigate against link with other systems of governance. We also manage compliance the impacts of the ever changing business risks associated with with the risk reporting requirements and we capture lessons learned value creation processes in a globalised economy. from risk experiences and practices as well from the outcomes of assurance activities. Our goal to protect and create value through our business activities and supporting activities drives us to objectively manage exposure Each of the operational divisions and key support functions has a and risks in all areas of the value chain. Risk Management office. The corporate risk department oversees all risk management activities across the business and manages To achieve this, we have made all necessary resources available strategic mitigation responses. to key people within the business. This includes the development of key systems and processes, the training of key personnel, and HSEQ Risk Management company-wide communication to ensure that Enterprise Risk Management is continuously improved and institutionalised across Engen Petroleum Limited manages all HSEQ risks through proper the organisation. implementation of HSE MS and MCF. Our risk management systems ensure that all risks to people, the environment, company assets, Our Board of Directors oversees the Enterprise Risk Management and company reputation are managed to as low as reasonably process at Engen. The Board’s Audit, Risk and Compliance practicable (ALARP). Every year Top HSEQ risks are identified based Committee ensures that the Enterprise Risk Management process on outcomes of incident investigation trends, all tiers of assurance, complies with the relevant standards and industry norms and that it near misses, analysis and benchmarking of industry best practises is applied effectively across the business to achieve an acceptable and evolving legislative requirements. The mitigation strategies risk profile for the business. for these risks are identified and implementation plans developed which eventually inform key focus areas for risk management for Our Risk Governance Framework the year. These top risks feed into overall Engen top risks as per Enterprise Risk Administration policy. At Engen, the risk profile is a critical tool for business strategy. Through our policy, we establish the organisational risk appetite The risk mitigation together with ongoing implementation of HSE and tolerance limits. Our risk governance system revolves around MS and MCF are monitored through different tiers of assurance. At the following four governance elements: the site level Tier 1 audits are conducted. These focus on specific 1) Risk Policy and Strategy elements, systems and areas, e.g. permit to work. Engen Petroleum 2) Risk Organisation and Structure Limited Corporate HSEQ conducts Tier 2 audits in all Engen operating 3) Risk Measurement divisions. These audits focus on HSE MS and MCF implementation. 4) Risk Operations and Systems PETRONAS conducts Tier 3 risk based audits on Engen. External audits are also conducted on a suppliers and contractor rendering service representing high risk.
Organisational Structure to Manage, Risk Management Framework Share Information and Build Capabilities and Guidelines
Risk Policy and Strategy
Risk Measurement Organisation Process Controls Methodologies and and Structure and Reporting Techniques Risk Mechanisms Risk Operations Measurement and Systems
28 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 29 Sustainability in Context
Engen’s Top Risks Our view of sustainable development is informed by the importance of creating and protecting value across five sustainability capitals, namely the Social and Relationship, Human, Manufactured, Natural and Financial. In our effort to provide high quality products and services to our stakeholders, we strive to continually enhance our value creation and address the negative impacts across the five capitals. Risk Detail Reference Regulatory risk Operating in 18 states across Sub-Saharan Africa and the Indian Ocean Islands Page 26 Value creation across sustainability capitals exposes the business to a multitude of evolving regulatory systems.
The financial impact of some of the regulations can be significant and compliance Human capital: Great people Inbound can be a journey taking years of investment. Developing and retaining talent. Creating an and great Logistics Strategic risk The availability of strategic skills remains a challenge and is exacerbated by Page 52, 42 environment for performance and creativity leaders increased competition for scarce skills. Attracting and retaining these skills contributes significantly to our ability to achieve our strategic objectives. Manufactured capital: We also operate within a wider community whose relationships play a critical Operational role in our success. It is critical to ensure that we derive value and synergy Managing our assets and all key infrastructure excellence through these relationships. required for our value creation Processing Refining There have been various incidents of labour unrest, particularly in South Africa. The impact of this on the value chain is significant and in some cases, individual Natural capital: Protected businesses across the value chain have no direct influence on the disputes, but Protecting the environment. Mitigating against and natural they are still affected by the outcome. adapting to effects of climate change systems Operational risk We operate very complex production facilities with hazardous and flammable Page 39 substances. Ensuring safe production and delivery of these products to customers Outbound is a primary focus. Social capital: Logistics Strong Strong relationships and proactive engagement with stakeholder Producing products on time and according to specification is critical for customer our stakeholders relationships satisfaction. Financial risk Slow economic growth, both globally and regionally, represents a risk to sustained Page 42 growth for us and for our customers. Financial capital: Long term Sales & Environmental risk Annually, we produce and transport billions of litres of product that can have Page 61 Sustainable financial performance through value creation financial Marketing negative impacts if released into the environment in an uncontrolled manner. across human, social, natural and manufactured capitals sustainability
Sustainable growth across all capitals Value created throughout Sustainable the organisational value chain outcomes
Furthermore, our activities are guided by the seven key results areas in line with our parent company PETRONAS’s sustainability framework.
30 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 31 Material Issues
Eleven material issues were identified through the stakeholder engagement process. These issues, which are of interest to both stakeholders and the business, inform the focus of our efforts. Biodiversity Shareholder Value Ensuring projects and Sustaining the company’s operations do not have profitability through significant impact on value creation, efficient the diversity of humans, extraction and animals and plants. manufacturing Sustainable financial Proactive stakeholder Regional business climate Protecting the environment performance engagement processes. To properly understand To ensure that we do not create Financial sustainability From “managing” relationships and respond to opportunities stakeholder value at allows us to grow as business towards creating and risks posed by the an unacceptable cost to natural Natural Resource Use and it also allows us to sustainable value environment within which systems that support life Climate Change Making oil and gas products contribute to the growth of our through relationships - (pg 54) we operate - (pg 18) and livelihoods - (pg 63) available at reasonable market stakeholders - (pg 36) Limiting GHG emissions and prices, promoting efficient use adapting to climate change Sustainability of energy and water, and supporting the use of renewable energy Framework . Good governance Regulatory compliance Customer and business Employee value creation and busines ethics Compliance with national partner value proposal To create a great place The creation of a culture Societal Needs regulations provides licence to A customer-focussed for great people - (pg 44) of responsibility, operate, compliance with out culture leading to Safeguarding human rights within Safety and Environment (HSE) our sphere of influence, accountability, integrity internal requirements allows strong partnerships - (pg 12) Preventing and eliminating injuries, contributing to community needs, and transparency - (pg 21) us to derive value through health hazards, investing in training and education, our strong relationships with promoting arts and sports damage to property authorities - (pg 26) and conducting our and conserving business in a Product Stewardship the environment. transparent manner. Ensuring that products conform to quality and HSE standards Safe and secure work Transformation Responsible citizenship and meet the needs of society. environment Supporting the principles Sensitivity to the realities We take seriously of fair and equitable value of our larger the protection of our people creation across the social communities - (pg 57, 72) against hazards associated spectrum - (pg 71) with our business In this report we provide information on Engen Limited’s operations, how governance drives sustainability in our organisation and our environment - (pg 52) performance in the five capital areas.
The Process to Determine Materiality
In the context of sustainability, an issue is material if it has significant influence on the ability of the business to deliver value. Such issues have a strong influence on business-related decisions taken by the leadership and stakeholders.
In order to identify material issues for the business we initiated an internal review of our stakeholder engagement process in 2013. This review resulted in the development of a process that covers all key stakeholder categories and the stakeholder groups within those categories. Since stakeholder engagement at Engen is decentralised and happening at various levels of the organisation, the focus was on the internal governance structures. These structures shape the organisation’s responsiveness to stakeholder issues.
We have identified senior managers that play a pivotal role in stakeholder (see stakeholder engagement sub-section) relationships across the business. Workshops were organised with these managers to better understand the status of the relationships, the key issues, the future outlook and mechanisms employed to strengthen these relationships. Such relationships include provisions enabling us to get feedback on our activities.
The material issues are then identified and agreed to by the business. These then guide our sustainability focus and inform the nature of the response by the organisation.
32 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 33 34 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 35 Financial Capital
Financial Performance Overview We continue to make significant capital investments across our value chain. Capital expenditure at the Refinery has a clear focus on the environment, maintenance and reliability, infrastructure, buildings and equipment, future fuels, and profit generating interventions. The financial performance overview encompasses a comparative year on year analysis of the 2014 reporting period. The refining margin was still negatively affected by the impact of the US and EU sanctions against Iran. However, the drastic global decrease in crude oil prices, Value added statement especially in the last quarter of 2014, played a significant role in improving the refining margin, not only of Engen but of refineries around the world in general. This had a marked impact in reducing the losses reported in the financial results of the Group for the financial year. The value added statement measures performance in terms of value added by the Group through collective efforts of management and employees. The statement shows how value added has been distributed to those contributing to its creation. Key Financial Indicators For the Year ended 31 December 2014 The key indicators of our financial performance were as follows: 31 December 2014 31 December 2013 Financial (Rm unless shown) 2014 2013 Rm Total value created 1 452 6 457 Extract from Statement of Profit or loss Turnover 108 249 105 776 Value Distribution Operating (loss)/profit (847) 3 947 Employees 2 052 1 916 (Loss)/profit for the year (960) 2 584 Equity Capital Providers 159 901 Extract from Statement of Financial Position Loan Capital Providers 142 163 Total Assets 33 619 38 320 Government 436 1 132 Equity attributable to equity holders of the parent 16 664 17 124 - Normal Company Tax 436 1 132 Sales Volume (in millions of litres) 9 475 9 628 CSI 19 25 Retained for future growth (1 356) 1 774 Sales volumes were negatively impacted by the increase in fuel Capital Investment - Depreciation and Amortisation 675 525 prices during 2014 (the average price of petrol increased by 7% - Retained Profit (1 575) 1 194 compared to 2013). In South Africa, consumer disposable income Engen continues to roll out signature convenience offerings across was also impacted when the South African Reserve Bank increased our network, including fast food and restaurant partnerships, - Deferred Tax (456) 55 interest rates by 50 basis points in January 2014 and by another franchise bakeries, franchise coffee, alternate payment partnerships Total value distributed 1 452 6 457 25 basis points in July. The industry thus showed negative growth and a range of other innovations. In parallel, Engen has steadily in the retail gasoline market of approximately 4.2%. Consumers overhauled the networks it acquired from its competitors in recent only experienced some relief in December 2014 when fuel prices years. dropped by 69cpl on the back of decreasing crude costs.
During 2014, IBD volumes improved with good sales growth 2500 2500 experienced in some of our affiliate operations.
495 Expenses due to higher staff costs and higher depreciation due to 2000 2000 the capital expansion programme in some of our markets, as well as Refinery depreciation charge on stay-in-business capital. In addition, 1500 369 1500 there were increased distribution costs, particularly with regards to (Rm) aviation products distribution in some markets. Expenses were also 1 815 affected by weakening currencies in a number of affiliates whose 1000 1000 local currencies weakened significantly during 2014. 1 461 500 500 Operating costs in 2014 also included a loss, driven by a release of the foreign currency translation reserve (FCTR) on deregistration 0 0 of Engen African Holdings (Mauritius) (EAH), a foreign intermediate 2014 2013 Employees Equity Loan Normal CSI Retained for holding company which was no longer required in the Group Capital Providers Capital Providers Company Tax Future Growth (500) structure. Growth Sustenance
Total assets decreased by 18% from the prior year by the end of (1000) 2014. This was driven mainly by a decrease in inventories on the 2014 back of a lower Rand crude cost as well as lower inventory holdings (1500) 2013 at the end of the year.
36 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 37 Summarised flow of capital between stakeholders (Rm)
Customers R108 249 Investment R88
Retained Income R1 356
Suppliers Communities R106 885 R19
Engen Employees Government R2 052 (Taxation) R436
Equity Finance Providers Providers R159 R142
38 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 39 Manufactured Capital
The success of Engen in creating value along its value chain The South African Fuel Oil Refinery (SAFOR), which has been can be, among other things, affected by the availability and producing lubricating base oils and is jointly owned by Engen, Caltex condition of manufactured capital, such as buildings, equipment and Total, was shutdown and the remaining units incorporated into and infrastructure, to support its operations. For Engen the main the refinery from August 2014. elements of manufactured capital include inbound shipping vessels, mooring facilities, the Refinery, pipelines, bulk transport vehicles, Following the shutdown, the crude diet and process operations the road network, rail transport and storage facilities. The degree were optimised for the new fuels-only configuration. In particular, to which Engen can influence the availability and condition of the Alkylation unit reliability and utilization achieved the best its manufactured capital depends on the degree of control it can performance for more than a decade, 98.5% and 61.6% respectively. exercise over them. In addition, a successful regeneration of the reformer catalyst has delivered octane capability not seen in recent previous cycles. Engen’s capital expenditure programme is aimed at maintaining or improving the condition of capital equipment or facilities, expanding The 2014 Refinery turnaround was successfully completed ahead our infrastructure for further growth and improve HSEQ performance of schedule with excellent quality records, with no major injuries, and comply with relevant regulations. spills, fires or leaks. The planned outage was achieved in spite of the disruptions arising from the metal workers industrial action. A The Refining Process successfully executed turnaround and record mechanical availability positioned the Refinery to benefit from the upswing in the refinery Engen owns and operates a fully integrated crude oil refinery margins in the second half of the year. The successful year at the in Durban, South Africa. The refinery is managed on the basis of Refinery illustrates the effect of allocating financial resources for operational excellence in health, safety, environmental, quality and capital expenditure and for intensified training of employees at the reliability dimensions. Refinery.
The Refinery achieved outstanding performance in 2014. A safe, Several interventions were initiated to ensure the South African reliable and stable operation resulted in the best refinery operating liquid fuels supply chain and neighbouring states had adequate performance of the last 10 years. The highlights of the year include capacity and were able to sustain the growth in demand over the the successfully executed turnaround and record mechanical long term. Engen initiated an optimatation programme to enable the availability. The culture of chronic unease drove excellent results required supply chain capacity interventions. not only in plant operations but also in personnel and process safety, environmental and regulatory compliance. An internally conducted Some of the key initiatives as part of this programme included Tier 2 Operations and Asset Management audit further contributed investments in the back of berth piping that enables high speed ship to our success. discharge into coastal tankage in the Durban Port area. In addition, Engen has invested in New Multi-Product Pipeline (NMPP) feeder Persistent focus throughout the year delivered the best reliability pipelines at Island View to enable connectivity to the NMPP. performance over the last five years. The refinery achieved 98.1% reliability versus a plan of 94.6%. In tandem with this As the fuels products landscape changes in RSA in-line with global outperformance, the actual OEE (Overall Equipment Effectiveness) trends, additional supply chains have also been invested in, namely reached 97.4% far surpassing the plan of 90.3%. additional tankage, pumps and piping at Engen Refinery and the depot network to cater for the increasing demand for ultra-low sulphur products.
100% Reliability 95% OEE 90% Mech. Availability 85% 80% 75% 70% 65% 60% 55% 50% 2010 2011 2012 2013 2014
40 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 41 Sales and Logistics The lubricants operates two lube blending facilities located near IBD the port of Durban. These are responsible for the blending and Our international business continued to implement the growth In addition to this, an extensive investment in the West African coast Engen manages and operate 50 depot terminals, 1 504 retail distribution of lubricants across South Africa and neighbouring strategy in the retail network in selected markets. of Namibia will enable coastal and primary depot facilities; namely sites, lube oils and chemicals blending facilities and a number of countries. We also have distribution centres in every country Walvis bay increased coastal tankage and Ondangwa primary depot distribution centres and warehouses across the Sub-Saharan Africa where we have affiliate presence. Products are distributed to all To enable growth in the other sub-Saharan countries where we facilites, which includes road and rail facilities. and Indian Ocean Islands. We also have access to more distribution distribution centres by rail and sea. operate, Engen has invested in an east coast corridor, by way of a infrastructure through partnerships and collaborations. coastal storage facility in Beira, Mozambique, to enable fuel flow to In 2014, we started the expansion of our Lube Oil Blend Plant (LOBP) the inland countries. ESM plastic line in Durban. This expansion is planned to increase our To respond to Gauteng and inland customer needs and improve our capacity by 500 bottles per minute. Commissioning is expected to IBD Operational Retail Sites logistics network, we have upgraded a numbers of inland depot take place in 2015. facilities. The upgrade of the Rustenburg depot continued this year, No. of Operational Dec 2012 Dec 2013 Dec 2014 Notable developments and engagements and is planned to be completed at the end of 2016. This project In partnership with the logistics group UTi, Engen is rolling out the Retail Sites (IBD) first UTi ByBox delivery terminals. The first site was completed at will see two new tanks installed, the installation of a rail siding, Botswana 42 44 46 expansion of the loading bays and the installation of a new fire- the Woodlands convenience centre in Woodmead, Johannesburg Burundi 20 21 17 Financial performance 73% above planned. Industry responding to fighting system. and further sites will be rolled out in the Sandton area. The system 3 new tax regimes implemented in 2014. Risk of the 1% turnover will be used by customers to send parcels, which can be collected tax remains high. During 2014 we started the upgrade of the East London terminal at Engen sites. It will also allow delivery of online-purchased items DRC 57 63 60 Leveraged our strong relationship with stakeholders to recover key to enhance supply during peak demand. Eventually, the complete and collection at Engen sites. The system has built-in security debts as well as compensation for our sites that had to make way upgrade will include office blocks, gantry structure, upgrade of the measures to safeguard the goods and ensure they are collected by for a national highway. wharf line and general upgrade of roads and surfaces. the intended recipient. Gabon 22 22 22 To align with environment legislation, Engen initiated a project As part of our effort to enhance customer experience and improve Ghana 23 27 25 Engagement in progress with regulatory authorities regarding to install vapour recover units (VRUs) at all required facilities, our service offerings, we have partnered with Butcher’s Best Biltong standards at service stations and margin increases. from manufacturing to depots, specifically, Kroonstad, Klerksdorp, Bar and launched the first Biltong Bar experience for our customers Kenya 9 9 14 Good progress in discussion with key industry stakeholders and Rustenburg, East London and Witbank. The Durban terminal at the Engen Vineyard Convenience Centre in Newlands. Plans for authorities regarding rollout of the cashless payment system. in Wentworth, as well as the Tara rail loading facility were also further roll-out to other sites in 2015 are currently underway. Malawi 11 11 11 included in this scope. Mauritius 30 31 32
Three new retail sites were built in South Africa to bring the total to Mozambique 14 17 16 Completion of the Beira Pipeline Terminal 1 057 retail sites for ESM. We rolled out eight new Corner Bakeries Namibia 57 57 56 Positive results obtained linked to good stakeholder relationships to bring our total to 497. In 2014, 17 Corner Bakery conversions took with key customers place, one new Fast Food was established and seven upgraded. We Reunion 33 33 34 Good stakeholder engagement strengthened our relationship with also opened seven new Woolworths Foodstops. key customers. Recharging stations were implemented in Reunion. Rwanda 19 19 18 Engen continues to be a key player in the petrochemicals business. Tanzania 7 5 6 We continue to focus largely on three areas in this sector: Zambia 35 34 34 Leveraged strong stakeholder engagement to maintain our licence • The base chemicals which are an output of the refinery to operate. Zimbabwe 39 44 56 Successful engagement with regulatory authorities on importation • Polymers and complementary products which we source and distribute permits for Diesel 50. Total 421 437 447 • Construction chemicals which include bitumen
The chemicals business has three blending facilities, the main blending and distribution plant located at Island View in Durban, the Epping plant in Cape Town and the Isando plant in Johannesburg. There is a network of distribution facilities that allows the chemicals business to be involved throughout the value chain of our product.
42 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 43 Human Capital
Human capital forms a critical part of our sustainability roadmap. Our vision in this respect is to develop strong leadership supported by capable teams. Engen recognises the importance of talent management and strong bench strength. Engen’s Rising Stars Engen had a strong showing at the Standard Bank Rising Star Awards, a business sector specific system that publicly Our Total Workforce recognizes inspirational and passionate individuals who have a capacity for achievement and success.
Temporary and contractors Permanent Grand Total Engen finalists in the Energy & Chemicals category were Nobleman Kani, Nthabiseng Mutisya, Lisa Ferraz and Mxolisi 2012 2013 2014 2012 2013 2014 2012 2013 2014 Bhebhe (pictured from left to right). Non SA 25 37 34 623 573 564 648 610 598 Nobleman Kani, Operations Manager – Imtrasel: Engen Petroleum Limited, and Alternate Director – ROSE SA 475 481 473 2914 2908 2951 3389 3389 3424 Foundation, says, “I have been exposed to great challenges and have had the opportunity to work with highly Total 500 518 507 3537 3481 3515 4037 3999 4022 competent leadership and high-performance teams that have helped to take my career development to new highs”.
Nthabiseng Mutisya, Engen Learning and Development Manager, says, “Over the past 3 years I have Developing Talent experienced both personal and career growth. In addition to being promoted from a consultant role to a management role, I have been given educational study opportunities as well as tools to increase my self- Through our Operations Academy, we continue to assess employees using the Management Toolkit Platform to determine the core needs of awareness, thus making me a better leader, African and human being”. each individual. All employees will be assessed during the next two to three years. Lisa Ferraz, Engen Organisational Development Specialist, says, “From the minute I started at Engen back in Our Human Capital Division continued to roll-out the Talent Management Programme during 2014 which is aimed at equipping employees for 2010, my personal development and career progression have been a priority for the organisation”. their current positions and preparing them for potential future positions. Mxolisi Bhebhe, Engen Business Planning and Accounting Manager, says, “The exposure I have been afforded Our graduate development programme continues to develop young individuals with exceptional talent supporting students in the fields of by Engen through my work experience has cemented my ability to participate at senior levels of management in the accounting, engineering, information technology, human capital development and marketing. During 2014 18 students were part of the organisation. Working in a multi-national organisation and with cross-functional teams has broadened my horizons”. programme and three were absorbed in Engen as employees.
Number of students in the graduate development programme
20 18 16 14 12 Total 10 Absorbed 8 6 4 2 0 2010/11 2012 2013 2014
Breakdown of skills development provided in 2014 for South African employees
Male Female Skills development Year A C I W A C I W Total In 2014 we launched the Business Administration Learnership In 2013 we engaged external auditors to identify improvement 2014 957 377 370 258 396 210 85 122 2775 programme. The programme was launched in partnership with the opportunities in our capability development data. This has resulted Total workforce 2013 917 369 384 339 350 212 86 153 2810 Project Management Institute (PMI) and is initially targeting people in improved employee training data. 2012 859 299 323 232 281 159 60 108 2351 living with disabilities. This programme focuses on enabling currently 2014 6 4 7 13 3 3 1 2 39 unemployed individuals and is rated an NQF level 2. The objective is to take participants to NQF level 4 and use the programme as a Employees with disabilities 2013 3 4 8 15 3 3 1 3 40 talent pool for future Engen recruitment. For 2014 a total of 23 Black 2012 4 3 5 9 1 4 1 2 29 females were enrolled. During 2014, 39 employees with disabilities were enrolled in the skills development programs of which 30 were male and 9 female.
44 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 45 Employment Equity* 2014 Permanent Employees 2014 Management Employees
Engen’s new 5 year EE plan, developed through a consultative process, was submitted to the Director General of Labour on 14 November FN 1,1% FN 2,8% 2014. The plan covers the period 1 August 2014 to 31 July 2019. The plan was developed with due consideration of the amendments to the W 15.2% EE Act and Regulations, and the impact of the revised BEE Codes.
Aligned with the Department of Labour’s reporting period, in July 2014 our permanent workforce in South Africa comprised a total of 2922 A27% employees, of which 28.7% were women. There was an increase from 26.1% to 27.7% of South African women managers. Black employee representation within the company increased from 82.4% in to 83.7%. W 26,6% The following diagrams illustrate Engen Employment Equity Workforce Profile** for all permanent employees compared to South Africa’s Economic Active People. A46%
Permanent employees Race and Gender representation July 2014 compared to SA EAP***
80%
70% I 15,6% 60% C 22,9% C 22.1% I 20,8% 50%
40%
30%
20%
10%
0% A C I W FN M F
Engen Permanent Employees SA EAP
Management Race and Gender representation July 2014 compared to SA EAP***
80%
70%
60%
50%
40%
30%
20%
10%
0% A C I W FN M F
Engen Management SA EAP
*Only Applicable in SA **The diversity ratios are calculated using South African employees against the total South African permanent workforce (including foreign nationals). Therefore, the diversity ratios do not add up to 100 %; the difference is the ratio of foreign nationals to total permanent workforce. *** South African Economically Active People
46 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 47 Our Employment Equity Performance Collective Bargaining Occupational Health Programme Occupational health hazards in this business are chemicals, Engen’s Workforce Profile as at 31 July 2014, as reported to the Department of Labour Wage negotiations are one of the contentious activities Engen has noise, fatigue and ergonomics. We manage these risks to manage as part of the sustainability roadmap and commitment to through our comprehensive industrial hygiene programme. Male Female Foreign Nat create a great place for great people with a great leadership team. All our facilities have up-to-date health risk assessments Occupational levels Total (HRAs) in compliance with the South African Occupational A C I W A C I W M F During the 2014 wage negotiations, we signed a two-year wage Health and Safety Act (OHSA), and related legislation. deal with employees which ensured that there will be no wage Top Management 3 1 0 3 2 1 1 0 3 0 14 negotiations in 2015. In other African countries we regularly conduct workplace health risk assessments and exposure surveys which are performed by Senior Management 16 14 13 24 8 8 4 9 7 0 103 We engage our employees through centralised bargaining in South rigorously selected Approved Inspection Authorities. Professionally Qualified Africa and Gabon. In Namibia and Tanzania, we have decentralised 172 149 172 182 88 72 33 67 16 4 955 Middle Management engagement with employees and their affiliated unions, however, Engen’s health-based industrial hygiene programme Skilled Technical Junior 280 149 127 72 205 133 39 56 2 0 1063 in Tanzania we also communicate with the Employee Association stands out as an industry leader. It goes beyond legal Management of Tanzania. Zambia is not unionised but we maintain discussions compliance as it aims to minimise health risks related to Semi-skilled 505 91 61 21 65 28 7 9 0 0 787 with the Zambian Employees Association. All other affiliates are not workplace exposure. Some of the key innovations include: unionised and we engage employees internally within Engen. Total Permanent 976 404 373 302 368 242 84 141 28 4 2922 • Exposure measurements by Similarly Exposed Groups (SEG’s), Employees Within Engen we have three platforms for discussing material enabling improved integration with medical surveillance. Temporary Employees 35 17 14 16 23 10 4 6 2 0 127 employee issues. The Operations Consultative Forum (OCF) focusses • Application of internationally accepted exposure standards on operational issues for our outbound supply chain employees and (which are sometimes more rigorous than SA’s statutory Total 1011 421 387 318 391 252 88 147 30 4 3049 the Refinery Consultative Forum (RCF) which deals with the refinery standards). employees. Lastly we have the National Consultative Forum (NCF) • Application of international best practice statistical techniques Permanent employees with which discusses issues that affect the whole business. to ensure high quality data interpretation. 6 5 8 16 1 6 1 3 0 0 46 disabilities • Intelligent reporting to optimise outcomes management and Organisational Health integration with medical surveillance. • Rigorous corrective action management. Engen’s organisational health service comprises a wide collection of Engen’s Workforce Profile as at 31 July 2013, as reported to the Department of Labour. health related activities across the entire organisation, linking with risk management, legal compliance, human resources and industrial Male Female Foreign Nat Occupational Levels Total relations, hence the use of the term “organisational health”, as A C I W A C I W M F opposed to simply “occupational health”. Top Management 2 1 0 3 2 1 1 0 3 0 13 The key objectives of Engen’s Organisational Health Service are to Senior Management 12 13 10 24 6 7 5 6 9 1 93 support the company in: Professionally Qualified 156 141 174 197 75 65 32 70 16 4 930 • Reinforcing Engen’s position as an employer of choice by Middle Management providing a tangible expression of the company’s care for its Skilled Technical Junior employees 272 144 128 76 194 134 42 66 1 2 1059 Management • Maximising employee productivity and quality of life Semi-skilled 525 106 65 28 65 30 6 11 0 0 836 through health initiatives aimed at optimising health and wellbeing Total Permanent • Satisfying its Occupational Health related compliance 967 405 377 328 342 237 86 153 29 7 2931 Employees requirements Temporary Employees 26 17 16 16 18 9 0 9 2 1 114 Our Health and Wellness programs are arranged into the Occupational Health Programme and the Employee Wellness Total 993 422 393 344 360 246 86 162 31 8 3045 Programme.
Permanent employees 3 5 9 16 1 5 1 3 0 0 43 with disabilities
48 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 49 In addition, our international travellers are exposed to additional geographically-specific risks. During 2014, the ebola virus epidemic in Employee Wellness Programme the region drew particular attention, as our International Business Division comprises operations in 15 countries throughout Africa, some of which are near to the countries directly affected by the epidemic. Ebola cases were confirmed in the northern region of the Democratic Our Employee Wellness Programme consists of the following initiatives: Republic of Congo (DRC) where we have affiliate operations. Through careful tracking and information surveillance, collaboration with International SOS, issuing travel advisories and restrictions, and implementing controls on our interactions with travellers to and from the • Health and Wellness Promotion (information and awareness) affected parts, Engen managed to avoid any significant adverse consequences of the epidemic. • Annual Health and Wellness Medicals (personal health risk screening) • Counselling and support services (Employee Assistance Programme/ EAP) Fitness to perform safety-sensitive work is an area of particular focus. Engen’s mandatory medical testing programme, with its double objective aimed at fitness to work assurance in safety sensitive work, and screening for early signs of occupational disease, continued • Nurse Based Primary Health Care Services uneventfully. All Engen employees are offered annual health screening, but not all screening is mandatory. For those who do not perform • Chronic Disease Risk Management safety-sensitive work, or who are not exposed to significant occupational health hazards, the screening is aimed at personal health risks, and • Incapacity and Disability Management managed through our Employee Wellness Programme.
Engen’s integrated approach to employee health risk management addresses issues across the wellness continuum, as illustrated below: Employees with Chronic Disease
Minimise Impact Minimise Likelihood
9,1% “Disease Paradigm” “Wellness Paradigm”
1,2% 5,6% Chronic Disease / Complication Disease Management Wellness Management M anagement
1,1% Chronic Disease / CVS Death Benefits Chronic Disease / Diabetes 6,7% Incapacity / Disability 30,33% Chronic Disease / HIV Management Substance / Alcohol Abuse Tertiary Prevention Secondary Prevention Primary Prevention Medical Condition (non Chronic) Focus Areas Prevent Progression to Prevent Progression to Illness Optimise Health 11,12% Occupational Disease / IOD Incapacity or Disability Other
CVS= Cardio-Vascular System Rehabilitation, Accommodation. Screening for Risk 26,29% IOD= Injury on Duty Interventions Health Promotion Rx Plan Compliance Factors
Absenteeism, Incapacity, Disability Personal Health Risk Mx Lifestyle (Education/Awareness Mx, Employee Assistance (smoking, BP, BMI, Chol.) Drives). Wellness Committees. Programmes, Monitoring & Control Organisational (Group) Risk Resiliency & Stress Management of Chronic Diseases MX (incl. Actuarial Impact Analysis) Fatique Management
Implementation Strategy
For employees who have shifted to the left of the “wellness continuum”, and who now have established chronic disease, the focus is on preventing disease progression through effective control, which is exercised through the chronic Disease Care Plans available through the Engen Medical Benefit Fund.
The outcomes of the personal health risk screening programs, as well as the statistics related to causes of incapacity, disability and premature death, provide useful guidance to the education and awareness drives.
50 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 51 Key outcomes of the personal health risk screening were: Visible Felt Leadership Leadership in safety is ‘Felt’ by those employees around us and action focused. It involves building a strong safety culture and engaging in Profile of Employee Health Risk Factors conversations with employees about the hazards and risks of the task. It is easily observable, shows personal commitment, makes a positive impression, involves and affects all employees. 60% Felt Leadership is a line responsibility where individuals take ownership and is driven by teamwork, and not the exclusive domain of senior 52% management. 50% 47% As part of Felt Leadership we initiated management walkabouts which is part of senior management performance contracts. During these walkabouts 40% 39% safety behaviour is observed by senior management followed by appraisal of good safety behaviour and correction of unsafe behaviour. A monthly executive summary is provided to management to address at risk behaviour.
30% 28% Capability Development 22% 23% The Taproot Training Methodology was rolled out to staff to assist with Incident Investigation so that incident root causes could be identified and % of Sample 21% corrective action put into place to prevent recurrence. 20% 16% 14% 13% The Engen STOP programme encourages all employees to implement immediate intervention to stop unsafe behaviour. STOP Training is on-going and 10% 12% 10% all new employees are being trained, with refresher training being rolled out to staff as well.
Induction training is being completed for all new employees with a high focus on HSEQ. 0% Smokers Raised BP Raised Gluc. Raised Chol. Raised BMI HIV Pos.
Engen SA Benchmark Safety Performance
This graph compares the prevalence of the main health risk factors in We continue the implementation of our behavioural safety programme 2010 2011 2012 2013 2014 Engen with the South African population, adjusted for the demographics which was rolled out to employees and management in 2010. unique to Engen. Note that these are employees found to have risk Lost Time Injury Frequency (LTIF) (per 200 000 man hours) 0.24 0.25 0.24 0.18 0.12 factors, not necessarily diagnosed with chronic disease. It shows that Behavioural Safety the Engen employees that where tested were well placed for all the risk Behavioural safety rolled out in 2010 with all Engen employees and factors, except obesity (Body mass Index or BMI). This will be a focus management participating. Total Recordable rate (TRR) (per 200 000 man hours) 0.63 0.69 0.34 0.36 0.44 area for Engen’s Wellness Programme for the foreseeable future. As a company, Engen believes incidents are preventable. Engen’s safety focus is about caring and believes we all have the right to go home Safety safely. Addressing at risk behaviour and conducting a safety observation Work-related fatalities 1 0 0 1 1 has the power to influence working safely and following procedures. At Engen safety is a way of life, it underlies every aspect of our business Each employee is given a quota of the number of observations to be and is embedded throughout our processes from the operational floor conducted for the month. This is captured and analysed on a monthly During 2014 our total recordable rate (TRR) increased from 0.36 to 0.44 and the lost time injuries frequency (LTIF) decreased from 0.18 to 0.12. to the boardroom. That is highlighted by the visible felt leadership basis to address any at risk behaviour. programme discussed later in this section. We have developed a Behavioural safety assessments, conducted against the roll-out, It is with sadness that we report a fatality during the year of reporting. This was due to a road transfer related incident at our Head Office in Cape comprehensive process to ensure safe operations, to learn from any identified leadership skills needed to reinforce safety awareness. Town. We extend our condolences to the family and friends of the deceased. We remain focussed to striving to ensure safety of our people and we incident that happens in areas where we have operational control and Conducting a behavioural safety observation and management conducted an investigation into the incident and implemented corrective action to prevent future recurrence. we have comprehensive assurance system to ensure the integrity of walkabouts shows our personal commitment to safety with Felt safety systems that we have put in place. Leadership also known as Visible Felt Leadership. We have developed an advanced safety dashboard with indicators that are discussed at the most senior level of the organisation and are linked to performance-based remuneration for senior managers and executives.
52 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 53 Social and Relationship Capital
Stakeholder Engagement Engaging our Stakeholders
Our stakeholder engagement continues to make strides since its review in 2013. One of the key outcomes of 2014 was the development and adoption As part of stakeholder engagement, relationship champions from across the business conduct an annual review of key stakeholder issues and the of the Stakeholder Engagement Policy. The policy provides guidance on stakeholder engagement at Engen with clear role definition, terminology and engagement channels that drive the relationship. The outcome of this process is the material issues reported in the sustainability context section, scope. and the engagement channels summarised in the figure below. While the list provided in the figure is not comprehensive, it provides an idea on the scale of the engagement. Furthermore, a Stakeholder Engagement Framework was developed and adopted during the year of reporting. This has been a great guiding document to harmonise all activities surrounding stakeholder engagement and it also links this activity to other key documents within the business, such as the The process followed in discussing stakeholder engagement, eventually influencing material issues, involves the identification of relationship code of business ethics, policies and our value system. It also provides clarity on performance assessments and the development of a Stakeholder champions for each stakeholder group (e.g. suppliers, customers). The champions hold a mini-workshop and review key stakeholder issues and Engagement Forum. engagement channels. Anticipated focus areas are highlighted for the upcoming engagement period and included in their engagement plans.
One of the key implementations of 2014 is the stakeholder engagement process, which eventually identifies material issues for the business. The stakeholder engagement plans of all senior managers are included as part of performance contracts across the business and are managed as part This process started in 2013 and was carried on in 2014 with the various stakeholder group leaders holding mini-workshops to discuss key issues of the normal performance management process. relating to their specific stakeholder group of focus.
To best manage stakeholders, four high level categories and their respective groups have been identified, as shown in the figure below: Employees Shareholders Government and Stakeholder group regulators
Employees To create a great place To ensure business alignment To ensure compliance with existing Authorisers for great people. between shareholders and the regulations. Why we engage • Shareholders To build great leadership. business. To participate in the development of • Government To realise our Journey to greatness. To attend to reserved matters. new regulations. • Regulators To participate in socio-economic • Organised meetings • Quarterly reviews development activities. • Culture surveys • Direct reporting channel by CEO • Organised events (roadshows, • Executive committee meetings • Engagement is dependent on How we engage annual events etc) material issues and strategic level Influencers Partners • Internal media • Engagement through meetings • Public • Employees • Formal platforms and forums and written submissions Stakeholder • Suppliers and • Through organised business and • Communities industry associations • NGOs Engagement service providers • Media • Business partners • Customers Customers and Suppliers Media, public, Stakeholder group Business partners communities and NGOs
Associations • Organised business • Industry bodies • Professional associations To create synergy between our value Strong supply chain, security of Sustainable social licence to operate and that of our partners. supply and high quality standards Synergy through strong relationships Why we engage To create lasting valuee for our across the supply chain. Responsible citizenship customers nd become the company of choice. • Supplier extranet • Corporate website • Service level agreements • Annual report • Conferences and trade shows • Supplier audits • 24h community line (Durban) • Customer Service Centre • Representative community forums How we engage • Web interface • Corporate Social Investment and Enterprise Development initiatives
54 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 55 Involvement in External Initiatives the NBI Energy Efficiency Leadership Network (EELN) which holds Corporate Social Investment (CSI) Artisan Learnership Programme meetings on a monthly basis to discuss and share experiences Each year the Refinery seeks young talented individuals to be part our Engen always welcomes the opportunity to work with government on various energy efficiency initiatives, including liaison with Engen continued with its corporate social investment projects Learnership Programme, specializing in, among others, instrument and regulatory authorities to advance sustainable development. We government authorities on energy and climate change policy and focusing on education, environment as well as health and safety mechanicians, fitters and electricians training, depending on the do this through direct participation in government initiatives as well processes. Engen is a member of the EELN Advisory Committee. during 2014. needs of the Refinery. The Learnership is in line with the Chemical as through the various industry associations. Industries Education and Training Authorities (CHIETA) standards. We hosted a number of the South African National Energy Educational Support to External Stakeholders Completion of this training leads to National Qualifications During the reporting period we were involved in a number of Association (SANEA) forums in Cape Town, which cover a wide Framework (NQF) Level 4 certification. government initiatives around climate change, energy issues, range of energy and climate change topics. SANEA offers Engen the Engen Maths and Science Schools environmental legislation, occupational health legislation, opportunity to exchange energy related information between South There are nine Engen Maths and Science Schools (EMSS) in four During this period, Engen has spent about R40 000 per learner for transformation and tax legislation amongst others. Africans and between South Africa and players internationally, via provinces across South Africa, namely Western Cape (1), Gauteng training. Approximately 12 of these learners continued to work at the World Energy Council networks. SANEA stimulates original (1), KwaZulu-Natal (4) and Eastern Cape (3). Approximately 1920 Engen on completion of their learnership. We participate in SAPIA’s Advisory Committee on Climate Change thought and catalyses transformation of the energy sector. learners were registered for 2014 and were assisted by 42 educators (ACCC), which discusses regulatory and voluntary issues on climate which included the nine Regional Coordinators. It is with pride that Computer School change policy and measures. We also participate in the SAPIA Our interests are further addressed through business associations we announce that the EMSS matric learners of 2014 achieved a The Engen Community Computer School, based in the area Environment, Health and Safety (HSE) Committee which deals such as Business Unity South Africa (BUSA) and Chamber of pass rate of 99% (up from 95% in 2013) compared to the national surrounding our Refinery, offers nationally recognised certificates with issues relating to road transport, security, environment and Commerce. average of 75.8% (the National average in 2013 was 78%). Also (NQF Level 3) computer courses to community members. The school emergency management matters. These engagements provide a 70% of the EMSS matric learners achieved a bachelor’s pass whilst currently provides computer skills training to approximately 300 platform for Engen and other companies in the sector to collectively To support the development of relevant industry standards, we the national average for a bachelor’s pass was 41%. students annually. engage in regulatory matters with authorities. participate with the South African Bureau of Standards (SABS) in the working groups and international plenary committee meetings Engen continued to be part of a group of companies that voluntarily involved in the development and adoption of ISO standards. work together to support the National Business Initiative’s (NBI) objectives of promoting sustainable growth and development in The Southern African Institute for Occupational Hygiene (SAIOH) South Africa through partnerships, practical programs and policy was chaired by Engen in 2014. engagement. This included participating in NBI forums including
56 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 57 Environmental Management Support to External All 60 school finalists won R1 500 cash, EduPlant t-shirts, a large Forecourt Wellness Engen Employee and Dealer Outreach Initiatives Stakeholders resource pack containing plant material and a wealth of environment This programme focuses on medical/wellness screening for education resource materials donated by eight contributors. forecourt attendants at Phambili Roadshows. The programme covers In addition to the Engen CSI commitments, Engen employees and EduPlant KwaZulu-Natal schools came first in three of five categories each Cape Town, Johannesburg, Tshwane and Durban, Bloemfontein, dealers have also been involved in community outreach activities. We are still supporting the EduPlant programme is being run by winning a R15 000 cash prize. East London and Port Elizabeth during. A total of 1952 forecourt During 2014 employees participated in the Winter Warmer Scarf Food and Trees for Africa (FTFA). The purpose of this programme attendants were screened and the total number of screenings (5 827) Knitting Challenge and over 550 scarves were knitted by employees is to assist schools and community with the establishment and/ Health and Safety Support to External Stakeholders included blood pressure, cholesterol, glucose and HIV screenings. and donated to various charities. Employees in the Eastern Cape or improvement of the schools’ food gardening projects. For 2014 participated in Mandela Day activities and donated mattresses and Engen made R2.45 million available for this programme. Driver Wellness Paraffin Safety school bags to the Vukuhambe Special School. In the Western Cape Engen Driver Wellness, a mobile health awareness initiative run by Engen’s `KlevaKidz’ Paraffin Safety Campaign is an awareness Engen donated office furniture to the Community Chest who have EduPlant focuses on Permaculture, a system of farming and the Corridor Empowerment Project (Coremp), continues to grow its campaign that educates rural and township children between the distributed the furniture to smaller NGO’s and NPO’s who care for gardening that combines plants, animals, buildings, water, the local positive impact on the country’s bulk truck operators with increased ages of seven and 11 on safe handling and storage of paraffin. This persons with disabilities. Other employee groups donated groceries people and landscape in such a way that it produces more energy driver participation in voluntary screenings and improved health programme visited 99 schools in five provinces during 2014 reaching to a nursery school. than it uses by recycling all nutrients and waste. This helps schools scores. 30 000 learners. The campaign entails industrial theatre paraffin to improve food security, nutrition and health as well as generates safety awareness. In 2014, 47 employees were supported in their community initiatives some much more needed income in some situations. Engen contributed approximately R1.2 million in support of Trucking through the Employee Community Partnership Programme. Engen Wellness in 2014. Trucking wellness is funded and driven by the continues to support community outreach initiatives through the A total of 250 EduPlant cluster workshops took place between National Bargaining Council for the Road Freight and Logistics Dealer Community Participation Programme. A total of 38 dealers January 2013 and October 2014. This was represented by four industry. It is a primary healthcare delivery programme dedicated participated in this programme. clusters in each of the nine provinces (36 clusters in total) with to the wellness of employees in the Road Freight and Logistics FTFA conducting seven workshops per cluster. Approximately 1605 Industry. participants were reached during the workshops and included 637 educators and 487 learners from 482 schools as well as 481 In 2014, 21 Engen sites were part of this programme which community members. commenced in June and concluded in November. A total of 7181 unique screenings were conducted in 2014, compared to 4815 in During 2014 the EduPlant Award 2013 which was a 49.1% increase. The total number of Ceremony took place where individuals screened also increased by 445 (50.9%) 60 schools in nine since 2013, as did all individual categories of provinces were chosen screening. Screenings for cholesterol increased as finalists out of the by 186 (43%), glucose by 433 (51%), BMI by 392 entries received 447 (51%), blood pressure by 444 (51%), (445 in 2012). HIV by 283 (47%), TB by 289 (48%) and The standard of sexually transmitted infections by entries in 2014 was 284 (47%). a vast improvement compared to the previous intake of applications.
58 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 59 Engen in Sub-Saharan Africa and the Indian Ocean The partnership between SIC and Engen dates back to 2009 when Engen provided fuel. Islands “Engen began partnering with SIC to provide the precious fuel that allows us to reach our target
Our affiliate operations continued community outreach initiatives in communities. With our hard working staff and heavy field schedule, currently Engen sponsors between the education, health and welfare arenas. 1800-2000 litres of fuel each month, worth approximately $2500 USD. For SIC, a small but highly recognizable
Engen Tanzania: Towards a healthy community organisation operating on a limited budget, this donation is invaluable and equates to nearly 10% of our overall It was in the early 1980s that the fight against the acquired budget each year” human immuno-deficiency syndrome (AIDS) picked up significant momentum. Today, more than 30 years later, the fight continues This partnership, to date, has resulted in: and much progress has been made. Engen Tanzania partnered with Support for International Change (SIC), a non-governmental • Over 135,000 free, confidential HIV tests and counselling services organisation, to address some of the vital aspects through which • Initiation and support for 17 mobile care and treatment centres providing monthly care and medication to over 1500 people communities are affected by AIDS. • 9 of these mobile care and treatment centres being established as permanent HIV clinics in the government health system • Awareness campaigns led by over 1400 Tanzanian and international volunteers Through this partnership Engen has been able to make a lasting • Provision of over 550,000 HIV prevention education interventions impact to the lives of communities that are affected by HIV/AIDS but are out of reach to many NGOs working to address the problem Tanzania in the various spheres of life that it affects. This programme has Support for International Change reached close to a 100 rural villages and places particular focus on (SIC): Donation of fuel to the four key intervention areas in the fight against the pandemic: NGO based in rural Arusha. The objective of SIC is to train • Education: There are still misconceptions about HIV that leaders in global health and need to be addressed. Awareness campaigns have development in order to limit increased the level of awareness of many but surveys the impact of HIV and AIDS in conducted by SIC showed that there are people who underserved communities. still believe in myths that have been proven wrong a while back. Awareness is a journey and reaching a percentage of the population is not enough to stop the spread of the virus, every single person needs to know the correct facts in order to make the right decision to protect the health and Ghana dignity of themselves, their family and friends as well as Operation Smile: Engen Ghana the health and dignity of those around him. provided fuel support for the • Testing: Promoting the idea that knowing your status is the operation. first step towards dealing with the syndrome through the provision of voluntary and confidential testing and Made a donation to the Otumfuo counselling. Providing support and care for people who test Education Fund. An education positive for the HI virus. fund to assist bright pupils who don’t have the means to further • HIV Care and Treatment: Tanzania provides free HIV care at their education. public hospitals. For rural dwellers the trip to a hospital can be a long and challenging experience. SIC provides free mobile clinics for rural residents. In some instances, these clinics are the only option available they can get. Zimbabwe • Community Support: Rural communities have a much Engen Bubi retail site: Support stronger social and community bond and this is their for the local soccer club through Indian Ocean Islands strength. SIC engages at community level and develops supply of sportswear. Link to Life: Counselling for cancer a virtuous cycle based on credible information through which patients from vulnerable groups. the community develops its own unique ways to manage their response to HIV/AIDS. Provision of massage therapy to cancer patients. Botswana Link to Life: Counselling for cancer Provision of temporary accom- patients from vulnerable groups. modation for Link to Life offices, centre and library.
60 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 61 Natural Capital
Our approach to managing our natural capital is based on international The Engen Refinery, Durban Terminal, Engen Lubricating Oil Blend best practice, legal compliance and maintaining our environmental Plant (LOBP) and Richards Bay Bunkering Services continued to meet and social licence to operate in all the countries we operate in. This the ISO 14001 environmental management system requirements. is one of the focus areas in our dedication to sustainability and forms We actively manage the following key environmental issues: part of the strategic pillars in our revised strategy. We are committed to reduce the negative environmental impacts of operations and to • Water strengthen our positive environmental impacts. • Energy
Our environmental team is responsible for ensuring that Engen policies • Climate change and procedures are aligned with all legal and regulatory requirements. • Atmospheric emissions The team is also responsible for the implementation and auditing of • Hazardous and non-hazardous waste environmental policies, standards and procedures in our operations. We proactively work with governments, other industry role players • Loss of Primary Containment (LOPC) incidents (including spills of product) and civil society on issues relating to natural capital.
We frequently review our environmental risks and opportunities and Fresh Water Management ensure that management plans are in place for all of our significant Responsible water management is critical in most countries where environmental risks. As part of continuous improvement, we we operate and has become a business imperative. Business measure and monitor our water consumption, energy consumption growth is becoming intrinsically linked to water security, making and fugitive emissions and use the information to make better water use efficiency a variable for business sustainability in water management decisions. As eco-efficiency is part of our sustainability stressed Sub-Saharan Africa. strategy, we strive to produce more useful goods by using fewer resources, producing less waste and reducing our carbon footprint. Recognising this, we applied a methodology developed by PETRONAS to calculate water availability for our South African operations. Some of the data reported in this section only covers our operations in South Africa, Swaziland and Lesotho. We applied the OECD water stress threshold of 1700 kL per person per year to identify areas under increasing water stress. According Environmental Management to this method, all our facilities in South Africa operate in areas with severe water scarcity. Using another approach, which bases water Managing our environmental aspects includes understanding and stress on the ratio between renewable water supply and water complying to relevant legislation, internal standards and relevant demand in a watershed, 11 of the 13 water management areas in international best practice. The regulatory framework relating to which we operate can be classified as under severe water scarcity. air quality, water and waste management is evolving and elevates the importance of environmental compliance and good practice. In our value chain, the refining process accounts for the majority Continuous monitoring of the changes in environmental legislation of our water requirements. The water withdrawal of two adjacent enables us to align our activities with legal requirements. facilities, the Island View facilities and the Durban Terminal, are included in the Refinery water withdrawal total. The PETRONAS Mandatory Control Framework (MCF) contains six elements which focus on environmental management. 36 Water withdrawal (kL) Refinery Engen Total 34,9 35 As part of our consistent approach to minimising 34,4 33,9 the impacts of our activities we base our environ- 34 33,6 mental management approach on these elements: 33 33 32,7
• Air emission management 32 RA • Environmentally hazardous substances 31,3 31 30,3 30,3RA • Environmental impact assessment x 100 000 30 • Hazardous waste management 29,1 29 • Soil and groundwater management 28 • Wastewater management 27
26 2010 2011 2012 2013 2014 RA = 2014 data Reasonably assured by KPMG
62 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 63 Total water withdrawal has decreased over the past three years. Our focus in the near future will be further water data quality To keep the conversation going on this topic, Engen conduct Year 2014 saw further progress in our South African retail outlet This has been due to a reduction in throughput as well as water improvement, and at all divisions and sites we plan to have more ECoPs (Environmental Committee of Professionals) meetings. energy efficiency programme that involves replacement of efficiency initiatives implemented. Improvements in systems defined roles and responsibilities, and the development of further These meetings consist of environmental professionals within the conventional lighting fixtures with energy efficient ones, mostly efficiency and reliability, as well as better water management, water conservation plans. The refinery has a budgeted 3-year plan business and they take place quarterly to discuss developments in the LED-type. During the year the energy saving through lighting resulted in the refinery almost doubling cooling water cycles. This to further reduce freshwater withdrawal. environmental legislation and strategies to better protect natural alternatives was 73%, with an energy cost saving of more than resulted in approximately 110 ML of water savings per year. resources. R 26m. The associated indirect carbon saving was 1 822 tons of Groundwater CO2e. The refinery also achieved an increase on the average cycles of The remediation strategy has been designed to remediate Energy Management water use from 6 to more than 10, resulting in water saving of contaminated soil and groundwater, and manage contaminated sites As a way forward, Engen has specified energy efficient lighting as to a standard that allows industrial and domestic use and addresses approximately 40ML per year. This was achieved by relaxing Energy management at Engen is a facet of climate change and a standard for all new sites and outlet upgrades. Our dealers can operating specification in line with international standards. Apart environmental protection of the soil and groundwater. This strategy purchase and install these specified lighting fixtures and receive a is being undertaken in liaison with the relevant authorities from resource efficiency management as part of the Engen Sustainability from contributing to resource efficiency, these initiatives resulted in Framework. 15% rebate on the cost and installation of the luminaires. financial savings in excess of R2.3 million per year for our refining different countries. process. With this strategy, Engen conducts site-based desktop risk Energy Consumption For Engen Sales and Marketing, data improvements in the verification based assessment to determine the status of the site in terms of of and discovery of incorrect bills brought about improvements in contamination. These Phase I (non-intrusive) environmental site water data accuracy and addressed minor overestimation of water assessments are conducted to identify contaminants of concern, consumption. This, together with optimisation of water use during potential or actual sources of historical or ongoing contamination, 16 and potentially responsible parties. Then Phase II and III (intrusive) equipment and surface washing, resulted in our reported water use 14 decreasing by almost 9 ML in 2014. environmental site assessments are conducted to characterize site conditions and define presence, level, and extent of contamination 12 as well as where contamination is present, in choosing appropriate Further water use overestimation was addressed through improved 10 boundary setting for our IBD affiliates. remediation methodologies and compilation of remediation action plans. 8 x 1 000 GJ The Lubricants division reduced water withdrawal significantly in 6 2013 by decreasing the number of wet fire-fighting exercises. In These initiatives support remediation methodologies ranging from 4 2014 water use further decreased due to a decrease in throughput. active engineered systems to natural attenuation to address the contaminated sites. 2 0 2010 2011 2012 2013 2014
Refinery Lubes SAFOR Buildings ESM Engen Total
We continue to be an active participant in the voluntary Energy At IBD, the Reunion Firefly initiative installed charging stations Efficiency Leadership Network (EELN), which builds on a pledge at their retail outlets for electric vehicles (EV). Engen has also made by organised business to the South African Minister of Energy completed the first prototype Photo Voltaic installation at one of our in 2012. The pledge entails that industry would mainstream energy retail sites in SA, the All Africa Convenience Centre in Alexandra, management in decision-making and operations. One highlight of Gauteng. The PV panels on the site can produce up to 170kWh during 2014 was Engen’s signing of the National Business Initiative (NBI) the day which is more than enough for the retail outlet requirement. agreement to be part of the Private Sector Energy Efficiency (PSEE) Daily output measurements are made to inform decisions regarding programme. The agreement calls for energy efficiency baseline the expansion of this initiative. studies to be done by PSEE at the NBI member companies with the view to implement the Energy Management System (ISO 50001) in the member companies. Engen has become a participant in this programme which is co-funded by the NBI and with the blessing of the Engen Energy Management Committee (EMAC). The baseline studies will cover office buildings, depots and terminals, the refinery, other operations and fleet management.
64 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 65 In office buildings, measures to reduce paper use and the energy In 2014 climate change continued to command a high level of attention Total Direct GHG Emissions consumption of printers, have had good results since 2013. in South Africa and at Engen. New mandatory requirements, as Staff have to use access cards to authorize printing, resulting Government response measures to climate change, were proposed. in a significant reduction in the amount of wasteful printing and These included the declaration of greenhouse gases (GHG) as a Engen’s Scope 1 GHG Emissions (105 CO e) uncollected printed material. Based on an internal survey conducted priority air pollutant, carbon budgets and national desired emission 2 before and after the monitoring of individuals’ printing, the savings reduction objectives. This compelled us to review our approach to 10.00 6.59RA per annum, for a sample of 20 staff members, has been as follows: the management of climate change and energy. 9.00 8.33 8.00 7.57
• Paper saved (size A4) - 74 kg (30 reams of paper) 5 Another response by the authorities is the proposed carbon tax, 7.00 6.78
• Energy saved - 3 kWh which will impose a cost on the use of fossil fuel - particularly e x 10 5.59
2 6.00 at the refinery - as well as a potential for increased electricity • GHG emissions reduced from electricity use - 3kg CO2e 5.00 tariffs. Engen actively participates in the industry’s dialogue with • Water saved during electricity production - 4.2 litres 4.00 government concerning these issues. Tonnes CO Tonnes 3.00 • Coal saved during electricity production - 1.59 kg 2.00 We continue to quantify our carbon footprint using internationally • Emissions reduced during paper production - 112 kg CO2e accepted guidelines and principles to allow for reporting data that 1.00 is complete, accurate, consistent, comparable and transparent. Our 0 2010 2011 2012 2013 2014 Climate Change and Greenhouse direct (Scope 1) and indirect (Scope 2) GHG emissions are provided Gas Emissions in the figure below. The total direct emissions include those from RA = 2014 data Reasonably assured by KPMG refining operations, base oil and lubricant blending plants, company Engen considers potential climate change impacts such as flooding, vehicles and the road tanker fleet. Engen does not currently estimate The amount of GHG emissions at Engen each year is closely associated with the throughput at the refinery that year and our data reflects insufficient water supply for operations, severe storms, increased and account for Scope 3 GHG emissions: all indirect emissions (not this. Although the refinery is our biggest GHG emission source, they use fuel gas as the major energy source which is comparatively cleaner vulnerability to diseases and interruption of the supply chain as real included in scope 2) that occur in the value chain. than fuel oil, which was used until 2002. risks to our business. Engen is aware that weather-related incidents can lead to significant loss of company assets and revenue, as well as loss of reputation.
Engen Total Scope 2 Emissions Refinery Emission Intensity 3.5
0,025 3.0 2.86 2.82 0,0185 RA 0,020 0,019 2.69 0,020 2.5 5 0,016 0,0186 2.29 2.21 0,015 e / BBL e x 10 2 2 2.0
tCO 0,01 1.5
Tonnes CO Tonnes 0,005 1.0 0 0.5 2010 2011 2012 2013 2014
0 2010 2011 2012 2013 2014
RA = 2014 data Reasonably assured by KPMG 2014 saw progress with the implementation of the Engen Climate Change Framework, adopted in 2009 to minimise the carbon footprint of our activities outside the Refinery. This includes the Fleet replacement programme. In the year under review we acquired an additional six Euro 5-standard bulk road tanker trucks with on-board technology to reduce GHG emissions. We now have a total of 17 such tankers meeting European specifications. Further efforts will include implementing measures to reduce our consumption of fuel and electricity, reviewing our policies on air travel for business, and further encouraging behaviour changes and efficiencies amongst our staff.
66 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 67 Atmospheric Emissions Waste Management
We aim to actively manage the amount of waste we produce by recycling whenever possible. We dispose responsibly of the waste we Refinery Air emissions generate and minimise the amount of waste we send to the landfill. Although the amount of Refinery waste recycled during 2014 was less Atmospheric emissions (tonnes) 2012 2013 2014 than the 2013 total, we are continuing with the waste recycling programme at the Refinery. The high level of waste generated prior to 2014 was due to clean-up related to legacy incidents which were approaching completion in 2014. RA Refinery SO2 2667 2480 2240 Refinery NOx - - 1044RA RA Refinery filterable Particulate Matter 241 251 217 Refinery waste management (tonnes) 2011 2012 2013 2014 RA = 2014 data Reasonably assured by KPMG Hazardous waste Generated 10 386 14 256 20 349 9 462 Recycled 6 871 10 737 10 242* 3 766 To remain true to our objective of not only managing our At Engen there has always been a strong focus on managing Disposed 3 515 3 519 10 107 5 696 emissions, but also providing transparent and accurate reporting atmospheric emissions, which are associated with the refining to our stakeholders, we embarked on a journey to improve our process. There has been a lot of effort towards maintaining these Non-hazardous Disposed 1 343 2 734 10 221 1 778 management of key emissions indicators. To do this, we subjected emissions within regulatory limits. The Minimum Emission Standards our 2013 performance for the emission indicators in the table to for listed activities in terms of NEM:AQA were promulgated late Total disposed to landfill 4 857 6 252 20 328 7 474 an internal review by KPMG to examine our systems and identify in 2013, not allowing adequate time for major plant modifications *Restated after internal audit areas of improvement. The internal review outcomes helped us to be done before the March 2015 due date. Whilst the Refinery to strengthen the system enough to request KPMG to conduct an meets most of the existing plant standards as well as some of the external independent assurance for the same indicators in 2014. The new ones, it has requested a postponement for certain compliance assurance resulted in a 13.7% improvement of the NOx data quality timeframes of the MES from the Department of Environment Affairs for 2014. All our emissions remain below the active South African as described in the table below. This postponement request was emission limits. accompanied by a full impact assessment and public participation process.
Section 21 Category Description Postponement Request Sub- Category 2.2 Catalytic Cracking Compliance to Particulate Matter limit Postponement for compliance with the Unit from the FCCU for existing plant MES for Particulate Matter for existing plant requested with a limit of 140mg/ m3 until 31 March 2019 Subcategory 2.4: Storage and Handling Installation of Vapour Recovery Unit at Postponement of the compliance with of Petroleum Products gasoline rail loading facility the MES for existing plant until 31 March 2016 Subcategory 2.4: Storage and Handling Installation of Internal Floating Roof Postponement of the compliance with of Petroleum Products for two storage tanks the MES for existing plant until 31 March 2016
68 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 69 Transformation
Loss of Primary Containment due to a single pipeline incident accounting for 91% of the major Engen’s transformation agenda is influenced by business, ethical The employment of people from designated groups in junior and LOPC volume for the year. We were fortunate that the product was and legislative imperatives. We are also keenly aware that this is senior management has continued to show improvements, while (LOPC) and Spill Management contained in the secondary containment. We are tightening our a journey that will require time and patience. Our Black Economic we continue to face challenges with regards to the representation systems to guard against these infrequent but high impact events Empowerment Policy states that “We will promote and develop of people with disabilities. A disability awareness campaign, LOPC refers to an unplanned or uncontrolled release of any material that result in large volumes escaping containment. This programme an enabling environment in which Engen will deliver on its together with the commitment of employing people with disabilities from its engineering containment. If the material released is is now being expanded to cover retail site deliveries as well. transformation strategy”. This policy extends to Engen’s employees, by the different divisions, shows the business is serious about contained within a designated secondary containment receptacle or dealers, suppliers, business partners and the wider community. In diversity of its workforce. Divisions, together with the Employment bunded area, it remains an LOPC, but is not referred to as a spill. In 2014 Engen started a Spill Response Strategy to identify and South Africa, our transformation programme is also governed by the Equity Committee, are paying special attention to this area in order A portion of LOPC that escapes the secondary containment is also pre-approve spill response companies that would respond to spill Broad-Based Black Economic Empowerment (B-BBEE) Act (Act 53 to boost our performance. logged as a spill. Our LOPC classification takes into account the incidents in Engen’s footprint in South Africa. A yearly performance of 2003) and other relevant legislation, as well as the Liquid Fuels flashpoint of the liquid as per API Standard 754. review, undertaken by Engen, will ensure that the service providers Charter and the Mining Charter. continue to meet the competences required to clean up spillages. Loss of Primary Containment (LOPC) incidents, which include The aim of the strategy is to have a service provider in each region We would like our employees to see value proposition in our fair and potential spills to the environment, represent a potential for soil to enable prompt response during spillages. This will enhance our equitable employment policies. and groundwater contamination. To minimise its occurrence and efforts to reduce the impact of environmental spillages which, impact, the LOPC reduction programme was launched in 2012. This despite an increase in the volume of Major Spils, have decreased programme has reduced the number of major LOPC from 20 in 2011 from 105 in 2013 to 17 cubic meters in 2014. Elements Weighting 2012 2013 2014 Indicator* to seven in 2014. The increase in volume to 257 cubic meters was Ownership 20 10.33 12.97 15.54 Number and volume of LOPC and Spills Management Control 10 9.37 9.12 9.53 Employment Equity 15 12.08 10.94 11.32 2012 2013 2014 Skills Development 15 8.25 8.68 9.68 Number of Major LOPC* 20 11 7 Preferential Procurement 20 18.03 14.8 15.43 Volume Major LOPC (kL) 124 157+ 257 Enterprise Development 15 10.18 14.53 15 Number of Major Spills (> 7bbl) 6 5 4 Socio-economic Development 5 5 5 5 Volume of Major Spills (kL) 58 105 17 Total 100 73.24 76.04 81.50 * Major LOPC definition applies as per the API Standard 754. For flammable liquids major LOPC threshold is 7 barrels or 1120 litres. For combustible liquids major LOPC threshold is 14 barrels or 2240 litres. B-BBEE Level 4 3 3 + = Restated to include an incident in which the volume was under investigation * Arrows compare 2014 to 2012 performance The programme focus has included leadership and awareness, analysis of incidents, behavioural changes, and improvement in Since transformation objectives have been incorporated in the The Skills Development score has increased steadily over the maintenance. Initiated at the depots and terminals, it was also Engen Balanced Scorecard, they have been expressed and cascaded past two years. An area of improvement is skills development rolled out to service stations across Engen and includes mandatory down and throughout the business, which leads to more effective expenditure on people with disabilities, which achieved the least monitoring plans for sites where there have been spills. planning and execution of each B-BBEE element by the organisation. points within the Skills Development element. This is consistent with the challenge identified under the employment equity element In April a Heavy Furnace Oil (HFO) spill occurred in the Port of when it comes to the employment of people with disabilities and Richards Bay. This resulted in the material coming into contact with Our B-BBEE Performance the training opportunities thereof. Improvements in the recording of the bay, impacting the surrounding area including the mangroves Since 2012, Engen has improved its B-BBEE Level status from a skills development spend that is within divisional control has seen in the Port. Response teams from specialist oil spill response Level 4 B-BBEE contributor to a Level 3 B-BBEE contibutor, achieving Engen being able to recognise more training spend that was not organisations were activated and the incident was quickly brought a score of 81.50% from 73.24%. This has been achieved by our included in the previous reporting period. under control, minimising any further impacts to the environment. deliberate in-depth analysis and verification of different elements Continual monitoring of the impacted area, including the mangroves, of the codes. The review of the business strategic objectives, as Our Preferential Procurement score has seen a drop since 2012. over the past year has shown that environmental impact was expressed in the revised Engen strategy, has yielded improvements Procurement from suppliers that are Black owned, especially small significantly limited as a result of the quick response. Monitoring for our transformation journey especially in areas like Ownership and micro enterprises as per the codes, have been a challenge will continue into 2015 when a final assessment of the environment and Enterprise Development. for Engen. Steps have been put in place to increase procurement will be done. from Black-owned and Black-woman owned suppliers with the In order to take a more long-term view, our performance regarding view to ensuring that Engen complies. The integration of the use the B-BBEE scorecard is discussed over the period 2012-2014. of information systems, and providing supportive guidance by procurement on suitable Black and Black-woman owned suppliers is Engen’s improved score on the Ownership element is derived starting to bear results for the preferential procurement element, as out of Pembani and the application of the exclusion principle as seen in the increased score for 2014. per the verification manual (recalculation in 2014). Our score for Management Control is steadily increasing.
70 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 71 It is worth noting that some Black-owned and Black-woman owned • Engen Pitch and Polish New B-BBEE Codes Efforts to transform the demographic composition of retail site entities that were brought into the supply chain as part of Engen’s ownership continued and eleven more BEE-owned sites were added. transformation are amongst the top 5 vendors for crude and refined This successful programme continues to unearth talented young of Good Practice Approximately 45% of our retail sites are owned or managed by entrepreneurs and 2014 was no exception. Below is the table of the top products. previously disadvantaged individuals. 4 businesses that made it to the finals from different provinces. The amendments to the B-BBEE Codes of Good Practice as published in the Government Gazette on 11 October 2013 have raised the bar For the first time, Engen scored full points in the Enterprise In addition to the DRC, Gabon, Burundi, Botswana and Zimbabwe Notable programs include: when it comes to implementing B-BBEE in line with government’s Development element. A number of successful enterprise which have indigenized shareholding requirements, there was an National Development Plan priorities. While these codes come development initiatives have been maintained and, where • KlevaKidz programme on paraffin safety increased focus on regulating transformation in Ghana and Namibia. into effect in 2015, we continue preparing the business for their necessary, enhanced to ensure that there is value both to Engen (discussed in more detail in the section on CSI) Various models and options are being explored to unlock indigenized implementation and where necessary, steps are being put in place and the recipients. shareholding and continue to improve the diversity of the business. to align policies and procedures with the spirits of the codes. To this • Engen Maths and Science Schools programme We have also embarked on a Strategic Sourcing project to empower Key initiatives include: effect, a project was launched to improve monitoring and reporting (discussed in more detail in the section on CSI) local suppliers as part of our construction project in all our affiliates. systems in line with the new codes. The increased emphasis on These will include the development of retail and commercial sites • Engen Incubator preferential procurement and enterprise and supplier development • Wildlands Green-preneurs programme where local suppliers are given preference over foreign contractors. is being considered in the review of our procurement processes. Based in the Raizcorp Business Incubator in Durban are 39 small This programme centers around teaching school children businesses that are undergoing intensive business support under the environmental awareness and poverty alleviation through food guidance of Raizcorp. In 2014, a review of the incubator programme gardens. The programme has been extended to the communities of was done to ensure that companies that are in the programme can Bushbuckridge where Engen is establishing an Integrated Energy become suppliers to the Refinery. This review means that at least Centre. This is to ensure that there is alignment with other Engen 80% of recipients should have the technical ability to undertake initiatives that are community orientated. contracts.
• Integrated Energy Centre – Bushbuckridge
Work is on-going in the building of the Engen Integrated Energy Centre (IEC), which is a One-Stop energy shop owned and operated by the Bushbuckridge community in Mpumalanga. Not only is this programme aimed at creating a viable enterprise development model for rural areas, it also plays a critical role in addressing social Recycling depot in Cato Manor boosts BEE, local challenges facing the rural poor. development
Over the past few years, Engen has consistently achieved a full The launch of a new recycling facility in the Cato Manor area Urvashi Haridass (Project Manager for Recycling at Wildlands) score for Socio-Economic Development. on 22 August 2014 was attended by Barbara Thompson, Deputy says the funds from Engen went towards a range of Minister of Environmental Affairs, Dr Andrew Venter (CEO of infrastructural interventions at the Cato Manor site. “We built Wildlands), Mntu Nduvane (Stakeholder Engagement Manager two sheds, one of 10 by 12 metres and another of 12 by 12 for Corporate Affairs at Engen), Councillor Lindiwe Ntaka metres. In addition, we concreted the full yard, refurbished Mhlongo (representing the Mayor’s Office) and local community our containers, three in total, and installed a water line and # Name Business Concept members. ablution facility.” Electricity has been installed which will allow the facility to commission additional machinery to enhance 1 Lebo Selloane A mobile x-ray service targeted at mine workers in the Welkom area and surrounding This recycling depot has been built and equipped under a multi- efficiencies. (Welkom) communities. million-rand enterprise development partnership between 2 Asa Mazomba An online procurement platform for the construction industry named Tender Point. Engen Petroleum and Wildlands Green-preneurs (Pty) Ltd. From July 2013 to June 2014, 290 Waste-preneurs in Cato (Port Elizabeth) Tasneem Sulaiman-Bray, GM: Corporate Affairs at Engen, says Manor have traded 951 000kg’s of recyclable waste, and have the facility is the latest initiative to come out of the company’s been rewarded with R144 764 worth of livelihood support 3 Themba Sehawu Fruit picking device, an innovative technology to improve speed, safety, and efficiencies R4.5 million investment deal with Wildlands Green-preneurs, items. (Nelspruit) on fruit collection by the farm workers. which was announced in October 2013. 4 Ayanda Ntsho An organic and environmentally friendly black peat alternative for growing mushroom “Engen’s investment, together with the investment of the (Soweto) farmers. RSA currently imports black peat from the Netherlands. “Engen’s investment will significantly boost recycling efforts Green Fund, will greatly benefit this cause as it allows us to while promoting black empowerment and local enterprises,” equip plants with infrastructure that will increase our output, says Sulaiman-Bray. “In return, we will receive carbon credits, thus boosting recycling in the region, benefiting more Waste- supporting our sustainability and planet change agenda. The preneurs and ultimately allowing us to employ more people,” partnership aims to benefit multiple initiatives serving a variety said Venter. “We are very excited about our partnership with of key causes, namely black economic empowerment (BEE), Engen and Green Fund. Thanks to these key partners Wildlands local enterprise development (ED) and green issues,” she says. is better equipped to do what it does best – green the economy.”
72 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 73 GRI CONTENT INDEX
This report has been compiled guided by the Global Reporting Initiative (GRI) Guidelines for Sustainability Reporting Governance G4. This index guides the reader to the page(s) where information relating to GRI parameters and performance indicators can be found. G4-34 Governance structure of the organisation 21 G4-36 Board procedures for overseeing the organisation’s management of eco- 21 nomic, social and environmental performance Parameter or performance indicator Page number(s) G4-39 Status of CEO vs. chair 21 No Brief description SPECIFIC STANDARD DISCLOSURES GENERAL STANDARD DISCLOSURES Economic Strategy and analysis DMA G4-1 CEO and Chairman statement 5-7 G4-EC2 Financial implications, risks and opportunities due to climate change 66 Organisational profile G4-EC7 Development and impact of infrastructure investments and services 57, 71 G4-3 Name of the organisation 1 primarily for public benefit G4-4 Primary brands, products, and/or services 12-13 Environment G4-5 Location of organisation’s headquarters 4 DMA Energy 65 G4-6 Countries where the organisation operates 11 G4-EN3 Energy consumption within the organisation 65 G4-7 Nature of ownership and legal form 11 G4-EN6 Initiatives for energy-efficient or renewable energy-based products 66 G4-8 Markets served 11 DMA Water 63 G4-9 Scale of the reporting organisation 16 G4-EN8 Total water withdrawal 63 G4-10 Employee numbers 44 G4-EN10 Percentage and volume of water recycled and reused 64 G4-11 Employees covered by bargaining agreements 49 DMA Emissions 68 G4-13 Significant changes regarding the organisation during the reporting period 4 G4-EN15 Direct GHG emissions (Scope 1) 67 G4-15 External initiatives 56 G4-EN16 Indirect GHG emissions (Scope 2) 66 G4-16 Membership of associations 56 G4-EN18 GHG Emissions intensity 67 Identified Material Aspects and Boundaries G4-EN19 Initiatives to reduce greenhouse gas emissions 66 G4-17 Entities included in organisation’s financial statements 36 G4-EN21 NOx, SOx, and other significant air emissions 68 G4-18 Process of defining aspect boundaries and defining the content 32 DMA Waste 69 G4-19 List of material aspects 33 G4-EN23 Total weight of waste 69 G4-20 Boundary for each aspect within the organisation 4 G4-EN24 Total number and volume of significant spills 70 G4-22 Explanation of the effect of any re-statements of information 4 Social: Labour Practices and Decent Work G4-23 Significant changes from previous reporting period regarding the report 4 G4-LA6 Rates of injury, occupational diseases and fatalities 53 Stakeholder Engagement G4-LA7 Workers with high risk of occupational diseases 52 G4-24 List of stakeholder groups engaged 54 G4-LA9 Employee training 44 G4-25 Basis for identification of stakeholders 54 G4-LA10 Programs for skills management and lifelong learning 44 G4-26 Approaches to stakeholder engagement 55 G4-LA12 Composition of governance bodies and employees according to diversity 46 indicators G4-27 Key topics raised by stakeholders and organisation’s response 55 Report Profile G4-28 Reporting period 4 G4-29 Date of most recent previous report 4 G4-30 Reporting cycle 4 G4-31 Contact point for questions 4 G4-32 G4 in accordance option 4 G4-33 Policy about external assurance 4
74 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 75 Independent Assurance Report on Selected Environmental Information
To the Directors of Engen Petroleum Limited Our Responsibility Opinion
We have undertaken a reasonable assurance engagement on selected environmental information as described below and presented in the Our responsibility is to express an opinion on the selected environmental In our opinion, the selected environmental information for the year Engen Limited Integrated Annual Report 2014 (the Report) of Engen Petroleum Limited (Engen) for the year ended 31 December 2014. This information based on the evidence we have obtained. We have ended 31 December 2014 is prepared, in all material respects, in engagement was conducted by a multidisciplinary team including environmental and assurance specialists with extensive experience in conducted our engagement in accordance with the International accordance with the GRI G4 Guidelines. environmental reporting. We were engaged to provide reasonable assurance on selected key performance indicators for the year ended 31 Standard on Assurance Engagements (ISAE 3000), Assurance December 2014 only. Engagements Other than Audits or Reviews of Historical Financial Other Matters Information, issued by the International Auditing and Assurance Subject matter Standards Board. That Standard requires that we plan and perform Our report does not extend to any disclosures or assertions relating our engagement to obtain reasonable assurance about whether to future performance plans and/or strategies disclosed in the We are required to provide reasonable assurance on the following key performance indicators prepared in accordance with the Global the selected environmental information is free from material Report. Reporting Initiative (GRI) G4 Guidelines, marked with a RA, and presented on page 7 of the Report. misstatement. The maintenance and integrity of Engen’s Website is the A reasonable assurance engagement in accordance with ISAE responsibility of Engen’s management. Our procedures did not Indicator Engen Operations Unit of measure 3000 involves performing procedures to obtain evidence about the involve consideration of these matters and, accordingly we accept Excluding IBD coun- quantification of the selected environmental information and related no responsibility for any changes to either the information in the 1. 1 Engen Scope 1 Direct GHG Emissions 105 tons CO equivalent tries* 2 disclosures. The nature, timing and extent of procedures selected Report or our independent assurance report that may have occurred Excluding IBD coun- depend on the practitioner’s judgement, including the assessment since the initial date of presentation on the Engen Website. 1. 2 Engen Scope 2 Indirect GHG Emissions 105 tons CO equivalent tries* 2 of the risks of material misstatement, whether due to fraud or error. Restriction of Liability Excluding IBD coun- In making those risk assessments we considered internal control 1. 3 Energy usage GJ tries* relevant to Engen’s preparation of the selected environmental information. A reasonable assurance engagement also includes: Our work has been undertaken to enable us to express an opinion 1. 4 Refinery energy usage Engen Refinery GJ on the selected environmental information to the Directors of Engen in accordance with the terms of our engagement, and for no other • Assessing the suitability in the circumstances of Engen’s 1. 5 Refinery Scope 1 Direct GHG Emissions Engen Refinery 105 tons CO equivalent 2 use of the criteria, as the basis for preparing the selected purpose. We do not accept or assume liability to any party other Excluding IBD coun- environmental information; than Engen, for our work, for this report, or for the opinion we have 1. 6 Water withdrawn m3 tries* • Evaluating the appropriateness of quantification methods reached.
3 and reporting policies and internal guidelines used, 1. 7 Refinery water withdrawn Engen Refinery m and the reasonableness of estimates made by Engen; and
1. 8 Refinery SOx emissions Engen Refinery Tons • Evaluating the overall presentation of the selected environmental information and whether the information presented in the Report is consistent with our findings, 1. 9 Refinery Total filterable Particulates Engen Refinery Tons overall knowledge and experience of environmental KPMG Services Proprietary Limited management and performance at Engen. * IBD countries refers to Engen’s downstream marketing operations in Africa other than South Africa, Lesotho and Swaziland.
Our work included the following evidence-gathering procedures: Directors Responsibilities • Interviewing management to evaluate the application of The Directors are responsible for the selection, preparation and presentation of the environmental information in accordance with the the GRI G4 Guidelines and to obtain an understanding of the control environment relative to the reported GRI G3.1 Guidelines. This responsibility includes the identification of stakeholders and stakeholder requirements and material issues, for environmental information; commitments with respect to environmental performance, and for the design, implementation and maintenance of internal control relevant to the preparation of the Report that is free from material misstatement, whether due to fraud or error. • Inspecting documentation to corroborate the statements Per PD Naidoo of management and senior executives in our interviews and discussions; Director Our Independence and Quality Control • Testing the processes and systems to generate, collate, Johannesburg We have complied with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants, aggregate, monitor and report the selected environmental information; which includes independence and other requirements founded on fundamental principles of integrity, objectivity, professional competence Date and due care, confidentiality and professional behaviour. • Inspecting supporting documentation and performing analytical procedures; and In accordance with International Standard on Quality Control 1, KPMG Services Proprietary Limited maintains a comprehensive system of • Performing site work at Engen Refinery (Durban). quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
76 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 77 78 Engen Limited Integrated Annual Report 2014 Engen Limited Integrated Annual Report 2014 79