A COMPANY BUILT BY PEOPLE THAT GROW OUR INDUSTRIES
WE ARE MADE BY
INTEGRATED ANNUAL REPORT 2015 page page page 06 09 30 ABOUT THIS REPORT ABOUT OHLTHAVER & LIST UNDER REVIEW
About this Integrated Annual Report Vision 2019, Group Portfolio Executive Chairman’s and Chief Directorate & Administration, Executive Officer’s Message, Group Executive Team, Operating Operational Review Structure, Materiality, Supply Chain
page page attached 56 90 USB SUSTAINABILITY REPORTS FINANCIAL STATEMENTS (also available on our website) Corporate Governance, Economic, Assurance Statement, Group Financial Position, Comprehensive Social and Environmental Value Added Statement, Seven Income, Changes in Equity, Cash Sustainability Year Review, Financial Review, Flows, Accounting Policies, Independent Auditor’s Report, Notes to the Annual Financial Report of the Directors, Group Statements, GRI Index Table Reference Information, Notice to Shareholders, Proxy Form 55
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WHAT WE DO – IS WHO WE ARE About this Report
ABOUT THIS INTEGRATED ANNUAL REPORT
The Ohlthaver & List Group (O&L) embraces Governance Code of Namibia (NamCode), based readers are invited to contact Gisela Botha, Ohlthaver & List’s risks and opportunities, Report and no significant departures have In identifying the issues and information to be its obligations as a corporate citizen towards on the Third Report of the King Commission on Group Company Secretary, on +264 61 2075111 as well as forward planning for sustainable been made from the scope, boundary or included in this Report, the Board considered the diverse spheres within which it operates, Corporate Governance in South Africa (hereafter Ext. 5313 by email at [email protected]. growth. It represents a milestone along the measurement methods applied in the Group’s the relative importance of each matter in terms including its shareholders, employees and the referred to as King III), it is intended to provide road to the integrated and targeted reporting Annual Report for 2014. of its known or potential effects on Ohlthaver environment. At the same time, we are aiming information on all sustainability-related aspects The scope and boundary of the Integrated that all stakeholders require in order to form & List’s ability to continue creating value for to build and sustain a corporate reputation of Ohlthaver & List’s activities. Furthermore, the Annual Report well-informed opinions of the Group and its Materiality all stakeholders. These matters were then and conditions that are conducive to profitable report is intended to provide an indication of This Integrated Annual Report covers the activities. It is the opinion of the Ohlthaver & List Board prioritised in terms of relevance to the intended businesses. This is apparent in the Group’s the company’s ability to continue to create such operations of the Ohlthaver & List Group in and senior management that the information users of the Report, so that non-pertinent Purpose: ‘Creating a future, enhancing life’, value for these stakeholders in the future. their entirety, including subsidiaries and joint Source data are gathered from the Group’s presented in this Integrated Annual Report is information could be set aside. We feel that which is inextricably linked to uplifting its ventures, in all markets in which these entities various operating divisions and are, to the the most relevant, or material, to the Group and this is in line with the reporting principles for communities and protecting their environments This report has been compiled with the operate. In this regard, an overview of the greatest extent possible, integrated so as to its various stakeholder groups. defining report content as defined by the GRI. in a sustainable way. assistance of GSA Campbell Consulting and Group is included in the Report, on pages 14-17. provide comparable performance data. is aligned with the principles of the GRI G4 Process for Identifying Content It is intended that the outcome of this process Guided by our Purpose, the Group strives to Reporting Standard (Core) of the Global The Integrated Annual Report is intended The Report includes disclosures on both In analysing the information to be included is an accurate and comprehensive Sustainability bring quality of life and wellbeing to people Reporting Initiative (GRI). This report, along with to provide all stakeholders with relevant financial and non-financial aspects of the Group. in the Integrated Annual Report, the Board Report, unburdened with the peripheral data to improve the socio-economic conditions of associated relevant information, and the GRI information regarding the value creation Financial disclosures correspond with those of and management considered two primary that tends to confuse rather than enlighten. citizens; to create conditions for everyone to Index, is also available on the Ohlthaver & List offered by the Group through its activities on the Company’s Annual Financial Statements questions: firstly, “Who is our reporting aimed Readers are welcome to request more detailed succeed, to continually pioneer and operate Website at www.ohlthaverlist.com an annual basis, as well as the economic, social for the 2015 financial year, which was compiled at” and secondly, “What decisions will they be information on any particular aspect of the at breakthrough levels, to build innovative and and environmental impacts arising from these in accordance with the requirements of the able to make based on our reporting”? Report. sustainable businesses and to generate long- In the preparation of this Integrated Annual activities. Operational activities are analysed Companies Act of Namibia. term profitability. Report, O&L has attempted to identify and within the context of the food production, In this context, it is the intention of Ohlthaver & Further information regarding Ohlthaver & report on the most significant sustainability- fishing, beverages, farming, retail trade, With regard to the availability of non-financial List that this Integrated Annual Report: List’s material issues and associated stakeholder This Integrated Annual Report provides related considerations and impacts arising from information technology, property leasing data, in instances where insufficient data exist • Informs and adds value for all stakeholders groups can be found in this Report, in the a detailed overview of the impacts of all the core activities of the Group, as well as all and development, marine engineering, steel to address various quantitative indicators with a valid interest in the Group; sections dealing with Materiality (page 25) and sustainability-related activities of the Ohlthaver significant internal and external stakeholder retailing and leisure and hospitality industries included in the GRI G4 Guidelines, the Report • Considers all issues that can impact on Stakeholder Engagement (page 23). & List Group (hereafter referred to as Ohlthaver groups with which the Group engages around that Group has interests in, as well as the focuses on relevant policies and practices that the Group’s ability to create value for these & List, the Group or the Company) and its these issues. broader macroeconomic climate in which the have been implemented within the Group and stakeholders; and affiliated companies, for the period 1 July Group operates. its subsidiaries - particularly those related to • Reports as comprehensively as possible on 2014 to 30 June 2015. In accordance with For additional information regarding the regulatory compliance in various areas. the known and potential impacts of these the recommendations of the Corporate Integrated Annual Report and its contents, The Integrated Annual Report also discusses This is the Group’s first GRI Integrated Annual issues for the Group and its stakeholders.
06 07 About Ohlthaver & List
ABOUT OHLTHAVER & LIST
Assurance the success of business and operating initiatives; WHO WE ARE The parent company of Olfitra is O&L Holdings Ohlthaver & List is confident that this report changes in the regulatory environment and OUR BUSINESS PROFILE (Proprietary) Limited and List Trust Company provides a comprehensive and balanced account other government action; fluctuations in (Proprietary) Limited, with the controlling of the company’s management of sustainability commodity prices and exchange rates; and As a truly African company employing 5 568 shareholder of the O&L Group being the Werner as well as its financial and ESG performance. The business and operational risk management. people in various sectors, the Ohlthaver & List List Trust. sustainability reporting principles and processes Group is rooted in and committed to, Africa employed by Ohlthaver & List are aligned with A discussion of the sustainability-related risks and all her peoples. The Group emerged from With annual revenues of over N$5 billion, O&L 5568 those of the GRI G4 Reporting Standard and and opportunities facing Ohlthaver & List is the early Ohlthaver & List Bank Kommission is a major contributor to state coffers and is this report has been subjected to a process included in the Corporate Governance section partnership between Hermann Ohlthaver and in the position of representing a significant of independent third-party assurance. The of this report, on page 56. Carl List in 1919; subsequently Ohlthaver & contributor to GDP in Namibia. Wherever it assurance statement can be found on page 90. List Finance and Trading Corporation Limited operates, this broad-based group is actively 15 (Olfitra) was established in Namibia on the engaged in uplifting the lives of its people, Forward-looking Statements Contact Details 13th of May 1923. The Group’s Headquarters is its consumers and society generally. We at COMPANIES While this Integrated Annual Report is intended O&L Group of Companies located in Windhoek, Namibia. O&L are relentless in our pursuit of creating as a retrospective review of Ohlthaver & List’s Alexander Forbes House a sustainable future for all and therefore Tanzania, lia, Bo ra tsw st a sustainability performance over its most 7th Floor, South Block Today, O&L is Namibia’s largest privately held passionately embrace our Purpose: ‘Creating u n A a , , y Z recently completed financial year, it also 23-33 Fidel Castro Street group of companies, with revenues contributing a future, enhancing life’ in everything we do n a a m
m b r i contains certain forward-looking statements Windhoek about 4% to GDP, business interests in food while actively pursuing our Vision, which is: a e , G
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08 09 About Ohlthaver & List
VISION 2019 BREAKTHROUGH ARCHITECTURE
PURPOSE CREATING A FUTURE, ENHANCING LIFE
VALUES
Let’s Talk | Let’s do it | Hooked on results | Naturally today for tomorrow | We grow people | We do the right thing right | We all serve
The most progressive and inspiring company
2019 VISION
N$2 billion EBIT | 4 000 additional employment opportunities | Employer of choice | 20% reduction in carbon footprint
2019 STRATEGIC AREAS OF FOCUS
Everyone purposefully Amazing experiences, Sustainable execution producing breakthrough enduring impact in everything everywhere
STRATEGIC OUTCOMES
Everyone is deeply connected to Consistent experiences, amazing Excellence in everything, purpose, lives the values and is relationships, lasting impact executed with care proud of what they do Purity inspired, reliable quality, Sustaining growth, ever-expanding, Everyone is successful, thriving impacting the whole securing the future and making things happen in breakthrough mode Always there, simple and easy, Bringing sustainability everywhere, the natural choice impacting the world Everyone is valued, recognised and appreciated for the Inspired by integrity, creating trust difference they make and confidence
010 11 About Ohlthaver & List
OUR VALUES
Let’s talk Open, honest, down-to-earth, from-the-heart communication
Let’s do it Deliver on tasks with speed and quality
Hooked on results Committed to delivering breakthrough outcomes
Naturally today for tomorrow Caring about the future, caring about everyone
We grow people Taking responsibility and providing opportunities for growth
We do the right thing right VISION 2019 Bringing thinking to everything
We all serve TO BE THE MOST Serving the purpose, owning the whole, everyone matters PROGRESSIVE AND INSPIRING COMPANY
12 13 About Ohlthaver & List
GROUP PORTFOLIO 1311 EMPLOYEES HANGANA SEAFOOD 822 EMPLOYEES 1 EMPLOYEE NAMIBIA BREWERIES BRANDTRIBE Hangana Seafood (Proprietary) 76 EMPLOYEES Limited, established in 1997, is Established in 1920, Namibia Established in 2012, Brandtribe BROLL NAMIBIA the operating company for the Breweries Limited (NBL) is among is a joint venture between O&L white hake quota holders, namely 221EMPLOYEES the frontrunners in the beverage (SA) and Techsys (CT). Brandtribe Broll and List Property Consortium Fisheries Limited and KRAATZ MARINE manufacturing sector in Namibia. has created and manages two Management (Namibia) Kuiseb Fish Products (Proprietary) The company leads the domestic digital platforms: the Brandtribe (Proprietary) Limited (Broll Limited. Hangana Seafood is Kraatz Marine was established in beer market and has a significant SMS gateway and the Brandtribe Namibia) is a strategic partnership 62 EMPLOYEES committed to a leadership role 1947 and provides engineering share of the premium beer e-CRM platform. The SMS gateway, between the O&L Group and the DIMENSION DATA NAMIBIA in the Namibian fishing industry and related services to the oil category in southern Africa. The only operational in Namibia, Broll Property Group of South and has a wet-fish fleet of eight and gas, miningand general total exports of NBL account 8 EMPLOYEES manages brand interactions Africa. It was established in 2003 Dimension Data Namibia vessels. industrial sectors. These services for more than half of the total with consumers via short codes. and Broll Namibia has been (Proprietary) Limited was include ship’s repair, rig repair, KRAATZ STEEL production output. Brewed Brandtribe is a multi-channel managing O&L’s Property Portfolio established in November 2006 as The company’s land-frozen fabrication, machining, welding and by choice according to the consumer optimisation platform. since then. O&L’s Property a business partnership between products are mainly exported to construction. Kraatz Steel operates from Walvis Reinheitsgebot of 1516, NBL beer It combines return on investment Portfolio, which provides mainly the O&L Group and Dimension 1EMPLOYEE Australia, France, Germany, Italy, Bay and has been engaged in enjoys an outstanding reputation and underlying data to provide prime retail and office space, Data Middle East and Africa. It has EROS AIR the Netherlands, Spain, the United industrial steel supplies in Namibia with regard to quality and purity, brands with a sustainable now exceeds the N$1.5 billion grown considerably since then States and the Southern African since 1995. The business supplies for which its brands have competitive advantage in the value mark. Properties included and is currently one of Namibia’s Eros Air (Proprietary) Limited was Development Community steel, steel-related products and earned international digital age. Brandtribe tracks the in the O&L Property Portfolio most successful information founded in 1978 and provides (SADC) region. non-ferrous metals to marine recognition. digital effectiveness of brands all in include the Wernhil Park Shopping technology (IT) solution providers. express corporate transport and engineering and construction one place, from push messaging Centre, Standard Bank Centre/ It services highly strategic charter flights for medical and companies, the mining sector and pay per click (PPC) advertising Town Square, Alexander Forbes Namibian clients, both within private purposes within southern (on land and offshore), fishing to consumer interactions, House/Carl List Mall, Fruit & Veg and outside the O&L Group Africa for the O&L Group and the factories/vessels, oil and allowing brands to quickly see City/Cashbuild complexand the and has a global footprint with general public. petroleum plants and what is working and what is Old Breweries Building (which are great penetration in the general public. not and most importantly, to all located in Windhoek) as well as Africa. identify why. the Pick n Pay Centre in Walvis Bay.
14 15 About Ohlthaver & List
687EMPLOYEES 1970 NAMIBIA DAIRIES EMPLOYEES MODEL PICK N PAY Namibia Dairies (Proprietary) Limited was created in 1997, Leading Namibian retailer Model 9EMPLOYEES following the merger between Pick n Pay is the direct descendant WEATHERMEN & CO Rietfontein Dairies and Bonmilk. 2 EMPLOYEES of Model Supermarkets. For over Since then it has grown into O&L ENERGY 194 EMPLOYEES 30 years, Model Supermarkets A joint venture between O&L and 62 EMPLOYEES Namibia’s primary dairy, juice and O&L LEISURE traded as Model Woolworths a leading Cape Town advertising WINDHOEK SCHLACHTEREI water manufacturing company, O&L Energy (Proprietary) Limited until the expiry of the associated agency, The Jupiter Drawing 74 EMPLOYEES with a total annual production focuses on energy management. The O&L Leisure Portfolio is made franchise agreement in 1997. A Room, has now grown into a fully- Windhoek Schlachterei (Proprietary) O&L CENTRE in excess of 38 million litres. The It also develops, designs, procures up of the 106-room Mokuti Etosha new franchise agreement was fledged agency in the Namibian Limited, acquired in the 1970s, company is the country’s market and implements renewable Lodge; the 46-room Midgard then entered into with Pick n advertising realm. Weathermen is known for its processed meat The Ohlthaver & List Centre leader, with a significant market energy projects, especially Country Estate; the boutique, 16- Pay South Africa and the first & Co. is a below-, above-, on-, products crafted in the European (Proprietary) Limited assumes share in all its product categories. large-scale solar power, solar room Chobe Water Villas lodge; Model Pick n Pay supermarket through- and beyond-the-line continental tradition. The the functions of investor and It also operates one of the most water heating and bioenergy and the 125-room, 4-star Strand was subsequently inaugurated agency, born and raised in the company is the second-largest shared services hub. It provides modern dairy farms in the world, systems. O&L Energy and its Hotel Swakopmund. in Namibia. To build its brand, digital age. It aims to be the main processed meat producer in and facilitates human capital, the !Aimab Superfarm, which is international partners offer the Model Pick n Pay has embarked navigating vehicle for brands in a the country, with a local market finance, corporate relations, located in Mariental in the Hardap highest German engineering on a strategy to extend its world where choices are vast and share of over 35%. Windhoek payroll, marketing, secretarial, risk Region, southern Namibia. and efficiency standards and the network of franchise stores consumer needs, competition, Schlachterei was fully integrated and SAP business management best workmanship and reliability. throughout Namibia with 19 the economy and the into Namibia Dairies in 2010 software support services to the These result in maximum energy stores countrywide at present. environment for brands are ever- to consolidate and optimise O&L Group. saving results, as well as important The business attributes its success changing. They see themselves as its manufacturing, sales and contributions to the improvement to the constant delivery of quality, the weathermen: the rainmakers distribution, marketing and of our environment. variety, customer service and for both their clients and the administrative functions on its value for money. advertising industry as journey to becoming a a whole. sustainable operation.
16 17 About Ohlthaver & List
DIRECTORATE AND ADMINISTRATION
EXECUTIVE DIRECTORS BOARD COMMITEES ADMINISTRATION
S Thieme G Hanke G Shilongo Audit Committee Company Registration Number 331 Executive Chairman Group Financial Director Chief Corporate Relations Officer HH Müseler, Chairman (Incorporated in Namibia) Appointed to the Board in 2001 Appointed to the Board on 16 November Appointed to the Board on 9 July 2014 EP Shiimi Elected Chairman of the Board on 17 April 2004 P Grüttemeyer Secretary 2002 Ohlthaver & List Centre (Pty) Ltd Remuneration Committee Postal address: P Grüttemeyer B Mukuahima EP Shiimi, Chairman PO Box 16 Chief Executive Officer Group Human Capital Director P Grüttemeyer Windhoek Appointed to the Board on 1 October 2003 Appointed to the Board on 1 May 2006 Business address and registered office 7th floor – South Block Alexander Forbes House 23-33 Fidel Castro Street NON-EXECUTIVE DIRECTORS Windhoek
UM Stritter E Ender (German) Reverend WS Hanse Auditors Vice-Chairman Appointed to the Board on 23 June 2008 Appointed to the Board on 2 April 2012 Deloitte & Touche Appointed to the Board in 1994 Registered Accountants and Auditors Elected Vice-Chairman on 17 April 2002 Chartered Accountants (Namibia) PO Box 47 C-L List HH Müseler Windhoek Appointed to the Board in 1980 Appointed to the Board on 20 March 2014 Attorneys EP Shiimi Governor LV McLeod-Katjirua Engling, Stritter & Partners Appointed to the Board on 1 August 2007 Appointed to the Board on 2 April 2012 PO Box 43 Windhoek
18 19 About Ohlthaver & List
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10 18 21 GROUP EXECUTIVE TEAM 7 14
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1 Sven Thieme, Executive Chairman 2 Mike Reilly, MD: Brandtribe 3 Martin Theron, MD: O&L Centre 4 Sonja Bartsch, MD: Eros Air 5 Dirk van Niekerk, MD: Kraatz Marine & Kraatz Steel 6 Berthold Mukuahima, Group Human Capital Director 7 Bernd Walbaum, MD: O&L Energy 8 Eike Kraft, MD: O&L Organic Energy 9 Terence Makari, MD: O&L Leisure 10 Gideon Shilongo, Chief Corporate Relations Officer 11 Marco Wenk, MD: Broll Namibia 12 John Fitzgerald, Global Marketing Director 13 Hendrik van der Westhuizen, MD: Namibia Breweries 14 Günther Hanke, Group Financial Director 15 Peter Grüttemeyer, Chief Executive Officer 16 Leon Crous, MD: Weathermen & Co 17 Rowan Kleintjies, MD: Dimension Data 18 Herman Theron, MD: Hangana Seafood 19 Norbert Wurm, MD: Model Pick n Pay 20 Günther Ling, MD: Namibia Dairies 21 Patricia Hoeksema, Group Manager: Corporate Relations
20 21 About Ohlthaver & List
OUR OPERATING STRUCTURE Procedures for appointment are formal, The Board of Directors is chaired by an Executive CODE OF CONDUCT AND BUSINESS ETHICS that proactively engaging with our stakeholders The process of identifying our key stakeholders transparent and for the full Board’s Chairperson; due to the vast experience and in- POLICY is key to creating value. Our approach to begins by gathering important members of During the period under review, the Board consideration although shareholders are depth knowledge he has of O&L businesses, stakeholder engagement is determined by our organisation − people who understand the comprised five Executive Directors and seven ultimately responsible for the composition of the incumbent has retained the position of A formal Code of Ethics and Business Conduct the principles of influence and dependency on business and its impacts. These individuals are Non-executive Directors. The names and the Board. The procedures involve evaluating Chairman over the reporting period. is in place to set out standards of integrity in the Group. A stakeholder-inclusive approach then invited to identify principal stakeholders appointment dates of each of the Directors are the existing balance of skills and experience dealing with suppliers, customers, business is followed by the Board to ensure that and their suggestions are then discussed in set out on page 18. within the Group and include a process of An evaluation of the independence of Non- partners, stakeholders, government and appropriate dialogue between the Company order that a stakeholder identification matrix assessing the Group’s needs. executive Directors resulted in the following society generally. Every employee is required to and stakeholders is maintained. We realise that can be created to plot the impacts of the The roles of the Chairperson and the Chief assessment: subscribe to the Code and strict adherence to it all our stakeholders must be treated equitably business on the various stakeholder groups Executive Officer are separate in order to A formal Induction Framework has been NON-EXECUTIVE DIRECTORS | INDEPENDENCE is a condition of employment. and therefore everyone strives to achieve an and vice versa. In this way we can identify the ensure a balance of power and authority, such adopted through the Director’s Governance UM Stritter Independent appropriate balance between the interests of key stakeholders for our business and develop that no one individual has unrestricted powers Policy and is being implemented. This C-L List Shareholder representative Compliance with the Code is monitored and all our stakeholders in the best interest of the engagement actions appropriately. of decision-making. The Board is responsible for serves to familiarise incoming Directors EP Shiimi Shareholder representative employees are encouraged to report any Company. the strategic direction of the Group: matters with the Company’s operations, its business E Ender Independent suspected contravention of the Code or reserved for the Board and its committees environment, strategies, Director’s duties and HH Müseler Independent perceived unethical behaviour. are defined to ensure that the Directors retain the sustainability issues relevant to its business. Governer McLeod O&L STAKEHOLDER MATRIX full and effective control over the Group -Katjirua Shareholder representative The Group also introduced a Tip-Offs
with specific regard to strategic, financial, A Board Evaluation Programme has been Reverend Hanse Shareholder representative Anonymous line whereby employees, suppliers HIGH Identified stakeholder groups: D organisational and compliance matters. developed and is being implemented through and customers can anonymously report (key stakeholders marked *) All members of the Board have a fiduciary the Company Secretary and the Audit The Board acknowledges that the majority of unethical activities. This line is operated by a A A* Employees / unions B responsibility to represent the best interests Committee Chairman. Non-executive Directors are not independent due company operating independently of O&L. G B* Shareholders H of the Group and all of its stakeholders. All to the O&L Group of Companies being majority E C Equity owners Directors have the appropriate expertise to Generally, Directors have no fixed term of owned by two entities (Werner List Trust and O&L STAKEHOLDER ENGAGEMENT D* Consumers / customers I fulfil their duties and enjoy significant influence appointment but retire by rotation. At each of Holdings). C E* Government / regulators at meetings. This ensures a balance of authority the Group’s Annual General Meetings, at least At O&L, we recognise that engaging with our F Pension fund F and precludes any one Director from exercising one third of the Directors retire, these being As this Integrated Annual Report is prepared for a stakeholders is very important as this will G* Suppliers (including monopolies) unfettered decision-making. the Directors who have served the longest since group of companies, there are several boards of impact our business directly and indirectly. Our H* Civil society / NGOs Importance of company to the stakeholder group their last election. If they are available, they are directors at various subsidiaries. The governance Purpose: ‘Creating a future, enhancing life’ LOW I Competitors LOW HIGH considered for reappointment. framework is determined by Olfitra and is then is directed towards stakeholders within and Importance of the stakeholder group driven down to each and every subsidiary. beyond our business operations. We recognise to the company
22 23 About Ohlthaver & List
As a critical stakeholder group, employees from the leadership teams. We hold workplace As such, the O&L Group actively and regularly delivering against our Strategic Area of Focus: relations through regular, direct engagement, most important issues, in the reporting period enjoy regular and constant interaction through forums within the different functions on a engages with government and regulatory bodies ‘Amazing relationships, enduring impact’, we by which means we continuously strive to work we conducted a Materiality Analysis, which our various employee engagement initiatives. weekly or bi-weekly basis; this is done in order through telephone calls, e-mails and face-to- pride ourselves in being a leader of positive together in fostering healthy relations that are examined the potential impact of specific Our human capital departments actively to keep employees and unions informed on face meetings. Other forms of engagement change, not only within our organisation, beneficial to all parties involved. sustainability issues from both a stakeholder engage our employees through face-to-face issues relevant to the critical role that they include the submission of compliance returns; but beyond. This is evidenced through our and a company perspective. communication, social media, e-mails, road play in relation to business performance and dialogue to understand and support the commitment to various organisations (such In addition to our proactive communication with shows, surveys, intranet, social events, training to create a platform for addressing together strategy of government (Vision 2030); talks to as Team Namibia and the Namibia Chamber of all stakeholders through various channels ranging A materiality workshop process was used to sessions, performance reviews, leadership any related issues. At these forums, our staff remain aligned with the regulations set by the Commerce and Industry) and industry bodies from traditional media to digital platforms, O&L identify issues that were then ranked in terms conferences, staff meetings and internal members have the opportunity to discuss various regulators; and adherence to these (such as the Self-regulating Alcohol Industry also engages with its shareholders through of importance. We assembled a group of publications in order to align employees with the matters of concern to them − thus ensuring regulations by maintaining open, honest and Forum and the Recycle Namibia Forum) in the quarterly List Trust, O&L Holdings and appropriate executive stakeholders for the Group’s strategies, Vision and Purpose, as well as we continue to live up to our ‘Let’s Talk’ Value. transparent relationships. The Group’s sound which we play a significant role through our Olfitra board meetings, as well as its AGM (and Group − people who have knowledge of the to achieve our strategic goal of remaining the If an employee is not comfortable with airing relationship with government is evident in our leadership and active participation. on other occasions when necessary). Namibia organisation and of the issues that impact and employer of choice in our fields of operation. his or her views at these forums, they can commitment and support to its Growth at Home Breweries Limited also has an AGM and various influence stakeholders. Each issue was then In caring for its employees, the Group continues contact the Tip-offs Anonymous hotline. The strategy through our use of local suppliers and In order to remain competitive and adjust our communication channels through which it discussed, agreed upon and plotted on a matrix to invest in training and development through hotline is administrated by an independent investment in job creation; payment of taxation product and service offerings to meet the interacts with shareholders. The Group’s financial that showed ‘level of concern’ and ‘affect’ on talent programmes and other leadership service provider, namely Deloitte & Touche on time and as per legislation; and decreasing ever-changing needs of our customers and results are also available on the O&L website and its two axes. The outcome of this materiality development initiatives (such as the O&L World). (South Africa). Use of the hotline is encouraged our carbon footprint by continuously seeking consumers, the O&L Group actively engages are shared widely through various stakeholder process was used to ensure that the most The results of our employee engagement by communication of our Value: ‘We do the more sustainable energy sources, to name but these stakeholders through direct dialogue, engagements. In this way, we keep shareholders relevant and material indicators were included initiatives − which are not just the prerogative of right things right’. The Audit Committee is a few examples. social media and marketing and advertising informed on our aggressive growth journey and in this Sustainability Report. the human capital departments but are owned responsible for embedding a culture of high activities, as well as through market research seek their approval for the major investment by all the leadership throughout the Group − ethical standards. As a caring corporate citizen, we are not only and perception surveys, to name but a few. This decisions required. are evidenced by the fact that O&L has won the concerned with managing our direct and is done on a daily, weekly and quarterly basis (as Deloitte Best Company To Work For accolade for All Directors may seek independent advice at indirect impacts on the spheres we operate required) in order to nurture the relationships MATERIALITY PROCESS four consecutive years. Further testimony to our the Company’s expense under appropriate within, but also in regularly engaging with that we have established and seek these success in this regard is the high staff morale circumstances in the discharge of their communities through various means − be it stakeholders’ continuous support to secure our Ohlthaver & List faces an array of issues related enjoyed throughout the Group. responsibilities. Directors have access to the our commitment to continuously adapting to long-term business growth by sustaining and to the operation of our businesses and expertise of the Company Secretary at all times. meet the needs of our customers, or through improving employment levels. how they impact society. To Employees have several channels available our ongoing corporate social responsibility and ensure that we are to them to raise their concerns and make Engagement with stakeholders beyond our social investment initiatives − activities that take Our commitment to sustainability is also focused on recommendations, or to obtain feedback organisation is also a priority for the O&L Group. place on a regular basis wherever we operate. In evidenced in our management of supplier the
24 25 About Ohlthaver & List
Key Material Aspects Identified in the Process the cost of doing business. Major impacts The effectiveness of our management approach MEMBERSHIPS AND ASSOCIATIONS SUPPLY CHAIN FRAMEWORK • Critical Information Systems relevant to the • Regulatory environment (external to are anticipated on our brewing, dairy to these material aspects has not been included management of the supply chain are organisation): and retail operations due to the upcoming in this report due to uncertainty about the Ohlthaver & List is a member of a number of Within the various operating companies (OpCos) maintained by the O&L OpCos. These - Training levies, environmental levies, export environmental legislation. The regulatory accuracy of our research. The Group intends, industry associations and forums related to the of the O&L Group of Companies, supply chain might include enterprise resource planning duties and many other pieces of legislation environment of the dairy industry also has a however, to include this information in next activities of the Group’s companies. management (SCM) encompasses the planning (ERP)/material requirements planning (MRP) impact all of our operating companies significant impact on our operations. year’s Sustainability Report. • Team Namibia and management of all activities relating to solutions; forecasting and planning tools (OpCos) in some manner, whether on a • Growth and expansion (external and internal • Namibia Chamber of Commerce and sourcing and procurement, conversion of raw such as Futurmaster and Forecast Pro; financial or compliance level. to organisation) The Group subscribes to the following externally Industry (NCCI) materials into finished goods and logistics. warehouse management systems; and • Water (external to organisation): - Our fishing, brewing, dairy and retail developed economic, environmental and social • Namibian Employers’ Federation (NEF) Importantly, it also includes coordination and routeing and scheduling systems etc. - Drought is a national crisis that impacts all operations are all impacted by growth and charters and principles: • Namibian Manufacturers Association (NMA) collaboration with channel partners: suppliers, of our operations, but especially the expansion issues. • Companies Act of Namibia • Namibia Environmental & Wildlife Society intermediaries, third-party service providers and Should service providers be able to offer beer and soft drink and dairy companies. • The Corporate Governance Code of Namibia (NEWS) customers. In essence, SCM integrates supply their own solutions, the ownership of the • Energy (internal and external to organisation): (NamCode) • Dairy Producers’ Association (DPA) and demand management within and across data must vest within the O&L OpCos’ O&L MATERIALITY MATRIX - All of our operations are impacted by • Namibia Hake Fishing Association companies and their stakeholders. Within the to enable flexibility to engage the uncertain electricity supplies in Namibia • Hospitality Association of Namibia (HAN) O&L Group of Companies, SCM is seen as an into regular request for quotation HIGH B and South Africa and the probability of load C A Regulatory environment • Self-regulating Alcohol Industry forum (SAIF) integrating function with primary responsibility (RFQ)/request for information (RFI) or tender shedding. B Water for linking the major business functions and processes. A • Skills - shortage and retention (internal to E C Energy – carbon footprint AWARDS RECEIVED business processes within the relevant OpCos D F organisation): G H D Skills – shortage and retention and across their relevant value chains. The • Use of service providers: in order to manage - We are experiencing shortages in certain E Cost of doing business (incl. taxes, levies, The O&L Group of Companies was named management of the supply chain includes all of supply chains effectively and efficiently, the skill sets that impact all operations on a general excise duties etc) the overall SADC region winner in the Large the logistics management activities noted above use of specialised service providers is level (i.e., in technical, IT, risk management, F Foreign competition / market distortion Business category in the 2011, 2012, 2013 as well as manufacturing operations and it drives supported. The identification of potential and logistics areas) while a lack of brewers, G Raw material impacts and 2014 Deloitte Best Company To Work For coordination of processes and activities with and service providers lies at the discretion of the people with specific dairy-related skills H Growth and expansion (limitations, including surveys. The O&L Group further holds the No.1 across marketing, sales, product design, finance relevant OpCo but should be guided by the
and experienced skippers affect our of Companies Importance to O&L Group LOW disposable income) position as the Deloitte Best Company to Work and information technology. following criteria: beer, dairy and fishing sectors respectively. LOW HIGH For in Namibia in the Large Business category - Cost efficiency; Importance to stakeholders • Cost of doing business (incl. taxes, levies, (2012, 2013 and 2014). In line with O&L’s value system and strategic - Innovation; excise duties etc.) (external to organisation): intent, the management of the supply chain is to - Sustainability (focused on the sustainable - All of our operations are impacted to a be conducted under the following framework: use of natural, human and financial greater or lesser extent where relevant, by resources);
26 27 About Ohlthaver & List
- “Local content” and empowerment of Material Impacts on the Supply Chain Our supply chain is also dependant on growth, SMEs; and A number of the Group’s material aspects with limitations to expansion having a material - Reliability and anticipated service levels. impact our supply chain. The regulatory impact. Quotas, distance from the market and environment adds costs to our material and market saturation in Europe limit the growth of OpCos are obliged to manage service service providers that are then passed on to our fisheries. The local market for our breweries providers by means of signed contracts and O&L and ultimately the consumer. The whole of is limited and dependant on national growth, service level agreements, as well as regular our supply chain is impacted by the energy crisis thus requiring a focus on South Africa and other and frequent service reviews. currently affecting Namibia and South Africa as export markets. Existing production capacities well as the national general skills shortage. and low-cost imported dairy products (which Contractual engagements with service erode local market share) limit the growth of providers should be limited to three years, Upcoming environmental levies on non- our dairies and threaten local production. The thereafter the provision of services should returnable plastic bags and containers are extremely competitive, limited and saturated be tendered/offered in the open market. expected to impact the cost of packaging local market limits the growth of our retail material for our suppliers; the dairy regulatory operations, making us dependant on national • The management of supply chain functions environment and the cost of electricity will growth. should be conducted in line with the ISO also have their impacts. The increase in cost 9001:2008 quality standard. of sewerage and effluent treatment only impacts our supply chain at the local level but some of our suppliers are reliant on single suppliers, including parastatals, resulting in non-competitive pricing and a monopolistic environment that also increases the cost of doing business.
28 29 JOINT MESSAGE FROM THE EXECUTIVE CHAIRMAN AND THE CEO
Developing countries faced a series of tough Commodity prices and foreign investment are economic wellbeing have created an optimistic challenges in 2015, including the looming expected to provide less economic support; atmosphere of hope, while on the economic prospect of higher borrowing costs in a new era subdued demand and economic activity in front we have experienced less turmoil than in of low prices for oil and other key commodities. emerging markets will weigh on the region’s previous years. According to the World Bank’s 2015 Global growth as well.* Economic Prospects report, this will result in The last financial year has seen a great a fourth consecutive year of disappointing In maintaining our track record of consistent performance by the O&L Group with special economic growth as developing countries have economic growth, the emergence of mention given to our Property Portfolio, Broll been projected to grow by 4.4% in 2015, with a global value chains (GVCs) is perceived as an Namibia; Namibia Breweries Limited (NBL); and likely rise to 5.2% in 2016 and 5.4% in 2017. opportunity for Namibia - especially in view of Namibia Dairies, which recovered significantly immediately forthcoming but we believe that despite the import they will do well in the coming years. Equally, some Although developing countries were an engine restrictions being great improvements will be offset by investment of global growth following the financial crisis, lifted. All in all we in the forthcoming year, thereafter the they now face a more difficult economic showed good overall situation will start to reverse, namely with the environment. The World Bank believes that growth in these Leisure Portfolio becoming profitable within countries that invest in people’s education and sectors, which we two to three years. health, improve the business environment and our abundant natural resources - as there is an believe will accelerate significantly in the years create jobs through upgrades in infrastructure urgent need to implement innovative measures to come. The fishing industry was impacted by the future looks bright. As employer of choice, will emerge much stronger in the years ahead. to enable the country to make the most of international fish prices as well as diminished we have made significant progress in the latter These kinds of investments will help hundreds of her comparative and competitive advantages, When taking financial performance into fishing quotas. Other principal challenges half of the financial year by increasing our total millions of people lift themselves out of poverty.* including policies to reduce the high cost of consideration however, we must always to come will include the successful opening number of employees to 5,568. In addition to its doing business, removing various bottlenecks remember that a portfolio of investments such of Chobe Water Villas and the Strand Hotel contributions to the economy and to enhancing The International Monetary Fund also projects in infrastructure and investing in skills as part of as that of the O&L Group is always impacted by Swakopmund by our operating company the lives of its people through its role as an sub-Saharan Africa’s economic growth to a broader diversification strategy. very well-performing businesses but also those O&L Leisure, while a further test will be the employer of choice, O&L has also continued slow down in 2015 to below the 4.4% annual that go through a development phase. A great successful turnaround of Pick n Pay in order to enhance the lives of the communities in is why it not only manages its average growth rate of the past two decades. The past financial year marks 12 months of example here is the Pick n Pay portfolio, which to resume previous profit levels with both new which we operate through our Corporate environmental and social impacts and invests Slower expansion of economic activity largely major transformations, including changes to embarked on a major investment programme and revamped stores. Social Investment Portfolio which supports, heavily in mitigating its effects on externalities, reflects the impact of the fall in oil prices and the political environment which have been very in building new stores and revamping existing inter alia, health, education and environmental but also continues to contribute significantly to other commodities on the region’s economies, positive indeed. Many initiatives undertaken stores, that will continue into the new year. Although the above factors have had an impact protection. O&L embraces its obligations as a enhancing the lives of the people within local even though net oil importers would see gains. by government to improve the socio- The return on these stores has not been on the return for shareholders, we believe that responsible and caring corporate citizen - which communities.
30 31 On the external front, the rise in interest rates Chairman and CEO, responsible for the leadership On behalf of the Board of Directors, we we have experienced will continue although we of the Board and for fostering a culture of would like to extend our heartfelt gratitude are confident that the increase will not be as openness and constructive debate that allows to all our employees, shareholders, steep as was experienced in the past. There for all views to be heard, we are pleased that the investors, the Government of the Republic is also a great opportunity to get the mass year under review indicated Board members’ of Namibia, our business partners, housing initiative back on track with the satisfaction of the positive ethical tone of the associates, customers and consumers for appropriate governance structures in place. Company and our approach - which is more the remarkable contribution they have focused on creating a value-based culture as made in 2015 towards our Purpose, Vision New ventures are envisaged through our opposed to a compliance-driven one. and Objectives. May 2016 be a year of great Energy initiative as well as other potential success! new undertakings. We are in the process of further enhancing our human capital by We are more than confident that O&L will have moving away from key performance indicator a great 2016. The number of projects which are (KPI) management to breakthrough stand in infancy can only grow and start contributing management – which is a forward-looking to the bottom line. Equally, changes in how Sven Thieme Peter Grüttemeyer approach, not a retrospective one. Major product we will manage performance management Executive Chairman Chief Executive Officer innovations and site renovations are underway in the future, coupled with sound leadership and many processes have been further interventions, can only contribute significantly streamlined. All of this, we believe, is building to the bottom line too. Overall, we believe that the foundation for our 2019 Breakthrough Plan. the foundation of the earnings before interest and tax (EBIT) trajectory projected to 2019 will be Good governance remains the foundation seen for the first time. upon which our Board and committee structure is based. While the Board empowers management to execute O&L’s strategies and holds it accountable for delivering against them, the Board also needs to provide responsible leadership to our leadership team that enables it to achieve a sustainable economic, social and environmental performance. As Executive * Sources: World Bank’s 2015 Global Economic Prospects report and International Monetary Fund
32 33 OPERATIONAL REVIEW
BEER AND SOFT DRINKS taste, offering consumers an exotic alternative to contribution to the local economy and helps with important facts to promote the two existing Vigo flavours. to show consumers how they can support the the responsible use of alcohol in Namibia Breweries Limited economic and social development of our nation our society. A new look for the McKane tonic and soda water through the single purchase of a local product. During 2014 – 2015, Namibia Breweries Limited variants was unveiled in a 330ml slender can, Through continuous innovation (NBL) delivered yet another commendable aimed at creating renewed interest in consumers NBL’s Employee Engagement and and sustainable operations, NBL financial performance. Revenue grew by for this high-quality NBL mixer range. Communications initiatives are designed to aims to continue to produce 5% from the previous financial year to N$2 ensure that employees are committed to the the quality consumers have 434 million for the period under review. In The introduction of the 330ml Windhoek organisation’s goals and values, motivated come to know and love and comparison with the previous financial year, Draught can in Mozambique was motivated by to contribute to NBL’s success and are able at overcome the challenges operating profit for the year ending 30 June customers’ preference for smaller serving sizes the same time to enhance their own sense facing our industry. We are 2015 increased by 12.2% to N$507 million. NBL and will provide customers and consumers alike of wellbeing. Employee engagement and confident that the next exceeded total budgeted volumes by 5%; this with more choice in this premium offering. communications were accomplished through financial year will deliver was mainly driven by an increase in domestic the continuation of successful and thriving further volume growth beer sales and volumes supplied to our joint Windhoek Draught also saw the launch of the platforms such as open forum meetings; as we will continue venture, DHN Drinks in South Africa. 360° marketing communication campaign ‘For business engagement forums; leadership/ to build sustainable Real’, which was aired across the SADC region. shop steward meetings; union leadership consumer confidence Our brands are enjoyed around the globe. We The brand also saw a renovation of its primary, engagement forums and the Affirmative and thus prompt currently export worldwide to countries such as secondary and tertiary packaging to maintain Action Consultative Committee meetings. Our renewed brand the United Kingdom, Germany and Australia as its relevance to its target consumers. Windhoek Mwenyopaleka Value Programme continued interest. well as to African countries, including Tanzania, Draught hosted the Nigerian R&B duo P-Square through various initiatives such as the Value Star Botswana, Zambia, Mozambique, Zimbabwe and for their first appearance on Namibian soil. Programme, the Mwenyopaleka Road Show and Swaziland. the monthly NBL newsletter. The Team Namibia product endorsement was In its effort to staying true to the innovative spirit rolled out across back labels of the Windhoek As an industry leader, NBL plays a leading role of the Vigo brand and to reinforcing brand affinity, Lager, Windhoek Draught and Tafel Lager in communicating the ‘responsible drinking’ Vigo Kiwano was launched by NBL to Namibian brands to celebrate our national pride and message and tackling alcohol abuse. NBL has customers and consumers in non-returnable NBL’s commitment to Namibia’s growth as a made significant investments over the years bottles and cans in June 2015 as the third variant in nation. The Team Namibia logo featured on through alcohol harm-reduction programmes, the range. This product has a uniquely refreshing Namibia Breweries’ products highlights our such as DRINKiQ, which aim to equip people
34 35 FRESH PRODUCE
Namibia Dairies (Proprietary) Limited
The vision of Namibia Dairies is to be recognised as a vertically integrated, independent dairy servicing the value chain from farm to fridge. food and employment security. Unfortunately During the year under review, Namibia Dairies these quantitative measurements were put focused on four critical success factors to aside by a court decision early into the financial achieve its strategic initiatives and business year under review. goals: - Financial stability; Despite increasing pressure on manufacturing The continued focus on the QDVP4 (quality, - Sustainable sources of growth; costs at the dairy and meat processing plants, distribution, visibility, price, promotion, - Service excellence; and as well as increasing feeding costs at the !Aimab persuasion and partnerships) Sales Excellence - Our people. Superfarm, total operations resulted in an Programme ensured benefits such as high- operating profit of N$48 million in the 2015 quality sales execution, improved sales Namibia Dairies, including processed meat financial year. This reflects a great financial performance, improved merchandising sales from Windhoek Schlachterei, reported turnaround when compared to the breakeven standards and greater consumer acceptance revenue of N$588 million for the year under situation back in the 2013 financial year. This and recognition. review, compared to N$497 million during the N$48 million includes a gain of N$7 million from 2014 financial year. The year-on-year increase the sale of the Aqua Splash brand. The !Aimab Superfarm now houses 1,420 cows All technical quality audits − comprising in turnover of 18% is due to increased selling in milk. The herd comprises just over 3,000 regulatory, supplier and compliance audits − Windhoek Schlachterei (Proprietary) prices as well as increased local demand gained The continued success of the Nammilk and animals and produces 65% of Namibia Dairies’ were passed. This confirms that the quality Limited by government’s support of local industry. On 16 Rietfontein trademarks resulted in good sales raw milk requirements, which meets 50% of management and food-safety systems at October 2013, the Ministry of Trade and Industry volume growth for a number of our products. Namibia’s fresh and UHT milk demand. The high Namibia Dairies are of good standard. We In its sixth year under the wing of Namibia Dairies, implemented quantitative measurements on Like-for-like sales volumes cost of production, led by very high feeding have also further optimised our systems Windhoek Schlachterei again showed a solid milk and other dairy products imported into in Namibia grew by 9% costs, remains the biggest challenge to the and processes to enhance effectiveness performance and is contributing positively to previous reporting period, driven by a strong Namibia, in line with the government’s ‘Growth on the previous reporting !Aimab Superfarm and is the main reason that and efficiency and will continue to drive our the operating profit of Namibia Dairies. Like-for- increase in our proudly African and promising at Home’ strategy to promote both Namibian period. it remains in a marginal operating loss position. continuous improvement philosophy. like sales volumes in Namibia grew by 14% on the ‘Proudly Namibian’ King Polony brand.
36 37 FISHING Development of properties: • Conducting an environmental impact Hangana Seafood (Proprietary) Limited assessment (EIA) to build a new concrete jetty of Phase 1 of the Service Hub Development. Hangana continues to aim towards being ‘The most progressive and inspiring company’ by Own freezer vessel operations: 2019 as well as becoming a world-class seafood • Investigating the viability of purchasing our company. own freezer trawlers or jointly owning freezer trawlers with the other The strategic focus areas for our 2019 Vision are: joint venture parties.
Increased focus on current business/system Value Adding: improvements, i.e: • In the process of preparing feasibility studies rates, market challenges and a significant • Installing new-design trawl doors and nets on exploring coating and crumbing options; and reduction in the fillet price due to oversupply vessels; • In the process of appointing a Food in the market by the South Africa industry. • Optimising the implementation of the TPM Technologist to develop new products Operating profit decreased from N$57.7 million (Total Productive Management) system; to N$42.5 million (-26.3%), mainly as a result • Optimal utilisation of Innova System Aquaculture: of an increase in fuel prices, high labour costs, (integrated production software system); • Investigating a possible aqua farming joint unexpected vessel breakdowns and higher and venture. utility costs, amongst other factors. • Market diversification Even though it was a challenging year for As part of our commitment and responsibility Implementation of trading strategy: Hangana (as well as for the fishing industry towards our Purpose: ‘Creating a future, • Registration of a Hangana Branch in SA; generally), our concentrated focus on strategic enhancing life’ and creating an additional 4,000 • Appointment of a Commercial Manager in areas resulted in a respectable turnover and employment opportunities by 2019, Hangana SA; and operating profit. Turnover declined from has started exploring other opportunities and • Development and implementation of a Global N$502.1 million to N$443.8 million (-11.6%) possible joint ventures in various aquaculture Trading Strategy over the reporting period, mainly as a result fields that could potentially improve the social of a decrease in available raw material due to welfare of communities within Namibia by quota reductions, fluctuations in exchange creating jobs and other business opportunities.
38 39 The following initiatives have also contributed • Building on and improving the vision and Hangana will continue to invest in the industry to the sustainability of the company: cooperative spirit of our 1,292 employees. while focusing on value adding, innovation and • Maintaining a fully integrated Quality further job creation. • Continuous investment in fleet Management System including Hazard efficiencies, such as new trawl doors and Analysis and Critical Control Points (HACCP), new net designs. ISO 22000 and British Retail Accreditation. • Upgrading our factory operating systems; • Building a “preferred customer” base with improving production efficiencies, flow of the emphasis on market diversification. raw material and stock control. • Continually focusing on product quality • Implementing Total Productive and customer service. Manufacturing (TPM), which will focus on the • Improving productivity by optimising our following four pillars: teamwork, continuous relationship with our employees through business improvement; visual management communication and incentives. (measuring performance target through • Introducing various operational excellence visual means); and 5S (a process developed initiatives to further reduce operational costs. to establish basic discipline and order in the • Working towards achieving world-class in work place). The TPM system will also grow quality in everything we do. and develop our own employees through Train the Trainer programmes, which will result in all of our employees receiving training inputs over the next 18 months.
40 41 Under Review
in customer counts (3%) and units sold (5%). initial difficulties it is now showing improving The highest growth rates achieved were in the turnover and profitability trends. In addition, the northern regions, at over 30%. investment in our new Tsumeb store (opened May 2014) is bearing fruit as this store has RETAIL These turnovers for the Division were achieved delivered average growth rates in excess of 25% despite significant competitor activity in certain over the previous financial year. Model Pick n Pay (A division of WUM regions, the closure of the inefficient Khomasdal Properties Limited) store in F14 and negative year-on-year growth Enhanced promotional activity during the year at our premium Auas Valley store due to a saw a substantial increase in promotions and This Division’s stated objective remains to comprehensive refurbishment aimed at creating advertising (including the annual Independence be the preferred and most trusted retail a premium retail destination. Day and Easter campaigns) as well as our group in Namibia. As a consumer-centric prominent ‘Win a House’ competition where organisation, the Division has made continued During the period under review we have made the lucky winner walked away with a home loan efforts in achieving this goal by focusing on significant investments in our operations to worth N$500,000. exceptional customer service, quality product increase our countrywide footprint and upgrade ranges, a world-class shopping experience, existing stores. This investment has seen the During the period, refurbishments were community-based social investment initiatives refurbishments of the Auas Valley and Oshakati undertaken at a number of stores. During and expanding our foothprint in Namibia. stores as well as the opening of two brand this refurbishment period, trading levels were These focus areas have been supported by new stores at Grootfontein (December 2014) negatively impacted resulting in reduced sales significant investment in our human capital and Mega Centre in Windhoek (April 2015). volumes and profits. Additionally a number as revised management structures, initiatives Furthermore, as another first for the Division, we of new stores have been opened. These new on leadership enhancement and engagement have opened two standalone Pick n Pay clothing stores often incur significant opening expenses sessions have provided the required levels of stores (Auas Valley and Mega Centre). The Auas and have a ‘settling in period’ during which support to our employees. Valley refurbishment also included the addition profits are subdued. The preceding factors have of a Wiesenhof coffee outlet − for which we had an impact on overall performance. The The outcome has been a turnover of N$1.54bn, have obtained the first franchise in Namibia. Division generated an EBIT of N$21.6 million up representing a growth of 12%, or N$165 million to 30 June 2015. This represents a decrease of in the reporting year. The increase in turnover The year under review saw our new concept 51.2% against the previous financial period. was mainly driven by an above-inflation increase store in Okongo (opened June 2014) operating in average basket size (9%) as well as increases for a full 12-month period and following certain
42 43 Under Review
The performance and profitability were further PROPERTIES impacted by the following key factors: • Gross profits (0.4% below prior year) were Broll & List Property Management (Namibia) impacted positively by the turnover growth (Proprietary) Limited and an increase in units sold, customer counts Central Properties (Proprietary) Limited and basket sizes; O&L Properties (A Division of Wum • Total shrinkage at a world-class 0.66%; Properties Limited) • Additional rebate income received from the Wernhil Park (Proprietary) Limited franchisor; • Efficiencies achieved through a focus on in- store execution and management; and Although the period under review has been • Our 50% joint venture with Natural Value extremely challenging, the O&L Group’s Foods (NVF) has contributed a profit of Investment Portfolio has yet again shown an N$944,000 which is 39% above than the overall strong performance and produced previous financial year. This result includes exceptional results in line with the target set for significant expenses borne in getting the the financial year. Otavifontein farm operational. The farm itself belongs to the WUM farming division and is The past 18 months have seen substantial leased out to NVF who are utilising the farm development in the central parts of Namibia. for agricultural purposes. Crops grown on the These developments were focused mainly on farm are sold for profit through Model the retail sector and included malls in Windhoek, Pick n Pay. Okahandja and Rehoboth. With the majority of the O&L Group’s Property Portfolio being retail related and located in Windhoek, the increase in development activity within central Namibia, as well as the reduced spending power per Angolan shopper compounded by the reduced numbers of Angolan shoppers, impacted not only the O&L-owned retail properties but the entire Namibian retail landscape.
44 45 Under Review
The O&L Property Portfolio has shown great Grove Mall is the largest single retail property The Wernhil Park Shopping Centre continued to Cashbuild erven earmarked for incorporation services to customers outside the O&L Group. It resilience however; although faced with in Namibia and this achievement has further show a solid operational performance with no into the expansion of Wernhil Park Phase 4 while also started an Energy-Saving Lights Programme substantial competition, the growth in value increased Broll Namibia’s Property Portfolio vacancies, strong turnover rentals and high foot the Old Breweries property has been identified for all O&L companies and external clients. of O&L’s core Investments Portfolio − which under Management to over N$ 2.8 billion. traffic numbers − which increased by 7.58% for a possible future mixed-use development. ENERGY includes Wernhil Park, Alexander Forbes House year-on-year. Retailer demand for premises in Together with Namibia Dairies and an external and the Standard Bank Centre − exceeded The Property Portfolio managed by Broll Wernhil Park remains high and such demand Broll Namibia remains extremely proud of O&L Energy (Proprietary) Limited engineering partner, O&L Energy is developing 10.5%, with operational EBIT increasing by 6% Namibia has shown exceptional growth over the will be accommodated on completion of Phase both the growth in its property value under a biogas plant at the Superfarm in Mariental, year-on-year. past five years and has exceeded its budgeted 4 development. Wernhil Park’s EBIT (including management as well as the overall O&L Property O&L Energy set up a network of international and which will be owned by Mariental BioEnergy. earnings before interest and tax by N$50 valuation gains) was 19% over the projected Portfolio results achieved during the 2014 - local suppliers and business partners, intensified Contruction of this plant is in progress. The planning stage of the expansion to the million, or 24%. This was achieved although budgeted figure with a value growth of 10.5% 2015 financial year. its marketing activities in Namibia and South Wernhil Park Shopping Centre has gained operational performance was challenged by compared to the previous financial year. Africa and developed various large-scale projects In addition, O&L Energy developed a bush-to- significant momentum and the development increased competition and lower consumer during the year under review. A strategic partner energy business through which invader bush in received in-principle approval from the City spending, trading densities and foot traffic The Standard Bank Centre also substantially for large-scale solar power plants was also Namibia is harvested and offered as an energy of Windhoek during May 2015. Development during the period under review. exceeded its valuation gain budget, showing brought on board. source to industrial companies. For this business is scheduled to commence during the a 12% increase from the previous year on a separate company - Organic Energy Solutions first quarter of 2016. Building work at the The overall portfolio generated revenue its property value; Alexander Forbes House The strategic focus for O&L Energy lies in the - was established, which started its operations development called 77 on Independence − (excluding deferred rentals) of N$139 million achieved a 9% year-on-year growth in project development, project management, this year. which comprises 165 residential units as well in the year under review compared to N$128 property value. Both increases exceeded the engineering, procurement and construction, as as a retail component on the ground floor million in the previous financial year, with an valuation budget. Standard Bank Centre’s retail well as operation and maintenance of: − commenced during June 2014 has been operational EBIT of N$105 million (2014: N$99 component, Town Square, showed exceptional • Large-scale solar power systems; progressing well and the property is headed for million). turnover rentals for the period under review, • Large-scale solar heating systems; and completion during June 2016. with most vacant properties having been let • Bio-energy plants. Total EBIT of N$261 million (2014: before the end of the financial year. The N$4.5 In addition to the strong performance of N$245 million) − which includes million upgrade planned for Town Square’s O&L’s Investment Portfolio, Broll Namibia − fair value gains of N$156 million retail component will be completed by the first O&L Energy also developed and started the Property Management Company of the (2014: N$145 million) − was quarter of 2016. implementing energy-saving solutions with a O&L Investment Portfolio and a subsidiary of achieved in the period under special Energy Management the O&L Group − secured the management review and exceeded our budgeted Both the Old Breweries and the Fruit & Veg System and Energy Auditing contract for The Grove Mall of Namibia during numbers by 24%. City/Cashbuild sites are still being held for activity within the O&L Group July 2014. At approximately 53,000m2, the development with the Fruit & Veg City/ and then expanded these
46 47 Under Review
The Central Reservations Office and Hotel the week and leisure visitors at weekends. Management teams are responsible for central Furthermore, the revitalisation projects at operations, marketing, sales, finance, HR, IT, both lodges continued during the year under development, technical services and hotel review, thereby adding value and enhancing the management. reputation of our brands.
During the year under review, the following Both the Strand Hotel Swakopmund and achievements were realised: Chobe Water Villas projects are on target for opening during October 2015 and 2016 • Mokuti Etosha Lodge increased its occupancy respectively. These two additional hotels in the from 42.1% in 2014 to 51.8% in 2015, while portfolio will create 270 additional employment also increasing its average room rate from opportunities in line with the Group’s Purpose N$813 to N$ 899. This enabled Mokuti of ‘Creating a future, enhancing life’. to generate an EBIT of N$4.3 million vs. a loss of N$0.2 million in the previous year. The achievements of 2015 lay a good foundation • Midgard Country Estate increased its for O&L Leisure’s journey towards F19. occupancy from 53.8% in F14 to 59.6% in 2015, while also increasing its average room LEISURE rate from N$604 to N$698. This enabled Midgard to generate an EBIT of N$0.7 O&L Leisure (Proprietary) million vs. a loss of N$1.5 million in the Limited previous year.
The year under review saw A key achievement worth highlighting is that O&L Leisure (Proprietary) Limited Mokuti has moved from #16 in the ‘Specialty maximise the potential of Mokuti Lodging in Etosha National Park’ category Etosha Lodge and the Midgard Country on TripAdvisor® to #4. Mokuti continues to Estate while pursuing the construction of benefit from foreign and local tourists seeking the Strand Hotel Swakopmund and Chobe thrilling wildlife encounters at Etosha, while Water Villas. Midgard primarily hosts conferences during
48 49 Under Review
ADVERTISING Achievements throughout the year: • Servicing a stable and strong local client base Weathermen & Co. (Proprietary) Limited and acquiring new clients, such as Pupkewitz Megabuild, Total Namibia, United Africa Group Through the 2015 financial year (its second year (Plaza Casino) and Pasta La Vita; of operation) Weathermen & Co. established • Growing the permanent staff complement itself as one of the leading advertising agencies from five to nine, with 100% staff retention in Namibia. Solid strategic creative campaigns • Moving to new premises to position the launched in its start-up year introduced the agency for successful growth; agency to clients who entrusted the agency • Being nominated as a category finalist in the with their brands and ignited an increasing South African advertising awards, the Loeries interest from other potential clients. The and being awarded ‘Ad of the Week’ for agency has had steady growth on all fronts, the Tafel Lager ‘Moments’ TV commercial by which puts it in a fantastic position to seize the leading South African marketing blog The under-construction boutique 16-room tremendous opportunities ahead. marklives.com; Chobe Water Villas – an exclusive and intimate • Increasing revenue to N$24.4 million from wildlife lodge – is located at the eastern tip of Emphasis was placed on the following strategic N$7.8 million in the 2014 financial year; and the famous Caprivi Strip, in the recently re- focus areas throughout the year: • Achieving an EBIT performance representing named Zambezi Region of Namibia. The lodge • Improving the creative product and service to a 270% growth in EBIT compared to the 2014 is situated in the 150 km² Kasika Conservancy, clients by attracting talented staff. Increasing financial year. in a secluded position directly on the banks of efficiencies of agency processes and systems Built on a historic and iconic site, with extensive the Chobe River and near to the town of Kasane via the investment in new hardware, software unique and creative entertainment areas – in Botswana. This location affords unobstructed and telecommunications systems; such as restaurants, bars, a delicatessen, a views towards the world-renowned Chobe • Maintaining the current client base and the lobby lounge, sea-facing terraces and a beach National Park and also overlooks the Sedudu acquisition of new clients; take-away – the Strand Hotel Swakopmund Island, which boasts the greatest density of • Innovating and evolving the agency’s service is bound to become a destination in itself wildlife species of any river system in the offering to clients; and for the residents of the beach town and for world, including elephant, lion, buffalo, hippo, • Maintaining and building a diversified visitors from around the world when it opens crocodile, as many as eight species of antelope supplier base and leveraging shareholder in October 2015. and 460 species of birds. positions and expertise in the market.
50 51 ENGINEERING the Marine & Offshore Division; the downturn in annual value of N$15.6 million, as well as various Capital investments amounting to the oil and gas industries had a negative impact other maintenance projects. The total revenue N$5.7 million (including the property of Kraatz Marine (Proprietary) Limited on revenue in the last quarter with a significant of N$36m generated from our mining clients N$2.1m in Tsumeb) were geared at further reduction in activity levels experienced. Dry accounted for 70% of revenue in the Industrial improving operational efficiencies and Kraatz Marine delivered an excellent set of dock projects were successfully completed Division and 31% of revenue in the business replacing outdated and ageing equipment. results (before provisions for bad debts) for the for two significant customers and generated overall. period under review, being significantly better revenue of N$16.8m. A conversion project Kraatz Marine is well positioned to react to than those of the previous period. However amounting to N$9.7m was also successfully A new business unit, Specialised Engineering emerging market opportunities in the future. at the time of this report, management have delivered in line with world-class standards. In Services (SES), was established in 2015. SES Access to bigger dry dock facilities remains a decided to create a bad debt provision of N$6.6 order to achieve sustainable growth in revenue is a multifaceted business unit focusing on key challenge, although strategies are in place million for a single customer. A payment plan we succeeded in expanding our client base machining services, hydraulic services, laser to address this challenge in due course. has been received from this customer and by adding new businesses − including Damen alignment and line boring. This business unit management is vigorously following on this plan Shipyards, Bumi Armada and Posh Fleet Services will service the marine and offshore, fishing, with the customer. Profitability was positively − to our client portfolio, which generated mining and general engineering sectors. affected by high activity levels during the year revenues of N$12m collectively. Another with a 75% increase in billable hours, particularly significant milestone for the Marine & Offshore Access to the right mix of skills, on both a in the Industrial Division, where target billable Division during the period under review was the permanent and limited duration basis, remains a hours were exceeded by 33%. signing of a 3-year maintenance agreement by challenge that we hope to address through our the Ministry of Defence for work on their navy Learn to Weld programme, which was launched Dry-docking revenue remained flat due to vessels. This division continued to provide ship- in the last quarter. Taking welding education to the downturn in the oil and gas industry as a repair services to our sister company, Hangana the next level is part and parcel of exploring result of the significant reduction in the oil Seafood, which accounted for 9% of our total new ways to bring quality vocational training price. Significant growth was experienced in ship-repair revenue. to underserved communities and six students the Industrial Division however, driven primarily were enrolled after more than 300 applications by the high activity levels generated by several The Industrial Division experienced a significant were received. The objective of the programme projects at Uranium mines. increase in activity levels during the period is to annually provide a minimum of 18 young under review. Revenue of N$3.4m was Namibians who do not have a permanent job Revenue for the financial period under review generated by the new regional office in Tsumeb with an additional skill that they can either use increased to N$107 million from N$62 million and revenue of N$1.5m was generated by the to get a permanent or higher-paying job or in 2014, while operating loss increased further regional office in Windhoek. even to start their own business. Enrolment in from N$2.2 million in 2014 to $5.5m in 2015. the programme is free of charge and training Margins reduced to 23% in 2015 compared to Activity levels at our mining clients increased runs over a 3-month period, covering the basics 32% in 2014. considerably during the period under review, of welding theory and practice. with the award of our first three-year leach Dry-docking revenue remained a challenge for tank maintenance contract, with an estimated
52 53 Under Review
ASSOCIATE AND JOINT VENTURE Dimension Data Namibia (Proprietary) The Group equity accounted a profit after tax of Limited N$2,8 million from Dimension Data for the year Brandtribe (Proprietary) Limitied under review, compared with a profit after tax During the year under review, Dimension Data of N$3,4 million in 2014. Included in the 2014 The Brandtribe joint venture recorded its first delivered exceptional revenue growth of 74% number was a recovery of bad debts to the value year of positive earnings before interest in this compared to the previous financial period in the of N$630,000. reporting period, with strong revenue growth Next Generation Data Centre and Networking of N$3.1 million to N$5.5 million (78% increase Integration businesses. vs. the prior year), while keeping a lid on operational expenses, which were in line with In particular, we built the Data Centre for the City the previous year. of Windhoek and furnished the O&L Data Centre at Namibia Breweries with new equipment. Our key focus areas for the year under review were: This year Dimension Data recruited six students • Increase revenue – as already stated, revenue of training through the Exponential Training increased from N$3.1 million to N$5.5 million. (XT) programme in order to develop their IT This increase was driven by an increase in SMS skills. This programme has been running for the revenue in Namibia and increased adoption of past nine years and has delivered 21 successful the Brandtribe platform in South Africa. graduates to date. • Positioning - based on customer feedback we reviewed how Brandtribe was positioned Our objectives for the period under review were: in an industry that is still very much in its • To deliver world-class enterprise services; infancy. Following this positioning work, • To continue to drive annuity and service-level we developed easy-to-understand marketing revenue; and material highlighting key features and benefits • To continue to build stronger vendor and relevant to potential customers. contractor relationships. • Route to market - this has proven to be the biggest barrier to entering the market in a meaningful way. When it comes to data, companies have many layers across multiple departments that might be involved in decision-making, which increases the complexity and time it takes to get Brandtribe approved as a service provider.
54 55 Sustainability
CORPORATE GOVERNANCE
PRINCIPLES OF CORPORATE GOVERNANCE with the principles and practices contained in the Joined the Ohlthaver & List Group of Companies Appointed: July 2014 Directorships: Non-executive Director of NBL chairman Werner List and Director since 1994. NamCode. in March 2004 as Group Financial Director Qualifications: Advanced Diploma in Business and Olfitra. Qualifications: Attorneys admission (University The Directors of the O&L Group of Companies responsible for formulating and executing Administration Laura McLeod-Katjirua, Namibian (56) of South Africa) are committed to maintaining high standards THE O&L BOARD OF DIRECTORS strategy as part of the Executive Team. He has Professional Membership: MABE, MCIM, FSBP, Qualifications: Diploma in Development Studies Experience: Practicing attorney since 1969 and of corporate governance, which they see as held various senior executive positions over the ACIBM and Management, Diploma in Basic Education senior partner and sole owner from 1970 to fundamental to discharging their stewardship Sven Thieme, Namibian (47) past 25 years. He is also currently the Chairman O&L Group Directorship: Olfitra and O&L Digital Joined the O&L Group in 2012 1976 of Engling Stritter & Partners focusing responsibilities. All the Group’s businesses share Group Executive Chairman of Dimension Data Namibia. Director of various External Directorship: Offshore Development Director of various O&L companies within the Group mainly on commercial law; Management and this commitment and the adoption of and Appointed: April 2002 O&L companies within the Group. Company (Pty) Ltd, Namibia Competition External: Regional Governor of Khomas Region, chairmanship. adherence to, sound corporate governance Joined O&L in 1998, elected as Chairman in 2002; Qualifications: BCom (Accounting) at University Commission, Team Namibia, Namibia Trade Other directorships: SeaFlower (Fishcor), National Directorships: Non-Executive Director on various policies have become a business imperative for previously a chartered accountant in Luxembourg Pretoria with completed articles. He obtained Forum, Wilderness Safaris Namibia (Pty) Ltd. Heritage Council of Namibia (NHCN). O&L companies, vice chairman of the Olfitra the Group. Qualifications: CA the senior management programme certificate board and Trustee of the Werner List Trust Director of various O&L companies within the with the University of Stellenbosch Business Hans-Harald Müseler, Namibian (66) Prins Eliakim Shiimi, Namibian (76) External directorships: Executive Chairman and The Board strives to provide the right Group, Chairman of the Werner List Trust School. He is a CFA (SA) and has attended various Appointed to Olfitra Board: 2009 as Alternate Qualifications: Grade 12, Certificate in Education CEO of Namibia Estate Enterprises (Pty) Ltd and leadership and a strategic oversight and External: President of the NCCI, Chairman of the other leadership and business courses Director; full Director from March 2014 Directorship: FNB Foundation 1992 - to date, Japonica Investments Nineteen (Pty) Ltd. control environment to produce and sustain WCC, Chairman of NBC, Member of the National Qualifications:CA (NAM), MBA (Stellenbosch), Rossing Foundation 1997- to date, EPIA value delivery to all its shareholders. The Board Planning Commission Berthold Mukuahima, Namibian (56) Post-Graduate Diploma: Compliance and Board Investment 2002 – to date, M& Z (Pty) Ltd 1997 Reverend Willem Hanse (50) continues to instil a culture of openness, Group Human Capital Director Governance (UJ) to date, Fountier Property 2013-2015 & Olfitra Non-Executive Director, joined the O&L Group in accountability and integrity, which is reflected Peter Grüttemeyer, Namibian (61) Appointed: May 2006 Directorship: Olfitra Board member and Audit Has over 40 years’ experience in Business April 2012 as non-executive director. in its commitment to best practices. The Chief Executive Officer Qualifications: BA; Certificate in IR; MBA Committee Chair Leadership and trading enterprises. Qualifications: Undergraduate from Academy Group is proud of its ethical and transparent Appointed: October 2003 Directorship: Director of Olfitra Trustee: O&L External directorships: Bidvest Namibia, Sanlam (UNAM), Windhoek, 1988 (Majored in History management of the business, not only in Joined the O&L Group in 2003; previously Pension Fund Namibia, Capricorn Asset Management Carl-Ludwig List, Namibian (67) and Psychology) and Pastoral Training from R. following accepted corporate practices for Partner-in-Charge of Deloitte Namibia External Trusteeship Chairman: HealthWorks Trusteeship: Benchmark Retirement Fund Chair. Non-Executive Director, joined the O&L Group R. Wright Seminary, Johannesburg, 1995 risk management, but also in providing strong Qualifications: CA (formerly, NABCOA); Alternate Trustee, Namibia in 1980 Experience: Includes Compliance, Marketing assurance to its shareholders and other Director of various O&L companies within the Group Business School. Ernst Ender, German (69) Qualifications: Banking (1971 Germany) and Public Relations (1990 to 2003), Special stakeholders by living the Group’s ethics. External: Chairman of NASRIA, Trustee of the Has accumulated over 25 years’ experience in Joined the Group in 1975, appointed to the NBL Directorship: Director of List Trust Company, OLFITRA, Assistant to the Prime Minister and Speaker Goreangab Trust strategic HR management in the higher education, Board in 1983 NBLIH, NBL and trustee of the Werner List Trust (2003 to 2010); also Presiding Elder at various GOVERNANCE AND COMPLIANCE OVERVIEW telecommunications and private sectors. Qualifications and experience: 2-year post- AME churches since 2010) Günther Hanke, Namibian (59) graduate commercial trainee-ship with AC UM Stritter (76) Directorships: O & L Holdings (Pty) Limited, Olfitra During this review period, the Board has gone Group Financial Director Gideon ML Shilongo, Namibian (51) Toepfer International: over 20 years’ experience Non-Executive Director, joined the O&L Group in External directorships: EPIA Investment to great lengths to further align the Company Appointed: November 2004 Executive Director relating to marketing, sales and export 1971 as legal advisor and assistant to the late Holdings (Pty) Limited.
56 57 Sustainability
Responsibilities of the Board • Monitoring and managing the relationships Integrated Report. This assurance included a BOARD MEETINGS AND ATTENDANCE Business Performance Review Meetings a platform for identifying opportunities and The Board’s role is to exercise stewardship between the Group and its regulators; review on the Governance content but did not Monthly business performance review meetings synergies within the Group and for discussing of the Group within a framework of prudent • Reviewing and implementing effective specifically include the NamCode. The Board is Meetings held by the Board during the financial are held with each individual operation. Full, in- issues requiring the Group’s attention. These and effective controls that enable risks to be systems of delegation and internal control, committed to provide external assurance on year under review and the concomitant depth business performance review meetings are meetings, which are held twice a year, are assessed and managed. The Board sets the and carrying out an annual review of the the Governance Section, in the context of the attendance by members was as follows: held quarterly, with shorter performance update attended by the Group Leadership Team, Group’s strategic aims, reviews whether the effectiveness of such systems; NamCode in the next reporting period. In terms MEMBERS 9/7/2014 25/9/2014 2/4/2015 meetings being held in the other months. senior managers from the O&L Centre and the necessary financial and human resources are in • Identifying and continually reviewing key of the Sustainability Report, a detailed Assurance E Ender A A A managing directors and financial directors/ place for it to meet its objectives and monitors risks, as well as their mitigation by Report has been provided. P Grüttemeyer A A A The purpose of the full business performance managers of the OpCos. management performance. The Board is management, against a background of G Hanke A A A review meetings is to conduct an in-depth kept informed about major developments economic, environmental and social issues; Communication with the Board Rev. WS Hanse A A A review of a specific operation’s performance AUDIT AND RISK COMMITTEES affecting the Group through quarterly Business • Reviewing and approving of Group strategy Communication with all stakeholders C-L List A A A and progress in disciplines such as finance, Performance Reports. The Board also holds at and the setting of long-term objectives and/ embodies the principles of balanced reporting, G Shilongo A A A marketing, human capital, risk management, Accounting, Auditing and Reporting least one strategy session each year, at which or changes in strategic direction; comprehensibility, openness and valuing Gov. LV McLeod Katjirua A # # corporate citizenship responsibility and IT. These This Integrated Annual Report focuses on high-level strategic matters are debated. • Monitoring the overall performance substance over form. The Board is aware B Mukuahima A # A meetings are attended by the Group Leadership material developments and issues and provides of the Group in relation to its objectives, of the importance of communicating the HH Müseler A A A Team and the senior leadership team of the pertinent, related performance indicators. We The Board has overall authority for the conduct plans and targets, as well as monitoring the Group’s activities to stakeholders in a balanced EP Shiimi A A A individual operation. The purpose of the define a material development or issue as one of the Group’s business. There are also a implementation of projects and decisions; and comprehensible manner and strives UM Stritter # A A performance update meetings is to focus on that affects our ability to remain commercially number of matters that have been specifically • Ensuring that the company has an to present clearly any matters material to a S Thieme A A # and discuss key issues affecting the individual viable and socially relevant to the communities reserved for the Board to decide upon, which effective and independent Audit Committee; proper appreciation of the Group’s position. A - Attended # - Apologies operation, as well as its financial results and in which we operate. include the following: • Assuming responsibility for information The interests and concerns of the Group’s forecasts. These meetings are attended by the • Approval of financial reporting and controls, technology (IT) governance; stakeholders are addressed by communicating Chairperson, the Managing Director and the The Board places strong emphasis on achieving such as interim and annual results, the • Confirming that the risk-based internal audit information as it becomes known. BUSINESS PERFORMANCE, ACCOUNTING AND Financial Director/Manager of the individual the highest levels of financial management, payment of dividends and accounting function is effective; AUDITING operation. accounting and reporting to stakeholders. policies; • Monitoring how stakeholders’ perceptions The Directors are responsible for preparing • Monitoring the cash and capital resources, affect the Company’s reputation; and The Group employs a comprehensive financial Group Operational Meetings the Annual Financial Statements (and other as well as the overall liquidity of the Group, • Verifying the integrity of the Company’s reporting and evaluation system, with the The purpose of these meetings is to review and information presented as part of these and authorising any significant acquisitions, Integrated Report. performance of each operating business unit evaluate the Group’s performance and progress statements) in a manner that fairly presents the disposals of core businesses, investments, being monitored against both budget and prior- in disciplines such as finance, marketing, human state of affairs, the results of operations and capital expenditure, or other material projects The Board is aware that in this reporting period, period performance through regular meetings. capital, risk management, corporate citizenship the cash flows of the Group. or transactions; independent assurance was obtained on the responsibility and IT. The meetings provide
58 59 Sustainability
The external auditors are responsible for carrying reliability of financial statements. Responsibility include: evaluating the Company’s governance Each Board committee acts within agreed the financial statements, the appropriateness of Integrated Report and has been tasked by the out an independent examination of the Annual for the adequacy and operation of the systems processes (including ethics); undertaking an written terms of reference. The Chairperson of the Group’s accounting and disclosure policies, Board to assist in overseeing the integrity of Financial Statements in accordance with the is delegated to the Executive Directors. The objective assessment of the effectiveness of each Board committee delivers a report at each compliance with IFRSs and the effectiveness Integrated Report. The Audit Committee has International Standards on Auditing (IASs). The records and systems are designed to safeguard risk management and the internal control scheduled Board meeting and minutes of Board of internal controls. In keeping with this policy, complied with its legal, regulatory or other external auditors also declare whether or not the assets and to prevent and detect fraud. The framework; systematically analysing and committee meetings are provided to the Board. Deloitte & Touche (Namibia), was appointed as responsibilities and has recommended the Annual Financial Statements are fairly presented internal audit is an independent appraisal and evaluating business processes and associated the Group’s external auditors, whilst Ernst & Integrated Report to the Board for approval. and whether or not they comply with International assurance function that is central to the Group’s controls; and providing sources of information, All Directors, as well as the Chairperson of each Young fulfilled the role of internal auditor, as Financial Reporting Standards (IFRSs). governance structures. Its primary purpose is to as appropriate, regarding instances of fraud, Board committee in particular, are requested stated previously. The Audit Committee meets at least twice a examine and evaluate the appropriateness and corruption, unethical behaviour and irregularities. to attend AGMs to answer questions raised by year, preferably prior to the Board’s approval The Group’s own Audit Committee evaluates the effectiveness of the internal control systems shareholders. The various Board committees Both the external and internal auditors have of the interim results and after the annual independence and effectiveness of the external applicable to the operational activities of the The internal audit function reports to the currently operating are set out below. unrestricted access to the Audit Committee and external audit has been completed prior to auditors and considers whether any non-audit business units within the Group. The Group Audit Committee at every meeting and has the attend all meetings to report on their findings the Board’s approval of the Annual Financial services rendered by such auditors substantially utilises the independent professional services cooperation and support of both Board and The current CEO is a member of the Audit and to discuss matters relating to accounting; Statements. Meetings held during the impair their independence. If this is found to be firm Ernst & Young to provide outsourced management. and the Remuneration committees, as a auditing; risk identification, measurement financial year under review and attendance by the case, appropriate corrective action is taken internal audit functionality which is currently consequence of the specific knowledge and and mitigation; internal controls; and financial Audit Committee members were as follows: with regard to those services. focussed on NBL. Nothing has come to the attention of the experience he possesses. Over time however, reporting. The Audit Committee ensures that MEMBERS 24/9/2014 15/3/2015 Directors to indicate any material breakdown in these committees will be structured to exclude a combined assurance model is applied to HH Müseler A A The independent auditor’s report is set out on The Audit Committee is responsible for the functioning of these controls, procedures the CEO and to have majority Non-executive provide a coordinated approach to all assurance EP Shiimi A A page 104 herein. overseeing the internal audit function and and systems during the year under review. Directors. activities. P Grüttemeyer A A approving the Internal Audit Plan. The Audit A - Attended Internal Audit and Control Committee ensures that the Company’s BOARD COMMITTEES Audit Committee The Audit Committee should satisfy itself as to Appointments to the Audit Committee are The Group’s internal controls are designed internal audit function is independent and has During the financial year under review, the the appropriateness, expertise and adequacy made by the Board and take into account a and operated to support the identification, the necessary resources, budget, standing and While the Board remains accountable to the Audit Committee comprised three Directors. of resources of the finance function and potential candidate’s education and/or business evaluation and management of risks affecting authority within the Company to enable it to Group and is responsible for the Group’s Two of them were Non-executive - being Mr HH the experience of the senior members of experience within the Audit Committee’s scope the Group, as well as the business environment discharge its functions. performance and affairs, it delegates to Müseler (Chairman) and Mr EP Shiimi - while one management responsible for the financial of activities. Members are appointed for a in which it operates. management and Board committees certain of them was Executive, being Mr P Grüttemeyer. function. This evaluation is to be performed 3-year term, with the initial term for at least one An Internal Audit Charter is formally defined and functions to assist it with properly discharging annually. member being two years and for at least one Internal control systems were introduced to approved by the Board. these duties. Appropriate structures for such The Audit Committee’s Terms of Reference are other member being one year. provide management and the Board with delegations are in place and are accompanied set out in an Audit Committee Charter. The Audit The Audit Committee is also responsible for reasonable assurance as to the integrity and The internal audit function’s key responsibilities by monitoring and reporting systems. Committee is mandated by the Board to review overseeing the content and disclosure of the
60 61 Sustainability
Risk Committee Audit Committee and gives feedback at Audit interests of the Group and its shareholders. The The Remuneration Committee does not Conflicts of Interest assurance programme in place to confirm that The purpose of the Risk Committee is to assist Committee meetings. Remuneration Committee is also empowered recommend disclosure of individual Director’s Directors are required to inform the Board compliance to laws, rules, codes and standards the Board of Directors in fulfilling its oversight by the Board to set the short- and long- fees. These fees are paid by subsidiaries and not immediately with respect to actual or potential is applied within the business. responsibilities with regard to the risks inherent Whilst the membership of the Risk Committee term remuneration of Executive Directors. by the holding company. conflicts of interest they may have in relation in the Group’s business, as well as the control would normally comprise Non-executive More generally, the Committee is responsible to particular aspects of a business. Directors are During the reporting period, no fines or processes with respect to such risks; the Directors, in its current form the membership for the assessment and approval of a broad Professional Advice obliged to recuse themselves from discussions sanctions for non-compliance with laws and assessment and review of credit, market, is made up of the persons as listed above. The remuneration strategy for the Group, which All Directors have access to the advice and or decisions on matters in which they have a regulations were initiated against the Group and fiduciary, liquidity, reputational, operational, Audit Committee achieves oversight of the Risk is documented in a Remuneration Policy services of the Company Secretary, who conflict of interest. no legal action for anti-competitive behaviour fraud, strategic, technology, data-security and Committee through the Chairmanship being and is at liberty to solicit the assistance of is responsible to the Board for ensuring was instigated. business-continuity risks; and the monitoring fulfilled by the CEO (also a member of the Audit outside consultants with specialised skills compliance with procedures, as well to During the financial year ended 30 June 2015, of the Group’s overall risk profile, including Committee) and the optional attendance of H and expertise to formulate and maintain applicable statutes and regulations. All Directors none of the Directors had any interest in Risk Management Practices significant risks faced by individual companies Müseler, the Chairman of the Audit Committee, an equitable compensation structure. The also have full and timely access to all information contracts or arrangements entered into by the The Board is ultimately responsible for within the Group and by the Group as a whole. who is an independent non-executive Director committee’s Terms of Reference are set out in a that may be relevant to the proper discharge of Group or its subsidiaries. managing the Group’s risk and setting its and of the internal auditors Ernst & Young. The Remuneration Committee Charter. their duties and obligations, thus enabling the risk appetite. The Risk Management System Membership comprises people in the following Risk Committee met twice in the last financial Board to function effectively. Compliance with Laws, Rules, Codes and is designed to manage rather than eliminate roles: year. There were no Remuneration Committee Standards the risk of failure in order to achieve business • Executive Chairperson; meetings held during the period under review The Company Secretary ensures that Board The Board acknowledges the responsibility objectives. The system includes having ongoing • Chief Executive Officer (Chairperson of the Remuneration Committee since the committee is only obliged to meet charters and various terms of reference are of ensuring that the Group is compliant with processes in place to identify, assess, manage, Risk Committee); The Remuneration Committee consists of two when it is deemed necessary for it to do so. regularly reviewed and complied with and laws, rules, codes and standards. The Board monitor and report on the significant risks • Group Financial Director; Directors: Mr EP Shiimi and Mr P Grüttemeyer ensures that all minutes are circulated to the has ensured that an effective Compliance faced by individual companies in the Group and • Group Human Capital Director; (CEO) and its responsibility is to review the The Board appoints the members of the relevant Directors. A Board evaluation process Framework has been established and by the Group as a whole. • Group Risk Manager; remuneration of the Group’s Executive Remuneration Committee, taking into has been adopted through the Directors’ implemented. This Compliance Framework • Chairpersons of OpCos’ risk committees; and Leadership, as well as performance bonuses consideration potential candidates’ education Governance Policy and is being implemented. is designed in such a way that the relevant A Risk and Opportunity Assessment is conducted • Company Secretary. and Directors’ fees. The remuneration of senior and/or business experience within the laws, rules, codes and standards are identified; on an annual basis at the OpCos to ensure that executives is based on their performance within committee’s scope of activities. Members are Board nominations are considered through compliance monitored; and any non- management remains aware of these issues In appointing members to the Risk Committee, their area of responsibility and is calculated appointed for a 3-year term, with the initial the Remuneration Committee and compliance rectified. throughout the Group. The assessment process a potential candidate’s education and/or using key indicators of operational and financial term for at least one member being two years recommendations on appointments are made identifies the critical business, operational, business experience within the committee’s performance, among other factors. The and for at least one other member being one to the Board for adoption. The compliance function has been delegated financial and compliance exposures facing the scope of activities are taken into account. Board’s remuneration philosophy dictates that year. to each OpCos, while the Audit Committee - individual operations, as well as the adequacy The Risk Committee is a subcommittee of the rewards to executives are balanced against the through the Group’s Risk Committee - has an and effectiveness of control factors at all levels.
62 63 Sustainability
Materiality levels are set for each business unit the appropriate level in each OpCo but also that period through its Annual Declaration they become available. Two objectives are Information Officer (CIO) who is responsible for in a suitable format. level and vary according to the nature, scope their impact on the Group as a whole is taken Programme, communication of its Code of aimed at here: employees take charge of their the management of IT; the Board is comfortable and size of the business concerned. In setting into consideration. Ethics and the implementation of a commercial own career development and the Company has that the CIO is suitably qualified and experienced These processes are implemented, documented these levels, due consideration is given not only crime audit at all of its OpCos. The Group has a database of talented individuals who are ready person and that he is primarily appointed to act and maintained on the Process Model. The to financial impact but also to the potential In the current period under review the Group also invested in a 24-hour Tip-offs Anonymous to move into higher positions. as a bridge between IT and the business. Process Model includes the following: threat to the integrity of the business as a going did not expose itself to any undue, unexpected hotline, which is available to everyone so that • Business continuity; concern, its reputation and the wellbeing of or unusual risks that caused it to suffer material they can report any unethical behaviour by Governance of Information Technology The Board is further responsible to monitor • Change control; employees and other stakeholders. losses. Group employees. The Board, assisted by the Risk and Audit and evaluate the investment and expenditures • Acceptable IT policies and procedures; committees, is responsible for the governance incurred for IT by the Group to ensure that it • Security policies and procedures; and Each OpCo in the Group has its own risk The Board of Directors is of the opinion that During the reporting period, one minor case of information technology (IT) of the entire acquires and uses the appropriate technology, • IT security standards. committee that identifies major risks from the risk matrix is an appropriate tool for risk of fraudulent action was identified and handed Group. The Board recognises that IT is essential processes and people to support its business the risk assessments outlined above and ranks identification and assessment. The matrix is over to Nampol for further investigation, which to manage the transactions, information and and governance requirements in a timely and Dispute Resolution these in a risk matrix. The Group has a formal risk very detailed and specific, and is therefore not is in line with the zero tolerance on fraud stance knowledge necessary to initiate and sustain a relevant manner. The Board recognises the importance of management process, which is documented in disclosed in this Sustainability Report in order of the Group. company. The Board therefore developed an resolving disputes with all stakeholders as the Group’s Risk Management Policy. The Group to ensure that no confidential information IT Internal Control Framework, which has been IT risks form part of the Group’s risk effectively, efficiently and expeditiously as risk matrix is compiled from the risk matrices of and thus undue advantage is provided to our Succession Planning adopted and implemented. The external auditors management activities and considerations. The possible and it has therefore implemented a the individual OpCos. competitors. The Group benefits from having an extensive provide assurance on this IT Internal Control Board recognises that IT legal risk arises from Dispute Resolution Methodology. The Directors pool of people with diverse experience and Framework when conducting their annual audit. the possession, ownership and operational use thus make use of the Labour Act − which has The risk matrix is used as a tool to assist During the reporting period, the Group competence at senior management level. The During 2014 and 2015, this external review did of technology that may result in the company a provision for alternative dispute resolution management in recognising all material risks to adopted a centralised risk management Board is confident that it is able to identify not result in any significant or material findings. becoming a party to legal proceedings. that is distinct from the Compulsory Dispute which the Group is exposed and ensuring that structure in order to ensure specialised focus suitable short- and long-term replacements Furthermore, the Group is aware of the need Resolution Mechanism channelled through the the required risk management culture, practices, on targeted risk management areas such as from within the Group when the need arises. Internal Audit Includes Procedures on IT in for compliance with applicable laws, rules, codes office of the Labour Commissioner. policies, resources and systems are progressively enterprise risk, occupational health and safety, its Internal Audit Programme. and standards that are affected by IT and the implemented and function effectively. The risk environmental management and security. In taking succession planning to the next level, The Board is aware that the Group’s IT strategy Board therefore ensures that IT-related laws, committees of the various OpCos report to the Through this centralised structure, operational the Group introduced a Talent on the Move must be integrated in the Company’s strategic rules, codes and standards are considered. Group’s Risk Committee. risk management across the Group has also Programme whereby forthcoming vacancies and business processes as a matter of priority. been standardised and enhanced. in critical positions are widely published. Although the Board is ultimately responsible The Board, through various processes, ensures The systematic risk assessment process Employees are encouraged to submit their for the IT governance framework, it delegates that the information generated and stored by ensures that risks and risk controls are not only The Group has entrenched its anti-corruption names for consideration so that their capacities the responsibility of implementation to the IT system is kept secure, private, confidential adequately identified, evaluated and managed at policies and procedures during the reporting can be developed to fill these positions once management. There is an appointed Chief and also available to users in a timely manner and
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ECONOMIC, SOCIAL & ENVIRONMENTAL SUSTAINABILITY
RISKS FROM CLIMATE CHANGE attempting to manage this through long-term LOCAL HIRING AND PROCUREMENT LOCAL PROCUREMENT SPENDING AS % OF TOTAL SPEND purchase agreements with fixed pricing and 2013/14 2014/15 Ohlthaver & List is aware of the very real threat constant supplier performance evaluation, as The O&L Group is committed to contributing to % LOCAL SPEND % LOCAL SPEND that climate change poses to our operations in well as by growing our own animal feed and communities by, among other things, hiring and Namibia Breweries Limited 33% 35% the highly arid country of Namibia. constantly monitoring the prices and costing procuring locally wherever possible. We therefore Namibia Dairies 53% 54% for our dairies. give preference to Namibian businesses and Model Pick n Pay 80% 80% Water scarcity and drought are of particular small- and medium-scale enterprises; 84% of Hangana Seafood 89% 88% concern to the Group. As water is one of our senior management are Namibian citizens. O&L Centre 60% 47% most material issues, the rising costs of this Kraatz Marine 91% 94% scarce resource are predicted to pose a financial During the year under review, local procurement Kraatz Steel 6% 5% challenge to operations − especially the water spending constituted 48% of all spending O&L Energy 95% 100% shortage in Windhoek that is already reaching on goods and services, compared to 45% Weathermen & Co. 85% 89% crisis levels. To address this challenge, the Group the previous year. The majority of imported Total 45% 48% is considering a number of options outlined in commodities comprise barley malt and hops the Environmental Sustainability section of for the brewing industry, as well as packaging this Report, including desalination, making use material for the brewing and dairy industries. of underground water sources and moving production sites in severely impacted areas to In July 2014, a strike in the metal industry In order to manage the risk that limitations to other regions. affected Namibia Breweries Ltd (NBL) as their growth pose for our operations, the Group key supplier, Bevcan, experienced production sells goods and services at competitive market Due to Namibia’s arid landscape and its shortfalls during this period that led to stock- prices, exports certain products and services legislation against GMO crops being used as outs and a delay in the supply of beverage cans. due to limited domestic market opportunities feed, the Group already has concerns relating and supports local communities and suppliers to the cost of feed for our dairy cows and the in order to encourage local growth. We have price of barley as a raw material for some of also diversified our Group Portfolio in order to our processes. Importing these raw materials maximise our potential for growth. from overseas markets is a costly endeavour. As a material issue for the Group, the cost of doing business is a risk that could increase greatly with climate change. The company is
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SOCIAL SUSTAINABILITY
HUMAN CAPITAL The table below depicts the spread of employees across the Group. It shows the number of Employment and Equity employees from the lowest (1) to highest (9) Job Grades.
WORKFORCE PROFILE AS AT 30 JUNE 2015 LEVEL IN EMPLOYEE HIERARCHY AND GRADE RACIALLY DISADVANTAGED JOB CATEGORY RACIALLY RACIALLY PERSONS WITH NON-NAMIBIANS TOTAL DISADVANTAGED ADVANTAGED DIABILITIES 2014 Variance 2015 Job Category Men Women Men Women Men Women Men Women Men Women Men Women Men Women Men Women Executive Directors (Grade 9) 3 1 0 0 3 1 Executive Directors 3 1 12 1 0 0 2 0 17 2 Senior Management (Grades 8A - 8C) 24 10 0 0 24 10 Senior Management 24 10 54 16 0 0 18 3 96 29 Middle Management (Grades 7A - 7C) 184 115 24 24 208 139 Middle Management 208 139 107 50 0 0 14 3 329 192 Specialised/skilled/senior supervisory (Grades 6A - 6B) 294 258 34 51 328 309 Specialised/skilled/senior supervisory 328 309 21 11 2 0 3 0 355 320 Skilled (Grade 5) 393 149 25 36 418 185 Skilled 418 185 1 2 1 0 1 2 421 189 Semi-skilled (Grades 2 - 4) 1048 899 85 138 1133 1037 Semi-skilled 1133 1037 0 1 6 1 0 0 1139 1040 Unskilled (Grade 1) 298 365 -4 9 294 374 Unskilled 294 374 0 0 1 0 1 0 296 374 Total permanent 2244 1797 164 258 2408 2055 Total permanent 2408 2055 195 81 10 1 39 8 2653 2146 Fix Terms/Temporary 467 317 -26 -2 441 315 Fix Terms/Temporary 441 315 8 2 0 0 0 1 451 318 Total 2711 2114 138 256 2849 2370 Total 2849 2370 203 83 10 1 39 9 3104 2464
The O&L Group of Companies subscribes to the The above table indicates that as at 30 June 2015 The Group recorded an increase of formerly were permanent at unskilled level and 28 were The O&L Group aims to create a feasible and principle of equal opportunities for all and gives 85.8 % of senior management are Namibian disadvantaged women. Of this, 138 employees temporary employees. flexible strategy that addresses work-related preference to Namibian citizens when filling citizens and hired from within the country. were appointed or promoted to semi- employment barriers and the expectations of vacant positions across the Group. Furthermore, skilled level, 51 to Specialised/Skilled/Senior The reduction in employees in the employees in the designated groups, namely the Group strongly supports the Affirmative Supervisory and 36 to skilled job categories. abovementioned category is as a result of racially disadvantaged, women and persons Action (Employment) Act, 1998 (No. 29 of 1998) The Group increased the number of formerly reduction of temporary employees because with disabilities. At the same time, the Group and files the required Affirmative Action report disadvantaged employees by 394, for the period of either projects that has been completed or recognizes the shortage of skills in Namibia as with the Office of the Employment Equity in review. 32 racially disadvantaged employees due to affluxion of time in their contracts of well as the ambitions and aspirations of current Commission on an annual basis. left the employment of the Group of which 4 employment. and future non-designated employees.
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In implementing its Affirmative Action Plan, the Remuneration at market midpoint and the Group is confident Group does not intend to unfairly discriminate The Group’s remuneration policy makes that its average minimum remuneration is in against any employee who does not belong to a provision for benefits: excess of sector benchmarks. designated group as defined in the Affirmative • Pension (Employee 7% & Employer 11%): Action (Employment) Act. The Group’s Grade 1-9, Employee Relations Affirmative Action Plan ensures that equity is • Medical Aid (50% Company Contr.): Grade 1-9 51.2% employees below supervisory and achieved within the organization in line with the voluntarily, management employees are covered by plans. • Transport Allowance: Grade 1 - 7A, collective bargaining agreements. • Funeral Scheme: Grade 1 - 9, The Talent on the Move Program that was • Acting Allowance Grade 1 - 7B, Retrenchments, transfers and organizational recently launched by the Group aims to address • Car Allowance, Housing Allowance: Packaged changes are done in accordance with contracts succession management for key positions employees, of employment. Minimum is one month notice. in order to accelerate the development of • Incentive Bonus: Grade 6A - 9, employees who show potential in their specific • Annual Bonus 13th cheque: Grades 1 - 5, All employees are subject to the Health and lines of work and who are willing to avail • Annual bonus based on performance: Safety Policy of the company as this is a legal themselves for development. Grade 6 - 9, requirement and is not negotiable. • Purchases Discount: Grade 1 - 9. The Group recognizes that, for some specialized There have been no incidents of discrimination, roles, competent designated incumbents may Temporary employees qualify for a subsidized no infringement in freedom of association only be available in the long term, but we transport allowance, 13th cheque, productivity and collective bargaining, no child or forced nonetheless undertake to ensure that there will bonus, funeral scheme, vitality HIV/AIDS cover labour during the reporting period. Grievances be a learning path to achieve this goal. and purchases discounts at our retail subsidiary. were filed by employees at Midgard Country Estate and Mokuti Etosha Lodge concerning In accordance with the Affirmative Action A minimum wage is difficult to benchmark management style and the introduction of an (Employment) Act, should the need arise in the absence of national minimum wage. employee handbook that regulates rules for the Group will facilitate the mentoring and The Group operates in diverse sectors and in staff accommodation. The grievances were development of every Namibian employed the absence of a national minimum wage it addressed through various meetings and with a non-Namibian as an understudy. The is difficult to do a meaningful comparison at amicably resolved. No operations were subject understudy employees are also part of the national level. At sector level, however, the O&L to human rights reviews or impact assessments. Talent on the Move Program. remuneration philosophy is to position wages
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Employee Turnover TRAINING evaluation of other people and situations, of a project, play a crucial part in these two O&L measures and monitors employee turnover sometimes leading to wrong conclusions). programmes and continuous improvement on a quarterly basis. In addition, we conduct Leadership and People Development • Managing corridor talks and grapevines monitoring and evaluation have been developed exit interviews with all employees who leave O&L World, an internal leadership development in organizations thus eliminating obstacles to track and quantify the results better. the Group. The objective of exit interviews is intervention, continues to grow in success and in focusing employees and achieving optimum to understand employees’ reasons for leaving its current focus is on: business results. ‘We Grow People’ Umbrella Development and, if possible, implement remedial measures • Introduction of course attendants to Initiatives where necessary to reduce loss of further Breakthrough Thinking methodology which A total of 422 employees attended the 8 O&L Hangana Seafood continues to invest in its personnel. A total of 755 employees exited the equip delegates with the tools to realize World sessions during the year under review. people skills through various means, including group during the reporting period. The table the power of thinking. This assists to unleash its Adult Literacy Programme and various job below indicates the various employee turnover potential and inspire creativity and innovation, The Breakthrough Management Skills (BMS) attachments. categories. leading to achieving stretched business targets. programme which is aimed at consolidating the • Course delegates are further equipped with leadership and management skills of existing During the financial year under review 50 The total employee turnover rate for the Group skills and tools on what it means to take a managers has seen another 72 successful employees, of whom 40 were women, amounts to 15.9% of staff (17.7% during the EMPLOYEE TURNOVER 2014/15 Stand, also how to implement the Stand. employees through its programme. The BMS enrolled in the Adult Literacy Programme. previous financial year), 10.2% less than the • Realization of the internal unlimited potential programme’s main focus is on breakthrough This programme has driven improved levels previous year, based on permanent employees RESIGNED 55% each one of us has. leadership competencies, strategy execution of literacy among Hangana’s low-skilled as at financial year end. This is internally regarded • Introduction to the O&L Purpose, Vision and emotional intelligence. employees. as a reasonable turnover rate given the fact that RETIRED 2% metrics, Values and Breakthrough Leadership it covers various categories of job termination Model. The Leadership Foundation Programme (LFP) Furthermore, the Quality and Engineering RETRENCHED 1% apart from resignations, which accounted for • Introduction to O&L Breakthrough Plan 2019. is aimed at introducing supervisors and junior departments at Hangana Seafood continued
55% of the staff turnover. Reasons given for CONTRACT END/EXPIRE 8% • Introduction to the Group Portfolio profile and managers to the basic skills of leadership and to offer job attachments to students from resignation were mostly related to employees Heritage. focusses on role clarification, time management tertiary education institutions, with the aim of taking up a better job offer or leaving to further DECEASED/DISABLED 2% • Course attendants are further taught good and self-improvement opportunities. The LFP enhancing their practical skills, experience and their career or studies. listening and networking techniques (Being has seen another 106 employees complete the exposure to the world of work. The Quality DISMISSAL 32% There for someone). programme. Department has given 3 job attachments to • Understanding how their roles are connected students who specialised in microbiology, to the greater O&L Purpose and Breakthrough The return on investment (ROI) planning projects biochemistry and metallurgical assaying, while Plan 2019. of the BMS and LFP, which assist employees to the Engineering Department has entered into • Introduction to the concept of Files (subjective implement their newly-acquired skills in a form an agreement with the Namibian Institute of
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Mining and Technology (NIMT) to host student of the Namibian youth with a new skill that they Brewing and Beverage Technology at the programme before the end of August 2015. In TOTAL SPENT ON GENERIC TRAINING, 2014 - 2015 which gave them more insight into our job attachments. The Engineering Department can use to either enter the job market, earn a TUM School of Life Sciences Weihenstephan, addition to this, Model Pick ‘n Pay continues refreshed Vision 2019 Metrics. has offered 7 job attachment opportunities better living, or possibly start their own small Germany; 3 NIMT academic bursaries in Fitting to provide practical experience for students OPERATION 2015 (N$) 2014 (N$) to students in various fields including businesses. 3 intakes are scheduled per financial & Turning, Instrumentation and Electrical studying at different catering schools across Hangana Seafood 1 134 152 492 405 The Employee Engagement Initiative, which was millwrighting, bricklaying, plumbing, water care year. (general); and 18 NIMT job attachments in the country with a view to employing them in Kraatz Marine 740 725 422 418 introduced in 2013 as part of our Vision 2019 (desalination plant), fitting and refrigeration. various technical disciplines. the different service areas on completion of Kraatz Steel 390 0 communication strategy, continues to empower 2 out of the 7 students have been offered Kraatz Marine and the Polytechnic of Namibia their courses. Pick n Pay recently also finalised Model Pick n Pay 1 279 212 905 708 our people by developing their personal permanent employment upon completion of signed a Memorandum of Agreement and will O&L Leisure gave internship opportunities to 8 designing a training programme for its store Namibia Breweries 5 170 959 3 834 328 connection to our Vision, Purpose and Values; their job attachments. provide 2 Polytechnic students per year with students from the Okakarara Vocational Training supervisors. Namibia Dairies 877 804 157 157 leveraging the corporate brand by building an opportunity to understand the real-life Centre who were placed at Midgard Country O&L Centre 2 338 882 2 046 175 a sense of belonging and ambassadorship Lastly, Hangana has introduced a programme challenges of their chosen profession in the Estate, Mokuti Etosha Lodge and the O&L Generic Training Interventions O&L Leisure 706 821 557 781 in employees; and creating a breakthrough known as Total Productive Manufacturing industry − the necessary technical as well as Leisure Head Office (where they were exposed During the year under review, 1 934 employees Properties 174 700 235 993 environment for all O&L staff members. Management - (TPM) - through which workplace skills − in order that they will be job to the hospitality industry through working attended various generic training interventions. Total 12 423 646 8 651 965 supervisors and employees will undergo ready at the completion of their studies. in all the different departments). As from July The most attended beside the regularly The Employee Engagement Initiative is a intensive training aimed at eliminating waste 2015, another 6 interns from the Okakarara scheduled O&L World, BMS, LFP, O&L group principal means by which we facilitate our and improving efficiencies and productivity. The Namibia Institute of Mining and Technology Vocational Training Centre and 1 intern from induction and DRINKiQ events, were the EMPLOYEE ENGAGEMENT connection with employees and its activities This initiative is based on four key pillars: (NIMT) collaboration is also proving to be Germany joined O&L Leisure for a 6-month generic training such as: SAP IT system training, include: communication and leadership teamwork, visual management (performance successful and another 14 students from NIMT internship programme at Midgard Country effective communication, performance Launched in 2004, the main objective of the development; utilising electronic newsletters; measurement & visual display), 5S (system have taken up their job attachments for a Estate and Mokuti Etosha Lodge. management, disciplinary hearings, disciplinary Mwenyopaleka Programme is to instil the the Touch 5 000 Campaign (an initiative whereby to establish basic discipline and order in the period of 6 months for level 1 & 2 intakes and hearing the role of the initiator and chairperson Group’s Purpose, Values, Vision and Mission (as leadership engages all 5000 group employees) workplace to create an environment that is an 12 months for level 3 intakes. Kraatz Marine As part of Model Pick n Pay’s initiative to and managing personal finances. well as the associated behaviours) in the heart O&L Values posters; regular engagement essential foundation for other best practices to therefore currently supports 14-16 students grow competent future leaders, the Division and mind of each employee in the Group. sessions with all employees; road shows; prosper and for people to be really effective) throughout a single financial year. has been implementing an intensive training A total of 39 510 training hours were recorded Over the past few years, the Mwenyopaleka the Value Star Recognition Programme, SMS and focused improvement. programme for its trainee managers. The during the reporting period (an average of Programme has allowed the Group to promote communication; internal publications which Namibia Breweries Ltd financed the following 11 trainee managers have all completed more than 7 hours per employee) while a total and communicate these objectives to a go out to all employees to acknowledge the Kraatz Marine has launched a Learn to Weld talent-development support during the their 9 months theoretical training with the of N$12,423,646 was spent on the generic large number of its employees. In 2015 the role that their achievements and contributions programme, through which 6 students have financial year under review: 6 study loans, Polytechnic of Namibia and are still undergoing training interventions during this time. Mwenyopaleka road shows were hosted for play towards the Group becoming ‘The most already been taught the basics of welding over which supported employees’ further education intensive practical training at various stores that the 11th time in six towns countrywide and progressive and inspiring company’ by 2019. a 3-month period. The training takes place once (certificate up to MBA level); 1 academic internal will prepare them for their different managerial approximately 4,201 employees attended a week and the objective is to equip members bursary to study for a Bachelor’s Degree in positions. This first intake is set to complete their ‘#Mwenyopaleka15’, a digital world theme,
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PERSONNEL ABSENTEEISM 2014/15 OCCUPATIONAL HEALTH AND SAFETY actions. During the annual audit, the O&L Group investigation; and implementation of corrective EMPLOYEE WELLNESS PROGRAMME our employees − while simultaneously building achieved an average compliance rate of 90% actions to ensure that similar incidents do not our corporate reputation and enhancing During the period under review, the Group against the Group Risk Control Standards for the reoccur. Due to the success achieved across the The Employee Wellness Programme originated PAID SICK LEAVE 71% relationships with our stakeholders. The conducted an in-house audit in respect of third successive year. Group through Project Occupational Health & with the vision of sustaining and enhancing O&L culture embraces diversity across our the implementation of its Group Risk Control Safety, the programme was entrenched during employee wellbeing. The programme aims to INJURIES ON DUTY 4% businesses and beyond and has thus enabled Standards. These standards are based on The Group launched Project Occupational Health the reporting period thereby ensuring that improve employee and workplace effectiveness us to establish excellent long-term relationships international best practices in the occupational & Safety during the 2013 reporting period. The 100% of our staff has representation through through the identification, prevention and COMPASSIONATE 11% with our Corporate Social Investment (CSI) health and safety field. Since its introduction in aim of the project is to ensure that a world- the various occupational health and safety resolution of personal and productivity issues partners and other stakeholders in areas of 2009, implementation of the Group Risk Control class Occupational Health and Safety system is committees established in the various Group − thus enhancing employees’ positive work particular relevance to our industries, as well Standards has had a very positive impact in implemented across the O&L Group. During this subsidiaries. An improved incident-reporting experience by creating a great workplace AWOL 1% as in areas of national importance, thereby terms of the management of occupational project, focus was placed on legal compliance process was also introduced. culture where people who are healthy and ensuring that we support the upliftment of all UNPAID SICK LEAVE 13% health and safety, including compliance with with the Labour Act and relevant occupational happy can experience job satisfaction. members of Namibian society. relevant legal requirements, the investigation health and safety regulations; health and safety The Group is proud to report that in its efforts to of incidents and the response to corrective awareness among staff; incident reporting and create and maintain a safe work environment, Absenteeism During the period under review, a total of the Group’s Disabling Injury Frequency Rate The analysis of absenteeism data during the almost N$3 million was spent on CSI, excluding (DIFR, or lost-time injuries per 200,000 hours year under review shows an absenteeism rate CORPORATE SOCIAL INVESTMENT indirect costs such as the CSI function’s, man worked) has stabilised below the target DIFR of 1.84% compared to 1.95% in 2014. This hours, travelling and accommodation etc. rate of 1.0 over the past three reporting years, shows a decrease of 5.6% and it is still below Creating a Future, Enhancing Life although the DIFR increased slightly from 0.6 our 2% target absenteeism rate. The Employee The Ohlthaver & List Group embraces its to 0.74 over this reporting year, mainly due to Wellness Programme continues to support obligations as a responsible corporate citizen improved incident reporting. The DIFR is made various ill-health prevention and intervention and therefore the Group’s Corporate Social up of 57 disabling/loss time injuries (injuries activities such as health education and Responsibility (CSR) Strategy supports our where the injured party missed the shift after awareness; psycho-social support services (i.e., Group Purpose − ‘Creating a Future, Enhancing the incident due to the injury). case management and referrals) and training. Life’ − in improving and uplifting the lives of the These activities all aim at addressing employee people in the Namibian communities in which Notwithstanding the success that the Group health and wellbeing issues with the purpose of it operates. achieved in lowering the DIFR since 2009, the reducing employee absenteeism. Group remains committed to maintaining the We support initiatives that are sustainable, focus on occupational health and safety during enhance the lives of community members, the 2016 financial year. conserve our natural resources and engage
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O&L gives support to community enhancement Ovatjimba communities through a socio- luxury items and who also give their time in supported joint Group initiatives such as the making one paid leave day in each calendar to provide young Namibians with welding initiatives including: economic programme providing educational spending the day with the children. O&L OVCs’ Christmas Party, the Shoe Box project year available to its employees to assist a charity education and skills development. Kraatz materials, basic necessities and improved to benefit orphans and vulnerable children and organisation or good cause of their choice. launched the Learn to Weld programme Education and youth development sanitation. Health the Palmwag Anti-poaching Trust, which seeks whereby six students were enrolled to learn the Literacy is essential to eradicate poverty in • The O&L-sponsored Let’s Read initiative During the year under review, O&L supported to address the national issue of rhino poaching HANGANA SEAFOOD basics of welding, both theory and practical, developing countries and to support sustainable supports a library in order to enhance the initiatives that advance the health of fellow in Namibia. • Hangana continued to support JJ`s Care while also receiving life-skills training. This development. Without literacy skills − the ability reading skills of learners at Adam Steve citizens, such as those relating to cancer Centre, an Edu-Therapy Day Care facility for programme provides young people with new to read, to write, to solve problems and to Combined School, situated in the town of Koës awareness, prevention and treatment and DIMENSION DATA children with physical and mental challenges skills so that they can improve their own lives access and use technology – generations of in the //Karas Region. combating the spread of HIV/AIDS, all major • During the year under review, Dimension Data and those with learning difficulties through while making a positive contribution within Namibians will struggle to engage fully with the • Through our collective efforts within the public health issues that affect a significant once again launched its Exponential Training donations of warm, hand-made winter blankets their communities and by so doing contribute world around them and will fail to reach their Group, O&L supported a school and clinic number of Namibians. Besides these initiatives (XT) programme, through which six candidates and food items − including a regular supply of to poverty alleviation in our country. full potential as parents/guardians, community construction project at Etunda Farm in the aimed at enhancing the lives of Namibians were selected to complete the 24-month Hangana fish products. • Kraatz once again made a N$20, 000 donation members and future leaders of our country. Otavi District that will improve education and generally, the Group also looks after the development course. The programme provides • Hangana continues to make a difference in towards the Workers Empowerment Fund. O&L believes that education builds a prosperous healthcare within the community. wellbeing of its own employees by investing in students with the opportunity to be trained Erongo Region communities: it donated fish to This fund has been in existence for a number nation and that our government should not be • As the youth are the foundation of a wellness initiatives benefiting 5,570 employees within the Microsoft or Cisco framework, various social welfare organisations such as the of years and is managed by a committee responsible for this development on its own but better future, our various OpCos have been across the Group. while giving them exposure to a world-class Celes Hope Kindergarten, Walvis Bay Kids Haven consisting of Kraatz employees guided by our that this is better achieved through collective engaged for many years in enhancing the lives working environment. The Dimension Data XT Children’s Home and Tutaleni Kindergarten and Group purpose: ‘Creating a future, enhancing efforts and wide ownership. of orphaned and vulnerable children (OVCs) While all our OpCos participate in the above O&L- programme develops young talented Namibians Primary School, to mention but a few. life’. Each year the committee members make a • O&L has developed an Adult Basic Education through investment and support to various led CSI initiatives, the following list summarises and provides them with job opportunities to • Hangana once again took the lead in difference in their community by giving support Development (ABED) training programme to children’s homes. For the past 11 years, O&L has key initiatives led by various individual OpCos improve their prospects for the future. organising the annual O&L OVC Christmas Party to a good cause; this year the fund supported give our employees the opportunity to improve hosted a memorable, fun-filled Christmas Day within the O&L Group. • Dimension Data commemorated World Food at the coast while also supporting various other the Kuisebmond Old Age Home to bring relief their literacy skills. The Adult Education Division event for OVCs in Khomas Region (Windhoek) Day, which is celebrated each year in October. social causes such as the Walvis Bay Mayoral to the elderly men and women living there. offers support in both theory and practice to and for the past 6 years it has hosted a similar BROLL AND LIST PROPERTY MANAGEMENT This is a joint effort of the company and its Relief Fund and the Cancer Association of • Kraatz also supported the Coastal Raiders increase functional literacy levels across the event in the Erongo Region (Walvis Bay). The NAMIBIA (BROLL) employees and this year the Children’s Life Namibia (CAN), as well as the Save the Rhino hockey team with the purchase of two hockey Company. children are treated to face painting, jumping • BROLL provides office space to the Change Centre − which cares for close to 53 Trust Fund. goal posts. This initiative aims to create a • For the past three years, O&L has supported castles, slip ‘n slides, a giant cake and a special Hifikepunye Pohamba Foundation, a charity OVCs − benefited from a donation of healthy platform for the youth to participate in the the Back 2 School and Stay@ School campaign appearance by Santa, who delivers a special gift founded by the former President of the food items and some voluntary support from KRAATZ MARINE/STEEL game of indoor hockey and in doing so to of the Office of the Prime Minister, an initiative to each child. These gifts are sponsored by the Republic of Namibia to advance the education our staff. • During the year under review, Kraatz invested enhance their physical and mental wellbeing that aims to enhance education and the living O&L employees who decorate gift boxes filled of marginalised children. • Dimension Data encourages its employees more than N$500,000 in the procurement while also developing self-discipline and conditions of marginalised San, Ovatue and with basic necessities, stationery and some • During the year under review, BROLL to take part in social upliftment initiatives by of a welding simulator and other equipment encouraging team work.
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MODEL PICK N PAY (A DIVISION OF WUM NAMIBIA BREWERIES LIMITED (NBL) Ohangwena Region) through NBL’s distribution May Oncology Clinic in the treatment of cancer our quest to reduce alcohol-related harm and skills as ambassadors for responsible drinking. PROPERTIES LIMITED) Local procurement network. Applying the John Stover measure, patients, as well as the Cancer Association of promote only the responsible use of alcoholic To date, more than 2,500 individuals − including • Pick n Pay continues to support local • Like the rest of the O&L Group, NBL is it is estimated that approximately 2,700 new Namibia’s awareness-raising programme to beverages. In addition to establishing an opinion leaders, decision-makers, community entrepreneurs in growing their businesses. committed to hiring and procuring locally HIV infections were prevented as a result of promote early detection and treatment. industry-wide commitment to responsible elders, members of law enforcement agencies This is achieved through assistance with wherever possible; therefore, as all O&L OpCos this initiative in the reporting year. Following • Through its Vigo brand, NBL supports the trade and alcohol-harm reduction among and social workers − have attended the DRINKiQ meeting our stringent listing requirements, do, NBL gives preference to local businesses the success of the Condom Distribution Pilot Blood Transfusion Service of Namibia with their all players, NBL has also continued to make programme. ongoing mentorship, coaching and preferential and small- and medium-scale enterprises. NBL Project, a staggered roll-out will ensure the campaigns that aim to ensure that an adequate significant investments in alcohol harm- • In addressing drinking and driving, which procurement of locally-grown products. has, however, taken the further initiative of project is extended to other regions of Namibia amount of donated blood is available for reduction programmes of its own. is considered to be one of a number of • During the year under review, Pick n Pay and seeking to establish a local barley industry and so as to broaden its impact. operations, cancer patients, accident victims, • During the year under review and in ‘Taking contributors to road fatalities, we continuously Natural Value Foods started to grow spinach, commenced with its first field trials in 2010. As • For the past five years, NBL has supported etc. while NBL also continued to support responsibility’ to the next level, NBL launched the seek ways to address road safety through cabbage, barley and oats at Otavifontein it has now been determined that barley can be the Mister Sister Mobile Health Service initiative the Nampharm Foundation Trust in assisting Stay Cool, Enjoy Responsibility campaign to instil collaboration with our strategic partners − the farm. Through this joint venture, we support grown in Namibia, NBL and its stakeholders are - a mobile clinic service administered by Namibian children needing facial reconstructive a sense of responsibility amongst consumers Namibian Police (Nampol), the Motor Vehicle our Group Vision Metric of creating additional taking the next steps towards the establishment PharmAccess and sponsored by the Heineken surgery. of alcohol by appealing for moderation and Accident Fund (MVA Fund), the National Road job opportunities and sustainable business of large-scale barley production in Namibia. Africa Foundation. Mister Sister has significantly consideration around their roles − be it as a Safety Council (NRSC), the Roads Authority (RA) development while also complementing the This will enable NBL to procure barley locally enhanced access to primary healthcare services Education: leader, role model, parent, caretaker/guardian and other stakeholders such as the West Coast efforts of government as outlined in Vision through establishing an entirely new industry and health education in rural and remote • NBL continued with their support to the and/or employee − while enjoying the benefits Safety Initiative and the Private Sector Road 2030 and the Growth At Home strategy. in Namibia; in so doing NBL will further support populations in the Khomas, Omaheke and School of the Visually Impaired, the School of that are derived from a society in which people Safety Forum − to raise awareness, increase • Pick n Pay demonstrated its commitment socio-economic development locally. Otjozondjupa regions. The Mister Sister initiative the Hearing Impaired; as well as Windhoek’s act responsibly. Thus while our campaign was law enforcement and enhance compliance to the wellbeing of the communities in which also conducted numerous education sessions Môreson School for the intellectually impaired born out of a need to address alcohol-related to the rule of the road. These efforts were it operates by supporting various children’s Caring for our community with patients and drove awareness through and Die Lebensschule (Rehoboth), a school harm, it also incorporated numerous other also complemented by our Stay Cool, Enjoy homes and schools, such as the SOS Children’s Health: direct engagement and SMS messages covering for children and teenagers with mental and social issues raised by our stakeholders. Responsibility campaign and the DRINKiQ Village, Huis Maerua and Dagbreek School to • A public-private partnership between NBL, topics such as maternal child and infant care, learning challenges. • The DRINKiQ training programme was again programme, which also address drink-driving. name but a few. the Ministry of Health and Social Services and family planning, diabetes, high blood pressure a key driver in engaging employees of the O&L • Having been instrumental in the • With Pick n Pay’s support, Madam Pohamba, GIZ launched a pilot project in March 2014 and hygiene, to mention only a few. Promoting responsible drinking: Group and external stakeholders on the issue of establishment of the Self-regulating Alcohol the First Lady at the time, launched Project to assess the impact such a collaboration • NBL’s long-standing support to the Cancer • At NBL we believe that efforts to reduce the responsible drinking. During the period under Industry Forum (SAIF) in 2007, NBL prides itself SaniCare to assist young girls with the basics of would have in supporting Namibia’s fight Association of Namibia (CAN) is another example misuse of alcohol are most effective when all review, more than 800 individuals attended with the impact SAIF has had over the years personal hygiene (particularly sanitary care) to against the spread of HIV/AIDS. The year-long of our commitment to enhancing the health stakeholders, inclusive of government, the the DRINKiQ programme during which they in ensuring voluntary compliance by all major ensure that this is no longer a barrier to school Condom Distribution Pilot Project proved to be of Namibians. Cancer is a major public health community and the industry, work together were familiarised with the facts about alcohol liquor industry players to world-class standards attendance. extremely successful and facilitated the delivery disease, one that affects a significant number of in addressing common goals − which is why consumption and participated in extensive in self-regulation and in leading targeted of 1,337 million SMILE condoms (primarily in Namibians. This is why NBL supports the Dr AB we have fostered numerous partnerships in dialogue in order to equip them with appropriate interventions that address alcohol-related harm.
80 81 The Alcohol Traders Programme (ATP) was yet Maltahöhe, Baby Haven and Dr Zephania again one of the SAIF highlights during the year Kameeta Pre-Primary and Day-Care Centre, by under review as it provided basic business skills sponsoring our healthy Nammilk Fresh Farm and responsible server training to approximately dairy products (Oshikandela, Omaere, long-life/ 320 shebeen owners. Another SAIF highlight UHT milk, Oshitaka and buttermilk) that are a was the Underage Drinking Programme, good source of calcium. hosted in partnership with Physically Active Youth (PAY), which commenced in June 2014 O&L LEISURE and engaged youths from disadvantaged • O&L Leisure supported the SOS Children’s communities on the dangers of underage Village with a weekend retreat at Midgard drinking while introducing them to healthy Country Estate. alternative recreational activities and equipping them with various life skills. Interviews with WEATHERMEN & CO. the beneficiaries confirmed that through this • Despite being a business still in its infancy, intervention there had been a marked change Weathermen & Co. embraced the O&L in attitude and behaviour and a concomitant philosophy of continuously seeking new and development of a stronger ability to resist social innovative ways of adding value in a manner pressures. that benefits the business, our people, our country and the African continent generally. We NAMIBIA DAIRIES therefore support the TEDxWindhoek workshop • During the year under review, Namibia Dairies and networks, which bring people together to supported Die Lebensschule in Rehoboth, an ‘think big’ by sharing breakthrough ideas for a institution that enhances the education and thriving future. health of children with physical and mental challenges, by giving them special hand-made blankets for winter as well as healthy Namibia Dairies products. • Namibia Dairies continued to support schools and homes for OVCs − such as Stampriet Primary School, Nabasib Primary School in
82 83 Sustainability
ENVIRONMENTAL SUSTAINABILITY
We as a Group believe that environmental Environmental precaution not available, to actively mitigate the risks so as Energy and Water Consumption Namibia Breweries Ltd has also implemented The coastal desalination plant at the O&L stewardship is something which goes beyond The O&L Group is takes a precautionary to reduce them to an acceptable level. Where Electricity, fuel and water are key requirements process waste water reuse initiatives. Group’s fishing operations already provides environmental policies and a commitment to approach when assessing possible risks that a the O&L Group is involved in a project, the aim in the O&L Group’s production and conversion Additionally the O&L Group has set water 50% of water requirements with the remainder sustainable environmental practices. We believe project may cause significant and irreversible is to avoid, where possible, or at least minimise processes. The O&L Group has taken note of consumption saving targets of 10%. obtained from municipal sources. that it is important to protect the environment damage to the environment. In cases where any negative environmental impact arising electricity supply shortages in the country and in which we operate and to look after the risks are identified, measures are taken to from the project. appropriate mitigation actions have been taken WATER, FUEL AND ELECTRICITY CONSUMPTION natural resources of our beautiful country avoid the risk and, if a feasible alternative is to address the possibility of load shedding. These UOM 2012-13 2013-14 2014-15 for the generations to come. We therefore include the installation of adequate standby Electricity kWh 64 527 269 63 129 842 61 683 576 embrace a multi-stakeholder approach in RAW MATERIAL PROCESSED generating capacity, the use of solar energy, HFO for heating litre 5 113 925 4 154 172 4 135 132 promoting sustainable environmental practices 2012/13 2013/14 2014/15 the replacing of less energy efficient lighting, Fuel for fish meal furnaces litre 500 596 537 108 448 704 in and beyond our business. In order to raise Malted Barley for Brewing tons 34 375 30 662 31 023 the introducing of more energy efficient Fuel for fishing vessels litre 9 412 881 7 258 958 4 795 058 awareness on water sustainability, the annual Fish landed tons 13 665 12 615 10 003 refrigeration systems, the improvement and Fuel for secondary transport and other applications litre 1 610 230 1 677 406 1 705 605 O&L Environmental Week focused on water Fish Processed tons 13 666 13 409 11 176 optimisation of production processes as well Water -municipal (potable) m3 1 766 717 1 513 568 1 476 836 awareness during a campaign, whereby our Milk Intake own production ex !Aimab litres (‘1000) 15 736 15 555 15 137 as engaging with relevant stakeholders on Water desalinated m3 4 192 103 029 97 740 employees, being a stakeholder group, were Milk Intake - Local producers litres (‘1000) 8 911 7 833 8 925 load shedding policies and plans to minimise Water for agronomy m3 4 135 000 4 169 126 3 664 238 encouraged to implement water saving Milk Powder converted tons 153 405 678 the impact of any interruption in supplies of Water from boreholes (estimated) m3 80 000 90 000 100 000 practices in their personal environment. This Concentrates/pulps converted tons 986 1 064 1 269 electricity. campaign was further entrenched through the O&L Value: ‘Naturally today for tomorrow’. (The Group’s packaging material scope is extremely diverse and complex and the exact usage has not Water supplies in the central and coastal Energy and Water intensity and efficiencies been determined) regions of Namibia have dropped to critically Energy and water efficiencies have improved The Group has embarked on a journey to low levels as a result of the ongoing drought. significantly in some operations over the implement a formalised Environmental The O&L Group has assessed the impact of reporting period, mostly due to increased Management System based on the these water shortages in especially the central volumes in some sectors, energy and water requirements of ISO 14001. The Environmental region where the beer and soft drink and milk/ saving initiatives and process optimisation. Policy and system documentation have been juice businesses operate, culminating in actions Electricity efficiency in the fishing and beer and completed and partially implemented to date being undertaken to mitigate the problem. soft drink sectors has decreased as a result of One of the possible mitigation actions includes decreased production volumes. The O&L Group the consideration of relocating the businesses is confident that efficiencies are well within to other more water secure regions, as well as industry benchmarks and in most cases exceed directly accessing underground water sources. these benchmarks.
84 85 Sustainability
Some selected energy and water efficiencies Some major key energy and water savings Carbon Footprint The O&L Group’s carbon footprint has decreased CARBON FOOTPRINT CONTRIBUTORS 2014/15 are reflected in the following table: projects completed or initiated during the The O&L Group is cognisant of the impact its by a significant 15.2% when compared to the ELECTRICITY 67% reporting period include: activities have on the environment and, in 2012/13 base year, as a result of a decrease in WATER, FUEL AND ELECTRICITY CONSUMPTION • Installation of energy saving lights at: particular, how these activities contribute to fuel and electricity consumption in the fishing METHANE 3% 2012-13 2013-14 2014-15 - Model Pick n Pay Stores (7 stores) climate change. As per the O&L Group Vision sector (due to reduced fishing quotas and Hangana Seafood - Hangana Seafood Metrics, a carbon footprint reduction target of significant improvements in catch rates) and a OTHER FUELS/ Fishing vessels fuel efficiency l/ton landed 689 575 479 - Namibia Breweries Limited 20% by 2019 has been set. reduction in HFO for the beer and soft drinks GASES 6% Electricity efficiency kWh/ton processed 902 946 1033 - Broll Namibia: Wernhil and Alexander sector (due to lower volumes). There have also Water Utilisation m3/ton processed 17.6 16.3 17.2 Forbes House parking areas The O&L Group’s carbon footprint is been significant improvements in efficiencies in HFO FOR Namibia Breweries - O&L Centre predominated by electricity consumption in other operations. HEATING 12% Electricity efficiency kWh/hl packaged 8.30 8.96 9.24 - Namibia Dairies Avis Plant and Prosperita its manufacturing and retail operations, heavy
Water utilisation hl/hl packaged 4.53 4.91 4.76 distribution Centre furnace oil (HFO) used in generating heat in the FUEL FOR FISHING Heating efficiency MJ/hl packaged 68.6 65.2 64.9 - Kraatz Marine beer and soft drink and milk/juice sectors and VESSELS 12% Namibia Dairies (production facility) • The installation of a biomass (wood chips) fuel consumption in the fishing sector. Electricity utilisation kWh/litre product produced 0.092 0.078 0.072 boiler at Namibia Breweries Limited to Water utilisation l/l product produced 3.49 2.90 2.77 be commissioned by the end of the next Heating efficiency l HFO/l product produced 0.015 0.017 0.016 financial year (it is envisaged this will esultr The table below reflects the carbon footprint (Scope 1 and 2 elements of the Greenhouse Gas SEGMENT CONTRIBUTION TO CARBON FOOTPRINT O&L Leisure in the carbon footprint being reduced by Protocol) of the O&L Group (tons CO2e Units): 2014/15 Electricity efficiency kWh/guest night 43.2 36.2 32.3 approximately 5 000 tons of CO2e units NAMIBIA BREWERIES 32% Model Pick n Pay per annum). CARBON FOOTPRINT CONTRIBUTORS (tons CO2e) 2012-13 2013-14 2014-15 Electricity efficiency kWh/product sold 0.203 0.193 0.183 • The installation of a biogas plant at !Aimab Electricity 64 527 63 130 61 684 MODEL PICK N PAY 23% Superfarm Fuel for fishing vessels 21 791 16 491 10 930 • Internal awareness campaigns HFO for heating 13 637 11 078 11 027 • Process optimisation and improvements Methane 2 942 2 910 2 849 O&L LEISURE 2% • Annual environmental week focusing on Other fuels/gases 5 147 5 455 5 178 water saving Total 108 045 99 063 91 668 OTHER 1%
NAMIBIA DAIRIES 16%
HANGANA SEAFOOD 26%
86 87 Under Review
85% of municipal supplied water volumes and World Environment Day in June through a NBL championed the establishment of the Waste Management and Recycling do not take into account the effluent pre- major awareness campaign within and beyond Recycle Namibia Forum (RNF) in 2009. The Vision Programmes treatment activities undertaken at Namibia the operating companies. This year the main of the RNF is to “make Namibia the country The O&L Group’s ongoing drive to instil a culture Breweries Limited’s main processing plant in theme was water conservation, in line with our in Africa that achieves the highest success in of recycling and environmental consciousness order to improve the quality of the water prior own sustainability agenda, as well as in support promoting the 3R’s of Reducing, Reusing and at the workplace now results in that the majority to discharge. of the water authorities’ efforts to conserve Recycling”. The RNF encourages numerous of solid waste at all major business is recycled. water, a critically scarce resource in Namibia. corporates and NGO’s to work together to During the period under review, one minor achieve this audacious Vision. Under the Reputable waste management contractors environmental spill was reported. Significant Namibia Breweries Limited chairmanship of NBL, the RNF has continued have been appointed to handle solid waste, contributions are also made by the O&L Group NBL embraces its responsibility towards the to lead various successful initiatives, such as which comprises of mostly packaging materials towards national clean-up and environmental environment in- and beyond- their operations. As the 2014/2015 Schools Recycling Competition in the beer and soft drink and milk/juice and awareness campaigns. such, in addition to continuously innovating and that supported the RNF’s Vision and saw the fishing sectors. Most of the solid waste, such investing into new technologies and practices collection of 183 tons of recyclables by schools as glass, cans, cartons and plastics, are collected Caring for our environment to reduce their environmental impact, NBL also participating in this environmental initiative. for recycling purposes. Exact volumes of solid During the year under review the O&L Group supports numerous campaigns to create public waste generated and recycled are not readily supported the Annual Ondangwa Town Council awareness of good environmental practices. This available. Clean-up Campaign which aims to educate local has seen NBL sponsoring numerous community residents on waste minimization and sustainable awareness and clean-up campaigns such as Efforts have also been made to utilise organic environmental practices. Project Shine which has for the last 8 years Scope 3 (indirect) waste. For example, spent grain at NBL is used The O&L Group, though its operating companies successfully engaged the Erongo community elements of the Greenhouse as cattle fodder at the !Aimab Superfarm and supported various efforts and organisations by empowering and educating learners and Gas Protocol have not been organic dairy waste is utilised as pig fodder. At aimed at preserving our natural resources. community groups which earn revenue established by the O&L Group, Hangana Seafood, fish offal is processed into These included the Palmweg Anti-poaching through their voluntary clean-up work. but it is presumed that this is fishmeal. Trust, The Save the Rhino Trust Fund and Next dominated by fuel used in the Generation Rhino Conservation Trust to combat NBL’s depots in the northern region of primary distribution (an outsourced Effluent charges in the Windhoek area have Rhino poaching, which has become a major Namibia continued to assist partners such as function) of raw materials, packaging increased almost threefold during the year concern in Namibia. Namibia Wildlife Resorts with transportation of materials and final products consumed. under review after the implementation of a recyclables such as paper, glass, plastic and tins The impact of Ozone depleting gases and new waste water treatment plant by the local For the second consecutive year, the O&L Group from Okaukuejo and Namutoni rest camps to NOx and SOx has not been determined. authority. Effluent charges are based on 60- joined the rest of the world in celebrating Windhoek for processing.
88 89 Reports
ASSURANCE STATEMENT
The Board, management and other The assurance engagement was conducted with reasonable tests for accuracy, consistency, issues (hereafter referred to as Material Corporate Social Investment management of sustainability-related issues. stakeholders of Ohlthaver & List: due consideration of the inherent limitations completeness and reliability; Aspects, in accordance with the GRI G4 - Promotion of responsible alcohol • All of the tested site-specific data was found related to the collection, collation, sampling and • the report complies with the requirements reporting standard) and the identification of consumption to be reasonably accurate and/or reliable. Sustainability Consulting was commissioned analysis of various types of non-financial data of the Global Reporting Initiative (GRI) G4 key stakeholders groups; - Education, training and skills • O&L’s reporting processes appear to by Ohlthaver & List (hereafter O&L) to provide included in the O&L Integrated Annual Report. “Core” Level Reporting standard. • A review of the approaches adopted by the development-related initiatives effectively reflect the AA1000AS (2008) Independent Third Party Assurance over the company to management of these Material • A confirmation that the report effectively principles of Inclusivity, Materiality and company’s 2015 Integrated Annual Report, Independence In the execution of this assurance assignment, Aspects and engagement with key addresses all indicators required to conform to Responsiveness. covering the period 1 July 2014 to 30 June 2015. During the past year, Sustainability Consulting it was the responsibility of O&L to provide stakeholders; the GRI G4 standard for a “Core” Level report. • The report appears to adequately meet the This assurance engagement was undertaken has not provided O&L with any form of advisory Sustainability Consulting with appropriate levels • An in-depth review of the accuracy, GRI G4 Reporting Standard for a “Core” Level by Alistair Schorn, the Managing Director services, or undertaken any commissions for the of access to relevant information, systems, consistency, completeness and reliability The assurance process was limited to the Report, with adequate responses provided of Sustainability Consulting. Mr. Schorn has company, that might in any way compromise sites and individuals. required to fulfil these of sample drawn from the information and/ disclosures made in the O&L Integrated for all Standard Disclosures, as well as for completed the Certified Sustainability Assurance the independence of the assurance process. objectives. or data collected, collated and reported on Annual Report for 2015 and to reviewing the Disclosures on Management Approaches to Practitioner (CSAP) course and possesses close Sustainability Consulting has also not been by O&L in its 2015 Integrated Annual Report, relevant policies and procedures related to the Material Aspects. to ten years of experience in the measurement responsible for the preparation of any part of Assurance approach and limitations at the company’s Head Office and from indicators described above. It did not extend to of corporate financial and environmental, social the report in question. As such, Sustainability The process applied in developing this selected sites of Namibian Breweries and engagement with any stakeholders other than Conclusions and recommendations and governance (ESG) performance, including Consulting remains an independent assurer assurance statement is based on the AA1000AS Namibia Dairy, for the following indicators: relevant company employees and management Based on the information reviewed during extensive experience in the field of integrated over the content and processes pertaining to (2008) principles of Inclusivity, Materiality and Governance processes representatives responsible for the indicators this engagement, Sustainability Consulting and sustainability reporting. this report. Responsiveness, the GRI G4 Reporting Standard - Risk Management under review. is confident that this report provides a and all other relevant best practices in the field - Regulatory Compliance comprehensive and balanced account of Assurance Standard Assurance objectives and responsibilities of sustainability reporting and assurance. In this Human Capital Findings O&L’s management of its identified Material The assurance engagement was conducted The primary objectives of the assurance regard, Sustainability Consulting’s approach - Employee Turnover Overall, the assurance process determined Aspects and key stakeholder groups, as well according to a non-aligned assurance model, process and the responsibilities of Sustainability to the assurance engagement included the - Leadership and People Development that, in general, O&L’s sustainability reporting as its financial and ESG-related sustainability meaning that it was not conducted in strict Consulting in this regard, are to provide O&L’s following: - Occupational Health & Safety processes are adequate and furthermore that performance, for the period under review. accordance with any particular assurance stakeholders with an independent ‘moderate • A review of sustainability measurement and Environmental Indicators these processes appear to be considerably standard. At the same time, however, the report level assurance’ opinion on whether: reporting procedures in place at the O&L - Energy and Water Consumption more advanced than is the norm amongst The data reviewed is generated by a systematic was assured against the principles of Inclusivity, • the sustainability content of the O&L Head Office, in order to determine - Energy and Water Intensity and many Namibian corporate entities. It was process and accurately represents the Materiality and Responsiveness, which are report adheres to the principles of Inclusivity, the context and content of sustainability Efficiencies further noted that: company’s ability to manage and report on all the guiding principles of the AccountAbility Materiality and Responsiveness; management by the company; Procurement • The company’s systems for the data collection, aspects of its sustainability performance, while AA1000S (2008) assurance standard. • specific data eportedr by O&L related to • A review of the processes applied by the - Supply Chain Framework collation and reporting of sustainability data conforming to the AA1000AS (2008) principles selected key sustainability indicators meets company in the determination of material are well-developed and support the effective of Inclusivity, Materiality and Responsiveness.
90 91 Reports
Furthermore, in spite of the fact that 2015 • In terms of future activities related to represents the first instance of O&L reporting assurance of O&L’s sustainability reporting according to the GRI G4 Reporting Standard, the activities, it is recommended that the report appears to comply with all requirements company considers undertaking such for G4 “Core” Level Report. assurance activities in line with accepted reporting standards such as the AA1000AS or At the same time, the following areas have been the ISAE3000 Accounting Standard. identified as requiring further consideration or actions: For additional information regarding the • The opportunity exists for O&L to enhance its processes and documentation related to this level of disclosure regarding its management assurance engagement, please e-mail alistair@ approaches to Material Aspects, particularly sustainabilityconsulting.co.za with regard to the reporting boundary for these Aspects, in terms of whether this boundary lies within or externally to the company. Alistair Schorn • Furthermore, it appears that some opportunity exists for improved disclosure in Johannesburg the area of stakeholder engagement, in 17 August 2015 terms of the issues raised by stakeholders and the actions taken by the company to address these, as well as in terms of the effective linkage of stakeholder groups with the company’s Material Aspects.
92 O&L’s new Strand Hotel, Swakopmund 93 Reports
GROUP VALUE ADDED STATEMENT
2015 2014 2015 2014 N$’000 N$’000 N$’000 N$’000 WEALTH CREATED Value retained Profit for the year attributable to owners of the parent 229 881 231 438 Value added by operating activities Non-controlling interest 180 991 144 823 Revenue 5 306 276 4 928 643 410 872 376 261 Paid to suppliers for materials and services (2 838 313) (2 723 003) Total Wealth Distributed 2 542 075 2 264 795 2 475 608 2 205 640 Value added by investing activities Interest income 26 932 16 809 2015 2014 Fair value gains on investment property 169 044 158 835 N$’000 N$’000 Income/(loss) from equity accounted investments (121 863) (116 489) 1. Additional amounts collected on behalf of central and local government 74 113 59 155 Quota levies 4 625 5 226 Rates and taxes paid on properties 10 445 9 140 Total Wealth Created 2 542 075 2 264 795 Customs and excise duties 605 367 557 749 WEALTH DISTRIBUTED Net Value Added Tax paid 71 561 10 051 Pay-as-you-earn tax (PAYE) deducted from remuneration paid 89 976 77 349 To Pay Employees Non-resident shareholders’ tax (NRST) deducted from dividends paid 5 791 4 826 Salaries, wages, medical and other benefits 815 233 711 723 Withholding tax on services 6 261 10 286 794 026 674 627 To Pay Providers of Capital Finance costs 147 801 144 249
To Pay Government Income tax 134 822 90 508 Additional amounts collected on behalf of central and local government 1 794 026 674 627 928 848 765 135 To be retained in the business for expansion and future wealth creation: Value reinvested Depreciation, amortisation and impairments 205 595 187 966 Deferred tax 33 726 79 461 239 321 267 427
94 95 Reports
SEVEN YEAR REVIEW
2015 2014 2013 2012 2011 2010 2009 2015 2014 2013 2012 2011 2010 2007 N$’000 N$’000 N$’000 N$’000 N$’000 N$’000 N$’000 N$’000 N$’000 N$’000 N$’000 N$’000 N$’000 N$’000 Consolidated Statements of Financial Position Consolidated Statements of Comprehensive Income Property, plant and equipment 2 927 207 2 696 792 2 305 890 2 215 497 1 925 782 1 676 672 1 534 137 Revenue 5 306 276 4 928 643 4 585 661 4 133 899 3 546 975 3 356 004 3 119 358 Investment property 1 589 504 1 429 946 1 310 316 1 109 364 980 758 376 877 230 144 Intangible assets 25 108 21 973 23 687 17 587 17 563 16 345 11 721 Operating profit after fair value adjustments and 820 789 790 159 788 234 628 523 594 523 360 749 332 423 Deferred taxation 15 364 21 940 38 965 37 201 50 270 61 015 64 670 gain on biological assets and agricultural produce Non-current investments 76 331 13 511 22 265 29 364 26 928 3 968 16 257 Finance costs (147 801) (144 249) (142 985) (134 087) (103 062) (89 957) (82 255) Non-current derivative financial instruments ------Share-based payment expense - - - - - (54 949) - Non-current biological assets 37 646 33 998 33 952 33 276 30 955 34 467 32 021 Equity losses from joint ventures and associates (on-going (120 501) (116 489) (107 085) (90 515) (69 549) (88 046) (38 967) Non-current trade and other receivables 43 804 47 263 47 416 42 377 45 068 28 424 27 292 operations) Non-current related parties 2 590 1 008 - 100 605 106 352 159 519 34 521 Equity losses from joint ventures and associates (deferred - - (188 089) - - - - Current assets 1 341 657 1 166 259 1 226 587 1 095 102 937 363 903 807 990 998 tax asset write down) Non-current assets classified as held for sale 4 500 6 375 17 479 23 934 5 796 4 529 4 505 Income from investments 26 932 16 809 21 609 24 829 23 889 21 687 23 315 Work in progress-Land and building under development 76 761 ------Profit before taxation 579 419 546 230 371 684 428 750 445 801 149 484 234 516 and construction Taxation (168 547) (169 969) (139 844) (131 754) (104 305) (88 199) (93 563) Total assets 6 140 472 5 439 065 5 026 557 4 704 307 4 126 835 3 265 623 2 946 266 Profit for the year 410 872 376 261 231 840 296 996 341 496 61 285 140 953 Other comprehensive income for the year, net of tax 8 632 151 169 59 583 134 262 128 967 34 849 23 226 Equity attributable to owners of the parent 2 276 310 2 029 247 1 683 570 1 444 949 1 183 477 801 586 764 070 Total comprehensive income for the year 419 504 527 430 291 423 431 258 470 463 96 134 164 179 Non-controlling interests 886 737 806 271 715 908 746 314 655 256 541 201 493 478 Deferred taxation 417 065 385 732 294 562 252 747 236 695 299 032 280 069 Profit (loss) attributable to: Non-current interest-bearing borrowings 1 209 798 1 012 978 1 003 983 1 306 622 1 073 684 669 860 423 245 Owners of the parent 229 881 231 438 180 969 144 383 192 554 (50 858) 30 874 Deferred income 7 928 4 900 - - - 135 18 076 Non-controlling interests 180 991 144 823 50 871 152 613 148 942 112 143 110 079 Non-current provisions 43 790 43 280 41 584 37 397 32 052 31 703 30 963 410 872 376 261 231 840 296 996 341 496 61 285 140 953 Non-current trade and other payables 4 784 3 362 3 449 2 825 2 495 2 110 - Total comprehensive income attributable to: Non-current related parties 28 273 10 636 12 506 14 149 9 139 - 43 789 Owners of the parent 238 246 345 209 238 640 274 191 288 249 (17 461) 53 853 Current liabilities 1 265 787 1 142 659 1 270 995 896 749 932 879 919 996 892 576 Non-controlling interests 181 258 182 221 52 783 157 067 182 214 113 595 110 326 Total equity and liabilities 6 140 472 5 439 065 5 026 557 4 704 307 4 126 835 3 265 623 2 946 266 419 504 527 430 291 423 431 258 470 463 96 134 164 179
96 97 Reports
FINANCIAL REVIEW
On the back of solid performance from Namibia Breweries, REVENUE Retail delivered a mixed performance during the million, an increase of 18% for the year under drought conditions and especially when comparing to the prior year’s year under review, contributing N$21 million to review. With the increase in revenues and sales a weak global demand performance. Group revenue increased by 7,7% compared with operating profit in 2015, compared with N$44 volumes, this segment has delivered a solid for mineral resources the previous year. This is mainly attributable to million for 2014. Revenues grew by 12% in operating profit of N$48 million versus N$25 affecting exports, the The information below should be read revenue growth for the retail segment (12,0%), 2015 compared to the prior year and margins million of the previous year. Namibian economy has in conjunction with the annual financial fresh produce segment (including Namibia remain on target, however below the line costs nonetheless achieved a statements for the year ended 30 June 2015, Dairies) (17,6%) and the properties segment related to the revamping of existing stores and The lower growth in revenues of our beer and commendable estimated as set out on the accompanying USB Flash (9,8%). Fishing offset these gains with a decline the opening of new stores has impacted profits soft drinks division, is in line with our strategy growth of 4.5% during 2014. drive. in revenue (-12,1%), mainly attributable to lower unfavourably in the current year. and expectations. During the previous financial On the back of this growth the sales when compared to the previous year. year there was an agreed reduction in volumes Group delivered solid results for GROUP OPERATING PERFORMANCE The property division contributed N$108 million to be packaged and supplied to the South African the 12 months ended 30 June OPERATING PROFIT AND FAIR VALUE (2014: N$99 million) to operating profit before fair market as the Sedibeng Brewery in South Africa 2015, in turn with some businesses Salient features ADJUSTMENTS value adjustments during the 2015 financial year. was to incrementally increase volumes. The full performing better than others. During The salient features for the year under review Our flagship property Wernhil Park, continued impact of this agreed volume reduction has not the year, we saw excellent performances are as follows: Operating profit increased by 3,2% compared to to deliver strong operational performance on yet materialised, but should materialise in the from our Property portfolio, Namibia prior year and fair value adjustments increased all levels, including trading densities, foot traffic future. Revenues grew by N$116 million to N$2 Dairies and Hangana Seafood as well as by 6,4% compared to the prior year. counts and low vacancy levels. 429 million and operating profit increased by N$54 million to N$505 million during the year Growth in revenues and operating profit was Our fishing division contributed N$44 million to under review, a commendable achievement in % 2015 2014 Increase N$ ‘000 N$ ‘000 mainly supported by the property, fishing, fresh operating profit in the year under review, whilst light of the above. Revenue 7.7% 5 306 276 4 928 643 produce and beer and soft drinks business down from prior year, the profit is well up on Operating profit 3.2% 651 745 631 315 segments. The strong growth in these segments historical performance. The favourable factors, Kraatz Marine delivered revenues and operating Fair value adjustments 6.4% 169 044 158 844 offset the impact from the reduced profitability such as the exchange rate were not sufficient margins that were materially similar to the Operating profit after fair value adjustments 3.9% 820 789 790 159 from our other segments, which includes our to offset the impact of lower export demand prior year. The slump in the oil industry has Equity losses from joint ventures and Leisure portfolio. The Leisure portfolio has achieved and increased pressure on hard currency prices had a negative effect on the ship repair side associates (on-going operations) 3.4% (120 501) (116 489) considerable improvement in its revenues but has compared to prior year. of the business. The industrial side continued Net finance costs -5.2% (120 869) (127 440) simultaneously incurred material pre-opening to show solid growth. Operating profit was Profit before taxation 6.1% 579 419 546 230 expenses for the two new exciting establishments The fresh produce segment encompasses however negatively affected by a single debtor Taxation -0.8% (168 547) (169 969) being constructed, namely Swakopmund Strand Namibia Dairies and Windhoek Schlachterei. which management has decided to provide for, Profit for the year 9.2% 410 872 376 261 Hotel and Chobe Water Villas. Revenues grew by N$90 million to N$588 however full recovery will be pursued.
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The Leisure portfolio performed well and saw PROFIT BEFORE TAXATION for plant and equipment (N$115,1 million). The seen positive returns with equity accounted CASH FLOW increased revenues of N$13 million to N$60 construction of the Strand Hotel is nearing profits of N$0,8million being recorded. million compared to the prior year. Operating The Group saw a N$31,9 million (5,8%) increase completion and will open to the public before Cash flow from operating activities increased losses before the impact of pre-opening in profit before taxation, from N$546,2 million the festive season starts in Swakopmund. The related parties net receivable balance from N$575,5 million in the 2014 financial year expenses for the two new establishments in the 2014 financial year to N$578,1 million for Construction on 77 on Independence is decreased by N$112,0 million from the previous to N$635,9 million in 2015. being constructed have reduced significantly. the 2015 period. progressing according to plan and budget and reporting year. The decrease can be mainly Some pre-opening costs for the two new completion is still anticipated to be on time in ascribed to a decrease of N$84,2 million from The net cash spent in investing activities establishments will be carried over into the new TAXATION the second half of the 2016 calendar year. DHN Drinks (Proprietary) Limited, which brought increased from N$450,3 million in the previous financial year and management anticipates that the 2014 total of N$147,0 million down to N$ reporting period to N$668,6 million for the year the Leisure portfolio will become profitable in The 2015 financial year’s taxation charge Other significant contributors were Model Pick 62,9 million for the 2015 financial year. under review. The overall increase is a result the next two to three years. amounted to N$168,5 million (2014: N$170,0 n Pay, which invested N$62,4 million during of equity injections made into joint ventures million), while the effective taxation rate was the year under review. This included the The 2015 reporting period total of N$434,6 while higher acquisitions of property, plant and SHARE OF PROFITS AND LOSSES FROM steady at 29,2% (2014: 31,1%). refurbishment of the Auas Valley, Oshakati and million for inventories represents an increase of equipment were made in the year under review. ASSOCIATE AND JOINT VENTURES Grootfontein shops, as well as the additional N$51,7 million in comparison with the previous STATEMENT OF FINANCIAL POSITION new store that was opened in Mega Center in financial year. Namibia Breweries inventory Cash and cash equivalents amounted to The Group equity accounted a profit of N$2,8 Windhoek. increased by N$17,0 million and Model Pick n N$324,7 million for the reporting period (2014: million (2014: N$3,4 million) from Dimension Total assets grew by N$684,9 million, namely Pay’s by N$30,63 million due to higher stocks of N$182,4 million). Data Namibia, a profit of N$0,8m from Mobi- from N$5 439,1 million in the 2014 financial year The 2015 financial year saw Investment property consumables and merchandise. Pay and N$0.5m from Natural Value Foods. The to N$6 124,0 million in the year under review. increase by N$159,6 million, from N$1 429,9 DIVIDENDS Group also equity accounted a loss of N$124,6 million in 2014 to N$1 589,5 million for the Total Interest-bearing borrowings increased by million (2014: N$120,3 million) from DHN Drinks Property, plant and equipment increased by 2015 financial year. The increase is principally a N$181,3 million from the 2014 financial year The Company declared a dividend of 102c per (Proprietary) Limited. N$230,4 million, up from N$2 696,8 million result of fair value gains of N$156,5 million on to N$1 502,9 million in the 2015 reporting share on 25 September 2015 (2014: 68c) in in 2014 to N$2 927,2 million for the current the revaluation of investment property and a period. This increase can mainly be attributed respect of the year ended 30 June 2015. FINANCE COSTS financial year. Capital additions overall further investment of N$2,9 million. to net financing raised for the construction amounted to N$446,5 million for the 2015 of the Swakopmund Strand Hotel and 77 on The net finance costs of N$120,9 million for the financial year (2014: N$380,2 million), which During the second half of the 2015 financial Independence. year under review is slightly lower compared to largely constituted the capital additions in the year, the Group acquired a 30% equity stake the prior year of N$127,4 million. WUM Group for Swakopmund Strand Hotel in Mobicash Payment Solutions (Proprietary) (N$174.7 million) and 77 on Independence (N$ Limited, a provider of mobile payment solutions, Günther Hanke 76,8 million) and the Namibia Breweries Group for N$19,3 million. This investment has already Group Financial Director
100 101 APPROVAL OF FINANCIAL STATEMENTS
Responsibility Of Directors the functioning of these The Directors are responsible for the controls, procedures and systems maintenance of adequate accounting has occurred during the period records and the preparation and integrity of under review. The annual the annual financial statements of Ohlthaver & financial statements are prepared on a List Finance and Trading Corporation Limited going-concern basis. Nothing has come to and its subsidiaries and related information. the attention of the Directors to indicate The financial statements have been prepared that the Company and the Group will not in accordance with International Financial remain a going concern for the foreseeable Reporting Standards (IFRSs). The Group’s future. independent external auditors, Deloitte & Touche, have audited the financial statements and their report appears on page 104 and 105 herein. These financial statements were approved by the Board of Directors on 25 September The Directors are also responsible for the 2015 and signed on its behalf by: systems of internal control. These are designed to provide reasonable but not absolute assurance as to the reliability of the financial statements; to adequately safeguard, verify and maintain the accountability of assets; and to prevent Sven Thieme and detect material misstatement and Executive Chairman loss. The systems are implemented and monitored by suitably trained personnel with an appropriate segregation of authority and duties. Nothing has come to the attention of the Directors to indicate that Peter Grüttemeyer any material breakdown in Chief Executive Officer
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INDEPENDENT AUDITOR’S REPORT
To the Shareholders Of Ohlthaver & from material misstatement, whether due on the effectiveness of the entity’s internal List Finance and Trading Corporation to fraud or error. control. An audit also includes evaluating Limited the appropriateness of accounting policies We have audited the consolidated and Auditor’s Responsibility used and the reasonableness of accounting DELOITTE & TOUCHE separate financial statements of Ohlthaver Our responsibility is to express an opinion estimates made by management, as well as Registered Accountants and Auditors & List Finance and Trading Corporation on these consolidated and separate evaluating the overall presentation of the Chartered Accountants (Namibia) Limited, set out on the accompanying USB financial statements based on our audit. financial statements. Per E Tjipuka and the Directors’ Report on page 106, We conducted our audit in accordance with Partner which comprise the statements of financial International Standards on Auditing. Those We believe that the audit evidence we have Windhoek, 25 September 2015 position as at 30 June 2015, statements of standards require that we comply with obtained is sufficient and appropriate to profit or loss and other comprehensive ethical requirements and plan and perform provide a basis for our audit opinion. income, statements of changes in equity, the audit to obtain reasonable assurance Deloitte Building, Maerua Mall Complex statements of cash flows for the year then about whether the consolidated and Opinion PO Box 47 ended and notes which comprise a summary separate financial statements are free from In our opinion, the consolidated and Jan Jonker Road of significant accounting policies and other material misstatement. separate financial statements present fairly, Windhoek, Namibia explanatory information. in all material respects, the consolidated and ICAN practice number: 9407 An audit involves performing procedures to separate financial position of Ohlthaver & Regional Executives: LL Bam (Chief Executive), A Directors’ Responsibility for the obtain audit evidence about the amounts and List Finance and Trading Corporation Limited Swiegers (Chief Operating Officer), GM Pinnock. Consolidated and Separate Financial disclosures in the financial statements. The as at 30 June 2015 and its consolidated Resident Partners: E Tjipuka (Managing Statements procedures selected depend on the auditor’s and separate financial performance and Partner), RH McDonald, H de Bruin, J Cronjé, The company’s Directors are responsible judgement, including the assessment of consolidated and separate cash flows for A Akayombokwa, A Matenda. for the preparation and fair presentation of the risks of material misstatement of the the year then ended, in accordance with Director: G Brand these consolidated and separate financial financial statements, whether due to fraud International Financial Reporting Standards statements in accordance with International or error. In making those risk assessments, and the requirements of the Companies Act Financial Reporting Standards and the the auditor considers internal control of Namibia. requirements of the Companies Act of relevant to the entity’s preparation and fair Namibia and for such internal control as presentation of the financial statements in the Directors determine is necessary to order to design audit procedures that are enable the preparation of consolidated and appropriate in the circumstances, but not separate financial statements that are free for the purpose of expressing an opinion
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REPORT OF THE DIRECTORS GROUP REFERENCE INFORMATION
Nature of Business Share Capital Going Concern OHLTHAVER & LIST CENTRE MODEL PICK N PAY KRAATZ STEEL WEATHERMEN & CO The Group is engaged in diversified business There were no changes in the Company’s The annual financial statements have PO Box 16, Windhoek PO Box 2200, Windhoek PO Box 317, Walvis Bay PO Box 16, Windhoek activities. Details of the Group’s activities are authorised or issued share capital during been prepared on the basis of accounting Tel: 061 - 207 5111 Tel: 061 - 296 4500 Tel: 064 - 207 620 Tel: 061 - 429 600 set out on the inside cover of this report. the year under review. Full details of the policies applicable to a going concern. This Fax: 061 - 234 021 Fax: 061 - 296 4550 Fax: 064 - 206 817 www.ohlthaverlist.com Company’s authorised and issued share basis presumes that funds will be available www.ohlthaverlist.com www.ohlthaverlist.com www.ohlthaverlist.com Financial Results capital at 30 June 2015 are set out in Note 19 to finance future operations and that The consolidated profit attributable to to the financial statements. the realisation of assets and settlement NAMIBIA BREWERIES LIMITED DIMENSION DATA NAMIBIA EROS AIR owners of the parent for the year ended 30 of liabilities, contingent obligations and PO Box 206, Windhoek PO Box 16, Windhoek PO Box 16, Windhoek June 2015 was N$228,5 million (2014: N231,4 Directorate And Secretary commitments will occur in the ordinary Tel: 061 - 320 4999 Tel: 061 - 373 300 Tel: 061 - 207 5111 million). The results of the Company and the The names of the Directors, as well as the course of business. Fax: 061 - 263 327 Fax: 061 - 373 301 Fax: 061 - 234 021 Group are fully set out on the accompanying name and the address of the Company’s www.nambrew.com www.dimensiondata.com www.ohlthaverlist.com USB Flash Drive. Secretary, appear on 18. Subsequent Events No adjusting events have occurred between HANGANA SEAFOOD BROLL NAMIBIA O&L LEISURE Dividends Holding Company the reporting date and the date of this PO Box 26, Walvis Bay PO Box 2309, Windhoek PO Box 2190, Windhoek An ordinary dividend of 102c per share was The Company’s immediate holding company report which are material in their effect on Tel: 064 - 218 400 Tel: 061 - 374 500 Tel: 061 - 388 400 declared in respect of the year under review is Ohlthaver & List Holdings (Proprietary) the affairs of the Group. Fax: 064 - 218 480 Fax: 061 - 237 499 Fax: 061 - 234 021 (2014: 68c per share). Limited. List Trust Company (Proprietary) www.hangana.com www.brollnamibia.com.na www.ohlthaverlist.com Limited is the holding company of Ohlthaver & Capital Expenditure List Holdings (Proprietary) Limited, while The NAMIBIA DAIRIES KRAATZ MARINE O&L ENERGY Capital expenditure on property, plant and Werner List Trust is the majority shareholder P/Bag 11321, Windhoek PO Box 555, Walvis Bay PO Box 16, Windhoek equipment during the year amounted to of List Trust Company (Proprietary) Limited. Tel: 061 - 299 4700 Tel: 064 - 215 800 Tel: 061 - 207 5111 N$446,5 million (2014: N$380,3 million), Fax: 061 - 299 4701 Fax: 064 - 206 848 Fax: 061 - 234 021 of which N$ 432,0 million (2014: N$348,0 Subsidiaries www.ohlthaverlist.com www.kraatzmarine.com www.ohlthaverlist.com million) was in respect of plant, equipment Details of the Company’s investment in and operating assets and N$ 14,5 million subsidiaries are set out in Note 6 of the (2014: N$32,3 million) for land and buildings. annual financial statements. Capital expenditure on investment property INTEGRATED ANNUAL REPORT 2015 PRODUCTION of N$ 2,9 million (2014: N$4,4 million) was Design and layout: Weathermen & Co incurred during the year under review. Printing and binding: John Meinert Printing Production and editing: Ohlthaver & List Centre with the assistance of GSA Campbell
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NOTICE TO THE SHAREHOLDERS
Notice is hereby given that the 67th Annual may deem fit; and General Meeting of the shareholders of 6) To transact such other business as may the Company will be held in the Werner be transacted at an Annual General List Boardroom, Ohlthaver & List Centre, Meeting. Windhoek, on Friday, 4 December 2015 at 08h30 for the following purposes: A member entitled to attend and vote at 1) To receive and consider and, if approved, the meeting is entitled to appoint one or adopt the Annual Financial Statements more proxies to attend and vote in his or her and the Report of the Auditors for the stead. A proxy need not also be a member year ended 30 June 2015 as submitted, of the Company. In order to be effective, and to confirm all matters and things proxy forms should be forwarded to reach undertaken and discharged by the the registered office of the Company by no Directors on behalf of the Company; later than 08h30 on Wednesday, 2 December 2) To elect Directors in the place of Messrs 2015. L McLeod-Katjirua, UM Stritter, E Ender, who retire by rotation in accordance By order of the Board with the Company’s Articles of Association Ohlthaver& List Centre (Pty) Ltd but, being eligible, offer themselves for Company Secretary re-election; Windhoek 3) To confirm the appointment of Directors 25 September 2015 since the previous Annual General Meeting; 4) To authorise the Directors to determine the auditor’s remuneration; 5) To place the unissued 6 507 083 ordinary shares of 50c each in the Company under the control of the Directors, who shall be authorised to allot all or any of those shares at their discretion, on such terms and conditions and at such times as they
108 109 PROXY FORM
for the 67th Annual General Meeting of I/We desire to vote as follows: For Against Abstain 1. Adoption of the Annual OHLTHAVER & LIST FINANCE AND TRADING CORPORATION LIMITED Financial Statements Registration Number: 331 2. Re-election of retiring Directors: UM Stritter The Secretary Ohlthaver & List Finance and Trading Corporation Limited E Ender PO Box 16 L McLeod-Katjirua Windhoek 3. Confirmation of Directors’ Namibia appointments since previous Annual General Meeting
I/We ...... (name in full) 4. Auditors’ remuneration of ...... 5. General authority to the Directors to allot and issue shares ...... (address) * Please indicate your response by inserting an “X” in the appropriate being a shareholder of ...... (number of shares) block to either vote “for/against/abstain from”. If no indication is of the abovementioned Company hereby appoint given, the proxy may vote as he/she thinks fit...... (name) or failing him/her ...... Signed ...... at ...... (name) this ...... day of ...... 2015. or failing him/her ...... (name) Signature(s) of shareholder(s) ...... or failing him/her, the Chairperson of the meeting as my/our proxy ...... to vote for me/us on my/our behalf at the 67th Annual General Meeting of the Company to be held in the Werner List Boardroom, Notes to the Proxy Ohlthaver & List Centre, 7th floor - South Block, Alexander Forbes 1. A member entitled to attend and vote at the aforementioned House, 23-33 Fidel Castro Street, Windhoek on Friday, 4 December meeting is entitled to appoint a proxy (who need not be a 2015 at 08h30 and at any adjournment thereof, in particular to vote member of the Company) to attend, speak and vote on a poll in for/against/ abstain from* the resolutions contained in the notice of his/her stead. the meeting. 2. Shareholders who wish to appoint proxies must lodge their proxy forms at the registered office of the Company by no later than 08h30 on Wednesday, 2 December 2015. 3. In respect of shareholders that are companies, an extract of the relevant resolution of Directors must be attached to the proxy form.
110 Alexander Forbes House, 23-33 Fidel Castro Street PO Box 16, Windhoek, Namibia Telephone: +264 61 207 5111 www.ohlthaverlist.com