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CEO Peter Staude with Hixonia Nyasulu and Bahle Sibisi

Click on the image to enlarge Tongaat Hulett Limited's NERA Certificate

BBBEE/ Transformation

BROAD BASED BLACK ECONOMIC EMPOWERMENT

Tongaat Hulett continues to make good progress by building on its proud history of numerous meaningful and sustainable broad based Black Economic Empowerment (BBBEE) initiatives for the benefit of all stakeholders. Steps continue to be taken to ensure that processes and measurements within the company are aligned with the relevant regulatory requirements and the South African Department of Trade and Industry’s (DTI) Codes of Good Practice. Where applicable, operations have been involved in the formulation of relevant industry/sector scorecards.

Transformation, equal opportunity, the creation of a diverse employee profile and indigenisation remain key performance areas in every geographical region where Tongaat Hulett operates.

Tongaat Hulett established the ESOP and MSOP employee ownership schemes for the benefit of all South African black employees and senior black management respectively, effectively placing a collective interest of 7% in the hands of such employees. The overall objective of the schemes is to retain and attract high calibre black employees at every level of the business and to create a sense of ownership amongst employees, as well as to engender an ownership culture within the greater Tongaat Hulett workforce. The introduction of BBBEE equity participation in 2007, included an 18% participation by two BBBEE groupings, Ayavuna Women’s Investments, as an anchor partner, combining with the Mphakathi Trust, which benefits the communities surrounding the Tongaat Hulett property developments and Sangena Investments, as an anchor partner, combining with the Masithuthukisane Trust, which benefits the small scale cane grower communities surrounding Tongaat Hulett’s four South African sugar mills.

The second BBBEE rating audit by the National Empowerment Rating Agency (NERA) was conducted in 2008 with Tongaat Hulett being categorised as a Level Four Contributor, with an overall score of 70,38% compared to the previous year’s score of 75,16%. The detailed comparative scorecards are shown below:

This means that entities purchasing from Tongaat Hulett may recognise 100% of the value of their Tongaat Hulett purchases in the procurement element of their scorecards. Going forward, reporting systems and targets will continue to be reviewed to ensure maximum alignment with the elements of the DTI Codes of Good Practice. The highlight of the accreditation is the improvement in enterprise development, management control and employment equity. The reduction in the ownership score is as a result of the movement in the Tongaat Hulett share price. This effect will reverse as the share price improves. The preferential procurement score reduced mainly as a result of a change in respect of the sampling process, following legislative amendments related to spend with black owned suppliers, particularly black cane growers. The reduction in the score for the skills development element was a consequence of the company’s leviable amount being higher than the previous year.

Management will continue to work towards the improvement of scorecard points where possible. Tongaat Hulett believes that BBBEE is essential to the sustainability of its South African operations, as well as the prosperity of South Africa and its people.

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