sustainability report · 2018-12-11 · sustainability reporting natural capital •...

SUSTAINABILITY REPORT

CONTENTS

20181


SUSTAINABILITY REPORTING

NATURAL CAPITAL• Environmental stewardship

• Water use

• Energy use

• Waste management

HUMAN CAPITAL• Safety and health stewardship – to adopt a safety first philosophy,

to achieve zero harm to our employees through efficient monitoring, prevention, and management of safety and occupational health risks.

• Human capital development – to adopt a people first philosophy which enhances the productive capacity of our employees by creating a working environment that encourages innovation and collaboration across functions and operations. We promote diversity and will not tolerate unfair discrimination of our employees.

• Transformation.

RELATIONSHIP CAPITAL• Stakeholder engagement and reputation

management – to acknowledge and recognise the direct and indirect impact of our business and to openly engage, communicate and respond to stakeholders’ legitimate concerns and interests.

At Phumelela, we are committed to sustainable development as an integral part of the way we do business in all our operations. The wellbeing of our business depends on the safe, cost-effective and profitable business model, with due consideration for the needs and expectations of all our stakeholders. Phumelela has an integrated approach to managing sustainability. We are committed to achieving sustainability by balancing our aspirations for a prosperous betting and horseracing business with

responsibility and accountability for our impact on the natural environment, society and the broader economic environment. Our mission, vision and values provide the fundamentals for our approach to our framework for sustainability.

Our sustainability performance has been grouped according to the following Key Performance Indicators (“KPIs”), all of which are underpinned by stakeholder engagement.

SOCIAL• Social development – we empower

communities to sustain themselves through relevant community projects in education, infrastructure development and the provision of local procurement and enterprise development opportunities.

• Product responsibility – we are committed to responsible gambling and are a member of the South African Responsible Gambling Trust. We communicate to our customers and employees thus increasing public awareness of responsible gambling.

• Commitment to external initiatives.

ECONOMIC CAPITAL• Profitability

• Headline earnings per share

• Cash generated from operating activities

• Total asset/solvency ratio

• Value added statement

20182


Our key stakeholders are depicted in the diagram below:

Suppliers

Shareholders

Tote operators and bookmakers

Employees

Government, gambling boards

and regulators

Broadcasters

Owners, breeders, trainers and jockeys

Racing Association

Customers, punters, race attendees

National Horseracing Authority

Communities

STAKEHOLDER RELATIONS AND ENGAGEMENT

At Phumelela, building long-term, stable and mutually beneficial relationships with our stakeholders is a business imperative because it establishes the context within which we can conduct successful business activities and create value for stakeholders.

Our success and the sustainability of our business depends

on the support of our stakeholders. Through continuous

engagement, Phumelela is able to ensure that the

reasonable expectations and interests of our stakeholders

are addressed in a mutually beneficial manner to ensure the

long-term sustainability of our business.

Our stakeholders are persons or groups who are directly

or indirectly affected by our operations, as well as those

who have interests in our business and/or the ability to

influence outcomes. Our broad range of stakeholders is

both internal and external and can be defined as those

parties who are invested in Phumelela (our employees,

shareholders, suppliers, owners, trainers, jockeys) and

those who have interests in our operations (regulators,

communities, unions, customers); all of whom may either

be directly affected by or have influence over our activities

at a corporate or operational level.

Our stakeholder engagement processes are used as a tool

for continuous dialogue, listening to views, and addressing

concerns in order to drive an active and productive

relationship and ensure the Group’s performance.

The engagement methods employed are as diverse as

the various stakeholders we engage with and include the

use of SENS announcements, face-to-face meetings,

our integrated report, committees, media releases, posters,

and hotlines, among other methods.

Stakeholder engagement is managed at both a

management and operational level. Members of

Phumelela’s management team are positioned on various

external boards relating to the sport of horseracing and

they regularly interact with the Racing Association, various

gambling boards and government. From an operational

level, the Racing Operations division interacts with owners,

trainers, breeders, jockeys and grooms. The Betting

Operations and On-course Hospitality divisions interact

with customers and attendees of horseracing events.

An overview of the process is provided in the following

diagram:

20183


KEY STAKEHOLDER OVERVIEW OF INTERACTION

Shareholders and the investor community

• Shareholders and members of the investor community are invited to attend bi-annual financial results presentations that take place in Johannesburg and Cape Town, with the most recent results presentation being aired live on Business Day TV. Further information is made available on our website, through the publication of the Integrated Report and as necessary via Securities Exchange News Service (“SENS”) announcements.

• Of particular interest is Phumelela’s international initiatives, fixed odds operations, sports betting developments, the regulatory environment, strategic initiatives and the impact (if any) on the Group, of the Steinhoff scandal.

Owners, trainers and jockeys

• The industry liaison committee meets quarterly to discuss racing and other industry-related matters concerning, inter alia, the health and safety of grooms, jockeys and horses, maintenance and quality of stabling facilities, grooms’ quarters, training tracks, racetracks and industry regulatory matters.

• Trainer representative committees are established at each racing/training venue. Regular meetings are scheduled to discuss the condition of training tracks, facilities and racetracks among other matters.

• To facilitate dialogue with the industry at large, a Racing Indaba was held during the year with key stakeholders to assess issues and opportunities facing horseracing, with a view to actively managing the image and reputation of horseracing and positioning the sport as a popular form of entertainment that resonates with the emerging millennial market whilst retaining its loyal traditional audiences.

• The South African Jockey Academy regularly engages with Phumelela to ensure the provision of training for prospective jockeys.

• The Racing Association represents the interests of racehorse owners in eight of the nine provinces in South Africa and engages with Phumelela on a regular basis.

• The programming committee is tasked with the production of race programmes that meet the needs of owners and trainers.

The Thoroughbred Horseracing Trust (“TBHRT”)

• Phumelela engages with the Thoroughbred Horseracing Trust (Phumelela’s largest shareholder) through a board of trustees who concern themselves with the promotion of the interests of everyone interested in and affected by the sport of horseracing in South Africa.

Customers • Meeting and exceeding our customer requirements are key to our future sustainability. Phumelela’s customers are engaged on a daily basis through a dedicated customer call centre; and as necessary through direct contact with area and branch managers at relevant betting outlets; the Tellytrack channel on DStv; media and notices in branches; and quarterly meetings of the National Responsible Gambling Programme. Phumelela has a dedicated customer care department, which facilitates the needs of its customers.

• Customer service continues to be a key focus area for training and development for branch outlets and call centre staff. In addition, the Group National Retail Executive’s primary focus is to improve customer experience in our branches.

• To provide more information to punters, personal computers and printers are supplied in certain branches; Sports Express magazines are supplied in certain outlets or printed in outlets where there is no delivery; information display TVs for sport have been introduced in certain outlets; information is also provided online via the websites www.phumelela.com and www.tabonline.co.za; and on the mobile platform www.tabsa.mobi.

• Phumelela continues to focus on upgrading its outlets for the benefit of its customers. Furthermore, we have rolled out free Wi-Fi in our branches for the benefit of our customers and also rolled out the Betting World TAB TV which enhances our customers’ product awareness.

• Collaboration with the National Responsible Gambling Programme (“NRGP”) takes place to increase visibility and public awareness of responsible gambling and staff continue to receive training to identify and assist problem gamblers.

STAKEHOLDER RELATIONS AND ENGAGEMENT CONTINUED

20184


http://http://phumelela.com

http://www.tabonline.co.za

http://www.tabsa.mobi



Employees and their families

• Phumelela engages with employees through a variety of formal and informal platforms.

In addition to regular interaction and communication between line managers and staff,

employees are formally engaged during performance reviews and as necessary/relevant

through meetings arranged by human resources personnel. An independent whistle-

blowing facility is available to enable employees to report suspected incidents of fraud and

unethical behaviour on a safe and anonymous platform. Trauma counsellors are provided

where required.

• Additional aspects of employee engagement are outlined below:

- Medical aid benefits: Meetings are held with staff, human resources and relevant

consultants to discuss medical aid benefits and ensure that all staff understand

the various options available at the time of annual renewal and to address issues

throughout the year. Monthly help desk sessions are being hosted by medical aids to

assist staff with their claim experiences and queries.

- Pension benefits: Quarterly meetings are held with trustees regarding pension benefits,

which have resulted in the development of an online platform to provide access to

personal details and retirement fund value.

- Retirement options: Pension fund administrators and human resources personnel meet

quarterly regarding retirement options.

- HIV/Aids: Phumelela provides engagement through an outsourced call centre and

trained professionals who are able to provide support for our HIV-positive employees.

- Finance: Phumelela has a housing loan scheme linked to the Retirement Benefit Fund.

Employees are also provided with interest-free loans for educational purposes, where a

full refund is given to employees when they successfully pass a course.

Communities • Phumelela actively engages with the communities in which it operates in order to foster

a good relationship and transparency. Meetings take place with a variety of community

stakeholders in order to ensure that community/company projects are of mutual interest.

• Ad-hoc meetings with the Turffontein Residents Association have resulted in the erection

of a barrier wall to reduce sound levels during floodlit racing at Turffontein.

We communicate regularly with the mounted SAPS at Booysens Police Station regarding

security matters. Regular communication takes place with SOJO (South of Joburg Business

and Residents Group), through which we invest in the rejuvenation and upliftment of

business and tourism in the Turffontein precinct. Our SOJO membership also allows us to

have regular interaction with municipal officials regarding municipal service delivery.

One such event is the Charity Mile Raceday held in conjunction with the City of Johannesburg.

• Phumelela contributed to the Highveld Horse Care Unit which cares for undernourished or

abandoned horses throughout the country.

• Phumelela contributed to the NPT Education Development Institute which provides

opportunities to the young, old and the unemployed to harness skills that can help them

find their worth in their daily lives through training, education and employment.

• Phumelela supports informal racing initiatives in certain provinces.

Suppliers • Phumelela aims to support local industry suppliers which are engaged through our

procurement manager in terms of operational requirements.

• Phumelela gives preference to empowerment rated suppliers, requesting the relevant

certification from potential suppliers. Phumelela’s procurement scoring reflects its

commitment to transformation.

20185



Unions and other employee representative forums

• The South African Catering and Allied Workers’ Union (“SACCAWU”) are no longer the

majority trade union, having lost significant membership to a new trade union APSA

(The Academic and Professional Staff Association). The maintenance of labour peace is

critical to the business. In this regard, trade unions who meet the qualifying threshold

requirements for organisational and collective bargaining rights are granted such rights in

line with the labour laws framework.

• Engagements occur through regular union meetings, collective bargaining forums, and

shop steward consultation.

• Material issues addressed relate to minimum shift hours and annual increase parameters.

Unions are informed of strategic matters where their assistance is required in job creation

and support in making representations to gambling boards.

• The Skills Development Act has resulted in the creation of a training forum that meets

bi-annually to approve the Company’s skills development plan and reports.

• In compliance with the Employment Equity Act, Phumelela has established an employment

equity forum which meets quarterly to approve the Company’s employment equity plan

and reports.

Provincial gambling boards

• Phumelela meets regularly with the appropriate bodies of provincial gambling boards in

order to ensure approval of new outlets, compliance with licence conditions, taxes and

regulations, as well as to ensure that Phumelela is involved in decision making that affects

all stakeholders in the industry.

• The compliance division ensures, inter alia, that regulatory licences are renewed timeously.

Business partners • Phumelela interacts directly with its business partners both locally and internationally

through various business initiatives that include, inter alia, the Tellytrack joint operation

between Phumelela, Gold Circle and Kenilworth Racing, Premier Gateway International

(a licensed tote operator in the Isle of Man) jointly owned by Phumelela and Tabcorp

Holdings Limited (Australia) and tote agents through a dedicated agency care manager

appointed to facilitate the relationship between Phumelela and agents.

Operators (Gold Circle and Kenilworth Racing)

• Gold Circle conducts racing and totalisator betting in KwaZulu-Natal and Kenilworth Racing

conducts racing and totalisator betting in the Western Cape.

• The Tellytrack partnership, a joint operation between Phumelela, Gold Circle and

Kenilworth Racing, operates the Tellytrack channel for the exclusive benefit of the

partnership. The Tellytrack channel is a television channel on which live broadcasts of

race meetings and other audio-visual content and data pertaining to race meetings are

broadcast in South Africa.

• The programming committee ensures that annual race programmes are coordinated and

optimally scheduled.

Bookmakers • Phumelela continues to engage bookmakers, regulators and the various ambits of

government to find a solution for an equitable contribution to the sport of thoroughbred

horseracing by bookmakers. Phumelela’s wholly owned subsidiary, Betting World

and jointly owned Supabets and Interbet are leading licensed bookmaking concerns in

South Africa.


20186


ENVIRONMENT

The key environmental impacts relating to the operations

at Phumelela are predominantly at our racetracks.

These include: energy and water usage to maintain the

racecourses; management of waste generated from the

attendance on race days; as well as the manure from

the horses stabled on site. The four racecourses and one

dedicated training centre occupy large areas of agricultural

land which require constant monitoring in terms of their

impact on biodiversity and the chemical materials needed

to maintain them.

WATER USE

South Africa is a water-scarce country and the steady

decline in the availability and quality of water is heightening

water security as a social and business risk. Water is

essential to the maintenance of our tracks. Wherever

possible we use our own water resources to irrigate the

tracks and maintain the gardens. Our water usage is

carefully monitored to ensure that there is no wastage.

Tracks are watered at cooler times of the day when there

is no wind.

We recognise that water-reduction initiatives are crucial to

sustainable operations. Our prime focus is optimising the

use of recycled water and developing innovative passive

water treatment systems for operations.

Water consumption

As a responsible organisation we have an obligation

to reduce our water footprint, as well as raise awareness

among our employees, customers and suppliers regarding

the importance of using water responsibly. We ensure

that water is used sparingly at all our training centres,

and to mitigate the impact that Phumelela’s footprint has

on the environment the following initiatives are in place:

• borehole exploration;

• increasing storage dam capacities; and

• harvesting rain water.

POTABLE WATER CONSUMPTION (LITRES)

Location/racecourse Main water sourcesPotable water consumption (m3)

2018 2017 2016

Turffontein

(Johannesburg)

• Potable municipal water supplies in offices

• Storage dam of 65 000m3 filled with rain run-off

provides the water we need to water the track,

maintain the grounds and clean the stables

• Boreholes 292 905 236 229 356 505

Randjesfontein Training

Centre (Midrand)


• Storage dam of 130 000m3

• Boreholes 308 235 373 287 307 222

Vaal (Vereeniging) • Potable municipal water supplies in offices

• Three reservoirs and raw river water usage

• Boreholes

• Storage dam of 25 000m3 61 510 66 601 63 030

Flamingo Park

(Kimberley)

• Storage dam of 10 000m3

• BoreholesNo municipal water

Fairview

(Port Elizabeth)


• Recycled water from a sewerage plant to water

the tracks

• Boreholes

• Storage dam of 110 000m3 83 616 127 400 82 935

Total 746 266 803 517 809 692

The Company’s continued environmental management structures have facilitated a more economical approach to water consumption within the Company in a more favourable manner.

20187


ENERGY USEDirect energy consumption consists of petrol and diesel used to transport our staff, jockeys, grooms and horses; as well as

for the running of generators at all racecourses. The diesel generators are primarily used as a back-up when there are power

shortages on the national grid, except in the case of night racing at Turffontein Racecourse where the light masts used are

powered by 14 additional free-standing diesel generators.

DIESEL AND PETROL CONSUMPTION (LITRES) (data from transportation and maintenance vehicles as well as generators)

Location/racecourseLitres

2018 2017 2016

Turffontein 184 061 182 604 209 040Randjesfontein 76 659 77 163 48 555Vaal 141 340 144 500 156 556Flamingo Park 27 702 32 706 25 118Fairview 39 291 38 173 43 050

Total 469 053 475 146 482 319

ELECTRICITY CONSUMPTIONIndirect energy consumption comes from our electricity usage.

During the past year we installed LED lights at Turffontein. The anticipated payback period is approximately two years.

ELECTRICITY CONSUMPTION DATA

Location/racecoursekWh

2018 2017 2016

Turffontein 1 917 377 2 281 234 2 123 435Randjesfontein 692 397 559 266 577 967Vaal 1 567 322 1 668 214 1 614 605Flamingo Park 390 069 498 735 471 962Fairview 630 207 666 854 527 928

Total 5 197 372 5 674 303 5 315 897

Notes: Independent energy consumption monitoring equipment has been installed at Turffontein to measure usage and verify municipal charges.

ENVIRONMENT CONTINUED

20188


ENVIRONMENT CONTINUED

WASTE MANAGEMENTOne of the major sources of waste from our racecourses is large amounts of horse manure. All horse manure removed from

our stables is stored in manure sheds built in accordance with the requirements of the Department of Health. The removal of

the manure is managed differently at each of our sites.

Recycling of waste generated on the premises has been implemented effectively at the Turffontein Racecourse.

Maintenance of the diesel tanks is done once in six months to ensure quality of the product and for effective use of the tanks.

There have been no significant spills to report. Wet waste at Turffontein Racecourse is produced by our outsourced catering

company (Isizwe Hospitality) and varies monthly according to the catering demands. Waste separation is currently being

endorsed by Phumelela, which includes the separation of waste as per wet waste, glass, plastic, paper and metal.

Non-hazardous solid waste is sent to the Robinson Deep waste disposal facility, which is a landfill site adjacent to

Turffontein Racecourse. Phumelela is a member of the Robinson Deep Environmental Monitoring Committee and engages

with the facility’s management to reduce the impact that this site has on the surrounding environment.

We also supply chemicals to assist with the control of odours and flies emanating from the site.

HORSE MANURE (SOILED BEDDING) DATA

Location/racecourse

Weight (T)

Method of removal 2018 2017 2016

Turffontein Removal of manure is done in-house 4 410 3 820 4 050

Randjesfontein The waste is removed daily, at no cost to Phumelela 10 480 10 000 7 830

Vaal The waste is removed daily, at no cost to Phumelela 4 746 5 826 10 800

Flamingo Park Removal of manure is done in-house 1 222 1 026 728

Fairview The waste is removed daily, at no cost to Phumelela 6 066 6 370 6 066

Total 26 924 27 042 29 474

AIR POLLUTION The Vaal Racecourse (“VRC”) is located within the Vaal Triangle Airshed Priority Area (“VTAPA”). High levels of air pollution

occurring in the VTAPA have become a source of concern for Phumelela. In order to address the matter, we have appointed

environmental experts to investigate air quality concerns at the Vaal Racecourse, particularly where pollutants may be

having an impact on both the equine and human capital that work in that area. We have also engaged with the Vaal Colliery

and its management on this matter. In addition, we have installed air dust monitoring equipment and also objected to the

extension of mining activities. To date it can be reported that dust fall outs were detected and samples were tested by an

independent air quality specialist. The samples were found to be largely compliant with the relevant air quality legislation.

20189


HUMAN CAPITAL

HEALTH AND WELLNESS At Phumelela we believe that a positive wellness culture in the workplace contributes to the physical, mental, and emotional

wellbeing of workers. The workplace becomes more productive and constructive when employers integrate breaks for

rejuvenation. It also helps to establish clear and reasonable roles and responsibilities and respect the time and talents of

individuals and their non-work demands. These steps provide the organisation with more opportunity to reduce the number

of sick days and health-associated costs and we are working to make our workplace a healthy place for our employees.

WORKSITE WELLNESS AT A GLANCEWellbeing programme

The Phumelela Gaming and Leisure Wellbeing Programme, a partnership between Phumelela and AON Elevate, has been

put in place in order to improve productivity and the general health and wellbeing of our employees, with specific focus on

supporting employees to deal with problems of a personal nature that may impact their work and wellbeing.

We are therefore committed to enhancing organisational health and wellness by:

• Fostering awareness and encouraging healthier lifestyles;

• Providing diverse wellness programmes and support to meet a wide range of personal and health related needs;

• Promoting an organisational culture that is focused on celebrating and improving the quality of life for all employees;

• Educate managers about the employee wellbeing;

• Create continuous awareness of the AON Elevate website.

Key findings

The following observation were noted for the period 1 August 2017 to 31 July 2018.

Interventions: On site events • Manager training is planned as an on-going exercise for the following year.

Programme awareness • Relaunch of the programme is planned for the coming financial year with wallet

cards, brochures and posters will be distributed.

• Newsletters are mailed to all employees with email addresses and these

employees have been registered on the AON Elevate website.

• Quarterly electronic hot topic news flashes are provided for distribution to

employees.

At Phumelela we believe that a positive wellness culture in the workplace contributes to the physical, mental, and emotional wellbeing of workers.

201810


HUMAN CAPITAL CONTINUED

Turffontein Employee Health ClinicIn August 2014 Phumelela, in partnership with Occupation Health and Safety (“OCSA”), launched an Employee Health Clinic

at Turffontein Racecourse, operating one day per week. The clinic was introduced in order to provide basic primary health

services and awareness as well as to provide medical surveillance to monitor the wellbeing of employees who might

potentially be exposed to hazardous working conditions.

Ongoing health education is given to all employees that attend the clinic on an individual basis and statistics of the

Turffontein Clinic activities are as follow for the year under review:

DESCRIPTION OF CARE INCIDENTS COMMENTS

Occupational health /pre-employment 11

Annual medicals 0

Occupational health follow-ups 7

Primary health 222

Primary health follow-up visits 34

Disabilities 1

Attendances for occupational doctors 17

Referrals (Doctors, hospitals) 24 Hospitals, OMP, dentist, optician, X-rays, eye clinic

Counselling 319 Ongoing process

Chronic consultations 31 Mostly referred (See referrals)

Injuries on duty (“IODs”) 4

Contractor attendance 0

Total attendances 670

Health education 325 Ongoing process

Meetings 6 Weekly meetings

OUR PEOPLEMotivated employees can lead to increased productivity and allow the organisation to achieve higher levels of output.

We therefore recognise that our success relies on our ability to attract and retain the best talent at every level. That is why

respecting human rights and diversity is at the heart of our business philosophy. We recognise and uphold our people’s rights

to a safe workplace, freedom of association, collective representation, just compensation, job security and development

opportunities.

Our approach consists in ensuring that:

• All employees are fully engaged, leading to high performance;

• Phumelela has an Employee Value Proposition/Total Reward Strategy which provides employees with the leadership and

incentives, both extrinsic and intrinsic, which will support high engagement levels;

• Protect employees’ basic human rights, respect diversity, and create value through teamwork;

• Continue to support the hire, training and development of previously disadvantaged individuals, with a special focus on

people with disabilities.

Youth job creationPhumelela continues to embrace a youth job creation initiative. By making effective use of government skills development

initiatives and the intellectual resources at the disposal of business, the Company has developed new entry level positions

within the organisation. The goal is to provide the unemployed youth of South Africa with an opportunity to enter the industry

and provide them with various Learnerships and employment opportunities.

Employee overviewPhumelela’s success is driven by its employees (1 494 employed by Phumelela and 956 by its wholly owned subsidiary

Betting World). We believe that better business decisions and stronger business performance – are driven by groups of

competent, high-calibre individuals with a mix of skills, experience and backgrounds.

201811


BREAKDOWN OF EMPLOYEES BY EMPLOYEE TYPETotal

2018

Total

2017

Total

2016

Total

2015

Gauteng 1 041 1 045 1 044 1 069Limpopo 109 77 84 78Mpumalanga 66 56 50 52North West 90 57 61 66Free State 75 68 105 107Northern Cape 23 27 31 31Eastern Cape 90 109 112 115

Total employees 1 494 1 439 1 487 1 518

TOTAL WORKFORCE BY EMPLOYMENT TYPE, RACE AND GENDER

MALE FEMALE

Black WhiteCol-

oured Indian Foreign Black WhiteCol-

oured Indian Foreign Total

Top management 2018 0 3 0 1 0 0 0 0 0 0 4

2017 0 3 0 1 0 0 0 0 0 0 4

Senior management 2018 1 3 1 0 0 0 4 1 1 0 12

2017 8 19 0 4 0 3 6 1 1 0 42

Professionally qualified

2018 9 14 3 4 0 2 5 1 0 0 38

2017 21 30 3 5 1 10 9 2 3 0 84

Supervisory and technical

2018 39 29 2 8 3 129 26 7 5 0 248

2017 75 24 5 6 0 159 38 15 2 0 324

Semi-skilled 2018 218 14 11 0 1 683 18 27 1 0 973

2017 103 3 3 0 0 580 10 33 2 0 734

Unskilled 2018 72 0 3 0 0 144 0 0 0 0 219

2017 76 0 4 0 0 164 0 2 0 0 246

Temporary 2018 0 0 0 0 0 0 0 0 0 0 0

2017 0 0 0 0 0 0 0 0 0 0 0

Total 2018 339 63 20 13 5 958 53 36 7 0 1 494

2017 283 79 15 16 1 916 63 53 8 0 1 439

TURNOVER OF EMPLOYEES

Turnover data Turnover data Turnover data2018 2017 2016

Headcount 1 494 1 439 1 487

Terminations Number % Number % Number %

Resignations 160 10,7 65 4,5 52 3,5

Retirements 12 0,8 19 1,3 10 0,7

Dismissals 19 1,3 9 0,6 21 1,4

Redundancies 207 13,9 8 0,5 6 0,4

Other reason for leaving 118 7,9 12 0,8 10 0,7

Total terminations 463 31,0 113 7,8 99 6,6

New recruits 518 34,7 65 4,5 68 4,5

Net turnover 55 3,7 (48) (3,3) (31) (2,1)

Churn rate 981 65,7 178 12,4 167 11,2


201812


EMPLOYEE RELATIONSWe believe that the maintenance of sound labour relations between the company, its employees, and trade unions is

critical to engendering labour peace. In this regard, we prioritise the building of strong relationships with employees and

unions. Unions which meet the threshold for sufficient representation are granted organisational rights in line with the legal

framework and confines of the law. We respect the right of employees to associate with trade unions of their choice. This is

evident from the number of employees affiliated to various trade unions, which currently stands at about 40%.

Notwithstanding, the business has witnessed substantial floor crossing by union affiliated employees from one union to the

other, resulting in the status of SACCAWU as the majority trade union being affected. There is currently no trade union which

meets the qualifying criteria for collective bargaining.

TRAINING AND DEVELOPMENT Training Academy

Phumelela, in partnership with various stakeholders in the gaming and leisure industry has registered a Training Academy

called Gaming World. The Academy is a non-profit training entity registered to offer qualifications specifically designed to

address the skills shortages in the sports betting and horseracing industries. During the reporting period the Academy has

commenced with its accreditation processes and is currently working with CATHSETA and the Quality Council for Trades and

Occupation (QCTO) to re-align the qualifications. The Academy has been structured to be the training hub of the industry

having both qualifications and customised modules inclusive of FICA training, Customer Service and Leadership courses.

Employee Training and Development

Training and development has been identified as a critical area within the Group. During the year, continuous effort was

made to address the link between productivity and training opportunities, while creating a talent pool for the future

through Learnerships.

Over the past financial year, the Phumelela Group offered Learnerships for Learnerships for 64 unemployed learners and for

88 employed learners broken down as follows:

NATIONAL CERTIFICATES

Employed

learners

Unemployed

learners

Gaming Operations (NQF level 3) 35 35Gardening and Horticulture (NQF level 3) 3 12Generic Management (NQF level 3) 23 2Generic Management (NQF level 4) for people living with disabilities 5 15Information Technology (NQF level 3) 15 0Occupational Directed Education and Training Practitioners (NQF level 5) 7 0

Total 88 64

Although Learnership programmes have been the focus of training and development, various skills-based and accredited

training initiatives have been undertaken; these include but are not limited to:

• FICA;

• Occupationally directed qualifications;

• IT skills;

• Management and leadership skills;

• Customer service skills; and

• Health and safety.


201813


OCCUPATIONAL HEALTH AND SAFETYSafety

As the largest horseracing entity in Africa we bring a healthier, safer and environmentally friendly horseracing experience to

our employees and customers. We are committed to ensure that health and safety of our employees including our customers

is one of our highest priorities. We remain focused on our long-term objective of “zero accidents.” With this objective in mind,

we continuously strive to improve our health and safety performance.

Behaviour-based safety training

We insist on strict compliance with our Health, Safety and Environment (“HSE”) Policy. Therefore, HSE committee meetings

are held regularly at all racing sites to address any deviations that arise at our workplaces.

Workmen’s compensation

Incidents of a minor nature relating to injury on duty were reported to the Department of Labour.


201814


SOCIO-ECONOMIC DEVELOPMENTPhumelela aims to invest in initiatives that facilitate

sustainable access to the economy for the beneficiaries;

as such we invest in skills development, enterprise

development and preferential procurement. We focus on

projects that impact our communities positively and afford

them access to the country’s economy whilst recognising

the value of developing a sustainable model that

connects our social investment to our core business

strategy. We are passionate about the future and believe

that creating shared value is the way forward for both

business and communities.

Skills development

Working in conjunction with the Thoroughbred Horseracing

Trust, Phumelela supports three programmes to develop

the skills of work riders, grooms and jockeys.

The Work Riders Training Programme provides certificated

twice weekly formalised training for mainly historically

disadvantaged South Africans (“HDSAs”) in exercising and

schooling thoroughbred horses. During the programme,

work riders who have demonstrated that they may have the

talent to become jockeys are given advanced training which

prepares them to ride in races.

The Thoroughbred Horseracing Trust sponsors the

training of promising young jockeys from disadvantaged

backgrounds. Their initial training is provided by the

South African Jockey Academy, where they complete their

apprenticeships in their home provinces.

ENTERPRISE DEVELOPMENTThere is a strong drive within the organisation to establish

a more strategic enterprise development initiative.

We believe enterprise development must seek to quantify

social and environmental value created across the supply

chain, and that this approach should ultimately inform the

broader business model for the Group.

We promote transformation throughout our supplier

base through preferential procurement and by assisting

suppliers to achieve compliance with high standards.

Phumelela supported three enterprise development

projects with the aim of helping HDSAs establish

black- empowered companies.

Phumelela has been instrumental in the development of

numerous small medium and micro enterprises. During the

financial period 1 August 2017 to 31 July 2018, Phumelela

supported the following projects:

• Isizwe Hospitality is a catering company set up with

Phumelela’s assistance and located on its premises.

It employs about 39 people who participate in the

shareholding of Isizwe through the Batho Pele Trust.

• Rowls Electrical is another Enterprise development

beneficiary that is significantly owned by HDSA

employees. Rowls Electrical fulfils all the general electric

requirements for the Company.

• Qhakazani Communication and Maintenance is the main

facilities service provider at the Turffontein and Vaal

racecourse. It employs about 18 people and 33,3% of the

business is owned by an Employee Share scheme.

Enterprise development trend spend2017 2016

R R

Rowls Electrical 212 557Qhakazani 310 836 272 716Isizwe Hospitality 3 378 900 2 963 760

Enterprise Development is a priority element as per the

Codes of Good Practice for B-BBEE. In the furtherance of

the Group’s commitment to transformation, the Group

has advanced a further loan of about R8 million to Omphe

Tshiamo Investments Proprietary Limited (Omphe Tshiamo)

to fund the roll-out of additional 10 Betting World and Tab

franchises in the North West province. Omphe Tshiamo

is 95% owned by previously disadvantaged individuals

resident in the North West province and the Group owns the

remaining 5%. The Group has entered into negotiations with

Omphe Tshiamo to increase its shareholding to 35% in the

Company.

Procurement

Phumelela has adopted a procurement policy to maximise

the awarding of contracts to suppliers that are controlled

by entrepreneurs from previously disadvantaged groups.

All large contracts are awarded by a tender committee,

which evaluates proposals in terms of actual empowerment

and other expected criteria.

SOCIAL AND RELATIONSHIP CAPITAL (SOCIETY)

Phumelela is committed to investing in the economic development of South Africa. We are also aware of how society views us, and are dedicated to upholding our reputation and supporting responsible gambling programmes.

201815


SOCIETY CONTINUED

CORPORATE SOCIAL INVESTMENTThe aim of the initiatives is to invest in our youth and develop our communities.

2018 SOCIAL INVESTMENT HIGHLIGHTS

* Corporate Social Responsibility

Over R4 million

spent on staffTRAINING including bursaries for the Group

Over R3 million

spent on CSR* programmes by the Group

Benefited

23 STUDENTS though the Group bursary scheme

Increased access to equine health and education programmes in Southern Africa to about

6000 BENEFICIARIES with contributions OVER R1 MILLION

EDUCATION BASKETBursary scheme

Phumelela rolled out a bursary scheme to benefit its employees, particularly those who fall in a lower income earning

bracket, with, with payment of school fees for their children. The Group offered a total of 23 bursaries in various provinces in

the year for an amount of about R380 000.

Phumelela has been involved in numerous projects focused on upgrading and refurbishing of schools in communities directly

and indirectly affected by our operations.

The education basket ensured that every grade 1 – 7 has access to the school curriculum online. This project, referred to as

the Interactive Whiteboard Programme was developed in partnership with the Department of Basic Education. Thus far,

we have trained 39 teachers from 2 schools in 2 provinces to use the new platform.

The whiteboard supports educators and learners to achieve national curriculum goals: such as Learner-centred learning;

Exploratory and Collaborative learning; encourage creativity, critical thinking and analytical skills.

We further provided study material to grades 8 to 12 benefiting about 985 learners as well as nutritional aid.

Read and Rise In partnership with Read to Rise, our subsidiary,

Betting World delivered reading books to 34 classrooms in 5 schools based in Makhado,

Limpopo. This program impacted about 2000 learners. A total of 4,982 new reading

materials were distributed to these learners.

201816


201817


Eastern Cape Walmer Primary school was provided with an interactive whiteboard as well as computer training for the teachers.

SOCIETY CONTINUED

Mpumalanga Phumelela also supported Salubindza Primary School through the sponsorship of three interactive whiteboards, educational toys for grade R-learners and supplies for the vegetable garden. About 20 educators were trained in Basic Computer Literacy including the board and curriculum training.

The following items were provided:• 3 x Inspire board’s - Interactive whiteboard installed with speakers• 3 x Overhead projectors with installation and cabling• 3 x Teacher laptops• Mathematics and Literacy software installed for grades 0 to 9

201817


201818


Free State Popano Secondary School was in dire need of school Textbooks for Grade 08 and 09. Phumelela supported the school through the sponsorship of Mathematics, Natural Science, Accounting, English and Sesotho textbooks.

Northern Cape We provided library furniture and study guides for grades 8 to 12 in Mathematics, Science and Accounting at Dr EP Lekhela, in Kimberley.

North West NPT Educational and Development Institute assists the local community with arts and craft skills amongst the women and youth, nutrition programmes through the sustainable vegetable gardens including livestock farming. The project further established an education centre assisting children of farm workers within the Hekport and Skeerpoort areas with extra maths lessons, technology skills and photography classes. An amount of R200 000 was invested in this project. Due to political unrest and violence in some areas in the North West, the project had to close down.

SOCIETY CONTINUED

201818


SOCIETY CONTINUED

Limpopo We have embarked on a programme focusing on inclusion and awareness of the blind community in society.

Phumelela contributed to the Rivoni for the Blind Society by procuring braille educational material including walking canes, training in orientation and mobility as well as counselling for the students. Rivoni assists those who are blind or visually impaired, by implementation of rehabilitation and self-help programmes.

The project has provided services to over 6000 visually impaired community members. Many beneficiaries have gained freedom of movement and access to education. Some have been able to enter into mainstream education through to university level. Others are employed in income

generating projects initiated by Rivoni.

Outcomes of the project

• 70 visually impaired persons of different ages were trained in orientation and mobility and received walking canes;

• 20 learners received braille training and are able to read and write in braille whereas other learners were

able to further their studies;

• Awareness programmes were conducted with community members educating them on issues of blindness;

• Needy learners were provided with daily living skills in order to conduct day to day activities;

• Families of affected blind persons received counseling; and

• 5 Braille machines were purchased for use to teach braille.

201819


SOCIETY CONTINUED

MANDELA DAY PROJECT As part of our commitment to support Mandela Day, the Group participated in the refurbishment of a Community Centre in Tembisa, donated educational toys including iPads to the youth development centre, sponsored the boys with soccer kits and arranged a fun day for the kids and the community. The home cares for boys of ages 12-18 years who come from challenging backgrounds, some homeless, orphaned and abused. The home provides shelter including counselling services through an in-house social worker. They also provide an early childhood development centre which caters for 50 children between the ages of 0 to 6 years.

Our staff assisted in the preparation of meals and painting of the facility. We encourage our employees to volunteer in various initiatives thus giving employees an empowering sense that they too can make a difference. The group identifies projects where employees can get involved and make a difference.

About R357 000 was spent on this projects excluding the cost of consumables and iPads. The learners were also provided with a meal for the day.

201820


SOCIETY CONTINUED

EQUINE HEALTH AND EDUCATIONHighveld Horse Care UnitPhumelela proudly sponsored projects in the Limpopo, Eastern Cape, North West, Free State, Mpumalanga and Northern Cape provinces, with the funding primarily used for horse care initiatives that include equine education projects, providing stabling and daily care (food, water, vaccinations, deworming etc) for abandoned and/or confiscated horses as a result of investigations into cruelty towards animals.

The Highveld Horse Care unit, founded in 1991, is the largest equine welfare organisation in the southern hemisphere and is predominantly funded by donations. Phumelela encourages the general public to support the organisations, which are in dire need of assistance.

2018 2017R R

Highveld Horse Care Unit 1 390 000 1 227 625

Further details can be found on their website, www.horsecare.org.za

Contribution towards equine interestsPhumelela is committed to the greater interest of the equine community, and as such invested in various projects that ultimately benefit previously disadvantaged individuals in the sport of horseracing and the equine community in general.

2018 2017R R

Racing and EquestrianAcademy 3 430 924 3 742 826Work Riders and Grooms Programme 289 999 327 500

Equine awarenessHomeless children were taken around the stables at Turffontein racecourse and were taught about the horse racing industry as most of them have ambitions of being jockeys.

201821


http://www.horsecare.org.za

SOCIETY CONTINUED

SPORTS DEVELOPMENTAmawundlu projectOur endeavour is to provide children from all sectors of the community with programmes that allow them to develop and participate in sports at the highest level. Sport offers children a healthy alternative to the conditions many live in, helps with their development, social integration, cultural understanding and improved life skills.

Amawundlu is a non-profit organisation offering sustainable sport development programmes for schools (Grades 3-9) through sport education and skills development. They provide physical education lessons to children who would otherwise, not have the opportunity to experience the obvious benefits of a professionally coached sport. They also provide skills development and training for young, aspiring coaches, thus creating employment opportunities. Amawundlu Sports Development is a perfect vehicle for nurturing a passionate support base for sports among the developing youth in South Africa.

This program reaches over 2000 school children weekly. They further provide in-service training for university students studying Sports Development and Management. Our wholly owned subsidiary Betting World contributed about R436 000 towards this project.

201822


SOCIETY CONTINUED

ANNUAL CHRISTMAS EVENTPhumelela’s Annual Christmas Tree event hosts various orphanages for a day and provides them with lunch and entertainment and a small gift. The event is facilitated by various Phumelela executives and employees who assist on the day. Phumelela’s commitment in uplifting these children is further demonstrated by our attempt at fulfilling various wish lists of these orphanages. Phumelela further facilitates the provision of donations from a number of independent enterprises for these orphanages which include St Laurence’s Children’s Haven, Abraham Kriel Childcare, and TLC Children’s Home.

CRIME PREVENTIONPhumelela has been a proud supporter of the mounted SAPS for over a decade. Our financial contributions have funded stabling facilities, an office complex, horse floats, motor vehicles and other crucial equipment which enable the invaluable policing and crowd control that the mounted police provide.

2018 2017R R

Mounted SAPS 177 158 132 307

COMMUNITY DEVELOPMENTOur community development initiatives are focused on the upliftment of the southern area of Johannesburg in which our head office and Turffontein Racecourse are located.

Through our membership and financial contributions to SOJO (South of Joburg) Business and Tourism, we are able to invest in the rejuvenation and upliftment of business and tourism in the Turffontein precinct of the SOJO project. We are confident that the infrastructure development and enhancement of the area surrounding the racecourse will promote the history

of one of South Africa’s oldest racecourses. The City of Johannesburg has conducted a Heritage Study

which revealed that the Turffontein Racecourse is one of the sites identified as

having social, historical and architectural significance.

The Racecourse was accordingly awarded the Blue Plaque by the City for its heritage significance.

SOJO in conjunction with the South African Police Services (“SAPS”) and

the City Council are also working to reduce crime and clean up the seven

SOJO precincts. A Phumelela executive is a director on the

board of SOJO representing the Turffontein precinct.

201823


SOCIETY CONTINUED

ENCOURAGING ACTIVE LIFESTYLESAmid growing concerns about chronic illnesses, obesity, low activity levels, and productivity at the work place, we continue to promote opportunities that encourage our employees to lead more active lifestyles. We participate in fun walks and fun runs thus promoting physical fitness.

CANCER AWARENESSThe Group also participated in the Cansa Shavathon Fundraising initiative to support those affected by the illness. We were able to raise funds of R86 000.

201824


201825


SOCIETY CONTINUED

PRODUCT RESPONSIBILITYPhumelela’s operations include horseracing, betting and media operations. Our media operations support our betting products. We adhere to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion and sponsorship.

Phumelela is aware of its responsibility to its customers and is committed to enabling informed betting. This commitment to responsible gambling is not only driven by increased political and consumer awareness, but through commitment to our customers and fostering a relationship of care and trust with them. We are a member of the South African Responsible Gambling Trust (“SARGT”), a public/private sector partnership accountable to the South Africa Advisory Council on Responsible Gambling (“SAACREG”), which funds the South African National Responsible Gambling Programme (“NRGP”).

The NRGP is communicated to our customers in all betting outlets (branches, agents and on-course), through posters and the supply of information leaflets in all of these premises, thus increasing visibility and public awareness of responsible gambling.

The NRGP runs training courses which are attended by Phumelela branch, agency and telebet centre employees.

2018 2017R R

Gambling awarenessSouth African Responsible Gambling Foundation (“SARGF”) 1 182 367 1 039 922

ENDANGERED WILDLIFE TRUST The Group has also partnered with the Endangered Wildlife Trust to improve sanitation and water resources in the Groot Marico area located in the North West.

The headwaters of the Marico River supply water to Groot Marico. The project aims to protect water resources and improve sanitation in and around the Groot Marico area. The traditional communities depend heavily on groundwater resulting to very basic sanitation facilities. They mostly rely on septic tanks, French drains or Pit latrines. A wastewater treatment plant introduction is under process. This recycling process will assist the community remove contaminants and produce treated wastewater that is safer for the environment.

An amount of about R200 000 was contributed towards this project.

201825


201826


ETHICAL STANDARDS

OUR CODE OF CONDUCT During the year, Phumelela adopted a new Code of Conduct for the Group. Senior and middle management, as well

as employees identified as being in potentially exposed positions, are required to formally certify that they know and

understand the Code of Conduct and its associated guidelines. This certification process further supports efforts to

fight corruption.

Promoting high ethical standards and combating corruption throughout our sphere of influence is an important part of our drive to deliver social value through our core activities.

201826


TRANSFORMATION

In the South African context, transformation is the journey

towards economic development, thus integrating the

black majority into the mainstream economy. Phumelela

fully embraces the notion of transformation and through

its Social and Ethics Committee promotes all elements of

Broad-based Black Economic Empowerment (“B-BBEE”).

Phumelela is fully committed to the amended Codes and

great strides have been made to align the transformation

charter, strategies, policies and processes accordingly.

The transformation charter and process that emanate will

ensure that appropriate strategies, policies and processes

are in place to drive transformation, and that the company

strategy incorporates B-BBEE requirements as prescribed

by the Department of Trade and Industry’s generic

scorecard and associated Codes of Good Practice.

During the 2017/2018 financial period Phumelela achieved

a level 4 BEE contributor thus improving from its previous

level 5 from initial verification. The improvement came as

a result of an increase in the investment towards skills

development for the benefit of black people and better

Enterprise supplier development engagements.

Transformation in South Africa is paramount for business growth. Phumelela is cognisant that B-BBEE is greater than a mere moral imperative, it is a licence to trade and commits to drive transformation. Over time, Phumelela maintained a level 2 B-BBEE rating before the amended Codes were implemented.

Transformation category

Targetscore

amended Codes

B-BBEEscore

2017/2018

B-BBEEscore

2016/2017

Ownership 25 22,77 23,22

Management control 19 13,35 11,41

Skills development 20 9,24 12,35

Enterprise supplier development 40 32,41 31,20

Socio-economic development 5 5,00 5,00

Total score 109 82,77 83,18

Transformation in South Africa is paramount for

business growth. Phumelela is cognisant that

B-BBEE is greater than a mere moral imperative,

it is a licence to trade, and therefore commits to

drive transformation. In driving the transformation

objectives set out by the Department of Trade and

Industry, Phumelela continuously strives to improve

its BEE status.

TRANSFORMATION ROAD MAP: PHUMELELA GAMING AND LEISURE LIMITED

2012

2013

2014

2016

2017

2015

B-BBEE SCORE

81,50

85,08

91,99

77,68

83,18

2007

BEE

Cod

es

82,772013

Am

ende

d B

EE C

odes

2019Improve to

level 3

2016Achieved

level 5

IMPLEMEN-TATION OF THE

NEW B-BBEE CODES

2015Achieved

level 2

2017Achieved

level 4

2018Achieved

level 4

201827


TRANSFORMATION CONTINUED

BETTING WORLDBetting World Proprietary Limited, a wholly owned subsidiary of Phumelela was audited by Empowerdex on

22 December 2017, the audit resulted in the company achieving an improved level 3 BEE contributor status. Betting World

improved from a level 4 (87.24 points) to Level 3 (90.82 Points). The remarkable improvement has been attributed to the

company’s hands on management approach which saw improvement on management control and skills development

elements.

Transformation category

Targetscore

amended Codes

B-BBEEscore

2017/2018

B-BBEEscore

2016/2017

Ownership 25 23,22 23,22

Management control 19 13,08 9,65

Skills development 20 14,91 11,98

Enterprise supplier development 40 34,61 37,39

Socio-economic development 5 5,00 5,00

Total score 109 90,82 87,24

The following measures were adopted by the Group to

drive its transformation agenda:

• Recruitment and succession plans have been

amended to account for the national economically

active population targets;

• Increased focus on learning programmes for black

people that could lead to prospective employment

within the Group or industry;

• Prioritised identification and development of black

women-owned suppliers;

• Hands-on supplier engagements; and

• Active management of the B-BBEE scorecard

throughout the Group.

TRANSFORMATION ROAD MAP: BETTING WORLD

2012

2013

2014

2016

2017

2015

B-BBEE SCORE

50,25

76,60

79,43

73,38

87,24

2007

BEE

Cod

es

90,822013

Am

ende

d B

EE C

odes

2019Improve to

level 2

2016Achieved

level 7

IMPLEMEN-TATION OF THE

NEW B-BBEE CODES

2015Achieved

level 3

2017Achieved

level 4

2018Achieved

level 3

201828


201829


TRANSFORMATION CONTINUED

COMMITMENT TO EXTERNAL INITIATIVESPhumelela is a member of a variety of external initiatives as part of its commitment to good corporate citizenship:

EXTERNAL INITIATIVELEVEL OF COMMITMENT

SA Responsible Gambling Trust (“SARGT”) – a public/private sector partnership accountable to the SA Advisory Council on Responsible Gambling (“SAACREG”).

Member

South African National Responsible Gambling Programme (“NRGP”) – committed to providing informed betting contribution each month.

Financial

SOJO (South of Joburg) Business and Tourism – an association for the upliftment of facilities and the establishment of employment opportunities in the south of Johannesburg, Phumelela appoints a director to the board.

Member

201829


sustainability report · 2018-12-11 · sustainability reporting natural capital •...

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