Transformation

Benefitting societies in which we operate

In line with Peregrine Group’s sincere attempt to progress transformation, Nala was established to be a sustainable Broad-Based Black Investment company. 70% of the shares in Nala are owned cumulatively by three BEE Trusts, being the Peregrine Educational Trust (35%), the Peregrine Community Development Trust (15%) and the Peregrine Employee Portfolio Investment Trust (20%).

These trusts have been established to promote the advancement of disadvantaged individuals through education, to aid in community development and to benefit Peregrine’s black staff (excluding directors). The remaining 30% of Nala is owned by Peregrine Holdings Limited. Nala acquired a 20% shareholding in Peregrine SA Holdings, which owns the South African operating subsidiaries, including Citadel, Peregrine Capital and Peregrine Securities, the remaining 80% being held by Peregrine Holdings Limited.

This allows Peregrine to focus its transformation efforts in the South African operations of the Group. This was brought about by Nala exchanging its 12.5% stake in the JSE-listed shares of Peregrine Holdings Limited for a 20% stake in Peregrine SA Holdings Proprietary Limited, the South African operating subsidiary of Peregrine Holdings Limited.

This direct holding into an unlisted holding company of the South African operations will, over time, enable Nala to participate in the cash flow of the business. Nala can and will pursue other investment opportunities.

In this regard, Nala owns 8.3% of the issued shares of Consolidated Infrastructure Limited, which investment has been funded through the Standard Bank of South Africa Limited. Consolidated Infrastructure Limited, through its power subsidiary Conco, is the largest turnkey developer and installer of high-voltage electrical substations and overhead cables in sub-Sahara Africa.
 

BEE

Peregrine’s commitment to transformation is evident from our consolidated B-BBEE scorecard and recognition as a level 4 contributing enterprise. The improvement from level 5 in 2015 to a level 4 is evidence of the Group’s commitment and focus on Transformation. The verification audit reflects the Black Economic Empowerment (BEE) status of Peregrine SA Holdings, the entity which is the holding company of the Group’s South African operating entities. The verification audit assessed the achievement by Peregrine SA Holdings, Peregrine Securities Group and Citadel of BEE targets as set out in the Financial Services Charter.

  2016  2015
Equity Ownership 15.05  13.47
Management & Control 5.77 4.77
Employment Equity 6.86 5.70
Skills Development 0.77 0.73
Preferential Procurement 13.56 9.52
Enterprise Development (ED) 15.00 15.00
Socio-economic Development (SED) 1.04  1.58
Access to Financial Services 0.24         -
Total Score  58.29 50.77
Final Score (converted)  70.24 60.44


Peregrine is committed to transformation as a critical business practice, not only for the Group’s sustainability, but also as a means to make a meaningful contribution in the larger South African society in which a large part of its businesses operate. Peregrine further acknowledges the reputational and operational risk inherent in failing to meet its B-BBEE objectives. To this end Peregrine has an established Group Transformation Forum (GTF), which meets at least three times a year.

The GTF comprises member representation of the major subsidiaries (by headcount) within Peregrine and functions as a discussion group and an advisory body to the board. Members include Chief Executive Officer Jonathan Hertz, Executive Director Mandy Yachad, Citadel Human Capital Director Marina Knox, a representative of Nala and representatives from other companies within the Group.

The key objective is to drive and address all elements of the B-BBEE scorecard in the spirit of authentic transformation. The board assumes responsibility for the dialogue on transformation and diversity between employees and management.

In the medium to long-term it is the intention that all local subsidiaries will have specific key focus areas to address transformation at a subsidiary as well as at a Group level.

The Group's transformation efforts further expand to our empowerment partner, Nala, which was established to be a sustainable Broad-Based Black Investment company.

 

The beneficiaries include an educational trust, a social investment trust as well as Peregrine staff. These trusts have been established to benefit Peregrine’s black staff excluding directors, to aid in community development and to promote the advancement of disadvantaged individuals through education.

Board representation

At year-end the Peregrine board included one black male independent non-executive director, Stefaan Sithole, equating to an 11% black representation. Stefaan is also a member of the Audit Committee and Chairman of the Social and Ethics Committee.

Preferential procurement

The Group is committed to developing committed and supportive relationships with B-BBEE service providers. As a result Peregrine received 100% recognition as a preferential provider. The Group further received the status of Value-adding supplier as well as Enterprise Development Beneficiary.

In addition Legae achieved a 135% BEE procurement recognition level.

The Peregrine Group will continue to focus on procurement as a strategic imperative to address a broader base of economic interest and growth for black owned companies.

Enterprise development

Certain subsidiaries within the Peregrine Group have Enterprise Development agreements in place with black-owned companies as set out below. A total of R10.82 million was spent with ED partners during the year, more than double the amount that was spent in 2015 (R4.47 million). The aim of ED agreements is to align internal processes such as recruiting and event co-ordination through empowering companies with black ownership. Peregrine continues to focus on developing procurement partners through such agreements and enterprise development is a specific scorecard focus for the year ahead, with particular emphasis on building businesses through direct enterprise development, as well as supporting businesses through procurement initiatives.

Various partnerships benefited from enterprise development partnerships. Longstanding relationships such as Legae and Peregrine Securities reflect long-term commitment and beneficial cooperative engagement.

The Group is currently looking at various proposals regarding the implementation of an integrated Enterprise and Supplier Development strategy.

 

Engaging and supporting communities

Peregrine is committed to advancing local communities through socio-economic development and empowerment programs, with a long-term and sustainable focus. The Group has a long-term strategy to empower communities and employees through its empowerment vehicle, Nala, and the three underlying trusts, the Peregrine Educational Trust, the Peregrine Community Development Trust and the Employee Portfolio Investment Trust. In addition to this the Citadel Philanthropy Fund (CPF), has been created as a platform for donor advised funding of community projects.

The CPF creates a platform and opportunity for companies, as well as individuals to allocate SED spend and to contribute to projects that have met all the regulatory and compliance criteria. The CPF encapsulates the Group’s strategic thinking around SED from a broad based and sustainable perspective, utilising resources and skills within the Group to create opportunities for the Group’s client community. From a beneficiaries’ perspective, the CPF enables broader participation and exposure to a variety of projects. The CPF further provides exposure of projects to a wider investment pool and is not limited to the Peregrine Group.

The Group remains committed in the medium to long-term to education, health and community upliftment, which will be more easily attained once Nala has repaid its debt and can distribute the dividends it will receive from Peregrine SA Holdings to its shareholders, the majority of which are the three Trusts mentioned above.

 

On an annual basis the Group aspires to dedicate 1% of its South African subsidiaries’ net profit after tax to initiatives that benefit societies in which most of its employees reside and operate in. To this end the Group allocated funds to various initiatives as detailed here.

To date the Group’s initiatives have focused on South Africa and particularly favoured education centred projects as the Group concurs with the sentiments expressed by BB King when he said “The beautiful thing about learning is no one can take it away from you”. Beneficiaries and allocation to such beneficiaries are decided upon by the Group SED Forum which comprises representation from Peregrine SA Holdings and all major subsidiaries. The SED Forum has developed a matrix to enable a fair selection of projects and the establishment of this forum has further brought collaboration and extended engagement enabling with passion and commitment the opportunity to share a vision and to make a difference.