Brikor : Corporate Governance Report 2022

Brikor Limited

SUSTAINABILITY

REPORT

2022

THE SPIRIT OF BRICKMAKING

CONTENTS

1 SUSTAINABILITY AT BRIKOR

1. United Nations Global Compact's Ten Principles
2. Data collation

1. ECONOMIC
2. Direct economic value generated and distributed
3. Procurement practices

1. Anti-corruption
2. Anti-competitivebehaviour
3. ENVIRONMENT

6 Environmental Policy and management systems

6 Carbon footprint

8 Emissions

1. Waste
2. Rehabilitation
3. Materials

10 Water and effluents

1. Biodiversity
2. Environmental initiatives

1. Environmental compliance
2. SOCIAL

12 Employment

1. Labour/management relations
2. Occupational health and safety
3. COVID-19response
4. HIV information and awareness
5. Training and education

20 Human rights and non-discrimination

20 Underaged or compulsory labour

1. Product responsibility
2. BROAD-BASEDBLACK EONOMIC EMPOWERMENT (BBBEE)

1. Scorecard

23 BBBEE Certificate

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SUSTAINABILITY AT BRIKOR

The Board acknowledges that in addition to being responsible for corporate performance, it holds a responsibility for triple bottom line reporting. The Group's corporate culture is one of absolute undeniable integrity, transparency, competency and efficiency in decision-making and the fair and equitable treatment of its human and natural capital. From a moral point of view, the directors of the Group are expected to apply sound and reasonable judgement which can only be achieved through nurturing the social capital element, mutual respect for cultural, social or other differences and to foster transparent communication which detracts from subjective viewpoints.

The directors understand that transparency not only relates to a principle of freely, and without prejudice or subjective interests, disclosing information to stakeholders, but also to acknowledge the individual shortcomings which could jeopardise stakeholders. This report, once again, emphasises the Group's commitment to integrity and the benefit of the greater good of all the stakeholders.

The sustainability report has been prepared in alignment to the six capitals (financial, manufactured, intellectual, human, social and relationship, natural), the Global Reporting Standards and incorporating disclosure on the United Nations Global Compact's ten principles, as set out below and indicated throughout this report.

UNITED NATIONS GLOBAL COMPACT'S TEN PRINCIPLES

The UN Global Compact's ten principles in the areas of human rights, labour, the environment and anticorruption enjoy universal consensus and are derived from:

• The Universal Declaration of Human Rights;
• The International Labour Organisation's Declaration on Fundamental Principles and Rights at Work;
• The Rio Declaration on Environment and Development; and
• The United Nations Convention against Corruption.

The UN Global Compact asks companies to embrace, support and enact, within their sphere of influence, a set of core values in the areas of human rights, labour standards, the environment and anti-corruption:

Human rights

Businesses should:

Principle 1: support and respect the protection of internationally proclaimed human rights; and

Principle 2: make sure that they are not complicit in human rights abuses.

Labour

Businesses should:

Principle 3: uphold the freedom of association and the effective recognition of the right to collective bargaining;

Principle 4: the elimination of all forms of forced and compulsory labour;

Principle 5: the effective abolition of child labour; and

Principle 6: the elimination of discrimination in respect of employment and occupation.

Environment

Businesses should:

Principle 7: support a precautionary approach to environmental challenges;

Principle 8: undertake initiatives to promote greater environmental responsibility; and

Principle 9: encourage the development and diffusion of environmentally friendly technologies.

Anti-corruption

Businesses should:

Principle 10: work against corruption in all its forms, including extortion and bribery.

Sustainability

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continued

DATA COLLATION

Sustainability performance information was gathered, and data collated for publication in the Integrated Annual Report and on Brikor's website. Every effort has been made to ensure data accuracy and completeness. There is, however, the possibility of small inconsistencies due to human error in recording and collating, and differences in interpretation of definitions.

Data has mainly been collated for Brikor and its subsidiary, Ilangabi, for the economic, environmental and social indicators for the period 1 March 2021 to 28 February 2022, and sustainability data collation coincides with Brikor's financial reporting cycle.

Financial data has been extracted from the consolidated annual financial statements. Intergroup transactions have been eliminated.

The basis for reporting on the financial elements is in accordance with the Group's accounting policies, which are disclosed in the financial statements.

Data is only reported where considered to be of sufficient accuracy and are reported according to the Global Reporting Initiative's guidelines.

Ongoing efforts are being made to improve the data quality and to broaden the content in the range of material topics.

ECONOMIC

During the reporting period, Brikor generated revenue of R272,7 million (F2021: R257,9 million), all of which was generated in South Africa.

The Bricks segment generated revenue of R195,1 million (F2021: R144,9 million). Gross profit in the Bricks

segment amounted to R40,3 million (F2021: R27,4 million) with the gross profit percentage increasing to 20,7%

(F2021: 18,9%). The Bricks segment realised an operating profit before interest and taxation of R12,4 million

(F2021: R3,0 million).

The Coal segment generated revenue of R77,6 million (F2021: R113,0 million). Gross profit in the Coal segment

amounted to a gross loss of R0,7 million (F2021: gross profit R 37,6 million). The Coal segment realised an

operating loss before interest and taxation of R12,7 million (F2021: operating profit before interest and taxation of R18,0 million).

Overall, the operating loss before interest, taxation and earnings from associate amounted to R0,3 million (F2021: operating profit before interest and taxation of R21,0 million) with an operating margin of -0,11%

(F2021: 8,1%). Loss before taxation and earnings from associate was R6,0 million (F2021: profit before taxation

of R16,3 million) with a total tax credit of R2,7 million (F2021: tax expense of R4,3 million). An attributable loss

before earnings from associate of R3,2 million (F2021: attributable profit of R12,0 million) was generated for the reporting period.

Total fees paid to auditors of R1,2 million (F2021: R1,4 million) did not include any non-audit fees as non-audit services were not rendered by the auditors in either the current or the prior reporting period.

During 2022, operating lease commitments amounted to R39,1 million (F2021: R36,9 million).

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DIRECT ECONOMIC VALUE GENERATED AND DISTRIBUTED

Value added statement

Value added is the measure of wealth created by the Group in its operations by adding value to the cost of raw materials, products and services purchased. The statement below summarises the total wealth created and shows how it was shared by employees and the stakeholders that contributed to its creation.

Also set out below is the amount retained and reinvested in the Group for the replacement of assets and the further development of operations.

	2022	2021
	R'000	R'000
Revenue	272 707	257 914
Less: Cost of goods and services	(233 084)	(192 934)
Value added from trading operations	39 623	64 980
Add: Interest received on investments	548	889
Total value added	40 171	65 869
Utilised as follows:
Employees
Salaries and benefits	100 812	80 975
Providers of capital
Interest on borrowings and shareholders' loans	1 785	1 046
Government - Company tax	81	1 506
- Current	81	1 506
	102 678	83 527
Retained for reinvestment
Depreciation and amortisation	10 743	7 743
Income utilised in the business	(73 250)	(25 401)
	(62 507)	(17 658)
Total utilisation of value added	40 171	65 869

Exchanges with government, including amounts collected on their behalf

Further to this and in the furtherance of the economy and national development, the table below indicates exchanges between the Group and government, including amounts collected on their behalf:

	2022	2021
	R'000	R'000
Employee taxes	12 700	9 488
Company taxes	(344)	(342)
Value added tax	16 596	19 852
Royalty tax	455	865
Carbon tax	3 021	-

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