JD Group’s commitment to sustainability

Introduction

The Group’s strategic intent and commitment is to build sustainable wealth and create value for its stakeholders.

As a foundation for the Group’s sustainability commitment, the King Report on Corporate Governance forms the backbone against which the Group develops its approach, strategies and corporate behaviours in ensuring that the Group promotes integrated sustainability.

The goal of sustainable development is to meet the needs of the present without compromising the ability of future generations to meet their own needs. JD Group, as one of the leading retailers in South Africa, firmly believes that it has a critical role to play and a responsibility to assist the country to achieve this goal as stated and outlined by the Group’s executive chairman, David Sussman.

“JD Group believes that the future prosperity of our country, as well as that of the Group, hinges, amongst other things, on the positive transformation and upliftment of our communities. It is the effects of this transformation process on standards and quality of life of our people that are at the heart of our concerns in achieving a sustainable economy.”

JD Group further believes and is committed to ensuring the financial, economic, social and environmental prosperity of the Group, today, tomorrow and into the future.

The challenge that remains for the Group is how, whilst recognising the current market and financial environment within which it trades, the Group can maintain its commitments to realise the overall benefits of a more sustainable Group and country.

Developments

Positive developments for the year under review include, but are not limited to, the following:

• Shareholders – Our shareholders have once again been provided with the facts of the Group’s business performance that is headed in the correct direction to meet and potentially exceed the Group's strategic business goal and shareholders' expectations. Notwithstanding the tough economic conditions, the shareholders received a dividend of 41 cents per share as a return on their investment.
  
  
• Employees – The formal launch of the Group’s ‘Art of Service’ business initiative will undoubtedly benefit our employees as internal customers.
  
  Employees including those in the bargaining unit qualified for and received salary increases despite the current state of the economy.
  
  
• Customers – More affordable and quality merchandise was provided by virtue of the strengthening of relationships with suppliers.
  
  Customers enjoyed the benefit of lower insurance costs and enhanced consumer rights with the application of the National Consumer Act (NCA).
  
  
• Suppliers – The strengthening of relationships with suppliers of both merchandise and services, assists such suppliers to become improved corporate citizens.
  
  
• Organised labour – The Group continues to foster and herald the benefits of managing and experiencing solid, transparent and sound relationships with the various trade unions it recognises in southern Africa and with whom formal relationships have been negotiated and concluded.
  
  Unions enjoy representation at various levels in the Group.
  
  
• Government and Regulators – Have once again experienced the Group’s commitment to proactively meeting its requirements with regard to applicable legislation and has driven industry initiatives in this regard. R795 million has been paid to Government and Regulators comprising of taxes, licenses and fees.
  
  
• Communities – The Group has maintained its forward thinking approach by positively contributing to various initiatives in the communities within which it operates and serves.

Challenges

Challenges in maintaining and achieving progress in sustainability include, but are not limited to the following:

• Attracting and recruiting, especially at senior management levels, the best possible available talent to the Group to meet the EE targets and to ensure continuity and sustainability.
• During the year under review the Group has launched a number of major, large scale projects with wide reaching change management implications for the Group and its employees alike, which projects are aligned to deliver on the new business and operating model. The challenge is to manage change fatigue and successful implementation.

2010 and beyond

JD Group is committed to delivering on the Group’s new business and operating model, which is crucial for the realisation of benefits for all stakeholders and in so doing, believe the following will be achieved:

• Shareholders – The shareholders will benefit from the anticipated improved business performance as the Group recoups its winning ways and meets the challenging targets that have been set, giving rise to significantly improved earnings yields.
• Employees – The execution of the Group’s ‘Art of Service’ business initiative will equally benefit the employees as internal customers, given the delivery of an improved shopping experience for our customers which should result in a higher market share and consequential business expansion, more job opportunities, improved remuneration and better conditions of employment.
• Customers – An improved shopping experience being provided by committed employees embracing the Group’s ‘Art of Service’ initiative through a new and inculcated way of life.
• Suppliers – With the new business and operational model and the aggression with which the Group will continue to take market share, suppliers will as a natural consequence of the higher demand for merchandise, benefit from the improvement in business performance.
• Organised labour – There will be a continued focus on striving for sound, solid, fair and equitable employee relations’ engagements, agreements and enhanced benefits.
• Government and Regulators – Will continue to experience the Group’s open, transparent and proactive approach to compliance it has enjoyed to date on all fronts, as both parties strive to attain sustainability through constructive dialogue and agreements.
  In addition, Government and Regulators will continue to benefit from the Group’s contribution to the revenue authorities and the Group’s role in providing jobs in the economy.
• Communities – The Group will continue to plough back into the communities within which it operates and serves, both financially and in sweat equity.