Introducing the report

Clicks Group has pleasure in presenting its Integrated Report to shareholders for the 2017 financial year. The report is aimed at demonstrating how the group’s health, beauty and wellness strategy creates value for shareholders while balancing our responsibilities towards our other stakeholders.

The Integrated Report is aimed at our shareholders who are our primary providers of capital. We do, however, recognise that other key stakeholders also influence the group’s ability to create sustainable value, including our customers, staff, suppliers, industry regulators and funding institutions.

Reporting scope and boundary

The report covers material information relating to the business model, strategy, material issues and related risks and opportunities, stakeholder engagement, financial and operational performance, and governance for the period 1 September 2016 to 31 August 2017. In addition the report focuses on the strategic objectives, operating plans, targets and prospects for the 2018 financial year. The Integrated Report is supplemented by the annual financial statements which are also available on the website.

Reporting covers the group’s main operating entities Clicks and UPD, which collectively account for 96% of turnover, and focuses on the operations in South Africa where the majority of revenue is generated.

There have been no changes from last year in the reporting scope and boundary.

Reporting compliance

The reporting process has been guided by the Integrated Reporting Framework (the IR framework) of the International Integrated Reporting Council, the King IV Report on Corporate Governance (King IV), the JSE Listings Requirements and the Companies Act. The application of King IV for the 2017 financial year is covered in the corporate governance report 2017 which is available on our website.

Materiality

The report focuses on information which the directors believe is material to investors’ understanding of the group’s ability to create value in the short, medium and longer term. The materiality test applied by the board is based on internal and external matters, both positive and negative, that substantively affect the group’s ability to deliver its strategy and could have a material impact on revenue and profitability.

Assurance

The content of the Integrated Report has been reviewed by the board and management but has not been independently assured. The annual financial statements have been assured by the group’s independent auditor, Ernst & Young Inc. (EY).

The non-financial and sustainability-related information contained in the report has been approved by the board’s social and ethics committee. Accredited service providers and agencies have provided selected non-financial performance metrics, including market share statistics and the BBBEE rating. Management has verified the processes for measuring all other non-financial information.

Forward-looking statements

The Integrated Report includes forward-looking statements which relate to the possible future financial position and results of the group’s operations. These statements by their nature involve risk and uncertainty as they relate to events and depend on circumstances that may or may not occur in the future.

The group does not undertake to update or revise any of these forward-looking statements publicly, whether to reflect new information or future events or otherwise. The forward-looking statements have not been reviewed or reported on by the group’s external auditor.

Commitment to good governance

The group's approach to governance goes beyond compliance, with open, honest and balanced reporting being at the foundation of our governance framework. The directors in turn believe that good governance can contribute to value creation through improved reporting to shareholders, greater transparency and disclosure, improved quality of management reporting to the board and enhanced accountability to shareholders. Refer to the creating value through good governance report.

Directors’ approval

The board acknowledges its responsibility to ensure the integrity of the Integrated Report. The directors have collectively assessed the content and confirm the report addresses all material issues, the integrated performance and the group’s strategy, as well as the short, medium and longer-term prospects.

The audit and risk committee, which has oversight responsibility for integrated reporting, recommended the report for approval by the board. The 2017 Integrated Report was unanimously approved by the board on 10 November 2017.