Introducing the 2024 integrated report

While consumers’ finances remain constrained, the last few months of the financial year were marked by improving sentiment following the national election and the formation of the Government of National Unity. The stable political and social environment, together with lower inflation, interest rate relief and the suspension of load shedding for several months, is positive for the medium to longer-term prosperity of consumers.

The group has pleasure in presenting its integrated report for the 2024 financial year. The report is again targeted at our shareholders, being our primary providers of capital, and the broader investment community, while we also acknowledge the role of our customers, staff, suppliers, industry regulators and funding institutions in the creation, preservation and the protection of value erosion.

Reporting scope and boundary

The report covers material information relating to the business model, strategy, material issues and related risks and opportunities, and performance for the financial year 1 September 2023 to 31 August 2024.

Forward-looking information focuses on the strategic objectives, operating plans and prospects for the 2025 financial year as well as the group’s medium-term financial targets.

The financial reporting boundary covers the performance of the group’s main operating businesses Clicks and UPD and focuses on the operations in South Africa where the majority of revenue is generated. The group has 57 stores in four neighbouring countries.

The integrated reporting boundary covers risks, opportunities and outcomes relating to the group’s operating environment, its businesses and the extent to which the strategic objectives and targets have been achieved. The boundary also incorporates the engagement with key stakeholders that could influence the group’s ability to create and sustain value.

Reporting and governance compliance

The IFRS Foundation’s Integrated Reporting Framework (January 2021) and the JSE Sustainability Disclosure Guidance (June 2022) have been applied in preparing the integrated report. The application of these reporting frameworks was proposed by management and approved by the board.

The framework recommends reporting to shareholders on the capital resources that are applied in the creation, preservation or erosion of value. While we have chosen not to present the integrated report according to these capitals, the impact of the six capitals on the group’s business activities and performance is covered in the relevant sections of the report.

All financial reporting complies with IFRS Accounting Standards, the South African Companies Act and the JSE Listings Requirements.

The directors confirm that the group has in all material respects applied the principles of the King IV Report on Corporate Governance (King lV) throughout the 2024 financial year. The application of King IV is covered in the corporate governance and King lV report 2024 which is available on our website.

We support the introduction of the sustainability reporting standards by the International Sustainability Standards Board although the adoption of the standards is not yet mandatory in South Africa. The application of uniform global sustainability and climate-related standards will align international reporting and ensure comparability of ESG disclosures across all markets.

Materiality

The JSE Sustainability Disclosure Guidance has formalised the concept of double materiality, covering financial and impact materiality.

Financial materiality is applied in reports and disclosures that are targeted primarily at shareholders and other providers of capital used in determining enterprise value. The financial materiality assessment applied by the board in measuring enterprise value is based on internal and external factors, both positive and negative, that substantively affect the group’s ability to deliver its strategy and which could have a material impact of 5% or more on the group’s profit before taxation.

Impact materiality relates to the social, environmental and economic impacts of our operations and we plan to enhance impact reporting in subsequent years.

The integrated report applies double materiality as it covers content and disclosures that are material to investors and other providers of capital (financial materiality) as well as the impacts on people, the planet and profits (impact materiality).

Independent assurance

The integrated report has been reviewed by the board but has not been independently assured. The annual financial statements have been assured by the group’s independent auditor, KPMG Inc.

The sustainability information in the report has been approved by the board’s social and ethics committee. Accredited service providers have measured selected non-financial performance metrics and management has verified the processes for measuring all other non-financial information.

Integrated reporting process

The preparation of the integrated report is the responsibility of a working group led by the chief executive officer (CEO) and chief financial officer (CFO), comprising senior members of the finance, marketing and corporate affairs teams, company secretary and the external investor relations consultants.

The integrated report working group aims to enhance the reporting and disclosure each year. The content is prepared based on interviews and submissions from executive directors, business unit heads, the company secretary and divisional executives. Draft reports are initially reviewed by the CFO and the CEO, with specific reports being reviewed and approved by the board chairman and the respective board committee chairs.

The draft of the integrated report is reviewed by all board members. The chairman of the audit and risk committee is responsible for the final approval of the report on behalf of the board, whereafter the integrated report is released to shareholders.