Introducing Our Integrated Report
Our 2020 financial period was dominated by the impact of the global COVID‑19 pandemic on the economy, our business, our financial performance as well as our stakeholders. The Group’s operations went into lockdown in late March until trading restrictions were progressively eased from May onwards in South Africa and from mid-June in the UK.
The apparel retail sector in both our major markets was particularly hard hit by the closure of the economy, compounded by the fragile economic state in which South Africa entered the lockdown and the UK retail sector still being under severe pressure following several years of Brexit-related uncertainty.
Against this background Truworths International presents its 2020 Integrated Report to provide our shareholders with balanced insight into how the business aims to create and sustain value. Central to this year’s report is the Group’s response to COVID-19 which is covered in the following pages and addressed in specific sections throughout the Integrated Report.
REPORTING SCOPE AND BOUNDARIES
The report covers material information relating to the business model, strategy, material issues and risks, governance and performance of Truworths International and its subsidiaries for the 52-week period from 1 July 2019 to 28 June 2020. The report is supplemented by the Group Audited Annual Financial Statements which are available on our website at www.truworthsinternational.com.
The financial reporting boundary of the report covers the results of the Truworths and Office operating segments. Truworths operates primarily in South Africa and has a retail presence in seven other African countries. Office operates principally in the United Kingdom, with a presence in Germany and the Republic of Ireland.
The integrated reporting boundary covers risks, opportunities and outcomes relating to the Group’s operating environment, its retail businesses and engagement with key stakeholder groups that could influence the Group’s ability to create and sustain value.
This year’s report is again targeted primarily at our shareholders, who are the principal providers of the Group’s financial capital, as well as the local and international investment community. We also recognise and appreciate the role of our customers, employees, suppliers and regulators in creating and sustaining value.
We continue to apply the principle of materiality in determining the content and disclosure in our Integrated Report. Management’s judgement has been used in deciding the issues that could substantively affect the Group’s strategy, revenue and profitability, and its ability to create value over time. The disclosure excludes information which could compromise our competitive advantage or is considered price sensitive in terms of the JSE Listings Requirements.
The directors in consultation with management each year identify the issues that could have the most significant impact on the Group’s ability to create sustainable value for its stakeholders. In determining these material issues the directors consider internal and external factors, including the Group’s strategy, the needs, expectations and concerns of our main stakeholders and the economic and trading environment.
These material issues are reviewed annually during the course of the board’s strategic planning process. Following the 2020 review the board confirmed that fashion risk, supply chain efficiency, retail presence, account risk (specific to the Truworths segment) and the turnaround strategy for the Office segment remain the material issues for the Group.
The risks relating to these material issues are disclosed together with medium-term opportunities to provide our shareholders with insight into the growth drivers of the business. (See Material Issues, Risks and Opportunities.)
REPORTING FRAMEWORKS AND COMPLIANCE
The guiding principles of the Integrated Reporting Framework of the International Integrated Reporting Council (IIRC) have been applied in the preparation of this report.
All Group financial reporting complies with International Financial Reporting Standards and with the South African Companies Act and the JSE Listings Requirements.
The King lV Code on Corporate Governance (King lV) has been applied throughout the reporting period and the directors confirm that the Group has in all material respects applied the principles of the code. The application of King lV is detailed in the report on and Application of King lV Principles 2020 on the Group’s website.
The Integrated Report has been reviewed by the directors and has not been independently assured. Accredited service providers have measured and provided assurance on selected non-financial metrics included in the Integrated Report while management has verified the processes for measuring all non-financial information.
The Group’s external auditor, Ernst & Young Inc. (EY), has provided assurance on the Group Audited Annual Financial Statements and expressed an unmodified audit opinion. EY has also reviewed the accuracy of the financial information extracted from the annual financial statements that appears in the Integrated Report.
Commitment to integrated reporting
The Group acknowledges the importance of and is committed to continuously improving the quality of its reporting to stakeholders. The Group’s 2019 Integrated Report was ranked 8th in the Ernst & Young (EY) 2020 Excellence in Integrated Reporting Awards, and the Group is the only retailer ranked in the top 10. This is the 13th consecutive year that the Group has attained a top 10 ranking in the EY excellence in reporting awards and is one of only two companies to have achieved this accolade, reflecting the consistently high quality of its financial and integrated reporting and the accountable and transparent manner it reports to stakeholders.
APPROVAL BY DIRECTORS
The board acknowledges its responsibility for ensuring the integrity of the Integrated Report. The directors confirm that the report fairly represents the Group’s performance for the period under review as well as the growth strategies, material issues, risks and opportunities, and prospects of the Group.
The directors believe that the Integrated Report has been prepared in accordance with the Integrated Reporting Framework of the IIRC.
The Audit Committee recommended the report for approval by the directors who consequently approved the Integrated Report for release to shareholders.