INTRODUCING OUR INTEGRATED REPORT
IT IS PLEASING TO REPORT THAT TRUWORTHS INTERNATIONAL AND ITS SUBSIDIARIES (THE GROUP) RECORDED ITS HIGHEST EVER EARNINGS IN THE 53-WEEK PERIOD FROM 28 JUNE 2021 TO 3 JULY 2022 AS TRADING PATTERNS NORMALISED WITH THE OPENING OF THE ECONOMY FOLLOWING THE DEVASTATION OF COVID-19.
While the pandemic is now largely behind us, the retail sector continued to encounter major headwinds during the year. These included the destructive outbreak of civil unrest in KwaZulu-Natal and parts of Gauteng early in the reporting period, global and local supply chain disruptions, flooding in KwaZulu-Natal, deteriorating economic conditions in South Africa's low-growth environment, high inflation globally following Russia's invasion of Ukraine, and weak prospects for consumer spending as interest rates started to rise.
Our 2022 Integrated Report aims to provide balanced insight to our providers of financial capital on how the Group's business activities create, preserve or erode value over time.
The Group continues to be guided by its Business Philosophy, focusing on its objective of creating long-term, sustainable value for stakeholders.
MATERIAL ISSUES
Each year the directors together with management identify the issues that could have the most significant impact on the Group's ability to create sustainable value for stakeholders. In determining these material issues, the directors consider internal and external factors, including the Group's strategic objectives, the needs, expectations and concerns of our main stakeholders, and the economic and trading environment.
These material issues are reviewed annually during the board's strategic planning process. Following the 2022 review, the board confirmed that the material issues for Truworths and Office remain aspirational fashion, supply chain and retail presence, with account management being specific to Truworths. The directors believe that it is no longer necessary to include a specific Group material issue on the turnaround of Office following the post-lockdown recovery and improved performance of the business during the reporting period.
The risks and opportunities relating to these material issues provide shareholders with insight into the growth drivers of the Group's businesses (refer to Material issues, risks and opportunities)
REPORTING FRAMEWORKS AND COMPLIANCE
The Integrated Reporting Framework of the IFRS Foundation has been applied in the preparation of this report. The Group supports the recent consolidation of international reporting bodies aimed at aligning integrated, financial and sustainability reporting standards globally to enhance the quality of information available to providers of financial capital.
The framework recommends reporting in terms of the capital resources applied in the creation, preservation or erosion of value. These capitals are financial, manufactured, intellectual, human, social and relationship, and natural capital. The impact of these six capitals on the Group's business activities and their role in value creation, preservation or erosion are covered in the relevant sections of this report. For ease of understanding and navigation of the report, visual icons have been included throughout the report to indicate where these capitals are addressed in the commentary.
All Group financial reporting complies with International Financial Reporting Standards, 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 Corporate Governance and Application of King lV Principles 2022 on the Group's website.
The directors welcomed the release shortly before the end of the reporting period of sustainability and climate change disclosure guidance by the JSE. The guidance will create an environment for best-practice disclosure and will inform the Group's environmental, social and governance reporting standards in future.
REPORTING SCOPE AND BOUNDARIES
The report covers material information relating to the business model, strategy, material issues and risks, governance and the performance of the Group for the 53-week period from 28 June 2021 to 3 July 2022. The report is supplemented by the Group Audited Annual Financial Statements 2022 which are available on our website at www.truworths.co.za/reports
The financial reporting boundary has been set so that the report covers the results of the Truworths and Office operating segments. Truworths operates primarily in South Africa and has a presence in five other southern African countries. Office operates principally in the United Kingdom, with a presence in Germany and the Republic of Ireland.
The integrated reporting boundary has been set so that the report covers risks, opportunities and outcomes relating to the Group's operating environment, its retail businesses and engagement with key stakeholders that could influence the Group's ability to create and sustain value, and also the extent to which the Group's objectives have been achieved.
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 the essential role of our customers, employees, suppliers and regulators in the value creation, preservation or erosion process.
We continue to apply the principle of materiality in determining the financial disclosure in the report. This ensures that the report contains information which is relevant to investors' understanding of the Group's ability to create long-term value.
INTEGRATED REPORTING PROCESS
The Group's integrated reporting process is managed by a working group led by the Chief Financial Officer (CFO). The process commences each year with an evaluation of the previous year's Integrated Report and detailed feedback from an independent integrated reporting specialist to identify opportunities to enhance disclosure and continually align with best reporting practices. The individual reports included in the Integrated Report are drafted based on discussions with executives, written submissions, internal presentations, and board and committee papers. Draft reports are initially reviewed by divisional executives, followed by a panel of executives, including the CFO, and finally by the Chief Executive Officer.
The board has delegated responsibility to an integrated reporting sub-committee, including members of the Audit Committee, which provides the final approval of the report before it is published.
EXCELLENCE IN INTEGRATED REPORTING
The Group is committed to continuously improving the quality of its reporting to stakeholders. The Group's 2021 Integrated Report was ranked 8th in the Ernst & Young (EY) 2022 Excellence in integrated reporting Awards and is the only retailer ranked in the top 10 of these awards. This is the 15th consecutive year that the Group has attained a top 10 ranking in the EY excellence in reporting awards and is the only JSE-listed company to have achieved this accolade, reflecting the consistently high quality of its financial and integrated reporting, and the accountable and transparent manner in which it reports to stakeholders.
INDEPENDENT ASSURANCE
Reporting elements
Assurance process
Integrated report
The Integrated Report has been reviewed by the directors and management, and has not been independently assured.
Financial information
The Group’s external auditor, EY, has provided assurance on the Group Audited Annual Financial Statements 2022 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.
Non-financial information
Management has verified the process for measuring all non-financial information and accredited service providers have measured and provided assurance on selected non-financial metrics disclosed in the Integrated Report, including:
- AQRate independently reviewed and verified the Group’s BBBEE rating in terms of the Broad-based Black Economic Empowerment Act 53 of 2003;
- Verify CO2 undertook an independent review of the scope 1, 2 and 3 carbon emissions; and
- PricewaterhouseCoopers, the remuneration consultant to the Remuneration Committee, has reviewed the remuneration policy and implementation report contained in the Remuneration Committee report.
RESPONSIBILITY OF 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 confirm that the Integrated Report has been prepared in accordance with the Integrated Reporting Framework.
Hilton Saven
Chairman
Chairman
Michael Mark
Chief Executive Officer
Chief Executive Officer
Emanuel Cristaudo
Joint Deputy Chief Executive Officer and Chief Financial Officer
Joint Deputy Chief Executive Officer and Chief Financial Officer
Sarah Proudfoot
Joint Deputy Chief Executive Officer
Joint Deputy Chief Executive Officer
Rob Dow
Dawn Earp
Hans Hawinkels
Maya Makanjee
Tshidi Mokgabudi
Thabo Mosololi
Roddy Sparks
Tony Taylor
NAVIGATION
REPORTING ON OUR CAPITALS
We continue to report in terms of the capital resources
applied in the creation, preservation or erosion of value. The
impact of these six capitals on the Group’s business activities
is covered in the relevant sections of the Integrated Report,
although we have chosen not to structure the Integrated
Report according to the capitals.
For ease of understanding and navigation of the report, icons have been used to indicate where these capitals are addressed throughout the Integrated Report.
FINANCIAL CAPITAL
The financial resources raised and available to the Group.
MANUFACTURED CAPITAL
The physical infrastructure used in the distribution and selling
of merchandise.
INTELLECTUAL CAPITAL
The knowledge across the business, systems, processes,
trademarks, intellectual property and brands.
HUMAN CAPITAL
The skills, capabilities, experience and development of the board,
management and employees.
SOCIAL AND RELATIONSHIP CAPITAL
Stakeholder relationships and engagement, corporate reputation
and values.
NATURAL CAPITAL
The environmental resources applied and utilised in the operations
of the business.
OUR BUSINESS ACTIVITIES
These are our four key business activities that contribute to our
ability to create value over the short, medium and long term.
ASPIRATIONAL FASHION
ACCOUNT MANAGEMENT
SUPPLY CHAIN
RETAIL PRESENCE
OUR KEY STAKEHOLDERS
Our ongoing engagement with our key stakeholders
enhances our relationship with them and improves our
understanding of their legitimate needs and interests.
SHAREHOLDERS
CUSTOMERS
EMPLOYEES
SUPPLIERS
REGULATORS
OUR COMMITMENT TO SUSTAINABILITY
As a responsible corporate citizen the Group is committed to
sustainable business practices and responsible
environmental, social and governance (ESG) practices, which
are essential in creating and sustaining long-term value.
The Sustainability Committee has aligned the Truworths sustainability programme with the following seven United Nations (UN) Sustainable development goals (SDGs) where the committee believes the business can have the most impact and play a role in contributing in some way towards the attainment of these goals:
This is an interactive report, which allows for navigation using the index links at the top of each page as well as the report, page and website references
Readers should note the following references throughout the Integrated Report:
Truworths International Ltd and its subsidiaries are referred to as 'the Group'
Truworths International Ltd is referred to as 'Truworths International' or 'the company'
The Truworths Africa segment is referred to as 'Truworths'
The UK-based Office segment is referred to as 'Office'
52-weeks refers to the period from 28 June 2021 to 26 June 2022, being the 2022 financial period excluding the 53rd week from 27 June 2022 to 3 July 2022. Refer to the Chief Financial Officer’s report for more detail.
The Truworths International Integrated Report is supplemented by additional information which is relevant to shareholders and other stakeholder groups.
The following additional documents are available online at www.truworths.co.za/reports
Financial Reporting
- Group Audited Annual Financial Statements 2022
- Annual Results Presentation 2022
- 10-Year Review, Ratios, Share Statistics and Definitions 2022
Environmental, Social and Governance Reporting
- Report on Corporate Governance and Application of King IV Principles 2022
- Social and Ethics Committee Report 2022
- Social and Environmental Report 2022
Annual General Meeting
- Notice to Shareholders (included in the Preliminary Report on the Audited Group Annual Results and Notice of Annual General Meeting)
- Form of Proxy
Group Websites
Truworths: www.truworths.co.za
Office: www.office.co.uk