GOVERNANCE

Sustainability Report

Ellies strives to make a difference to the communities within which we operate. A process is currently being finalised whereby Ellies is initiating policies and procedures for gathering sustainability information, which will assist in the assessment of performance. This, together with enhanced management of material risks, will enhance sustainability reporting in the future.

Economic

Ellies has plotted the economic value generated and distribution to employees, government, providers of capital and the amount retained for growth. Climate change had no direct effect on the Group’s activities and therefore no financial provision is made for this.

Cash flow requirements, to run operations and pay for capital expenditure, are generated from operations as well as manageable overdraft facilities arranged with our bankers, Standard Bank.

The Group has a well-diversified mix of products sourced and manufactured locally as well as from international suppliers. We also manufacture and package a large amount of our own products.

Human Capital

Our employees embody the Group’s innovative, entrepreneurial spirit and are a key factor in its success. Ellies’ essential skills and experience of its workforce will be even more critical in the future. It is therefore essential that we continue to invest in and nurture our people to meet our strategic objectives.

Our performance
As at year-end, Ellies employed 841 permanent staff, down 4% from 2017 (878). At 841 employees, Ellies Electronics employs the greatest proportion (78%) of our employees. Ellies’ Industries, by comparison, employs 22%. The reduction in Ellies numbers from 2017 is due to the restructuring of operations within Ellies.

Core skills and talent management
Ellies continues to invest in the skills and development of its people through training opportunities and deliberate and ongoing performance feedback. Our most essential skills requirements vary across all disciplines and different regions. We recruit new talent based on – among other things – their experience in these areas, however, we also invest in developing skills through learnership programmes.

Attraction and retention of talent
Even amidst a challenging period for the Group, its employees remain loyal to the organisation. Overall employee turnover at a group level was 3,2%, up from 3,1%. We believe this marginal increase to be due to business restructuring.

Compensation is also an important aspect to attracting and retaining key talent as well as managing performance. Ellies will review compensation of employees on an annual basis.

Performance
Ellies has long valued and encouraged an entrepreneurial working environment in which employees are empowered to innovate. This spirit is what sparked the company’s inception and remains evident in the workforce today.

As our businesses come together under the brand proposition we are conscious of the importance of unifying our workforce under a single shared vision and culture. This transition takes time because, in many cases, the businesses have evolved independently over decades.

Reducing our workforce
Morale can present a challenge when company performance is in decline. Our strategy of refocusing the business has also meant that certain areas throughout the Group have been restructured. We realise that this can place our employees under pressure and therefore strive to treat them with respect and fairness throughout the journey. This means communicating candidly as soon as information is in the public domain, and looking after employees’ interests, even when their future does not lie with the Group.

We are conscious of the human impact these decisions have and therefore do not take them lightly. Over the course of the year, our workforce contracted by 4,2% because of restructuring.

Labour relations
At year-end, 39% of our total workforce was unionised. The unions represented in the business are NUMSA, SACCAWU and Abanqobi. Ellies Industries forms part of the MEIBC (Metal Industries Bargaining Council). However, Ellies Electronics falls outside the bargaining council and therefore engages with unions at plant level. All labour disputes have been resolved during the reporting year.

Looking ahead
In a cost savings environment, scaling back investment in employees can be tempting but doing so would run contrary to our need to preserve a highly skilled and innovative workforce equipped to deliver on our strategic objectives. We have therefore taken a firm decision to review our training and development expenditure and expect to spend an average of 3% of payroll for this – more than the 2,4% minimum according to the Code of Good Practice.

An engaged workforce is a stable and productive one. We are committed to providing an environment that is conducive to delivery and founded on the values that drive a high-performance culture within our business.

Environment

Lighting in all our offices as well as our warehouses is energy efficient, and the Group has installed solar power at its head office in Johannesburg. We do not yet, however, measure the direct or indirect energy consumption of our facilities, but are in the process of putting in place a system to measure energy consumption. Due to the Group not measuring its energy consumption, no comparison can be made to measure the savings made due to conservation and efficiency improvements.

Our head office is supplied with water from Johannesburg Water, and water consumed in respect of day-to-day operations is modest, therefore the Group does not measure water consumption, and will not do so in future. Ellies currently has an initiative in place to collect rain water, and recycles and reuses this water in our day-to-day operations.

All land occupied by Ellies is in various main metropolitan areas and, therefore, the operations have no impact on any protected areas. As the day-to-day operations of the Group have no significant impact on the environment in which we operate, no habitats need to be protected or restored.

Ellies has no immediate plans to implement strategies to manage the Group’s impacts on biodiversity. No IUCN Red List Species’ habitats are affected by any of our operations.

Ellies, as a Group, is extremely aware of the impact that our operations have on the environment and will in future have in place, where necessary, ways in which to measure the effect of the impact of these operations on the environment, by comparing measurements, year on year.

Human Rights

The fundamentals and values of Ellies dictate fairness and integrity in the treatment of all staff and the adherence to human rights. Over the period under review, no incidents of discrimination or human rights abuses have been reported or investigated by the Group. Ellies opposes the use of child labour and is not aware of any such practice across the Group’s operations.

Practices and decent working conditions

Employees ensure that Ellies remains competitive, its service levels remain high and its business is conducted in an ethical and profitable manner. Our commitment to our employees spans a variety of areas including employment equity; health and safety; basic human rights; HIV/Aids and skills development.

We are further guided by prevailing legislation including the Basic Conditions of Employment Act; the Labour Relations Act; the Skills Development Act; the Occupational Health and Safety Act; and the Employment Equity Act.

The Group acknowledges that employees have the right to exercise freedom of association and collective bargaining. Unprotected strike action is deemed a risk to Ellies’ manufacturing operations and therefore we endeavour to consult or negotiate effectively and responsibly with the respective trade unions.

Employment Equity

Ellies’ recruitment policies are codified, in accordance with the Employment Equity Act, to attract the necessary competencies while creating equal employment opportunities. Our policies, including our updated Employment Equity Plan, are geared towards attracting, retaining and promoting our staff through career development and succession planning at all levels.

Health and Safety

The Group is committed to ensuring a safe and healthy working environment and to ensuring compliance with the Occupational Health and Safety Act.

Fraud and Corruption

All Ellies employees are aware of the Group’s zero tolerance to corruption within and outside of the organisation and are encouraged to report such matters to management, in any form of communication the employees are comfortable with, be it in a formal meeting or via email. Once an incident of corruption has been reported, the legitimacy of the allegations will be investigated and appropriate action will be taken, which could lead to the termination of employment.

In the period under review, no donations have been made to any political parties, politicians or institutions related to the South African government. No incidents of anti-competitive behaviour were reported in the period under review – and no fines were issued for any non-compliance with laws or regulations.

Product Responsibility

Ellies has a diversified range of products that are sold throughout the country and is vigilant as to the safety of the products purchased by customers. All Ellies products are tested and approved by Ellies’ R&D Department. Once this department’s quality control is approved, relevant regulatory approvals are obtained. Each shipment is batched, labelled and quality control tested for quality assurance before being released into the warehouse.

Corporate Social Responsibility

Ellies socio-economic development expenditure is done through its corporate social investment (CSI) programme. We use our expertise to focus on projects close to our business, ensuring that we have the maximum positive impact while raising interest in the business and helping us to maintain a close relationship with the beneficiaries with whom we partner.

While it is not a material business issue, investing in our communities is an important demonstration of our company values and is closely linked to our social licence to operate.

Ellies Engage
Ellies Engage was established as the Group’s social investment programme which takes responsibility to contribute towards social upliftment. Our goal is to give back to the communities and public that support us, through active involvement in initiatives and projects that support and care for vulnerable groups and people in need.

With our country facing complex social transformation challenges, we have committed ourselves to deliver sustainable benefits to the lives that are touched through harsh living conditions. The programme involves charity (donations and/or community work), staff engagement, enterprise development and learnerships.

Things on Wheels
Things on Wheels is a joint initiative in association with Ellies. The project provides a loaf of bread and soup to individuals in underprivileged communities in the townships of the Western Cape. During this financial period 600 students received food parcels daily as part of the project.

Ellies Installer School (Ellies Training Academy)
Established in 2008 to support Ellies’ commitment to both B-BBEE and growing the SMME sector, Ellies’ training programmes are geared towards equipping trainees with the knowledge and skills needed to run a business and install terrestrial and satellite TV, PA and audio/video security systems and PV solar systems under 1 MW to residential homes and gated communities.

We further assist and support our upskilled beneficiaries by outsourcing work to them via both our prepaid installation voucher system, granted tenders and customer requirements. It’s just another way that Ellies is trying to contribute to social upliftment and grow the Ellies Family. All courses are run separately and focused to the subject matter enrolled for, are subsidised and are run based on demand with a minimum of 40 applicants per course per training mode. Our training facilities and courses are all SETA-approved.

As part of the basic Ellies/Elsat accreditation process, trainees complete the Ellies Installer Introduction course (our most popular course), with Ellies presenting up to three courses per month.

Additional courses include:

  • Installer level 2 course: The course is designed to prepare DStv/satellite installers with practical and theoretical knowledge and skills used in the broadcasting industry, and to formalise existing installers’ knowledge of satellite products, standards and applications to enhance their effectiveness in the field. We are responsible for training and accreditation of all MultiChoice accredited installers.
  • DTT refresher training: DTT refresher training: A one day course covering, transmission signals and broadcasting network structure, practical Installations and troubleshooting along with aerial characteristics
  • Practical PV: This is a two-day solar PV practical course providing two CPD points to successful trainees.

A total of 628 installers graduated from the Installer School during this reporting period, an increase of 27 installers when compared to last year’s 601 installers.