Merafe Resources Integrated Annual Report 2018

MERAFE RESOURCES INTEGRATED ANNUAL REPORT 2018 37 KEY POINTS – 2018 The Venture spent R49.9 million on corporate social investment and enterprise development (2017: R27.1 million) 64% of the Venture’s expenditure on capital goods was on BEE spend (2017: 64%) 84% of the Venture’s expenditure on services was on BEE spend (2017: 86%) 77% of the Venture’s consumable expenditure was on BEE spend (2017: 74%) Corporate social investment ("CSI") The Venture, which contributes to various CSI projects, spent R49.9 million (2017: R27.1 million) on CSI projects and enterprise development in 2018. The amount budgeted for these projects is R213 million (2017: R134.6 million) over a five-year cycle of which to date R100.7 million (2017: R50.8 million) has now been spent. They include community health programmes, a crop and hydroponics project, community centres, crèches, youth programmes and school nutritional programmes. They also include infrastructure programmes including the construction of housing and school rebuilds. The Venture as part of its five year programme, has also contributed to the establishment of catering enterprises, food banks and business support centres. During 2018 the Venture also supported a number of health and community projects and programmes. These included Ratanang Orphanage Centre, the Lydenburg Rusoord old age home and a number of school and community nutritional and health programmes. As previously reported, Merafe has been supporting both the Meriti Secondary School (Meriti) and Boitekong Secondary School (Boitekong) since 2012 with the implementation of a variety of infrastructure, curriculum and social welfare projects, through Adopt-a-School Foundation. Both schools are located in the Bojanala district in the North West Province. Adopt-a-School Foundation is currently in the process of completing the Physical Science and Life Science laboratories, as well as the resourcing, educator development and learner support programmes in both schools. An important aspect and goal of the projects is to promote active learning and cultivate a positive attitude towards Physical Science and Life Science. Specifically the laboratories aim to, provide educational support to learners to assist them in achieving curriculum coverage; permit learners to learn abstract concepts through concrete experiences and thus increase the understanding of those ideas; mentor learners and assist them to comprehend the subjects and skills by way of classroom-based support; enable learners to personally experience the joy of discovering principles and relationships to afford them the opportunity of applying and understanding abstract life and physical science concepts; and ultimately improved learner performance in the subject. At Boitekong, the projects completed by the end of 2018 include the construction of an ablution facility; sanitation and hygiene programmes; construction of six (6) classrooms; renovation of the Physical Science and Life Science laboratory; educator development and classroom-based support for Physical Science and Life Science; Physical Science and Life Science laboratory equipment and accessories and laboratory management training. The future needs of Boitekong include the construction of a school hall; perimeter fencing; strategic planning, leadership and governance programmes; a grade 12 Mathematics programme; and grade 12 Mathematics supplementary lessons. The Company has shortlisted and prioritised projects from the above to focus on in 2019. For Meriti the projects completed at the end of 2018 include the construction of an ablution facility; construction of five (5) classrooms; construction of a feeding scheme kitchen; erection of palisade fencing; erection of walkway covers; erection of shelter for feeding scheme kitchen; renovation of the Physical Science laboratory; construction of the Life Science laboratory; educator development and classroom-based support for Physical Science and Life Science; Physical Science and Life Science laboratory equipment and accessories; as well as laboratory management training. The future needs of Meriti include the construction of a library; revamping the sports fields and construction of a combi-court; strategic planning, leadership and governance programmes; grade 12 Mathematics programmes; and grade 12 Mathematic supplementary lessons. Merafe will again shortlist and focus on specific projects in these areas in 2019. The Merafe spend in 2018 on CSI projects was R3.3 million. A budget of R6 million has been approved for projects commencing in 2019. The Merafe CSI budget is based on 1% net profit after tax. As mentioned earlier, this is in addition and does not include the CSI and Enterprise Development spend in the Venture where Merafe contributes 20.5% of such spend. Enterprise development Small, medium and micro enterprises ("SMMEs") play a key role in job creation in South Africa and our investment in their development is an important part of the contribution both Merafe and the Venture make to the socio-economic capacity of communities. It also increases our ability to procure from black-owned enterprises. The Venture has enterprise development commitments in terms of the Mining Charter Scorecard. The Venture spent R13.5 million (2017: R2.3 million) on enterprise development in 2018. Job creation and skills development The Venture recognises that its commitment to employing local people whenever possible is to the advantage of both itself and the local communities. Direct employment at the Venture’s operations, indirect employment through contractors and its use of local suppliers provides an income for thousands of families. Our commitment to employing local people includes providing training opportunities that enable community members to meet the Venture’s competency requirements. See page 4 of this report for a review of stakeholder engagement. See page 35 of this report for further information on the range of skills training the Venture provides and its investment in this training.