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Commitment to good governance

Good corporate governance is the foundation for sustainable value creation and has been proven to contribute to long-term equity outperformance.

Effective governance leads to value creation through improved reporting to shareholders, greater transparency and disclosure, improved quality of management reporting to the board and enhanced accountability to shareholders.

We note the heightened focus on governance among local and international investors in the wake of high-profile corporate failures and welcome the opportunity to engage with shareholders on the group’s governance philosophy, processes and practices. We believe the group’s governance practices are robust and this is confirmed in leading independent assessments of governance standards.

“The group’s approach to governance extends beyond
regulatory compliance, with open, frank and balanced disclosure
being at the foundation of our governance framework”

Throughout this report we aim to demonstrate in a balanced manner how the group’s health, beauty and wellness strategy creates value for shareholders while balancing our responsibilities towards our other stakeholders.

The integrated report is aimed at our shareholders who are our primary providers of capital. We also recognise the role of other key stakeholders in creating value, namely our customers, staff, suppliers, industry regulators and funding institutions.

The King IV Report on Corporate Governance (King lV) has been applied throughout the 2018 financial year and the directors confirm that the group has in all material respects voluntarily applied the principles of the new code. The application of King IV is covered in the corporate governance report 2018 which is available on our website.

Reporting scope and boundary

The report covers material information relating to the business model, strategy, material issues and related risks and opportunities, governance, financial and business performance, and directors’ remuneration for the period 1 September 2017 to 31 August 2018. In addition the report outlines the strategic objectives, operating plans and prospects for the 2019 financial year as well as the group’s medium-term financial targets. The integrated report is supplemented by the annual financial statements which are also available on the website.

Reporting covers the group’s main operating businesses, Clicks and UPD, which collectively account for 96% of turnover, and focuses on the operations in South Africa where the majority of revenue is generated.

The report includes information which we believe is material to investors’ understanding of the group’s ability to create value. The materiality test applied by the board is based on internal and external matters, 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.

Independence 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, Ernst & Young Inc. (EY).

The non-financial and sustainability-related information contained in the report has been approved by the board’s social and ethics committee. Accredited service providers and agencies have provided selected non-financial performance metrics, including market share statistics and the BBBEE rating. Management has verified the processes for measuring all other non-financial information.

Board approval

The board is responsible for ensuring the integrity of the integrated report. The directors have collectively assessed the content and confirm the report addresses all material issues, the integrated performance and the group’s strategy, as well as the short, medium and long-term prospects.

The audit and risk committee has oversight responsibility for integrated reporting and recommended the report for approval by the directors. The 2018 integrated report was unanimously approved by the board on 7 November 2018.

David Nurek
David Kneale

David Nurek

Independent non-executive chairman

David Kneale

Chief executive officer