The basis of this report originates from the recommendations included in the King Report on Governance for South Africa 2009 and more specifically the recommendations regarding integrated reporting and disclosure in respect of the company’s financial and non-financial profiles.
The requirements of the G3 Sustainability Reporting Guidelines developed by the Global Reporting Initiative have also been considered in drafting this report, although the aim of the report is to provide information to stakeholders which is relevant and useful and not necessarily an attempt to meet all of the reporting requirements of the guidelines named above.

Sustainability reporting is the practice of measuring, disclosing and being accountable to internal and external stakeholders for organisational performance towards the goal of sustainable development. “Sustainability reporting” is a broad term considered synonymous with others used to describe reporting on economic, environmental and social impacts (e.g. triple bottom line, corporate responsibility reporting, etc).

CEO STATEMENT (Relevance of sustainability to the organisation and its strategy)

PSG Konsult is committed to acting as a socially responsible company in our global community. This means that we will fully comply with the laws, rules and regulations of the countries in which we operate. It also means that we will go further by continually evaluating our business practices using the principle
of sustainability.

At the heart of sustainability lies the desire to maintain a balance between the economic, environmental and social needs of our world today, without compromising the opportunities of future generations. We want PSG Konsult to always be associated with a respect for human rights, safe work conditions, and environmentally sound business practices, for our own organisation and those with whom we partner.

CORPORATE GOVERNANCE AND ETHICS

PSG Konsult maintains extensive ethics and corporate governance structures. These include but are not limited to the board of directors, board committees, memorandum and by-laws of the company, as well as legislative, regulative and statutory requirements. We also actively communicate and enforce a detailed Code of Business Conduct for all employees and provide numerous communication channels through which employees, subject to law, can report possible code violations.

1. Ethical code of conduct
   Please refer to the Overview.

2. Compliance
   PSG Konsult has specialist knowledge that adds value to compliance. A practical approach is followed concerning the business activities of its staff , but ensures that documentation complies with legal requirements. All compliance administration costs are carried by the company.

   Compliance officers represent PSG Konsult’s interest on all regulating forums and ensure complete support to financial planners in the case of claims. The financial planner can also depend on a compliance manual, free professional liability cover, regular updating of records as required and direct contact with compliance officers.

3. Corporate governance
   Convergence is being driven by the view that boards have a fiduciary responsibility to address risks and CSR is fundamentally about risk management. CSR converges with governance at the values level. However, it is agreed that because the nature of CSR management can differentiate company performance, it is relevant to corporate governance. Effective management of CSR risks and opportunities can improve financial results thereby warranting governance.
4. Disclosure of financial information
   

   • Regular information about activities, structure, financial situation, business results
     The PSG Konsult Group communicates information about activities, structure, financial situation and business results by way of publishing the following reports:

     Interim financial results – Drafted on the guidelines set per IAS 34 as at 31 August of each
     financial year.
     Review/provisional financial results – Added to the PSG Konsult website as soon as provisional results for the financial year are approved by the board of directors following the year-end audit. Annual report – Prepared in accordance with International Financial Reporting Standards (IFRS). The annual report for the year ended 29 February 2012 was printed on Cocoon Offset, a FSC-certified 100% recycled paper and A5 paper size used in order to promote the protection of the environment.
     Annual general meeting – In terms of the Companies Act and sound corporate governance, an annual general meeting is held at which the annual financial statements and reports are adopted and any member of the company is entitled to attend, speak and vote.
     Press releases (mergers and acquisitions) – For the sake of transparency and clear communication, PSG Konsult issues press releases to inform all of its stakeholders of material mergers and acquisitions, including details regarding the strategic fit to the group’s operations and the possible growth opportunities.

     All of the above reports are added to the group’s website (www.psgkonsult.co.za) and distributed to all shareholders by mail or e-mail depending on preference.

   • High standards of quality in reporting, accounting and auditing
     To ensure the quality of reporting and accounting accuracy in general, PSG Konsult has established a fully fledged Finance Department staffed by skilled and experienced accountants, including a number of qualified chartered accountants.

     The quality of reporting is enhanced by the engagement of a professional graphic design firm and a shareholder communication firm, which assists PSG Konsult in drafting the reports referred to above.

     PSG Konsult retained the services of PricewaterhouseCoopers (AAA Empowerdex rating
     Level 2 Contributor) as its external auditor, a highly respected and reputable firm with a worldwide presence.

   • Publication of basic information on the parent company, its main affiliates, its percentage ownership, direct and indirect in these affiliates, including shareholdings between them. This information is included in the detailed notes to the annual financial statements and more specifically the notes on investments in associated companies and interest in subsidiaries.
     The PSG Konsult website also includes information about the PSG Konsult Group, its services
     and affiliates.
5. Taxation
   Punctual payment of tax debts: PSG Konsult’s Finance Division is responsible for drafting of all income tax, VAT returns and payments. To ensure punctual payment of taxes, a status report on provisional and final taxes are presented to the finance and risk committee which meets twice yearly.
6. Combating corruption
   
   • No payments to officials or employees of business partners
     PSG Konsult only transacts with reputable business partners and all payments to such partners are made by the Finance Department. Payments from the Finance Department are subject to internal controls over payments, including segregation of duties, dual signatories, limited access to payment systems and monthly reconciliations.
   • Introduction of management control systems which discourage bribery and corruption In combating bribery and corruption, PSG Konsult has established the following committees and divisions:
     Executive committee – Overall review of financial results, including questioning of unusual or unexpected expenditures or payments.
     Internal audit function – The group has appointed a qualified chartered accountant to head up its Internal Audit Function which performs investigations and internal audits on a selection basis.
     Compliance officer – The Compliance Division is headed by a qualified advocate and completes
     a number of compliance audits across all of the group’s offices and advisors.
   • No illegal donations to candidates for public office or political parties
     PSG Konsult subscribes to a company-wide code of conduct which is published on its website and directs the manner in which business is conducted.
7. Competition
   No anti-competitive agreements: In acting as a registered financial services provider, PSG Konsult has a policy to only place business with approved product suppliers. This is achieved through the PSG Konsult product committee which approves all products prior to being offered to our clients. Furthermore, all broker codes registered with product houses are signed off by the chief financial officer of the PSG Konsult Group.

DIVERSITY

PSG Konsult strives to value and respect the individual differences of our employees, clients and business partners and is committed to achieving diversity in our workforce. We believe that a diverse workforce provides employees with a better place to work and our company with a competitive business advantage. The company actively seeks out and implements programmes designed to foster mutual respect and achievement of personal success, striving for all individuals to reach their full potential.

Valuing diversity is a core value of PSG Konsult, an important corporate social responsibility which impacts how we service our clients, how we recruit candidates and how we become better corporate citizens. As a leading staffing provider, PSG Konsult has made a commitment to develop a diverse workforce that is representative of the communities in which we reside.

PSG Konsult’s diversity objectives are paving the way for a new generation of employees that have a better sense of awareness, tolerance and a greater understanding of the world around us by focusing on:

Awareness and diversity of thought – PSG Konsult Academy established formal training in 2009 for internal employees to gain a better understanding of diversity and raise awareness among our peers and our customers. The programme focuses on diversity of thought, thought leadership, self-awareness and inclusion. Internal employees at PSG Konsult – from leadership to new employees – participate in these training programmes.

HUMAN RIGHTS AND LABOUR STANDARDS

PSG Konsult is committed to uphold the human rights of workers and to treat them with dignity and respect. The company’s commitment includes adhering to and recognising the critical importance of standards regarding freely chosen employment, child labour, discrimination, harsh or inhumane treatment, minimum wages, working hours, and freedom of association.

In addition to adhering to the above requirements and standards, PSG Konsult does not tolerate retaliation against anyone who reports in good faith through the appropriate channels a suspected violation of any provision of the above statement or any other irregularities.

1. General principles
   
   • Respect of human rights
     In the PSG Konsult Group we are committed to:
     • supporting and respecting the protection of internationally proclaimed human rights;
     • ensuring that we are not complicit in human rights abuses;
     • upholding the freedom of association and the effective recognition of the right to
       collective bargaining;
     • eliminating all forms of forced and compulsory labour;
     • elimination of discrimination in respect of employment and occupation; and
     • working against all forms of corruption, including extortion and bribery.
   • Enhancement of human capital through creation of employment and promotion of employee education and training
     PSG Konsult Group continues to invest in our workforce – providing our employees with skills training, health and wellness programmes and opportunities to gain experience. The budget in respect of the new financial year for training and development is in excess of R2,3 million.
   • No discrimination or disciplinary measures against employees who in good faith report to management or the relevant authorised practices which infringe the law, the guidelines or company policy
     In the PSG Konsult Group’s personnel policy, all forms of discrimination in respect of disciplinary measures, employment and occupation are addressed.
   • No demands for exemptions from ecological or social standards
     PSG Konsult Group is committed to making no demands for exemptions from ecological or social standards and the group supports a precautionary approach to environmental challenges.
   • No improper involvement in local political activities
     The PSG Konsult Group is committed not to engage in any improper involvement in local
     political activities.
2. Employment
   
   • Increasing employment possibilities and standards
     PSG Konsult has established a recruitment bureau and a recruitment policy in order to increase employment possibilities and standards.

   • Promoting equality of opportunity and equal treatment in employment
     PSG Konsult has submitted an Employment Equity Plan on 22 December 2011 as required by the Department of Labour. The workforce profile for 2012 indicates that we had a 29% growth in staff overall, of which 23% is black (designated employees) and 46% female (designated employees).

     The PSG Konsult Limited employment equity committee was elected and approved by EXCO. Employee representatives from all different disciplines in the business have been included.

   • Avoiding arbitrary dismissal procedures
     PSG Konsult has a personnel policy which includes a disciplinary code of conduct. In this code all formal arbitrary dismissal procedures are addressed.
3. Employment/Social partners
   
   • Worker rights for trade union representatives
     PSG Konsult acknowledges the rights for trade of all workers. Freedom of association is also acknowledged in the organisation’s personnel policy.
   • Abolition of child forced labour
     No child labour in any form is allowed in the organisation.
   • Ban on discrimination
     All staff are aware that there are explicit policies against discrimination in hiring, remuneration, promotion, training or termination of employment of any employee on the basis of gender, race, age, ethnicity, disability, sexual orientation or religion. The organisation does not tolerate jokes or behaviour in the workplace that insults employees on the basis of gender, race, age, ethnicity, disability or sexual orientation.
   • Promotion of effective collective agreements
     Various committees have been established in PSG Konsult in order to promote effective collective agreements. These committees include a remuneration committee, employment equity committee, human resource committee and an audit committee.
   • Duty of information towards workers and their representatives
     PSG Konsult realises that the organisation has a responsibility towards the provision of information to all employees and their representatives. For this reason the organisation has created an intranet where all relevant communication (including the personnel policy) is displayed. All personnel have access to the intranet.

   • Employment of local personnel/training measures to improve the level of qualifications
     In PSG Konsult’s recruitment policy, the employment and training of internal staff are confirmed. All positions are firstly advertised internally on the intranet to give internal staff the opportunity to apply for such positions.

     Several internal training programmes are facilitated by PSG Konsult Academy in order to develop the skills of all personnel. These training programmes are focused on all levels of the organisation.

4. Working conditions
   • No pay, benefits or working conditions which are less favourable than those enjoyed by comparable workers in the host country
     All salaries are market related and normal increases, based on inflation and performance, are instituted by the remuneration committee every year.
   • Adequate wages so that workers and their families can meet their basic needs
     Market-related salaries are being paid to all employees.
   • The highest health and safety standards
     All PSG Konsult staff are working in offices which comply with health and safety standards as stipulated by the Occupational Health and Safety Act.
5. Knowledge and technology
   

   • Promotion of know-how transfer and training
     PSG Konsult Group has provided training opportunities for all levels of staff in the organisation. A total of R2,3 million has been budgeted for PSG Konsult Academy to do training in the organisation during the coming financial year.

     Training in life management, retirement planning and care of dependants have also been conducted in the organisation.

6. Labour relations
   
   • Freedom of workers to organise and associate
     As stipulated by the personnel policy, all employees of PSG Konsult have the freedom to organise and associate.
   • Right of workers to make complaints without suffering disadvantages
     The grievance procedure in the PSG Konsult personnel policy makes provision for all employees in the PSG Konsult Group to complain. The policy also makes provision for employees to be assured that they will not suffer any disadvantages as a result of the complaint.

HEALTH AND SAFETY

PSG Konsult endorses the principle that the quality of products and services, and employees’ morale
are enhanced by a safe and healthy work environment. PSG Konsult maintains health and safety programmes for its facilities.

All PSG Konsult staff are working in offices which comply with health and safety standards as stipulated by the Occupational Health and Safety Act.

COMMUNITY AND ENVIRONMENTAL INVOLVEMENT

PSG Konsult strives to understand and respect the cultural values and laws wherever we operate.
PSG Konsult actively supports important initiatives in those communities where our employees live and work.

This commitment is visible in our support for the Wildlands Indigenous Trees for Life Programme, as well as various projects with good causes on a regional basis. We also encourage our employees to support initiatives that are important to them.

PSG Konsult Corporate

With regard to black economic empowerment, we are of the opinion that this is not a political need but an economic necessity. To this end we have created PSG Konsult Corporate Limited, a black-empowered brokerage in which we have an interest. With our assistance and that of our financial planners, we aim to build this brokerage to the betterment of the financial future of our country.

Wildlands Conservation Trust

The Wildlands Conservation Trust was founded in KwaZulu-Natal, but has since found its way to the Western Cape through an innovative project called the Indigenous Trees for Life Programme, in conjunction with PSG Konsult, PSG Konsult Corporate and Spier.

This programme empowers local communities to grow their own trees for the upliftment of the community. At the same time they also contribute to the environment by assisting, amongst others, with reforestation projects.

For more information visit the following website: www.wildlands.co.za/home.aspx

BADISA

BADISA is a Tswana word that means “shepherd” and “caretaker”. The name is a combination of three Afrikaans words, BARMHARTIGHEID (compassion), DIENS/DIAKONAAT (service/diaconate) and SAAM (together). BADISA strives towards rendering a quality service to people and communities and achieves this through:

• comprehensive developmentally focused social service programmes which are aimed at enabling people to function optimally; and
• developing effective networks for distress relief and poverty alleviation.

At PSG Konsult we have committed ourselves to supporting BADISA for an initial three-year period in order to develop skills, train personnel and volunteers and monitor the results through ISUMASA (project division of BADISA), thereby improving sustainability by managing smarter.

Learnership Programmes

PSG Konsult offers learnerships in conjunction with PSG Konsult Academy and INSETA for trainee financial planners, short-term brokers and stockbrokers.

The one-year learnership entails an on-the-job training programme whereby the trainee is placed within the office of a successful financial planner, short-term broker or stockbroker who acts as principal.
Formal training and assessment is done via PSG Konsult Academy.