OUR SOCIAL IMPACT

AfroCentric is committed to sustainability in South Africa. We are a proud corporate citizen and aim to support and make a difference to society.

AfroCentric was established with the philosophy of promoting transformation and empowerment. We are a black-owned company and the most transformed health-related business listed in South Africa. The Group invests in healthcare-related businesses and our contribution to healthcare extends beyond our products and services.

We invest in people, support transformation, benefit society, provide health management to our members, and make healthcare more accessible to all South Africans. Our social impact starts within our Group and expands to the suppliers and communities that we directly impact and the broader society that is impacted through our health management initiatives.

AHL is a wholly owned subsidiary of AfroCentric. Therefore, the ownership credentials of AfroCentric are directly attributable to those of AHL through the modified flow-through principle. As a broad-based entity AHL is measured on all of the five elements of the B-BBEE scorecard: ownership, management control, skills development, enterprise and supplier development, and socio-economic development.

Investing in our people
				4 710 Permanent employees			196 Non-permanent employees			7.10% Employee turnover
				2% Disabled employees			70% Female employees			30% Male employees
				54% Black representation at top management			0.30% Foreign employees			3.18% Skills develop % of payroll

Transformation
				B-BBEE Level 2			Preferential procurement R903m Of total procurement

Community impact

126 External learners on learnership programmes

R3m SED spend

R3.2m Enterprise development spend

R6m Supplier development spend

B-BBEE contributor status – historical scorecard comparison

Element	Weighting		2018		2017		2016		2015
Equity ownership	25		24.76		24.76		25		25
Management control	19		13.53		13.10		13.41		13.70
Skills development	20		17.38		15.98		15.75		15.55
Enterprise and supplier development	40		41.65		41		38.21		37.75
Socio-economic development	5		4.90		5		5		3.9
	1092		102.22		99.84		97.37		95.9
Total and B-BBEE level			Level 11		Level 2		Level 2		Level 2

1	The 2018 B-BBEE level is projected through the Group's quarterly reviews. The B-BBEE verification process is conducted in November 2018 by Honeycomb BEE Ratings Proprietary Limited.
2	Weighting includes bonus points.

Investing in our people

Developing our people and promoting a high-performance culture is vital to our strategic objectives. Our people are a key differentiator, and we are committed to developing them. The Group has a comprehensive wellness programme and learning and development opportunities, and we seek out other upliftment opportunities. AfroCentric strives to embed a culture which enables us to attract and retain a diverse workforce.

Employment equity and employee profile

54% African employees

21% Coloured employees

8.20% Indian employees

17.20% White employees

We view transformation as a key driver towards a productive, innovative and sustainable business. Management is committed to diversity and transformation, which is demonstrated through managing employment equity (EE) through a number of divisional EE forums and the National Employment Equity Forum. These forums provide a platform to monitor of our EE progress and to debate various related matters. Our EE policy, EE plan and our transformation strategy drive the implementation of EE within our business.

Our EE plan can be viewed on our website:

http://afrocentric-online.co.za/reports/afrocentric-ar2018/pdf/employment-equity-plan.pdf

Our EE plan can be viewed on our website:

http://afrocentric-online.co.za/reports/afrocentric-ar2018/pdf/employment-equity-policy.pdf

Total workforce profile (including employees with disabilities) as at 30 June 2018

			Male								Female						Total
Occupational levels	A		C		I		W		A		C		I		W
Top management	1		1		2		6		3		0		0		0		13
Senior management	8		2		4		33		9		3		0		24		83
Professionally qualified and experienced specialists and mid-management	83		21		38		75		148		45		56		195		661
Skilled technical and academically qualified workers, junior management, supervisors, foremen, and superintendents	510		218		107		73		1 238		683		180		404		3 413
Semi-skilled and discretionary decision-making	258		18		5		4		352		34		8		27		706
Unskilled and defined decision-making	7		1		0		1		19		1		1		0		30
Grand total	867		261		156		192		1769		766		245		650		4 9063

A	= African C = Coloured I = Indian W = White
3	The total employee figure of 4 906 is for SA operations only (excluding outside SA subsidiaries).

Talent and leadership development

Online learning

1 060 online courses

The AfroCentric Learning and Performance Academy offers online training. Employees have constant virtual access to legislative courses, Company policies and functional training courses. Over the course of the year, we developed our Introduction to Healthcare and ICD 10 Coding courses which are now readily available to all employees. 1 060 online courses were undertaken by 287 employees in the period under review.

Skills development

AfroCentric invests a percentage of the total payroll into training and developing black employees. There is a difference between measuring and recording skills development, and measuring and recording the EE requirements (the latter only measures the number of people that attended training as opposed to the total spend).

202 employees benefited from INSETA

The Group has INSETA-accredited internship and learnership programmes which comply with sector requirements and provide accelerated and practical work experience for school leavers, graduates and unemployed people. To date, 87% of these learnership students have become permanently employed within the Group.

Leadership development

247 programmes

AfroCentric's leadership competencies assist the business to implement the relevant leadership development programmes. These programmes are tailored for the Group's objectives. We believe that leadership is not what you do, but how you do it. Our leaders are groomed to display the behaviours and skills that inspire and engage our employees.

Study Assistance Programme

Various employees are financially unable to pursue further studies. AfroCentric's Study Assistance Programme sponsors selected employees for approved courses. The Study Assistance Programme is aligned to our business strategy and priorities.

Passion Awards

Recognising employees is vital to their performance which directly impacts the success of the Group. Our recognition programme, known as the Passion Awards, allows managers to recognise employee behaviour that is linked to the organisation's values. The recognition programme offers monetary and non-monetary rewards to employees. All reward and recognition programmes are coordinated as part of the Passion Awards programme.

Differently Abled Employees

103 Differently Abled Employees

The Group has implemented a number of programmes whereby differently abled employees are recruited on six-month fixed-term contracts. These employees gain work experience while being trained to become permanently employable. Employees from diverse demographics are a valued part of our workforce. The Group promotes employing differently abled people which is evident in the number of differently abled employees we employed in the business. All business units in the Group have demonstrated full support of this initiative.

Bursaries

R1 179 795 spent on bursaries

AfroCentric's bursaries for medical doctors reduces the skills shortage in the private and public health sector. Bursary recipients were selected based on academic excellence and their financial needs. We invested R1 179 795 into the studies of four black female scholars. We are proud of their performance and of the contribution we are able to make toward developing talent in South Africa.

Learnership programmes

The Learning and Performance Academy implemented a number of learnership programmes for AfroCentric employees and unemployed individuals. The programmes help candidates earn qualifications and gain valuable working experience. In 2018, 180 employees and 126 unemployed people participated in the programmes.

Employee wellness programme

The employee wellness programme (EWP) is comprehensive and employee-centric. The programme trains managers to identify distressed employees. Distressed employees are encouraged to partake in the programme. Healthwise is an easily accessible platform that provides wellness services for employees and their immediate dependants.

The programme is designed along four pillars:

					Physical Wellbeing This consists of our annual business unit wellness days, DBC wellness days, on-site weight loss programme, boot camp, and charity walks. We also offer the clinic on-site at our Florida offices.

Emotional Wellbeing This is our 365 24/7 Employee Assistance Programme (EAP) facilitated by Ask Nelson. It provides counselling services to our employees and their immediate family members.

					Financial Wellbeing The debt management programme facilitated by our service provider, Interface, offers employees free financial wellbeing services on issues such as budgeting, wills and estates.

Organisational Wellbeing This is absence management through our ICAS first day of absence system and disability management through Sanlam Group Life.

Clinic on-site

In line with our vision to empower greater access to sustainable quality healthcare, and to improve employee productivity and wellness, we launched our first on-site employee healthcare facility on 6 March 2018, which provides employees with primary healthcare services ranging from health assessments and consultations, to family planning and disease management.

The facility is managed and operated by an external service provider to ensure confidentiality for employees' health data and records. While the facility is fully sponsored by the Group, dispensed medication is subsidised and comes at a marginal cost to employees.

We intend to continue expanding the facility's service offerings to our employees and, should this pilot initiative be successful, to make available similar services to employees at our regional operations.

Performance management

AfroCentric uses a Balanced Scorecard (BSC) approach to performance management. The BSC provides the tools for management to drive competitive success. It translates an organisation's strategy into performance measures that provide the framework for a strategic measurement and management system. To be a progressive organisation, we continuously research best practice to build a high-performance culture.

When managing individual performance, we aim for a 'win-win' environment where managers and employees share clear expectations and objectives from the outset. Employees participate in all phases of the process and share ownership of the outcomes with the organisation. Performance discussions should cover more than just performance ratings – the focus should be on real-time performance. Leaders should have regular meaningful conversations that are not fear-based, but aimed at improving performance gaps with the aim that individuals understand how their performance and behaviour link to the organisational strategy and how their contributions drive business growth. We emphasise self-management in achieving total quality and customer service, and employees are encouraged to maximise their contribution in their current role, while having access to opportunities to grow and develop their careers within the AfroCentric Group

Outlook/future focus areas

Our next phase will include the development of our core and functional competencies across the business that will allow us to embed those competencies that will lead us into a sustainable future.

Transformation

Transformation is a strategic enabler for AfroCentric to achieve its vision of creating sustainable healthcare. It enables us to drive sustainability for all of our stakeholders.

There are a number of societal issues in South Africa such as imbalances in career, educational and economic opportunities. B-BBEE directly addresses economic transformation in South Africa by increasing the number of black people that manage, own and control the country's economy.

AfroCentric's transformation framework supports the national strategic priorities and our own social impact agenda. The Group adheres to the South African Government's B-BBEE policies and other transformation-related legislation such as, but not limited to the:

• National Development Plan 2030;
• National Strategy for Broad Based Black Economic Empowerment;
• Revised Broad Based Black Economic Empowerment Act 53 and related amendments;
• Amended Codes of Good Practice on Broad Based Black Economic Empowerment of 2013;
• Employment Equity Amendment Act of 2014 and related regulations; and
• Skills Development Act and related Skills Development Levies Act.

At AfroCentric, we aim to transcend compliance and go beyond the numbers for transformation, while adhering to the spirit of the B-BBEE Codes. We have several structures that debate, critique and approve the transformation initiatives. The Board and the AfroCentric Health Group Executive Committee support these structures, primarily through the following committees:

• Transformation Steering Committee
• Social and Ethics Committee
• Enterprise and Supplier Development Committee

Our level of compliance with the B-BBEE scorecard demonstrates our commitment to driving transformation within the Group and in the way in we do business.

Equity ownership

AHL ownership profile (30 June 2018)	20181		2017		2016
Exercisable voting rights by black people that flow through to AHL	80.22%		80.22%		34.51%
Exercisable voting rights by black women	9.42%		9.42%		13.46%
Entitlement to economic interest by black people that flows through to AHL	80.22%		80.22%		34.51%
Entitlement to economic interest by black women	9.42%		9.42%		13.46%
Economic interest that flows through to black designated groups	14.00%		14.00%		13.79%
Involvement of ownership of the enterprise of new black entrants	11.03%		11.03%		13.57%

1	The 2018 figures are projected through the Group's quarterly management reviews. The verification process will be conducted in November 2018 by an external provider, Honeycomb BEE Ratings Proprietary Limited.

Management control

EE is driven as part of compliance with the EE Act. This involves compiling a five-year plan, and setting quantifiable targets for each race, gender and employment category. Progress is measured and reported annually to the Department of Labour.

AfroCentric's EE plan outlines our own targets for EE. These add to the universal targets for EE compliance under the B-BBEE Codes by including a measure for the representation of black disabled employees among the Group's total employees. The Company uses these targets to measure its EE performance for the EE element under the B-BBEE Codes.

Outlook/future focus areas

To ensure that the EE plan, promotion, retention and succession are in line with Economic Active Population (EAP) and that diversity and representation increases.

Community impact

AfroCentric is involved in sustained, collaborative, strategic efforts to uplift the wider communities. The Group is dedicated to improving community life, people's experience and continuous community learning.

Enterprise supplier development

The Group considers the preferential spending amount on black-empowered companies who provide services and products to our business. We particularly focus on black-owned small, medium and micro enterprises (SMMEs), who also have black female and designated group ownership.

R443m Spend on black-owned supplers

R146m Spend on black women-owned suppliers

R143m Spend on exempt micro enterprises (EMEs)

R10m Spend on developing suppliers and enterprises

R98m Spend on qualifying small enterprises (QSEs)

Our enterprise development pillar uplifts the South African economy by developing smaller businesses and growing, among others, the small business sector. The Group has various initiatives to develop SMMEs. We invest in sustainable projects that are aligned with the Group's business objectives with a reasonable expectation of providing a direct or indirect financial return.

AHL aims to invest 2% of NPAT on developing suppliers and enterprises as it has done for the past three years. The Group has invested over R10 million in SMMEs and deserving initiatives.

Our ESD beneficiaries include:

Enterprise supplier development initiatives 2017/18
Entity		Description
Belinda Ogundipe Associates Inc.		Dr Ogundipe is a general practitioner with an existing practice, consulting at DBC Sandton and DBC Roodepoort. Allocated ED funding will expand the national footprint of the DBC network and provide functional rehabilitation services to underserviced areas such as Soweto.
Classic Health Consulting		Classic Health Consulting develops innovative and practical healthcare delivery solutions for underserviced areas in Africa and other developing countries. It finalised the i-Health Clinic which offers a turn-key community primary facility and contributes to socio-economic development in South Africa's rural and under-serviced areas.
Eluthandweni Maternity Clinic		Eluthandweni Maternity is a maternity clinic in the East Rand township, offering affordable primary healthcare services to residents. AfroCentric has assisted the Maternity Clinic to acquire an ambulance and upgrade its medical equipment, including the security aspects.
Maps at Toms 24 Hour Delivery		Maps at Toms 24 Hour Delivery provides courier services for medication and parcels. It has successfully graduated from being an enterprise to form part of the Group's supply chain. AHL has assisted Maps at Toms 24 Hour Delivery to acquire its fleet.
Travel Nation		Travel Nation provides comprehensive flight and package deals to individuals and corporates. AHL has invested in their unique travel system and licensing.
Medtech AfriCorp		Medtech offers specialised services which include ensuring: patients attend rehabilitation sessions after being discharged from hospital; employers make alternative work arrangements in the workplace, should the injuries sustained not allow the patient to continue the same duties; and patients' home environments are reorganised to complement the patients' new physical state and for the building to be disability friendly
MBEESWAX		MBEESWAX is an online digital marketing company that is currently our preferred supplier. It assists the Group with digital strategies including presence.

Socio-economic development

The Group has a broad approach to socio-economic development initiatives. AfroCentric focuses on uplifting historically disadvantaged communities and our initiatives that qualify for recognition under the socio-economic development element as stipulated in the B-BBEE Codes of Good Practice.

The Group has invested over R3 million towards SED initiatives, which is 1% of NPAT.

Current socio-economic development projects

We have allocated 1% of NPAT to a few flagship projects that we plan to channel a significant portion of our budget to over three to five years.

SED SPEND (R’000) – 2015/16

SED SPEND (R’000) – 2016/17

SED SPEND (R'000) – 2017/18

Vision for Change				AfroCentric and Vision for Change are committed to changing the lives of South African children, mainly in rural and disadvantaged communities. In collaboration with the Department of Health, we identified Emfundisweni Primary School located in the Alexandra area for conducting eye screenings for learners. Learners with visual impairments were further tested, and those in need of prescription glasses were fitted with spectacles on 14 November 2017. 1 003 learners received eye screening and testing 40 children were identified as having visual impairment and fitted with prescription glasses by qualified optometrists.
AHL Bursary				In 2017, four historically disadvantaged black females in the Faculty of Health Sciences at the University of Pretoria and Sefako Makgatho Health Sciences University were identified as candidates for the AHL Bursary. We are in year two of the bursary, and candidates have produced exceptional academic results. We will monitor the students further and develop a programme for their educational needs and personal wellbeing.
Charlotte Maxeke Johannesburg Hospital School				AfroCentric supports the Charlotte Maxeke Hospital's school with their annual needs and maintains a good relationship with the hospital for the wellbeing of the learners.
Emfundisweni Primary School Project				We are funding infrastructure, classroom and office equipment upgrades at Emfundisweni Primary School.
Tumelo Home: For the Mentally Handicapped (Tumelo Home)				AfroCentric is assisting Tumelo Home to build or acquire a secondary property which will accommodate its growing waiting list and older residents who have special stimulation needs. Tumelo Home currently houses 32 stay-in and 13 day care children and youth with severe mental and physical disabilities. The home also has a waiting list of over 300 children.
Uitkoms Home for Girls (Uitkoms)				AfroCentric purchased a 27-seater bus to address the logistical issues at Uitkoms, a community-based organisation (CBO) and non-profit organisation (NPO). Uitkoms provides residential facility for girls aged 12 to 18 years. The girls are sent for rehabilitation after exposure to abuse, exploitation, and neglect of a physical, sexual, or emotional nature.
Council of Medicines South Africa (CMSA)				At the beginning of 2018, AfroCentric committed to support CMSA with R1 million every year for the next five years. CMSA approached AfroCentric to sponsor the role of an educationist. The purpose is to strengthen the quality of (biannual) examinations, as CMSA is an independent organisation that examines medical doctors and dentists undergoing postgraduate training. The work done includes assessing doctors that undergo specialist training (there are currently 28 different colleges, each representing a different specialty).

Increasing access to healthcare through value chain optimisation

Value chain optimisation creates value, not only by diversifying revenue streams, but also through increasing the value for every Rand spent on healthcare for patients and employers.

Pharmaceutical value chain

Activo Health's distinctive business model is informed by its central philosophy of managing risk through a spread of products and distribution channels, as well as skilful management of registrations, acquisition of dossiers and a conservative approach to stock control. Activo Health is the second-largest privately owned pharmaceutical company and in the top 25 pharmaceutical manufacturers and suppliers in South Africa. It has achieved this position by developing one of the best channel marketing pipelines in its sector and it has built strong associations with bulk purchasers and the rest of dispensers.

Through this acquisition, AfroCentric can more effectively improve access to affordable, quality generic medicines.

Value chain optimisation – Pharmaceuticals

Integrated Chronic Care Model

ICCM is an important component in healthcare management and funding.

Medscheme's ICCM was implemented on 1 May 2017. It coordinates the various aspects of chronic patient care by sharing information between funders, healthcare professionals, hospitals and members. It also involves the members' family care and support structures. This decreases costs for our clients while improving the healthcare for our members.

Non-communicable diseases (NCDs) have become more prevalent in developing countries than in high-income countries. This is due to genetic factors and lifestyle issues such as lack of exercise, poor diet and stress. NCDs such as hypertension and diabetes account for over 50% of healthcare costs and it is imperative for us the implement a sufficient preventative strategy.

Over the past five years, the number of Medscheme's scheme members with three or more chronic diseases has increased by 50%, both as a result of an increased incidence of lifestyle-related diseases and more proactive identification of at-risk patients.

Outlook/future focus areas

Our future focus areas will include:

• home-based care;
• more alternative reimbursement models for surgical procedures;
• multidisciplinary teams for specific health needs;
• accurately identifying illnesses and treating them appropriately;
• palliative care and optimal outpatient care;
• using genomics, artificial intelligence and analytics to assist healthcare providers and managed care employees in focusing on the correct cases; and
• reviewing of the traditional utilisation management programmes.