2024

INTEGRATED REPORT

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Introducing our 2024 Integrated Report

We have pleasure in presenting the Group’s Integrated Report for the financial period ended 30 June 2024. Through our reporting, we aim to demonstrate in a balanced way how the Group has adapted and responded to the constrained economic and trading environment to create, preserve or erode value over the short, medium and long term. As always, our reporting is aligned with our Business Philosophy, with its focus on creating long-term, sustainable value for our stakeholders.

We report to shareholders on the differing outcomes of our businesses in South Africa and the United Kingdom. In SA, consumer spending and confidence continued to be impacted by rising living costs and the higher interest rate environment, resulting in the deterioration in the credit health of consumers and pressure on disposable income. The latter stages of the financial period were dominated by the build up to the national elections, followed by the transition to the formation of the country’s first post-democracy coalition government. In the UK, the inflation rate has moderated to a level within the Bank of England’s target range and economic growth prospects have improved. However, consumer spending remains constrained due to pressure on household disposable income from higher living costs (refer to Retail trading environment).

Our 2024 Integrated Report is targeted primarily at our shareholders who are the principal providers of the Group’s financial capital. We also recognise and acknowledge the role of our key stakeholders in the value-creation process, being our customers, employees, suppliers, lenders and regulators.

REPORTING FRAMEWORKS AND COMPLIANCE

The IFRS Foundation’s Integrated Reporting Framework (January 2021) has again been applied in preparing our Integrated Report, together with the JSE Sustainability Disclosure Guidance (June 2022). The application of these reporting frameworks was proposed by management and approved by the board.

The Integrated Reporting Framework recommends reporting in terms of the capital resources applied in the creation, preservation and erosion of value. The impact of these six capitals on the Group’s business activities and their role in creating, preserving or eroding value are covered in the relevant sections of this report.

Financial capital relates to the financial resources raised and available to the Group from the providers of capital.

Manufactured capital is the physical infrastructure used in the distribution and selling of merchandise, including distribution centres, retail stores and online platforms.

Intellectual capital focuses on the knowledge across the business, systems, processes, trademarks, intellectual property and brands.

Human capital deals with the skills, capabilities, experience and development of the board, management and employees.

Social and relationship capital covers stakeholder relationships and engagement, corporate reputation and values.

Natural capital relates to the environmental resources applied and utilised in the operations of the business.

For ease of understanding and navigating the report, the above visual icons have been included throughout the report to indicate where these capitals are addressed in the commentary.

All Group financial reporting complies with IFRS Accounting Standards, the South African Companies Act (71 of 2008, as amended) and the JSE Listings Requirements.

The King IV Report on Corporate Governance™* for South Africa, 2016 (King lV) has been applied throughout the reporting period and the directors confirm that the Group has, in all material respects, applied the principles of the code. The application of King lV is detailed in the Report on Corporate Governance and Application of King lV Principles 2024 on the website www.truworths.co.za/reports.

The inaugural global sustainability reporting standards of the International Sustainability Standards Board are effective from the Group’s 2025 financial reporting period, although the adoption of the standards is not yet mandatory in South Africa. An external review of the Group’s sustainability reporting is being undertaken which will include an assessment of the disclosure requirements of IFRS S1 and S2 relative to current reporting.

REPORTING SCOPE AND BOUNDARIES

The report covers material information relating to the business model, strategy, material issues and risks, governance and the performance of the Group for the financial period ended 30 June 2024. The report is supplemented by the Group Audited Annual Financial Statements 2024 which are available on our website.

The integrated reporting boundary has been set so that the report covers risks, opportunities and outcomes relating to the Group’s operating environment, its retail businesses, capital resources and engagement with key stakeholders that could influence the Group’s ability to create and sustain value, and also the extent to which the Group’s objectives have been achieved.

The financial reporting boundary covers the results of the Truworths and Office operating segments. Truworths operates primarily in South Africa and Office operates primarily in the United Kingdom.

* Copyright and trademarks are owned by the Institute of Directors in South Africa NPC and all of its rights are reserved.

INTEGRATED REPORTING PROCESS

The Group’s Integrated Reporting process is managed by a working group led by the Chief Financial Officer (CFO). The process commences each year with an evaluation of the previous year’s Integrated Report and detailed feedback from an independent integrated reporting specialist to identify opportunities to enhance disclosure and continually align with best reporting practices.

The individual reports included in the Integrated Report are prepared based on discussions with executives, written submissions, internal presentations, and board and committee papers. Draft reports are initially reviewed by divisional executives, followed by a panel of executives, including the CFO, and finally by the Chief Executive Officer (CEO).

The board has delegated responsibility for the final approval of the report to an integrated reporting sub-committee which includes members of the Audit Committee.

MATERIALITY

We continue to apply the principle of materiality in determining the disclosure in the report. In aligning our reporting with the JSE Sustainability Disclosure Guidance, we have again applied the double materiality approach across our reporting suite.

Reports targeted at shareholders and providers of capital, which deal with the Group’s financial performance and are used by investors in assessing the future value of the Group, also referred to as enterprise value, apply the principle of financial materiality. The primary report in this case is the Integrated Report.

Multi-stakeholder reports which cover the Group’s environmental, social and governance (ESG) reporting apply the impact materiality approach which relates to the economy, environment and society.

The application of the double materiality approach is reflected in the components of our annual reporting suite:

Financial reporting

  • Integrated Report 2024
  • Group Audited Annual Financial Statements 2024
  • Summarised Audited Group Annual Results 2024
  • Annual results presentation 2024
  • 10-year review 2024

Financial materiality

Reporting on matters that impact on financial performance and the assessment of enterprise value

Environmental, social and governance reporting

  • Environmental, Social and Sustainability Governance Report 2024
  • Report on Corporate Governance and Application of King IV Principles 2024
  • Social and Ethics Committee Report 2024

Impact materiality

Reporting on matters that reflect the Group’s impact on the economy, environment and society

RESPONSIBILITY OF DIRECTORS

The board acknowledges its responsibility for ensuring the integrity of the Integrated Report. The directors confirm that the report fairly represents the Group’s performance for the period under review, as well as the growth strategies, material issues, risks and opportunities, and prospects of the Group.

The directors confirm that the Integrated Report has been prepared in accordance with the Integrated Reporting Framework and the JSE Sustainability Disclosure Guidance.

Hilton Saven

Chairman

Emanuel Cristaudo

Joint Deputy Chief

Executive Officer and

Chief Financial Officer

Michael Mark

Chief Executive Officer

Sarah Proudfoot

Joint Deputy Chief

Executive Officer

Rob Dow

Hans Hawinkels

Thabo Mosololi

Wayne Muller

Tony Taylor

Dawn Earp

Tshidi Mokgabudi

Daphne Motsepe

Roddy Sparks

MATERIAL ISSUES

Each year, the directors together with management identify the issues that could have the most significant impact on the Group’s ability to create sustainable value for stakeholders. In determining these material issues, the directors consider potential positive and negative impacts internally and externally, including the Group’s strategic objectives, key risks, the needs, expectations and concerns of our main stakeholders and the economic and trading environment.

The material issues for the 2024 financial year are unchanged. The risks and opportunities relating to these material issues provide shareholders with insight into the factors that create, preserve or erode value (refer to Material issues, risks and opportunities).

EXCELLENCE IN INTEGRATED REPORTING AWARDS

The quality of our Integrated Reporting was again recognised in the Ernst & Young 2024 Excellence in Integrated Reporting Awards. The Truworths International 2023 Integrated Report was ranked 7th in the Ernst & Young 2024 Excellence in Integrated Reporting Awards among the 100 largest companies on the JSE.

The Group’s report has been ranked in the top 10 for the past 17 consecutive years of these awards, and ‘Excellent’ for the last 22 years.

No other company on the JSE has come near to achieving this prestigious recognition.

INDEPENDENT ASSURANCE

Reporting elements

Integrated Report

Assurance process

The Integrated Report has been reviewed by the directors and management; it has not been independently assured.

Reporting elements

Financial reporting

Assurance process

The Group’s external auditor, Deloitte & Touche (Deloitte), has provided assurance on the Group Audited Annual Financial Statements 2024 and expressed an unmodified audit opinion. Deloitte has also inspected the consistency of the financial information extracted from the Annual Financial Statements that appears in the Integrated Report.

Reporting elements

ESG reporting

Assurance process

Accredited service providers have measured and provided assurance on selected ESG metrics disclosed in the Integrated Report, including:

  • AQRate independently reviewed and verified the Group’s B-BBEE rating in terms of the Broad-Based Black Economic Empowerment Act, 53 of 2003;
  • Verify CO2 undertook an independent review of the Group’s carbon emissions; and
  • Global corporate governance and remuneration consultants to the Remuneration Committee reviewed the Remuneration policy and Implementation report contained in the Remuneration Committee report

2024

INTEGRATED REPORT