Social, ethics and transformation report

It gives me great pleasure, on behalf of the social, ethics and transformation committee (the committee), to present our annual feedback to shareholders for the financial year ended 30 September 2021, in accordance with the requirements of the Companies Act and the JSE Listing Requirements.

In my report to shareholders the year prior, I spoke of the extremely challenging operational environment within which the Company operated and the resolve and resilience that was required to see us through.

The year under review has remained as challenging. The pressure of the pandemic has been unrelenting, with the third wave exceeding previous waves by some distance. The unrest in KwaZulu-Natal (KZN) in July 2021 amplified an already strained environment but we are sincerely grateful that we did not lose any patients, employees or doctors to the unrest and suffered no physical damage to our hospitals.

Continued delivery by our frontline colleagues and extended employee base, whilst bearing the distress and relentless pressure and impact of the pandemic and the unrest, has emphasised all of the heroes we have on the frontline and within the Company.

It is important for the Company and the committee to also acknowledge the official inquest into Esidimeni and the tragic deaths of 144 former patients, who had been transferred from our facilities. This inquest commenced on 19th July 2021 in the High Court of Pretoria. The Esidimeni tragedy of 2016 caused untold suffering to our former patients, to their families, and to those who cared for them. Life Healthcare continues to support and cooperate with the investigative authorities and the Gauteng Department of Health.

As the world over navigates this uncertain and difficult time, we at Life Healthcare remain resolute on Making life better for all our stakeholders.

COMPOSITION OF THE COMMITTEE

There was an additional appointment to the Committee for the year under review and the current constitution is as follows:

• Audrey Mothupi (Chairman and independent non-executive director)
• Prof Marian Jacobs (independent non-executive director)
• Joel Netshitenzhe (independent non-executive director)
• Dr Malefetsane Ngatane (independent non-executive director)
• Caroline Henry (appointed with effect from 1 September 2021)
• Peter Wharton-Hood (Group Chief Executive and Executive Director)

Senior executives and functional heads attend meetings, as appropriate and at the request of the Committee. All members of management who present on various matters are experts on each of the disciplines or areas falling within the mandate of the Committee specified in regulation 43(5) of the Companies Act. The Chairman of the Board is a standing invitee. The committee met twice during the year under review, and the proceedings of each meeting were reported to the Board.

RESPONSIBILITIES

The Committee has a statutory responsibility to monitor the Group's activities in terms of the Companies Act with regard to matters relating to:

• ethics and business integrity
• social and economic development
• good corporate citizenship
• environment, health, patient, and public safety
• consumer relationships
• labour and employment practices

The Committee continues to execute on its responsibility to draw matters within its mandate to the attention of the Board and to shareholders, when necessary.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) HIGHLIGHTS

The Group's journey to identify ESG matters as part of our operational performance continued to gain traction for the year under review, with the creation of a Group Sustainable Development Committee and the approval of the Sustainable Development Strategy by the Committee. The current ambition rests on moving towards a more holistic approach of identifying key ESG matters and linking these to risks and opportunities as well as materiality and long-term strategic intent. The Group's current focus is now on identifying strategic interventions with linkages to business strategy for value creation.

Recognising the global nature of our business, our international operations have been fully integrated into our ESG agenda and during the last 12 months have taken some notable progress driven by the appointment of two international executives onto our ESG governance committee. This year has seen our international colleagues align their ESG reporting framework to the Group model and also introduce a series of ESG specific initiatives including: the development of an integrated equality, diversity and inclusion strategy with associated objectives, measures and targets and the introduction of electric vehicle options into company car schemes. We anticipate the coming year will see further significant steps being taken.

In August 2021, the Company celebrated Women's Month with the Girl Child Project at Jabulani Secondary School in Soweto, and Siyanda Secondary School in Sweetwaters, KZN. The events were attended by the Honourable Gauteng MEC for Health, Dr Nomathemba Mokgethi and the Honourable Deputy Minister of Health, Dr Sibongiseni Dhlomo respectively. Feminine care packs were distributed to each girl child in the school, as well as holding career guidance talks with regards to nursing and pharmacy. Three nursing bursaries for each school were made available to students who met the criteria. The total sponsorship value over the duration of the training period is R1 million.

Our Women in Life programme, implemented last year, continues to gain traction and focus. This senior group of women leaders continues to play a vital role in maintaining our operational excellence and driving our strategic outcomes.

There were some notable achievements during the year under review and I am delighted to report that, during the fourth quarter, the Group received an upgraded ESG rating from 'A' to 'AAA' from MSCI. MSCI is the world's largest provider of ESG indexes. An 'AAA' rating places Life Healthcare in a best-in-class category within the global healthcare sector.

The Green Building Council of South Africa has also completed its review of the Group's new head office building and has awarded Life Healthcare a 5-Star Green Star Office Design certification. This is an outstanding achievement by the Group and further entrenches our commitment to environmental imperatives as per our medium to long term sustainability strategy.

The Committee confirms that the Group has retained its position as a constituent of the FTSE/JSE Responsible Index, based on the FTSE ESG rating.

CORPORATE SOCIAL INVESTMENT AND RESPONSIBILITIES (CSI)

I am proud to confirm that the Group's focused drive to continue supporting our stakeholders, yielded pleasing results for the year under review. Some of the notable initiatives are listed herein:

• 4 000 food parcels were distributed to needy communities in KZN, Gauteng and Eastern Cape, parcels each of which fed a family of four for four weeks
• In a drive to create access to drinkable running water, three Play pumps were installed in the Eastern Cape and a further six have been earmarked for KZN
• Funding for the establishment of a rural community centre and the salaries for the practitioners in the Manketu Village in Pondoland were approved during the year under review
• During the civil unrest 2.5 tons of basic food was distributed to employees in KZN
• 200 cataract surgeries were sponsored in Limpopo in partnership with the SA National Council for the Blind
• Funding for the establishment of a Saturday School for learners and educators of Nomzamo Secondary School in the Western Cape, specifically focusing on additional tuition in maths and science, has been approved
• 25 nursing bursaries have been awarded for students in their third and fourth year of study at 12 higher education universities across the country
• We continue to fund the full operations of the Optima College for visually impaired students. 354 training programmes were undertaken in 2021

IMPACTFUL PARTNERSHIPS

Guided by our belief that healthcare providers have an obligation to partner with government, especially during times of unprecedented crisis, we are proudly supporting South Africa's massive vaccination drive and efforts through 22 Life Healthcare vaccination sites, manned by approximately 320 employees across the country. The Company has administered a total of 380 000 vaccinations to date in 2021.

In Europe, our international colleagues also stepped up to support the fight against Covid-19 through various partnerships with public health providers, including the provision of a 24/7 national CT imaging service in the UK and the creation of additional laboratory capacity in Italy.

DIVERSITY AND INCLUSION

South African operations

Steady progress continues to be made on improving employee diversity, with good performance in 2021. There is also an increased focus on improving the number of women within the higher grades of the organisation. A number of training initiatives were put in place during the year under review, including; hospital management, nurse management, finance and administration and engineering. These initiatives will continue to be a focus area for 2022.

International operations

The international initiative to develop an integrated equality, diversity and inclusion strategy and action plan for each region has concluded with country-specific strategies, objectives, targets and action plans in place for implementation during 2022.

National Transformation Committee

The Company has an established National Transformation Committee in South Africa comprising of 22 employee members, with representation from all the South African businesses and across various employee skill levels. This committee will further drive and embed a culture of equality, diversity and inclusivity in South Africa.

Broad-Based Black Economic Empowerment (B-BBEE)

We are pleased to announce that the Group has obtained an improved level 3 B-BBEE contributor status (2020: level 4) for the year under review, based on the measurement criteria contained in the B-BBEE Codes of Practice. The independent verification process was completed during November 2021.

CONCLUSION

Based on its monitoring activities for the year, no substantive non-compliance with legislation and regulations relevant to the committee's mandate was raised.

The Committee remains cognisant of the fact that our material matters are those issues that could affect the economic, environment and social value we create for our stakeholders. With this in mind, the committee continues to play a key role in assisting with the strategic management of our material matters, to ensure sustainable value in the short, medium, and long term.

The Committee is satisfied that it has discharged its responsibilities in accordance with its mandate for the year ended 30 September 2021.

In closing, I extend my sincere appreciation to my fellow Committee members, to the management team, and to the entire formidable workforce at Life Healthcare. Your unwavering support during a challenging year has been phenomenal.