SBV SERVICES INTEGRATED REPORT 2017
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S B V S E R V I C E S I N T E G R AT E D R E P O R T 2017
Waltloo Cash Centre
We shape the cash
industry through thought
leadership, innovation, a low
risk profile and an excellent
client service record.
SBV SERVICES INTEGRATED REPORT 2017
S
BV’s Integrated Report is the company’s primary report to This report is relevant to any stakeholder who wishes
all its stakeholders and covers the company’s performance to make an informed evaluation about the company, its
for the last two financial years ending June 2017 and performance and its ability to create value over the long
also provides an overview of future objectives. The Strategic term.
Committee (Stratco) and Audit Committee have collectively
considered the contents of this report and are satisfied that it Over the past three years SBV has undertaken a significant
accurately represents the company’s performance over this transformation programme to ensure the sustainability of
period. We have made a concerted effort to implement the our business. This change has had an impact on all of our key
guidelines specified in the International Framework and stakeholders who have supported us throughout the process.
where there are gaps, we plan to close these by the time the This integrated report is dedicated to our stakeholders whom
2019 Integrated Report is compiled. we thank for their invaluable and ongoing support.
GROUP CEO’S STATEMENT 1
SOUTH AFRICA CEO’S STATEMENT 3
OUR STORY – ENABLING SEAMLESS CASH SUPPLY ACROSS THE VALUE CHAIN 8
OUR BUSINESS ENVIRONMENT AT A GLANCE 13
LEADING A BETTER BUSINESS FOR TOMORROW 15
GOVERNANCE FRAMEWORK 18
BOLSTERING OUR RESILIENCE AND ENSURING SUSTAINABILITY THROUGH A SOUND RISK MANAGEMENT FRAMEWORK 22
JOINING FORCES IN THE FIGHT AGAINST CIT CRIME 24
SBV’S SECURITY HEROES 25
LEADING THROUGH BUSINESS CONTINUITY MANAGEMENT AND DISASTER RECOVERY 26
SOCIAL AND RELATIONSHIP CAPITAL 28
HUMAN CAPITAL 40
OPERATIONAL PERFORMANCE 46
MAKING OUR MARK ON THE AFRICAN CONTINENT 50
SBV SERVICES INTEGRATED REPORT 2017
We all go through life leaving a little footprint, no matter what you do, or how you do it, and that’s your legacy. SBV SERVICES INTEGRATED REPORT 2017
A WORD FROM OUR GROUP CEO (outgoing)
Grant Dunnington
Dear Stakeholders,
In November 2017 I will be retiring from SBV after 16 years,
having joined in 2001. During this time the business has grown
significantly and I have witnessed momentous change, not
only in the company but also in the industry. SBV has evolved
from a utility company, to a commercial entity, and has grown
from a company with a turnover of R200 million per annum
with less than 1 500 staff to a business that today is generating
in excess of R3 billion in turnover with a staff complement of
more than 7 000 people. It now has operations in Lesotho and
Namibia with plans to expand into other African countries
as it leverages its expertise in South Africa and supports it’s
South African customers abroad.
Securing the contract from Absa for the outsourcing of 100%
of its cash operations in 2012 was a significant milestone and
resulted in a large increase in SBV’s operations and footprint,
which enabled scale economies and efficiencies to be realised
in the business.
Any project of this size comes with
challenges, but it is pleasing to see
that these have by and large been
overcome as the aquired operations
have been fully integrated into SBV.
In February 2016 another significant milestone was achieved
I wish to thank all our stakeholders for the role that each of
when, after a number of years of negotiation, Prosegur, a leading
you have, and will continue to play in SBV’s success and wish
Spanish-based global security company, acquired a one-third
to especially thank our dedicated and committed staff for
stake in SBV, opening access to global best practice and expertise.
making SBV what it is today.
Over the past 16 years cash in circulation has continued to grow
To my successor Mark, who I know has the same commitment
by more than inflation. There is no reason to believe that this
and passion for the business and its people that I have, I wish
growth will slow down and given the critical role that SBV plays
you every success, and trust you will have as much enjoyment
in the industry, it is well placed to benefit from this, despite some
leading this team as I have had over the past 16 years.
of the current challenges. SBV is the leader in the industry and this
position is only made possible by its outstanding people.
Finally, I would like to express my gratitude to the Board of
Directors for their support during this journey and wish them
I am proud to have been entrusted with the leadership of SBV and
all well for the future.
know that I can retire with confidence that this team, under the
leadership of the current executive, will see SBV continue to grow
Grant Dunnington
from strength to strength.
Group CEO (Outgoing)
1
SBV SERVICES INTEGRATED REPORT 2017
The ability to price appropriately for
the specialised Cash-in-Transit services
remains a challenge and will continue to
attract significant focus into the future.
2
SBV SERVICES INTEGRATED REPORT 2017
A WORD FROM OUR CEO, SOUTH AFRICA
Mark Barrett
I
am pleased to present the biennial SBV Services Integrated
Report for the period July 2015 to June 2017. Reflecting on
the past two years we can, as an organisation, be proud
of the extraordinary efforts of our teams of people who have
worked tirelessly to embed the new technology, optimise
our business processes, improve customer service levels and
manage the ever-growing risk environment.
The external environment continues to be challenging from a
cost-pressure perspective and from a crime perspective. Good
progress has been made in conjunction with the Shareholder
Banks to implement a new operating model to address the
deficiencies in the previous wholesale cash storage and
processing model.
Excellent progress in driving greater
efficiencies, improved service levels
and optimisation of processes
continues to be reflected in the
Processing division and continued
pressure on costs and an inability
to price appropriately to the market
continues to be a focus point for the
Logistics division.
Our organisation has significantly improved its engagements
with the stakeholder Banks and continues to explore
approaches that will reduce costs and improve service
levels. The key challenge that the organisation is digesting is I wish to thank all our shareholders for suporting the Stratco
the need to realign the Cash-in-Transit operating model to team as we continue to transform the business.
the new requirements introduced through the changes in the
risk environment and the outcomes flowing from the union I also thank you for your support over the last two financial
negotiations. The ability to price appropriately for the specialised years and look forward to engaging with you as we continue
Cash-in-Transit services remains a challenge and will continue to to shape the cash-services sector.
attract significant focus in the future.
I am confident that with the guidance of the Board of
Staff remain our greatest asset and whilst there are ongoing Directors and the support of the SBV team we will continue to
efforts to improve the level of engagement with our teams across successfully sustain the business.
our South African, Lesotho and Namibia business, we recognise
that we can never do enough to ensure that staff are aligned and Mark Barrett
engaged to deliver the outcomes for the organisation. CEO, South Africa
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SBV SERVICES INTEGRATED REPORT 2017
GROUP STRUCTURE
4
SBV SERVICES INTEGRATED REPORT 2017
WHAT WE DO
We provide quality, sustainable and integrated risk, security and
cash-handling solutions that:
• Serve the customers’ needs;
• Employees can be proud of; and
• Create value for all our Stakeholders
After all, it is not just about money, it is about life.
STATEMENT OF PURPOSE
• We play a critical role as the appointed agent
to the shareholder banks to enable cash availability
• We ensure that we meet the cash and security
requirements to safely move, store and process
items of high value
• We support the Central Bank’s objective
to increase cash velocity
• We manage cash risk
VALUES
• Teamwork
• Integrity
• Respect
• Customer Focus
• Leading SBV
VISION
SBV’s vision is to be the preferred, commercially independent,
international, industry expert in moving, holding and processing
items of high intrinsic value.
MISSION
SBV is the leading provider of innovative, secure and cost-efficient
solutions and services for the processing, moving and managing
of cash assets and other items of high intrinsic value and high risk.
We are the trusted and preferred partners of the banking industry.
5
SBV SERVICES INTEGRATED REPORT 2017
OUR PRESENCE
Ongwendiva
Namibia
Windhoek
Louis Trichardt
Lesotho Mahwelereng
South Africa SMCR
Polokwane
Rustenburg
Burgersfort
Ormonde
LIMPOPO
Bedford Centre SMCR
Cradlestone SMCR Secunda
SMCR Nelspruit
Eastgate SMCR
Greenstone SMCR Waltloo
Kempton Park Midrand MPUMALANGA
Mahikeng Mall Of Africa SMCR Emalahleni
GAUTENG
NORTH WEST Vaal
Klerksdorp
Newcastle
Welkom KWAZULU-NATAL
Bethlehem Richards Bay
Kimberley
FREE STATE
Pietermaritzburg
Bloemfontein
Riverhorse
LESOTHO Durban
NORTHERN CAPE Maseru Pavilion SMCR
South Africa
Port Shepstone
Mthatha
EASTERN CAPE
East London
WESTERN CAPE
George Port Elizabeth
Cape Town
6
SBV SERVICES INTEGRATED REPORT 2017SBV SERVICES – AN OVERVIEW
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SBV SERVICES INTEGRATED REPORT 2017OUR STORY – ENABLING SEAMLESS CASH SUPPLY
ACROSS THE VALUE CHAIN
A
frica still has predominantly cash-based economies,
which means that managing the life cycle of cash has
a direct impact of the integrity of the economies in
which we work. At SBV, we pride ourselves on making sure
that cash in circulation is of a high quality, always available,
where it’s needed and on time.
Every year, SBV processes R1.8 trillion in cash and we transport
R1 trillion in notes and coins. On average in a month we service
over 13 000 ATMs, 3 000 bank branches and 5 000 retail sites.
This means that we have touchpoints at every place along the
cash life cycle: a responsibility that we take very seriously.
One of our key partnerships is with the South African Reserve
Bank (SARB). The SARB is responsible for removing old notes
from circulation and replacing them with newly printed ones.
Managing the rate of coin and note production to replace old
and worn notes involves a complex economic balance. SBV
provides the SARB with valuable, on-the-ground insight into
the demands across different touchpoints of the cash cycle.
SBV ensures sustained cash availability, while managing the
associated costs and risks.
The movement of cash is intricate and extensive and a single
banknote or coin will pass through a multitude of hands and
systems during its lifetime. Maintaining a balance across the
cycle to ensure that cash is available wherever it is needed,
though not piling up in excess quantities, requires significant
information management, data collection and analysis.
Once implemented, good cash management can have a positive impact on the way in which the economy functions and can keep logistical
costs at a minimum for all participants in the cash cycle. SBV is part of the solution in achieving this.
Cash is more than just money, it’s about people, quality of life, business and commerce. Cash helps to maintain a healthy, integrous economy.
8
SBV SERVICES INTEGRATED REPORT 2017Our reason for existing
S
BV Services is a guardian of cash and a curator of cash’s
journey through the economy. We partner with the
banking industry and the central banks to take care
of cash throughout its life cycle. We also offer customised
solutions for the banks’ retail clients. We add value at every
step of the cash journey by creating customised cash-
service solutions for our different clients and partners.
Our four major customers are
Absa Bank Limited, FirstRand
Bank Limited, Standard Bank of
SA Limited and Nedbank Limited.
Our goal has been to help our
customers benefit from a reduction
in their cash management costs
and risks and provide them with an
array of innovative solutions.
Through a focus on strengthening and sustaining our partnerships and significant investments in our capabilities and business processes, as well
as a consistently low risk profile, we have built our reputation as a trusted leader in the cash environment.
Our steadfast reliability and integrity are essential for the continuation of our business and are what make our clients trust us as a reliable cash-
services partner. We endeavour to embody integrity and stand out as a world-class, ethical and professional company. We have a thorough
understanding of our customers and the dynamics involved in the cash industry. Even in the face of challenges, we aim to consistently do the
right thing, and take accountability for all our decisions.
SBV has a remarkable capacity for innovation and one of our key distinguishing features in the market is our adaptability to meet the needs of a
continually changing sector. This adaptability has led to recent highlights like the development of smaller cash centres for the handling of cash
collected from clients’ premises and our shopping mall cash-recycling system.
We value the people we encounter at every point in our work, including our employees, our clients and the public, and all our solutions are
designed with people in mind. Innovations developed by SBV always prioritise public safety and the safety of our cash-in-transit employees, and
clients have seen the benefit of this. Our solutions and services keep people safe, cash flowing and optimum efficiencies in place along the cash
supply value chain. SBV takes care of the risks associated with cash, and provides peace of mind and smart solutions.
History and recent highlights
Founded in 1986, SBV Services is a leading provider of cash services and solutions in South Africa. In addition, we have
expanded into other African countries, including extending our business into Namibia and Lesotho. In total, SBV has 36 cash
centres plus 8 Shopping Mall Cash Recycling Centres, a fleet of over 1 000 vehicles, and a workforce of over 6 300 people in
South Africa, and over 900 people in Namibia and Lesotho. We provide a suite of customised cash services and solutions to banks
and the commercial and retail environments.
9
SBV SERVICES INTEGRATED REPORT 2017Prosegur – a key strategic
partnership
In 2016, SBV Services formed a strategic alliance with
Prosegur a global leader in the private security industry, with
the sale of a 33.33% stake in our ownership to the Madrid-
based company. The alliance forms part of SBV’s strategy for
sustainable growth and diversification, particularly as we look
to continue expanding into Africa.
Our engagement with Prosegur dates back to 2010 and this
relationship has enhanced our competitiveness as a key player
in the cash sector. The alliance is a positive step for our two
companies as we will maximise synergies through the transfer
of knowledge, resources and capabilities. With a global
industry leader on board, we will raise the bar on international
best practice within the African cash environment and increase
our ability to grow and diversify our business.
Prosegur is a global company in the private security industry. It
has over 160 000 employees and a presence in Asia (China, India
and Singapore), Europe (France, Germany, Luxembourg, Portugal
and Spain), Oceania (Australia) and Latin America (Argentina,
Brazil, Chile, Colombia, Mexico, Paraguay, Peru and Uruguay).
Prosegur offers companies, households and retail businesses
security that they can trust, based on the most advanced
solutions in the market.
SBV’s existing partnership with the four largest banks in South
Africa, our national infrastructure and our expertise in the cash-
services sector, make the alliance a strategic achievement for
Prosegur, whilst also giving it an African presence.
Since 2001 Absa Bank Limited, FirstRand Bank Limited,
Standard Bank of SA Limited and Nedbank Limited have
each held a 25% shareholding in SBV. With the new Prosegur
alliance, the banks each hold a 16.67% share in the business.
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SBV SERVICES INTEGRATED REPORT 20173 Decades in the cash-services sector
On 26 September 2016 SBV celebrated
30 years in business. Our growth,
innovation and commitment to the
cash-services sector over the past three
decades have established SBV as a
leader in the South African cash market
and in other key markets across the
continent.
Over the last 30 years, SBV has been a front runner in developing
technology to constantly improve our services and capabilities in the
cash industry. SBV leads the industry by maintaining a low risk profile,
statistics provided by the South African Banking Risk and Information
Centre (SABRIC) on cash-in-transit crime bear testament to this as
SBV consistently experiences the least number of attacks. Recent
investments and developments include establishing Automated
Commercial Deposit Processing in our cash centres to reduce the
time and cost of processing cash.
SBV has also increased its IT capability with investment in data
production and business intelligence integration with our banking
clients’ cash management systems through Inventory Supply
Accounting (ISA) for better efficiency in cash management. In
addition, we have invested in research and testing of new technology
that contributes to the mitigation of risks in both the Processing and
Logistics environments.
Our commitment to continually developing and improving our
services has been a key part of our success and sustainability.
From humble beginnings as a utility company, our expansion into
a fully integrated cash-services organisation and our increased
geographical reach are an exciting foundation on which to build for
the next 30 years.
SBV’s journey would not have been possible without the
partnership of others. Dedicated employees and an executive
team that is committed to excellence and growth have been
a fundamental part of our successes.
11
SBV SERVICES INTEGRATED REPORT 2017In honour of Mandela Day and to celebrate SBV’s 30th Anniversary, 30 000 colouring books and crayons were printed
and distributed by SBV employees to homes and schools in their communities. These colouring books were custom
made including designs and stories of hope contributed by SBV’s employees and covered themes of conservation and
saving – topics which reflect SBV’s values and hope for future generations.
KEY STATISTICS – OVERVIEW OF OUR EXISTING CAPABILITIES
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SBV SERVICES INTEGRATED REPORT 2017OUR BUSINESS ENVIRONMENT AT A GLANCE
A
s a key role player in the economy and partner to the Central Banks and the Commercial Banks, SBV’s business environment is
influenced by several complex and intricate components that are interdependent. An impact or change in one element of our
business has a consequence on every other component. We are cognisant that our shareholders and customers are feeling the
pressures of a challenging economic and political climate and this places significant pressure on SBV to contain the costs of the company’s
cash services and solutions while at the same time investing in the business to improve efficiencies, mitigate our risks and meet the needs of
our customers. Furthermore, lower living standards, the unemployment rate, and crime and corruption expose our people and our business
to severe risks.
We face several other challenges including complex relationships and dependencies
on the shareholding banks who are also our customers and whom we need to support
in realising their own strategic deliverables.
We are, therefore, reviewing our business model to clarify roles and expectations so that benefits can be derived for both SBV and our
partners. The retail market is also volatile and price sensitive presenting ongoing pressures to reduce our pricing structures. We are, however,
focused on the protection of human life and will therefore not compromise on the costs that we need to incur to protect people and assets.
Despite the challenges that the business faces, SBV is a solutions and customer-focused business and has taken several deliberate measures
to build the business and to address its customer’s issues. Through the foundations that we have built over the last two years, we are currently
at the forefront of the industry in terms of our infrastructure, capabilities, technology, risk management and talent acquisition.
We have recognised the opportunities presented by the challenges that our business has faced and have reshaped our business to deliver
on our promises to our customers and to the cash-services sector while at the same time ensuring sustainability.
Political
Instability and conflict in Parliament coupled with looming allegations of fraud and corruption have created serious
reputational damage in South Africa and have resulted in a lack of confidence in the integrity and capability of Parliament’s
governance. These conditions have been aggravated by service delivery failures. A decline in consumer business confidence
has a impact on SBV’s customers as purchasing, manufacturing and trade slow down.
Economic
Fluctuating fuel prices have an impact on SBV’s variable costs and also the consumer. Low economic growth, food inflation
as a result of the drought season, a weakening Rand and South Africa’s downgrading to junk status have had a negative
impact on consumers and businesses resulting in pressure on the banks and our retail clients to contain operational costs.
Social
Over the last year South African businesses have been significantly impacted by ongoing strike and protest action and this
in turn has had an impact on SBV’s operations. With contingency plans in place and dedicated teams within our operations,
the impact on service delivery has been successfully contained.
Consumers are under severe pressure and faced with debt issues, this is compounded by a growth in unemployment,
inflation, low living standards and inequality with high levels of poverty. This complex social environment potentially
exposes the cash industry to crime, it also can potentially foster fraud and dishonesty. Fraud, crime and corruption increase
insurance costs as well as the costs of acquiring intelligence and technology thereby adding to the capital expenditure
and operational costs to the business. Despite these challenging conditions, SBV continues to create job opportunities
and to invest in skills development, training and education. SBV’s talent force, of more than 7 000 employees has remained
consistent with no job losses being suffered over the period. Employee wellness is also a key focal point and the company
offers several programmes and benefits to enhance employee wellbeing and lifestyle.
13
SBV SERVICES INTEGRATED REPORT 2017Technological
Cybercrime continues to present challenges and threats at a global level and is a critical component of our IT risk
management framework.
A key component of SBV’s strategy over the last two years has been the advancement of our IT capabilities and to improve
efficiencies and reduce costs to the banks through automation.
Our customers have already started to gain visibility of the benefits of our investments and, looking ahead, our strategy is
to provide greater integration with the bank’s systems with added automation. Furthermore, the deployment of advanced
technology is instrumental in mitigating SBV’s risks.
Legal
Cash availability and the handling of cash is highly regulated by the Currency and Banking Act and is governed by the
South African Reserve Bank Act. As a preferred partner to the SARB, SBV ensures that its practices are aligned to legislation
and leads in the cash-services sector to support the SARB’s objectives by ensuring the velocity of cash, safeguarding the
quality of cash, ensuring cash availability and mitigating systemic risks.
Complexities are also presented by the Competition Commission’s legislation and we need to ensure that our practices
and competitiveness in the industry are equitable.
Environmental
SBV is conscious of its responsibility to reduce the impact that it has on its environment and in addressing the global
warming crisis. SBV’s most significant impact on the environment is the fuel consumption and carbon emissions of its
fleet and as such it is currently replacing its entire fleet with engines that are compliant with Euro 3 standards. Fleet
management technology also plays a role in ensuring that our fleet is efficiently managed and as such is reducing our fuel
consumption.
SBV’s recently developed cash centres are fitted with solar panels and water tanks. Furthermore, lighting in all our buildings
has been replaced with energy efficient lighting.
SBV is committed to effectively monitoring and managing its water and electricity consumption and to the implementation
of a national waste management and recycling programme within the next year.
Power and water cuts together with extreme weather conditions have also had a significant impact on the commercial
environment. SBV has played a supportive role in ensuring cash continuity and security over these periods and has
developed a Business Continuity Plan for disaster recovery and cash risk mitigation.
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SBV SERVICES INTEGRATED REPORT 2017LEADING A BETTER BUSINESS FOR TOMORROW
SBV is on a relentless drive to lead in customer service, risk and expertise and this has
been articulated in SBV’s strategy, which is founded on six pillars:
• n ongoing focus on people, with the ultimate goal to retaining our top talent, fostering an engaged and committed workforce and to
A
be an Employer of Choice.
• Re-enforcing and growing our partnerships with the banks and central banks and the diversification of our business.
• An inward focus on driving efficiencies, automation, IT integration and service excellence.
• Enabling delivery through the effective deployment of the six capitals (financial, human, social and relationship, intellectual, manufactured
and natural) to support our operational teams.
• An outward focus on our customers and on providing innovative products and solutions to the market and bespoke solutions to our
customers.
• Risk mitigation to protect people and assets.
SBV strategy
Over the last two years SBV has continued to make progress in executing our strategy while recognising the ongoing negative contribution
to cash-in-transit services, and the commitment to cash availability principles. We have successfully executed capital expenditure programmes
to strengthen our position as a leader in the cash services sector and to improve sustainability. Furthermore specific emphasis was placed on
establishing strong operational stability to deliver positive business results.
15
SBV SERVICES INTEGRATED REPORT 2017What we have achieved to date
2015 – 2016: Stabilisation of the business
The integration of the Absa Cash Solutions business and the taking on of the Standard Bank Mthatha and Mahikeng centres played a key role
in identifying gaps within our business that needed to be filled so that we could build a stable, world-class business that allows us to manage
customer expectations and complex markets.
2016 – 2017: Margin management and profitability
We reviewed costs at every level of our business to ensure that we are profitable, meet the requirements of our shareholders and that our
cash-handling and cash-processing business grows.
Furthermore, we invested significantly in infrastructure, automation, lean methodologies technology and operational efficiencies to create
long term value for our stakeholders.
How we measure performance
SBV’s Strategic Committee has Lead
adopted the Balanced Scorecard with Risk
methodology to evaluate
and measure performance
throughout
the business. Operational
Excellence
Performance metrics are defined
by the strategy’s business goals
and are evaluated on a quarterly PEOPLE FIRST
basis by the management team, We are a people Service
business and are Excellence
the Stratco and the Board of
engaged, committed
Directors. and passionate
cash and security
experts Partnering with
Customers
and all
Stakeholders
SUSTAINABILITY
• Profitability
• Value Based Leadership
• Business Operating Model
• Corporate Citizenship
• Performance Excellence
16
SBV SERVICES INTEGRATED REPORT 2017The Board of Directors accepts that there are eight non-executive
directors appointed by four shareholding banks (The Standard
Bank of SA Limited, FirstRand Bank Limited, Nedbank Limited
and Absa Bank Limited) each owning a 16.67% share in SBV, and
four non-executive directors appointed by Prosegur owning a
33.33% share in SBV.
17
SBV SERVICES INTEGRATED REPORT 2017GOVERNANCE FRAMEWORK
Board of Directors
Grant Dunnington Group CEO (outgoing)
Mark Barrett CEO South Africa
Pieter Steyn Financial Director
Murray Stocks Nedbank Limited
Brian Duguid Nedbank Limited
Wally Fisher Standard Bank of South Africa Limited
Larry McCarthy Standard Bank of South Africa Limited
Luchaan Zeelie FirstRand Bank Limited
Preggie Pillay Non-Executive Prospective Director **
Akash Singh Non-Executive Prospective Director **
Punki Modise Non-Executive Prospective Director **
Germán Gut (Prosegur) Non-Executive Prospective Director **
Gonzaga Higuero (Prosegur) Non-Executive Prospective Director **
Louis Oro (Prosegur) Non-Executive Prospective Director **
Mar Oña (Prosegur) Non-Executive Prospective Director **
** Registration of the above directors with the Private Security Industry Authority (PSIRA) and Companies and Intellectual Property
Commission (CIPC) is pending.
The Board of Directors accepts that there are eight non-executive directors appointed by four shareholding banks (The Standard Bank of
SA Limited, FirstRand Bank Limited, Nedbank Limited and Absa Bank Limited) each owning a 16.67% share in SBV, and four non-executive
directors appointed by Prosegur owning a 33.33% share in SBV.
There are three executive directors appointed. A formal evaluation of the Board, its committees and its directors, is carried out annually. Board
responsibilities include:
• Compliance with King III and King IV;
• Setting and implementation of strategic objectives;
• Approval of major acquisitions, disposals and capital expenditure; and
• Oversight of internal control systems, governance and risk management.
In compliance with King III and King IV the Board acts in the best interests of the company stakeholders by:
• Complying to the charter stipulating the Board’s responsibilities;
• Holding quarterly board meetings;
• Monitoring the relationship between management and all stakeholders of the company; and
• Identifying, monitoring and addressing risks that present potential threats to the company’s sustainability. Risk committee meetings are
held on a quarterly basis to assess the progress made on the mitigation of identified risks.
Executive structure and responsibilities
Grant Dunnington Group CEO (Chairman, outgoing)
Mark Barrett CEO: South Africa
Pieter Steyn Chief Financial Officer (appointed 1 September 2016)
Derek Singh Executive: Risk and Compliance (“acting” since September 2017) and Infrastructure
Fanie Pretorius Executive: Logistics
Hamilton Melane Executive: Cash Processing
Ravina Reddy Executive: Human Resources and Corporate Relations
Sanjay Moothiram Chief Information Officer (appointed 1 September 2016)
Shaun Nicholls Executive: Business Transformation and Industry
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SBV SERVICES INTEGRATED REPORT 2017SBV Executive Structure
The Group CEO, is responsible for the appointment and termination of the Strategic Committee members (subject to the approval of the
Appointments and Remuneration Committee). The Strategic Committee is responsible for:
• Developing Group and business unit strategies;
• Monitoring strategic progress in terms of key milestones;
• Measuring performance against the company scorecard; and
• Reviewing of the operational, safety and sustainable development procedures of the company’s business units.
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SBV SERVICES INTEGRATED REPORT 2017Sub-committees of the Board
Sub-committee Responsibilities Attendees
Social and Ethics Monitor the company’s activities associated with any relevant legislation, other W Fisher
Committee legal requirements or prevailing codes of best practice including: (Non-Executive Chairman)
(Meetings held quarterly) • The Broad-Based Black Economic Empowerment Act
• The Employment Equity Act L Zeelie
• Labour and employment matters (Non-Executive Member)
• Good corporate citizenship
• Promotion of equality, prevention of unfair discrimination, and reduction of A Singh
corruption (Non-Executive Member)
• Contribution to the development of communities
• Recording of sponsorship, donations and charitable giving B Duiguid
• The company’s activities relating to the environment, health and public safety (Non-Executive Member)
• Monitoring Consumer relationships, including advertising, public relations
and compliance with consumer protection laws L Oro
• Development of the framework, policies and guidelines for health, social (Non-Executive Member)
investment, HIV/Aids and environmental management
• Review of the policies and performance in respect of sustainable SBV Services
development of the Group and the progressive implementation of its G Dunnington
policies M Barrett
• Encouragement of independently managed subsidiaries, associates P Steyn
and significant investments in the Group to develop policies, guidelines R Reddy
and practices congruent with the Group’s health, social, HIV/Aids and D Singh
environmental policies S Moothiram
• Receive and consider reports from all companies in the Group covering H Melane
sustainability matters and produce the biennial Integrated Report, which F Pretorius
focuses on the impact of the company in the economic, environmental and L Keta
social spheres D Knoetze
• Consider material, national and international regulatory and technical
developments in the fields of health, social, HIV/Aids and environmental
management
• Ensure facilitated participation, co- operation and consultation within the
Group on health, social investment, HIV/Aids and environmental matters
with government, industry, national and international organisations and
institutions
• Provide guidance relative to the initiatives required to maintain the
company’s listing in the Responsible Investment Index Series
• Provide guidance in relation to the promotion of good sustainability
practices.
Investment Committee • Reviews and assesses mergers and acquisitions; P Pillay
(Meets as required by • Reviews and assesses all business investments; and L McCarthy
the business) • Reviews benefits realisation. M Stocks
P Modise
G Higuero
G Dunnington
P Steyn
M Barrett
D Singh
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SBV SERVICES INTEGRATED REPORT 2017Sub-Committees of the Board
Sub-committee Responsibilities Attendees
Risk and Audit • rovides enterprise risk management (ERM) oversight by monitoring the
P W Fisher (Non-Executive
Committee implementation of the agreed SBV risk framework and driving corrective Chairman)
(Meetings held quarterly) actions based on the risk reporting provided; L Zeelie (Non-Executive
Member)
• Assists the Board in discharging its duties relating to the safeguarding of A Singh (Non-Executive
assets; and Member)
• Operates adequate control processes and systems and the preparation of B Duiguid (Non-Executive
accurate financial reporting statements in compliance with all applicable Member)
legal requirements and accounting standards. L Oro (Non-Executive
Member)
SBV Services
G Dunnington
M Barrett
P Steyn
R Reddy
D Singh
S Moothiram
H Melane
F Pretorius
L Keta
D Knoetze
KPMG
P Fourie
C Pietersen
IT Sub-committee • E nsures alignment of the IT strategy and the execution of the business L Zeelie (Chairrman)
(Meetings held quarterly) strategy. W Fisher (Non-Executive
Member)
G Dunnington
M Barrett
R Anderson
A Geyer
P Grobler
P Human
I Keller
H Lesar
N Maharaj
P Makabane
H Melane
S Moothiram
V Naidoo
L Naudee
S Nicholls
F Pretorius
D Singh
P Steyn
REMCO • onitors and ensures the objectivity, credibility and integrity of the
M L McCarthy (Chairman)
(Meetings held quarterly) remuneration framework. M Stocks
• Makes key remuneration decisions. G Higuero
P Pillay
P Modise
G Dunnington
M Barrett
R Reddy
21
SBV SERVICES INTEGRATED REPORT 2017BOLSTERING OUR RESILIENCE & ENSURING SUSTAINABILITY
THROUGH A SOUND RISK MANAGEMENT FRAMEWORK
S
BV is continually focused on reducing its risks and this is supported by significant investments in increasing automation and acquiring
technology that is aligned to global best practice. We are also dedicated to the Business Continuity Management of the cash industry
and effective crisis management, a responsibility that we take seriously.
SBV Risk Management Framework
Managing risk will always be integral to generating sustainable shareholder and stakeholder value. SBV endeavours to apply the principles
of King IV to such an extent as to make risk management not only a reporting and oversight obligation, but a management discipline. In
support of this, risk management forums have been established to further support the formal risk reporting structures and to drive risk
management as part of the culture and organisational practice at SBV.
Stratco/Executive Management
The SBV executive and its management structures are responsible for applying the defined risk management process across the business.
This enables management to identify potential events, which if they occur, will affect SBV in achieving its strategic objectives. Risks will be
managed within SBV’s risk appetite and tolerance levels as set by the Board.
Risk Management Services
The Risk and Compliance Division is the owner of the SBV Risk Management Framework and drives the implementation and reporting of all
risks in SBV. This includes:
• Defining and implementing the risk process;
• Facilitating risk workshops with all areas of the business annually;
• Ensuring updates to risk reporting at least quarterly;
• Tracking and updating on risk corrective actions;
• Reporting on all risks to line management and Stratco;
• Providing status reports on risks to the Risk and Audit Committee; and
• Driving risk management as an effective management tool in SBV.
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SBV SERVICES INTEGRATED REPORT 2017Risk Management Approach To manage all risk areas, the senior management team will
focus on implementing mitigating controls and action plans
The Risk Management Framework is derived from the lines of including the following potential risks:
assurance as per the King IV Report. The framework enables
management to assign resources efficiently to mitigate the
significant risks to an acceptable level and to identify who is
Structural review of SBV to meet
responsible for each risk. shareholder objectives
It is imperative that a structural review of SBV is conducted
To assist with the overall risk management process, risk in terms of what Shareholder objectives it supports and how
registers are grouped into the following categories: it supports them. This may drive a new target operating
• Strategic Risk Report, supported by: model for SBV and includes a detailed review of the costing of
– Information Technology products and services and a review of pricing strategies as well
– People and Communication as its commercial industry responsibilities. These initiatives
– Logistics include operational, financial and people efficiencies which
– Processing will create resilience and business sustainability.
– Finance
– Business Transformation The structural and operational review must close out the
– Infrastructure and Facilities following related gaps:
– Africa Operations • Diversification of income – The dependency on the four
major banks for the bulk of its revenue is a risk to SBV.
Management owns, and is accountable to the Board for • Outdated shareholder agreements – Our Shareholder
designing, implementing and monitoring, the process of risk agreements are outdated. The original principles and the
management and integrating it into the day-to-day activities basis for the formation of SBV has radically changed.
of SBV. The risk owners include the Processing Managers, • Non-alignment of Shareholder banks – There
the Logistics Managers, the Financial Director, the Executive: are differing views as to SBV’s role by the different
Human Resources and Corporate Relations, the Executive: Shareholders. This is based on the fact that there are
Processing, the Executive: Logistics, the Executive: Business differing needs from SBV by individual Shareholders.
Transformation and Industry, the Executive: Infrastructure and • Onerous contracts with banks – These contracts do
Facilities, the Chief Information Officer, the General Manager not cater for any significant changes in the environment
for Africa Operations and the Executive: Risk and Compliance. resulting in the inability of SBV to absorb material shocks
triggered by factors outside its control.
These risk registers are reviewed quarterly by each Executive • Risk vs rewards model is misaligned – The increasing
Head based on the following: trend in cash-in-transit heists as well as the recently agreed
• Actual loss experience; increased insurance excess layers continue to place the
• Control self-assessment results, completed by Processing risk for reward for SBV cash-in-transit services out of kilter.
Managers and Logistics Managers; The recent settlement with the Motor Transport Workers’
• Operational Risk Management dashboard results, Union (MTWU) has also added additional costs onto the
provided by Operational Risk Management team; cash-in-transit operations. The current wholesale cash-in-
• Internal audit reports; and transit operating model and the under-recovery of costs
• Reports or any other feedback from other internal and for these services cannot be underestimated.
external assurance providers.
SBV’s Risk Profile
This financial year saw a renewed steep trajectory in violent
heists and the threat of potential workforce instability. The
current deterioration in the external risk environment in
South Africa, continues to attract the attention of the
underwriters, which will significantly impact bottom line, and
places the overall 207/2018 budget at risk.
23
SBV SERVICES INTEGRATED REPORT 2017JOINING FORCES IN THE BATTLE AGAINST CIT CRIME
The industry cash-in-transit (CIT) risk has continued on a steep upward trajectory and we are alarmed about the recent targeting of CIT
companies by criminals. CIT crime is characterised by excessive violence and shoot outs between the perpetrators and CIT members as well
as the SAPS. Attacks are carried out with military precision and the use of explosives is increasing.
In this financial year as at 31 October 2017, SBV has experienced 15 CIT robbery incidents. Industry CIT robbery incidents have increased by
44% from 2016 YTD (218 incidents) to 2017 YTD (313 incidents). Incidents in October 2017 increased by 24% compared to October 2016.
42 incidents were reported for the month of October, the highest since August 2009. Based on monthly trends over the past five-years
(2012-2016), incidents for November 2017 will exceed 30.
SBV is reinforcing its internal systems and risk mitigation measures to keep our employees, the public and our customers’ assets safe. We are
also working closely with our industry partners, with SABRIC, the authorities and law enforcement officials to ensure that everything possible
is being done to prevent these serious crimes.
Our Risk and Compliance team is committed to ensuring that
justice is served and we are pleased that over the last two months
five criminals have been convicted and sentenced, one of whom
was involved in the murder of an SBV employee.
Despite the increase in CIT crime, SBV has maintained the lowest
risk profile and we will persist in further reducing, mitigating and
fighting CIT crime.
We are, however, conscious that the entire industry is vulnerable
to CIT crime, at all times, and will work collaboratively with all role
players to reduce this iniquitous threat to the industry and society
at large.
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SBV SERVICES INTEGRATED REPORT 2017SBV’S SECURITY HEROES
In honour of SBV’s Logistics Heroes
Behind the wheel of SBV’s cash-carrying vehicles, on foot at strategic sites in
commercial areas, guarding ATM sites and moving purposefully through
public spaces, SBV’s Logistics employees are on duty ensuring that human
lives are protected whilst ensuring that cash is available to keep the economy
flowing. SBV’s Logistics teams are our security heroes who are dedicated to
public safety, to the communities that SBV serves and to their teams.
SBV’s Protection Officers are highly trained to perform their duties in dangerous
environments and to effectively respond to security threats. CIT crime is,
however, extremely violent and there are unfortunate incidents where team
members are injured and even more tragically when there is a loss of life.
In October 2016, SBV held its second Annual
Remembrance and Bravery Recognition
ceremony in recognition of individuals who
have demonstrated extraordinary acts
of bravery in the face of danger and in
remembrance of our team members who
lost their lives in the line of duty.
We honour and remember our team members who sacrificed their lives
in the line of duty between November 2015 and September 2017.
Moses Thomas Manzini, from the Nelspruit centre passed
away on 7 September 2016.
Matthew Bongo Mdleleni, from the Cape Town centre
passed away on 1 April 2017.
Mpilo Pius Nxumalo, from the Durban centre passed away
on 31 March 2017.
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SBV SERVICES INTEGRATED REPORT 2017LEADING THROUGH BUSINESS CONTINUITY
MANAGEMENT AND DISASTER RECOVERY
Every organisation is at risk of experiencing SBV’s role – case studies
an incident that could prevent it from At the end of 2014 South Africa experienced increased power
outages and/or controlled load shedding, which was triggered
continuing normal business operations at by the collapse of a coal storage silo at one of Eskom’s power
any time. plants. This crisis caused frustration to the consumer and had
negative consequences for businesses. On 15 January 2015,
Eskom held a media briefing to communicate the state of
Therefore, those responsible for governance are responsible South Africa’s power supply, which at that point was extremely
to ensure that careful planning and preparation takes place constrained.
to enable the organisation to recover from such incidents as
soon as possible. SBV, as the representative of the CIT industry and Cash
Supply Chain Industry (“CSCI”), has been tasked as part of the
The development, implementation and maintenance of sound planning process by the National Joint Operating Committee
Disaster Recovery and Business Continuity plans at SBV rests with (“NATJOC”), with the development of a business continuity plan
the Stratco and the Risk and Compliance team. in the event of a severe crisis as a result of an electricity supply
distribution failure.
A high-level strategy and plan was developed based on a set
scenario as defined by (NATJOC) that took into consideration
the potential of a complete and total shut down of the electrical
grid with a resulting shut down of the Retail and Financial
Service industries. SBV, on behalf of the financial services sector
developed an industry plan for this and similar scenarios. The
objective of this plan was to implement actions to ensure that
the CIT industry can continue and sustain critical operations for
as long as possible with limited resources.
In recognition of SBV’s economic role in almost every component
of the cash value supply chain, SBV has been particularly
mindful of its obligation to ensure preparedness across all
of its key services. As part of SBV’s contingency planning, we
embarked on a progamme to safeguard electricity supply to all
our major facilities. Provision was made for additional fuel and
generator capacity at these facilities to ensure electrification
where there is a steep increase in the demand for electricity,
especially during certain peak periods of the year.
The Zion Christian Church (ZCC) is the largest African-initiated
church in Southern Africa. The church’s headquarters are at
Zion City Moria in Limpopo Province, South Africa. Every year
over the Easter weekend, an estimated 3 to 5 million ZCC
members travel to the Moria Mountain resulting in millions of
rand in circulation in the Limpopo province over the weekend.
Tourism continues to be an economic driving force and more
than 1.1 million tourists visited the Eastern and Western Cape
regions in December 2016. SBV ensures that cash is available
over these periods, that the associated risks are managed and
that as soon as the cash reaches SBV’s facilities, it is validated,
sorted and either stored or used for re-distribution.
26
SBV SERVICES INTEGRATED REPORT 2017SBV adds significant value to the South African Financial Services industry and particularity supports its bank partners. The Social Assistance
Act of 2004 and regulations to the Act provide the legal framework for the administration of social grants. Grants are targeted at categories of
people who are vulnerable to poverty and in need of state support. The Government Pensions Administration Agency paid out pensions and
benefits worth over R3.7 billion to approximately 114 200 beneficiaries during 2014/2015. SBV manages the cash handling process for the
majority of the monthly social grant withdrawals by the South African Social Security Agency, including pensioners’ grants.
The ATM remains a convenient, trusted self-service channel for many customers and continues to play a key role as a source of access to cash. SBV
manages over 3 000 ATMs on average per month as part of our strategy to ensure the availability of cash and the careful management thereof.
SBV’s role in managing systemic risk
SBV plays a major role in almost every component of the cash value supply chain, which necessitates significant work in developing strategies,
plans and actions that provide protection or alternative modes of operation for activities or business processes, which if interrupted, might cause
serious damage or significant loss.
Evolving core elements taken into consideration include:
• Crisis management and communications plan – a process designed to enable an effective response to an event. During the year, a hostage
management process was added to the SBV crisis management plan to prepare the business for effective planning and communication
protocols if such an event should materialise.
• IT disaster recovery – addresses recovering business critical IT assets, including systems, applications, databases, storage and network
assets.
• Business continuity plan or recovery plan – recovering critical business functions and processes that affect delivery of core services to
our clients. As a component of business continuity management, emergency response plans are documented and tested regularly. These
include immediate actions to preserve lives and safeguard property and assets.
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SBV SERVICES INTEGRATED REPORT 2017SOCIAL AND RELATIONSHIP CAPITAL
An Overview of our Stakeholder Engagement Framework
SBV is a sum of all its key stakeholders who are the pulse of our business. We recognise the important role that all of our relationships play in
enabling us to add value and to prosper. At SBV our engagements with our stakeholders are important and we are focused more than ever
on building and maintaining healthy, productive and sustainable relationships. We have key relationships with our people, Central Banks,
Commercial Banks, our shareholders, our clients, law enforcement, authorities, regulators and suppliers and we are dedicated to adding
continued value to all stakeholders supported by quality and enduring engagements.
An overview of our key stakeholder engagements:
Stakeholder How we engage with our stakeholders How we add value to our stakeholders
• uarterly Board meetings held with the SBV
Q • strong Stratco team develops an integrated
A
Shareholders and Stratco. strategy that takes all our key stakeholders
Investors • Formal committees such as the Appointments into consideration. The Stratco drives company
and Remuneration Committee, Audit and Risk objectives and is responsible for the delegation of
Committee, Social and Ethics Committee and the resources and the management of the business.
IT Steering Committee. • Deliverables of the strategy are measured against
a company scorecard.
Employees • E mployee engagement is a key focal point of • E ncourage employees to engage with one
the company strategy that is delivered by the another and to exchange ideas, experiences
Human Resources, Communications and Change and stories and also to provide feedback to
Management teams. management on their world of work.
• Shared culture and values system through the • Foster an environment that is conducive
Values in Action Campaign. to transparent and honest communication
• Dedicated Change Management team engages through the availability of various platforms for
with employees. communication.
• Updates, videos, presentations, posters and • A shared value system is fostered though the
the quarterly newsletter are used as platforms Values in Action campaign and contributes to
to keep employees informed on company an ethical work environment.
information, news, messages from the Stratco,
employee benefits, employee wellness, the
company strategy and campaigns.
• Roadshows hosted by the Regional General
Management team.
Transformation Committee
• Members at each centre and support office • T ransformation forums and engagements with
engage with employees to address any the Change Management team encourage
Transformation issues within a centre and to bottom up feedback and communication on
ensure that we are meeting transformation matters that are of importance to employees.
standards. • The Transformation forums play a critical
• The Executive Transformation Committee meets role in facilitating the achievement of our
quarterly and the centre committees meet employment equity plans and to drive
bi-monthly to address specific transformation employment equity objectives.
issues within a centre.
• The Executive Transformation Committee
provides input into the delivery of the
employment equity strategy.
• Annual reports on employment equity matters
are submitted to the Department of Labour for
assessment.
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SBV SERVICES INTEGRATED REPORT 2017Stakeholder How we engage with our stakeholders How we add value to our stakeholders
Employees Health and Safety Committee • ealth and Safety Committee provides a
H
• Health and Safety Officers give feedback from platform for reporting on risks that are relevant
employees to the Health and Safety Committee. to employees.
• The Health and Safety Committee meets on a
quarterly basis. • E mployees are incentivised and motivated
• A Cash Processing incentive scheme encourages for greater performance. This enhances the
greater delivery on efficiencies and productivity. customer service experience.
• Non-financial recognition and long-service • Employees are recognised and acknowledged for
awards. extraordinary performance.
• Annual Bravery Recognition and Remembrance • Employees who have demonstrated bravery
function and bravery awards. while defending an attack are awarded and
• Operational training and development through recognised at an annual awards function.
a dedicated training department. • Training of operations and logistics employees
• Company orientation and onboarding is of high importance and adds value to their
programmes. lives by improving their skills and experience.
• Education Assistance Programme for It also adds to our clients’ experience through
permanent employees. higher standards in service. SBV prides itself
• Performance management programme. on maintaining a high standard in its logistics
• Succession planning, talent management and training programmes, which ultimately result in
leadership development programme. the protection of human lives.
• Learnership programmes through the • Company orientation and onboarding enhances
Milpark Business School. employees knowledge and fit into the company,
• KPMG Ethics Hotline to report unethical and assists new employees to embrace the company
fraudulent activity. culture and opens the lines of communication
• Early Warning Robbery Hotline to report on any from the start.
criminal activity. • Education assistance programme provides
• Professional Employee Relations team engages opportunity for personal development.
with employees on disciplinary and grievance • Employees have clear guidelines on
procedures. expectations, the company scorecard and
• Employee Relations team administers and visibility of their personal development.
assists employees and their families with • Succession planning and talent management
the distribution of benefits, counselling and mobilises the retention and motivation
support. of employees and executives. Leadership
Development Programme empowers managers
to engage with employees and to drive a
performance culture.
• Opportunity for growth and development in
specialised areas of the business environment.
• Putting our people first through a continued
focus on providing a safe and secure working
environment.
• Whistle blowing promotes a culture of integrity
and mitigates risks.
• Fair and equitable engagement process aligned
to legislation.
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