Lewis : Integrated Report 2023

INTEGRATED ANNUAL REPORT 2023

FOR THE YEAR ENDED 31 MARCH 2023

OVERVIEW	CREATING VALUE	LEADERSHIP	OPERATIONS	FINANCIAL	GOVERNANCE	SHAREHOLDER	1
	FOR STAKEHOLDERS		REVIEW	REVIEW		INFORMATION

01 OVERVIEW

Review of 2023 financial year	03
Introducing the Integrated Report	04

02 CREATING VALUE FOR

STAKEHOLDERS

Group profile	07
Value creating business model	08
Strategy and targets	09
Material issues and risks	11
Stakeholder engagement	15
Investment case	18
Sustainability report	19

ADDITIONAL ONLINE CONTENT

The Integrated Report is supplemented by additional financial and governance related reports which are available online at www.lewisgroup.co.za

• Annual financial statements 2023
• Five-yearfinancial review
• Corporate governance report
• Application of King lV principles
• Social, ethics and transformation committee report
• Annual general meeting*
• • Notice to shareholders
  • Form of proxy

* Will be issued in due course

03 LEADERSHIP

04 REVIEWOPERATIONS

Chairman's report	29				Merchandise, supply chain and stores	37
			Managing credit risk		40
Board of directors	31
Chief executive officer's report	33
Executive management	35
	00
	Investment case
	05	REVIEWFINANCIAL
	00
	Sustainability report	43
	Chief financial officer's report
	Five-year review	46
	Independent00	auditor's report	47
	Summary consolidated financial	47
	Stakeholder
	statements
	engagement
	06	GOVERNANCE	07	INFORMATIONSHAREHOLDER
	Corporate governance report	61	Shareholder analysis	77
	Shareholders' diary	78
	Remuneration report	65
	Corporate information	78

LEWIS GROUP INTEGRATED ANNUAL REPORT 2023

OVERVIEW	CREATING VALUE	LEADERSHIP	OPERATIONS	FINANCIAL	GOVERNANCE	SHAREHOLDER	2
	FOR STAKEHOLDERS		REVIEW	REVIEW		INFORMATION

01

OVERVIEW

REVIEW OF 2023 FINANCIAL YEAR	03
INTRODUCING THE INTEGRATED REPORT	04

LEWIS GROUP INTEGRATED ANNUAL REPORT 2023

OVERVIEW	CREATING VALUE	LEADERSHIP	OPERATIONS	FINANCIAL	GOVERNANCE	SHAREHOLDER	3
	FOR STAKEHOLDERS		REVIEW	REVIEW		INFORMATION

REVIEW OF 2023 FINANCIAL YEAR

		MERCHANDISE SALES		REVENUE		GROSS PROFIT		SATISFACTORY PAID		COLLECTION RATES
		INCREASED BY		INCREASED BY		MARGIN AT		ACCOUNTS AT		STRENGTHENED TO
		1.4%		3.1%		40.6%		80.4%		80.8%
		to R4.4 billion		to R7.5 billion
		DEBTORS' BOOK		DEBTOR COST GROWTH		EARNINGS PER SHARE		HEADLINE EARNINGS PER		TOTAL DIVIDEND
		GROWTH OF		CONTAINED TO		DECREASED BY		SHARE INCREASED BY		MAINTAINED AT
		7.5%		7.0%		5.7%		1.0%		413
						to 689 cents		to 857 cents		cents per share

LEWIS GROUP INTEGRATED ANNUAL REPORT 2023

OVERVIEW	CREATING VALUE	LEADERSHIP	OPERATIONS	FINANCIAL	GOVERNANCE	SHAREHOLDER	4
	FOR STAKEHOLDERS		REVIEW	REVIEW		INFORMATION

INTRODUCING THE

INTEGRATED REPORT

We are reporting to shareholders on a year dominated by the global impact of the war in Ukraine and a stalling domestic economy under severe pressure from rising fuel, energy, food and borrowing costs, which has been compounded by the highest ever levels of electricity load shedding, all factors which have conspired to curb the country's growth prospects.

Our 2023 Integrated Report aims to demonstrate the resilient nature of the business model in the current constrained environment and how the Group has responded to the multitude of challenges to maintain and create value for our shareholders and other stakeholders.

REPORTING SCOPE AND BOUNDARY

The report covers information relating to the integrated performance and activities of the Group, which includes the main operating company, Lewis Stores (Proprietary) Limited, and its subsidiaries (the Group) for the period 1 April 2022 to 31 March 2023. The companies operate in South Africa, where 85% of the revenue is generated, as well as Namibia, Botswana, Eswatini and Lesotho.

The reportable segments are:

• Traditional retail, comprising Lewis, Best Home and Electric, and Beares
• Cash retail, comprising the United Furniture Outlets (UFO) chain

There have been no changes in the reporting scope and boundary over the past year.

The principle of materiality has again been applied in preparing the content and disclosure in this report. Materiality is determined by the board and is applied to internal and external issues that could positively or negatively affect the Group's ability to create value over time and are likely to have a material impact on strategy and performance. This excludes the disclosure of price-sensitive information or detail that could compromise the Group's competitive position.

GOVERNANCE AND COMPLIANCE

The Integrated Report reflects the Group's commitment to good corporate governance, underpinned by the reporting principles of accountability, transparency, balance and materiality.

Reporting complies with the requirements of the Companies Act and the JSE Listings Requirements while financial reporting complies with International Financial Reporting Standards (IFRS). The King Code on Corporate Governance (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 King lV. The Group's application of the 16 principles of the code is outlined in the King lV Report available on www.lewisgroup.co.za.

INTEGRATED REPORTING FRAMEWORK

The guiding principles of the Integrated Reporting Framework of the IFRS Foundation have been applied in preparing this report.

The framework recommends reporting to shareholders in terms of the six capital resources applied in the creation, preservation or erosion of value which are as follows:

Financial capital relates to the financial resources received from providers of capital and deployed by the Group.

Manufactured capital is the physical infrastructure used in the selling of merchandise, including retail stores (rented and owned), online store, storerooms and the Group's head office.

Human capital focuses on the competency, capability and experience of the board, management and employees.

Intellectual capital addresses the collective knowledge and expertise in the business as well as systems, processes, intellectual property and brands.

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

Natural capital deals with the environmental resources applied and utilised by the Group.

The impact of the six capitals on the Group's operations and performance is addressed in the relevant sections throughout the report and detailed in the Value creating business model on page 8.

LEWIS GROUP INTEGRATED ANNUAL REPORT 2023