Bell Equipment Limited | Integrated Annual Report 2020

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

STRONG RELIABLE MACHINES

STRONG RELIABLE SUPPORT

BELL EQUIPMENT LIMITED

INTEGRATED ANNUAL REPORT

2020

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Contents About this report

About this report ................................................................ifc

OVERVIEW

What we do ..........................................................................2

Our value creation process ................................................2

Our growth path ..................................................................4

Where we are ....................................................................... 6

Our business model and products .....................................9

Strategic overview and risk management .....................18

Global corporate structure ............................................... 26

Board of directors ...............................................................28

Group executive committee ............................................30

PERFORMANCE REVIEW

Joint report by the chairman and chief executive ......32

Finance director’s report ..................................................36

Corporate governance report ........................................39

Stakeholder relations report incorporating

sustainability elements ......................................................48

GENERAL

Glossary ..............................................................................66

Corporate information ................................................... ibc

This integrated annual report, which is the group’s primary

communication to shareholders and other Bell Equipment

stakeholders, covers the nancial year 1 January 2020 to

31 December 2020.

The report should be read in conjunction with the full audited

consolidated nancial statements and its notice of AGM. The

full audited consolidated nancial statements, which are

available on request from the company secretary at the group’s

registered ofce and online, provide a comprehensive insight

into the nancial position of the group for the year under review.

The following main codes and standards were considered in

providing information in the report:

• the Companies Act

• the JSE Listings Requirements

• King IV

• The IIRC’s International Framework

The scope of this report includes all of Bell Equipment’s subsidiaries

and operating regions. Bell Equipment continues to embed

management, sustainability and governance-related reporting

systems and processes in the operations. The six capitals are

reported on and the content focuses on the material issues

that have occurred during the nancial reporting period and

in certain instances up to the date of nalisation of this report.

Bell applies the principle of materiality in determining the

disclosures of the integrated annual report. The process of

identifying and prioritising the material matters for inclusion in this

report involved reviewing:

• its strategy;

• risks and risk management process;

• stakeholders; and

• the six capitals.

| OVERVIEW

The six capitals

HUMAN

INTELLECTUAL

SOCIAL AND

RELATIONSHIP

MANUFACTURED

ENVIRONMENTAL FINANCIAL

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

We welcome stakeholders’ feedback on our reporting, which

can be sent to [email protected].

GW Bell

Non-executive chairman

L Goosen

Chief executive

In order to achieve the group’s strategic objectives and manage

its risks, these material issues are continuously monitored by Bell

Equipment and its board, as the governing body.

Assurance in relation to its nancial statements continues to

be provided by the independent external auditor, Deloitte

& Touche. Bell Equipment applies the combined assurance

model which seeks to optimise the assurance obtained from

management and internal and external assurance providers.

The group continues to maintain internal accounting and

administrative control systems and procedures designed to

provide assurance that assets are safeguarded and that

transactions are executed and recorded in accordance with

the group’s policies and procedures.

The report may contain certain forward looking statements

other than the statements of historical fact which cannot be

construed as reported nancial results. Investors are cautioned

not to place undue reliance on any forward looking statements

contained herein, as they have not been reviewed or reported

on by the group’s external auditors. Whereas the group has made

every effort to accurately and reasonably ensure the accuracy

and completeness of the information contained within this

integrated annual report, any forward looking statements speak

only as at the date that they are made; the actual results may

vary materially from those expressed or implied; and the group

undertakes no obligation to publicly update or alter these or to

release revisions after the date of publication of this integrated

annual report.

Responsibility statement

The board acknowledges its responsibility to ensure the integrity

of information contained in the integrated annual report, the

notice of AGM and the annual nancial statements of the group

and both the audit committee and the board have applied

their collective minds in the preparation of this report.

The board is of the opinion that this integrated annual report

addresses all material issues, and presents fairly the performance

of the group. The integrated annual report, the notice of AGM

and the full audited consolidated nancial statements were

approved by the audit committee and the board on 23 April

2021.

23 April 2021

SCAN THIS BARCODE

to download this report

OR VISIT OUR WEBSITE

www.bellir.co.za

Bell determines its material matters through the

following process:

IDENTITY

• The process of identifying potential material matters is a

group wide responsibility requiring input from all business

units and operations, and taking into account input

from stakeholders.

• Areas of potential impact that are assessed include

nancial, environmental, social, strategic, competitive,

legislative, reputational and regulatory matters.

RANK

• Issues are prioritised according to operational and

strategic impact on the sustainability of the business.

• GEC assumes responsibility for approval of the

material matters before endorsement by the relevant

committees and nal approval by the Bell Equipment

board.

APPLY AND VALIDATE

• The material matters are applied to inform on Bell

Equipment’s long term business strategies and targets

as well as short to medium term business plans.

• This is undertaken through the execution of the group’s

strategy.

ASSESS

• The material matters are continuously assessed against

performance to strategy, impact on sustainability and

on stakeholders.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| OVERVIEW

What we do

Our value creation process

Strategies and daily operations are focused on building

long term relationships that will, in turn, generate continuous

machinery and aftermarket sales.

This is achieved by listening to our customers’ needs, developing

relevant equipment and aftermarket solutions, manufacturing

quality products and, above all, ensuring that stakeholders

throughout our value creation process receive meaningful

support to sustain our business.

Our corporate culture

Strong family values of integrity, honesty, accountability, and

respect have been ingrained in Bell Equipment since Irvine

Bell founded the company in 1954 as a small engineering and

agricultural equipment repair service in northern KwaZulu-Natal.

He was joined in the business by his wife Eunice, brother Rob

and brother in law Malcolm Campbell. Today the family ethos

continues with employees and customers globally valued as

part of the extended Bell family, creating a unique and healthy

working environment.

As a South African company that is listed on the JSE and

employs locally, Bell Equipment is an integral part of the

communities in which it operates and takes its responsibilities as

a corporate citizen seriously. The group purchases from local

suppliers wherever possible and invests in meaningful outreach

opportunities with a particular focus on education, training,

and development both internally and externally.

Aftermarket

Product

Development

Manufacturing

Distribution & Customers

Together the Bell Equipment group of companies manufacture, distribute, export,

and support a wide range of heavy equipment on a global scale to the mining,

construction, quarrying, agriculture, forestry, and waste handling industries.

Bell believes in the philosophy that if its customers succeed so will the group and it creates

value by striving to give customers the best ownership experience.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| OVERVIEW

Bell unveils the world’s largest

ADT, the B50D.

2002

The GLC is commissioned in

Jet Park, Johannesburg.

2008

Series III haulage tractors make

their entry.

2010

Truck assembly operations

commence in Europe.

2003

Bell releases Series II haulage

tractors into the market. A new

standard of excellence is set with

the launch of the D-series ADTs.

2001

Bell Equipment takes over the

Bomag dealership with the

German-based OEM.

2009

Bell Equipment establishes

beachhead in Russian market.

2011

Our growth path

Drawing on more than six decades of experience, our value creation process has

seen the company grow its intellectual property, product range, global footprint, and

reputation as a provider of quality heavy equipment. Developments in our most recent

history include:

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Bell Equipment re-enters the

Americas and commences

the appointment of distributors

and dealers in the region.

2012

Large E-series ADT enters

market.

2016

60 years in business. 50th anniversary of

Bell tri-wheeler. 30 years of ADT design and

manufacture. Introduced B60D.

2014

Gary Bell becomes chairman,

Leon Goosen chief executive. ALC

opened. Phase 3 expansion in

Germany commences.

2018

Bell takes its industry leading

technology underground with new

side mount low prole ADTs

2020

Launched new E-series ADT. Granted Terex

Finlay distribution rights.

2013

Kobelco Excavators join southern African

range. Phase 2 expansion work in Germany

completed. BESSA is 30% black women

owned following a BBBEE transaction.

2017

Introduced Series IV haulage tractors.

Concluded a two year investment into

new, upgraded CSCs (Middelburg,

Nelspruit, Rustenburg and Kitwe, Zambia).

2015

BECSA and BESSA conclude BBBEE

transaction and become 51% black

owned. Phase 3 German expansion

completed.

2019

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| OVERVIEW

Where we are

Bell manufactures and operates globally with machines in over 80 different countries

worldwide. The company values its global support network, which supplies equipment

solutions, ancillary products and after sales services. This network is, in turn, supported by

a robust OEM structure to ensure efcient lines of communication between end users of

the product and the group globally.

• Dealer network supported by Bell owned operations in

South Africa, Zambia and Zimbabwe

• Full range of Bell manufactured products throughout

Africa

• Full range of Deere, Bomag, Finlay and Kobelco

partner products in southern Africa

• Dealer parts stocking supported from logistics hubs in

Europe and Africa

Sub Saharan Africa

• Independent dealer network

supported by a Bell operation in the USA

• Full range of Bell ADTs supplied from

German assembly plant and Bell Tracked

Carrier supplied from South Africa

• Dealer parts stocking supported from

logistics hubs in USA, Europe and Africa

North America & Canada

• Independent dealer network supported from the

South African factory

• Full range of Bell manufactured products

supplied from South Africa

• Dealer parts stocking supported from logistics

hubs in USA and Africa

South America

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Manufacturing

Distribution

Products

Aftermarket

Key

• ADT assembly plant at Eisenach-Kindel, Germany

• Independent dealer network supported by Bell owned

operations in the UK, Germany and France

• Full range of Bell ADTs supplied from German assembly

plant

• Dealer parts stocking supported from logistics hubs in

Europe and Africa

Europe & North Africa

• Independent dealer network supported by a Bell owned operation

in Russia

• Full range of Bell ADTs supplied from South Africa

• Dealer parts stocking supported from logistics hubs in Europe

and Africa

Asia

• Independent dealer network

supported by a Bell owned

operation in Australia

• Full range of Bell manufactured

products supplied from South

Africa

• Dealer parts stocking supported

by logistics hubs in Singapore,

Australia and Africa

South East Asia & Oceania

• Bell manufacturing operation and headquarters in Richards Bay

• Network of Bell owned service centres

• Full range of Bell manufactured products supplied from South Africa

• Full range of Deere, Bomag, Finlay and Kobelco partner products

• Dealer parts stocking supported from logistics hubs in Europe and Africa

South Africa

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| OVERVIEW

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Southern Africa’s full

range material handling

distributor

Cost-effective agriculture

and forestry solutions

provider

Provider of aftermarket

services

Global ADT specialist and

innovation pioneer

Our business model and products

With a common thread of providing solutions for customers who require materials

handling machinery, the Bell business and products are clearly dened within four

groupings:

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| OVERVIEW

Bell Equipment has been manufacturing ADTs since the 1980s

and has emerged as a global ADT specialist due to its policy in

design and manufacture of simplicity, overdesign,

interchangeability of componentry and ruggedness.

Currently on its E-series generation of trucks, Bell is recognised as

a world leader and innovator for the ground breaking

technological advancements that it has pioneered over the

past three decades to improve safety, productivity and machine

efciencies.

With the largest range on the market, Bell offers customers

traditional 6x6 ADTs along with a niche offering of 4x4 ADT

crossover trucks that offer signicant cost advantages to

customers not needing 6x6 off road capability. These trucks still

provide sound all weather characteristics on undulating haul

roads and light terrain.

Across the range the ADT product’s versatility is further enhanced

through the Bell Versatruck programme that uses the ADT

platform as a base for tailor made solutions. An ADT’s ability to

be easily adapted to various roles such as a water or fuel tanker,

or a service truck, is a growing trend in South Africa and

elsewhere in the world.

Bell Equipment’s strategy is to focus on manufacturing

efciencies to ensure world class quality and durability across

the range.

Bell as a global ADT specialist

Proprietary eet management system

Uncompromising safety standards

Highest level of automated machine protection

Leading engine technology

Class leading fuel economy

Superior ride quality

First to market with innovations

Lowest cost per tonne/Reduced overall operating costs

Since the mid 1960s ADTs have become an increasingly familiar, and invaluable, sight on

many jobsites throughout the world. Demand has been driven by the versatility of the

trucks and their ability to go where other trucks are unable to go.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| OVERVIEW

The strategy has provided a win-win scenario as business is easier

for customers when they have only one supplier and one point

of contact for their equipment needs, particularly if that supplier

is able to deliver strong, reliable support. At the same time Bell

has been able to broaden its industry exposure.

The strategy going forward is to consolidate these product

ranges to improve the group’s ability to stock and support

machines that are popular in the market.

Combined, Bell Equipment’s partnerships enable the group to

meaningfully augment its own manufactured products, thereby

providing the full spectrum of equipment for mining, quarrying,

construction, roads and rehabilitation as well as the government

and waste management sectors.

Distribution takes place through Bell CSCs in South Africa, Zambia,

Zimbabwe and eSwatini and through dealer owned operations

elsewhere in southern Africa. Whether Bell owned or dealer

managed service centres, the focus is always on understanding

applications and customer expectations in order to provide the

right combination of equipment.

Bell as southern Africa’s full range materials handling

distributor

Meeting customers’ equipment needs

Premium like-minded partners

Diversied industries

Specialised manufacturers

Low operating costs

Innovative products

High performance and reliability

Full line solutions

Due to the Bell group owning much of its distribution network in southern Africa there has

been a dedicated focus on building the product range in this region to offer customers

a full range of equipment solutions across all industries. This has largely been achieved

through strategic partnerships with like minded OEMs that are leaders in their respective

elds.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| OVERVIEW

Today the group services agriculture and forestry with a carefully

selected combination of products that have been designed

to meet customers’ needs as they moved from manual to fully

mechanised operations.

The Bell tri wheeler, a founding product, can be adapted for

either sugarcane or timber handling or tted with forklift tines.

The group also manufactures a range of purpose built rigid

haulers and trailers as well as articulated tractors and ineld self

loading forwarders based on the proven Bell ADT product.

Through our own brand Matriarch Equipment we have

reafrmed our commitment to offer agriculture and forestry

customers specialised niche products. Two slew loaders are

aimed at sugarcane farmers wanting to embark on controlled

trafc practices while for the forestry industry there is the Skogger

timber extraction and loading machines, the FASTfell felling and

bunching machine and the LogPro loading machine.

Through the Kobelco partnership Bell is able to offer excavator

carriers to the forestry industry and Matriarch provides a

professional and thorough approach to the conversion of

Kobelco excavators for a wide variety of forestry applications.

This includes conversions to fully functioning forestry processors

as well as wheeled timber handling units.

Bell as a cost effective agriculture and forestry solutions

provider

Designed for ease of operation

First stage mechanisation

Lowest cost per tonne

Low to medium volume operations

Loading and haulage solutions

Purpose-built machines

Robust for harsh African conditions

Maximum availability and utilisation

The agriculture and forestry industries were the cornerstone of Bell in its formative years

and the group sees long term value in strengthening and growing this important aspect

of its business.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| OVERVIEW

The long term sustainability and shared resources offered by

an independent dealer have proven to be the most effective

model in global markets to ensure that our customers receive

the level of service and support that they expect. Dealers are

treated as part of the extended Bell family, which ensures a

commitment to direct customer communication so that the

group can understand the key focus areas that promote long

standing customer relations.

Our expansive dealer network is supported by strategically

placed, locally staffed Bell owned operations and a network of

logistics centres that are ideally positioned to provide quick and

efcient parts supply across the globe and the group continues

to invest in this support structure.

The Bell aftermarket package is aimed at positioning the group

as a partner rather than a supplier by offering multi faceted

support through every step of the Bell ownership experience.

From before a customer’s Bell ownership journey begins, the

group is able to provide expert advice on site requirements and

machinery selection as well as offer accessible and affordable

nance options. This support continues throughout the lifecycle

of a machine with solutions geared at protecting the equipment

asset, keeping the machine running and even giving customers

extra value through the second life of a machine or selling it on

as a pre-owned piece of equipment.

Bell as a provider of aftermarket services

Building on our belief that ‘if we help our customers succeed so will we’, Bell Equipment

places strategic importance on providing strong reliable machines that are backed by

strong reliable support wherever they are working in the world.

Bell ReMan

Bell Pre Owned Equipment

Bell Extended Warranty

Bell Fleetm@tic®

Bell Finance

Bell Lubricants

Bell Maintenance Contracts

Bell Parts

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| OVERVIEW

Strategic overview and risk management

HUMAN

INTELLECTUAL

SOCIAL AND

RELATIONSHIP

MANUFACTURED

ENVIRONMENTAL

FINANCIAL

The six capitals

OUR VISION

Bell Equipment’s vision is to be the global ADT specialist and a leader in the heavy

equipment and industrial goods sector, developing and supplying leading, quality

brands into the construction, mining, forestry, agriculture and industrial sectors in a

number of chosen markets.

STRATEGIC OBJECTIVES

EFFICIENCY: Focusing on what counts

TEAM: We all share the same goal

SAFETY: See you back tomorrow

QUALITY: Make a commitment and stick to it

CUSTOMER: If we help our customers succeed, so will we

STRATEGIC FOCUS AREAS

• Return on invested capital

• Global ADT volumes

• Aftermarket contribution

• Product and product support costs

• Increased intellectual property (new products)

• Human capital

• Transformation

• Strategic alliances

• Enhanced technology

Capture global ADT

volumes by providing

industry leading

product uptime and

value

Be the preferred

full range material

handling solutions

provider in southern

Africa

Maintain its Bell

heritage by providing

innovative niche

product solutions for

the material handling

sectors

Premium aftermarket

support throughout

the product lifecycle

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Maintain its

Bell heritage

by providing

innovative

niche

product

solutions for

the

material

handling

sectors

Premium

aftermarket

support

throughout

the product

lifecycle

Capture

global

ADT

volumes

by providing

industry

leading

product

uptime

and value

Be the

preferred

full range

material

handling

solutions

provider in

southern

Africa

Strategic

objectives

Strategic

focus areas

Measurement Risks Capitals

Global ADT

volumes

• Revenue growth

• Market share

• Aftermarket contribution

• NPAT

• ROIC

• Product attributes

• Dealer management

• ‘EYE’ contact experience

• Prolonged global economic crisis as

a result of the COVID-19 pandemic

• Competitor risk

• Currency risk

• Supply chain risk

• Regulatory risks

• Political risk

• Cyclical nature of construction

and mining equipment industry

Aftermarket

contribution

• Aftermarket revenue growth

• Innovative aftermarket products

• NPAT

• ROIC

• Aftermarket service levels

• Dealer management

• IT system development

• Development of aftermarket

logistics and sales channels

• ‘EYE’ contact experience

• Prolonged global economic crisis as

a result of the COVID-19 pandemic

• Competitor risk

• Currency risk

• Supply chain risk

• Regulatory risks

• Alternate parts suppliers

• Skills development

• IT system risks

Product and

product support

costs

• NPAT

• ROIC

• Competitor risk

• Currency risk

• Supply chain risk

• Regulatory risks

• Political risk

• Cyclical nature of construction

and mining equipment industry

Increased

intellectual

property (new

products)

• Research and development

investment

• Attraction and retention of top

engineering skills

• Regulatory risk

• Loss of skills

Empowerment,

transformation

and human

capital

• Enhanced BBBEE ownership and

BBBEE across all South African

entities

• Enhanced BBBEE recognition levels

• Work place surveys

• Leadership

• Apprenticeships

• Study assistance

• Staff turnover

• Internal promotions

• Union interactions

• Skill pool

• Staff turnover

• Loss of key skills

• Health and safety risks

Strategic

alliances

Product

• Product market shares

• Brand recognition

• ‘EYE’ contact experience

Components

• Value (warranty, cost, availability)

• Brand recognition

All

• Regular evaluation of all strategic

alliance partners

• Alliance partner product risks

• Currency risks

• Competitor risks

Enhanced

technology

• Enterprise resource planning

systems integrations

• Digital platforms

• Internet of things capabilities

• Cybersecurity

• Regulatory risks

• Return on investment

• Skills

• User acceptance

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| OVERVIEW

Inherent risks Risk mitigation factors

COMPETITOR RISK

The risk that the Bell Equipment group’s competitors’ actions

have a signicant negative inuence on the group’s business

and shareholders’ value.

• Live and demonstrate the Bell Equipment group motto of

‘Strong Reliable Machines, Strong Reliable Support’.

• Constantly exceed customer expectations through superior,

innovative products and aftermarket support.

• Maintain research and development spend through the

trough and mid cycles, and accelerate spend in the peak

cycles, thus ensuring that the Bell Equipment ADT continues

to be an advanced premium product.

• Adopt and practice the 1-BELL philosophy in all activities.

• A focused ADT global volume growth strategy has been

deployed together with dealer migration and development

objectives to broaden market footprint and capture

additional volumes.

• Ongoing investigation into the viability of an offshore

manufacturing facility closer to major ADT markets to

enhance exibility and pursue efciency improvements. The

rst phase of the process has been completed resulting in Bell

Equipment manufacturing certain components at the Kindel

factory for the northern hemisphere markets.

CURRENCY RISK

Currency volatility, not only in the Rand but also in other

major currencies that the group is exposed to, is a signicant

risk because the group trades in different currencies and has

operations in many countries.

The group is also exposed to operational and nancial

currency exposures due to changes in the value of trading

accounts and loans, especially intra group accounts,

denominated in foreign currencies. This has a direct impact

on the group’s trading results, statement of nancial position,

cash ows and competitiveness.

• A group treasury policy is in place.

• Projections of import and export cash ows are maintained.

The principle of matching South African import and export

cash ows is followed wherever possible.

• The majority of any remaining net foreign currency receipt

and payment ows are covered forward. Foreign subsidiaries

do not hedge their intra-group purchases.

• The timely application of pricing policies on selling prices

facilitate hedging against movements of major currencies to

the Rand and other volatile currencies to which the group is

exposed.

• Cost containment and consideration of alternative suppliers,

markets and manufacturing locations.

• The size of equity and loans in foreign subsidiaries is monitored

to ensure these are appropriate considering commercial

requirements.

Strategic overview and risk management continued

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Inherent risks Risk mitigation factors

STRATEGIC ALLIANCE PARTNERS AND KEY SUPPLIER RELATIONS RISK

The brands represented by Bell Equipment form an integral

component of the Bell Equipment group’s strategic goal

of being an integrated OEM. These international brands

become synonymous with Bell Equipment in relevant

distribution territories therefore careful thought and effort

goes into selecting strategic alliance partners and suppliers.

Revenue derived from these products contributes materially

to the Bell Equipment group revenue. Therefore, risks

associated with a breakdown in relations and/or material

non performance by either party poses signicant risks.

Although infrequent, changes to strategic alliance partners

does occur and could be attributable to corporate action,

changes in strategic direction, product and product

contribution performance. There have been changes to

strategic alliance partners and the details around these

changes are provided elsewhere in this report.

• Continually build/improve the group’s relationships with

strategic alliance partners and suppliers at all levels within the

organisation, supporting mutually benecial objectives.

• Formal process of setting, monitoring and evaluating key

performance matrices to meet strategic objectives.

• Add value by enforcing effective communication to all

partners and suppliers on market movements and the group’s

strategy.

• Maintain the Quest for Gold programme which acknowledges

key suppliers for outstanding service.

• Adopt the 1-BELL philosophy in dealing with strategic alliance

partners and suppliers.

• Additional absorption initiatives include pursuit of manu-

facturing opportunities for alliance partner products, further

new product development, or assessing opportunities for

products outside of the group’s industry. Periodic checks for

opportunities with alliance partners are done.

POLITICAL RISKS IN THE COUNTRIES IN WHICH THE GROUP OPERATES

The group is exposed to the varying political landscapes in

the regions in which it operates due to the global nature

of the group’s business and new markets. Therefore, it is

susceptible to the associated political risks in certain regions

in which it operates or plans to operate.

• As a responsible corporate citizen that contributes to the

well being of the regions in which it operates, the group

endeavours to cooperate with the local authorities in those

regions while remaining apolitical.

• The group strives to minimise exposure in perceived high risk

countries through effective risk management practices.

• Maintain business continuity plans catering for all eventualities

the group may be susceptible to in the higher political risk

regions to which it is exposed. These continuity plans are

updated annually with inputs from accredited auditors to

ensure international and best practice compliance.

• A critical review of the viability of owned dealer operations

was performed with an objective to right size the group’s

footprint and apply the business model. Dealer migration will

be pursued where the group is not able to establish nancially

viable and sustainable owned operations.

CYCLICAL NATURE OF THE CONSTRUCTION AND MINING EQUIPMENT INDUSTRY

The business model is highly dependent on achieving sales

volumes of the core manufactured products. This is due

to the upfront and substantial investment in research and

development, production capabilities as well as inventory

which is required to maintain a competitive advantage.

The inherent cyclicality of the industry is affected by the

continued uncertainty in the commodity and emerging

markets which has resulted in uctuations in demand for

the group’s products in these key sectors. Accordingly, the

nancial performance and achievement of strategic goals

of Bell Equipment is directly dependent on its ability to react

to the changes in the business environment.

• Perform regular evaluations of the order book and forecasts

to ensure the validity thereof.

• Secure adequate committed funding lines and actively

manage cash ows.

• Actively manage working capital, reduce expenses and

increase efciencies within the group.

• Deliver exceptional customer service to capture the

available business.

• Diversify geographically, away from dependence on

traditional mining territories.

• Grow diversied revenue streams leveraging the Bell

Equipment distribution network and manufacturing

capabilities.

• Robust capital planning and budgeting processes.

• Monitor impact of business environment on key customers’

access to and ability to service credit.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| OVERVIEW

Inherent risks Risk mitigation factors

REGULATORY RISK

It is recognised that there is an increased probability of risk

of regulatory non compliance to laws and rules due to the

geographic spread of the operations and therefore the

size of the regulatory environment as well as the different

languages and cultures.

This inherent risk is further increased due to a disconnect

between rst and third world regulatory environments.

• A group wide compliance programme continues to mature in

relation to the unique regulatory requirements, and product

and operational restrictions are assessed on a periodic basis.

• Local management is tasked with keeping abreast of

regulatory changes within their respective jurisdictions and

do so by making use of internal resources and external

experts where required.

• A review of the contract management system, employee

contracts and tender guidelines have been completed at

a high level to ensure compliance with existing and new

regulatory requirements.

• A review of conditions of sale, credit applications and

conditions of purchase in terms of POPI requirements was

also undertaken.

• Governance, ethics and compliance training is ongoing

throughout the operations. An annual training programme

has been implemented to procure that appropriate and

topical legislative and governance training takes place

across the group.

HUMAN CAPITAL

Bell Equipment group recognises that human capital is

vital to its success. Human capital risks manifest under the

following themes:

• Skills retention

Due to the locations it operates in and the fact that

the world is becoming a so called global village, Bell

Equipment’s ability to retain key skills is constantly under

threat.

To deliver a world class product and service, world

class people is a must. Key scarce skills, particularly

engineering/technological skills in the South African

environment remains a challenge.

• Health and safety

This risk refers to the possibility of human capital being

exposed to an unsafe work environment and/or practices

which result in injury whilst on duty. This is an inherent risk

due to the operating environment.

• Signicant training and investment in employees assists

in creating an increasing and enhanced skills base. The

Bell Equipment apprentice programme serves as a good

foundation for technical skills required for both Bell Equipment

and the industry.

• Implementation of performance management systems.

• Retention strategy for critical skilled employees.

• A risk based health and safety management system that

clearly establishes the company’s expectations of employees

in terms of health and safety performance. The system is

aligned with OHSAS 18001:2007, a leading international

standard for occupational health and safety management

systems.

• A comprehensive behaviour based health and safety

training programme is enforced across the group to promote

safe behaviour and awareness.

• The 1-BELL philosophy is actively practised on all levels through

leadership, teamwork, personal accountability and effective

communication. This, together with the safety management

system, ensures the creation of a safe working environment

and culture, reducing the likelihood of workplace injuries.

Strategic overview and risk management continued

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Inherent risks Risk mitigation factors

GLOBAL COMPETITIVENESS

As primarily a South African based manufacturer supplying

the global market, the increased cost of doing business in

South Africa directly impacts the product cost and therefore

inuences Bell Equipment’s competitiveness. Pressure

from organised labour for above ination wage increases,

disruptions to business across the value chain due to strikes,

declining productivity, escalating fuel and electricity prices,

compounded with the necessity of private back up power

generation due to prior power outages and increasing

compliance costs are some of the expenses that contribute

to the increased costs of doing business in South Africa. This

hinders the marketability and protability of South African

manufactured products.

• Continuously evaluate component country sourcing for

suitable price advantages.

• Continuously monitor the effect of cost pressures and

strategically evaluate the option of offshore manufacturing

where feasible.

• Monitor productivity and critically evaluate the case for

mechanisation, where possible.

• Continuously evolve the group’s design philosophy to

incorporate new technology, safety and best practices.

NICHE PRODUCT DEPENDENCE

Whilst Bell Equipment has carved out a niche in the global

earthmoving equipment industry and continues to strive to

be the leading global ADT OEM, the group is cognisant of

its dependence on this product, which is exposed to the

commodity cycles.

• Grow diversied revenue streams that leverage the

Bell Equipment distribution network and manufacturing

capabilities.

LACK OF TRANSFORMATION

There is pressure on corporate South Africa to transform in

accordance with government’s transformation objectives.

Government business and incentives are often aligned to the

BBBEE Codes thereby making the transformation decision an

economic decision.

• BECSA achieved a 51% black owned and Level 2 BBBEE

recognition level whilst BESSA achieved 51% black ownership,

30% black women ownership and a Level 1 BBBEE recognition.

The improved black ownership in both entities was a result of

the transaction implemented with effect 1 January 2020.

INFORMATION SECURITY AND DIGITAL DISRUPTION

The speed of information technology development is driving

companies to invest in the latest technology to remain

competitive, while at the same time protecting themselves

against cyber attacks.

• Various action plans are in place to improve cyber security

and adherence to data protection legislation.

• Redesign of enterprise architecture to provide agile,

integrated system landscape.

• Replace and upgrade legacy systems.

• Appointment of Chief Technical Ofcer to focus on customer

interfacing technologies and process automation projects.

• Development of online customer platforms including online

parts solutions and a global used equipment website.

BUSINESS CONTINUITY DUE TO POWER SUPPLY

The inability of government to resolve the leadership crisis at

the country’s troubled electricity utility Eskom and the possible

long term implementation of extended load shedding could

have a devastating effect on not just the group’s business

but also on the domestic industry.

• All its strategic operations and factory in South Africa have

been equipped with back up power generators that will

alleviate most of the risk of business continuity due to power

interruptions.

• Most of the group’s critical suppliers have back up generators

to ensure uninterrupted production and supply of strategic

parts.

• Dual supply from international service providers on production

critical and strategic parts.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| OVERVIEW

Inherent risks Risk mitigation factors

BUSINESS CONTINUITY DUE TO SUPPLY CHAIN FAILURE

The current economic climate continues to increase the

probability of business disruption due to supply chain failures.

While all supply chains face risks with extended lead times,

port congestion, economic and political instability as well as

currency uctuations, Bell Equipment has the added risk of

a remote location and a large portion of in house designed

components that are not freely available on the open

market. The ability to monitor the performance of these key

suppliers and proactively identify and manage those at risk is

critical to ensuring supply continuity to Bell Equipment.

• Immediate risks related to items with signicant Bell IP are

under review. These include the following categories of

components: wiring harnesses, rubber to metal, electronic

controllers, composites, gear cutting and specialised

machining. This is running in parallel with the review and

update of the critical supplier business impact analysis to

identify possible alternatives or critical supplier requirements.

• Monthly supply chain risk management meetings now take

place. This covers original equipment and aftermarket.

Supply chain and supplier risks are evaluated and rated.

Actions to mitigate are agreed and progress is reviewed.

• Disruptions are however anticipated, and precautions have

been taken to increase inventory buffers to insulate against

the potential increase in supplier and shipping lead times

where necessary.

• Brexit: various risk mitigation measures were implemented.

CLIMATE CHANGE AND ENVIRONMENTAL

Business impact on the climate, and companies’ ability to

withstand climate change, are issues of increasing global

importance, and vital to the group’s stakeholders.

Climate change, to which no one is immune, continues to be

a catastrophic risk. Although lockdowns worldwide caused

global emissions to fall in the rst half of 2020, evidence from

the 2008–2009 nancial crisis warns that emissions could

bounce back. A shift towards greener economies cannot be

delayed until the shocks of the pandemic subside. Climate

action failure is the most impactful and second most likely

long term risk identied in the World Economic Forum.

Bell Equipment actively strives for high standards of

environmental performance in its operations. It aims to

achieve this by integrating world class environmental

principles into its business strategy.

In order to meet this vision, the group is committed to:

• Implementing and maintaining environmental management

systems that drive continual improvement.

• Reducing its environmental impact across the group with

particular emphasis on energy consumption, water usage,

waste reduction and recycling.

• Ongoing and effective assessment and training to ensure

employee knowledge of environmental risks.

• Waste reduction and the recycling of materials where the

means to recycle materials exist.

• Preventing and reducing all forms of pollution by employing

effective technologies.

• Increasing the use of modern communication techniques to

reduce the need for travel.

• Complying with and where possible exceeding all relevant

legislation, commercial requirements and codes of conduct

regarding the impact on the environment of its business.

• Maintaining transparent, consultative relationships with all

stakeholders through effective communication channels.

• Supporting the fundamental human rights of employees,

contractors and suppliers within the communities in which it

operates.

• Contributing to the long term social, economic and

institutional development of its employees and the

communities within which its operations are located.

• The group’s commitment to low carbon and renewable

energy is a signicant contributor to its efforts in reducing

carbon emissions.

Strategic overview and risk management continued

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Inherent risks Risk mitigation factors

BUSINESS CONTINUITY RISK DUE TO COVID-19

The unprecedented nature of the COVID-19 pandemic set

in motion one of the most abrupt disruptions in decades,

leaving organisations reeling with uncertainty as fear spreads

faster than the virus itself. The effects of quarantine, isolation

and travel restriction strategies continue to have a brutal

impact on the economy and multiple industries, with the

nancial markets punishing investors with steep declines.

• Bell Equipment takes this pandemic very seriously and is

working continuously to minimise the risk it poses to the health

and safety of its employees and customers, as well as long

term business sustainability.

• Formation of a global crisis response team to identify key risks

facing the group, and to consider, monitor and implement

the required responses to the COVID-19 impact on the

business on an ongoing basis.

• Specic policies and procedures have been developed and

implemented for the most likely emergencies and scenarios.

• Work around plans have been implemented for the relevant

departments to ensure that critical business functions can

continue.

• Work from home strategies and rotating shift systems have

been implemented where possible to ensure minimum risk to

its employees.

• Virtual communication channels have been enabled and

promoted as the preferred communication channels.

• Infection control strategies have been implemented, based

on hazard exposure, using appropriate combinations of

engineering and administrative controls, safe work practices,

and personal protective equipment (PPE) to prevent

employee exposures.

• Training sessions have been provided to employees to ensure

the measures are effectively implemented and maintained

at a high standard.

• Processes have been implemented to monitor supply chains

to ensure minimal disruption.

• Cash management processes have been elevated.

• Regular interactions with stakeholders have been undertaken

to communicate the impact of the pandemic on the group

and the effect on the stakeholders.

• Investigation of the opportunity to fast track certain

technology enabled solutions for customers.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| OVERVIEW

Global corporate structure

BELL EQUIPMENT

LIMITED

Bell Equipment

Properties SA

(Pty) Limited

100%

Bell

Equipment

Limited

Bell Equipment

Group Services

(Pty) Limited

100%

Bell

Equipment

Limited

70% Bell Equipment SA Holdings Limited

7,5% K2017044733 (South Africa) (RF) (Pty) Limited (SIBI SPV)

22,5% K2017044733 (South Africa) (RF) (Pty) Limited (SIBI SPV)

7,5% Bell Equipment Foundation Trust

15% K2019577563 (South Africa) (RF) (Pty) Limited (BEE Manco)

100%

BECSA

Holdings

Limited

70% Bell Equipment

Limited

30% K2019577563

(South Africa) (RF)

(Pty) Limited

(BEE Manco)

BECSA

Holdings

Limited

Bell Equipment

Sales South

Africa Limited

Bell Equipment

Company SA

(Pty) Limited

Bell Equipment

SA Holdings Limited

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Bell Equipment

Australia

Pty Limited

100%

Bell

Equipment

Limited

Bell Equipment

Company (Swaziland)

(Pty) Limited

100%

Bell

Equipment

Limited

IA Bell Equipment

Company (Namibia)

(Pty) Limited

Bell Equipment UK Limited

Bell Equipment Russland LLC

Bell Euro Finance Limited

Bell Equipment (Deutschland) GmbH

Bell Equipment Company

(Zambia)

Limited

Bell Equipment (DRC) SARLU

Bell Equipment North America Inc

Bell PTA (Private) Limited

Bell France SAS

Bell International Finance Limited

100%

Bell

Equipment

Limited

Bell Equipment

International SA

100%

Bell

Equipment

International

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| OVERVIEW

Board of directors

Gary Bell (68)

Non-executive chairman

Mech Eng Diploma (Natal Technikon)

Appointed to the board: 1977

Risk and sustainability committee member;

Social, ethics and transformation committee member;

Nominations committee member;

Remuneration committee member.

With an engineering and manufacturing background,

Gary has over forty years’ experience in and knowledge

of the mining and construction machinery industry both

regionally and internationally.

He currently sits on the board of Trade and Investment

KwaZulu-Natal.

John Barton (73)

Lead independent non-executive director

FCMA, GCMA, AMP (Harvard)

Appointed to the board: 2009

Chairman of the nominations committee;

Audit committee member;

Risk and sustainability committee member;

Remuneration committee member.

John worked for the Anglo American group and

subsidiary company Mondi where he was the chief

executive and deputy chairman until 2007. He is a past

president of the Durban Chamber of Commerce and

Industry and was the co-chairman of the KZN Growth

Coalition.

John was the chairman of Foskor (Pty) Ltd and CBL Ltd.

Karen van Haght (54)

Group nance director

BCompt (Hons) (UNISA), CA (SA)

Appointed as an employee: 2000

Risk and sustainability committee member;

Social, ethics and transformation committee member.

Karen was a senior audit manager at Deloitte & Touche

prior to joining Bell as the group nancial controller in

2000. She has held the position of group nance director

since 2006.

Leon Goosen (48)

Group chief executive

BAcc (Stellenbosch), BCompt (Hons), CTA (UOFS), CA

(SA)

Appointed as an employee: 2007

Risk and sustainability committee member.

Prior to joining Bell, Leon was a partner at Deloitte

& Touche in South Africa and Namibia. He held the

position of executive director of Bell from January 2009

and was the chief operations ofcer from December

2014, contributing considerably to the strategic direction

of the group, until he was appointed as chief executive

on 1 June 2018.

Derek Lawrance (74)

Independent non-executive director

BCom (Economics) (Wits), CA (SA)

Appointed to the board: 2016

Chairman of the audit committee;

Chairman of the remuneration committee;

Risk and sustainability committee member.

Derek has held numerous senior executive positions

in both listed and unlisted South African companies,

operating in multidisciplinary environments with both

local and foreign partners and shareholders.

He is currently an independent director of:

* The Amber House, Milkwood and Thekwini RF Funds

Ltd, which together comprise all the note and bond

holding companies of SA Homeloans Ltd;

* Expand a Sign International Pty Ltd.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Hennie van der Merwe (73)

Independent non-executive director

BA (Law) LLB (Stellenbosch), LLM (Tax) (Wits)

Appointed to the board: 2016

Chairman of the risk and sustainability committee;

Nominations committee member.

After practicing as a commercial and corporate

attorney for twelve years, Hennie held senior executive

positions and directorships in large stock exchange

listed corporate entities in the banking, commercial and

industrial sectors, both in South Africa and abroad.

He currently serves in the following listed board positions:

• Chief executive and executive director of Trencor Ltd,

although he will be retiring from the board during 2021;

• Non-executive director of Textainer Group Holdings Ltd,

listed on the New York Stock Exchange;

• Non-executive director and chairman of the board of

Master Drilling Group Ltd.

Rajendran Naidu (48)

Independent non-executive director

BCom (Cape Town), CA (SA)

Appointed to the board: 2017

Audit committee member;

Social, ethics and transformation committee member;

Nominations committee member.

Rajendran was a partner at Deloitte in the nancial

institutions team and corporate nance practices.

He was previously a group general manager at Sasol

Limited responsible for corporate nance, investor

relations and shareholder value management. At that

time he was also chairman of the audit committee of

Sasol Petroleum International and served on the board

of trustees for Sasol’s Group Enterprise Development Trust

and worked closely with global investment banks and

global consulting rms. Rajendran currently manages

Pritor Capital which provides strategic and corporate

development advisory and investment services.

Ashley Bell (38)

Non - executive director

BCom (Marketing) (UNISA)

Appointed to the board: 2015

Risk and sustainability committee member;

Social, ethics and transformation committee member.

Ashley has eleven years engineering and marketing

experience in co-founding an OEM servicing the forestry

and agricultural sectors.

Mamokete Ramathe (41)

Independent non-executive director

BCom (Wits), BCom Hons (UNISA), Masters (Development

nance) (Stellenbosch), Masters (Leading innovation

and change) (York St John, UK)

Appointed to the board: 2017

Chairman of the social, ethics and transformation

committee;

Audit committee member.

Mamokete is the Founder and CEO of Mamor Capital,

an investment company focusing on the ICT sector.

Prior to this role she was the executive head of mergers

and acquisitions at Vodacom Group, where she was

responsible for evaluating and executing mergers and

acquisitions transactions and other relevant corporate

actions in line with the group’s strategy. She is a

seasoned investment executive with more than 18 years’

experience in nancial services; spanning corporate

nance advisory, private equity, mezzanine nance,

infrastructure nance and mergers and acquisitions.

She serves on the board of OUTsurance Holdings as an

independent non-executive director, and a member of

the board investment committee.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| OVERVIEW

Group executive committee

The committee is chaired by the chief executive and comprises the nance director, the managing directors of each of the regions

and the executives listed below. The committee meets regularly and deliberates, takes decisions and/or makes recommendations

on all matters relating to the group’s strategy and day to day operations within its mandate. The mandate is set by the board and

where appropriate, decisions and/or recommendations are referred to the board or relevant board committees for nal approval.

Aldo Mayer (48)

Director: Global Sourcing and Strategic Projects

National Higher Diploma – Mech Eng (Natal Technikon)

B Tech (Business Management) (Natal Technikon)

Aldo has 25 years’ experience at Bell Equipment.

Avishkar Goordeen (41)

Chief Strategy Ofcer

BCompt (Hons) (UNISA)

CA (SA)

Avishkar has 14 years’ experience at Bell Equipment.

Diana McIlrath (47)

Group Company Secretary and Legal

BCom (UKZN)

LLB (UKZN)

Diana has 4 years’ experience at Bell Equipment.

Johan van Wyngaardt (52)

Director: Group Human Resources

DMS Dip HRM (Damelin); DMS Dip IR (Damelin)

B Tech (Advanced Business Management) (Natal Technikon)

Johan has 15 years’ experience at Bell Equipment.

Karen van Haght (54)

Group Finance Director

BCompt (Hons) (UNISA)

CA (SA)

Karen has 20 years’ experience at Bell Equipment.

Leon Goosen (48)

Group Chief Executive

BAcc (Stellenbosch); BCompt (Hons)

CTA (UOFS); CA (SA)

Leon has 13 years’ experience at Bell Equipment.

Dominic Chinnappen (52)

Director: Group Manufacturing and Sales and Operations

Planning

BCom (Hons) (Logistics) (UNISA)

CPIM (Apics)

Dominic has 33 years’ experience at Bell Equipment.

Douglas Morris (47)

Managing Director: Europe, Middle East and Africa

BCompt (UNISA)

Douglas has 6 years’ experience at Bell Equipment.

Neville Paynter (56)

Managing Director: Bell Equipment North America

NTC 3 & 4 Aircraft Technology (Germiston Technical College)

Diploma in Business Management (Damelin)

Diploma in Business Enterprise Studies (Institute of Commercial

Management, Bournemouth, UK)

Neville has 18 years’ experience at Bell Equipment.

Neville has resigned with effect from 1 April 2021.

Stephen Jones (50)

Director: Group Engineering, Marketing and Product Portfolio

National Higher Diploma – Mech Eng (Natal Technikon)

B Tech (Business Management) (Natal Technikon)

Stephen has 26 years’ experience at Bell Equipment.

Duncan Mashika (41)

Managing Director: Bell Equipment Sales South Africa Limited

BCom (Wits); HDip Acc (Wits)

CA (SA)

Duncan has 2 years’ experience at Bell Equipment.

The GEC is empowered and responsible for implementing the board approved strategies

and for managing the affairs of the group.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Aldo

Avishkar

Diana

DominicJohanNeville

DouglasKarenStephen

DuncanLeon

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

Joint report by the chairman and chief executive

Overview

2020 was fraught with extraordinary challenges for the Bell

Equipment group from a re in our Richards Bay administration

building in January, which displaced a number of employees,

to the outbreak of the COVID-19 pandemic a few months later

that created operational complications, aggravated tough

global trading conditions and kept margins under pressure.

The year started enthusiastically in South Africa with the President

announcing imminent infrastructure projects. However, the

failure of these projects to materialise, coupled with the reduced

demand for product in most markets due to the impact of the

pandemic, meant the group had to work prudently to bring

high inventory levels down to acceptable levels and carefully

balance sales requirements and production plans.

The protection of jobs remains a top priority, with all capex

delayed and discretionary expenses halted to manage

cashow and trim expenses to match the reduced income

levels. In addition, the group implemented 20% short time across

all operations from May to July. GEC members took a 25%

salary reduction during the same period and the non-executive

directors of the board sacriced 30% of their director’s meeting

fees for six months.

The local market saw yet another signicant drop in volumes of

mining and construction equipment purchased. The COVID-19

pandemic and subsequent lockdown restrictions had a

devastating impact on the supply chain, customer operations

and purchases. The country went through further economic

decline with cuts in demand and reduced spending in all sectors

serviced and supplied by Bell.

The North American market, impacted by COVID-19 and

presidential elections, also suffered a downward trend in the

construction industry cycle. Most construction indicators were

down with the ADT industry showing a 25% decline compared

to 2019. Due to the cyclical nature of the business, some of the

downturn was already anticipated in sales forecasts going into

2021.

Despite the ADT market conditions, distribution of the Bell ADT

products in the US posted the second highest annual result since

2013 with a 1,4% increase in market share.

Business in Canada was extremely volatile and Bell was unable

to recover from a woeful 2019. The distributor network into which

Bell supplies, carried over large inventory of new ADTs from 2019

into 2020, which impacted on sales from production for the year

and resulted in the year ending with a disappointing market

share for Bell sales into this market.

Several major projects in the UK, notably the HS2 rail project, are

creating opportunities as the country’s government works to

strengthen the economy post Brexit. While Bell has grown market

share in the UK and Germany, margins are tight throughout

Europe, resulting in a stagnant market in general.

Overall global markets have shrunk and competition has

increased putting margins under immense pressure.

Australia managed the lockdowns well and realised growth

in Bell ADT market share attributed largely to infrastructure

and mining in Western Australia. However, reduced demand

for commodities due to the pandemic and the subsequent

| PERFORMANCE REVIEW

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

lockdowns have impacted negatively on the South East Asia

and Oceanic region.

While Africa also struggled with slowing demand for commodities

directly impacting the ADT market, forestry and agriculture

were well sustained and provided growth in our tri wheeler and

Matriarch product range.

The group continued to increase its presence and market share

in the Latin American ADT market where new model launches,

opening of new routes to market and the introduction of the

Matriarch line also experienced growth in the forestry and

agriculture sectors.

Financial

In the 2020 nancial year the focus was on cash preservation

and working capital management, and the positive aspect of

the results for the year is the reduction achieved in inventory

and borrowings levels despite all the negative impacts on the

business brought about by the pandemic. Sales were especially

constrained in the rst half of the year when lockdown restrictions

were most severe and a decline in sales for the year of 14% led

to the group reporting a loss after tax for the year of R57,2 million,

after reporting a loss at half year end for the six months to 30

June 2020 of R52,3 million.

Operations

During the lockdown restrictions, parts of our South African

market were considered essential services, so we could operate

to support them. Measures were implemented that maintained

business activity through the months where trading was virtually

halted. By staying close to customers and focusing on growth

and opportunity areas, we made small market share gains

thereby reducing the overall negative impact of the pandemic

on volumes sold. Having stock at sufcient levels to support this

was essential.

During the year, the North American dealer network was

expanded by adding three new dealers, covering territories

in Alabama, Kansas, Oklahoma, Missouri and Maine. In Africa,

Hardrock Earthworks cc was appointed as an authorised supplier

and distributor in Namibia towards the end of 2020.

Our strategy to migrate to an independent dealer model in

select markets has proven benecial by enabling Bell to provide

better coverage and support to customers in markets where

areas are vast and machine populations comparatively low. This

is further supported by synergies found with dealers that have

complementary product lines in their stable. This enables them

to derive additional revenue streams across different industries

and sectors, manage through challenging and cyclical market

trends as well as drive higher efciencies and utilisation from

resources critical to superior customer support.

To effectively manage and analyse the growing dealer network,

Bell is implementing the Aspire dealer management programme.

This tool will be used to measure dealer performance and offer

incentives to meet set targets.

Our American Logistic Centre (ALC) continued to rationalise

and optimise inventory holding in 2020 and grew parts sales to

the distribution network year on year.

Three tracked carrier prototypes were tested in the US across

the year to ensure integrity of design and engineering of the

product. The ofcial product launch for the US was undertaken

in February 2021 with great interest.

In August 2020 John Deere and Bell mutually agreed to change

the distribution arrangements that are in place in certain

southern African markets whereby Bell exclusively distributed

John Deere construction and forestry products under the Bell

marque.

From March 2021 Bell transitioned to a non exclusive John Deere

dealer arrangement to allow John Deere to engage with and

start appointing additional dealers. Bell will continue to distribute

John Deere products until January 2023 and will provide

aftermarket, technical and product support to customers for a

further 10 years thereafter.

Post the nancial year end, Bell has been appointed as the

distributor for the full range of JCB construction products in South

Africa effective 1 May 2021. This change presents an exciting

and important opportunity to reinvigorate the product lines

affected by the changes in relationship with John Deere, as

well as introduce additional products, and will enable Bell to be

better positioned as a full line distributor in this important market.

JCB is the world’s third largest construction equipment brand by

volume and has a rich history in the country spanning more than

40 years. As such, we believe this is a perfect match of premium

products to a great distribution network.

Sustainability

Bell Equipment nds itself in a consolidation phase where no

major expansionary capex spend has been budgeted for the

foreseeable future. This follows several years of large expansions

including the group’s European Logistic Centre (ELC) in Germany

in 2016/2017, the establishment of the ALC the following year

and the expansion of the Eisenach-Kindel manufacturing facility

in Germany in 2018/2019.

The group appreciates the importance of being a sustainable

business and the risks associated with not continuously pursing

this as a goal. We therefore continue to evaluate ways in

which to improve sustainability and believe that continuous

improvement across all aspects of the business is key.

Respect for the environment is important to our sustainability

and initiatives are in place to further lessen our environmental

footprint in terms of water and power usage as well as waste to

landll.

The internet of things and the fourth industrial revolution

continue to gain traction. The group understands that there is

signicant scope to grow the business with better adoption of

these technologies in both future product development as well

as immediate customer interactions.

With regards to product development, Bell has expanded its

presence in the autonomous vehicle control space through

collaborations with third party suppliers and has demonstrated

the ability to provide a vehicle that can be safely controlled in a

trial work application.

Complementing our investment to grow intellectual property

(IP) as a growth strategy, a signicant amount of focus is

being placed on direct customer interaction during and after

initial machine sales. This is being achieved through further

developments with Fleetm@tic

, our industry leading telematics

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

Joint report by the chairman and chief executive continued

system, the adoption of value added services like online parts,

and improving platforms for immediate online technical support.

Corporate Governance

Our commitment to be a good corporate citizen pervades

our total approach to the business and we endeavour to act

in a responsible, ethical, balanced and commercially sensible

manner.

We are ever conscious of the impact on the environment and

we have made pleasing progress, as detailed in our stakeholder

relations report, as we continue to measure and mitigate these

risks.

Bell is committed to the highest standards of corporate

governance. Details of governance structures and the extent

to which we apply relevant principles of corporate governance,

including King IV and regulatory requirements, are provided in

this report.

In addition to changes to our strategic partnership with John

Deere mentioned earlier in this report, in early November

2020 the company was notied by IA Bell & Company, a

38,7% shareholder in the company, that it had entered into a

formal binding agreement to acquire John Deere’s 31,37%

shareholding in the company, conditional on the fullment of

certain conditions precedent.

On 9 March 2021, the company received notication of a non-

binding expression of interest from IA Bell & Company in respect

of a possible transaction to acquire the entire issued ordinary

share capital of Bell Equipment not already held by or to be

acquired by IA Bell & Company if the John Deere transaction

outlined above is implemented, by way of a scheme of

arrangement in terms of section 114 of the Companies Act,

subject to the fullment of certain conditions precedent,

and further subject to the John Deere transaction becoming

unconditional and being implemented. In regard to these two

possible transactions shareholders are referred to the company’s

relevant announcements published on SENS.

Shareholders will be informed if and when the company

receives a binding rm intention offer from IA Bell & Company to

acquire the entire issued ordinary share capital of the company,

and the company will continue to comply with the JSE Listings

Requirements and will comply with the Takeover Regulation

Panel requirements, to the extent applicable, in this regard.

Throughout this process the board is focussed on sound

governance, looking after shareholders, employees and

customers as a priority.

Transformation

Following the successful conclusion of BBBEE transactions, which

took effect on 1 January 2020, both BECSA and BESSA are 51%

black owned, and have improved BEE scorecards that position

the group more competitively in the local market, in line with our

commitment to our transformation responsibilities.

Importantly the score also secures our access to government-

backed initiatives. Support from government in terms of the

APDP extension is valued and we are in discussions with the

Minister and DTIC for greater protection as a proudly South

African manufacturer and a substantial employer.

We also continue to engage with government at various levels

to encourage a better understanding of the assistance they

could provide through implemented policy to help us to grow

the economy in these extremely difcult times.

Outlook

The sentiment going into 2021 has been cautiously optimistic

from most regions with a healthy order book in place for the rst

half of the year. An easing of restrictions for business is evident,

with several mining and infrastructure projects coming online or

being unlocked in the short term.

However, the group anticipates another tough year as we

continue on the road to recovery. We believe that with

an ongoing focus on cash preservation and expenses

management, we have the capacity, the people and leading

products to recover from the devastation caused by the virus.

Restructuring is being investigated in terms of location

rationalisation and efciency improvements, however no

retrenchments are planned at this stage as people are critical to

our operational objective of selling to and supporting customers

and their Bell machines.

The industry outlook for South Africa remains depressed as the

country grapples with low infrastructure spending in a weakened

economy with spiralling national debt. The announced

partnership with JCB should lead to some gains within the

markets and growth for the company. JCB has signicant market

share in the sectors in which it is active, and Bell has increased

its resources to ensure our support is able to match the machine

population.

Bell Equipment, as one of the country’s leading OEMs and

a signicant employer, continues to pursue government

mechanisms that would focus on off road ADTs imported into

South Africa to level the playing eld and help to preserve the

jobs it creates.

Through all regions we will continue focusing on improving

customer service and dealer management to ensure that we

drive growth in the aftermarket and supporting our active eet

globally.

Dividends

The board has resolved not to declare a nal dividend for the

2020 nancial year.

Appreciation

In a year characterised by uncertainty and high levels of fear

and anxiety we have become more mindful of what matters

most and what we should be grateful for. While the positives of

the year may not necessarily be reected in our nancial results,

the group is extremely proud of how we adapted, overcame

adversity, and grew stronger as a team as a result.

Our executive management is commended on maintaining

hands on leadership and dynamic energy in these

unprecedented times. Their ability to achieve a good balance

of empathy and determination has encouraged adaptation

and resilience throughout our global workforce and ensured

business continuity.

The COVID - 19 pandemic has irrevocably changed the way

we live and work and we are appreciative of the sacrices our

employees made towards the sustainability of the group, the

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

discipline and diligence with which they embraced our work

from home strategies and their commitment to perform essential

services to keep our customers operational.

At the same time, we remember those staff members who we

lost to the virus. We also pay tribute to Howard Buttery, a former

chairman of the Bell board and a larger than life character who

played an integral role in the history and development of the

group, who passed away from COVID-19.

It goes without saying that in our 66 years in business we have

weathered our fair share of storms. Throughout this period we

have been grateful for the guidance and commitment of our

fellow board members and we have no doubt that we will

emerge stronger this time too, thanks to their efforts.

A special thanks to our extended family of customers and

dealers across the globe who continue to invest in the group

and our products and entrust us with the ongoing support of

their Bell machines.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

The pandemic affected all aspects of the business in 2020.

The initial hard lockdowns in the rst half of the year led to the

closure of the factory in South Africa for a month and in high

levels of uncertainty and subdued sales in all markets. These

sudden challenging conditions focused the business on cash

preservation and working capital management.

Financial performance

Revenue of R6,7 billion for 2020 was 14% down on 2019, which

was an improvement on half year end when sales to 30 June

2020 were down 24% on the comparative period. Sales for the

rst half of 2020 were severely impacted by hard lockdowns

and other measures taken by authorities globally to control the

spread of the pandemic. Weak market conditions, low activity

levels in the sectors that the group operates in and uncertainty

relating to the duration and severity of the pandemic meant

that there was reduced demand for Bell’s products across all

key markets. Sales in the second half of 2020 were 17% up on the

rst half and signs of some recovery were evident. The Rand was

approximately 17% and 15% weaker against the Euro and USD

respectively in 2020 compared with 2019 and this helped offset

some of the impact of the volume pressure on revenue. Sales

volumes were down approximately 25% on 2019.

The group incurred a loss after tax of R57,2 million for the year,

after reporting a loss after tax for the half year to 30 June 2020

of R52,3 million. Apart from the impact of weak economic

conditions and low sales on the bottom line, the result for the

year was further negatively affected by low production volumes,

due to the group having started 2020 with record high inventory

levels which meant that planned production levels were low

while inventory was being sold off and right sized, as well as

by certain once off costs. Low production levels resulted in low

recovery of a largely xed cost base, especially at the Richards

Bay factory. This is evident in the operating losses reported for the

group’s manufacturing operations in South Africa and Germany

in the segmental report. The once off costs incurred in 2020

related to provisions totalling R82 million for residual value losses

on guarantees provided to a nancial institution on equipment

rentals nanced in the USA, the impairment of R32 million on the

group’s owned facility in Kitwe, Zambia and the impairment of

certain research and development projects totalling R23 million.

These matters are detailed in notes 24 and 41 of the annual

nancial statements. Headline loss per share was 31 cents (2019:

restated HEPS of 71 cents) for the year. In light of the continued

difcult market conditions, no interim or nal dividend was paid

for the 2020 year. In the prior year, an interim dividend of 20 cents

per share was paid.

The share price of the company is trading at a signicant discount

to net asset value per share and as this is an indicator of possible

impairment in terms of IAS 36: Impairment of Assets, valuations

and assessments were performed to determine the recoverable

amount of the group’s main cash generating unit and certain

other key assets in the group. No impairments resulted from this

review. Refer to note 41 in the annual nancial statements for

further details of this assessment.

The group also assessed the potential impact of the weak

economic conditions brought about by the pandemic and

changed economic circumstances in certain countries,

specically Zambia, on the judgements and estimates exercised

in determining the carrying values of assets and made additional

provisions where necessary. Additional provisions were made on

certain categories of inventory. The owned customer service

centre in Kitwe, Zambia and certain non core development

projects were impaired. Note 41 of the annual nancial

statements provides further details of these assessments.

During the second half of 2020, our internal processes identied

an error relating to the accounting for the group’s standard

warranty provision on manufactured equipment sales. A rm of

accounting specialists was engaged to assist with determining

the correct accounting treatment for this complex area. This

was remediated by management prior to the nalisation of the

year end results and led to the restatement of prior year audited

results as detailed in note 5 of the annual nancial statements.

The change in accounting treatment has no impact on the

expected cash ows relating to the group’s warranty obligations.

Segmental performance

The group conducts two main business operations. The rst is the

OEM operations comprising manufacturing, assembly and sales

of equipment and aftermarket products to independent and

group owned distributors and dealers. These OEM operations are

conducted from South Africa and Europe. The second business

is the direct sales business which comprises owned distribution

operations in South Africa and Rest of Africa that are engaged

in direct sales of own manufactured products, other third party

products and the supply of aftermarket support and products

to the market. The South Africa direct sales business comprises

customer service centres in South Africa and Swaziland. Rest

of Africa comprises customer service centres in Zambia and

Zimbabwe.

The OEM business in South Africa reported an operating loss

in 2020 as a result of low production volumes due to over

stocking and weak demand. Low production volumes meant

Finance director’s report

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

unrecovered overheads at the Richards Bay facility. Total sales,

including both external and inter segment sales, reduced by

23,4% in 2020. External revenue contributed 16,0% of group sales

in 2020 compared with 18,4% in 2019.

External sales by the OEM business in Europe decreased by 18,4%

in 2020 with the contribution to total group sales decreasing from

36,4% in 2019 to 34,7% in 2020. This segment was hard hit by low

assembly volumes at the Kindel factory and weak conditions and

low demand from the USA, as well as the provision for residual

value losses relating to guarantees provided to a nancial

institution for equipment rentals funded in the USA, resulting in

an operating loss for the year.

External revenue from direct sales operations in South Africa

decreased by 5,7% compared with 2019 and contributed 44,5%

of group sales in 2020, compared with 40,3% in 2019. The South

African sales operation performed remarkably well considering

the difcult year experienced by the South African construction

and mining sectors. Sales volumes recovered well in the second

half of the year following extremely low activity in the rst half of

2020 in this market during the period of complete lockdown in

South Africa. The release of unutilised maintenance provisions at

the expiry of a number of rental contracts in 2020 contributed to

the better than expected result for the year.

The external sales of the direct sales operations in Rest of

Africa, being owned customer service centres in Zambia and

Zimbabwe, decreased by 16,0% in 2020 and contributed 4,8% to

group sales in 2020 compared with 4,9% in 2019. This segment also

reported an operating loss for the year because of the adverse

effect of the impairment of the group’s owned customer service

centre facility in Kitwe, Zambia. An independent valuation was

performed during 2020 and the carrying value of the property

was written down to the market valuation and this resulted in

a R32 million charge to prot or loss. The group continues to

support customers in difcult conditions in Zimbabwe on the

basis of payment in advance in South Africa for parts and

machines supplied.

Gross margin

The gross margin is dependent on the product and geographic

mix of sales, market conditions and exchange rates. Market

conditions and demand during 2020 were weak, competition

was strong and margins were under pressure. In addition,

substantial foreign currency losses were incurred and accounted

for in cost of sales on the revaluation and settlement of foreign

currency suppliers due to the weakening of the Rand during

2020. Although selling prices are adjusted to counter the

impact of currency changes on costs, a time lag applies. The

refund liabilities relating to the residual value guarantees also

contributed to a lower margin as the charge was to revenue

in line with IFRS 15. The average gross margin for the year was

18,4% compared with 18,5% in the prior year.

Other operating income

Other operating income relates mainly to production incentives

in the form of import duty rebates earned on the South

African government’s Automotive Production Development

Programme. This benet decreased very signicantly by 47%

to R62,6 million in 2020 from R117,2 million in 2019, due to a

decrease in production volumes of qualifying products in 2020.

Expenses

In response to the pandemic, immediate action was taken to

reduce costs through employee short time and the halting of all

non essential expenditure. The group has a predominantly xed

cost base and therefore, although the curtailment of expenses

reduced the negative impact of the pandemic on the bottom

line, this was not sufcient to adequately address the full effect

thereof.

2020 External Revenue Analysis - geographic

Manufacturing, assembly, logistics and dealer sales

operations - Europe

Direct sales - South Africa

Manufacturing, assembly, logistics and dealer sales

operations - South Africa

Direct sales - Rest of Africa

34,7%

16,0%

44,5%

4,8%

2020 External Revenue Analysis - by product

70,0%

2,4%

21,8%

4,8%

Sale of parts

Service income

Sales of equipment

Extended warranty

Rental income

1,0%

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

Finance director’s report continued

Group overheads decreased by 7,6% in 2020. The main factors

contributing to this decrease in expenditure in 2020 were the

following:

• A reduction in variable costs relating to the lower production

volumes in 2020, including contract labour and overtime

costs.

• Cost reductions in many areas affected by the pandemic

related restrictions, such as marketing and travel.

• Savings from the staff short time implemented from May to

July 2020.

• In the prior year, IFRS 2 share based payment charges of R82,3

million relating to the BBBEE deal concluded in December

2019 were incurred. Substantial consulting fees were also

incurred in 2019 on that transaction, relating to transaction

advisory, legal, taxation and accounting advice.

• The above cost reductions were offset by the impact of a

signicantly increased under recovery of overheads at both

production facilities, in Richards Bay and in Germany, in

2020 and by the once off costs incurred in 2020 as detailed

above.

The group has continued its investment in research and

development and development costs totalling R38,9 million were

capitalised during 2020. These costs are amortised over the life of

new machines once projects have been completed. The total

cumulative carrying value of capitalised development costs at

year end amounted to R233,6 million and total amortisation of

development costs for the year amounted to R27,0 million.

Interest paid

Borrowings were very high at the start of 2020, as a result of

high inventory levels, but reduced by half year end and have

remained stable since then. Interest costs were R90,0 million for

the rst half of 2020 and R64,1 million for the second half of the

year.

Taxation

The effective group tax rate (credit) of 15% is low due to the

impact on a low pre tax result of small prior year charges and

withholding taxes.

Financial position

Despite the loss for the year, the net asset value per share

increased by 3,4% from 3542 cents in 2019 to 3664 cents in 2020.

This was due to the impact of the weaker Rand at year end

compared with the 2019 year end on the net assets and foreign

currency translation reserve.

Property, plant and equipment

The group halted all non essential capital expenditure during

2020 and only capex critical to the continuation of operations

was considered. Additions to capex of R45 million in 2020

comprised mainly factory plant and equipment of R42,6 million.

Right of use assets

The renewal of the group’s rental of the Jet Park premises in

Johannesburg for a 12 year period resulted in an increase of

R164,3 million in right of use assets in 2020. Lease liabilities has

consequently also increased.

Deferred tax assets

The group has substantial deferred tax assets of R221,2 million.

The main reason for the increase in this asset in 2020 is an amount

of R57,2 million relating to the estimated tax loss in BEGS of

R204,3 million. This tax loss is mainly as a result of the abnormally

low factory production volumes in 2020 and the once off costs

carried by this entity. Management is satised that this deferred

tax asset is recoverable, based on forecasts which indicate that

BEGS is expected to utilise this tax loss from 2022.

Working capital

The factory in South Africa was forced to close for a month

during the South African lockdown and disruptions to the supply

chain were experienced. Consequently, the excess inventory

holdings in the group at the start of the lockdowns proved to be

benecial during that period. Inventory ended 2020 at 240 days

compared with 238 days at the end of 2019. The days inventory

at year end is impacted by low sales in 2020. The inventory value

in Rand terms is down 13% compared with the end of 2019

and taking the weakening of the Rand in 2020 into account,

has reduced by substantially more than that in real terms. This is

evident in the signicant reduction in the level of borrowings in

the group in 2020.

Trade receivables days ended 2020 at 48 days, up from 42 days

at the end of 2019. Total allowances for expected credit losses

amounted to R34,5 million at year end, of which R20,6 million

related to customers in the South African market. Considering

the circumstances in 2020, we are pleased with collections

and credit management and bad debts remain low. Although

certain customers experienced cash ow challenges during

2020 and this impacted on the timely collection of receivables in

some cases, receivables are generally recovered in full.

Cash generated and borrowings

The reduction in inventory levels released cash and resulted in a

reduction in group borrowings. Cash generated from operations

amounted to R996,2 million in 2020. Subsequent to year end

the IDC working capital facility was reduced from R750 million

to R550 million. Cash ow forecasts indicate that the group has

sufcient borrowing facilities to meet its plans and cash ow

requirements.

Exchange rates

The Rand depreciated in 2020, resulting in the group reporting

net currency losses of R46,7 million for the year, mainly at the

Richards Bay factory on import payments and on the revaluation

of foreign payables, which exceeded the gains earned on

foreign currency receivables. Not evident in this reported net

foreign currency loss is the favourable impact of a weaker Rand

on revenue in Rand terms.

The group’s approach to managing foreign currency exposures

remains the same as in past years. A substantial portion of the

group’s purchases and sales transactions are in foreign currency

and as such the group has a strong natural currency hedge.

Forward cover contracts are utilised to manage the residual

trade exposure to the Rand.

The group is further exposed to currency uctuations with respect

to the translation of prots into Rand, as a substantial portion of

the group’s operating prot is derived from operations outside

South Africa.

Looking ahead

The group was able to withstand extremely challenging

circumstances in 2020 and despite the pandemic, borrowings

and inventory levels have improved signicantly compared with

this time last year. We expect conditions to remain challenging

in the short term. We will continue the focus on working capital,

cash and cost management.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

The directors are ultimately responsible for ensuring compliance

with all relevant laws, regulations and codes throughout the

group, which compliance is monitored and reported on at

both committee and board level. The board and its committees

continue to monitor closely the implementation of Bell

Equipment’s legal compliance processes and improve upon

them to mitigate the risk of non-compliance with the laws in the

various jurisdictions in which it does business. The group has an

established and comprehensive group approvals framework

that is reviewed annually and is aimed at clarifying the various

limits of authority in place within the group. The board recognises

that delegating authority does not reduce the responsibility of

directors to discharge their statutory and common law duciary

duties. As a parent company Bell Equipment Limited strives to

exercise appropriate governance oversight over its subsidiaries

while acknowledging their independence and the legal and

governance responsibilities that apply to each subsidiary.

King IV principles

Bell Equipment supports the governance outcomes, principles

and practices of King IV. The group views developments and

governance trends as opportunities to continuously improve

and entrench its own standards. Bell Equipment has considered

its application of and adherence to the King IV principles and

the group materially complies with the principles of King IV

and continues to identify areas where the recommended

practices can be applied, enhanced and entrenched in its

governance structures, systems, processes and procedures so

that they support and give effect to the aspiration as expressed

in those principles. Practices are scaled in accordance with

proportionality considerations and are interpreted and applied

in a way that is appropriate for the group and the sector in

which it operates. Bell Equipment’s report on the application of

the King IV principles is available on its website www.bellir.co.za.

Ethics

Through the code of ethics and code of business conduct, the

group conrms its commitment to high ethical and legal standards

in dealing with its stakeholders. The board accepts responsibility

for ensuring that the group’s business is conducted honestly,

fairly, legally, reasonably and transparently. Management is

driving this leadership culture of ethical conduct by establishing

the correct tone at the top in respect of the group’s corporate

culture by ensuring it is based on the 1-Bell philosophy and

aligning it to evolving best practice.

Corruption is a risk that is managed on an ongoing basis,

particularly in the diverse areas in which the group operates.

Ongoing awareness training on the prevention of fraud and

commercial crimes and the entrenchment of applicable policies

set stringent standards relating to fraud and the prosecution

of offenders, the acceptance of gifts from third parties and

declarations of potential conicts of interest.

The annual submission by employees of their electronic

employee governance declarations conrming their

compliance to the group codes and policies; their declaration

of any potential conicts of interest as set out in the conicts of

interest policy as well as their disclosure of any approved outside

activities, continue to be undertaken. Any non-compliance with

policies or perceived material conicts of interest is reviewed

and addressed by the GEC.

The established fraud working group meets quarterly or

more regularly when required and monitors and oversees the

investigation of all fraud related and unethical matters and

reassesses the adequacy of the internal control environment

(particularly those controls directly impacting on the incidents).

The fraud working group provides strategic guidance to different

departments on fraud and unethical behaviour detection and

preventative actions. Fraud awareness training in prevention

and detection of fraud in the workplace is ongoing and the staff

are encouraged to report suspected fraudulent or unethical

behaviour on a condential basis via the anonymous tip off

reporting line. Awareness of this facility is created through

presentations, newsletters and encouragement of staff to report

such incidents before signicant losses are incurred. All matters

reported through the anonymous tip off reporting line are also

assessed by the fraud working group and meetings are set up

with the internal auditors and investigators to ensure matters are

effectively investigated in terms of the group prevention of fraud

and commercial crime policy.

Financial statements and external review

As a part of Bell Equipment’s corporate governance policy,

the implemented standards and systems of internal controls

continue to be improved by management to provide

reasonable assurance on the integrity and reliability of the

nancial statements and to adequately safeguard, verify and

maintain accountability for shareholder investments and group

assets.

The board is of the opinion that the internal nancial controls are

adequate and that the nancial records can reliably be used for

preparing the nancial statements in accordance with IFRS and

to maintain accountability for the group’s assets and liabilities. The

recent JSE Listings Requirements’ amendments relate to internal

nancial controls where the primary responsibility for internal

controls over the nancial reporting process and the accuracy

of nancial reporting rest with the board and management

(specically the chief executive and chief nancial ofcer) of

the group. The board has identied and dened the critical

internal nancial controls and understood what the impact on

control failure will have on the group, developed a framework

to establish an approach of how the identied controls will be

evaluated and developed a standard consolidated report of

the critical controls identied and evaluated to monitor the level

of adequacy and effectiveness frequently. This allows the chief

executive and chief nancial ofcer to provide the necessary

representation that the essential internal nancial controls are

adequate and operating as intended.

During the year under review management identied certain

concerns relating to the group’s accounting for the standard

warranty provision on manufactured equipment sales. An

independent rm of accounting specialists and subsequently an

The group remains committed to the highest standards of governance, ethics and integrity through an

ethical culture, competitive performance, effective control and legitimacy in order to create sustainable

value and enhance long term equity performance. The board continues to provide prudent and ethical

leadership and continues to exercise appropriate governance oversight in this regard.

Corporate governance report

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

Corporate governance report continued

external legal advisor were appointed to assist management and this process resulted in the restatements of previously reported

nancial results as reected in note 5 of these annual nancial statements. The directors are satised that the steps taken by

management remediated the controls in this area by year end to support the reliability of the group’s 2020 nancial results. No other

matters came to the attention of the directors to indicate that any other material breakdown in the functioning of controls had

occurred during the year and up to the date of this report.

Corporate governance structure

Board composition and diversity

Gender

Female

Male

22%

78%

Age

46 - 69 years

70 years +

35 - 45 years

33%

45%

22%

Director designation

Non executive

Independent non executive

Executive

56%

22%

Race diversity

White

Black

22%

78%

Group executive committee (GEC)

The GEC is empowered and responsible for implementing the strategies approved by the board and for managing the affairs

of the group. The GEC is chaired by the chief executive and comprises the group nance director, the managing directors of

each of the regions and the executives listed on page 30.

Bell Audit services committee Fraud working group Credit committee

Management committees

Social, ethics &

transformation

committee

Audit committee

Risk and

sustainability

committee

Remuneration

committee

Nominations

committee

Bell Equipment Limited board committees

Executive

directors

Leon Goosen

Karen van Haght

Non-executive

director

Ashley Bell

Lead independent

non-executive

director

John Barton

Independent

non-executive

directors

Hennie van der Merwe

Derek Lawrance

Mamokete Ramathe

Rajendren Naidu

Chairman of the board

Gary Bell (non-executive)

Board of directors

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Current representation

No representation

Knowledge, skills and experience

The composition of the board reects both executive and non-

executive directors, comprising a majority of non-executive

directors, of whom the majority are independent, in order to

ensure that there is a clear balance of authority so that no one

individual has unfettered decision making powers.

During the year under review the board undertook a structured

and formalised evaluation of the independence of the

non-executive directors and conrmed that ve of the non-

executive directors are independent as dened by King IV and

the JSE Listings Requirements. The board, being mindful of its

responsibility to preserve an appropriate balance of skills and

experience on the board, remains of the view that the retention

of certain board members beyond nine years is benecial in

certain circumstances to ensure this balance and that orderly

succession can take place. The independence of the non-

executive directors will continue to be assessed by the board on

an annual basis.

An independent board, chaired by the lead independent non-

executive director, has been appointed to consider the possible

shareholder transaction that was announced to the market

during the reporting period.

The group has a policy in place detailing the procedures for

appointments to the board of directors. The appointments

are formal and transparent and a matter for the board as a

whole, duly assisted by the nominations committee. The board

annually considers whether the size, composition and diversity

are appropriate to ensure its effectiveness.

Newly appointed directors are formally informed of their duciary

duties by the company secretary. Upon their appointment,

directors receive an induction pack and are trained on their

responsibilities and the obligations imposed upon them.

Engineering

manufacturing

Financial

acumen

Executive

business

leadership

Strategic

planning

Risk control

and

management

Human

capital

growth and

development

Governance

and legal

Sustainability.

environmental,

health and

safety

100

67%

100% 100% 100%

78%

56%

44%

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

Roles and responsibilities of chairman, lead independent

non-executive director and chief executive during the

reporting period

Chief executive: full time executive director

The role of the chief executive, as determined by the board, is to:

• own the vision and build the culture of the group;

• oversee and deliver the group’s performance;

• lead the group and the management team;

• be ultimately responsible for all day to day management

decisions and operations of the group in order to implement

the strategic goals set by the board through the GEC;

• be the group’s principal spokesperson; and

• act as direct liaison between the board and management

and communicate to the board on behalf of management.

Chairman: non-executive director

The role of the chairman is to:

• provide leadership and rm guidance to the board, while

encouraging proper deliberation;

• lead the board and not the company;

• be the link between the board and management;

• be the main link between the board and shareholders; and

• provide skills and industry experience to the group.

Lead Independent non-executive director

The role of the lead independent non-executive director is to:

• provide independence as the chairman is not an independent

non-executive director;

• ensure adherence to good governance principles;

• handle all conict of interest matters that may arise;

• assume the responsibilities of the chairman when the latter is

unable to attend relevant board and committee meetings; and

• assume the responsibilities of the chairman when the

chairman’s performance is being appraised or term of ofce

is being reviewed.

The roles of the non-executive chairman and the chief executive

are formalised, separate and clearly dened. As Gary Bell is

not an independent non-executive chairman, John Barton is

the appointed lead independent non-executive director and

he has been appointed to handle all matters where there

is a perceived conict of interest relating to the shareholder

transaction. Leon Goosen, the chief executive and other

executive directors are employed on service contracts. Karen

van Haght is a full time executive nance director and chief

nancial ofcer of the group. There is a formalised succession

plan in place for the GEC including the chief executive and

chief nancial ofcer. The chief executive does not currently

have any additional professional commitments.

The board recognises the benets of gender, race, skills,

experience, knowledge, age and culture diversity at board level.

In line with the approved diversity policy promoting gender,

race, skills, experience, knowledge, age and culture diversity,

the aspirational targets for achieving gender diversity on the Bell

board was to ensure that at least 25 percent of the board was

comprised of women by the end of 2018 and for achieving race

diversity on the board was 30 percent by end of 2018. Whilst

the board has gender and racially diverse representation, the

board continues its efforts to increase such representation and

the nominations committee will continue to focus on achieving

these voluntary targets in the nomination and appointment of

directors.

All non-executive directors have unrestricted access to

management at any time. When required, non-executive

directors are entitled to access the external auditors and, at Bell

Equipment’s expense, are able to seek independent professional

or expert advice on any matters pertaining to the group.

In accordance with Bell Equipment’s MOI, at least one-third of

the non-executive directors must retire by rotation each year

but may offer themselves for re-election. The non-executive

directors retiring by rotation and standing for re-election by the

shareholders are Rajendran Naidu, Mamokete Ramathe and

Ashley Bell. Their brief biographies can be found on pages 28

and 29.

Board charter

The board is responsible for approving the strategic direction of

the group and assisting management in achieving its strategic

goals. The strategic vision of the group is set out on page 18.

The scope of authority, responsibility, composition and

functioning of the board is contained in a formal charter.

The board charter and each of the committees’ charters are

reviewed annually. The board and committee charters are

available on request from the company secretary.

The directors retain overall responsibility and accountability for:

• monitoring corporate governance, approval of the group’s

strategy, setting objectives, monitoring implementation of

board plans and strategies, effective leadership on an ethical

foundation;

• approving the strategic direction of the group and the budget

necessary for the implementation of the strategy;

• being the guardian of ethics and the values of the group;

• exercising leadership, enterprise, integrity and judgement in

directing the group so as to achieve continuing prosperity for

the group, retaining full and effective control of the group;

• appointing the chief executive and ensuring proper

succession planning for the group’s executive directors and

senior management;

• assuming overall responsibility for risk management;

• safeguarding the integrity of corporate governance

processes;

• ensuring that technology and systems used in the group are

adequate to run the business properly and evaluating and

monitoring IT governance within the group;

• implementing best practice disclosure and reporting practices

that facilitate transparent and open communication with key

stakeholders throughout the year;

• ensuring that procedures and practices are in place, including

systems of internal control, that protect the group’s assets and

reputation; and

• approving the annual nancial statements and the integrity of

the integrated annual report.

Committees’ mandate and charters

The board charter allows for the delegation of responsibilities to

committees formed by it to assist in the execution of its duties,

power and authority, taking into account the dictates of the

Companies Act and the JSE Listings Requirements. The board

applies responsible governance in ensuring the managing of

the business within the approved risk appetite through various

board committees and delegation to such committees is formal

and involves approved and documented charters for each

committee, which are reviewed annually and any changes are

Corporate governance report continued

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

approved by the board. The board annually reviews whether

each committee as a whole has the necessary knowledge,

skills, experience and capacity to execute its duties effectively.

In line with the Companies Act and King IV, the group has a

separate audit committee, a remuneration committee, a

social, ethics and transformation committee, a nominations

committee and a risk and sustainability committee. They play

an important role in enhancing good corporate governance

and improving internal controls, thus assisting in the sustainable

performance of the group. There are further management

committees including the Bell audit services committee, which

the audit committee chairman attends, the fraud working group

and the credit committee.

The board is satised that the committees are aligned with the

principles set out in King IV and are appropriately structured

and competent to deal with the company’s existing and

emerging issues and that they have effectively carried out

their responsibilities according to their charters and terms of

reference, and the annual work plans that are approved at the

commencement of the year.

Nominations committee

Composition

Chairperson:

John Barton – lead independent non-executive director.

Members:

Rajendran Naidu – independent non-executive director;

Hennie van der Merwe - independent non-executive director;

Gary Bell – non-executive chairman of the board .

Brief particulars of the committee members can be found on

pages 28 and 29.

Three meetings were held during the year.

Summary of roles and responsibilities

The roles and responsibilities of the nominations committee are:

• to ensure appropriate board composition in order to achieve

the appropriate balance of skills, experience and diversity

required to lead, control and best represent the group;

• to consider the performance of directors and oversee

the development and implementation of continuing

development programmes for directors;

• to review the policy which details the procedures for

appointments to the board, and which ensures a balance of

power and authority at board of directors’ level so that no

one director has unfettered powers of decision making; and

• to review succession planning arrangements for the board

and the executive management of the group.

Social, ethics and transformation committee

Composition

Chairperson:

Mamokete Ramathe - independent non-executive director .

Members:

Gary Bell – non-executive chairman of the board;

Ashley Bell – non-executive director;

Rajendran Naidu – independent non-executive director;

Karen van Haght – nance director.

Brief particulars of the committee members can be found on

pages 28 and 29.

Three meetings were held during the year.

Summary of roles and responsibilities

The responsibilities of the social, ethics and transformation

committee, which are aligned with the statutory functions as set

out in the Companies Act and the regulations to the Companies

Act, include:

• monitoring group activities on social, transformation and

economic development, good corporate citizenship,

environment, environmental risks, health and safety,

consumer relationships, labour and employment;

• compliance with the Employment Equity Act and BBBEE

legislation; and

• educational development of its employees.

The full report by the chairman of the social, ethics and

transformation committee can be found on page 54 of the AGM

book of which the social, ethics and transformation committee

report forms part.

Audit committee

Composition

Chairperson:

Derek Lawrance - independent non-executive director.

Members:

John Barton – lead independent non-executive director;

Rajendran Naidu - independent non-executive director;

Mamokete Ramathe - independent non-executive director.

All the members were elected as members of the committee by

the shareholders at the AGM on 15 July 2020.

Five meetings were held during the year.

Summary of roles and responsibilities

The roles and responsibilities of the audit committee are aligned

with the statutory functions as set out in the Companies Act and

the regulations to the Companies Act and include:

• oversight of the group’s nancial reporting;

• ensuring continued independence of external auditors;

• overseeing the external audit process;

• overseeing the integrated reporting;

• applying, as practical, the combined assurance model to

ensure a coordinated approach to all assurance activities;

• reviewing the expertise, resources and experience of the

nance function;

• considering the appropriateness of the expertise and

experience of the nance director; and

• overseeing the internal audit function.

The full mandate of the audit committee can be found in the

detailed audit committee report included in the audited 2020

annual nancial statements on the group’s website.

The audit committee has ensured that the group has established

appropriate nancial reporting procedures and that those

procedures are operating. This included considering the

group structure to ensure that it has access to all the nancial

information to allow the group to effectively prepare the report

on the nancial position of the group. The audit committee has

also ensured that the appointment of the auditor is presented

and included as a resolution in the upcoming annual general

meeting.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

Risk and sustainability committee

Composition

Chairperson:

Hennie van der Merwe - independent non-executive director .

Members:

John Barton - lead independent non-executive director;

Ashley Bell – non-executive director;

Gary Bell – non-executive chairman of the board;

Derek Lawrance - independent non-executive director;

Karen van Haght – nance director;

Leon Goosen - chief executive.

Brief particulars of the committee members can be found on

pages 28 and 29.

Three meetings were held during the year.

Summary of roles and responsibilities

The risk and sustainability committee is responsible for:

• the review and monitoring of the implementation of the

group’s risk management policy and plan;

• the review of the Bell Equipment group risk appetite and

risk tolerances and the review of the risk appetite and risk

tolerance matrices, the Bell Equipment group strategic risk

risk and sustainability committee meetings;

• the review and assessment of the risk philosophy,

strategy and policies recommended by the GEC and the

consideration of the reports by the GEC on these issues;

• reporting to the audit committee on its ndings in respect

of material legal and compliance risks and in respect of the

company’s policies on risk assessment and risk management

which may have an impact on the group’s nancial

statements;

• reviewing the adequacy of insurance coverage;

• focusing on the development, progressive implementation

and monitoring of the policies and plans to deal with the

sustainability issues which relate to the long-term sustainability

of the group;

• reviewing the integrated annual report to shareholders with

regard to the relevant sustainability considerations as set out

in the stakeholder relations report; and

• considering whether and to what extent external assurance

is required on integrated reporting to shareholders with

regard to the relevant sustainability considerations.

Remuneration committee

Composition

Chairperson:

Derek Lawrance - independent non-executive director.

Members:

John Barton – lead independent non- executive director;

Gary Bell – non-executive chairman of the board.

The chief executive attends all remuneration committee

meetings by invitation.

Three meetings were held during the year

Summary of roles and responsibilities

The roles and responsibilities of the remuneration committee are

to:

• oversee the establishment of and regularly review the group

remuneration policy;

• ensure that the remuneration policy and the implementation

report are both put to non-binding advisory votes at the

AGM of shareholders and that the process of engagement

with shareholders in the event of a 25% or more vote against

such reports is followed;

• oversee the preparation of the remuneration committee

report for inclusion in the integrated annual report;

• advise on non-executive directors’ remuneration;

• advise and monitor executive remuneration and ensure

that the group’s executive directors and management

are rewarded fairly in accordance with their individual

contribution to the group’s overall performance objectives;

• approve and review incentive bonus or share schemes; and

• evaluate the chief executive’s performance.

The detailed responsibilities of the remuneration committee can

be found under the remuneration committee report on page 39

of the AGM book of which the remuneration committee report

forms part.

Group company secretary

The company secretary continues to ensure that board

procedures, regulations and governance codes are observed,

and also provides guidance to the directors on governance,

compliance and their duciary responsibilities. Directors have

unrestricted access to the advice and services of the company

secretary.

The company secretary provides advice and updates to the

board at all meetings by reporting on new and amended

legislation and regulations relevant to the group’s business. She

coordinates the induction programme for newly appointed

directors, as well as the board and committee evaluation

process.

In terms of the JSE Listings Requirements the board is required to

consider and satisfy itself on an annual basis on the competence,

qualications and experience of the company secretary.

Following the formal assessment conducted by the board of the

company secretary in December 2019, an informal assessment

was undertaken in 2020 to assess her competence. A further

formal assessment will be undertaken during 2021.

The board remains satised that the company secretary has

the requisite competence, qualications and experience to

carry out the required responsibilities and continues to be

independent of the board. The company secretary is not a

director of the company.

The board is satised that the company secretary is the

gatekeeper of good governance, and that in the absence of

any existing relationships, she is able to interact with the board

and its individual directors at arms length, and that the directors

are able to look to the company secretary for guidance on their

responsibilities and duties.

Board and committee evaluations

Following a formal and comprehensive questionnaire based self

evaluation assessment undertaken by the directors in respect of

the board, the committees, the chairman and the company

secretary at the end of 2019, the action items owing from such

evaluation report were considered by the board and separately

by each of the committees. A further formal self evaluation

assessment will be undertaken at the end of 2021.

Corporate governance report continued

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Attendance at board and committee meetings

The board meets at least once every quarter. Additional

meetings are convened to consider specic business issues that

may arise between scheduled meetings. During the year under

review, an additional ve board meetings were convened to

consider specic business.

Attendance register: 1 January 2020 to 31 December 2020

Board

Audit

Risk & Sustainability

Nominations

Remuneration

Social, ethics &

transformation

committee

Number of meetings held

9 5 3 3 3 3

John Barton

8 5 3 3 3 n/a

Gary Bell

9 n/a 3 3 3 3

Karen van Haght

9 5* 3 n/a n/a 3

Leon Goosen

9 5* 3 2* 3* 3*

Ashley Bell

9 n/a 3 n/a n/a 3

Hennie van der Merwe

9 n/a 3 3 n/a n/a

Derek Lawrance

9 5 3 n/a 3 n/a

Mamokete Ramathe

9 5 n/a n/a n/a 3

Rajendran Naidu

9 5 n/a 3 n/a 3

* Leon Goosen and Karen van Haght attend the committee

meetings as invitees.

Compliance governance

The board is responsible for the governance of compliance with

applicable laws and with adopted non binding rules, codes and

standards. The company secretary is responsible for providing

advice to the operational business units, creating awareness

and developing an understanding of the relevant existing, new

and amended legislation and regulations. An analysis of the

current and pending legislation and regulations relevant to the

group is presented to the board and to the relevant committees

during the year. Board members are committed to complying

with the disclosure, transparency and listing rules of the JSE and

King IV.

Key areas that received focus in the past nancial year included

the amendments to the JSE Listings Requirements, including the

required attestation by the group chief executive ofcer and

chief nancial ofcer in terms of paragraph 3.84 (k) of the JSE

Listing Requirements, the Protection of Personal Information Act,

the effect of COVID-19 on the business and the supply chain

including force majeure events, the Companies and Intellectual

Property Commission’s companies’ compliance disclosure

requirements, King IV and other material legislation affecting

the group.

Conicts of interest and share dealings

The board recognises the importance of acting in the best

interest of the group and protecting the legitimate interests

and expectations of its stakeholders. The board consistently

applies the provisions of the Companies Act on disclosing or

avoiding conicts of interest. Directors are required to declare

their personal nancial interests, in contracts or other matters

in which Bell Equipment has a material interest or which are to

be considered at a board meeting, in general annually and

specically at the commencement of each meeting of the

board and each committee meeting, in accordance with the

requirements of the Companies Act.

Where a potential conict of interest exists, directors are

expected to recuse themselves from relevant discussions and

decisions. During the reporting period, the conicts of interest

in respect of the shareholder transaction in terms of which I A

Bell & Company (Pty) Ltd, a 38,7% shareholder in the company

entered into a formal binding agreement to acquire John

Deere’s 31,3% shareholding in the company, subject to certain

conditions precedent, have been managed through the

ongoing disclosure of interests by directors at each meeting

and the recusal of such interested directors. The appointment

of an independent board was also undertaken and the formal

appointment of the lead independent non-executive director

as the chairman of the independent board, following the

notication to the board of the non binding expression of interest

in respect of a possible transaction to acquire the entire issued

ordinary share capital of Bell Equipment not already held by or

to be acquired by I A Bell & Company (Pty) Ltd.

All directors are required to comply with the group code of

ethics, the provisions of the Financial Markets Act, 2012 and the

JSE Listings Requirements regarding inside information, price

sensitive information, dealings in securities and the disclosure

of such dealings which have also been covered previously in

various Bell codes, policies and procedures, including the group

code of business conduct and the group corporate information

policy.

As required by the JSE Listings Requirements, a closed period is

implemented at both half year and at year end until the release

of the interim and year end results respectively. During closed

periods, directors and designated senior executives may not

deal in the shares or in any other instrument linked to the shares

of the group. Directors and senior designated employees are

required to instruct their portfolio or investment managers not to

trade in Bell Equipment securities without their written consent.

Details of all dealings by directors during the reporting period

are contained in the directors’ report in the audited annual

nancial statements on the website.

External audit

The external auditors are responsible for reporting on whether

the nancial statements are fairly presented and whether they

are prepared in all material respects in compliance with IFRS.

Their audit also includes an assessment of selected internal

controls. The preparation of the annual nancial statements

and the adequacy of the systems of internal control remain the

responsibility of the directors. Further information on the external

auditors can be found in the audit committee report in the

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

annual nancial statements.

Internal control systems

The group has developed an effective group controls framework

to provide reasonable assurance to management with respect

to nancial statement preparation, asset safeguarding, IT

general controls, inventory, payroll, treasury and company

secretariat functions.

The minimum controls required in each group operation for

each business cycle, with clear accountability by name for

each control, is in place and such framework is key to driving

an improvement in controls throughout the group. A control

self assessment tool to assist managers in managing the internal

controls within their areas of accountability is being successfully

utilised by the group.

The effectiveness of internal control systems can change with

circumstances and, for this reason, these are reviewed and

updated regularly. The systems presently in place are suitably

aligned with the monitoring requirements and nothing has

come to the attention of the directors, or internal auditors, to

indicate that any material breakdown in the functioning of Bell

Equipment’s key internal controls and systems occurred during

2020, except for the deciency described under the heading

nancial statements and external review on page 39 of this

report.

Internal audit

Ernst & Young Advisory Services continues to provide the group

with internal audit services on an outsourced basis. The group’s

internal audit function use a risk based methodology. The annual

internal audit plan is developed giving due consideration to the

risks identied as well as business requirements and is approved

by the audit committee. The GEC and the Bell audit services

committee are kept fully up to date with the internal audit

function’s activities through comprehensive reports that include

the internal audit ndings and recommendations, management

comments and regular status updates. During the year in review,

the Bell Equipment group internal audit function fullled its duties

with the support and cooperation of the board of directors,

management and staff.

IT governance and compliance

IT is an integral part of Bell’s business operations, and acts as an

enabler to the group’s strategic and operational goals. There

is an appointed chief information ofcer and an IT steering

committee that continue to manage IT governance across

the group. This committee meets on a quarterly basis and

reviews adherence to the IT controls framework. The IT controls

framework is aligned to COBIT and includes controls that ensure

strategic alignment, deliver value and manage performance,

provide information security, manage IT risk and compliance,

and ensure business continuity management. The committee

ensures that matters such as ever increasing regulatory

and governance compliance, cybersecurity and digital

transformation are adequately addressed, whilst continuously

focusing on innovative and business centric solutions.

During the reporting period the IT strategy was revised to ensure

alignment with business strategic goals, incorporate the impact

of technology drivers and trends and appropriately mitigate IT

risks. SAP production and warehouse management functionality

was implemented to support the expansion of the Eisenach-

Kindel fabrication and warehousing facilities. Investment in

Microsoft’s productivity suite has been made thereby enabling

collaboration, integration, data governance, and user

empowerment through incorporated business intelligence tools.

Bell Equipment’s online parts footprint has been expanded to

include European dealers thereby driving increased aftermarket

revenue streams and improved customer interaction.

The risk of cyberattacks and legislative requirements around

data protection have continued to be a focus. Security incident

monitoring and response capability has been expanded and

security awareness training is ongoing. ISO 27001 has been

adopted by the group as the information security standard.

Deloitte & Touche continue to conduct a general computer

controls review to evaluate the IT general control environment.

Risk Management

The board is responsible for the governance of risk

management within the Bell Equipment group and has

approved a policy and framework to identify, analyse,

report and mitigate risks, and thereby govern the group risk

management process. Oversight is delegated to the risk and

sustainability committee, which is a committee of the board.

The board sets the Bell Equipment group risk appetite and

risk tolerances annually on the recommendation from the risk

and sustainability committee. Risk registers are presented to

the committee, which identify the most signicant risks based

on likelihood and impact of occurrence, with mitigating

controls documented per risk. This is achieved by requiring

that subsidiaries report their key risks and responses to the risk

and sustainability committee at each committee meeting. The

chairperson of the risk and sustainability committee reports the

most signicant risks derived from the above process to the

board.

The risk appetite and risk tolerance matrices, the group strategic

risk register and the high impact risks are reported on at the risk

and sustainability committee meetings. The unprecedented

nature of the COVID-19 pandemic has been taken very seriously

by the group and the group continues to work to minimise the

ongoing risks it poses to the long-term business sustainability.

Greater detail on this and other material risks facing the group

can be found on pages 20 to 25.

Management assesses risk in accordance with international

best practice based on probability, impact and quality of the

existing control environment. These measures produce residual

risk scores that indicate the signicance of the risk and allow for

prioritisation of risk mitigation measures.

The Bell Equipment risk management framework model

classies the risks into types of risk with a potentially positive

or negative effect on the ability of the business to meet its

strategy and protect or create value. It then goes on to

formulate the approach to be followed in managing risk,

reviewing controls in place, implementing additional controls

required and identifying who is responsible in managing the risk.

Combined assurance is based on identied risks and how

assurance is achieved and reported to the board through the

audit committee.

Corporate governance report continued

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Tip off reporting line

Bell Equipment is committed to conducting healthy business

practices with honesty and integrity. For this reason, Bell

Equipment subscribes to an anonymous tip off reporting line

service that enables all stakeholders to report anonymously

on suspected dishonest behaviour. This service is administered

independently by a professional services rm, and enables

all stakeholders to anonymously report environmental, safety,

ethics, accounting, auditing and control issues or other

concerns. Awareness is created by advertising on staff notice

forums and subsidiary company websites. The follow up on all

reported matters is coordinated by the fraud working group

and reported to the audit and risk and sustainability committee.

Engagement with stakeholders

The board acknowledges that it is ultimately responsible for

the management of relationships with the group’s major

stakeholders. A strong emphasis is placed on its customers,

alliance partners, suppliers, employees and shareholders.

During the reporting period the group received focus by the

media following its annual general meeting in July 2020 and

the notication to the market of the possible transaction taking

place between its two major shareholders and the notication

of a non-binding expression of interest by IA Bell & Company

in respect of a possible transaction to acquire the entire issued

share capital not already held by or to be aquired by IA Bell &

Company by way of a scheme of arrangement subject to the

fullment of certain conditions precedent. The board continues

to comply with the Companies Act and the JSE Listings

Requirements and timeously noties its stakeholders through the

correct channels as these transactions progress.

The board through the social, ethics and transformation

committee receives formal feedback from management on a

quarterly basis as to the nature of the interaction that has taken

place with the relevant stakeholders. A report on how the group

has engaged with its stakeholders during the reporting period is

available on pages 48 to 65.

Access to information

Bell Equipment continues to comply with the requirements of the

Promotion of Access to Information Act of 2000, as amended

(PAIA). The corporate manual is available on the website at

www.bellir.co.za. During the reporting period and to the date

of this report the group received four PAIA applications from

two shareholders, which applications were considered by the

board and with the assistance of external legal counsel, were

appropriately and timeously responded to.

Sponsor

Investec Bank Limited remains Bell Equipment’s corporate

sponsor in compliance with the JSE Listings Requirements, and

among other functions, advises the board on compliance with

the JSE Listings Requirements.

Conclusion

The board believes, in respect of the business specically

reserved for its decision, it has satisfactorily discharged its

duties and responsibilities during the year under review. The

governance processes continue to be regularly reviewed to

align with legislative and regulatory changes, and to reect

changes in the business to ensure processes remain relevant.

Fourth line of defence

(highest level of independence)

Independent assurance - external audit

Third line of defence

Internal audit

Board and GEC

reporting

Second line of defence

Management of risk and compliance

First line of defence

Management oversight

Top down approach

Integrated assurance

through reporting on

results

Combined assurance

through process and

teams

Risk

Bottom up approach

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

Bell Equipment’s key stakeholder base includes employees, customers, government departments,

shareholders and nanciers, communities, suppliers and alliance partners. These individuals, groups and

organisations affect and are affected by Bell Equipment’s activities, products or services and associated

performance. Engaging with and building relationships with these stakeholders is key to sustaining the

group’s business.

Bell Equipment strives to create mutual value by cultivating

enduring and sustainable partnerships with its stakeholders.

The board retains oversight of stakeholder management, while

implementation and monitoring of stakeholder engagement is

devolved to the various management teams within the group.

Each of the group’s operations engage with their diverse range

of stakeholders based on the group’s core values of respect,

honesty and integrity.

The Bell Equipment brand is the essence of who it is in the

marketplace. The organisation uses its brand to differentiate

itself through its people centric approach to business and by

promoting the 1-BELL philosophy internally and nurturing it

externally, thereby adding value to all stakeholders.

The group’s stakeholder engagement strategies, systems and

processes continue to be enhanced to better understand

and respond to its stakeholders’ legitimate concerns and to

form collaborative partnerships to nd solutions to collective

challenges.

Bell Equipment’s approach to corporate sustainability is

enhanced by focusing on the six capitals and understanding

the value created by the group using these six capitals. Through

carefully identifying the interests and expectations of each key

stakeholder group Bell creates value using the relevant capital/s,

thereby striving to ensure sustainability of its business.

1. Human capital:

determines the capacity of an organisation to accomplish

its goals. Bell employees represent a rich and diverse

human capital base that provides the skills, competencies,

capabilities and experience that ensure the growth and

sustainability of its business to deliver innovative products and

services that are world class. Bell manages its human capital

to ensure people’s health and safety and invests in their

professional and personal growth.

2. Manufactured capital:

is the investment in people, property, infrastructure, buildings,

plant, production oriented equipment, machines and tools

that Bell relies on to efciently enable the group to be exible

and responsive to customer demand in getting Bell products

to market, while utilising production processes that adhere to

environmental regulatory requirements.

3. Intellectual capital:

consists of the Bell brand, know how and the technical

acumen of its research and development staff, the company

culture and its world class systems and processes. The success

Bell achieves in developing, managing and expanding its

products and services is the result of the knowledge and

experience of people who expertly manage the diverse

interests that collectively provide innovative products and

service solutions.

4. Financial capital:

is the pool of funds, obtained through nancing and

generated through its operations that are available to Bell

for use in the production of its products and the provision of

services. This capital reects how successful Bell has been at

achieving the sustainable development of its environmental,

human, social and manufactured capital. Bell continues to

enhance its nancial capital by:

• effective management of risk;

• corporate governance structures;

• ensuring equitable use of wealth created; and

• assessing the wider economic impact of its activities

on society.

5. Social and relationship capital:

encompasses interactions with its stakeholders, including its

customers, employees, alliance partners, nanciers, investors,

communities, suppliers, and governments. Bell prides itself on

conducting business by taking into account its legal, ethical

and economic responsibilities.

6. Environmental capital:

is an input to the production of an organisation’s products

and the provision of services. An organisation’s activities also

impact, positively or negatively, on environmental capital.

Bell is committed to the responsible use and protection of the

natural environment through sustainable practices.

Engagement is an integral part of developing an understanding

of Bell Equipment’s stakeholder needs, interest and expectations.

Set out below are the key stakeholders with whom the group

engages on a regular basis and the means of engagement. The

use of six capitals in respect of stakeholder engagement is further

illustrated in the following tables and information thereunder.

The six capitals

HUMAN

INTELLECTUAL

SOCIAL AND

RELATIONSHIP

MANUFACTURED

ENVIRONMENTAL

FINANCIAL

Stakeholder relations report

incorporating sustainability elements

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

The COVID-19 pandemic had a massive impact on our employees during

2020 as the world struggled to come to terms with how the virus changed

life as we know it, from both a business and individual perspective.

In response to market conditions, the group took steps to reduce costs

during the months of May, June and July by implementing 20% short time

across the global operations. During the same period, GEC members took

a 25% salary reduction and the board of directors sacriced 30% of their

director’s meeting fees for a six month period.

Our employees showed great understanding, loyalty and cooperation

when faced with this necessary short time, and having to adhere to

COVID-19 protocols, amongst other challenges. Importantly, they made

sure our customers continued to receive quality service, all of which

underpins why our employees are the group’s greatest asset.

During this time Bell has prioritised the protection of jobs and easing the

nancial pressure on employees caused by the global lockdowns. Where

available, the group applied for relief measures in the countries in which

we operate to try and cushion our employees globally. In South Africa we

applied for the Temporary Employer/Employee Relief Scheme (TERS) for

those months when the group embarked on short time.

Notably, Bell Zimbabwe continued to provide nancial assistance to

employees to mitigate against the economic pressures in the country.

Our employee relations environment remains very stable and the group is

grateful for the support shown by the South African labour unions, which

have committed to lobbying government to work towards improving the

sustainability of the group for all stakeholders.

Of the new employments, 12 were appointments that improved the group’s

transformation requirements.

EMPLOYEES

Reason for

engagement

Stakeholder interests and

expectations

Methods of engagement and value creation

• Bell Equipment’s

people are the

heart and soul of its

business. Their skills

and commitment

determine the

group’s ability to

realise its strategy.

• Healthy working conditions.

• Fairly remunerated for their

service.

• Recognition.

• Health and safety.

• Career advancement.

• Employment equity.

• Employee forums

(e.g. health and safety, employment equity committees).

• Training and skills development.

• Learning programmes for disabled black employees.

• Information road shows about employee benets

(e.g. medical aid and pension funds).

• Fraud awareness road shows.

• Fraud management briefs.

• Induction programmes.

• Quarterly GEC feedback sessions.

• Internal newsletter and intranet.

• Health and safety ‘toolbox talks’.

• Employee wellness days.

• Long service awards.

• Anonymous tip off reporting line.

• Regular engagement with trade union representatives on

key issues.

Average number of employees who

benetted from TERS per month

1977

Total TERS funding received

R40,5 million

Total workforce

2969

New permanent employees in 2020

Promoted employees in 2020

HUMAN

SOCIAL AND

RELATIONSHIP

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

Total Global Workforce

3500

3000

2500

2000

1500

1000

500

122

Africa

Australasia Europe

307

2521

USA

Grand

Total

2969

The annual long service awards ceremony was deferred in

2020 due to COVID-19 restrictions on the number of people

allowed at a function. The group will celebrate these

achievements together with those employees who reach

long service milestones in 2021, if possible. The number of

employees who qualied for long service awards in 2020 is

as follows:

10 years

20 years

30 years

40 years

Long Service Awards 2020

Africa

Bell Equipment total workforce

Male Female

81,15%

18,85%

Australasia

100%

Europe

17,26%

82,74%

South Africa

19,67%

80,33%

USA

25%

75%

Employment equity summary: Actual December 2020

Male Female

Occupational levels

African

Coloured

Indian

White

African

Coloured

Indian

White

Grand

Total

BECSA

Top management 0 0 0 0 0 0 0 0 0

Senior management 0 0 0 1 0 0 0 0 1

Professionally qualied and experienced specialists and

mid-management

7 0 17 16 7 0 1 3 51

Skilled technical and academically qualied workers,

junior management, supervisors, foreman and

superintendents

56 9 90 47 11 1 6 9 229

Semi-skilled and discretionary decision making 498 17 122 37 108 9 25 7 823

Unskilled and dened decision making 6 0 0 0 2 1 2 1 12

Grand Total 567 26 229 101 128 11 34 20 1116

Stakeholder relations report continued

incorporating sustainability elements

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Occupational levels BECSA BEGS BESSA

Grand

Total

Top management 0

Senior management 0

Professionally qualied and experienced specialists and

mid-management

Skilled technical and academically qualied workers, junior

management, supervisors, foreman and superintendents

Semi-skilled and discretionary decision making 5

Unskilled and dened decision making 0

Grand Total 6 2 2 10

African Indian WhiteColoured

Male Female

Occupational levels

African

Coloured

Indian

White

African

Coloured

Indian

White

Grand

Total

BEGS

Top management (CEO) 0 0 0 1 0 0 0 0 1

Senior management 0 0 2 4 0 0 0 2 8

Professionally qualied and experienced specialists and

mid-management

20 2 11 79 1 0 3 14 130

Skilled technical and academically qualied workers,

junior management, supervisors, foremen and

superintendents

29 3 22 29 8 3 9 19 122

Semi-skilled and discretionary decision making 53 3 5 1 20 1 9 17 109

Unskilled and dened decision making 1 0 0 1 1 0 0 0 3

Grand Total 103 8 40 115 30 4 21 52 373

BESSA

Top management 0 0 0 0 0 0 0 0 0

Senior management 2 0 0 0 0 0 1 0 3

Professionally qualied and experienced specialists and

mid-management

2 1 2 14 1 2 1 2 25

Skilled technical and academically qualied workers,

junior management, supervisors, foremen and

superintendents

80 10 12 106 3 3 2 7 223

Semi-skilled and discretionary decision making 69 12 18 8 33 10 6 29 185

Unskilled and dened decision making 7 0 1 0 5 1 0 0 14

Grand Total 160 23 33 128 42 16 10 38 450

Employees with disabilities – BECSA, BESSA and BEGS combined

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

BECSA

BEGS

BESSA

Combined BECSA, BEGS and BESSA male workforce age analysis

600

500

400

300

200

100

18 - 20

4 0 0

over 65

0 0 0

21 - 30

365

31 - 40

521

132

41 - 50

325

106

51 - 60

158

61 - 65

Training

Bell Equipment has had a dedicated focus on training for almost 30 years and is a fully accredited training provider with well

equipped training facilities in South Africa located in Richards Bay and Johannesburg. Training is focussed on ‘growing our own

timber’ through the group’s MERSETA registered

apprenticeship programme as well as providing

operator and technical training for Bell employees

and its customers.

The outbreak of COVID-19, the hard lockdown and

the further working from home arrangements of the

non scheduled employees has required much of the

training opportunities to take place online.

In 2020 training across the group was wide ranging

and included technical, apprenticeship, soft skills and

legislative training as well as education assistance.

Attendance was as follows:

140

120

100

18 - 20

0 0 0

over 65

1 0 0

21 - 30

31 - 40

123

41 - 50

51 - 60

61 - 65

Combined BECSA, BEGS and BESSA female workforce age analysis

BECSA

BEGS

BESSA

Group training gures

180

141

BECSA

BESSA

BEGS

BENA

EMEA

External

customers

268

2 483

Stakeholder relations report continued

incorporating sustainability elements

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

BECSA appointed Motto Human Research to administer a condential and anonymous culture, climate and engagement survey

among employees and facilitate focus group discussions and training to address the results of the survey.

This provided an opportunity to identify strengths, opportunities and areas for development to improve the business and ensure a

continued focus on employees and their success.

Survey results indicated Bell employees are committed, loyal and care about the group. The survey further indicated Bell employees

are customer orientated, innovative and want to be involved in decision making. The survey highlighted several development areas

that would improve the overall ethos of Bell. These areas formed the basis of an organisational development plan that was driven

through group and individual coaching, workshops and leadership training during the year. 2021 will be used to build on these

interventions and to continue with leadership and diversity training.

Company

Technical

Training

Soft Skills

Legislative

training

Appren-

ticeship

training

Artisan

recognition

prior learning

Education

Assistance

Graduates

/ Interns /

In-Service

Bursaries

BECSA 25 1611 605 209 4 5 20 4

BESSA 111 7 135 0 1 14 0 0

BEGS 15 119 30 0 0 15 1 0

BENA 0 3 0 0 0 0 0 0

EMEA 1 24 25 2 0 2 0 0

External Customers 107 1 3 30 0 0 0 0

111

BECSA, BESSA and BEGS training by type

1800

1600

1400

1200

1000

800

600

400

200

BECSA

BEGS

BESSA

Technical

training

Soft skills

training

Education

assistance

Graduates /

Interns /

In-Service

Legislative

training

Apprenticeship

training

ARPL

119

1611

605

135

209

0 0

4 1 0

15 15 14 20 1 0

Bursaries

4 0 1

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

Employee wellness

The BECSA Wellness Week was delayed

until December 2020 due to COVID-19

and fewer employees were able to

participate due to social distancing

and other COVID protocols.

External service providers that

took part included: Old Mutual,

SANCA Zululand, SOS Optometrists,

Momentum Health and their rewards

partner, Multiply, and Care Works.

Activities comprised: personal nancial

wellness planning, retirement planning,

medical aid and gap cover presentations and advisory services,

eye testing, BMI (Body Mass Index) testing, HIV testing, glucose,

blood pressure and cholesterol testing, male cancer testing (124

employees tested), pap smears (40 tests done), psychological

services as well as alcohol and drug related counselling services. A

total of 559 employees were tested for HIV and TB.

THE BELL WAY

Safety & health principles

BEHAVIOUR

All harmful practices and unsafe acts

will be investigated to determine

what happened and why.

Necessary steps will be implemented

to prevent any recurrences.

CULTURE

We believe we can proactively

prevent harmful exposures and

occupational risk.

We are all responsible for correcting

unsafe practises and behaviours.

SYSTEMS

We will adopt a common, simple

set of non negotiable standards

and rules throughout the group

that will be implemented and

maintained by line management.

(58,64%)

Richards Bay

factory employees

who participated in

Wellness Week

1 502

Health and Safety

The safety and wellbeing of all

our employees, contractors,

suppliers and customers is

of paramount importance

to Bell Equipment and

fundamental to the

sustainability and growth

of our operations. Our

aspiration is to operate

sustainably, without harm to

people, the environment and

the communities in which we

operate. Written rules, standards and

procedures are important and necessary, but they are

not enough. Bell Equipment has therefore developed a

culture in which the value of safety is embedded in every

level of the workforce.

Reduction in

total group injuries

12-month average TIFR

reduced from

2,77 to 2,42

in 2020

13%

Our safety performance is measured using a range of leading and lagging indicators, including Total Injury Frequency Rate (TIFR) and

Lost Time Injury Frequency Rate (LTIFR). Both these frequency rates are calculated on total man hours worked.

There were no ndings of non compliance, nor were any nes or penalties incurred.

Group total accidents

2016 2017 2018 20192015

160

140

120

100

2020

Stakeholder relations report continued

incorporating sustainability elements

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Our 1-BELL integrated approach to the management of

occupational safety, process safety, occupational health

and quality is based on the fundamentals of leadership,

teamwork, effective communication, accountable behaviour

and continuous improvement. The approach is detailed in the

group safety management system which is implemented and

embedded by the management of every group company to

enable the journey towards zero harm.

The safety, health and environment committees at both the

factories and operating subsidiary levels are responsible for

overseeing compliance with health and safety legislation and

policies. All employees, including contractors, receive safety

training.

The group employs a safety management system based on

behaviour based safety. The system requires a baseline risk

assessment to identify the major risks at the individual operations.

These risks are then examined further by conducting issue based

risk assessments and identifying appropriate control measures to

mitigate the risks. Further mitigation measures include visible felt

leadership and ongoing training.

As required by South African regulations, Bell Equipment has

established safety and health committees at all the relevant

divisions to approve and implement all mandatory safety training

and operating procedures. Safety staff oversee compliance

audits, site conditions and identify and allocate any necessary

corrective actions.

COVID-19

The pandemic is identied as an

inherent risk in our strategic overview

and risk management report

on page 25 due to the risk it

poses to Bell globally. However,

it bears noting that measures

implemented by the group, and

the adherence thereto by our

employees and customers, have

helped to minimise the risk it poses

to the health and safety of these

important stakeholder groups.

Measures are followed as far as reasonably practicable and

include:

• Following health advice and information

Advice is followed from the World Health Organisation, as

an international source, and the Department of Health and

the National Institute of Communicable Diseases, as local

sources.

• Implementing administrative measures

Risk assessments in respect of COVID-19 are conducted

and updated. Required measures are adapted in terms of

regulations specic to the working environment.

• Communicating with employees

Updates are consistently provided on COVID-19 including

the approach in the workplace regarding attendance and

preventing the spread of infection.

Email, SMS and WhatsApp is used for ongoing communication

with all employees. Safety notice boards are found on the

factory oor and ofces and are updated daily with the

notices sent via electronic channels.

• Sanitising and disinfecting

Adequate facilities are provided for employees to wash and/

or sanitise their hands regularly within the workplace. Stringent

disinfection measures have been adopted for high risk work

areas and places.

• Identifying vulnerable workers

Employees with weakened immune systems and long term

health conditions have been identied and mitigating actions

implemented to protect their health.

• Enforcing social distancing

Social distancing protocols and best practices have been

implemented along with work from home strategies where

possible.

• Screening employees and visitors

Employees and visitors are screened for any of the commonly

reported symptoms associated with COVID-19 before

entering the workplace.

• Providing face masks and personal protective equipment

Employees are supplied face masks and other personal

protective equipment as prescribed, depending on their

occupation, free of charge.

• Ongoing training and awareness

Induction programmes ensure employees are aware of

COVID-19 symptoms, how infection is spread and preventative

action. Self assessment declarations are conducted to

disclose possible symptoms.

Number of employees

who tested positive

during 2020

63 had recovered as at

end of December 2020

Sadly, one employee

passed away on

1 January 2021.

Group COVID-19 cases per country

South Africa

North America

Germany

United Kingdom

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

The extraordinary circumstances surrounding the COVID-19

pandemic during 2020 dealt a severe blow to our traditional

face to face interactions. This forced the group to reassess its

communications strategy and methods to sustain and build on

our relationships with customers.

CONEXPO-CON/AGG in Las Vegas, United States in March 2020

provided the only opportunity to meet customers on a large

scale before the worldwide lockdowns. Although the show

closed a day earlier than planned, the event was a success

for Bell Equipment. This was largely due to the premium spot

Bell secured in the North Hall, where all the major equipment

manufacturers are housed, as well as the considerable interest

generated by the launch of the group’s Tracked Carrier.

The Bell stand was hosted by senior, technical and product

managers from Bell Trucks America, Bell Equipment in South

Africa, and Bell Equipment North America. We had many

compliments on the friendly, approachable attitude of the Bell

team as well as the open stand layout that made visitors feel

welcome.

While a limited number of factory tours were conducted later

in the year under strict COVID-19 protocols, due to social

distancing regulations, the group chose to engage with

customers mainly on social media. Two distinct channels,

namely Bell Equipment Global ADT and Bell Equipment South

Africa, were created on LinkedIn, Facebook, Instagram, and

YouTube to effectively channel content to our global customer

base. The aim is to launch a third channel, Bell Equipment Sugar

and Forestry, in 2021. The group appreciates the inuence of this

form of communication and will be endeavouring to constantly

improve its reach.

In keeping with the growing trend towards online communication,

and to conserve cashow, the group reduced its print media

advertising. Instead, in addition to the group’s own Bulletin

magazines, different direct marketing methods like email e-cards

and customer surveys were employed, the results of which are

easier to quantify.

Bell Equipment continues to gain benet from the external

monitoring service, “EYE” customer service. Calls are made on a

regular basis by an external consultant, on behalf of the group,

who contacts customers randomly from a list of recent parts

transactions. Customers are asked to rate their perception of Bell

Equipment’s service. The group’s service rating remains rmly in

the world class range.

Although the annual technical services seminar was not held

due to the pandemic, the technical services team was able

to maintain its role as an important face and aspect of the

customer relationship as an essential service and made sure

customers around the world were able to continue with their

operations.

The work from home strategies brought on by regional lockdowns

allowed the team to focus on generating and delivering more

online courses and these were met positively by those who were

engaged by this medium.

An increased acceptance amongst all players in the industry

to online and virtual meetings is seen as a positive move during

the year. While direct face to face communication will never be

totally replaced, the group will focus on rolling out more virtual

communication and training platforms going forward.

The rollout of the Aspire dealer relationship programme slowed in

the early part of the year and could only be reinitiated through

virtual platforms during the second half of 2020. A number of

dealers are now active in the programme and incorporating

more dealers will be a key action for 2021. The programme

uses various specic metrics aligned to rewards that will drive

improvement in both the dealer and Bell.

CUSTOMERS

Reason for

engagement

Stakeholder interests and

expectations

Methods of engagement and value creation

• To meet the group’s

customers’

needs and build long

term loyalty.

• To enhance Bell

Equipment’s

brand and grow

market share.

• Innovative products that meet

operational needs.

• World class after sales support.

• Overall value proposition.

• Personally committed and trusted

advisor.

• ‘EYE’ external customer service monitoring service.

• Face-to-face engagement with sales and customer service

teams.

• Trade exhibitions.

• Product launches and demonstrations.

• Ongoing research and development.

• Factory tours.

• Advertising.

• Traditional and social media including Bell Bulletin magazine

and Facebook.

• Website.

• Ongoing product testing.

INTELLECTUAL

SOCIAL AND

RELATIONSHIP

MANUFACTURED

INTELLECTUAL

SOCIAL AND

RELATIONSHIP

Stakeholder relations report continued

incorporating sustainability elements

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

The group’s manufacturing operations form part of a complex

international supply chain. We strive to continuously improve

our efciencies and quality standards while working closely with

our supply partners to ensure rapid response to our evolving

customer needs.

In South Africa we remain reliant on infrastructure stability in so

far as power, water, port facilities and roads are concerned.

Infrastructure reliability in the country remains a concern and

the group continues to monitor this to mitigate risks that could

develop.

The extension of the group’s Eisenach-Kindel facility in Germany

has created further manufacturing efciencies for both

our German and South African operations. The investment

demonstrates the group’s commitment to being a global

manufacturer as it continues to enhance its exibility to respond

more efciently to customer requirements in our northern

hemisphere markets.

Product costs and manufacturing reliability are continually

benchmarked to world class standards and guide our

manufacturing strategy.

Appreciating the importance of continuous improvement

throughout the business, Bell continues to invest in and grow its

people and assets, improving skills, knowledge and know how to

remain lean and cost competitive.

Understanding that delivering on customer expectations is

essential to how products are accepted in the market, the

group is likewise continually focused on strengthening its quality

management systems and compliance with international

regulatory requirements. Adequate investment has been

allocated to manufacturing capacity and technology to ensure

that our global manufacturing operations continue to operate

sustainably amongst the best in the world.

The continued gathering of momentum for autonomous

developments and projects in 2020 have shown us how close

to market we are in this regard. Though still in the early adopter

and commercial investigation stage there has been increased

requests for information on what is possible and discussions on

potential real world commercial opportunities.

The Bell ADT Mark 3 upgrade at the end of 2019 made all Bell

ADTs ready to integrate with a pedestrian detection system (PDS)

and crash avoidance system (CAS). This provided an important

foundation to enable the group to provide an ‘autonomous

ready’ ADT.

Additional vehicle control systems have been developed and

trialled to position the group to have a system available when

the need arises.

Bell has decided to be technology agnostic, being able to

partner with various sensor and software specialists according

to our customer’s needs and preferences. This gives our

customers the ability to run different brands of equipment in one

autonomous operation. This concept was trialled during 2020

when two B30E trucks worked on an autonomous quarry site in

the Alps with pleasing results.

ADT innovation has been carried through to our new generation

low prole ADTs for underground mining, which are tted with

all our standard features for safety, productivity, and machine

protection. This includes keyless start, hill assist, speed control, bin

tip prevention, auto park application and turbo spin protection

to protect the engine. Onboard weighing is now standard on

these trucks and Bell Equipment’s proprietary eet management

software, Fleetm@tic®, enables machine owners to access daily

production gures.

In addition, future investments in information and communication

technology will increasingly transition Bell after sales service into

the digital space.

Face masks were removed briey for the purpose of the photograph

MANUFACTURED

INTELLECTUAL

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

COVID-19 may have affected our ability to engage face to

face with our stakeholders but embracing online meetings

and communication has proved highly effective in sustaining

relationships with suppliers and alliance partners. For example,

during the South African lockdown the sales team beneted

from online training on partner products.

Unsurprisingly, factory lockdowns and border restrictions

affected deliveries by our suppliers and alliance partners,

sometimes impacting on our own ability to deliver. In the face of

the pandemic many of our partners, both locally and abroad,

have also needed to restructure.

As a result of social distancing restrictions, no marketing events

were held, and very few customers visited the factory. However,

new partner products continued to be introduced to the

southern African market and included the tenth generation

Kobelco Excavators from the SK210 to the SK520 at various

stages of 2020 as well as the SK220XD-10 in November.

The refuse compactor business has proven to be positive in

2020 and Bell has captured a major portion of the market with

focused assistance from Bomag. Bell has also performed well in

the public sector with Bomag products specically.

Sales of Finlay units rallied in the last two quarters.

Based on changes in the operating environment of Bell and John

Deere, both companies agreed on new arrangements in August

2020, which will see Bell TLB manufacture end in May 2021. The

group will distribute Deere products on a non exclusive basis

from mid March until January 2023 and will continue to provide

aftermarket, technical and product support to our customers for

a further 10 years thereafter.

BESSA has been appointed to distribute the full range of JCB

construction equipment effective 1 May 2021.

The termination of the Kamaz distribution agreement is reaching

a conclusion with the last of the inventory currently being sold.

Communication with suppliers was a challenge in 2020 due

to remote working and restricted travel brought about by

the COVID-19 pandemic. However, through online meetings

and use of technology interaction was maintained and even

heightened in some cases.

The Bell Quest for Gold supplier/business partners evaluation

programme, which aims to develop mutually benecial

and protable relationships with suppliers/business partners,

implement quality and cost controls as well as measure and

reward outstanding performance, continued to operate. The

programme targets those suppliers/business partners linked with

production and saw over 240 suppliers/business partners being

evaluated as part of the 2020/2021 programme.

To avoid overlap with the group’s nancial year end, the

measurement period of the programme was moved to cover

the period from 1 April 2020 to 31 March 2021. Considerable

time and resources were also spent on streamlining the reporting

process, updating the database, and aligning scoring measures

to the current business environment, taking timeframes into

account. For example, quality was previously measured in terms

of parts per million defects but now also considers the action

and time taken to resolve defects.

The annual suppliers’/business partners’ conference was not

held in 2020 due to the virus, but the group is considering a

virtual conference in 2021.

SUPPLIERS AND ALLIANCE PARTNERS

Reason for

engagement

Stakeholder interests and

expectations

Methods of engagement and value creation

• Suppliers and alliance

partners are key

to the group’s

performance and

core to the group’s

strategic positioning.

• Timely payment and fair terms.

• Future growth of the group and

understanding the expectations of

the group.

• Reputational consistency.

• Responsible and positive brand

management.

• Product launches and demonstrations.

• Trade exhibitions.

• Quest for Gold supplier improvement

initiative.

• 913 South African suppliers form part of Bell

Equipment’s supplier network.

• Ongoing regular direct engagements.

• Service level agreements and audits.

• Suppliers conference.

• Factory and site visits.

SOCIAL AND

RELATIONSHIP

MANUFACTURED

Stakeholder relations report continued

incorporating sustainability elements

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

The group recognises its responsibility as a global corporate citizen to provide meaningful CSI and SED programmes and initiatives

to uplift and empower its stakeholders and the communities within which it operates. Our CSI and SED policies identify priority areas,

outline implementation strategies and enable the group to monitor CSI and SED expenditure and measure the impact of projects,

ensuring that they are aligned to the group strategy and contribute to the group’s overall mission, vision and adhere to its core values.

Bursaries

In 2020 bursaries were awarded to:

• A third year UNISA student studying towards a Bachelor of Education degree.

• A second year Cape Peninsula University of Technology student studying towards a National

Diploma in Mechanical Engineering.

• A third year University of KwaZulu-Natal student who is studying towards a BSc Mechanical

Engineering degree.

• A Grade 12 learner at Grantleigh School.

• The Bell Foundation Trust continued its bursary assistance to Zinhle Dlamini for her third year in

Mechanical Engineering at Stellenbosch University.

To further assist black women with their education in the engineering and allied elds, the Bell Foundation Trust will

increase its bursary sponsorship in 2021 to include an additional two engineering students.

Thuthukani Special School

BECSA has been involved with Thuthukani for many years due to the instrumental role it fulls in the

advancement and development of learners with severe to profound intellectual disability aged 6 to 19

years.

Previous spend with Thuthukani allowed them to build a new play to learn room which they will be

naming the Gary Bell Play to Learn Centre. For 2020 it was agreed to continue sponsoring Thuthukani

and, with the play to learn room almost completed, it was agreed, at the request of Thuthukani, to

assist with the outtting and equipping of the room and area.

The ability of children with severe to profound intellectual disability to learn through play is affected by

the way that their brains work. Thuthukani will therefore use the Gary Bell Play to Learn Centre as a specic

resource for teaching children how to play and plans to have themed toys available for each class.

The interior of the room was designed to accommodate various play stations, for example a play

kitchen, lounge, dress up area, messy play area and outside play area. Age appropriate toys and play

equipment were then required to furnish the room. For the outside play area, a landscaped garden

with paths and areas where children can climb, run, jump and drive pretend cars was envisioned.

During the year they built a miniature town with roads, road signs, hospital, school, park, shopping centre

and a “sandpit” for dumping trucks and a life size dollhouse with ¾ adult size furniture for a kitchen, dining

area, baby room and lounge area. The furniture was not completed by the end of 2020 as COVID-19

impacted on the waiting period for some of the materials required.

Awarded

bursaries

for 2020

BECSA spend

for 2020

R300 000

BESSA

contribution to

Thuthukani

R350 000

LOCAL COMMUNITIES

Reason for

engagement

Stakeholder interests and

expectations

Methods of engagement and value creation

• Empowering local

economies builds

trust in Bell Equipment

while communities

benet from social

and environmental

initiatives.

• Socio economic empowerment.

• Community involvement on key

issues.

• Employment creation.

• Environmentally responsible.

• Social development through sports development,

sponsorship of local sports events.

• Providing air assistance for crime ghting initiatives.

• Earthmoving equipment apprenticeship programmes.

• Trade ins and the Bell Backed Loan Scheme for qualifying

small black owned businesses.

• Welfare projects within the communities in which the group

operates.

• Support of CANSA events.

HUMAN

SOCIAL AND

RELATIONSHIP

ENVIRONMENTAL

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

It was hoped to have a grand opening in the rst half of 2021, once it has been completed, but this is dependent on what the

pandemic will allow both in terms of completing the project and the restrictions on gatherings and schools opening.

The Thuthukani school buildings are on land owned by the Thuthukani Trust and maintenance requirements must largely be funded

through sponsorships. BESSA identied Thuthukani as an SED beneciary for the rst time in 2020 and contributed funds towards the

following maintenance projects:

• Awnings in front of the senior phase classrooms to provide shade and shelter from the weather.

• Expanding the current intercom system to enable communication with all teachers.

• Upgrading of playgrounds, including landscaping, pavers and jungle gyms.

• A rainwater management project, which included the purchase and installation of water tanks.

In addition to the Thuthukani funding, BESSA contributed R300 000 to AmaZulu FC and R13 000 to Underdogs Pool Club for SED.

Amangwe Village

The long standing relationship between Bell and Amangwe proved invaluable during 2020 as the COVID-19 pandemic affected them

for much of the year.

Currently BECSA helps to fund an organic food gardening initiative which empowers Amangwe to maintain an existing garden at

Amangwe as a model for replication in rural communities. Replication is achieved by imparting knowledge to

community members through a coordinator and trained staff.

The garden plays an important role in:

• poverty alleviation

• promoting the role of nutrition in the ght against chronic illnesses, including HIV/AIDS

• providing organic vegetables to the rural community, especially the unemployed

• providing balanced and nutritious meals to children in Amangwe’s crèche

• provide medicinal herbs and plants to make ointments for home based carers to treat skin ailments.

BECSA spend

for 2020

R250 000

Community members trained on gardening

methods

Crèche children who benetted from the

garden

Stakeholder relations report continued

incorporating sustainability elements

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Disabled learnerships and YES programme

The following spend was made by BECSA and BESSA through

Uconomy, formerly Unlockd who underwent a name change in

2020:

BECSA and BESSA again supported the Youth Employment

Service (YES), which actively creates opportunities for young,

black South Africans to gain work experience through internships.

Some YES learners are being hosted by the GLC and BESSA, both

at Jet Park and Rustenburg, where they are obtaining practical

experience in the business.

ESD

BECSA contributed R1,081 million towards supplier

development. In addition, BECSA contributed R1,198 million

towards enterprise development beneciaries in 2020 from

outstanding loans to the value of R3 910 210. These ESD

contributions are in the form of grants and developmental

loans for the benet of 51% black owned EMEs and/or QSEs.

BESSA invested in developmental loans with recognised

contributions of R2,63 million in 2020 for the benet of 51%

black owned EMEs and QSEs. The outstanding values on these

ESD loans amount to R5 274 089. PJLG Steel Works, the 100%

black owned EME that offers BESSA welding and boiler making

services, continued to benet from the 5% pa interest bearing

loan to expand their business in 2020.

Khula Senior Secondary School

BECSA is assisting Khula senior secondary school in Esikhaleni to realise the dream of having their own

school hall. The project was launched in December 2018 and the steel structure and roof were nanced

by the school. At that time BECSA provided additional funds of R100 000 towards the foundation, oor

and brickwork and appointed a contractor.

Construction started in February 2019 and the foundation, oor and part of the walls were completed

but work stopped when the funds ran out. BECSA contributed a further R200 000 for the continuation

of the project. This was used towards brickwork, plastering and electrical work that started early in 2020.

The COVID-19 pandemic halted progress and work could only continue when the restrictions allowed.

To complete the project, the school requires approximately R1 million and BECSA has donated R250 000

towards this for use in 2021.

YES spend

BECSA

BESSA

R2,64 million

R1,73 million

BECSA spend at

Khula senior

secondary school

during 2020

R200 000

Uconomy (formerly Unlockd) spend

BECSA

BESSA

R1,02 million

R714 000

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

The group’s focus is primarily on the Richards Bay facility due to the size and nature of the

operation. In 12 other countries we have operations that are low risk in terms of environmental

exposure. These are managed and monitored by individual appointed managers to ensure

compliance with that country’s environmental laws and regulations, including ling reports

in terms of the applicable legislation when necessary.

Group policy regarding the environment includes:

• implementing and maintaining environmental management systems that drive continual

improvement.

• implementing processes for reducing environmental impact across the organisation with

particular emphasis on energy consumption, water usage and waste reduction and

recycling.

• ensuring employee knowledge of environmental risks by effective assessment and training.

• seeking to reduce waste and recycle materials where possible and where the means to

recycle materials exist.

• preventing and reducing all forms of pollution by employing effective technologies.

• increasing the use of modern communications techniques to reduce the need for travel.

• complying with, and where possible exceeding all relevant legislation, commercial

requirements and codes of conduct regarding the impact on the environment of our

business.

• maintaining transparent, consultative relationships with all stakeholders through effective

communication channels.

• supporting the fundamental human rights of employees, contractors and the communities

in which we operate.

• contributing to the long term social, economic and institutional development of our

employees and the communities within which our operations are located.

Environmental Sustainability

In terms of the group’s policy regarding the environment, the following environmental sustainability initiatives were undertaken in

2020:

Rainwater harvesting Richards Bay Harvested rainwater supplies the wash bays instead of municipal water and is

used for the ushing of toilets and urinals in the factory ablution facilities. Due to

COVID-19, plans to increase storage capacity were deferred to 2021. During 2021

continuous improvement of the system will provide water security for ablution

facilities and some production processes.

Machine coolant

recycling

Richards Bay In addition to our specialised liquid recycling units and our thinners recycling plant,

machining coolant is now being recycled before disposal. This is controlled by the

maintenance process to maintain the quality of coolant and prevent unnecessary

disposal of coolant. Machining coolant that is not reusable is sent to a bulk

treatment plant.

Solar power feasibility

investigation

Richards Bay This project was placed on hold due to delays and difculties experienced in 2020.

Electricity and water usage at the Richards Bay sites are still being monitored along

with waste usage and recycling statistics.

Electricity saving

programmes

Jet Park Workshop and warehouse lights were replaced with new technology energy saving

lights to conserve electricity and realise a cost saving benet.

Waste recycling Richards Bay Further to our waste classication programme, as per the Waste Act Regulations

and our existing on-site recycling initiatives, our service provider supports the

initiative to divert waste to recyclers instead of landll, thereby reducing the group’s

impact on the environment. All documents have been received and maintained as

per regulation requirements.

Employee awareness drives form part of toolbox talks while continuous

improvements to processes are driven by audits and ongoing projects.

• Innovation

• Constant

monitoring of

international best

practices

Environment

and

sustainability

• Effect

positive change

• Minimise

ecological

footprint

ENVIRONMENTAL

Stakeholder relations report continued

incorporating sustainability elements

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

The last external audit showed great improvements in terms of compliance. An action plan was implemented to reduce the risk of

any non compliances. The next external audit is scheduled for 2021. There were no reportable incidents to the DOE that occurred in

2020. Our main environmental risks have been identied and are being addressed as follows:

Hydrocarbon storage • This is an ongoing exercise.

• Bund pallets have been designed and built in house by the tool and design department.

This is based on cost saving and custom applications.

Hazardous waste management • Employees are educated on the correct disposal methods as an ongoing drive that forms

part of toolbox talks and awareness campaigns.

Storm water management • All oil traps are serviced on a regular basis and scheduled water quality tests are done on

existing water ways.

• Waste area has been bunded and an old oil tank has been moved to more suitable

location with relevant storm water structures built, in accordance with the storm water

management plan.

Air quality management • Permits have been renewed and are valid in terms of municipal by laws.

• A dust monitoring programme commenced in 2020 with one monitoring station. This will

be extended by an additional four stations in 2021.

Environmental compliance at the Eisenach-Kindel factory in Germany is controlled by the facility’s quality representative in conjunction

with the respective authorised organisations for environmental control and waste disposal. The environmental requirements are spelt

out in the labour law and ISO 9001:2008 quality management system. No incidents were reported during 2020 and the next internal

audit will be conducted during 2021.

Understanding the importance of our environment and our responsibility as a good corporate citizen, Bell Equipment serves on

external bodies such as the local municipality’s uMhlathuze crisis committee, and liaises with the uMhlathuze water stewardship

partnership, which integrates major industries in the uMhlathuze region, which is where the Richards Bay factory is located.

2021 plans include:

• increased environmental audits for all processes to provide an in depth review of waste management, and therefore improvements

to recycling.

• continued dust monitoring.

• developing a greenhouse gas emission report for the Richards Bay factory.

• renewal of necessary permits in Q3 2021 in terms of municipal water and waste management by laws.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| PERFORMANCE REVIEW

In the past year Bell Equipment engaged with the IDC, SEFA,

and other lenders, sometimes jointly with SANRAL, with a view to

nding a funding solution to assist contractors to access funds for

projects. These engagements are ongoing.

The proposed DMRE’s mining charter is presenting some

opportunity and challenges for the group. While there have

been numerous engagements between local manufacturers

and DMRE, the OEM forum is making signicant inroads in ghting

the local content prescripts of the mining charter.

The RT57 programme continues to bear good fruit but the

stiff pricing competition is hampering our best efforts. We are

therefore pleased that President Cyril Ramaphosa has issued

strong statements on the ‘Buy Local Campaign’, which will

hopefully lter down to the next RT57 programme in 2022.

We are in close discussions with the Presidential Infrastructure

Coordination Council and administrators of the Presidential

Infrastructure Fund, who are responsible for identifying and rolling

out 276 projects with a total investment value of more than R2,7

trillion. Budgetary allocations for this process have been made

to the DBSA, the Government Technical Advisory Centre and the

Presidential Infrastructure Coordinating Commission’s Technical

Project Management Unit.

BESSA has always maintained that service delivery takes

place at local government level. To this end, we have actively

participated in the President’s Khawuleza Initiative that piloted

the district development initiative. We intend to further improve

relations at this level and to partner with municipalities to further

contribute towards improving infrastructure in rural communities.

GOVERNMENT

Reason for

engagement

Stakeholder interests and

expectations

Methods of engagement and value creation

• The group’s

relationship with

governments

impact on its ability

to contribute

towards job

creation, broader

economic, social

and environmental

objectives globally.

• Socio economic growth.

• Skills development.

• Employment creation.

• Transformation.

• BBBEE.

• Local design and manufacture of equipment and the use of

locally produced materials.

• Employer of 2 521 South Africans.

• Senior executive meetings with ofcials at various levels of

government.

• Participation in industry consultative bodies and public forums

including:

- National Economic Development and Labour Council;

- Business Unity South Africa.

- South African Capital Equipment Export Council.

- SEIFSA.

• Economic empowerment leading to social upliftment

programmes and initiatives including:

- trade ins and the Bell Backed Loan Scheme for qualifying

small black owned businesses.

- earthmoving equipment apprenticeship programmes.

HUMANMANUFACTURED INTELLECTUAL

Stakeholder relations report continued

incorporating sustainability elements

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

SHAREHOLDERS, INVESTORS,

FINANCIERS AND INSURERS

Reason for

engagement

Stakeholder interests and

expectations

Methods of engagement and value creation

• To create an

informed perception

of the group and its

activities.

• Group strategy implementation.

• Group performance and sustained

returns on investment.

• Leadership strength and

management depth.

• Risk management.

• Transparent executive

remuneration.

• Alignment of values.

• Responses to macro economic

and socio economic environment.

• AGM.

• IAR and Interim results.

• SENS announcements.

• Media relations.

• Group website including a dedicated investor relations page.

• Dividend policy.

• Sound corporate governance.

• Meetings, roadshows and ad hoc telephonic engagement,

outside of a closed period.

• Market perception audits.

Bell Equipment strives to create value for all its stakeholders and

to manage its nancial capital to support the group’s growth

and diversication objectives in a sustainable and protable

manner.

Bell continues to engage with its shareholders through its IAR

and its AGM held annually. The social, ethics and transformation

committee of the Bell Equipment Limited board, as detailed in its

report incorporated in the AGM notice, is mandated to report to

shareholders at the AGM thereby providing a holistic overview

of the group and its activities as a good corporate citizen.

Through SENS announcements the group provided its

shareholders with updated information, pertinent events or

corporate actions and governance, relevant to the business

and which could impact the share price.

An investor relations company is engaged to assist Bell with its

annual investor relations programme. This programme includes

presentations to shareholders, nanciers and interested parties,

the arrangement of one on one meetings with shareholders,

peer review of share price data, shareholder analyses, index

comparisons as well as the compilation of nancial press releases

for Bell Equipment.

Engagement with nanciers and insurers is equally important

to the group and Bell ensures that these stakeholders are kept

abreast of developments in the group. Interactions are through

meetings, face to face engagements, business and nancial

updates.

The group will continue to strive for improved interaction with

these important stakeholders on an ongoing basis to nurture

strong relationships.

INTELLECTUAL

SOCIAL AND

RELATIONSHIP

ENVIRONMENTAL

FINANCIAL

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| GENERAL

Glossary

ADT Articulated Dump Truck

AGM Annual General Meeting

AIS Automotive Investment Scheme

ALC American Logistics Centre

APDP Automotive Production and Development Programme

Bell Equipment or

Bell or the group Bell Equipment Limited and its subsidiaries

BEE or BBBEE Black Economic Empowerment or Broad Based Black Economic Empowerment

BECSA Bell Equipment Company SA Proprietary Limited

BEEO Bell Equipment European Operations comprising the Bell operations in Germany, UK,

France and Russia

BEGS Bell Equipment Group Services Proprietary Limited

BENA Bell Equipment North America Inc.

BESSA Bell Equipment Sales South Africa Limited

CIDB Construction Industry Development Board

COBIT Control Objectives for Information and Related Technology

Companies Act Companies Act of South Africa No 71 of 2008 (as amended)

COVID-19 Corona virus disease

CRM Customer Relations Management

CSC Customer Service Centre

CSDP Central Securities Depository Participant

CSI Corporate Social Investment

DBSA Development Bank of Southern Africa

DOE Department of Environmental Affairs

DMRE Department of Mineral Resources and Energy

DRC Democratic Republic of the Congo

DTIC Department of Trade, Industry and Competition

ELC European Logistics Centre

EME Exempted Micro Enterprise

ESD Enterprise and Supplier Development

EU European Union

FTA Field Technical Analyst

GDP Gross Domestic Product

GDPR General Data Protection Regulation

GEC Group Executive Committee

GLC Global Logistics Centre

HEPS Headline earnings per share

IAR Integrated Annual Report

| GENERAL

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

IDC Industrial Development Corporation of South Africa Limited

IFRS International Financial Reporting Standards

ISO International Standards Organisation

IT Information Technology

John Deere John Deere Construction and Forestry Company, a Delaware corporation

JSE Johannesburg Stock Exchange Limited

King III King Code of Governance Principles and the King Report on Governance

King IV King IV Report on Corporate Governance in South Africa 2016

KPI Key Performance Indicators

LIMUSA Liberated Metalworkers Union of South Africa

LTIFR Lost Time Injury Frequency Rate

LTIS Long Term Incentive Scheme

LTRS Lifetime Revenue Stream

Matriarch Bell brand name for forestry products

MERSETA Manufacturing, Engineering and Related Services Sector Education Training Authority

MHCV Medium and Heavy Commercial Vehicle

MOI Memorandum of Incorporation

NPAT Net Prot after Tax

NUMSA National Union of Metalworkers of South Africa

OEM Original Equipment Manufacturer

QSE Qualifying Small Enterprise

ROE Return on Equity

ROIC Return on Invested Capital

SANRAL South African National Roads Agency

SAP System Applications and Products in Data Processing

SED Social Economic Development

SEFA Small Enterprise Finance Agency

SEIFSA Steel and Engineering Industries Federation of Southern Africa

SENS Stock Exchange News Service

STIS Short Term Incentive Scheme

SVA Shareholder Value Add

TIFR Total Injury Frequency Rate

TLB Tractor Loader Backhoe

TMP cycle Trough, mid and peak cycle

UASA United Association of South Africa

US United States of America

1-BELL Bell initiative used to unite the greater Bell organisation through the adoption of a number

of common areas of focus and key values associated therewith.

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

| GENERAL

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020

Corporate information

BELL EQUIPMENT LIMITED

Registration Number: 1968/013656/06

JSE SHARE CODE

BEL

ISIN CODE

ZAE000028304

GROUP COMPANY SECRETARY

Diana McIlrath

Tel: +27 (0)35 907 9111

[email protected]

POSTAL ADDRESS

Private Bag X20046

Empangeni, 3880

South Africa

BUSINESS AND REGISTERED ADDRESS

13 - 19 Carbonode Cell Road

Alton

Richards Bay, 3900

AUDITORS

Deloitte & Touche

Tel: +27 (0)31 560 7000

SHARE TRANSFER SECRETARIES

JSE Investor Services Proprietary Limited

Rennie House

13th Floor, 19 Ameshoff Street

Braamfontein

PO Box 4844

Johannesburg, 2000

Tel: +27 (0)11 713 0800

Fax: +27 (0)86 674 3260

ATTORNEYS

Edward Nathan Sonnenberg Inc.

JSE SPONSOR

Investec Bank Limited

WEB ADDRESS

www.bellequipment.com

INVESTOR RELATIONS WEB ADDRESS

www.bellir.co.za

BELL EQUIPMENT LIMITED | Integrated Annual Report 2020