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Directors’ report
for the year ended 30 June 2013
Nature of business
Imperial is a diversified industrial services and retail group with activities spanning logistics, vehicle distribution and retail, car rental, parts and industrial products distribution and financial services.
| – | All of these operations are conducted in South Africa. |
| – | Logistics operations are conducted in sub-Saharan Africa, Europe and the United States of America. |
| – | Vehicle retail operations are conducted in the United Kingdom, Australia and neighbouring countries in Africa. |
| – | Financial services operations are conducted in Botswana and Lesotho. |
Financial performance
The net attributable profit for the year amounted to R3 294 million (2012: R2 980 million). Basic headline earnings per share for the year was 1 804 cents (2012: 1 566 cents).
The results for the year are set out in the consolidated statement of profit or loss on page 19 of this report.
Share capital
The authorised and issued share capital is detailed in note 17 and the shares repurchased in note 18 to the annual financial statements on pages 56 to 58.
The number of shares in issue on 30 June 2013 were as follows:
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| Company | Shares repurchased | Net | |||||
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| Ordinary shares | |||||||
| The movements in the ordinary shares were as follows: | |||||||
| Ordinary shares at beginning of year | 209 843 029 | (7 864 456) | 201 978 573 | ||||
| Deferred ordinary shares converted to ordinary shares | 1 131 910 | 1 131 910 | |||||
| Ordinary shares issued during the year* | 1 861 850 | 1 861 850 | |||||
| Ordinary shares repurchased and cancelled during the year | (4 003 074) | (4 003 074) | |||||
| Ordinary shares at end of year | 208 833 715 | (7 864 456) | 200 969 259 | ||||
| Deferred ordinary shares | |||||||
| The movement in the number of deferred ordinary shares | |||||||
| were as follows: | |||||||
| Deferred ordinary shares at beginning of year | 14 110 992 | 14 110 992 | |||||
| Converted into ordinary shares | (1 131 910) | (1 131 910) | |||||
| Deferred ordinary shares at end of year | 12 979 082 | 12 979 082 | |||||
| Total issued share capital | 221 812 797 | (7 864 456) | 213 948 341 | ||||
| Non-redeemable, non-participating preference shares | |||||||
| Opening and closing balance | 4 540 041 | 4 540 041 |
*Shares bought back in 2010 and issued in settlement of share incentive scheme obligations.
The preference shares are classified as interest-bearing debt in the statement of financial position due to the cumulative nature of their dividend rights.
Directors and secretary
The names of the directors and secretary who presently hold office are set on page 104 of this report.
In accordance with the articles of association Messrs OS Arbee, HR Brody, MP de Canha, RL Hiemstra, GW Riemann and M Swanepoel retire by rotation at the forthcoming annual general meeting but, being eligible, offer themselves for re-election and theirre-election is recommended by the board.
Mr RL Hiemstra retired as an executive director on 30 September 2012 but remained on the board as a non-executive director. Mr AH Mahomed retired from the board on 30 June 2013. Mrs SL Botha resigned as a director on 5 September 2013.
The aggregate interest of the directors and prescribed officers in the issued ordinary share capital of the company is disclosed in the remuneration committee report on page 17.
The board has considered and confirmed the suitability, qualifications and competence of the company secretary.
Imperial Holdings Share Appreciation Rights, Deferred Bonus and Conditional Share Plan Schemes
Details of the rights granted in terms of the schemes are set out in note 17 to the annual financial statements on pages 57 to 58.
Dividends
Details of the dividends declared are set out in note 36 to the annual financial statements on page 70.
Subsidiaries
Details of the company’s principal subsidiaries are reflected in Annexure A to the annual financial statements on page 89.
The attributable interest of the company in the aggregate profits and losses of its subsidiaries after tax for the year under review was as follows:
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| 2013 Rm |
2012 Rm |
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| Profits | 3 077 | 2 895 | |||
| Losses | 178 | 226 |
Purchases by the group of material subsidiaries, businesses and associates were as follows:
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| Business acquired by the group | Nature of business | Percentage interest | ||
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| RTT Health Sciences | Africa Logistics | 100 | ||
| Orwell Trucks Limited | UK Truck retail | 100 | ||
| KWS Carriers (Pty) Ltd | Africa Logistics | 60 | ||
| MDS Logistics Plc (associate) | Africa Logistics | 49 |
Special resolutions
The company passed the following special resolutions at a general meeting held on 16 August 2012:
| – | Amending the preference share terms in the Memorandum of Incorporation. |
The company passed the following special resolutions at its annual general meeting held on 31 October 2012:
| – | Granting to the directors of the company general authority for the acquisition by the company or any subsidiary, of ordinary shares in the company. |
| – | Granting to the directors of the company specific authority for the acquisition by the company of its own ordinary shares from a wholly owned subsidiary of the company, Imperial Corporate Services (Pty) Ltd. |
| – | Granting to the directors of the company specific authority to provide financial assistance to related and inter-related parties as contemplated in section 45 of the Companies Act, 2008 (the Act). |
| – | Approving the directors’ fees payable from 1 July 2012 to the date of the next annual general meeting in 2013. |
The company passed the following special resolutions at a general meeting held on 15 March 2013:
| – | Adopting a new Memorandum of Incorporation in terms of the Act. |
Subsidiaries of the company passed special resolutions, the nature of which might be significant to members in their appreciation of the state of affairs of the group, as follows:
| – | Granting to the directors of the companies specific authority to provide financial assistance to related and inter-related parties as contemplated in section 45 of the Act. |
| – | Granting to the companies authority to make distributions as contemplated in section 46 of the Act. |
| – | Approving directors’ fees payable from 1 July 2012 to 30 June 2013. |
| – | Adopting a new Memorandum of Incorporation. |
| – | Changing the capital structure of Regent Insurance Company Limited and Regent Life Assurance Company Limited. |
Events subsequent to year-end
In terms of the Ukhamba Black Economic Empowerment transaction 1 122 377 deferred ordinary shares have converted to ordinary shares. These shares were listed on the JSE on 2 September 2013.
The group sold its Tourism division to Cullinan Holdings Limited (Cullinan) for a consideration of R90 million, payable in 81,8 million Cullinan shares, subject to Competition Commission approval.
The group increased its shareholding in Renault South Africa (Pty) Ltd from 49% to 60%, subject to Competition Commission approval.