Imperial - Annual FS 2014 - Consolidated AFS: Directors' report

Integrated Report 2014

Annual Financial Statements 2014

Sustainability Report 2014

A more detailed review of the results is contained in the integrated report.

Nature of business

Imperial is a mobility group active predominantly in three major areas of mobility being consumer and industrial logistics; vehicle import, distribution and dealerships, retail, rental and aftermarket parts; and vehicle related financial services.

–	All of these operations are conducted in South Africa.
–	Logistics operations are conducted in sub-Saharan Africa, Europe, South America and North 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 272 million (2013: R3 296 million). Basic headline earnings per share for the year was 1 625 cents (2013: 1 805 cents).

The results for the year are set out in the consolidated statement of profit or loss of this report.

Share capital

The authorised and issued share capital is detailed in note 16 and the shares repurchased in notes 17 to the consolidated annual financial statements.

The number of shares in issue on 30 June 2014 were as follows:

	Company	Shares repurchased	Net
Ordinary shares
The movements in the ordinary shares were as follows:
Ordinary shares at the beginning of year	208 833 715	(7 864 456)	200 969 259
Deferred ordinary shares converted to ordinary shares	1 953 846		1 953 846
Ordinary shares repurchased and cancelled during the year	(2 971 808)		(2 971 808)
Ordinary shares at the end of year	207 815 753	(7 864 456)	199 951 297
Deferred ordinary shares
The movement in the number of deferred ordinary shares were as follows:
Deferred ordinary shares at the beginning of year	12 979 082		12 979 082
Converted into ordinary shares	(1 953 846)		(1 953 846)
Deferred ordinary shares at the end of year	11 025 236		11 025 236
Total issued share capital	218 840 989	(7 864 456)	210 976 533
Non-redeemable, non participating preference shares
Opening and closing balance	4 540 041		4 540 041

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 109 of this report.

In accordance with the Memorandum of Incorporation, Messrs S Engelbrecht, TS Gcabashe, RJA Sparks and A Tugendhaft and Ms P Langeni retire by rotation at the forthcoming annual general meeting but, being eligible, offer themselves for re-election and their re-election is recommended by the board.

In accordance with the Memorandum of Incorporation, the appointments of Messrs M Akoojee, MJ Lamberti, PB Michaux, and JJ Strydom, who were appointed during the year are submitted for confirmation at the forthcoming annual general meeting.

The aggregate interest of the directors and prescribed officers in the issued ordinary share capital of the company is disclosed in notes 40.

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 notes 18 to the consolidated annual financial statements.

Dividends

Details of the dividends declared are set out in notes 34 to the consolidated annual financial statements .

Subsidiaries

Details of the company’s principal subsidiaries are reflected in notes 39 to the consolidated annual financial statements.

Purchases by the Group of material subsidiaries, businesses and associates were as follows:

Material subsidiaries acquired by the Group

Subsidiary	Nature of business	Percentage interest
Renault SA (Pty) Ltd* Eco Health Ltd	Vehicle importer and distributor Distributor of pharmaceutical products in Nigeria	60 68

*	Previously a 49% associate and acquired a further 11% resulting in controlling interest.

Material subsidiaries disposed of by the Group

Subsidiary	Nature of business	Percentage interest
Edusport (Pty) Ltd	Tourism	74.9
Grosvenor Tours (Pty) Ltd	Tourism	100

Special Resolutions

The company passed the following special resolution at a general meeting held on 21 October 2013:

–	Amending the deferred ordinary share conversion terms in the Memorandum of Incorporation.

The company passed the following special resolutions at its annual general meeting held on 7 November 2013:

–	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 44 and 45 of the Companies Act, 2008 (the Act).
–	Approving the directors’ fees payable from 1 July 2013 to the date of the next annual general meeting in 2014.

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 2013 to 30 June 2014; and
–	Adopting new Memoranda of Incorporation.

Events subsequent to year end

The Group acquired a 62,5% interest in Pharmed Pharmaceuticals (Pty) Limited, a pharmaceutical wholesaler, for a consideration of R148 million in July 2014.

Accounting policies and new and revised standards

These are outlined in notes 1, 2, 3.