Today, our 53 000 people serve clients from more than 1 200 locations in 31 countries on five continents, extending the leading positions of our five divisions in carefully chosen segments and specific niches of the logistics and vehicles value chains. For over six decades, through economic cycles, political transition and social transformation, the underlying theme of Imperial's development has been leadership in mobility.

In an environment of profound structural and systemic change, defending and extending the group's leadership requires new vision and understanding, discipline and agility.

The changes underway at Imperial are therefore transformational. They begin with greater strategic clarity at corporate and business level. They call for sharper execution that increases returns on capital and executive effort. They compel us to deliver social value while enhancing our core business operations. They target productivity and efficiency improvements through a simplified group structure. And, by deepening a culture of empowered accountability, they will drive focused long-term value creation for all our stakeholders.

While retaining the entrepreneurial creativity and capital management excellence that underpinned our success in the past, we are implementing the strategy, structures and mind-set that will shape our success in the future.

The division is a major user of fuel and the largest contributor to the group's scope 1 emissions. It accounts for 78% of the group's fuel consumption and 60% of scope 1 emissions.

Initiatives in the division to improve fuel and emissions efficiency focus on three components that influence fuel consumption vehicle utilisation, vehicle specification and driver ability. Improvements in fuel efficiency have a significant positive cost impact as fuel is one of the major drivers of logistics costs.

All vehicles purchased by the division are tested for their suitability and fuel consumption. The division's policy is to purchase the highest Euro-rated vehicles available, with constant pressure being applied to OEMs to supply higher-rated trucks that produce lower emissions and use less fuel. There is an ongoing focus on working with drivers to produce optimum fuel efficiencies from vehicles. Driver training programmes are undertaken on a regular basis to support drivers in optimising vehicle technology.

Despite revenue growth of 15% during 2015, and an increase in the distance travelled by the division's vehicles of 2%, fuel usage fell by 3% and scope 1 emissions by 6%, demonstrating that measures to improve fuel and emissions efficiency are having a positive impact.

The drive to minimise environmental impact and ensure regulatory and legal compliance is a significant area of focus for the division. During the year, the division introduced an environmental policy, supported by a policy statement which sets out the division's commitments in respect of the environment.

Where environmental legislation is in force in the countries where the division operates, the division's primary objective is to ensure compliance with all legislation. In the absence of relevant local legislation, industry best practice is applied. Waste management and the risk of contamination of water or soil as a result of discharges are some of the potential environmental impacts managed by the division. The number of environmental incidents reduced sharply by 23% during 2015, however the division is taking measures to ensure further improvements in environmental management practices, including through the recycling of contaminated water and improved waste management practices.

The division has set targets for the reduction of energy usage and business travel. The objective is to reduce energy usage by 25% per square metre by the end of June 2015 and to save 15% on passenger kilometres, using the 2013 financial year as a basis. Overall, the division's recorded electricity usage increased by 3% due to the impact of acquisitions and a change in the

During 2015, the division delivered R50 billion in retail goods across the continent, covering almost 500 million kilometres. Although the total number of fatal incidents in the division decreased in comparison to 2014, from seven to five, our objective is to achieve zero fatalities caused by our operations.

We continuously invest resources in improving the safety of assets and employees, particularly in technology solutions. Vehicle tracking and monitoring systems have been improved significantly. Accident investigation processes with the use of IT tools such as drive-cam have enhaced the way we analyse and remedy incidents.

See the download on road safety for more detail on the safety measures implemented by the division during the year.

Employees play a key role in ensuring that the division reaches its strategic and growth objectives. With training and development spearheaded through the Imperial Logistics Academy, the division has spent close to R110 million on skills development during the year. Our target is to spend of 2% of payroll on skills development and appoint previously unemployed learners or interns to cover 2.5% of total headcount.

With the development and introduction of a formal talent management strategy for the group, our training and development programmes will increasingly be linked to the group's talent management strategy.

We also continue to contribute through our research, sponsorships and partnerships to thought leadership and innovation within the discipline of supply chain and logistics management.

See the download on people, performance and succession for more detail on the people development initiatives undertaken by the division during the year.

Recognising that clients are increasingly incorporating sustainability considerations into their decision making, the division is putting in place the systems required to capture non-financial data across its operations. Fuel efficiency is already a major consideration within the business, and initiatives are continually underway to use this resource more efficiently, both from a cost and impact perspective.

We continually investigate and implement emissions reduction initiatives, including for example the modernisation of our logistics fleet with Euro 6 trucks to reduce diesel consumption and training for drivers on fuel-efficient driving.

In line with the EU and national legislation, Logistics International is in the process of establishing an energy management system aligned with the ISO 50001 standard. Currently energy data such as electricity and heating consumption is monitored through our sustainability data management system. With the help of the standardised energy management system, we will be able not only to put targets in place but to improve our energy performance by reducing energy consumption and therefore energy costs and greenhouse gas emissions.

We strive to monitor and improve the efficient use of water, particularly in the areas of our business concerned with chemical manufacturing, the transportation of liquids and shipping. Several sites, particularly chemical manufacturing operations, have wastewater treatment systems for the re-use of cleaned waste water for industrial use.

Occupational health and safety standards are strictly regulated by law and the underlying legislation is highly developed. Our corporate policy stipulates our primary health and safety goals, which are:

> Reducing accidents at work and work-related illness

> Reducing work-related hazards

> Ensuring legal requirements in occupational safety are met and that the organisation is not exposed to legislative risk

> Systematically improving internal processes for occupational health and safety

The division has implemented various standards to support its goal of meeting the highest quality, environment, health and safety standards, including:

> Guidelines on occupational safety and health management (NLF/ILO-OSH 2001)

> Specifications for occupational health and safety management (OHSAS 18000)

> Standards related to quality management systems (ISO 9001)

> Guidelines on safety and security for customs procedures (Authorized Economic Operator AEO guidelines)

> Quality management for service providers to the automotive industry (VDA 6.2)

Attracting skilled employees into the logistics industry is challenging in Germany, where the unemployment rate is low (4.7% in June 2015).

To source trainees and develop awareness of employment opportunities in the sector, the division participates in various regional vocational training and job fairs. It works through a specialist consultancy to make information on opportunities in the company available in tertiary institutions, working with approximately 300 colleges in the country to recruit graduates, young professionals and engineers. An internet platform for online recruiting has been developed and the division regularly participates in career and recruitment fairs for students and graduates. Division-wide apprenticeship programmes also play a major role in attracting graduates and school leavers.

The division offers a wide range of training initiatives each year for different employee categories. In 2014, it started a development programme for young professionals to support employees and help them achieve and maintain the required competency level. We designed a leadership guideline that outlines the desired competencies and qualities of our leaders. This guideline is used as a basis for designing our training and development programmes.

We have also started to use diagnostics for the selection of employees and to measure the outcomes of our development initiatives, backed by newly- implemented talent management software to track talent management, education and performance and competency development in the division.

In 2016, we will focus on career planning initiatives and working with employees to define their career and personal development goals.

High turnover is a feature of the vehicle sales environment, particularly for emerging brands. In response, the division has established a Retail Training Academy, alongside the Technical Training Academy already in place. The Academy is aligned with the recently-formed Institute of Vehicle Sales Professionals. High-quality employees will be recruited, trained and developed through the Academy and appropriately remunerated, with the aim of retaining employees through a focused career path as vehicle retail professionals.

The business requires a knowledgeable and skilled workforce. Training and educational needs and requirements are assessed on an ongoing basis to identify weaknesses and gaps. Appropriate and innovative interventions, solutions and programmes are implemented to address these. Technical training in the vehicles divisions is undertaken through the Imperial Technical Training Academies, which is recognised as a leader in the provision of automotive technical trades training. 226 apprentices from the division were registered in 2015. Training costs across the division were just less than R42 million, over R5 500 per employee.

A senior transformation manager has been appointed in the division and a range of initiatives and interventions are being implemented, including ongoing diversity training. Employment equity plans have been developed and are being implemented. Training and development is undertaken in support of the division's diversity strategy. Of the 226 apprentices in diesel and petrol mechanic trades in 2015, 139, or 61% were black.

Compliance is a material issue for the division as the financial services segment markets and sells a variety of regulated and unregulated products and services and is a registered financial services provider under South African legislation. Formal policies and procedures are in place to assess new products and services before launch , and compliance reviews of current product and service offerings are also undertaken on a regular basis. The results of these processes are presented to the finance and risk committee. Quarterly compliance reports are generated and submitted to the Financial Services Board. To date, no compliance concerns have been raised by the Financial Services Board.

Training and development of employees is a critical enabler in achieving our business objectives, and in particular in providing superior customer service, as benchmarked against competitors. Skilled employees are essential to service, diagnose and fix problems on motor vehicles and to maintain sales volumes and market share in the current challenging economic environment.

We employ new apprentices annually and sponsor training through our own training centre and those of OEMs, ensuring a pipeline of suitably-qualified technicians. Learnerships are used at various levels in the division to support transformation plans and build a pool of skilled employees at junior levels, where high turnover levels are frequently experienced. Management development programmes are offered in the car rental business to build business and management skills. Selection for development initiatives is supported by rigorous procedures for the assessment of candidates, with assessment outcomes being used to build individuals' development plans.

When servicing and repairing vehicles we assume responsibility for ensuring that the stringent quality and safety requirements of clients and OEMs are met. In our manufacturing plants, we also need to ensure that products conform to our manufacturing standards and quality control checks before they can be released. If products are defective, we not only run the risk of costly legal claims and reputational damage, we may also put our clients at risk.

We ensure that product and service quality is maintained in our operations through technical training and ongoing reviews of our operations by OEMs. Quality control checks are undertaken before products are released from our operations into retail outlets.

Our products are required to conform to both regulatory and OEM industry standards. Quality control is undertaken to make sure that these standards are met. Purchasing of stock items from reputable suppliers is essential. Technical teams are in place to assess the quality of any parts returned.

No instances of non-compliance with laws and regulations concerning the provision and use of products and services have been recorded. There have been only minimal recalls on products manufactured by us, and in all instances technical faults were easily corrected.

Business operations are affected by a range of legislation and regulations, including the Financial Advisory and Intermediate Services (FAIS) Act, the Protection of Personal Information Act (POPI), the Consumer Protect Act (CPA), and the Financial Intelligence Centre Act (FICA). In some cases it will involve reporting to, and audits by, Regulatory Authorities.

Auditing of critical processes are undertaken by the businesses to ensure compliance. Our internal audit team plays a key role in assessing the processes and controls in our businesses. Where required, compliance assessments are undertaken externally.

Compliance is a key element in the business and management are well aware of all the different legislation affecting our business. There were no instances of non-compliance with legislation in 2015.

The division has over 500 sites, which collectively consumed over 60 000 Mwh of electricity during 2015. Investments were made during the year at many of these operational sites to reduce the consumption of electricity through the installation of energy saving light bulbs, the use of solar panels and light sensors. Timelines have been put in place for the roll out of sustainability initiatives in the division.

The division is a relatively heavy user of water, for manufacturing operations and for washing cars prior to retail or hire. Over 550 000 kL of water were consumed by the division in 2015. Many dealerships have implemented water conservation initiatives, such as the use of Eco Wash, a highly water-efficient means of washing cars, or the recycling and retreatment of water in specially-designed wash bays.

Our aim is that our employees should both reflect the demographics of our clients and differentiate our offering through the delivery of sound financial advice, product and excellent service. We know that transformation is good for our business success in the long term. Our support for BBBEE objectives contributes to the diversity of our organisation, broadens our range of skills and perspectives, gives us a better understanding of a broader range of market segments and affords us access to new business networks and opportunities.

Over the past year we have put in place a three-year employment equity plan to meet employment equity targets.

Regent has put the Treat Customers Fairly (TCF) initiative at the core of our business and customer centricity is paramount. TCF legislation came into effect at the beginning of 2014. Our positioning of TCF as a critical business imperative will enhance our strategy of empowering our clients. Companies will be required to demonstrate through management behaviour, measures and monitoring that they are consistently treating customers fairly in all phases of their relationship with clients, including product design and marketing, the provision of advice on services and during point-of-sale and after-sale contact. Successful delivery of these outcomes will ensure that customers' financial services needs are appropriately met by a sustainable industry.

With the expected implementation of the Protection of Personal Information Act (POPI) in South Africa, we have developed a policy regarding customer information and the safeguarding and storage of customer data. This will be rolled out as part of the division's strategy for upgrading its IT infrastructure.

Compliance is a material issue for the division as the financial services segment markets and sells a variety of regulated and unregulated products and services and is a registered financial services provider under South African legislation. Formal policies and procedures are in place to assess new products and services before launch , and compliance reviews of current product and service offerings are also undertaken on a regular basis. The results of these processes are presented to the finance and risk committee. Quarterly compliance reports are generated and submitted to the Financial Services Board. To date, no compliance concerns have been raised by the Financial Services Board.

Imperial has evolved entrepreneurially, with each division recruiting, tracking and developing its own top talent. Recruitment for senior roles has typically taken place from within each division, and turnover rates are low. Senior leaders benefit from deep specialisation in their area of business.

To support our growth objectives, however, we recognised the need to develop executive capability as a group resource, identifying, selecting, developing and rewarding exceptional leaders who can serve across the business. We also wanted to be able to widen our pool of potential candidates to those in other industries and from outside the business, as our business growth requires it. Our proposed talent management framework supports these objectives by providing a consistent basis for calibrating both internal and external candidates for senior roles.

Underpinning this initiative is our strategic view of the business, including an understanding of the sectors in which we are competing and the factors which give us competitive advantage today and will continue to contribute to value creation in an environment of profound systemic and structural change. We understand that the balance between factors which can and cannot be controlled has changed significantly and that, in this context, our executives need to be well equipped to make conscious business strategy choices about how to allocate capital within their businesses and divisions.

To support our talent management framework, we are establishing a more comprehensive group-wide human resource architecture that will provide the data we require to identify the capability requirements for each role, potential growth opportunities for employees early in their careers and potential future successors for senior leaders who are not yet on our radar. In short, the human resource architecture will provide objective and consistent data on our most important resource our people to enable better decisions to be taken about how they can be developed and deployed.

As a result of these steps we anticipate delivering:

> Improved operational and technical capabilities,
including accurate workforce planning;
> People-focused leadership, which we believe is key to
improved organisational performance and
sustainability; and
> A shift from a culture which is by nature focused on
driving superior operational and financial performance,
particularly over short-term time horizons, to developing
increased capability for strategic thinking that sustains
long-term value creation

We expect to roll out our talent management system over the next 18 months, an ambitious timeframe for such a comprehensive initiative in a business of the scale and diversity of Imperial. Implementation of the framework will be accompanied by a communications strategy to ensure that the model of change is well understood by employees and ongoing work to raise the profile and skills of the human resources function in the business.

As we formalise talent management structures in the business, we will seek to retain the empowering culture that has benefited Imperial in the past, and is derived from the entrepreneurial origins of the group.

Ukhamba is an investment holding company which was formed by Imperial on 6 November 1998 as a joint venture between Imperial and the Ukhamba Trust. The Ukhamba Trust gave historically- disadvantaged South Africans an opportunity to purchase an interest in Ukhamba through the purchase of Ukhamba Trust A units.

The company was formed to create a culture of savings among Imperial's historically disadvantaged employees and to give employees an opportunity to generate wealth. Seed capital of R15 million was provided by Imperial for the creation of Ukhamba.

In 2004, Imperial issued an effective 10,1% of its share capital to Ukhamba Holdings. Since then, Ukhamba has distributed R850 million to shareholders. Ukhamba was restructured in 2013 to allow beneficiaries to monetise their investment in Imperial. This was done through an over-the-counter listing of A shares.

Ukhamba also owns shares in a JSE-listed company DAWN Limited and in unlisted companies, Probe Corporation SA, Life Green Group Investment Holdings and Giuricich Brothers Construction.

Our stakeholders are those entities or individuals that may be significantly affected by the activities, products or services of the Imperial group, as well as those whose actions may affect the ability of the group to successfully implement its strategies and achieve its objectives.

Our stakeholders include a wide range of groups and individuals, with varying levels of involvement with the business, and diverse and sometimes conflicting interests that we need to balance.

Share owners expect favourable long-term returns on their investments in our group, and have the inalienable right to exercise effective ownership over their equity. Any dilution of this right by management for any reason whatsoever will irretrievably undermine our corporate integrity, and cannot be tolerated.

We work with debt providers to access debt funding at competitive rates in different jurisdictions, facilitated by our balance sheet and credit rating.

Research analysts facilitate an understanding of the group for our owners and prospective investors, who provide the capital we need to execute on our strategy. Collectively, the investment community supports the effective functioning of equity markets, which is essential to attracting capital at a fair price.

Our clients’ needs drive the nature of the products and services we offer and the way in which we deliver them. Strong competition in our areas of mobility and changes to our clients’ operating contexts require that we strengthen our customer focus and unlock value for our clients.

Our suppliers are critical to our client relationships given their role in the quality and delivery of products and services, and their adherence to our ethical standards. A number of OEMs we represent have specific criteria that cover various aspects of how we retail their product.

Strategic partnerships, including finance partners and joint ventures, enable deeper penetration into value chains and greater reach of our products and services. BEE partners are critical to meeting our moral obligations and delivering on elements of our BEE scorecard.

The Imperial Group is subject to various regulations across multiple jurisdictions.

Our social licence to operate depends on being a good corporate citizen and maintaining constructive relationships with the communities in which we operate.

Many of our employees choose union representation in exercising their rights. While we respect their choice to do so, it can never diminish our obligation to interact directly with them as individuals in a fair, open and respectful manner.

Every employee contributes skills, perspective and energy to building, maintaining and deepening the relationships with our clients and other stakeholders on which our survival depends. Together, within the framework set by Imperial, our employees determine the quality of the working environment and the group’s ability to attract and retain individuals of calibre at all levels. Investment in the development of their capabilities and skills is an imperative.