Basis of preparation and accounting policies

The Summarised Consolidated Financial Statements for the year ended 30 June 2018 are prepared in accordance with the requirements of the JSE Limited Listings Requirements, the JSE Guidance Letter: Summary Financial Statements dated 25 July 2011, the requirements of the Companies Act of South Africa, in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as a minimum, contain the information required by IAS 34 – Interim Financial Reporting.

The accounting policies applied in the preparation of the Summarised Consolidated Financial Statements are in terms of IFRS and are consistent with those applied in the Annual Financial Statements. The definitions of capital items, EBITA and related adjustments are included in the accounting policies in the June 2018 Annual Financial Statements. There were no standards and amendments to standards with a material impact on the Summarised Consolidated Financial Statements that are relevant to and became effective for the first time in Super Group’s financial year that commenced 1 July 2017.

The Summarised Consolidated Financial Statements are extracted from the Annual Financial Statements, but are not audited. The Annual Financial Statements have been audited by KPMG Inc., who expressed an unmodified opinion thereon. The Annual Financial Statements and the Independent Auditor’s Report thereon are available for inspection at the company’s registered office. The directors take full responsibility for the preparation of the Summarised Consolidated Financial Statements and the financial information has been correctly extracted from the Annual Financial Statements.

The Independent Auditor’s Report does not necessarily report on all of the information contained in this report. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor’s engagement they should obtain a copy of the Independent Auditor’s Report together with the accompanying Annual Financial Statements from the issuer’s registered office.

Standards effective for financial year commencing 1 July 2018:

  • IFRS 15 Revenue from Contracts with Customers
  • IFRS 9 Financial Instruments
  • Classification and Measurement of Share-based Payment Transactions (Amendments to IFRS 2)
  • Transfers of Investment property (Amendments to IAS 40)
  • IFRIC 22 Foreign Currency Transactions and Advance Considerations Standards effective for reporting periods starting on or after 1 July 2019:
  • IFRS 16 Leases
  • IFRIC 23 Uncertainty over Income Tax Treatments

The Group will adopt the above standards and interpretations when they become effective.

The Group has held workshops with their external auditors, KPMG Inc., and determined the potential impact of the adoption of IFRS 15, IFRS 9 and IFRS 16 on the Summarised Consolidated Financial Statements.

IFRS 15 – Revenue from Contracts with Customers replaces IAS 18 – Revenue, and provides a single comprehensive model for revenue recognition based on the satisfaction of performance obligations and additional disclosures in respect of revenue. The only material anticipated change is in the SG Fleet businesses resulting in a gross up of end of lease income as revenue and the corresponding expense for the related fleet management costs. There will be no material impact on profit or loss nor retained earnings; however, had the SG Fleet businesses applied the standard for the year ended 30 June 2018, revenue would have increased by AUD198 300 000 (R1 969 million) with a corresponding increase in expense. The new standard also introduces expanded disclosure requirements and changes in presentation. These are expected to change the nature and extent of the Group’s disclosures about its revenue from contracts with customers and associated assets.

IFRS 9 – Financial Instruments replaces IAS 39 Financial instruments. The assessment indicates that the impairment allowance of receivables currently estimated on the incurred loss model will be estimated on an expected credit loss model and the impact of the change in the allowance is not expected to have a material impact on the Group.

IFRS 16 – Leases replaces IAS 17 – Leases, introduced changes to lessee accounting, in particular, the requirement to recognise leases currently classified as operating leases on the Statement of Financial Position. The standard requires a lessee to recognise a right-of-use asset, representing its rights to use the underlying lease asset, and a lease liability representing its obligation to make lease payments, with certain exceptions for short-term leases or leases of low-value assets, on the Summarised Consolidated Statement of Financial Position. The initial assessment indicates that the present value of operating rental commitments disclosed in note 9 of the salient features to be recorded as a financial liability with a corresponding capitalised non-current asset on the Summarised Consolidated Statement of Financial Position. The related amortised finance cost and non-current asset depreciation will be recorded in the Summarised Consolidated Statement of Comprehensive Income, replacing the operating lease expenses currently recognised.

The Board’s initial view on the other standards not yet effective is that the impact is not expected to be material.

The Summarised Consolidated Financial Statements are presented in Rand, which is the company’s functional currency and the Group’s presentation currency, rounded to the nearest thousand.