Directors’Report

The directors present their report which forms part of the Annual Financial Statements of the company and of the Group for the year ended 30 June 2018.

Nature of business

Super Group Limited (Registration number 1943/016107/06), the holding company of the Group, is a company listed on the Main Board of the JSE in the “Industrial Transportation” sector, incorporated and domiciled in the Republic of South Africa. Super Group is a broad-based supply chain management business, operating predominantly in South Africa, with operations across sub-Saharan Africa and businesses in Australia, Europe, New Zealand and the United Kingdom. Its principal operating activities include supply chain management, dealerships and fleet management activities.

Financial results

The results for the year are set out in the Summarised Consolidated Financial Statements presented here on this Integrated Report. The Annual Financial Statements are published on the Group’s website www.supergroup.co.za.

Year under review

The overview of the results as well as the financial performance of the Group is dealt with in the Chief Executive Officer’s Report and the Divisional Reviews in the Integrated Report published on the Group's website.

Significant events

SG inTime acquisition of an interest in Ader Group
SG inTime acquired Ader effective 4 July 2017 for a purchase consideration of R173.8 million. The statement of financial position as at 30 June 2018 has been impacted by increases in intangible assets of R135.4 million, goodwill of R67.3 million, trade and other receivables of R263.4 million, interest-bearing borrowings of R119.1 million and trade and other payables of R318.9 million as a result of this acquisition. Trading relating to the 12 months ended 30 June 2018 has been included in the statement of comprehensive income.

SG International Holdings Limited acquisition of SMC
SG International Holdings Limited acquired SMC effective 4 July 2017 for a purchase consideration of R414.3 million. The statement of financial position as at 30 June 2018 has been impacted by increases in goodwill of R152.2 million, inventories of R557.0 million and trade and other payables of R701.7 million as a result of this acquisition. Trading relating to the 12 months ended 30 June 2018 has been included in the statement of comprehensive income.

Acquisition of an additional interest in SG Fleet
During the financial year ended 30 June 2018, Super Group acquired an additional 14 186 914 shares in SG Fleet for an amount of R551.7 million, increasing its effective shareholding to 57% (30 June 2017: 52.4%).

Acquisition of minority interest in Digistics
Effective 18 September 2017, Super Group Holdings Proprietary Limited acquired the remaining 45.0% minority interest in Digistics Proprietary Limited for R102.7 million, increasing the Group’s holding to 100%.

Acquisition of an interest in MDS Group
Supply Chain Africa acquired a 90% interest in MDS Group effective 1 October 2017 for R59.0 million. MDS Group is a webbased express domestic courier company, servicing both individuals and corporates.

Acquisition of a 15% interest in Legend
During the year Super Group Holdings Proprietary Limited acquired an additional 15.0% interest in Legend Proprietary Limited for R99.7 million, increasing the Group’s holding to 90%.

Disposal of a 15% interest in SG Coal
Effective 1 April 2018, SG Coal disposed 15.0% of its business to the Group’s Black Women Empowerment Scheme for R105.0 million.

Subsequent events

The JSE listed Super Group’s SPG004 senior unsecured notes, in terms of the company’s DMTN Programme dated 22 October 2013 on 27 September 2018. The value of the SPG004 issue was R450 million with interest being the three-month JIBAR plus 200 basis points, with the coupon rate payable quarterly on 27 March, 27 June, 27 September and 27 December of each year. The maturity date of this issue is 27 September 2023.

Share capital

The authorised and issued share capital is detailed in note 13 of the Annual Financial Statements.

Directors and Group Company Secretary

The names of the directors and Group Company Secretary who currently hold office are as follows:

Phillip Vallet: Independent Non-executive Director and Chairman of the company

  • John Newbury: Independent Non-executive Director
  • David Rose: Independent Non-executive Director
  • Mariam Cassim: Independent Non-executive Director
  • Dr Enos Banda: Independent Non-executive Director
  • Valentine Chitalu: Independent Non-executive Director
  • Oyama Andrew Mabandla: Independent Non-executive Director
  • Peter Mountford: Group CEO
  • Colin Brown: Group CFO
  • Nigel Redford: Group Company Secretary

The only change to the Board to the date of posting of the Integrated Report was the appointment of Oyama Andrew Mabandla effective 1 September 2018.

Details of directors’ remuneration, share appreciation rights and options appear here.

Dividends

The Board has resolved not to declare a dividend for the current year. The dividend policy will be reviewed in the year ahead.

Resolutions

During the year, other than the resolutions passed at the Annual General Meeting on 28 November 2017, the shareholders of the company passed no other resolutions. No special resolutions, the nature of which might be significant to members in the appreciation of the affairs of the Group, were passed by any subsid/.iary companies during the year covered by this Integrated Report.

Subsidiary companies

Details of the principal subsidiary companies appear here on the Annual Financial Statements available on
the website.

Share option schemes

Refer to note 37 of the Annual Financial Statements for information relating to option schemes, share-based payments and the B-BBEE Staff Empowerment Scheme.

Litigation statement

Super Group is not involved in any material legal or arbitration proceedings or legal actions, nor are the directors aware of any proceedings that are pending or threatened, that may have, or have had, in the 12-month period preceding the date of this Integrated Report, a material adverse effect on the Group’s financial position.

Material changes

There have been no material changes in the financial or trading position of the company and its subsidiaries between 30 June 2018 and the date of this Integrated Report.

Going concern

The directors consider that the Group and company have adequate resources to continue operating for the foreseeable future and that it is therefore appropriate to adopt the going-concern basis in preparing the company’s financial statements. The directors have satisfied themselves that the Group and company are in a sound financial position and that it has access to sufficient borrowing facilities to meet its foreseeable cash requirements.