Integrated Annual Report 2013
Individual thinking, collective success
Content Scope and boundary
IFC
OneLogix at a glance
1
Logistics supply chain model
2
Highlights
3
Group at a glance
4
Group structure
6
Our business model
7
Value-added statement
8
Our African footprint
9
Our investment case
10
Five-year review
10
Group strategy
13
Material issues and strategic focus
14
Key risks
15
Milestones
16
Stakeholder engagement
17
Leadership
19
Ethical leadership
20
Chairperson’s report
21
CEO’s report and operational reviews
22
Directorate
26
Executive teams
28
Reports to stakeholders
30
Corporate governance
31
Risk management
37
Our people
39
Remuneration report
45
Environmental conservation
46
Community upliftment
47
Annual financial statements
49
Shareholder information
93
Shareholder analysis
94
Shareholders’ diary
95
Notice of annual general meeting
96
Form of proxy
101
Definitions
104
Contact details
IBC
OneLogix Limited Registration no.: 1998/004519/06 ISIN: ZAE 000026399 JSE Main Board sector: Transportation Services Share code: OLG Listing date: 11 September 2000 Shares in issue: 231 595 235 (31 May 2013)
Navigation toolkit The following icons represent easy reference to related content. For an explanation of the material issues’ icons, please see page 14.
Go to www.onelogix.com Key facts
The complete integrated report 2013 is also available on our website.
Go to www.onelogix.com
Scope and boundary The directors of OneLogix are proud to present the company’s fourth integrated annual report. OneLogix operates in the logistics industry in Southern Africa through eight companies offering specialised logistics services within well-defined niches. The company’s shareholding interests in the operating companies range from 40% to 100%. The specific nature of the services in the operating companies sets relatively high barriers to entry, with each business having built a strong positioning in its chosen market.
Statement of responsibility The Audit and Risk Committee acknowledges its responsibility on behalf of the board to ensure the integrity of this integrated annual report 2013. The committee has accordingly applied its mind to the report and believes that it appropriately and sufficiently addresses all material issues, and fairly presents the integrated performance of OneLogix and its subsidiaries for the year within the scope and boundary above. The Audit and Risk Committee recommended this integrated annual report 2013 to the board for approval
This integrated annual report represents a holistic overview of the company’s performance for the year 1 June 2012 to 31 May 2013 in terms of financial, social, economic and governance parameters and overall sustainability. It seeks to communicate the company’s business strategy and planning as well as all other relevant issues in an open and balanced manner. We believe it projects an honest and balanced approach to sustainability that encompasses a fair account of all of the capitals employed by the group in our business activities and which we thereby impact.
The integrated annual report 2013 is available in hard copy on request from the registered office (see the IBC of this report) and is also posted on the group’s website: www.onelogix.com
For further information, please contact the representative of the company secretary (see Contact Details on the IBC).
Forward-looking statements This
integrated
statements The scope of the report encompasses all eight operating companies within two reportable segments: Specialised Transport and Retail. A non-reportable segment, Other – Logistics Services includes the remaining businesses that are involved in providing services to the logistics industry. It does not extend to sustainability information in respect of each of the 263 independent franchise entities operated under the PostNet brand. OneLogix’s operational activities are based primarily within South Africa. However, operations in all the segments extend either their infrastructural or services reach into the greater southern African region.
|
that,
annual
report
unless
otherwise
contains
forward-looking
indicated,
reflect
the
company’s expectations as at 31 May 2013. Actual results may differ materially from the company’s expectations if known and unknown risks or uncertainties affect its business, or if estimates or assumptions prove inaccurate. The company cannot guarantee that any forward-looking statement will materialise and, accordingly, readers are cautioned not to place undue reliance on these forward-looking statements. The company disclaims any intention and assumes no obligation to update or revise any forward-looking statement even if new information becomes available as a result of future events or for any other reason, save as required by regulation and/or legislation.
Assurance To ensure the integrity of sustainability reporting in the group, the following assurance has been undertaken: Business process
Nature of assurance
Status
Assurance provider
Unqualified audit
Assured
PwC
BEE scorecard
Assured
EmpowerDex
Internal assurance
Internal assurance
Group SHEQ Manager
ISO 9001:2008 Quality Management Systems
Assured
SABS
Assured
PwC
Operational/financial risk Annual financial statements Empowerment B-BBEE Safety Health and safety Quality Quality assurance (United Bulk) Ethics Whistleblowing hotline
Feedback The OneLogix group directs considerable energy towards ensuring a successful organisation with a sustainable future for all stakeholders. With this in mind we extend an open invitation to send any constructive views on this report to CEO Ian Lourens (
[email protected]). Alec Grant Audit and Risk Committee Chairperson
Ian Lourens CEO
Geoff Glass FD
OneLogix at a glance Logistics supply chain model ............................. 2 Highlights ............................................................. 3 Group at a glance ................................................ 4 Group structure ................................................... 6 Our business model............................................. 7 Value-added statement ....................................... 8 Our African footprint............................................ 9 Our investment case...........................................10 Five-year review ..................................................10
Entrepreneurship involves a willingness and confidence to face and triumph over adversity.
Key facts VDS was established in 1988 by Neville Bester, the largest shareholder in the OneLogix group. Coupled with the substantial risks of starting a new business, the additional challenge of delivering vehicles as far afield as
Market leader in local and cross-border auto logistics Up to 900 vehicles delivered per day
Uganda was certainly not for the faint hearted. With an unfailing belief that he would prevail, Neville employed a few drivers and led self-drive convoys from Durban harbour into the then infrastructurally deficient Africa. These journeys took up to ten days. Following delivery, the next hurdle was getting back home. Tales of an undaunted Neville driving a
Up to 300 collection points; ± 1 000 delivery locations > 250-strong fleet of delivery trucks and trailers
Kombi full of tired but intrepid drivers back home are part of VDS lore.
Storage capabilities for > 15 000 vehicles
With growing market acceptance of ‘off wheels’ delivery options and the
Strong IT support platform
purchase of larger trailers from Europe, VDS slowly increased its delivery
Ability to fully integrate with customers’ supply chain
fleet to over 20 vehicles. Simultaneously VDS’s capability of offering control points both within South Africa and cross border were welcomed by an expanding customer base. As a result the business continued to grow and prosper. Today Neville remains at the helm and VDS continues to exhibit the ‘can do’, resilient, innovative and self-confident approach which formed the foundation of a successful business all those years ago.
Established track record in greater southern Africa
2
Logistics supply chain model
Logistics
Origin
Transportation
1
Storage
2
Retail
3
Delivery
5
4
Supporting logistics with service delivery
Repair
OneLogix Integrated Annual Report 2013
Intelligence
Asset management
3
Highlights Total distribution for the year of
Successful transition to
17%
9,5 cents per share
JSE Main Board
Revenue
Operating income
HEPS
20% to +R1 billion
10%
excluding profit on sale of assets
93 000
30
18 600
6
0
0910
10 11
12
11 13
12
13
Cash generated from operations* (R’000)
0 09
0910
10 11
12
11 13
12
13
ROE (%)
0910
10 11
12
11 13
12
13
23,5
23,1
36
11 13
12
9
0 09
13
18
5
0
12
27
10
24 000
20,3
20,8
15 14,2
79 881
48 000
57 468
64 425
72 000
11
45
20
97 489
116 140
96 000
10
Gearing ratio (excluding cash on hand) (%)
25
120 000
09
44,3
09
18,3 11,8
12
39,5
0
21,4
71 067
37 200
18
8,9
175 000
55 800
24
42,2
388 245
350 000
471 626
525 000
74 400
51 676
673 542
700 000
41 996
875 000
92 536
1 050 000
90 420
HEPS* (cents)
1 040 301
Operating profit* (R’000)
864 097
Revenue* (R’000)
25,0
14%
38,0
from continuing operations
37,2
HEPS
0 09
0910
10 11
12
11 13
12
13
09
0910
10 11
12
13
* From continuing operations
Operations Latest acquisitions successfully integrated and performing well
Margin squeeze Positive employee relations
Successful amalgamation of RFB Logistics and OneLogix Projex to create one operating entity in the project management of abnormal loads and general freight markets
Car-carrier industry permit issues resolved Atlas Panelbeaters extends OEM accreditations Final exit from media business
Strong customer retention and customer base growth
Continued evaluation of acquisition opportunities OneLogix Integrated Annual Report 2013
4
Group at a glance Company reference
Year established
Specialised Transport Revenue contribution 2013
2012
90%
89%
VDS
A recognised leader in both the local and cross-border auto-logistics market
1988
CVDS
Provides an auto logistics service for vehicles in excess of 3,5 tons, on their own wheels, to destinations throughout South Africa and neighbouring countries
2007
OneLogix Projex
Provides logistics for the movement of large shipments of abnormal and general freight through the port of Durban, the country’s largest port
1991 RFB Logistics established
2010 OneLogix Projex, established in-house
2013 Amalgamated
United Bulk
Specialises in transporting high value and liquid hazardous chemicals, oils, acids, food grade product and petroleum gas
1996
PostNet
Provides business service centres with a primary offering of courier services, which fits strategically with the group’s focus on logistics
1994
Retail Revenue contribution 2013
2012
3%
3%
Other – Logistics Services Revenue contribution 2013
2012
Offers accident repairs, structural repairs to chassis, Atlas Panelbeaters cab rebuilds, specialised spray painting and an accident
2002
recovery service for commercial trucks
7%
8%
* minority interest
OneLogix Integrated Annual Report 2013
Developer of transport-related accounting software used extensively within the OneLogix group. The software includes transport-specific monitoring of fuel and tyre consumption, workshop and spares management, fixed asset register control with an ability for full income reporting per truck
1996
Drive Report* Driver behaviour management company with two pillars:
2000
QSA
DriveCam and Drive Report, both aimed at addressing cost optimisation and road safety (two key factors within the logistics industry)
5
Year joined OneLogix
2001
MD and years of service
Number of staff
Footprint
Customer base
Neville Bester
680
Head office in Kempton Park with branches in Durban, East London, Port Elizabeth, Cape Town, Beitbridge, Harare and Lusaka
Includes Mercedes-Benz, BMW, Volkswagen, General Motors, Hyundai, KIA, Chrysler, Toyota, Nissan, Volvo, Porsche, Suzuki, GWM and Ford. Private clients, motor fleet operators and inter-dealer move requirements
268
Gauteng, Pinetown and East London
Includes MBSA (Mercedes-Benz, Freightliner and Fuso), Volvo, MAN Truck and Bus (including Volkswagen Trucks), Renault, UD and Hino
122
Durban harbour precinct and Johannesburg
Includes Rohlig-Grindrod, Bidvest Panalpina, DB Schenker, Hellman Worldwide Logistics, Santova, Babcock, Barloworld Logistics, Doosan and Group Five
207
Headquarters in Vanderbijlpark with branches in Worcester and Durban
Includes Sasol, Afrox, AECI, Omnia, Distell, KWV, Engen, Totalgaz and Kayagas
32
Head office in Midrand with branches in Cape Town, Port Elizabeth and Durban, and 263 franchised outlets throughout South Africa
60 000 private and SMME customers per day
61
Springs head office and workshops
Includes Grindrod, Imperial Logistics, Elite Truck Hire. McDonalds Transport
4
Centurion head office
Includes Reinhardt Transport, Stols Vervoer, HFR, VDS
42
Head office in Benoni with satellite offices in Cape Town, Bloemfontein and Nelspruit.
Fleet customers include Super Group, Imperial, Unitrans, DHL, Eskom, BP, Shell, Sasol and Barloworld Logistics
25 years
2007
Dick van de Zee 6 years
2010
Nadir Moosa
2013
3 years
(Amalgamated)
2013
Patrick Pols 17 years
1994
Chris Wheeler 19 years
2010
Morné Nel 3 years
2013
Chris Cloete 17 years
2013
Louis Swart 13 years
OneLogix Integrated Annual Report 2013
6
Group structure
CEO
COO
Group HR
Group IT
Specialised Transport
100%*
FD
Group SHEQ
Internal Audit
Retail
Group Finance and Admin
Other – Logistics Services
100%*
65%*
75%* 55%* 90%*
60%*
* Percentage owned by OneLogix
OneLogix Integrated Annual Report 2013
40%*
Our business model
7
The purpose of OneLogix is to be at the forefront of offering world-class logistics and related services to the entire southern Africa region.
Our vision is that each of the companies within the group will aim to be the supplier of preference to its respective market in recognition of its product quality and customer service excellence.
Our values are operating imperatives through which we drive our group companies to realise our vision:
A commitment to excellence
Respect
All employees are encouraged to continually operate at
Each person is seen as an individual deserving of respect.
their individual optimum levels and to enjoy contributing
Fairness
their very best performances.
All people are treated in a reasonable and equitable manner which strives to be objective and fair.
They are expected to operate at high energy levels and with immediacy in seeking solutions to challenges.
Accountability
Teamwork
Everyone within the group will be held accountable for all their actions both within the business environment and outside of the company within their community.
All employees understand the importance to success of specialist input from different people. They work with a common goal in mind and in an
Trust
environment which encourages every participant of a
Staff are trusted to act in the best interests of the company in a reciprocal relationship, and trust amongst colleagues is actively encouraged.
team to perform optimally.
Integrity All actions are based on sound principles and intentions.
Decentralised management structure The group operates on a decentralised management structure wherein the leaders of each business are encouraged to continue their entrepreneurial building of the business, supported by the centre.
Companies within the group or those targeted for future incorporation must operate a specific business model with definite key characteristics: Entrepreneurial in nature Occupy a well-defined logistics market niche
Op
er at
in g c o m p a ni
es
Strong positioning in market niche Sustainable prospects
Acquisition Information technology
Defined, pervasive, strict customer focus
(funding and administrative support)
Strong business processes that facilitate the maximisation of operating margins
Capital raising
Finance
management and staff
OneLogix Balance sheet
Create an innovative culture that empowers and motivates
Administration
Human resources
Strategic direction and guidance
OneLogix Integrated Annual Report 2013
8
Value-added statement 2013 R000 Revenue Purchases from suppliers for goods and services Profit from discontinued operations Share of profits from associate
1 040 (632 8 4
%
2012 R000
301 266) 762 814
864 097 (524 810) 2 103 –
Value added
421 611
341 390
Value distributed Employees Taxation Finance providers Shareholders Asset replacement Profits retained for future expansion
264 22 13 24 51 46
445 237 071 633 054 171
63 5 3 6 12 11
421 611
100
205 23 8 23 43 36
066 750 917 004 801 852
60 7 2 7 13 11
341 390
100
Value distributed
2013
Employees 63% Asset replacement 12% Profits retained for future expansion 11% Shareholders 6% Taxation 5% Finance providers 3%
OneLogix Integrated Annual Report 2013
2012
%
Employees 60% Asset replacement 13% Profits retained for future expansion 11% Shareholders 7% Taxation 7% Finance providers 2%
Our African footprint
9
Specialised Transport
The group’s African footprint was pioneered by VDS and has progressively grown over the past 25 years.
Retail Other – Logistics Services
Democratic Republic of the Congo
Tanzania
Angola
la Malawi Zambia Lusaka
Harare Ha ra rare
Zimbabwe Zimb babwe e
Control and monitoring point for VDS at Beitbridge
Nelspruit
Botswana
tbridge r Beitbridge
Namibia
The primary geographical area of operation is within South Africa
Nelspruit Nels elss spruit uit
Johannesburg Johannesb J ohannesb h
Bloemfontein Dur ban Durban
Drive Report Af South Africa East ast London London
Gauteng
PostNet Atlas Panelbeaters QSA Drive Report
Port ort Elizabeth
Cape Town
Durban
VDS CVDS
VDS CVDS United Bulk OneLogix Projex
Port Elizabeth
East London on
PostNet
VDS
Drive Report
PostNet
VDS CVDS
South Africa The primary geographical area of operation is within South Africa where the group has an extensive and appropriately sophisticated infrastructure of offices, storage facilities and workshops. This infrastructure ensures that the group offers a true national footprint to its customers.
Drive Report
VDS CVDS United Bulk OneLogix Projex
Bloemfontein
Cape Town
The Zimbabwean and Zambian offices were established to fulfil the function of a general control and monitoring point for the VDS fleet
Zambia The Zambia (Lusaka) office is the control point for the VDS Zambia registered fleet. It also performs enroute repairs and acts as a service centre for customers in the region.
PostNet
Zimbabwe Particular strengths of the office include a substantial refuelling capacity, control point and a service centre for group customers in the region.
This footprint will continue to facilitate penetration of the region by particularly CVDS, OneLogix Projex and United Bulk.
OneLogix Integrated Annual Report 2013
10
Our investment case
Favourable market positioning of each business Empowering and entrepreneurial company structure and culture Structured to easily assimilate acquisitions Strong and focused management teams Tradition of excellent customer service (empirically verified) Management shareholding ensures strong vested interest in a successful company
Five-year review for the year ended 31 May 2013 The statement of comprehensive income and cash flows distinguish discontinued operations from continuing operations. Comparative figures have been restated. 2013 R’000
2012 R’000
2011 R’000
2010 R’000
2009 R’000
1 040 301 (896 711)
864 097 (729 876)
673 542 (563 815)
471 626 (386 548)
388 245 (320 107)
143 590
134 221
109 727
85 078
68 138
(51 054) –
(43 801) –
(38 660) –
(33 402) –
(24 444) (1 698)
Operating profit Net finance costs Share of profits from associate
92 536 (13 071) 4 814
90 420 (8 917) –
71 067 (4 542) –
51 676 (9 142) –
41 996 (12 859) –
Profit before taxation Taxation
84 279 (22 237)
81 503 (23 750)
66 525 (18 635)
42 534 (12 265)
29 137 (9 030)
Profit from continuing operations Profit from discontinued operations
62 042 8 762
57 753 2 103
47 910 2 279
30 269 12 354
20 107 4 562
Profit for the year Other comprehensive income: Revaluation of land and buildings Currency translation differences Income tax relating to components of other comprehensive income Deferred tax increase due to CGT inclusion rate increase
70 804
59 856
50 189
42 623
24 669
– 161
– 165
1 300 (38)
– –
– –
–
–
(182)
–
–
–
(760)
–
–
–
Total comprehensive income
70 965
59 261
51 269
42 623
24 669
Profit attributable to: – Owners of the parent – Non-controlling interest
65 488 5 316
53 729 6 127
38 697 11 492
34 711 7 912
20 391 4 278
Profit
70 804
59 856
50 189
42 623
24 669
Total comprehensive income attributable to: – Owners of the parent – Non-controlling interest
65 649 5 316
53 134 6 127
39 550 11 719
34 711 7 912
20 391 4 278
70 965
59 261
51 269
42 623
24 669
Group statement of comprehensive income Revenue Operating and administration costs Earnings before interest, taxation, depreciation and amortisation (‘EBITDA’) Depreciation on property, plant and equipment and amortisation of intangibles Impairment of intangible assets
OneLogix Integrated Annual Report 2013
11
2013 R’000 Group statement of financial position Assets Non-current assets Property, plant and equipment Intangible assets Interest in associate Loans and receivables Deferred taxation Current assets Inventories Trade and other receivables Current tax receivable Cash and cash equivalents Total assets Equity and liabilities Equity Ordinary shareholders’ funds Non-controlling interests Liabilities Non-current liabilities Interest-bearing borrowings Deferred taxation Share-based compensation liability Current liabilities Trade and other payables Interest-bearing borrowings Vendor liability Non-controlling interest put option Current tax liabilities Bank overdrafts Total equity and liabilities
2012 R’000
2011 R’000
2010 R’000
2009 R’000
217 682 33 550 – 6 887 –
213 406 56 370 120 279 –
446 66 33 7 1
418 289 935 219 474
327 555 31 982 – 6 498 2 155
274 241 32 498 – 6 271 1 492
10 148 5 54
090 994 512 749
14 119 1 102
12 105 1 42
759 210 943 494
157 460 035 791
9 88 2 60
525 866 229 233
5 044 67 601 – 27 399
774 680
616 596
475 945
418 972
370 219
292 272 17 184
264 498 5 892
200 226 30 046
181 889 19 427
153 482 14 728
149 722 51 605 –
122 431 26 846 –
81 286 21 080 4 132
61 208 20 196 1 986
68 042 18 605 903
156 74 9 16 1 6
088 137 000 206 616 850
136 211 50 017 – – 701 –
95 595 41 554 – – 2 026 –
86 330 46 506 – – 1 430 –
69 037 44 118 – – 1 304 –
774 680
606 596
475 945
418 972
370 219
OneLogix Integrated Annual Report 2013
12
Five-year review (continued) for the year ended 31 May 2013
Net cash generated from operating activities – continuing operations – discontinued operations
Net cash flows from investing activities – continuing operations – discontinued operations
Net cash flows from financing activities – continuing operations – discontinued operations
2013 R’000
2012 R’000
2011 R’000
2010 R’000
2009 R’000
97 489 (58)
116 140 2 934
79 881 1 846
57 468 8 050
64 425 9 240
97 431
119 074
81 727
65 518
73 665
(88 482) (62)
5 108 (462)
(18 024) (835)
434 27 975
(9 166) (1 677)
(88 544)
4 646
(18 859)
28 409
(10 843)
(63 517) (75)
(64 195) 65
(78 829) (1 444)
(61 077) (16)
(44 512) 88
(63 592)
(64 130)
(80 273)
(61 093)
(44 424)
Net (decrease)/increase in cash resources Cash and cash equivalents at beginning of year Exchange gain/(loss) on cash
(54 705)
59 590
(17 405)
32 834
18 398
102 494 110
42 791 113
60 233 (37)
27 399 –
9 001 –
Cash and cash equivalents at end of year
47 899
102 494
42 791
60 233
27 399
225 658 225 658 231 258
225 658 219 355 223 715
202 131 203 789 203 789
210 131 210 131 210 131
210 131 210 131 210 131
29,0
24,5
19,0
16,5
9,7
25,1
23,8
18,3
11,8
8,4
3,9
0,7
0,7
4,7
1,3
28,3
24,0
19,0
16,5
9,7
24,5
23,3
18,3
11,8
8,4
3,8
0,7
0,7
4,7
1,3
25,1
22,1
19,0
13,0
10,2
25,0
21,4
18,3
11,8
8,9
0,1
0,7
0,7
1,2
1,3
24,5
21,7
19,0
13,0
10,2
24,4
21,0
18,3
11,8
8,9
0,1
0,7
0,7
1,2
1,3
Number of shares in issue (‘000) – Total – Weighted – Diluted Basic earnings per share (cents) – Basic earnings per share – Basic earnings per share from continuing operations – Basic earnings per share from discontinued operations Diluted basic earnings per share (cents) – Diluted basic earnings per share – Diluted basic earnings per share from continuing operations – Diluted basic earnings per share from discontinued operations Headline earnings per share (cents) – Headline earnings per share – Headline earnings per share from continuing operations – Headline earnings per share from discontinued operations Diluted headline earnings per share (cents) – Diluted headline earnings per share – Diluted headline earnings per share from continuing operations – Diluted headline earnings per share from discontinued operations
OneLogix Integrated Annual Report 2013
Group strategy Material issues and strategic focus ....................14 Key risks ..............................................................15 Milestones ...........................................................16 Stakeholder engagement ....................................17
Entrepreneurs must have the ability to see opportunities that others don’t see and the aptitude to turn this vision into reality.
Key facts CVDS was originally established in 2007 as an in-house initiative between OneLogix and Dick van der Zee, an Eastern Cape entrepreneur involved in the trucking and motor industry. OneLogix had successfully grown and positioned VDS as a leading South African cross-border auto-
Offers a complete supply chain solution in commercial vehicle logistics Service points in Gauteng, Pinetown and East London
logistics company, and recognised that its disciplines and experience could be applied to a company in an adjacent market. OneLogix management therefore broached the possibility of entering the truck
Holds > 50% market share Moves up to 2 500 vehicles per month
delivery market with one of its customers. Understanding the power of a motivated entrepreneur, the group approached a like-minded Dick to lead the new venture as a fellow shareholder. CVDS was the first instance at OneLogix of utilising the group’s established management platform to enable another business to realise its full potential. CVDS started off with one customer in the Eastern Cape and it was not long before it had proved its mettle. Strong and focused attention on meeting highly demanding customers’ expectations proved to be central to its growth. Today CVDS has not only acquired substantial market share with an ever-increasing customer base, but also boasts an unparalleled nearperfect delivery record, something it has sustained for the full seven years of its existence.
150 collection points; > 350 destination locations On-time delivery performance average of 99,8% Storage capacity for over 2 000 vehicles
14
Material issues and strategic focus Material issues facing OneLogix
OneLogix’s strategic focus
Meeting and exceeding customers’ expectations
Sustaining an intimate understanding of the markets of operation within the group • Constant monitoring of the nature and dynamics of each market
• Ensuring the best possible value proposition is presented to the market at all times • Continually evaluating new opportunities in existing markets as well as new markets
Anticipating customers’ future needs
Enhancing the group’s entrepreneurial approach • Encouraging creative approaches to existing and new market opportunities
• Rewarding innovative responses to challenges
Understanding the dynamics of the competitive landscape
Sustaining an intimate understanding of the markets of operation within the group
Enhancing the group’s entrepreneurial approach
Insight into the implications of State-driven initiatives
Sustaining an intimate understanding of the markets of operation within the group
Enhancing the group’s entrepreneurial approach
Striving for operational excellence • Thoroughly understanding business processes and cost structures enabling (including excellence sustainable and competitive pricing options in financial • Continually reviewing operations with a view management) to increasing productivity
All round operational efficiencies
• Integrating newly acquired or newly established companies into the OneLogix operational system in an efficient and productive manner • Maintaining an appropriately motivated, skilled, competent and value driven workforce
Developing an appropriate supplier network
Striving for operational excellence across all aspects of the business
Developing and maintaining high calibre staff
Developing leadership and people • Continually focusing on maintaining a high performance culture • Ensuring the entrepreneurial attitude of management and staff is maintained and enhanced • Providing opportunities for people development and related recognition and reward
• Ensuring a functionally efficient ethos of teamwork • Creating an enabling culture based on a clear value system that ensures staff identification with business goals
Sustained growth of group businesses
Ensuring that business models within the group are resilient and sustainable • Maintaining competitive advantages • Maintaining a healthy financial position for all companies • Successfully integrating various strategic inputs at all times • Ensuring responsible and safe operations • Regulatory compliance
Protecting the company’s reputation • Ensuring positive stakeholder relationships • Developing empowering and retaining skilled people • Focusing intently on customer service • Fostering a workforce centred on excellence and respect at all times
Sourcing suitable acquisitions
Market intelligence • A suitable acquisition model
OneLogix Integrated Annual Report 2013
Key risks
15
Risk process The OneLogix executive management team is responsible for identifying key risk areas facing the group as well as control issues relating to risk. Consideration is given to profit growth, return on investment and debt levels against targets set during the annual budget process. This process involves continual review of risk on a monthly basis. The reviews are in turn tabled with the Audit and Risk Committee, which gains a keen insight by discussing the risks further in person with the executive management team. The committee tests the group’s risk tolerance levels once a year and recommends changes to policy if required, taking into account profitability, liquidity/solvency and utilisation of assets. These findings are communicated to and sanctioned by the board of directors, which takes ultimate responsibility for management of the group’s risk. The entire process is designed to manage rather than eliminate risk.
Risks are classified in the following categories: Economy Business strategy
The major risks facing the group include: The stated intention of central government to transport greater volumes and types of freight on an improved rail system
Financial Margin squeeze experienced by several of the group
IT
companies
Industrial relations
Dependence on earnings generated by VDS, the largest
Human resources Operations Regulatory
entity within the group Unstable labour relations within the freight and related industry Possible steps by the postal regulator to discourage mail
Environmental
box rentals by PostNet retail outlets
Safety, health and environment
Sourcing and keeping quality drivers across the group
Social
Fuel theft
OneLogix Integrated Annual Report 2013
Milestones Comprehensive income attributable to owners of the parent (R’000)
‘09
52 500
‘07
VDS
22 500 15 000
00
RFB Logistics
18 984 13 331
9 541
7 500 0
4Logix
30 000
Magscene
‘00
Press Support
‘01 37 500
CVDS
45 000
Isingwe and staff trust
‘04
01
02
QSA
Atlas Panelbeaters
OneLogix Projex
60 000
Drive Report
United Bulk
‘13
‘10
PostNet
16
65 649 53 134
39 550 34 711
20 391
15 381
8 180
03
04
05
06
07
08
09
10
11
12
13
Financial year
‘00
OneLogix lists on JSE
‘10
PostNet and Media Express part of group
Acquires Atlas Panelbeaters Established OneLogix Projex within the group Commencement of exit process from media logistics industry
‘01
Acquires VDS Disposes of Press Support, Media Express and minority interest in Internet Express Acquires additional 20% share in Magscene (total shareholding now 80%)
‘04
OneLogix transfers to AltX Pays maiden capital distribution Acquires controlling interest in 4Logix Recognised as top performing share price on AltX for the 2010 year
Introduces B-BBEE initiative when a B-BBEE Staff Trust and Izingwe Capital acquire 25% of main operating subsidiary OneLogix (Pty) Limited
‘06
‘07
Wins prestigious AltX Performance Award (African Access National Business Awards)
Substantial upgrade of VDS fleet and expansion of infrastructure
‘11
Extend footprint in media logistics space
‘13
B-BBEE flip up so that Izingwe Capital and OneLogix BEE Trust hold 10,25% and 2,56%, respectively, in the company Acquires a 55% stake in QSA Final exit from media logistics space
Acquires Press Support and 60% of Magscene Disposes of Magscene to CTP Limited CVDS established within the group Acquires a 60% stake in United Bulk Acquires a 40% stake in Drive Report
‘09
Enters abnormal and general freight market Acquires RFB Logistics
Transfers to JSE Main Board: Transportation Services Sector
Disposes of interest in 4Logix
Surpasses R1 billion revenue mark
OneLogix Integrated Annual Report 2013
Stakeholder engagement
17
OneLogix recognises that building mutually beneficial long-term relationships with all stakeholders is fundamental to creating sustainable value. The table below sets out our stakeholder engagement processes and how we integrate feedback into strategy and business operations. It is a given that stakeholder interests are dynamic and require continual and adaptive management attention, which is ongoing.
OneLogix Employees
Customers
What matters to them
Suppliers
Shareholders/ Investors
Funders
Government
(providers of debt)
Local communities
How we communicate and gather feedback
Our response
• Job security
• Individual performance reviews
• Career and personal development
• Regular formal and informal interaction with staff
• Promotion preference from within group
• Rewards for excellent performance
• Training sessions
Employees
• No discrimination • Communication • Quality work environment • Health and safety
• Regular formal job satisfaction and cultural climate surveys
• The second annual staff satisfaction survey was undertaken at VDS, OneLogix Projex, PostNet and Atlas Panelbeaters. Findings include: – overwhelming majority of people enjoy working at their particular company; – vast majority of staff are clear as to what is expected of them; – vast majority believe that their particular company is ethical, professional, sustainable and a good corporate citizen; and – attention must be directed at improving communication both intra-group and intra-company.
• Increased investment in development and training • Group bursary scheme for staff (and their children) • Monthly newsletter • Regular meeting with unions and non-unionised staff • Constant internal discussions with staff re-enforce company culture, Code of Conduct, policies and procedures • Open door policy throughout the group • Ongoing health and safety programmes
Customers • Service delivery • Resolution of problems • Competitive pricing • Communication
• Maintain healthy and professional relationships via: – clear service contracts; – involvement of senior staff; – regular face to face meetings; – email updates and systems interaction; – call centres; – general availability of staff; and – events.
• Strong focus on customer service • Constant monitoring of health of relationship by all senior management • Constant two-way communication
• Company and product brochures • Annual customer surveys • A second annual customer satisfaction survey was conducted at VDS with the following findings: – VDS is seen as both a superior car-carrier and a general service provider to the industry; – communication with customers at all levels is deemed to be outstanding; and – the company is clearly perceived to be ethical, professional, sustainable and a good corporate citizen. OneLogix Integrated Annual Report 2013
18
Stakeholder engagement (continued) What matters to them
How we communicate and gather feedback
Our response
• Clear communication of expectations
• Contracts and service agreements
• Clarity around delivery requirements
• Training
• Professional relationships that ensure impartiality and no corruption
Suppliers
• Adherence to payment terms
• Meetings and workshops
• Events • Focus on suitably qualified BEE operations
• Communication on future direction of company
• Regular communication with appropriate staff including senior management • Timeous payment and fair business practice
Shareholders/investors • Financial performance (including ability to service debt, solvency and liquidity) • Sustainable growth/returns • Company reputation • Communication
• Annual and interim reports • Results presentations
• Ongoing engagement and communication
• SENS announcements • General meetings • Site visits • Road shows • Regular one-on-one meetings • JSE showcases • Comprehensive website • Immediate availability of executive management team • Engage with financial media
Funders (providers of debt) • General prospects of business
• Regular formal and informal interaction
• Key operating ratios (e.g. liquidity, gearing, interest cover, solvency)
• Review of facilities
• Regular internal communication and review of business operations • Consider alternative options e.g. vendor finance share issues etc.
Government • Job creation • Regular and compliant tax payment
• Regular communication with appropriate government departments
• Strong history of compliance
• Dialogue with local community interest groups
• CSI spend
• Compliance with all laws and regulations Local communities • Job creation • Social development
OneLogix Integrated Annual Report 2013
Leadership Ethical leadership .............................................. 20 Chairperson’s report ........................................... 21 CEO’s report and operational reviews .............. 22 Directorate .......................................................... 26 Executive teams ................................................. 28
Typically, entrepreneurship is stimulated by an opportunity.
Key facts In late 2009, OneLogix acquired 100% of Durban-based harbouroriented general freight and abnormal load logistics company, RFB Logistics. The then managing director Mark Snowball was an inveterate entrepreneur looking to emigrate, yet indicated a willingness to continue at the helm for a few more years. At the same time OneLogix management was presented with an
Well-established reputation of handling large scale project work, including abnormal cargo Services include load consolidation, packing and unpacking, storage, cross-haul and long-haul
opportunity to harness the services of an experienced management
Ideally located within Durban port precinct
team from a similar, disbanded business. As a result the group
Accredited to enter any port in South Africa
established OneLogix Projex in 2010. Since both RFB Logistics and OneLogix Projex operate in similar
Regularly undertakes cross-border work as far as DRC
markets, it made commercial sense to merge them into one group company under the banner of OneLogix Projex. This became effective in 2013. The management platform developed and perfected by OneLogix at VDS, was again successfully deployed to these companies. The new OneLogix Projex has benefitted from the group’s extensive knowledge base of administration and financial control, workshop management,
Fleet of 57 trucks with superlink, flatbed, lowbed, extendable and step deck trailers Flexibility of moving loads from < 1 ton to 150 tons Vast country-wide network of subcontractors to enhance flexibility
fleet management and IT systems. The present OneLogix Projex team, led by Nadir Moosa, Ronnie
Strong and established reputation for outstanding customer service
Robertson, Karan Pillay, Sagie Moodley and Krish Bhimsan has fully embraced the OneLogix culture.
Over 1 500 satisfied customers
20
Ethical leadership In accordance with the board charter, the board is the ultimate
• zero tolerance for any form of corruption, unethical business
guardian of the group’s values and ethics and in the execution of
practice and behaviour that contravenes a law, regulation or
its duties strives to embody these values as an example to the
accepted norms of society;
group. It follows that the board aims to integrate responsible
• avoidance of actual or potential conflicts of interest that may
corporate citizenship into the company’s growth strategy as well
compromise an individual’s ability to act in the company’s best
as into daily operations in order to ensure the sustainability of the business.
interest; • refusal of gifts, hospitality or other forms of favour from third
As an implicit and explicit business imperative, the directors
parties in return for any kind of favour, service or treatment;
and senior management of each group company continually
• desisting from direct or indirect discriminatory practices and
strive to conduct business with the utmost integrity towards all
The Social and Ethics Committee, a newly established statutory committee of the board, monitors the group’s compliance with relevant social and ethical requirements and best practice to ensure that the group is meeting its responsibility to its various stakeholders. The committee has at the outset reviewed the group’s Code of Conduct, which is explicitly based on the group’s published Value System (available on the website: www.onelogix.com
supporting the process of sustainable and real transformation; • safeguarding the use of company assets for legitimate
stakeholders.
|
) and addresses the following issues:
• business is to be conducted with integrity, mutual respect and professionalism, in order to enhance the company’s reputation;
OneLogix Integrated Annual Report 2013
purposes only; • protecting the confidentiality of company information; • adhering to systems of internal control designed to meet the company’s strategic objectives; • subscribing to and acting in accordance with sound health, safety and environmental practices; • generally applying good corporate governance and high ethical standards in all instances; and • generally complying with all the laws of the countries within which the group operates.
Chairperson’s report
21
“OneLogix remained a stellar
performer on the JSE’s AltX with the share price appreciating by 67% over the first six months of 2013, before we transitioned to the JSE Main Board.
”
Sipho M Pityana Chairperson OneLogix has again delivered a pleasing performance despite a
until a suitable independent non-executive replacement can be
trying year. This is testament to the strategic positioning of the
appointed. In mid-April independent non-executive director
group in well-defined logistics niches of South Africa and
Lesego Sennelo was appointed Chair of the Remuneration
southern Africa, the strength of the business model and the
Committee.
quality and depth of management skills. OneLogix remained a stellar performer on the JSE’s AltX with the share price appreciating by 67% over the first six months of 2013, before we transitioned to the JSE Main Board in June and are
Transformation During the year OneLogix retained its Level 4 BEE rating. Going forward particular attention will be focused on skills development
now listed under the ‘Transportation Services’ sector.
programmes within the group.
I am proud that in a very real sense the group contributes to the
Outlook
efficient logistical infrastructure of the southern Africa region,
Trying business conditions are expected to continue in the short-
which is critical in ensuring the functional competitiveness of
term. OneLogix will remain focused on growing and developing
South Africa and the greater area.
existing businesses to their full potential. New acquisitions will be
Buys and sale
identified in line with our proven strategic approach.
The group continued to hone its focus and market positioning with three strategic acquisitions. The two largest of these, United Bulk and Drive Report, are set to prove valuable contributors in the future. Both sellers remain firmly invested, consistent with the
The OneLogix businesses are well-conceived and well-managed. Our management and employees continue to perform at the highest levels of excellence, and for that I would like to express
proven OneLogix model of acquiring entrepreneurial businesses
my deepest appreciation. It is a key to our success. I believe that
to which it can provide a management platform for expansion
the enabling culture within the group facilitates our performance
and to help them realise inherent potential. In addition OneLogix
by continually encouraging and empowering people.
divested of its last media logistics interest when it sold its stake in Magscene during the year.
I would also like to thank our business partners, customers, suppliers, business advisers and shareholders for their ongoing
Directorate
invaluable support.
We were deeply saddened by the passing of Joe Modibane in late February 2013. Joe was a long-standing board member and his valuable insights into the business will be missed. He was an independent
non-executive
director,
Chairperson
of
the
Remuneration Committee and a member of the Audit and Risk and Social and Ethics Committees. His position on the Audit and Risk Committee has been temporarily filled by non-executive director, Andrew Brooking,
Sipho Pityana Chairperson 26 August 2013 OneLogix Integrated Annual Report 2013
22
CEO’s report and operational reviews
“We have a long track record of
building sustainable businesses and buil we take seriously our responsibility to sustainable business to adhere a practices in all areas in which prac
”
we operate.
Ian Lourens CEO
2013 was a landmark year in that for the first time the group
managed and staffed by skilled and determined teams across
exceeded R1 billion revenue. This was largely driven by organic
the board.
growth, supplemented by acquisitive growth in the second half of the year. During the year the group made three acquisitions: United Bulk,
Sustainability Our stakeholders are the people to whom what we do matters, and our concern for them is integral to how we do business.
Drive Report and QSA, all of which contributed positively to earnings during the latter few months. These acquisitions complement the existing group companies and operate across
Bottom line success, while obviously good, lacks true meaning without real cognisance of the implications of our daily business
a broad spectrum of the logistics market. In addition they
operations. We recognise that wealth creation is vital for our
provide an important revenue buffer as they are essentially non-
survival and the ongoing support of our stakeholders, and are
cyclical.
proud of our achieving this in a meaningful way since listing on the JSE. However, social responsibility and big picture thinking
The year was also marked by the group’s final exit from our noncore media logistics businesses with the sale of Magscene to
play an equally important role when it comes to making business decisions for our long-term sustainability.
CTP Limited. This left us well-placed to focus on our larger core businesses to enhance growth prospects. The existing group businesses continued to deliver satisfactory performances to varying degrees, providing a strong base for
We have a long track record of building sustainable businesses and we take seriously our responsibility to adhere to sustainable business practices in all areas in which we operate.
earnings growth. This was achieved within a demanding macro-
Financial overview
economic environment and once again is testament to our
Group revenue increased 20% from R864,1 million to
spread of well-conceived and resilient businesses, which are
R1 040,3 million. The majority of the growth can be attributed to
OneLogix Integrated Annual Report 2013
23
organic growth in existing businesses, with the new acquisitions contributing to revenue in the second half of the year. Operating profit, excluding profit on sale of assets, increased by 10% from R84,4 million to R92,8 million. A capital profit of R6 million was recognised in the prior year relating to the disposal
Revenue increased by 20% R864,1 million to R1 040,3 million
of a group property in KwaZulu-Natal. Operating margins remain under pressure due to above-inflation increases in major input costs, such as labour and fuel prices (which are recovered from the customer base but only down the line). PostNet, however, provides somewhat of a buffer in this
HEPS from continuing operations increased by 17% 21,4 cents to 25,0 cents
regard with consistently high operating margins. Initiatives are in place to manage cost creep in the group in line with top-line growth. Operating margins, excluding profits on sale of assets, declined from 9,8% in 2012 to 8,9%.
EPS grew 18% 24,5 cents to 29,0 cents
HEPS rose 14% from 22,1 cents to 25,1 cents on the back of strong performances from the Specialised Transport and Retail
Over the years the excessive reliance of the group on earnings
segments. This was offset to an extent by a reduction in
generated by VDS has been systematically reduced, either by
contribution to earnings from the Other – Logistics Services non-
way of purposeful and strategic acquisitions or in-house start-up
reportable segment. HEPS from continuing operations rose 17%
initiatives. The acquisitions of United Bulk and Drive Report, each
from 21,4 cents to 25,0 cents.
vibrant and specialised businesses within their own niches,
EPS grew 18% from 24,5 cents to 29,0 cents, boosted by the capital profit realised on the disposal of Magscene.
represent yet another step in this unfolding strategy. Many of the group companies are generally moving into mature lifecycle stages, which in turn demands particular responses
Diluted HEPS and EPS are marginally lower than their respective undiluted measures due to the dilutive effect of the shares held by
from the group’s entrepreneurially-oriented leadership. Margin squeeze at VDS is one such challenge and specifically, adequate
the employee BEE Trust as treasury shares.
recovery of rising input costs from OEMs is proving difficult (see
Operating cash flows remained robust at R97,4 million (2012:
‘Operational reviews’ below).
R119,1 million). Although down on the prior year given increased
The group also recognises the importance of continual
working capital requirements, the group has strict working capital
enhancement of business processes, many of which find
structures in place which ensure optimal cash flow management.
expression in the IT systems of the organisation. Early in the year
CAPEX on continuing operational infrastructure for the year totalled R86,9 million. Investment in acquisitions totalling R79,2 million was offset by the net proceeds of R8,5 million received on the disposal of the group’s interest in Magscene.
we acquired a 55% stake in transport accounting software company QSA. This software is extensively utilised by all four of the companies in our Specialised Transport segment as well as by Atlas Panelbeaters. This strategic purchase will not only ensure future development specific to group needs, but, with
Challenges to our growth drivers
further investment will also facilitate the unrealised broader
We continue to be vigilant in evaluating the risks and opportunities
market potential of QSA products.
in government’s intention to substantially upgrade the country’s rail infrastructure. We remain convinced that road-based logistics solutions, especially those offered by the OneLogix group, will retain their central role in the economic growth of our country and
Operational reviews All the recent acquisitions have been successfully integrated into the operational fabric of OneLogix. The major growth driver remains the Specialised Transport segment of the group.
region. The challenge will be to adapt timeously with appropriate confident that the group’s explicit entrepreneurial focus will help
1. Specialised Transport VDS
us to meet and, in many cases pre-empt, this challenge.
VDS continued to perform well during the year notwithstanding
initiatives to retain our leadership positions in this arena. I am
challenges. It remains a pre-eminent operator in the local and In this context we are happy to report that the abnormal load
cross-border auto-logistics markets. Its service delivery is
permit issue has been resolved in a manner providing car-carrier
acknowledged as superior, supported by extensive storage
companies a more reasonable time to accommodate regulatory
facilities around the country, a leading IT support system that
requirements. The resolution of the problem is in no small
seamlessly integrates with our customers, efficient workshop
measure due to an industry-wide coordinated initiative, largely
facilities, highly productive driver training and strong management.
initiated and driven by OneLogix group executives.
These are all positive differentiators which contribute to VDS’ OneLogix Integrated Annual Report 2013
24
CEO’s report and operational reviews (continued) for the year ended 31 May 2013 hard won leading position in the market. (Within South Africa VDS
OneLogix Projex
has three major competitors while in the greater southern Africa
The newly invigorated OneLogix Projex exceeded even our
region it is the major operator.)
optimistic projections. It is firmly making its mark as an
VDS’ infrastructure is necessarily complex to accommodate its service offering, and is designed with the sole intention of constantly improving customer service levels. Developing VDS into the industry leader has over the years utilised the greatest
increasingly important operator in the sizeable market of moving abnormal loads and general freight from Durban harbour, a position which was improved by its recent relocation to new and more appropriate premises within the Durban harbour precinct.
portion of the group’s CAPEX. However, in turn VDS has
The company works with large clearing houses and importers of
performed an important nursery function by developing skills
capital equipment. It also has a well-established and considerable
and refining generic processes applicable to all the logistics
network of outsourced contractors, which together with its own
businesses in the group. These have been productively utilised
flexible fleet of 57 vehicles, gives it a dexterity to process large
in growing the capability and market share of the other
and complex loads in short timespans. The company is also well-
businesses, particularly those that are newly established or
known for its high levels of customer service emanating from the
acquired.
legacy of RFB Logistics.
The company has also played a pivotal role in pioneering the
United Bulk
OneLogix
entrepreneurial
The newly acquired United Bulk rounds off the Specialised
businesses and offering them the benefit of a management
Transport segment. The acquisition became unconditional on
platform to grow and expand.
1 February 2013.
VDS is a very well-managed business, a factor which will be
The complementary business culture and philosophies of United
important in overcoming challenges ahead. As a mature business
Bulk have ensured that the acquisition was integrated with ease.
there is a focus on appropriate cost management and evaluation of
Plans to increase earnings are far advanced. The success of this
new opportunities. The OEMs largely drive service level
acquisition adds credence to the OneLogix business model.
business
model
of
acquiring
expectations and pricing. Margin squeeze therefore remains a concern. It is becoming increasingly difficult to recover
Despite the high barriers to entry in this niche market of liquids
proportionate input cost increases from price-sensitive OEMs
logistics given the specialised equipment and associated skills, it
while at the same time maintaining our high delivery standards.
is nonetheless a highly competitive market. The associated
Further, the capital intensive imperative of the business demands
margin squeeze pressure is well-managed by an experienced
continual investment in optimal fleet infrastructure, general
and motivated team.
facilities including workshop and storage yards, IT, people and general management efficiency.
2. Retail PostNet
Nonetheless the business’s general proactive approach will
PostNet made good progress for a mature business and remains
ensure its success and VDS is expected to remain an important
a valuable contributor to the group, with high margins and reliable
contributor to group earnings.
annuity income. As a mature business it demands appropriate
CVDS
management that balances established success with new innovations to grow its revenue base.
CVDS also delivered a pleasing performance. It remains a market leader in the commercial vehicle storage and movement market.
For the third consecutive year, in 2013 the PostNet brand was
As with VDS, the OEMs are the predominant customers. The
named the leading local courier brand by the Sunday Times
market is less sophisticated, competitive and infrastructurally
Brand Survey. The company continues to evaluate new
demanding than VDS’ local and cross-border auto-logistics
opportunities for growth and diversification.
environment. While this has given CVDS free reign to structure and define operational levels, it is also indicative of the lower barriers to entry which have a negative impact on factors including pricing. The company’s service delivery standard of 99,8% has been sustained since inception in 2007 and evidences the group’s strong focus on customer satisfaction.
The protracted interaction with the national postal regulator, of some 19 years’ duration, is still unresolved and we are confident that management will continue dealing with this issue in the most effective manner.
3. Other – Logistics Services Atlas Panelbeaters The business has responded favourably to the corrective actions
During the year CVDS increased its market share to include
put in place earlier in the year. Performance over the latter six
customers such as MAN, Volkswagen, Hino (Toyota) and UD
months in fact exceeded expectations. Atlas Panelbeaters
(Nissan). This necessitated investment in infrastructure. The
operates an established business model within a mature market
improved service base will further position the company to take
environment. It relies on its hard won reputation of quality work
advantage of anticipated market share growth in the future.
and customer service and a strict anti-corruption policy.
OneLogix Integrated Annual Report 2013
25
Further to this and post year-end, it secured access to a sizeable new market segment by gaining Mercedes-Benz accreditation as an authorised accident repair facility. This marks a further unfolding of its strategy of recognition by all OEMs of its quality and reliable workmanship.
Drive Report The business has effectively contributed to earnings since late December 2012 and also exceeded expectations for the year. Drive Report is another group pioneer, in the market niche of driver behaviour management, and differentiates itself from vehicle monitoring services. A degree of low priced competition has now entered the market. However this competition lacks the intelligent feedback capability of Drive Report which will ensure its continued leadership of the market. Drive Report is well positioned to take advantage of the unfolding regulatory and self-regulatory road safety initiatives in South Africa, as well as in Africa and the Middle East.
Thanks to the skill and effectiveness of our management teams we have excellent working capital management, general financial management, tested business systems, a strong operational focus, an innovative mind-set and a professional interaction with the various stakeholders, particularly customers. We believe our enabling culture is yet another competitive advantage that underpins our ongoing success. In the year ahead we will continue to pursue organic growth. The group is a reasonably strong cash generator, which will facilitate a continued assessment of appropriate earnings-enhancing acquisitions of quality operators in well-defined markets.
My thanks Our strength in a trying year is due to every member of the OneLogix team, their tireless work and unswerving enthusiasm. I extend my heartfelt thanks to the entire management team and staff, as well as my fellow directors.
QSA The investment in QSA during the year was a strategic move to secure the IT advantage enjoyed by many of our companies. The company is in an investment and development phase and therefore is a small contributor to group earnings as expected. Going forward we will aim to exploit not only the advantages of the software for the group, but the opportunities for broader market expansion.
Ian Lourens CEO 26 August 2013
How we are moving forward The strength of OneLogix’s management teams throughout the group is evident in our performance.
OneLogix Integrated Annual Report 2013
26
Directorate
Executive Ian K Lourens (61) CEO BA (Hons) MBA Ian is the cofounder of PostNet Southern Africa (Pty) Limited and was previously Brand Manager at Beecham and Marketing Manager at Hoechst. He is a former Mayor of Midrand and past Chairperson of the Franchise Association of Southern Africa.
Non-executive Neville J Bester (54) Neville founded VDS in 1988. He is currently the Managing Director of VDS. Neville also focuses on stakeholder engagement, acquisitions and general strategy.
OneLogix Integrated Annual Report 2013
Cameron V McCulloch (41) COO BCom BAcc CA(SA)
Geoffrey M Glass (38) FD BCom Honours (Acc) CA(SA)
A chartered accountant, Cameron was the group Financial Manager at Pinnacle Technology Holdings before becoming a Senior Manager at PricewaterhouseCoopers Inc. He joined the group in 2002. Cameron previously held the position of FD, before being appointed COO in 2008.
A chartered accountant, Geoffrey was previously FD of Cargo Africa Group (a subsidiary of Imperial Holdings). He joined OneLogix as FD in 2008.
Sipho M Pityana (54) Chairperson BSc MSc Sipho is currently the Executive Chairperson of Izingwe Capital (Pty) Limited. He was formerly Director General of the Departments of Labour and Foreign Affairs. He joined the private sector as executive director, Nedbank Investment Bank and presently serves on leadership of various business organisations.
27
Independent non-executive Ashley B Ally (48) MSc MBA
Andrew C Brooking (48) BA LLB LLM
Ashley is presently CEO of Izingwe Holdings (Pty) Limited and a board member of Abedare Cables, Powertech and Scaw Metals.
Andrew is a founder and director of Java Capital (Pty) Limited, sponsor to OneLogix. He is an attorney and a member of the New York Bar. He was previously a partner in a large Johannesburg law firm.
Debrah A Lesego J Sennelo (35) Hirschowitz (39)* BCompt BCom Hons BCompt Honours CA(SA) (Accounting) CA(SA)
Alec J Grant (64) Lead independent director BCom FCIS CAIB MBL
Debrah is a chartered accountant with expertise in the auditing and banking arena. She is presently Chief Financial Officer at Izingwe Holdings (Pty) Limited.
Alec has 35 years’ experience in banking and has held a senior executive position in the Barclays Group. Formerly he was also CEO and executive director of CorpCapital Bank after starting Fulcrum Bank.
* Alternate director to AB Ally.
Lesego is presently the Financial Director of Golding Mia Kutlwano, a stockbroking firm, before which she was a senior manager at the Passenger Rail Agency of South Africa. She is President of African Women Chartered Accountants (‘AWCA’) and also serves on the boards of ACWA Investment Holdings Ltd, Power FM, Duma Travel and sits on the Medshield Audit Committee.
Tribute to Joe Modibane It was with great sadness that we announced the passing of Joe Modibane in late February 2013. Joe served on the board for 12 years and his valuable insights into the business will be sorely missed. He served as independent non-executive director, Chairperson of the Remuneration Committee as well as member of the Audit and Risk Committee and the Social and Ethics Committee. We use this opportunity to extend our condolences to his family, friends and colleagues.
OneLogix Integrated Annual Report 2013
28
Executive teams Exco
Back (left to right) Louis Swart, Hein Swart, Ronnie Robertson, Patrick Pols, Japie Britz, Chris Cloete, Morné Nel, Dick van der Zee Front (left to right) Nadir Moosa, Toitjie Cillié, Chris Wheeler, Cameron McCulloch, Ian Lourens, Geoff Glass, Mitzi Vosloo, Neville Bester
Postnet Back (left to right) Gary Garcez, Wayne Price, Marius Louw, Graeme Saunders Middle (left to right) Chris Wheeler, Deon Roos, Pieter Strydom,Dawid Liebenberg Front (left to right) Candy Cerovich, Kiasha Govender, Maryke van der Horst, Dominic van der Horst, Jeanette Padayache
Atlas Panelbeaters Back (left to right) Arno Swarts Front (left to right) Morné Nel, Chanel Jansen van Rensburg, Tracy Worrall
QSA Front (left to right) Chris Cloete, Allan van Eetveld, Vincent Kaufman, Helgard van Wyk
OneLogix Integrated Annual Report 2013
29
VDS
Back (left to right) Ronnie Gerber, Japie Britz, Nico van Rensburg, Johan Duvenhage, Geoff Glass, Dimitrie Georgeson, Lance Jansen Middle (left to right) Cameron McCulloch, Shannon Middlemiss, Martin Terblanche, Andre Pieterse, Pierre van Schalkwyk, Steve Oosthuizen, Hein Swart, Johan Gates Front (left to right) Neville Bester, Adri de Klerk, Jan Pretorius, Toitjie Cillié, Danie Bezuidenhout, Linda Govender, Renier Basson, Aobakwe Moseta
CVDS Back (left to right) Quinton Roos, Ajay Jaram, Gwyneth le Roux, Stephen Cronje Front (left to right) Rufus Pieterse, Dick van der Zee, Jonathan Beukes
United Bulk Back (left to right) Rudi Bloem, Louis Fourie, Lourens Roux Middle (left to right) Albert Erxleben, Gideon du Plessis, Buks Venter, Ruaan van Tonder Front (left to right) Selwyn Dawson, Mitzi Vosloo, Patrick Pols
OneLogix Projex Back (left to right) Andrew Lockett, Sagie Moodley, Ronnie Robertson Front (left to right) Karan Pillay, Nadir Moosa, Krish Bhimsan
OneLogix Integrated Annual Report 2013
Reports to stakeholders Corporate governance ........................................ 31 Risk management ............................................... 37 Our people ......................................................... 39 Remuneration report .......................................... 45 Environmental conservation .............................. 46 Community upliftment .........................................47
Know your stuff, identify what you want to achieve and invoke all your self-confidence in order to defy conventional wisdom which says it can’t be done.
Key facts Founder and managing director of United Bulk, Patrick Pols, is another member of the OneLogix group who epitomises the valued spirit of the entrepreneur. Seizing an opportunity while working for a leading South African chemical company, Patrick started a liquid bulk logistics company in 1996, as the first step into the daunting domain of the road tanker industry dominated by large corporate fleets. Recognition of the vast opportunities in the
Delivers throughout South Africa and southern African countries Over 120 trucks carry solvents, acids, resins, caustic soda, mineral oils, cement additives, mining chemicals, LPG, ammonia gas, milk, wine, cider concentrate, fruit concentrate, potable alcohol, vegetable oils
industry and a steely determination to access the rewards proved to be sufficient motivation. Setbacks included losing the founding contract, which true to character, he took as a catalyst for greater things, namely to broaden the customer base. This initiative proved beneficial, especially during the recent recession. In 2011, the success of United Bulk was reflected in the acquisition of its 100th truck. United Bulk has established a well-defined niche in a market dominated by sizeable competitors, thereby realising the founding vision.
ISO 9001 approved since 2002 Introduced largest LPG carrier into local market in 2007 Introduced largest liquid bulk tanker into local market in 2010 Exclusive carrier of Marula pulp for the Amarula brand
The successful United Bulk team work with hazardous goods, which requires a great deal of responsibility. This is accompanied by a corresponding encouragement to take initiative and make decisions. Balanced by a strong work ethic and self-discipline, staff are encouraged to
Transports all Woolworths milk sourced in Eastern Cape and Western Cape to processing plants
express themselves and realise their own full growth potential. The trust, commitment and mutual respect finds resonance with the way the greater OneLogix group operates.
Well-established reputation for customer service
Corporate governance
31
OneLogix’s board appreciates that effective corporate governance is a key driver of sustainability. As the custodians of OneLogix’s system of corporate governance, it is committed to complying with all regulatory dictates as well as international best practice standards in this regard. Specifically OneLogix subscribes to the Code of Corporate Practices and Conduct set out in the King III Report. The group’s application of Chapter 2 in King III is set out below with the full application list of all chapters available on the website: www.onelogix.com |
Principle number
Description
Application
2.1
The board should act as the focal point for and custodian of corporate governance
In terms of the board charter, the board ensures sound corporate governance by managing its relationship with management and other stakeholders along sound corporate governance principles
2.2
The board should appreciate that strategy, risk, performance and sustainability are inseparable
In accordance with the board charter, the board is responsible for aligning strategic objectives, purpose, vision and values with risk and performance. The group monitors the extent of its risk closely and the Social and Ethics Committee is responsible for sustainability issues
2.3
The board should provide effective leadership based on an ethical foundation
In accordance with the board charter, the board provides overall leadership of the business, a cornerstone of which is acting as guardian of the group’s values and ethics
2.4
The board should ensure that the company is and is seen to be a responsible corporate citizen
The board is the focal point of good corporate citizenship and seeks to integrate this value into the group’s growth strategy and daily operations. The newly formed Social and Ethics Committee explicitly includes good corporate citizenship as part of its responsibilities
2.5
The board should ensure that the company’s ethics are managed effectively
In terms of the board charter, the board ensures that the group’s ethics are managed effectively. The Social and Ethics Committee will assist the board in this regard
2.6
The board should ensure that the company has an effective and independent audit committee
The Audit and Risk Committee comprised three independent non-executive directors, one of whom (Joe Modibane) sadly passed away during the year. Andrew Brooking, a sitting non-executive, has temporarily filled this position while the board evaluates a new independent non-executive appointment to the board and Audit and Risk Committee
2.7
The board should be responsible for the governance of risk
The Audit and Risk Committee is responsible for overseeing the group’s risk management programme. The committee reports to the board, which retains ultimate responsibility for the control and management of risk. The committee will ensure that the disclosure of risk is comprehensive, timely and relevant and that an effective policy and plan is in place to achieve strategic objectives
2.8
The board should be responsible for information technology (‘IT’) governance
The board, through the Audit and Risk Committee is responsible for effectively managing relevant IT risks
2.9
The board should ensure that the company complies with applicable laws and considers adherence to non-binding rules, codes and standards
The board charter demands that the board complies with applicable laws and considers adherance to non-binding rules and standards, with the assistance of the Audit and Risk Committee
OneLogix Integrated Annual Report 2013
32
Corporate governance (continued)
Principle number
Description
Application
2.10
The board should ensure that there is an effective risk-based internal audit
An internal audit function is in place, with a reporting line to the Chairperson of the Audit and Risk Committee in place
2.11
The board should appreciate that stakeholders’ perceptions affect the company’s reputation
The group understands that fully functional interaction with all stakeholders is critical to the sustainability of the business
2.12
The board should ensure the integrity of the company’s integrated report
The board’s Audit and Risk Committee is responsible for recommending the integrity of the integrated report to the board
2.13
The board should report on the effectiveness of the company’s system of internal controls
The Audit and Risk Committee assumes this responsibility and reports to the board
2.14
The board and its directors should act in the best interests of the company
The board clearly understands its responsibility in acting on behalf of shareholders. This is included in the board charter. The board acts in the best interests of the group by ensuring that individual adhere to legal standards of conduct, are permitted to take independent advice, disclose real or perceived conflicts to the board and deal in shares in accordance with accepted best practice
2.15
The board should consider business rescue proceeding or other turnaround mechanisms as soon as the company is financially distressed as defined in the Act
The Audit and Risk Committee reviews the going concern, solvency and liquidity principle on an ongoing basis as set out in the Companies Act
2.16
The board should elect a Chairperson of the board who is an independent non-executive director. The CEO of the company should not also fulfil the role of Chairperson of the board
The board complies fully with this requirement
2.17
The board should appoint the Chief Executive Officer and establish a framework for the delegation of authority
This is in place
2.18
The board should comprise a balance of power, with a majority of non-executive directors. The majority of non-executive directors should be independent
The board has a majority of non-executive directors. The death of Joe Modibane resulted in two remaining independent non-executive directors (compared with three previous independent non-executive directors). The board is taking steps to ensure a majority of non-executive directors are independent
2.19
Directors should be appointed through a formal processes
The formal processes of the board demand a formal and transparent system of appointing directors. The Remuneration and Nominations Committee assists with this process
2.20
The induction of and ongoing training and development of directors should be conducted through formal processes
A formal induction programme is followed for new directors. Inexperienced directors are mentored by fellow directors and directors receive briefings on changes in risk, laws and environment
OneLogix Integrated Annual Report 2013
33
Principle number
Description
Application
2.21
The board should be assisted by a competent, suitably qualified and experienced company secretary
Probity Business Services (Pty) Limited, an independent company secretarial practice is appointed in terms of the Companies Act, the JSE Listings Requirements and the recommendations of King III
2.22
The evaluation of the board, its committees and the individual directors should be performed every year
The first such assessment was performed during the 2013 year. It is planned to continue with this practice every year
2.23
The board should delegate certain functions to well-structured committees but without abdicating its own responsibilities
The board delegates specific functions, without abdicating its own responsibilities, to the following committees: • Executive Committee • Audit and Risk Committee • Remuneration and Nominations Committee • Social and Ethics Committee Each of these committees has a formal charter approved by the board
2.24
A governance framework should be agreed between the group and its subsidiary boards
All policies and procedures are communicated to subsidiary boards
2.25
Companies should remunerate directors and executives fairly and responsibly
The board charter places the responsibility for ensuring an appropriate remuneration strategy with the board. The group’s Remuneration and Nomination Committee makes independent recommendations to the board for final approval ensuring that the group remunerates non-executive directors and executives fairly and responsibly and that the disclosure of directors remuneration is accurate, complete and transparent. In addition, fees for board and committee members are approved annually at the annual general meeting
2.26
The remuneration of directors is disclosed in the Integrated Annual Report
The remuneration of directors and executive management is disclosed in the integrated report (see pages 83 and 84)
2.27
Shareholders should approve the company’s remuneration policy
Details of the remuneration policy are set out on page 45. The group will work towards shareholders endorsing the group’s remuneration policy at a future annual general meeting
OneLogix Integrated Annual Report 2013
34
Corporate governance (continued) The principles of good corporate governance permeate the group with a healthy and ethical environment wherein every employee is expected to behave with integrity, honesty and fairness, led by the board.
The board The board is the highest decision-making body and is responsible and accountable for the performance and affairs of the group. It has full control over all the subsidiaries and divisions of the group. The directors exercise leadership with integrity based on principles of fairness, accountability, responsibility and transparency. The board is the focal point for good corporate citizenship and acts accordingly, expecting all employees to follow its example.
The board Members Independent non-executive directors
Executive directors
Non-executive directors
IK Lourens (CEO)
SM Pityana (Chairperson)
LJ Sennelo
GM Glass (FD)
AB Ally
AJ Grant
CV McCulloch (COO)
AC Brooking
Neville Bester
Committees Members Audit and Risk Committee
Remuneration Committee
Social and Ethics Committee
AJ Grant (Chairperson)
LJ Sennelo (Chairperson)
LJ Sennelo
LJ Sennelo
AB Ally
IK Lourens
AC Brooking
AJ Grant
GM Glass
By invitation IK Lourens (CEO) GM Glass (FD) CV McCulloch (COO)
By invitation IK Lourens (CEO)
Number of independent directors 2/3
2/3 The board completed a self-evaluation process and deemed the board to be fully functional. The composition will be reviewed again in the current year.
OneLogix Integrated Annual Report 2013
1/3
35
The responsibilities of the Chairperson and CEO, and those of
In terms of the memorandum of incorporation one-third of the
other non-executive and executive directors, are clearly separated
non-executive directors retire at each annual general meeting.
to ensure an appropriate balance of power. The Chairperson
Retiring directors may make themselves available for re-election
provides leadership to the board in all deliberations ensuring
provided that they remain eligible as required by the memorandum
independent input, and oversees its efficient operation. The CEO
of incorporation and in compliance with the JSE Listings
is responsible for proposing, updating, implementing and
Requirements. All newly appointed directors are required to have
maintaining the strategic direction of OneLogix as well as ensuring
their appointments confirmed at the next annual general meeting.
appropriately supervised and controlled daily operations. In this Accordingly, AJ Grant and SM Pityana will offer themselves for
regard he is assisted by the COO, FD and Exco.
re-election at the upcoming annual general meeting. The independent non-executive directors are high merit individuals who objectively contribute a wide range of industry
The board meets at least quarterly with additional meetings when
skills, knowledge and experience to the board’s decision-making
necessary. Directors are briefed timeously and comprehensively in
process. See page 27. OneLogix’s definition of independent is in
advance of these meetings with sufficient information to enable
line with King III recommendations. These directors are not
them to discharge their responsibilities. Meetings are conducted in
involved in the daily operations of the company. Non-executive
accordance with a formal agenda which ensures that all
directors are non-permanent employees of the group.
substantive matters are properly addressed.
Board and committee meeting attendance Board 20 August 2012 SM Pityana (Chairperson)* AB Ally (alternate DA Hirschowitz) NJ Bester AC Brooking* GM Glass (FD) AJ Grant#+ IK Lourens (CEO) CV McCulloch (COO) JG Modibane# LJ Sennelo#
26 November 22 February 2012 2013
29 May 2013
9 9 9 9 9 9 9 9 9 9
9 9 9 9 9 9 9 9 N/A 9
9 9 9 9 9 9 9 9 9 9
A 9 9 9 9 9 9 9 9 9
Audit and Risk Committee
Remuneration Committee
20 August 22 February 2012 2013
16 April 2013
N/A 9 N/A N/A
N/A N/A N/A N/A
N/A A N/A N/A N/A 9
◊
◊
9
9
◊
◊
◊
◊
◊
9 N/A
9 9
N/A N/A 9
* Non-executive # Independent non-executive + Audit and Risk Committee Chairman Remuneration Committee Chairman ◊ Attended by invitation
9
Board processes
directors and management, which is reviewed and updated as
The board is governed by a formal board charter setting out its
necessary.
composition, processes and responsibilities. The charter mandates the board with regularly reviewing operational
Attended A Absent N/A Not applicable
Go to www.onelogix.com for a copy of the full Code of Conduct.
processes and procedures, identifying key risk areas and
Directors have unrestricted access to the company secretary,
monitoring non-financial aspects affecting the group.
company information, records, documents, and property and are
Go to www.onelogix.com for a copy of the full board charter.
The board accordingly identifies key performance indicators and risk areas of the group’s business operations. These are monitored regularly with particular attention given to resource planning, processes, products and people.
afforded the opportunity, at the company’s expense, to seek independent counsel should this be deemed to be necessary. The company secretary, Probity Business Services (Pty) Limited, is an independent company secretarial practice providing services to numerous JSE-listed companies. The board has evaluated the competency, qualifications and experience of the
Further the board adheres to a corporate Code of Conduct
company secretary and is comfortable that the company
that addresses conflicts of interest particularly relating to
secretary, and in particular its representative Neville Toerien, OneLogix Integrated Annual Report 2013
36
Corporate governance (continued) maintain an arm’s length relationship with the board at all times
and internal control matters. The CEO, COO and FD attend
and is sufficiently qualified and skilled to act in accordance with,
meetings by invitation. Further meetings are convened when
and update directors in terms of the recommendations of the
necessary. The board is of the opinion that in light of the nature
King III Report and other relevant regulations and legislation.
and size of the group, two meetings per year are sufficient to
The company has a formal policy restricting share dealing by directors and other officers with access to price-sensitive
discharge the responsibilities of the committee. See page 35 for the attendance register.
information. Trade in OneLogix shares is prohibited during
The committee sets the principles for and approves any non-
‘closed periods’ (as defined by the JSE) prior to the announcement
audit services provided by the firm of external auditors. A
of interim and annual results or while the company is trading
separate disclosure is made in the annual financial statements of
under cautionary. Directors are required to report their share
the amounts paid for non-audit services (see note 2 to the annual
dealings to the Chairperson who, with the company secretary
financial
and sponsor, ensures that these announcements are published
responsibilities during the year in accordance with its formal
on SENS.
charter.
Go to www.onelogix.com for a copy of the formal share trade policy.
statements).
The
committee
has
satisfied
its
Refer to the Audit and Risk Committee report on page 54 for further information in this regard.
The board is advised by the Remuneration Committee in the
Remuneration Committee
appointment of any new directors. The nomination and
The Remuneration Committee operates under formal terms of
appointment of new directors is formal and transparent. With
reference setting out its composition, role and responsibilities. In
respect to new appointees the board charter mandates a formal
addition to establishing the group’s remuneration strategies and
induction programme, which prior to the company’s transfer to
policies, the committee is tasked with determining the criteria
the JSE Main Board was implemented largely through the
used to measure the performance of executive directors.
mandatory AltX course conducted by the Wits Business School. The programme covers pertinent aspects of company law, stock
Refer to for the full report on page 45 in this regard.
exchange regulations, the roles, responsibilities and liabilities of
Social and Ethics Committee
directors, basic techniques of financial analysis and the
The committee has held one meeting attended by all members
importance of investor and media relations. Going forward, the
since it was constituted.
sponsor will be responsible for ensuring that the induction process is adhered to.
In terms of a formal charter approved by the board during the year, the Social and Ethics Committee is responsible for assisting
The board encourages shareholders to attend annual and other
the board in monitoring the group’s business conduct in
general meetings and directors including committee Chairmen
accordance with regulation and legislation including the
attend these meetings.
Companies Act, and international best practice.
Board committees
Specifically the committee is mandated to monitor the group’s
Audit and Risk Committee
activities in terms of social and economic development, good
The Audit and Risk Committee is governed by a formal Audit and
corporate citizenship, environment, health and public safety,
Risk Committee Charter.
consumer and employee relationships.
Go to www.onelogix.com for a copy of the Audit and Risk Committee Charter.
The committee reports to the board on these matters, and directly to shareholders at the company’s annual general
The committee meets at least twice a year with the group’s
meeting. The committee has held one meeting since it was
external auditors, internal auditor and executive management to
constituted, at which it reviewed the group’s Code of Conduct.
review accounting, auditing, financial reporting, risk management
Details are available on www.onelogix.com
OneLogix Integrated Annual Report 2013
|
Risk management
37
The risk management process within OneLogix is dealt with in a stepped structure:
1
The board is ultimately responsible for the management of risk and determination of risk tolerance levels in respect of each identified key risk.
2
In this endeavour the directors are assisted by the Audit and Risk Committee. This committee reports directly to the board. It has several responsibilities which include internal control, internal audit, risk management and insurance. At each meeting the committee reviews the risk matrix and addresses any areas of concern where necessary.
3
The Audit and Risk Committee works closely with the Internal Audit function which has a reporting line directly to the committee Chairperson, and the external auditors. With a comprehensive knowledge of the business, the Internal Audit function evaluates the effectiveness and general compliance of controls aimed at addressing risk within the group. External audit reports on the fair presentation of financial information on a statutory reporting level in compliance with IFRS and the Companies Act. The board, assisted by the Audit and Risk Committee, evaluates the effectiveness and independence of the external auditors.
4
Executive management implements operational controls to ensure the validity, accuracy and completeness of financial information, and reports in this regard to the Internal Audit function and the Audit and Risk Committee. Exco at each business is responsible for risk management which is reported to group executive management.
Internal control
sustainability under normal and adverse operating conditions,
The board and management make use of generally recognised
and responsible behaviour towards all stakeholders.
risk management and internal control processes to maintain a sound system of risk management and to sustain a practical and effective internal control environment. These internal control processes are designed to provide reasonable but not
Nothing has come to the attention of the directors to indicate that a material breakdown in the controls within the group has occurred during the year.
absolute assurance regarding the safeguarding of assets, the
Legal compliance
maintenance of proper accounting records, the integrity and
The board and each director within the group has a working
reliability of financial information and the minimisation of
understanding of the laws, rules, codes and standards applicable
significant
to the business in all its various forms.
fraud,
potential
liability,
loss
and
material
misstatement while complying with applicable laws and regulations. The systems are designed to manage rather than
Each board director and managing director of individual group
eliminate risk of failure and opportunity risk.
companies has access to appropriate legal advice when required. The cost of such advice is funded by the group.
In this manner the board is able to provide reasonable assurance regarding the achievement of organisational objectives for the
Further, the company secretary, together with the group’s
efficiency of operations and compliance with applicable laws,
sponsor, monitors compliance with the provisions set out in the
regulations and supervisory requirements. In addition the
Companies Act, the JSE Listings Requirements and the King III
systems of internal control enable the board to ensure business
Report. OneLogix Integrated Annual Report 2013
38
Risk management (continued) for the year ended 31 May 2013 Some of the principal South African legislation regulating the
applications and systems, anti-virus management, firewalls,
markets within which the group operates are listed below:
automation of input wherever possible and off-site e-mail
Group
archiving.
Companies Act;
The disaster/recovery plan includes an assessment of potential
Income Tax Act;
risks including anticipated recovery times and contingency plans
Competition Act;
in case of disaster. All business related data is backed up on a
Employment Equity Act;
daily basis and stored across physically separate locations.
B-BBEE Act;
Mirroring of data on multiple servers is used to further mitigate
Basic Conditions of Employment Act;
risk. All critical data links are fully redundant, and a disaster/
Consumer Protection Act;
recovery site is being planned at the leading South African third
Financial Advisory and Intermediary Services Act;
party data centre. Contingency plans and disaster/recovery
Labour Relations Act;
plans are in place.
Skills Development Act;
The group complies with IT laws and all IT-related rules, codes
Skills Levies Act;
and standards are considered. Personal and other information of
Unemployment Insurance Act;
suppliers, customers, employees and other stakeholders are
South African Post Office Act;
identified and treated as company assets, and OneLogix
Safety Health and Environment Act;
conforms to the proposed Protection of Personal Information
Machine and Occupational Safety Act;
Act. Hardware and software is purchased from reputable
National Traffic Management Corporation Act;
suppliers and only licensed software is used. Any employee
National Road Traffic Act; and
found not to be using licensed software will be subject to
Fire Brigade Services Act.
disciplinary action including potential dismissal.
Environmental laws
The role of IT in achieving business strategies is clear: IT
National Environmental Management Act;
operations align with business operations and translate business
National Water Act; and
requirements into efficient and effective IT solutions.
Hazardous Substances Act. A number of actions were put in place during the year to reduce
IT governance
key personnel risks.
During the year OneLogix finalised an IT Governance Charter covering: • Information integrity; • Continuity of service;
The IT Director is tasked with reviewing ongoing business requirements within the areas of software, technological and physical infrastructure, as well as business continuity plans.
• Security;
The IT Policy is implemented and maintained, ensuring security,
• Support of the business; and
confidentiality, integrity and availability of information.
• Skills development and retention.
The board has final responsibility for the overall supervision of IT
OneLogix has policies and procedures in place to ensure
objectives and risk. IT management reports to the board on the
information integrity by implementing hierarchical password
progress of the IT functional objectives, and to the Audit and Risk
access control, rigorous testing and change control of
Committee regarding mitigation of risks.
OneLogix Integrated Annual Report 2013
Our people
39
OneLogix employs 1 210 permanent staff (2012: 958) and 194 temporary staff (2012: 171). This includes foreign nationals employed by the company and excludes the Drive Report staff (minority shareholding).
Workforce by ethnicity (excluding foreign nationals)
Breakdown of staff per company in the group OneLogix VDS CVDS OneLogix Projex United Bulk PostNet Atlas QSA
30 680 268 122 207 32 61 4
African
Coloured
Indian
White
65,0%
5,4%
3,7%
25,9%
Employment of Africans has continued to rise – from 56,9% in 2011, to 59,5% in 2012, to the present 65,0% accounting for the decrease over the same period of Coloured and Indian
The company complies fully with all the Department of Labour information submission requirements, the more pertinent of which are listed below:
employment – from 14% to 11% to the present 9,1%. Employment of Whites during this period fluctuated – 29,1% (2011) rising marginally to 29,5% (2012) and dropping to the present 25,9%. This reflects the group’s commitment to employment preference where possible for previously disadvantaged groups.
Workforce by gender (excluding foreign nationals)
The group’s Employment Equity Committee monitors the implementation of employment policies appropriate to the business environment, market and South African landscape. The policies are
84,7%
designed to attract, motivate and retain quality staff at all levels.
(2012: 80,9%)
Staff turnover
15,3%%
Staff turnover in terms of voluntary resignations remains low.
(2012: 19,1%)
Minimum notice periods are determined by the employment period as follows: • Less than six months – one week
Foreign nationals employed by the group
• Six to 12 months – two weeks • More than one year – one month • Senior positions – as individually negotiated
98%
Dismissals during the year were down from 82 in 2012 to 68 in 2013. Generally dismissals can be explained by the company’s firm but fair disciplinary procedures. The group is continually working
2%
to improve employment criteria to ensure that the appropriate candidates are appointed first time – the right people for the right
Gender inequality within the group remains a challenge. The majority of employees are from traditionally strongly male dominated occupations such as qualified heavy duty vehicle drivers, mechanics and maintenance technicians.
roles, first time – reducing necessary disciplinary action. The return-to-work rate after parental leave has been exemplary at 100%.
Staff turnover by type, gender and race Terminations
Male African Coloured Indian
White
Female African Coloured Indian
White
Foreign nationals Male Female
Total
Resignation Non-renewal of contract Retrenchments Dismissals Dismissals incapacity Retirement Death
20 8 – 41 1 5 2
2 – – 9 – – –
– – – 2 – – –
13 4 – 6 1 – –
3 2 – – – – –
– 1 – – – – –
1 – – – – – –
5 – – 3 1 – –
4 1 – 7 – – 1
1 – – – – 1 –
49 16 – 68 3 6 3
Total
77
11
2
24
5
1
1
9
13
2
145
OneLogix Integrated Annual Report 2013
40
Our people (continued) Benefits
The Bursary Scheme for children of staff totalled in excess of
Full-time staff are granted access to a medical aid scheme via a leading service provider at statutory rates. Employees receive the benefit of unconditional acceptance (no waiting period, no exclusions, and no late joining fee penalties).
R521 000 for the year and was utilised as follows:
Staff also have access to life assurance with a leading service provider, together with a company funded scheme which provides three times annual salary at death and in the event of total and permanent disablement. In addition staff are provided a provident fund administered by a leading service provider. OneLogix contributes 7,5% of pensionable salary (8% for drivers) with the staff member contributing a voluntary percentage of his/her salary between 0% and 7,5% (8% for drivers). The fund administration costs are paid by OneLogix. The fund further includes a family funeral benefit of R10 000.
The Staff Bursary Scheme totalled in excess of R403 000 for the year and funding was utilised as follows: Gender BCom BBA Road Transportation Management Business Management Storekeeping and Control Marketing Management Logistics Management Computer Literacy Human Resources Entrepreneurship IT Programming Artisan Plumbing Welding National Diploma Drivers Licence HIV and Aids management Safety Samtrac Total
OneLogix Integrated Annual Report 2013
Schooling BCom BBA Business Management IT Programming Computer Literacy Human Resources
85 2 1 2 2 1 1
N1 – N6
1
Total
95
All employees within the group receive regular performance and career development reviews. This process was recently initiated at Atlas Panelbeaters and United Bulk.
Further, staff have access to a Staff Bursary Scheme which typically contributes at least 95% of study costs. There is also a Bursary Scheme for children of staff to which OneLogix contributes 80% of study costs. Finally, staff have the benefit of access to discounted lending rates for new vehicle purchases via a national service provider.
Course
Number of children
Course
Male
Female
2 – 2 2 1 1 3 4 1 1 1 1 1 1 2 14 – 1
1 2 1 1 – – 1 4 1 – 1 – – – – – 1 1
38
20
B-BBEE The group is a Level 4 contributor in terms of B-BBEE and the scorecard is set out below: Actual score
Target score
Ownership Management Employment equity Skills development Preferential procurement Enterprise development Socio-economic development
9,03 2,92 6,92 10,97 18,03 15,00 4,56
20,00 10,00 15,00 15,00 20,00 15,00 5,00
Total score
67,43
100,00
Scorecard information
Analysis
Results %
Procurement recognition level Black ownership Black women ownership Value Adding Enterprise
100,00 12,81 1,98 Yes
Skills development and training The group’s skills training objectives include to: • develop and empower staff; • improve productivity and quality of work; • assist in creating skilled and professional people; • assist in career pathing and self-development; and • address skills scarcity.
41
Formal training courses presented to staff during the year included: Total Accident Incident Investigating Advanced Driving Skills Ashepp and Into to SAMTRAC Basic Electrical and VCAD Pro Business Admin Learnership Business Management and Admin CCMA and Bargaining Council Chairing Disciplinary Hearings IT Designer Training IT Developer Training Discovering Excel Training Drivecam Workshop Excel on Steroids Finding and Hiring the right people Fire Fighting First Aid Forklift Refresher Health and Safety Awareness Heath and Safety Environment Training Health and Safety Representative HR Training Indaba Implementing Employment Equity Intermediate Assessment Job Design and Job Evaluation Labour Law Conference Labour Law Practical Overview Management Programme Management for New Managers Marketing degree Microsoft SQL Server Mid-Year Payroll Seminar Management Learnership National Fines Management Nelson Mandela Critical Thinking Skills Occupational Injures OHS Legislation COIS Act Payroll and UIF Seminar Professional English Course Professional Driving Recruitment and Selection Skills Development Facilitator Telephone Etiquette Telephone Impact and Customer Services Train the Trainer VIP Premier Training Total
2 8 1 8 10 2 1 3 2 1 6 3 1 1 15 18 3 1 1 11 2 1 2 1 1 2 1 1 1 1 2 14 2 7 2 1 2 1 32 1 1 3 2 2 2 185
OneLogix Integrated Annual Report 2013
42
Our people (continued)
Number of training courses
45 courses
Black/previously disadvantaged
113 staff members
Total spend
R1 335 112
Average hours per employee
8 hours per month
Average hours for learnerships
16 hours per month
Learnerships
8 Business Admin (3 disabled) 14 Management 32 Professional Driving (26 unemployed)
Labour relations The following trade unions are operative within OneLogix:
• South African Equity Workers Association (‘SAEWA’) – 20% representation
VDS
• Solidarity – 10% representation
• South African Transport and Allied Workers Union (‘SATAWU’) –
Atlas Panelbeaters
10% representation • Transport and Allied Workers Union (‘TAWUSA’) – 2%
• National Union of Metalworkers of South Africa (‘NUMSA’) – 2% representation
representation CVDS • South African Transport and Allied Workers Union (‘SATAWU’) – 11% representation • Transport and Allied Workers Union (‘TAWUSA’) – 9% representation
The group still applies the 30% threshold for purposes of sufficient membership for limited organisational rights and 50% plus one for purposes of majority membership. Unions under the 30% threshold that are party to any registered Councils within the
respective
industries,
automatically
enjoy
limited
organisational rights as defined by the Labour Relations Act. 70%
OneLogix Projex
of staff are covered under collective agreements, with VDS and
• African Meat Industry and Allied Workers Union (‘AMITU’) – 27%
CVDS represented at the Motor Ferry Bargaining Council.
representation AMITU still not recognised within the Road Freight Logistics Industry (‘RFLI’) scope. The existing positive relationship
Despite OneLogix not holding formal recognition agreements
with the union structure is conditional and documented
with any union within the group, positive relationships are
• South African Transport and Allied Workers Union (‘SATAWU’) – 8% representation
maintained through regular formal and informal forums. Union membership in the group is currently waning, which can be
United Bulk
attributed to hard-earned and high levels of trust between
• South African Transport and Allied Workers Union (‘SATAWU’) –
management
17% representation OneLogix Integrated Annual Report 2013
and
employees
together
with
a
proactive
management approach based on respect and transparency.
43
An incident of illegal industrial action occurred during February
Submission of employee grievances is less than 0,15% of the
2013 at CVDS in East London. The strike was supported by
total staff number.
TAWUSA. Following the issuing of ultimatums, 35 employees were dismissed. Although TAWUSA referred the dispute to the CCMA for conciliation and it was declared as unresolved, the union subsequently elected not to refer the dispute to the Labour
Health and safety OneLogix complies with the South African Health and Occupational Health and Safety Act, 85 of 1993, and has a group Health and Safety Officer in place, who reports to the group
Court in Port Elizabeth.
SHEQ Manager. The Group Human Resources Manager, together with the strike management committee dealt with the illegal industrial action in
A group SHEQ management programme is also in place, with
a swift and efficient manner with minimal effect on operational
clearly defined SHEQ roles and responsibilities, a structured
processes.
continuous improvement process and a training programme
Disciplinary and grievance procedure The group has revised and improved its existing progressive
ensuring employees are competent to execute particular SHEQ duties.
disciplinary code and procedure which incorporates best
A four-phase plan has been in place for some time to address
practices and labour law developments. The emphasis is on a
areas of non- or part-compliance with the aim of achieving full
corrective rather than a punitive approach.
compliance with all relevant legislation.
Phase 1
Phase 2
Phase 3
Phase 4
focuses on statutory
focuses on risk impact
seeks to ensure the
will deal with the
appointments, training and
assessments, planned task
implementation of
sophistication of
competence, monthly
observations, vehicle
environmental management
performance measurement
statutory inspections,
maintenance and inspection
and control procedures,
and control, and a
registers, fire prevention
procedures and emergency
personal hygiene
management review
and control measures, good
preparedness and
programmes, occupational
process.
housekeeping, demarcation
response.
hygiene management and
and symbolic safety
infra-structure management
signage, incident
and control.
management and procedure, SHEQ committee meetings and ensuring management commitment.
Phase 1 is almost entirely rolled-out across the group and we are now concentrating on implementing Phases 2 and 3.
OneLogix Integrated Annual Report 2013
44
Our people (continued) The group companies at the most advanced stage of compliance, in terms of Phase I, are currently VDS, CVDS, United Bulk and Atlas Panelbeaters. However the remaining group companies made good compliance progress during the year. The major occurrence of incidents within the group during the year occurred at VDS, which is unsurprising given that this is the largest company in the group.
Health and safety incidents
We sadly reported one fatality while on duty, Lindokuhle (Welcome) Mazibuko, in March 2013. There were also 33 incidents reported during the year, analysis of which indicates that minor types of injuries were sustained, although sometimes to major body parts e.g. eyes. The major causes of injuries were losing footing, getting trapped between objects and accidentally getting objects in eyes.
50 45 40 35
Health and safety training during the year included: 30 25
Training intervention type
20 15 10 5 0 OneLogix
VDS
Atlas
CVDS
Projex
* There were no incidents reported at PostNet, United Bulk and QSA
OneLogix Integrated Annual Report 2013
Basic Fire Fighting First Aid Level 1 Safety Representative Course Forklift Certification COIDA Course SHEMTECH Total
VDS
CVDS
Atlas
OneLogix Projex
8 12
1 1
– 2
5 5
10 1 3 1
1 – – –
2 7 – –
1 2 – –
35
3
9
13
Remuneration report
45
Remuneration Committee During the year the Remuneration Committee comprised
Directors’ emoluments are set out in note 24 to the annual financial statements.
independent non-executive directors, JG Modibane, who chaired
Remuneration practices across the group
the committee, and AJ Grant, as well as non-executive director,
The company policy with respect to remuneration is to maintain the salary levels, including those of executives, at comparable market medians, while also striving to maintain a company culture and other employment factors well above comparable market norms.
AB Ally. Subsequent to the untimely death of JG Modibane, LJ Sennelo has assumed the position of chair, assisted by AJ Grant and AB Ally. The committee is responsible for determining the remuneration and terms of employment of the company’s directors and senior management. It meets as and when required, but at least once on an annual basis. The CEO attends meetings by invitation and is excluded from deliberations in respect of his own remuneration. The committee operates under formal terms of reference setting out its composition, role and responsibilities. In addition to establishing the group’s remuneration strategies and policies, the committee is tasked with determining the criteria used to measure the performance of executive directors. The terms of reference further include guidelines for base fees of directors’ remuneration as well as for payments for termination of an executive director’s employment. In evaluating the remuneration of executive directors and senior management, the committee incorporates an evaluation of their performance against predetermined benchmarks, industry standards and the company’s value-added model.
Non-executive directors The attendance fee structure for non-executive directors is set out in detail below:
Existing fee 2013 R
Proposed annual fee 2014 R
Board Chairperson Board member
32 000 9 000
35 200 9 900
Audit and Risk Committee Chairperson Member
19 000 12 500
23 750 15 625
Remuneration Committee Chairperson Member
9 000 9 000
9 900 9 900
Social and Ethics Committee Member
9 000
9 900
Type of fee (per meeting)*
For the past few years the average salary increase across the group has been higher than the cost of living increase. While the percentage increase is set at group level, individual managing directors of group companies have the discretion to vary this percentage both upwards and down, depending on particular circumstances within that company. Certain staff have increases determined by Bargaining Councils and the company is therefore bound by these decisions. Group companies strive to pay bonuses whenever possible. Bonuses are performance-related and are measured by predetermined criteria during performance reviews. Bonus payments are determined on a formula basis pertinent to each particular company. The company makes a contribution on behalf of employees to a provident fund and in addition staff have the opportunity to make their own contributions. The company bears the administrative costs for these additional contributions. Executive salary scales are determined by reports generated specifically for the group by PE Corporate Services. Three reports are utilised: a. Top Executive Remuneration Survey (‘TERS’), which considers 800 companies both listed and unlisted within South Africa. b. The JSE Abstract of Disclosed Information, based on published financial information of all JSE-listed companies for the last 12 months and suitably adjusted for inflation for purposes of the OneLogix comparison. c. Peer comparisons of JSE-listed companies, suitably adjusted for inflation where applicable. The executives’ bonus payment is based on a return on equity formula which has been in operation for the past few years.
OneLogix Integrated Annual Report 2013
46
Environmental conservation OneLogix is cognisant of the impact it has on the environment
Another area of concern is fuel and oil spillage, wastage and theft
and has actively implemented consumption saving initiatives
which is a priority for the group. Tanks are purposefully designed
throughout the group.
to minimise spillage and limit ground pollution.
A central element of the group’s procurement policy is to engage
With respect to our vehicles all used tyres are returned to
suppliers with a proven ability to:
suppliers for appropriate recycling purposes and no asbestos
• cost effectively supply the most advanced environmentally
products are accepted when replacing brake shoes and clutch
friendly product; and
plates on vehicles.
• recycle used product in accordance with current industry environmental standards.
In terms of recycling other materials, used batteries are all returned to suppliers with ability to recycle, scrap metal is sold to
The group’s strong emphasis on operating efficiency has a clear congruence with best environmental practice. Chemical products used within the group are monitored and only specified cleaning materials with acceptable specifications are used. In addition appropriate spray booths capture solvent and oil waste product and wash bays effluent is channelled to
approved scrap dealers and all scrap paper is sold to recycling organisations. To conserve electricity, electrical equipment and appliances are switched off at night wherever appropriate and environmentally efficient equipment is used wherever possible.
separate waste, oil and water. Our bulk tanker wash bays meet all
Going forward the group intends measuring its carbon footprint
environmental specifications.
and implementing formal programmes to offset carbon emissions.
VDS moving forward on fuel efficiency The fuel efficiency process introduced at VDS not only results in cost efficiencies but also reduces the company’s emissions. Ensuring fuel efficiency within the group is maintained at an optimal level is achieved by a combination of outsourced providers and group resources as set out below: an outsourced and specialist organisation produces measurement metrics for diesel usage per truck for the entire fleet. When these metrics exceed the norm, this is flagged with internal fleet controllers who take appropriate action; a further specialist service provider produces information on fuel consumption per driver on a monthly basis; OneLogix’s internal driver training programme ensures further controls such as excessive idling and ‘green band’ driving metrics; Drive Report and DriveCam profiling of driver behaviour; and timely and efficient workshop servicing of vehicles.
OneLogix Integrated Annual Report 2013
Community upliftment
47
The various companies within the group support a range of deserving community upliftment projects within their geographic region.
VDS
United Bulk
For the third year in a row, VDS committed over R100 000 to assisting the East London Rotary Club deliver nappies to children in the rural Eastern Cape. Throughout the year nappies were collected by VDS vehicles at several geographic points throughout South Africa (mostly in Johannesburg and Cape Town) and delivered to a central collection point in East London.
United Bulk has been involved in hosting the Free State leg of the well-known ‘Rally to Read’ initiative for the past 11 years. It is an annual event involving business and remote schools around the country, in terms of which convoys of off-road vehicles deliver educational material to some of the country’s most neglected schools. In order to ensure the sustainability of this initiative, the respected READ Educational Trust follows up with principals, teachers and children during the remainder of the year. United Bulk’s annual contribution to Rally to Read amounts to approximately R300 000.
VDS further contributed some R5 000 to various other charitable institutions during the year, the most notable of which were to the Pathway School (see Atlas Panelbeaters below) and the John Wesley Community Center in Benoni.
OneLogix Projex The company has been supporting Umthombo Street Children, a not for profi t company, since May 2012 with a monthly donation of R5 000 (R60 000 per annum). Umthombo is committed to providing alternatives off the streets for destitute children in Durban. In many cases this means reintegration back into their communities with appropriate family preparation and support, and if this is not possible, empowering them to make a fresh start.
Atlas Panelbeaters Atlas Panelbeaters contributed R30 000 to Pathway School in Pretoria, a non-profit organisation providing schooling for disabled children. A further R5 000 was donated to CANSA (the Cancer Association of South Africa) later in the year.
OneLogix Head Office The OneLogix Head Office supports a staff initiated project known as The OneLogix Care Group via an annual donation of funds including profit derived from vending machines located within group companies. The Care Group itself also undertakes fund raising activities. The Care Group aims to assist staff members throughout the group who are deserving of assistance. Examples of initiatives are: donating a wheelchair for use by a staff member’s son who is severely paraplegic; funding the replacement of household goods for a colleague whose shack burnt down; and assisting in a cochlear operation for a staff family member.
OneLogix Integrated Annual Report 2013
48
Community upliftment (continued)
PostNet For the second consecutive year, PostNet has hosted 20 underprivileged primary school children at each of the Stormers (Super 15 Rugby championship) and Western Province (Currie Cup championship) home games at Newlands, Cape Town. Two teachers accompany the children, who receive free transport, entry, lunch, a school stationery pack of PostNet products, T-shirts, front line seating, and an exclusive opportunity to meet with the home players after the game. PostNet’s annual contribution to this initiative exceeds R300 000. In addition to this, PostNet contributes R20 000 to Potters House in Soweto, a Christian graphic and web design school which imparts skills to disadvantaged teenage children. It also facilitates their access to employment in the mainstream graphic design world. PostNet further contributes R1 000 per annum to the National Sea Rescue Institute.
OneLogix Integrated Annual Report 2013
Notes to the annual financial statements (continued) for the year ended 31 May 2013
Annual financial statements Directors’ statement of responsibility ................ 50 Declaration by the company secretary ...............51 Directors’ report.................................................. 52 Report of the Audit and Risk Committee ........... 54 Independent auditors’ report ............................. 55 Statements of financial position ......................... 56 Statements of comprehensive income .............. 57
Talk, listen and learn, the world is changing fast, big will not beat small anymore, it will be the fast beating the slow.
Statements of changes in equity ........................ 58 Statements of cash flow ..................................... 60 Accounting policies ............................................ 61 Notes to the annual financial statements ........... 69
Key facts While the world was expecting the worst to unfold during the country’s first democratic elections in April 1994, Ian Lourens and Chris Wheeler were polishing windows, marshalling shopfitters, preparing stock and training staff in preparation for the opening of the country’s first PostNet store in Benmore Gardens, Sandton. Staring adversity in the face became a way of life for these two founders of PostNet, who are still with the OneLogix group. PostNet faced many trials during its set up phase, such as legal challenges from the South African Post Office, attracting sceptical franchisees and customers and convincing landlords of the viability of the concept. To the surprise of many, all obstacles were overcome after substantial financial and personal sacrifice by the founders. Today the PostNet store network consists of 263 stores countrywide and employs over 1 500 people. The entrepreneurial legacy of the founders is to be found in the prevailing culture. Managing Director Chris Wheeler places an emphasis on innovation, teamwork, commitment, open communication, trust and a strong work ethic and training of people is a cornerstone of the business. There is a strong interdependence between head office and the store network. Franchisees are referred to as business partners and are supported by an experienced and enabling team of business development managers.
Owner operated retail network throughout South Africa 263 franchise stores Largest privately-owned counter network in South Africa > 60 000 customers per day 55 000 mailbox customers > 475 000 domestic parcels moved pa > 100 000 international parcels moved pa
49
50
Directors’ statement of responsibility The directors acknowledge their responsibility for the adequacy of accounting records, the effectiveness of risk management and the internal control environment, the appropriateness of accounting policies supported by reasonable and prudent judgements and the consistency of estimates. The directors further acknowledge their responsibility for the preparation of the annual consolidated financial statements, adherence to applicable accounting standards and presentation of related information that fairly presents the state of affairs and the results of the company and of the group. The annual consolidated financial statements set out in this report incorporate the results for the year ended 31 May 2013. They have been prepared by the directors in accordance with International Financial Reporting Standards, as well the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by Financial Reporting Standards Council, the JSE Listings Requirements and in the manner required by the South African Companies Act. They incorporate full and adequate disclosure and are based on appropriate accounting policies which have been consistently applied and which are supported by reasonable and prudent judgements and estimates. No event material to the understanding of this report has occurred between the financial year-end and the date of this report. In the context of the audit carried out for the purposes of expressing an opinion on the fair presentation of the annual consolidated financial statements, the auditors have concurred with the disclosures of the directors on going concern. The external auditors are not responsible for providing an independent assessment of internal financial controls but are responsible for reporting on whether the financial statements are fairly presented in conformity with International Financial Reporting Standards. The external audit offers reasonable, but not absolute, assurance on the accuracy of financial disclosures.
Board approval The annual consolidated financial statements were approved by the board of directors on 26 August 2013 and are signed on its behalf by:
IK Lourens CEO 26 August 2013 Johannesburg
OneLogix Integrated Annual Report 2013
GM Glass FD
Declaration by the company secretary
51
In terms of section 88(2)(e) of the Companies Act, No 71 of 2008, I confirm that for the year ended 31 May 2013, OneLogix Group Limited has lodged with the Companies and Intellectual Property Commission all such returns and notices as are required of a public company in terms of the Act and that all such returns and notices are true, correct and up to date.
Probity Business Services (Pty) Limited Company secretary 26 August 2013 Johannesburg
OneLogix Integrated Annual Report 2013
52
Directors’ report for the year ended 31 May 2013 The directors present their integrated annual report, which forms part of the annual consolidated financial statements of the company and the group for the year ended 31 May 2013.
Preparation of financial statements in terms of the Companies Act The annual consolidated financial statements have been audited by PricewaterhouseCoopers Inc. in accordance with the requirements of the Companies Act. The financial statements were prepared by Mr Geoff Glass, the Financial Director of the group, who is a qualified CA(SA).
Nature of business The group’s activities are specialised logistics for passenger and commercial vehicles, liquid bulk logistics, repairs to commercial vehicles, transport of goods and franchise activities.
Group results The group’s financial results are set out in detail in the annual consolidated financial statements and accompanying notes.
Share capital At year-end the authorised share capital comprised 500 000 000 ordinary shares of 1 cent each, of which 231 595 235 (2012: 231 595 235) were issued. The company’s unissued shares have been placed under the control of the directors until the upcoming annual general meeting.
Subsidiaries Details of the company’s interest in its subsidiaries are set out in note 25 to the annual consolidated financial statements.
Dividend A dividend of 4,5 cents per share was declared and paid during the year under review (2012: 1,8 cents per share). A further dividend of 5 cents per share was approved on 26 August 2013 and will be paid on 7 October 2013.
Capital distribution A capital distribution of 4,5 cents per share was declared and paid during the year under review (2012: 6,7 cents per share).
Directors The directors during the year were as follows: Non-executive directors SM Pityana (Chairperson) AB Ally (alternate DA Hirschowitz) AC Brooking Independent non-executive directors AJ Grant JG Modibane (deceased 23 February 2013) LJ Sennelo (appointed 25 July 2012) Executive directors NJ Bester GM Glass (FD) IK Lourens (CEO) CV McCulloch (COO) In terms of the memorandum of incorporation, AJ Grant and SM Pityana will retire as directors at the upcoming annual general meeting and, being eligible, will offer themselves for re-election.
Directors’ interest No material contracts in which directors have an interest were entered into during the year other than the transactions detailed in note 24 to the annual consolidated financial statements. Directors’ emoluments are set out in note 24 to the annual consolidated financial statements.
OneLogix Integrated Annual Report 2013
53
Directors’ shareholding At 31 May 2013, the directors of the company held, directly and indirectly, 130 176 470 (2012: 132 629 101) shares in the issued share capital of the company. Save for the shareholdings detailed below, no other director held any interest in the issued share capital of the company.
Director AB Ally# NJ Bester* AC Brooking# GM Glass* IK Lourens* CV McCulloch* SM Pityara#
Associate 2013
Direct 2013
Indirect 2013
Associate 2012
Direct 2012
Indirect 2012
5 938 729 – – – – – 10 454 816
– 91 253 945 – 1 240 000 13 165 854 7 000 000 –
– – 1 123 126 – – – –
5 938 729 – – – – – 10 454 816
– 91 253 945 – – 13 165 854 9 192 631 –
– – 1 123 126 1 500 000 – – –
16 393 545
112 659 799
1 123 126
16 343 545
113 612 430
2 623 126
* Beneficially held # Non-beneficially held
Since year-end to the date of this report there has been no change in directors’ shareholding.
Company secretary The secretary of the company during the year under review was Probity Business Services (Pty) Limited, whose business and postal addresses are set out on the IBC of the integrated annual report.
Auditors PricewaterhouseCoopers Inc. will continue in office in accordance with Section 90(6) of the Companies Act of South Africa.
Special resolutions The following special resolutions were passed by shareholders of the company during the year (all were passed at the annual general meeting on 26 November 2012): • general authority for the company or its subsidiaries to acquire shares in the company; • approval of non-executive remuneration: 2012/2013; • authority to provide financial assistance for group inter-related companies; • approval of the conversion of ordinary shares; and • adoption of new Memorandum of Incorporation. The following special resolution was passed by the shareholders of OneLogix Projex on 1 March 2013: • conversion of share capital to no par value and an increase in the authorised share capital.
Subsequent events No material fact or circumstance has occurred between year-end and the date of this report which has a material impact on the financial position of the company or the group. 26 August 2013 Johannesburg
OneLogix Integrated Annual Report 2013
54
Report of the Audit and Risk Committee In terms of section 94 of the Companies Act, no 71 of 2008 (the ‘Act’), the Audit and Risk Committee reports that it has adopted appropriate formal terms of reference as its mandate, and has regulated its affairs in compliance with this mandate, and has discharged all of responsibilities set out therein. The Audit and Risk Committee has discharged the functions in terms of its charter and ascribed to it in terms of the Act as follows: • reviewed the interim and year-end financial statements and integrated annual report, culminating in a recommendation to the board to adopt them. In the course of its review the committee: – took appropriate steps to ensure the financial statements were prepared in accordance with International Financial Reporting Standards (‘IFRS’) and in the manner required by the Act; – considered and where appropriate, made recommendations on internal financial controls; – dealt with concerns or complaints on accounting policies, internal audit, the auditing or content of annual consolidated financial statements, and internal financial controls; and – reviewed legal matters that could have a significant impact on the group’s financial statements, • reviewed external audit reports on the annual consolidated financial statements; • reviewed and approved the internal audit plan; • reviewed internal audit and risk management reports and, where relevant, made recommendations to the board; • evaluated the effectiveness of risk management, controls and governance processes; • verified the independence of the external auditor, nominated PricewaterhouseCoopers Inc. as auditor for 2013 and noted the appointment of Mr Johan Potgieter as the designated auditor; • approved audit fees and engagement terms of the external auditor; and • determined the nature and extent of allowable non-audit services and approved contract terms for non-audit services by the external auditor. The members of the Audit and Risk Committee will be re-elected at the forthcoming annual general meeting. As required by JSE Listings Requirement 3.84(h), the Audit and Risk Committee has satisfied itself that the group Financial Director has appropriate expertise and experience. In addition the committee satisfied itself that the composition, experience and skills set of the finance function met the group’s requirements. Nothing has come to the attention of the Audit and Risk Committee that there has been a material breakdown in the internal accounting controls during the financial year. We base this on the information and explanations given by management as well as discussions with the independent external auditors on their results of their audits.
Alec Grant Audit and Risk Committee Chairperson 26 August 2013
OneLogix Integrated Annual Report 2013
Independent auditors’ report to the shareholders of OneLogix Group Limited
55
We have audited the consolidated and separate financial statements of OneLogix Group Limited, set out on pages 56 to 91 which comprise the statements of financial position as at 31 May 2013 and the statements of comprehensive income, statements changes in equity and statements of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.
Directors’ responsibility for the financial statements The company’s directors are responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatements, whether due to fraud or error.
Auditors’ responsibility Our responsibility is to express an opinion on these consolidated and separate financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated and separate financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of OneLogix Group Limited as at 31 May 2013, and its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards, and the requirements of by the Companies Act of South Africa.
Other reports required by the Companies Act As part of our audit of the consolidated and separate financial statements for the year ended 31 May 2013, we have read the directors’ report, the Audit and Risk Committee’s report and the company secretary’s certificate for the purpose of identifying whether there are material inconsistencies between these reports and the audited consolidated and separate financial statements. These reports are the responsibility of the respective preparers. Based on reading these reports we have not identified material inconsistencies between these reports and the audited consolidated and separate financial statements. However, we have not audited these reports and accordingly, do not express an opinion on these reports.
PricewaterhouseCoopers Inc. Director: J Potgieter Registered Auditor Johannesburg 26 August 2013
OneLogix Integrated Annual Report 2013
56
Statements of financial position at 31 May 2013 Group
Company
Notes
2013 R’000
2012 R’000
2013 R’000
2012 R’000
8 9 10 11 12 20
446 418 66 289 – 33 935 7 219 1 474
327 555 31 982 – – 6 498 2 155
– – 51 401 – – –
– – 49 824 – 66 508 –
555 335
368 190
51 401
116 332
10 090 148 994 – 5 512 54 749
14 759 119 210 – 1 943 102 494
– 13 691 71 748 – 1 438
– 32 923 – – 996
219 345
238 406
86 877
33 919
774 680
606 596
138 278
150 251
2 35 (8 271 13
316 375 431) 779 258 153 7 286 288 (29 752) 17 184
2 45 (8 216 13
316 797 431) 713 258 153 5 709 127 (11 144) 5 892
2 316 40 150 – 87 056 – – 7 286 – – –
2 316 50 572 – 90 641 – – 5 709 – – –
309 456
270 390
136 808
149 238
149 722 51 605
122 431 26 846
– –
– –
201 327
149 277
–
–
156 74 9 16 1 6
088 137 000 206 616 850
136 211 50 017 – – 701 –
1 437 – – – 33 –
993 – – – 20 –
263 897
186 929
1 470
1 013
Total liabilities
465 224
336 206
1 470
1 013
Total equity and liabilities
774 680
606 596
138 278
150 251
ASSETS Non-current assets Property, plant and equipment Intangible assets Investment in subsidiaries Investment in associate Loans and other receivables Deferred taxation
Current assets Inventories Trade and other receivables Loans and other receivables Current tax receivable Cash and cash equivalents
13 14 12 15
Total assets EQUITY AND LIABILITIES Capital and reserves Share capital Share premium Treasury shares Retained earnings Revaluation reserve Other reserves Share-based compensation reserve Foreign currency translation reserve Transactions with non-controlling interests Non-controlling interests
Non-current liabilities Interest-bearing borrowings Deferred taxation
Current liabilities Trade and other payables Current portion of interest-bearing borrowings Vendor liability Non-controlling interest put option liability Current tax liabilities Bank overdrafts
16 17 18
19 20
21 19 11 27.5 15
The accompanying notes are an integral part of the financial statements.
OneLogix Integrated Annual Report 2013
Statements of comprehensive income
57
for the year ended 31 May 2013 Group
Notes Continuing operations Revenue Dividend income from subsidiaries Fuel and motor vehicle expenses Other operating expenses Employment costs (Loss)/profit on disposal of property, plant and equipment Depreciation of property, plant and equipment and amortisation of intangible assets
2 3
Company
2013 R’000
2012 R’000
2013 R’000
2012 R’000
1 040 301 – (269 508) (362 503) (264 445) (255)
864 097 – (206 532) (324 279) (205 066) 6 001
– – – – – –
– 4 146 – – – –
(51 054)
(43 801)
–
–
536 814 494) 423
90 420 – (11 470) 2 553
– – – 7 458
4 146 – – 8 094
Operating profit Share of profit of associate Finance costs Finance income
4 4
92 4 (15 2
Profit before taxation Taxation
5
84 279 (22 237)
81 503 (23 750)
7 458 (621)
12 240 (22)
Profit from continuing operations Profit from discontinued operation
6
62 042 8 762
57 753 2 103
6 837 –
12 218 –
70 804
59 856
6 837
12 218
Other comprehensive income: Currency translation differences Deferred tax increase due to CGT rate change
161 –
165 (760)
– –
– –
Other comprehensive income for the year net of tax
161
(595)
–
–
Total comprehensive income
70 965
59 261
6 837
12 218
Profit attributable to: – Owners of the parent – Non-controlling interests
65 488 5 316
53 729 6 127
70 804
59 856
65 649 5 316
53 134 6 127
70 965
59 261
56 941 8 708
51 501 1 633
65 649
53 134
Total comprehensive income attributable to: – Owners of the parent – Non-controlling interests
Total comprehensive income attributable to owners of the parent arises from: – Continuing operations – Discontinued operations
Basic earnings per share (cents) Continuing operations Discontinued operations
7
29,0 25,1 3,9
24,5 23,8 0,7
Diluted basic earnings per share (cents) Continuing operations Discontinued operations
7
28,3 24,5 3,8
24,0 23,3 0,7
The accompanying notes are an integral part of the financial statements.
OneLogix Integrated Annual Report 2013
58
Statements of changes in equity for the year ended 31 May 2013 Attributable to equity holders
Group
Share Share capital premium R’000 R’000
At 1 June 2011 2 021 Dividends declared to non-controlling interests – Capital distribution to shareholders – Dividends to shareholders – Non-controlling interest acquired – Conversion of shareholding in BEE consortium 297 Share issue expenses – Share-based compensation reserve movement (refer to note 28) – General share repurchase (2) Treasury shares disposed – Profit for the year – Other comprehensive income for the year – At 31 May 2012 Dividends declared to non-controlling interests Capital distribution to shareholders Dividends to shareholders Non-controlling interest acquired Transactions with non-controlling interest (refer to note 26.1) Share-based compensation reserve movement (refer to note 28) Profit for the year Other comprehensive income for the year At 31 May 2013
20 227
Treasury Retained shares earnings R’000 R’000 (264) 167 153
Revaluation Other reserve reserves R’000 R’000
Sharebased compensation reserve R’000
TransForeign actions currency with nontranscontrollation ling reserve interests R’000 R’000
Noncontrolling interests R’000
Total R’000
11 067
52
–
(30)
–
30 046
230 272
–
–
–
–
–
–
–
–
(3 265)
(3 265)
(15 526) –
– –
– (4 169)
– –
– –
– –
– –
– –
– –
(15 526) (4 169)
–
–
–
–
–
–
–
(1 501)
1
(1 500)
41 859 (444)
(8 431) –
– –
2 951 –
– –
4 395 –
(8) –
(9 645) –
(27 017) –
4 403 (444)
– (319) – –
– – 264 –
– – – 53 729
– – – –
– – 101 –
1 314 – – –
– – – –
– – – –
– – – 6 127
1 314 (321) 365 59 856
–
–
(760)
–
–
165
–
–
(595)
(8 431) 216 713
13 258
153
5 709
127
(11 144)
5 892
270 390
–
2 316
45 797
–
–
–
–
–
–
–
–
–
(3 789)
(3 789)
–
(10 422)
–
–
–
–
–
–
–
–
(10 422)
–
–
–
(10 422)
–
–
–
–
–
–
(10 422)
–
–
–
–
–
–
–
–
–
7 363
7 363
–
–
–
–
–
–
–
–
(18 608)
2 402
(16 206)
– –
– –
– –
– 65 488
– –
– –
1 577 –
– –
– –
– 5 316
1 577 70 804
–
–
–
–
–
–
–
161
–
–
161
2 316
35 375
(8 431) 271 779
13 258
153
7 286
288
(29 752)
17 184
309 456
The accompanying notes are an integral part of the financial statements.
OneLogix Integrated Annual Report 2013
59
Share capital R’000
Share premium R’000
Retained income R’000
Share-based compensation reserve R’000
At 1 June 2011 Comprehensive income for the year Capital distributions Share purchase Conversion of shareholding in BEE consortium Share issue expense Dividend paid Share-based compensation reserve movement
2 021 – – (2) 297 – – –
25 002 – (15 526) (319) 41 859 (444) – –
82 592 12 218 – – – – (4 169) –
– – – – 4 395 – – 1 314
109 615 12 218 (15 526) (321) 46 551 (444) (4 169) 1 314
At 31 May 2012
2 316
50 572
90 641
5 709
149 238
– – – –
– (10 422) – –
6 837 – (10 422) –
– – – 1 577
6 (10 (10 1
2 316
40 150
87 056
7 286
136 808
Company
Comprehensive income for the year Capital distributions Dividend paid Share-based compensation reserve movement At 31 May 2013
Total R’000
837 422) 422) 577
The accompanying notes are an integral part of the financial statements.
OneLogix Integrated Annual Report 2013
60
Statements of cash flow for the year ended 31 May 2013 Group
Company
2013 R’000
Restated 2012 R’000
2013 R’000
2012 R’000
1 114 775 (968 650)
947 896 (793 415)
14 436 –
– (37 298)
154 2 (11 (22 (2 (4
481 553 470) 390) 865) 169) – 2 934
14 436 7 458 – (608) – (10 422) – –
(37 298) 8 094 – (4) – (4 169) 4 146 –
97 431
119 074
10 864
(29 231)
(24 (1 8 (59 (20 8 (1 1
186) 783) 456 094) 120) 492 262) 015 (62)
(21 418) (1 763) 29 057 – – – (768) – (462)
– – – – – – – – –
– – – – – – – – –
Net cash flows used in investing activities
(88 544)
4 646
–
–
Cash flows from financing activities Capital distribution Increase in borrowings Repayment of borrowings Repayments of accrued preference shares Share issue expenses Sale of treasury shares Repurchase of shares Acquisition of non-controlling interest Discontinued operation
(10 422) 8 522 (61 617) – – – – – (75)
(15 526) 9 894 (56 680) – (444) 382 (321) (1 500) 65
(10 422) – – – – – – – –
(15 526) – – 46 116 (444) – (321) – –
Net cash flows (used in)/from financing activities
(63 592)
(64 130)
(10 422)
29 825
Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of year Exchange gain on cash resources
(54 705) 102 494 110
59 590 42 791 113
442 996 –
594 402 –
47 899
102 494
1 438
996
Notes Cash flows from operating activities Cash receipts from customers Cash paid to suppliers and employees Cash generated from/(utilised in) operations Interest received Interest paid Taxation paid Dividend paid to non-controlling interest Dividend paid to shareholders Dividend received Discontinued operation
23
6
Net cash flows from/(utilised in) operating activities Cash flows from investing activities Purchase of property, plant and equipment Purchase of intangible assets Proceeds from disposal of property, plant and equipment Acquisition of subsidiaries Acquisition of associate Disposal of subsidiary Increase in non-current receivables Insurance proceeds Discontinued operation
Cash and cash equivalents at end of year
8
26 11 23.1
6
6
15
The accompanying notes are an integral part of the financial statements.
OneLogix Integrated Annual Report 2013
146 2 (15 (21 (3 (10
125 423 494) 354) 789) 422) – (58)
Accounting policies
61
for the year ended 31 May 2013 The significant accounting policies adopted in the preparation of the group’s financial statements are set out below. Except as described below, these policies have been consistently applied to all the years presented.
1.
Basis of preparation The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (‘IFRS’). The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain items of property. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the group’s accounting policies. Actual results could differ from those estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 22 of the accounting policies.
1.1
Cash flow restatement Cash flows from investing activities and cash flows from financing activities for the year ended 31 May 2012 have been restated. Property, plant and equipment additions previously included acquisitions of assets that were financed by instalment sale agreements and mortgage bonds. In terms of IAS 7: Statement of Cash Flows, only cash payments for assets acquired should be included and not those financed by way of finance lease or acquired on credit. Additions financed by way of instalment sale agreements and mortgage bonds have been excluded from the restated cash flows from investing activities line item. Accordingly, borrowings raised included the gross amounts of new instalment sales agreements and mortgage bonds entered into during the year and these have been excluded from the restated cash flow from financing activities line item. The previously reported and restated line items are shown in the table below: 2012
Purchase of property, plant and equipment Net cash flows from investing activities Increase in borrowings Net cash flows from financing activities
As previously reported R’000
Adjustment R’000
As restated R’000
(117 (91 106 32
96 96 (96 (96
(21 4 9 (64
747) 683) 223 199
329 329 329) 329)
418) 646 894 130)
The restatement had no impact on net movement in cash resources, nor the balance thereof at year-end.
2. Consolidation 2.1
Subsidiaries Subsidiaries are all entities (including special purpose entities) over which the group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date on which control ceases. Investments in subsidiaries in the company’s stand-alone financial statements are accounted for at cost less impairment. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments. Cost also includes direct attributable costs of investment. Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Subsidiaries’ accounting policies have been changed where necessary to ensure consistency with the policies adopted by the group. Business combinations The group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. OneLogix Integrated Annual Report 2013
62
Accounting policies (continued) for the year ended 31 May 2013 The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisitiondate fair value of any previous equity interest in the acquiree over the fair value of the group’s share of the identifiable net assets acquired is recorded as goodwill. If this is less than the fair value of the net assets of the subsidiary acquired in the case of a bargain purchase, the difference is recognised directly in the statement of comprehensive income. Common control transactions Business combinations in which all of the combining entities or businesses are ultimately controlled by the same party or parties both before and after the business combination (and where that control is not transitory) are referred to as common control transactions. The accounting policy for the acquiring entity would be to account for the transaction at book value in its consolidated financial statements. The book value of the acquired entity is the consolidated book value as reflected in the consolidated financial statements of the selling entity. The excess of the cost of the transaction over the acquirer’s proportionate share of the net asset value acquired in common control transactions, will be allocated to the existing control business combination reserve in equity. Where comparative periods are presented, the financial statements and financial information presented are not restated. Transactions with non-controlling interest The group treats transactions with non-controlling interests as transactions with equity owners of the group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity in a separate reserve. Dilution gains or losses on disposals to non-controlling interests are also recorded in equity in a separate reserve. This reserve may be transferred to retained earnings. Written put options over the group’s own shares are accounted for as gross liabilities and initially measured at fair value, being the present value of redemption amount. As the liability is contingent on events beyond the group’s control, it is accounted for as a demand liability. The liability is not held for trading or otherwise designated as fair value through profit or loss and is therefore accounted for at amortised cost. The liability is remeasured at each reporting date to the expected cash flow amount with any changes accounted through profit and loss.
2.2
Associates Associates are all entities over which the group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased or decreased to recognise the investors share of the profit or loss of the investee after the date of acquisition. The group’s investment in associates includes goodwill identified on acquisition. If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate. Dilution profits and losses relating to such partial disposal are accounted for in the income statement. The group’s share of post acquisition profit or loss is recognised in the income statement, and its share of post acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate. The group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to share of profit/(loss) of associates in the income statement. Profits and losses resulting from upstream and downstream transactions between the group and its associate are recognised in the group’s financial statements only to the extent of unrelated investors interests in the associates. Unrealised losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the group. Dilution gains and losses arising on investments in associates are recognised in the income statement. Any contingent consideration to be transferred by the group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 and adjusted to the investment in associate.
OneLogix Integrated Annual Report 2013
63
3. Foreign currencies Items included in the annual consolidated financial statements of each of the group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in South African Rand which is the group’s presentation currency. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement under other expenses. The results and financial position of all the group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (a) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet; (b) income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and (c) all resulting exchange differences are recognised in other comprehensive income. On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of borrowings and other currency instruments designated as hedges of such investments, are taken to other comprehensive income. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in the income statement as part of the gain or loss on sale. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences are recognised in other comprehensive income.
4. Property, plant and equipment Land and buildings comprise mainly vehicle storage facilities and offices. All property, plant and equipment (‘PPE’) is shown at cost less subsequent depreciation and impairment, except for land, which is shown at revaluation less impairment. Land is shown at fair value based on periodic, but at least triennial, valuations by external independent valuers. All other classes of plant and equipment are stated at historical cost less depreciation. Increases in the carrying amount arising on revaluation of land and buildings are credited to other comprehensive income and shown as revaluation reserves in shareholders’ equity. Decreases that offset previous increases of the same asset are charged in other comprehensive income and debited against revaluation reserves directly in equity; all other decreases are charged to operating profit. Cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred. Depreciation on assets is calculated using the straight-line method to allocate the cost of each asset to its residual value over its estimated useful life, as follows: Years Vehicles – trailers Vehicles – horses Buildings Plant and equipment Office furniture and equipment Computer equipment and software Vehicles Leasehold improvements Vehicle storage facilities Land is not depreciated
7 – 15 4–8 20 4 – 10 5 – 10 2–3 4–5 Shorter of useful life or the period of the lease 10 – 20
Major renovations are depreciated over the remaining useful life of the related asset or to the date of the next major renovation, whichever is sooner. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date. OneLogix Integrated Annual Report 2013
64
Accounting policies (continued) for the year ended 31 May 2013 An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in the income statement. Borrowing costs incurred for the construction of any qualifying assets are capitalised during the period of time that is required to complete and prepare the asset for its intended use. Other borrowing costs are expensed.
5. Intangible assets (a) Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the group’s share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisitions of associates is included in investments in associates. Goodwill on acquisition of subsidiaries is tested annually for impairment or more frequently if assets and circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of the value in use and the fair value less costs to sell. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing. (b) Brands and contractual customer relationships Brands and contractual customer relationships are recognised at cost. They have a definite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of brands and customer relationships over their estimated useful lives (3 – 5 years). (c) Computer software Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised over their estimated useful lives (two years). Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred. Costs that are directly associated with the production of identifiable and unique software products controlled by the group, and that will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets. Direct costs include the costs of software development employees and an appropriate portion of relevant overheads. Computer software and development costs recognised as assets are amortised over their estimated useful lives using the straight-line method (not exceeding five years). (d) Research and development Research expenditure is recognised as an expense as incurred. Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as intangible assets when it is probable that the project will be a success, considering its commercial and technological feasibility, and costs can be measured reliably. Other development expenditures are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Development costs that have a finite useful life and that have been capitalised are amortised from the commencement of the commercial production of the product on a straight-line basis over the period of its expected benefit, (not exceeding five years).
6. Impairment of non-financial assets Assets that have an indefinite useful life (such as goodwill) are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are tested for impairment whenever events or changes in circumstance indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). An impairment loss recognised on an asset in a previous period is written back through the income statement if the estimates used to calculate the recoverable amount have changed since the previous impairment loss was recognised. The reversal of the impairment charge is limited to the carrying amount that would have been determined had no impairment loss been recognised in previous years. Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the reporting date. Impairment losses on goodwill are not reversed.
7.
Financial assets The group classifies its financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its investments at initial recognition. The group had no financial assets carried at fair value through profit or loss, held-to-maturity investments or available-for-sale financial assets during the current or prior years.
OneLogix Integrated Annual Report 2013
65
(a) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and with no intention of trading. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. Loans and receivables are included in trade and other receivables in the balance sheet. Purchases and sales of investments are recognised on trade-date, the date on which the group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Investments are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the group has transferred substantially all risks and rewards of ownership. The group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. Impairment losses recognised in the income statement on equity instruments are not reversed through the income statement. Refer to accounting policy for trade receivables for impairment policy. Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.
8. Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method. It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
9. Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the income statement.
10. Cash and cash equivalents Cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.
11. Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction from the proceeds, net of tax. Where any group company purchases the company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity attributable to the company’s equity holders until the shares are cancelled, reissued or disposed of treasury shares is accounted for in a separate reserve in equity. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the company’s equity holders. The profit/(loss) realised on sale of treasury shares is accounted for in a separate reserve in equity.
12. Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method. Borrowings are classified as current liabilities unless the group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.
13. Current and deferred income tax The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively. OneLogix Integrated Annual Report 2013
66
Accounting policies (continued) for the year ended 31 May 2013 The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in countries where the company’s subsidiaries and associate operate and generate taxable income. Management periodically evaluates individual positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. The deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting or taxable profit or loss. Deferred income tax is determined using tax rates and laws that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available, against which the temporary differences can be utilised. The estimated future taxable profits are based on management’s forecasts and budgets. Deferred income tax is provided on temporary differences arising on investments in subsidiaries except where the timing of the reversal of the temporary difference is controlled by the group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.
14. Employee benefits (a) Pension obligations Group companies operate various pension schemes. The schemes are funded through payments to insurance companies or trustee-administered funds, determined by periodic actuarial calculations. The group has defined contribution plans. A defined contribution plan is a pension plan under which the group pays fixed contributions to a separate entity. The group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available. (b) Termination benefits Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The group recognises termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value. (c) Profit-sharing and bonus plans The group recognises a liability and an expense for bonuses and profit-sharing, based on a formula that takes into consideration the profit attributable to the company’s shareholders after certain adjustments. The group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation. (d) Share-based compensation plan The group operates an equity-settled, share-based compensation plan, under which the entity receives services from employee as consideration for shares of the group. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the shares as at the grant date, adjusted for the number of shares expected to vest in November 2013. Service conditions are the only vesting conditions associated with the shares. The shares that are expected to vest have been issued to the BEE share trust and are consolidated as treasury shares until they unconditionally vest to employees in November 2013. At the end of each reporting period, the group revises its estimates of the number of shares expected to vest. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity.
15. Provisions Provisions for restructuring costs and legal claims are recognised when the group has a present legal or constructive obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the OneLogix Integrated Annual Report 2013
67
amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the balance sheet date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the increases specific to the liability.
16. Revenue 16.1 Revenue recognition Revenue comprises the fair value of the sale of services and publications, net of value-added tax, rebates and discounts and after eliminating sales within the group. Revenue is recognised in the ordinary course of business as follows: (a) Sales of services Services offered by the group include the following: • delivery of motor vehicles (passenger and commercial); • repairs to commercial motor vehicles; and • general and abnormal transport of goods, liquids and gas. Sales of services are recognised in the accounting period in which the services are rendered, by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided. Estimation of the percentage of completion of trips does not involve significant judgement due to the relatively short distance of trips which are normally completed within a short time period. (b) Royalty income Royalty income is billed monthly and is recognised on an accruals basis. Royalty income is calculated as a percentage of the franchisee’s turnover.
16.2 Recognition of other income (a) Interest income Interest income is recognised on a time-proportion basis using the effective interest method. When a receivable is impaired, the group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues accreting the discount as interest income. Interest income on impaired loans is recognised either as cash is collected or on a cost-recovery basis as conditions warrant. (b) Dividend income Dividend income is recognised when the right to receive payment is established.
17. Leases The group is the lessee Leases of property, plant and equipment where the group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment acquired under finance leases are depreciated over the shorter of the asset’s useful life and the lease term. Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. Payments made under operating leases, net of any incentives received from the lessor, are charged to the income statement on a straightline basis over the period of the lease.
18. Trade payables Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. OneLogix Integrated Annual Report 2013
68
Accounting policies (continued) for the year ended 31 May 2013 Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
19. Dividend distribution Dividend distribution to the company’s shareholders is recognised as a liability in the group’s financial statements in the period in which the dividends are approved by the company’s shareholders.
20. Dividend tax Secondary tax on companies (‘STC’) has been replaced with dividend tax with effect from 1 April 2012 at a rate of 15%.
21. Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decisionmaker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive committee that makes strategic decisions.
22. Critical accounting estimates and assumptions The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: (a) Business combinations On the acquisition of a company or business, a determination of the fair value and the useful life of intangible assets acquired are performed, which requires the application of management judgement. Future events could cause the assumptions used by the group to change which could have a significant impact on the results and net position of the group. (b) Estimated residual values and useful lives of vehicles The residual values are based on published trade prices of similarly aged comparable assets. Management adjust the residual values for current industry conditions. The useful life is determined by the estimated utilisation of the related asset.
23. New standards, interpretations and amendments to existing standards issued that are not yet effective: The following new standards, amendments and interpretations to exciting standards are not yet effective as at 31 May 2013. The group is currently evaluating the effects of the standards and interpretations which have not been early adopted by the group. Effective for year ending
Standard/Interpretation
Title
Amendment to IFRS 7
Financial instruments: Disclosures – Asset and Liability Offsetting
May 14
IFRS 9
Financial Instruments – Classification and measurement of financial assets
May 16
IFRS 9
Financial Instruments – Guidance on financial liabilities and derecognition of financial instruments
May 16
IFRS 10
Consolidated Financial Statements
May 14
IFRS 11
Joint Arrangements
May 14
IFRS 12
Disclosures of interests in other entities
May 14
IFRS 13
Fair value measurement
May 14
IAS 27
Separate financial statements
May 14
IAS 28
Associates and Joint Ventures
May 14
Amendments to IAS 32
Financial Instruments – Presentation
May 15
Amendments to IFRS 10, IFRS 11 and IFRS 12
Consolidated Financial Statements, Joint Arrangements and Disclosure of Interests in Other Entities
May 14
Amendment to IFRS 1
First-time adoption of IFRS
May 14
Amendment to IAS 1
Presentation of Financial Statements
May 14
Amendment to IAS 16
Property, Plant and Equipment
May 14
Amendment to IAS 32
Financial Instruments Presentation
May 14
Amendment to IAS 34
Interim Financial reporting
May 14
OneLogix Integrated Annual Report 2013
Notes to the annual financial statements
69
for the year ended 31 May 2013 1.
Segment information Management has determined the operating segments based on the monthly reports reviewed by the executive committee that are used to make strategic decisions. The chief operating decision-maker has been identified as the group’s executive committee. The executive committee considers the business from both a geographical basis and business type, being the Specialised Transport, and Retail Segment. All revenues are currently derived from operating segments within South Africa. The Zambian and Zimbabwean operations derive their revenues from VDS as intergroup revenue. This inter-group revenue has been eliminated within the Specialised Transport segment. The reportable segments derive their revenue from the following operations: • Specialised Transport: Services revenue from VDS, CVDS, RFB, OneLogix Projex (RFB and Projex were amalgamated during the year) and United Bulk; and • Retail: Royalty and other franchise revenue from the PostNet group. The other reconciling item includes operating segments which do not meet the individual quantitative threshold for separate reporting, being QSA and Atlas Panelbeaters. The group’s executive committee assesses the performance of the operating segments based on operating profit. This measure excludes net finance costs and taxation expense. The total assets and total liabilities of the segments presented in the segmental analysis exclude inter-group loans, taxation payable or receivable and deferred tax. Consolidation entries are shown as part of corporate items. There are no inter-segment revenues or other business transactions between the segments. No single customer contributed more than 10% of revenues in the current year. Segment information for the year ended 31 May 2013
Revenues R’000
Segment results R’000
Segment assets R’000
Segment liabilities R’000
Specialised Transport Retail
936 967 30 188
99 458 12 148
686 539 26 261
339 856 15 857
Total reportable segments Other Corporate items
967 155 73 146 –
111 606 4 599 (23 669)
712 800 17 146 3 813
355 713 10 032 46 258
1 040 301
92 536
733 759
412 003
– – – – – –
4 814 (15 494) 2 423 – – –
– – – 5 512 1 474 33 935
– – – 1 616 51 605 –
–
(8 527)
40 921
53 221
1 040 301
84 279
774 680
465 224
Unallocated: Share of profit of associate Finance cost Finance income Taxation Deferred taxation Investment in associate
Total
Capital expenditure R’000
Depreciation Amortisation R’000 R’000
Specialised Transport Other (including discontinuing operation) Retail Corporate items
75 176 1 633 9 893 198
45 254 1 826 357 236
3 227 257 – –
Total
86 900
47 673
3 484
(62)
(70)
(33)
86 838
47 603
3 451
Discontinued operation Continuing operations
OneLogix Integrated Annual Report 2013
70
Notes to the annual financial statements (continued) for the year ended 31 May 2013 1.
Segment information (continued) Segment information for the year ended 31 May 2012
Revenues R’000
Segment results R’000
Segment assets R’000
Segment liabilities R’000
Specialised Transport Retail
768 424 28 648
93 422 10 788
480 134 16 723
(261 993) (8 712)
Total reportable segments Other Corporate items
797 072 67 025 –
104 210 5 138 (18 928)
496 857 39 202 66 439
(270 705) (25 575) (12 379)
864 097
90 420
602 498
(308 659)
– – – –
(11 470) 2 553 – –
– – 1 943 2 155
– – (701) (26 846)
–
(8 917)
4 098
(27 547)
864 097
81 503
606 596
(336 206)
Capital expenditure R’000
Depreciation R’000
Amortisation R’000
Specialised Transport Other (including discontinuing operation) Retail Corporate items
117 334 2 114 310 252
39 315 1 914 367 187
2 283 112 – –
Total
120 010
41 783
2 395
Unallocated: Finance cost Finance income Taxation Deferred taxation
Total
Discontinued operation Continuing operations
(500)
(265)
(112)
119 510
41 518
2 283
Group
Company
2013 R’000
2012 R’000
2013 R’000
2012 R’000
2 776
2 616
–
–
17 520 876 201
10 639 616 769
– – –
– – –
2 814 213 2 860 32 220 19 852 130 068 29 694 14 596 108 813
2 859 15 2 951 26 048 19 848 126 940 23 403 12 753 94 822
– – – – – – – – –
– – – – – – – – –
362 503
324 279
–
–
2. Other operating expenses The following significant items have been charged/(credited) in other operating expenses: Repairs and maintenance expenditure Operating lease rentals Property Office equipment Foreign exchange loss Auditors’ remuneration Audit fees Other services Royalty fees Insurance and claims Customs, clearing and visa costs Subcontractors fees Toll fees Security Other expenses
OneLogix Integrated Annual Report 2013
71
Group
Company
2013 R’000
2012 R’000
2013 R’000
2012 R’000
244 265 616 3 102 49 14 836 1 577
194 319 441 1 258 61 7 410 1 577
– – – – – –
– – – – – –
264 445
205 066
–
–
2 423 – –
2 553 – –
– 5 240 2 218
– 8 023 71
2 423
2 553
7 458
8 094
(14 839) (655)
(11 460) (10)
– –
– –
(15 494)
(11 470)
–
–
17 601 – – 497
17 685 9 500 1 000
621 – – –
20 – 2 –
18 098
19 194
621
22
4 136 3
4 556 –
– –
– –
4 139
4 556
–
–
22 237
23 750
621
22
The taxation on the group’s and company’s profit before taxation differs from the theoretical amount that would arise using the basic tax rate as follows: Profit before taxation Tax calculated at a tax rate of 28% (2012: 28%) Secondary Tax on Companies Expenses not deductible for tax purposes Adjustments in respect of prior year Foreign tax rate differential Income not subject to taxation Deductions granted by SARS1 Capital profits taxed at 50% Deferred tax increase due to increase in CGT inclusion rate Securities transfer tax
84 279 23 598 – 647 – 119 (1 348) (779) – – –
81 503 22 821 500 992 11 130 – (65) (838) 195 4
7 458 2 088 – – – – (1 467) – – – –
12 240 3 427 2 – – – (3 407) – – – –
Taxation
22 237
23 750
621
22
3. Employment costs Salaries and wages Staff recruitment Staff training Staff relocation Contributions to defined contribution plans Share-based compensation
4. Finance (cost)/income Finance income Bank Preference share investment dividend accrued Subsidiary companies
Finance cost Instalment sale and mortgage bond liabilities Other
5. Taxation Current taxation Current year South African Normal Tax Adjustments in respect of prior years Secondary Tax on Companies Foreign taxation
Deferred taxation Current year Adjustment in respect of prior year
Further information about deferred taxation is presented in note 20. 1 These deductions relate to learnership allowances granted by SARS in terms of s12(h) of the Income Tax Act.
OneLogix Integrated Annual Report 2013
72
Notes to the annual financial statements (continued) for the year ended 31 May 2013 Group 2013 R’000
2012 R’000
10 181 (9 788) (103) –
31 205 (28 009) (377) 28
Operating profit Finance income Finance costs
290 90 (9)
2 847 202 (32)
Profit before taxation Taxation
371 (104)
3 017 (914)
Profit from discontinued operations Profit from disposal of discontinued operation
267 8 495
2 103 –
Total profit from discontinued operation
8 762
2 103
Attributable to: – Non-controlling interest – Equity holders of the company
54 8 708
470 1 633
8 762
2 103
(58) (62) (75)
2 934 (462) 65
Basic and diluted earnings per share are calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in issue during the year. Reconciliation to headline earnings Profit attributable to shareholders Loss/(profit) on sale of property, plant and equipment Taxation and non-controlling interest effect Profit on sale of discontinued operation Taxation and non-controlling interest effect Insurance proceeds Taxation and non-controlling interest effect
65 488 255 (233) (8 495) – (1 015) 577
53 729 (6 001) 842 – – – –
Headline earnings Profit after tax from discontinued operation (note 6) Non-controlling interest
56 577 (267) 54
48 570 (2 103) 470
Headline earnings – continuing operation
56 364
46 937
6. Discontinued operation With effect from 1 October 2012, OneLogix disposed of its 80% interest in Magscene (Pty) Limited to CTP Limited for R10 million. Comparative financial information in the statement of comprehensive income has been restated to reflect the discontinued operation. Analysis of the discontinued operation is as follows: Revenue Operating and administration costs Depreciation and amortisation Profit on disposal of property, plant and equipment
Analysis of cash flows from discontinued operation is as follows: Net cash generated from/(utilised by) operating activities Net cash flows utilised by investing activities Net cash flows (utilised by)/from financing activities
7.
Earnings and headline earnings per share
OneLogix Integrated Annual Report 2013
73
Group 2013 R’000
7.
2012 R’000
Earnings and headline earnings per share (continued) Net number of shares in issue (‘000) Total Treasury shares held Total less treasury shares Weighted average Diluted
231 (5 225 225 231
595 938) 658 658 258
231 (5 225 219 223
595 937) 658 355 715
Basic earnings per share (cents)
29,0
24,5
Continuing operations Discontinued operation
25,1 3,9
23,8 0,7
Diluted basic earnings per share (cents)
28,3
24,0
Continuing operations Discontinued operation
24,5 3,8
23,3 0,7
Headline earnings per share (cents)
25,1
22,1
Continuing operations Discontinued operation
25,0 0,1
21,4 0,7
Diluted headline earnings per share (cents)
24,5
21,7
Continuing operations Discontinued operation
24,4 0,1
21,0 0,7
Dividends declared A dividend of 4,5 cents per share was declared and paid during the year under review (2012: 1,8 cents per share).
Leasehold improvements R’000
Land and Plant and buildings equipment R’000 R’000
Office furniture and Vehicles equipment R’000 R’000
Computer equipment R’000
Total R’000
8. Property, plant and equipment Group Year ended 31 May 2013 Opening carrying amount Additions Acquisition of subsidiaries Disposal of subsidiaries Disposals Depreciation charge Foreign exchange differences Transfers
7 933 4 899 – – – (2 509) – –
107 846 10 951 – – – (2 325) – –
3 444 592 223 – – (1 658) – 72
201 110 60 950 90 006 (495) (8 631) (37 434) 35 –
2 726 4 866 519 (209) (54) (881) 11 (72)
4 496 2 804 145 (55) (26) (2 866) 5 –
327 555 85 062 90 893 (759) (8 711) (47 673) 51 –
Closing carrying amount
10 323
116 472
2 673
305 541
6 906
4 503
446 418
At 31 May 2013 Cost and revaluations Accumulated depreciation
23 312 (12 989)
126 316 (9 844)
8 922 (6 249)
471 502 (165 961)
12 706 (5 800)
21 872 (17 369)
664 630 (218 212)
Carrying amount
10 323
116 472
2 673
305 541
6 906
4 503
446 418
Depreciation charge of R47,6 million has been included within continuing operations and R0,07 million in discontinued operations in the statement of comprehensive income. Details of assets pledged as security are disclosed in note 19. The register of property is held at the company’s registered office.
OneLogix Integrated Annual Report 2013
74
Notes to the annual financial statements (continued) for the year ended 31 May 2013 8. Property, plant and equipment (continued) Land was revalued during the 2011 financial year by independent valuers. The method used to value the properties was based on the direct comparative market value method of comparable properties. The fair value at 31 May 2013 of land included in land and buildings is R74,8 million (2012: R70 million). If land and buildings were to be recognised at cost, the carrying amount would have been R58,5 million (2012: R53,7 million). Reconciliation to revaluation reserve included in equity: 2013 Land and buildings R’000
2012 Land and buildings R’000
Prior year revaluations Deferred tax recognised
16 300 (3 042)
16 300 (3 042)
Revaluation reserve
13 258
13 258
2013 R’000
2012 R’000
Total additions of property, plant and equipment Less: non-cash additions and additions at discontinued operations
85 062 (60 876)
118 131 (96 713)
Total cash additions as per statement of cash flows
24 186
21 418
Reconciliation of additions paid in cash:
Asset additions financed through instalments sale agreements and mortgage bonds have been removed from the additions as per the statement of cash flows in order to disclose only those additions paid in cash.
Vehicles R’000
Office furniture and equipment R’000
Computer equipment R’000
Total R’000
3 581 1 447 (43) – (1 541) –
162 911 76 875 – (6 942) (31 764) 30
1 671 1 719 43 (3) (734) 30
3 267 4 012 – (42) (2 741) –
274 241 118 131 – (23 094) (41 783) 60
107 846
3 444
201 110
2 726
4 496
327 555
18 414 (10 481)
115 366 (7 520)
7 416 (3 972)
316 135 (115 025)
5 874 (3 148)
18 825 (14 329)
482 030 (154 475)
7 933
107 846
3 444
201 110
2 726
4 496
327 555
Leasehold improvements R’000
Land and buildings R’000
Plant and equipment R’000
Group Year ended 31 May 2012 Opening carrying amount Additions Transfers Disposals Depreciation charge Foreign exchange differences
3 193 7 679 – – (2 939) –
99 618 26 399 – (16 107) (2 064) –
Closing carrying amount
7 933
At 31 May 2012 Cost and revaluations Accumulated depreciation Carrying amount
OneLogix Integrated Annual Report 2013
75
Other intangibles R’000
Goodwill R’000
Internally generated software R’000
Group Year ended 31 May 2013 Opening carrying amount Additions Acquisition of subsidiary Amortisation charge Disposal of subsidiary
1 974 – 19 854 (1 991) –
26 028 – 17 719 – (1 429)
3 980 1 838 – (1 493) (191)
31 1 37 (3 (1
Closing carrying amount
19 837
42 318
4 134
66 289
At 31 May 2013 Cost Accumulated amortisation and impairment
25 791 (5 954)
42 318 –
10 285 (6 151)
78 394 (12 105)
Closing carrying amount
19 837
42 318
4 134
66 289
Group Year ended 31 May 2012 Opening carrying amount Additions Amortisation charge
2 962 – (988)
26 028 – –
3 508 1 879 (1 407)
32 498 1 879 (2 395)
Closing carrying amount
1 974
26 028
3 980
31 982
At 31 May 2012 Cost Accumulated amortisation and impairment
7 450 (5 476)
26 028 –
9 005 (5 025)
42 483 (10 501)
Closing carrying amount
1 974
26 028
3 980
31 982
Total R’000
9. Intangible assets
982 838 573 484) 620)
Amortisation charge of R3,4 million has been included within continuing operations and R0,03 million in discontinued operations in the statement of comprehensive income. Impairment tests for goodwill Goodwill is allocated to five of the group’s cash-generating units (‘CGUs’), namely Vehicle Delivery Services, a division of OneLogix (Pty) Limited, RSA Tankers (Pty) Limited t/a United Bulk, OneLogix Projex (Pty) Limited, Quasar Software Development (Pty) Limited and Atlas Panelbeaters (Pty) Limited. The group annually tests whether goodwill has suffered any impairment, in accordance with its accounting policy. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These calculations require the use of estimates. These calculations use cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond the five-year period are extrapolated using an estimated growth rate of 5,9%. Management determined budgeted gross margin based on past performance and its expectations for the market development. The weighted average growth rates used are consistent with the expectations of management and are in the range of 5,9% – 8,8%. The discount rate of 21% is pre tax and reflects specific risks relating to the relevant segment. The attributable goodwill allocated to the CGUs is as follows:
Vehicle Delivery Services (Division of OneLogix (Pty) Limited) RSA Tankers (Pty) Limited t/a United Bulk Magscene (Pty) Limited OneLogix Projex (Pty) Limited Quasar Software Development (Pty) Limited Atlas Panelbeaters (Pty) Limited
Goodwill 31 May 2013 R’000
Goodwill 31 May 2012 R’000
19 175 17 406 – 5 399 313 25
19 175 – 1 429 5 399 – 25
42 318
26 028
OneLogix Integrated Annual Report 2013
76
Notes to the annual financial statements (continued) for the year ended 31 May 2013 9. Intangible assets (continued) Analysis of other intangibles: Contractual business R’000
Customer relationships R’000
Information technology R’000
Brand R’000
Total R’000
Year ended 31 May 2013 Opening carrying value Acquisition of subsidiaries Amortisation charge
– – –
1 755 18 737 (1 658)
– 1 117 (224)
219 – (109)
1 974 19 854 (1 991)
Closing carrying amount
–
18 834
893
110
19 837
At 31 May 2013 Cost Accumulated amortisation
– –
24 126 (5 292)
1 117 (224)
548 (438)
25 791 (5 954)
Closing carrying amount
–
18 834
893
110
19 837
Remaining useful life (years)
–
1–8
4
1
–
Year ended 31 May 2012 Opening carrying value Amortisation charge
– –
2 633 (878)
– –
329 (110)
2 962 (988)
Closing carrying amount
–
1 755
–
219
1 974
594 (594)
5 766 (4 011)
364 (364)
726 (507)
7 450 (5 476)
Closing carrying amount
–
1 755
–
219
1 974
Remaining useful life (years)
–
2
–
2
–
At 31 May 2012 Cost Accumulated amortisation and impairment
Company 2013 R’000
2012 R’000
Unlisted: Shares at cost Balance at the beginning of the year Additional investment in OneLogix (Pty) Limited
49 824 1 577
1 960 47 864
Balance at the end of the year
51 401
49 824
Aggregate attributable after tax profits of subsidiaries Aggregate attributable after tax losses of subsidiaries
53 891 (54)
46 715 (1 057)
Aggregate attributable after tax profits of subsidiaries
53 837
45 658
10. Investment in subsidiaries
Refer to note 25 for detail of principal subsidiary undertakings. Further details pertaining to the acquisition of indirectly held subsidiaries are noted in business combinations ( refer to note 26). The above shares are ceded to Nedcor Bank Limited as security for the group’s borrowing facilities. Refer to note 19.
OneLogix Integrated Annual Report 2013
77
11. Investment in associate The acquisition of 40% of Drive Report (Pty) Limited for R20,1 million cash consideration was concluded effective 15 December 2012. A contingent payment of R9 million will become payable should Drive Report be successful in a pending tender. The contingent payment has been capitalised as part of the investment in the associate. The preliminary allocation of the purchase price was allocated to goodwill and will be finalised within 12 months of the acquisition date as allowed in terms of IFRS 3. Group 2013 R’000
2012 R’000
Total assets Total liabilities
49 279 (18 841)
– –
Net assets
30 438
–
Revenue since acquisition Profit since acquisition Group’s share of profit of associate Reconciliation of carrying amount: Original investment in associate (including contingent payment) Equity accounted earnings, net of taxation (cumulative since acquisition)
52 429 12 034 4 814 29 121 4 814
– – – – – –
33 935
–
Group
Company
2013 R’000
2012 R’000
2013 R’000
2012 R’000
2 031 – 5 188
768 – 5 730
– 71 748 –
– 66 508 –
7 219
6 498
71 748
66 508
12. Loans and other receivables Loans to franchisees Cumulative preference shares and accrued preference dividend Royalty prepayment
The preference shares were issued by OneLogix (Pty) Limited at a par value of R65 million, the dividend on the shares is based on the ruling prime rate plus 2%. The accrued preference dividend included in the balance above is R6,7 million (2012: R1,5 million). The cumulative preference shares and accrued preference dividend are redeemable on 22 November 2013. The above cumulative preference shares are ceded to Nedcor Bank Limited as security for the group’s borrowings facilities. The fair value approximates the carrying value. The royalty prepayment relates to a once-off payment made to PostNet International Franchise Corporation in order to reduce future royalty payments pursuant to the existing agreement in place. Group
Reconciliation of carrying value Opening carrying value Current portion allocated to trade and other receivables
Loans to franchisees Loans for asset purchases General loans to franchisees Provision for impairment of general loans
Company
2013 R’000
2012 R’000
2013 R’000
2012 R’000
5 730 (542)
6 271 (541)
– –
– –
5 188
5 730
–
–
650 2 508 (1 127)
483 890 (605)
– – –
– – –
2 031
768
–
–
The loans for asset purchases are fully performing, bear interest at rates linked to the prime rate and are repayable over a period of two to three years. The loans are secured by the asset purchased by the franchisee. The general loans to franchisees are repayable over two years and bear interest at rates linked to the prime rate. The loans are fully performing except for the balances impaired which are more than a year overdue.
OneLogix Integrated Annual Report 2013
78
Notes to the annual financial statements (continued) for the year ended 31 May 2013 Group
Company
2013 R’000
2012 R’000
2013 R’000
2012 R’000
333 7 751 2 006 –
303 7 584 910 5 962
– – – –
– – – –
10 090
14 759
–
–
13. Inventories Trading merchandise Vehicle spares and consumables Work-in-progress Publications
Group 2013 R’000
Company 2012 R’000
2013 R’000
2012 R’000
336 767) 300 594 747 –
– – – – – 13 691
– – – – – 32 923
119 210
13 691
32 923
14. Trade and other receivables Trade receivables Provision for impairment Other receivables and prepayments Sundry loans VAT receivable Loan to subsidiary
137 (1 11 1
303 286) 106 467 404 –
148 994
109 (2 6 1 4
The group has provided Nedcor Bank Limited with a first cession over its book debts and loans to subsidiaries with a carrying value of R136,0 million (2012: R106,6 million) in order to secure credit facilities (refer to note 19). The loan to subsidiary bears interest at prime plus 2% and has no fixed terms of repayment and is not considered to be impaired. The age analysis of trade receivables is as follows: Group Gross 2013 R’000 Fully performing Past due not impaired: 30 to 60 days Past due not impaired: 60 to 90 days Past due not impaired: 90 days and over Past due and impaired: 90 days and over Total
97 24 9 4 1
Impairment 2013 R’000
516 254 456 791 286
– – – – (1 286)
137 303
(1 286)
Gross 2012 R’000 83 17 3 2 2
Impairment 2012 R’000
154 826 536 053 767
– – – – (2 767)
109 336
(2 767)
The standard credit terms across the group are 30 days. R’000 Reconciliation of impairment provision Balance at 1 June 2011 Increase in provision during the year
2 730 37
Balance as at 31 May 2012 Decrease in provision during the year
2 767 (1 481)
Balance as at 31 May 2013
1 286
The creation and release of provision for impaired receivables have been included in ‘other expenses’ in the income statement (note 2). Amounts charged to the allowance account are generally written off, when there is no expectation of recovering additional cash. Other receivables and sundry loans are not overdue or impaired. All trade and other receivables are denominated in South African Rands other than R0,1 million which is denominated in US Dollars.
OneLogix Integrated Annual Report 2013
79
Group
Company
2013 R’000
2012 R’000
2013 R’000
2012 R’000
54 749 (6 850)
102 494 –
1 438 –
996 –
47 899
102 494
1 438
996
15. Cash and cash equivalents Cash at bank and on hand Bank overdrafts
Group and Company Number of shares 2013
Number of shares 2012
Authorised The total authorised number of ordinary shares is 500 000 000 shares (2012: 500 000 000 shares) with no par value
500 000 000
500 000 000
Issued Balance at the beginning of the year Share repurchase Share issue
231 595 235 – –
Balance at the end of the year
231 595 235
2013 R’000
2012 R’000
202 131 285 (223 550) 29 687 500
2 316 – –
2 021 (2) 297
231 595 235
2 316
2 316
16. Share capital
At the company’s annual general meeting, held on 26 November 2012, a special resolution was passed converting all the ordinary shares in the company, (comprising both the issued shares and the authorised and unissued shares) from ordinary shares with par value of 1 cent each of shares to no par value without altering the substance of the specific rights and privileges associated with each share. Group
Company
2013 R’000
2012 R’000
2013 R’000
2012 R’000
Issued Balance at the beginning of the year Capital distributions Share repurchase Shares issued Share issue expenses
45 797 (10 422) – – –
20 227 (15 526) (319) 41 859 (444)
50 572 (10 422) – – –
25 002 (15 526) (319) 41 859 (444)
Balance at the end of the year
35 375
45 797
40 150
50 572
17. Share premium
Group Number of shares 2013
Number of shares 2012
2013 R’000
2012 R’000
Treasury shares at the beginning of the year Treasury shares acquired Treasury shares disposed
5 937 500 – –
410 810 5 937 500 (410 810)
8 431 – –
264 8 431 (264)
Treasury shares at the end of the year
5 937 500
5 937 500
8 431
8 431
18. Treasury shares
OneLogix Integrated Annual Report 2013
80
Notes to the annual financial statements (continued) for the year ended 31 May 2013 Group
Company
2013 R’000
2012 R’000
2013 R’000
2012 R’000
67 490 6 647
43 926 6 091
– –
– –
74 137
50 017
–
–
107 494 42 228
77 878 44 553
– –
– –
149 722
122 431
–
–
232 859
172 448
–
–
50 000 83 538 16 184
44 559 59 304 18 568
– – –
– – –
149 722
122 431
–
–
Effective interest rates
%
%
%
%
Instalment sale liabilities Mortgage bond liabilities
7,79 9,38
7,66 9,26
– –
– –
19. Interest-bearing borrowings Current Instalment sale liabilities Mortgage bond liabilities
Non-current Instalment sale liabilities Mortgage bond liabilities
Total borrowings Maturity of non-current borrowings Between one and two years Later than two years and not later than five years Later than five years
Refer to note 27.5 for the contractual maturity analysis. Securities 1. The group has a R267,5 million credit facility with Nedcor Bank Limited which is secured by way of cession over the debtors’ book of the group and the group’s mortgage bonds. The group has supplied Nedcor Bank Limited with an unlimited suretyship, incorporating cessions of all loan funds in favour of OneLogix (Pty) Limited, PostNet Southern Africa (Pty) Limited, PostNet Advertising (Pty) Limited, Commercial Vehicle Delivery Services (Pty) Limited and PostNet Holdings (Pty) Limited. Further limited suretyship in favour of Nedbank Bank Limited has been issued by Atlas Panelbeaters (Pty) Limited and OneLogix Projex (Pty) Limited. 2. Instalment sale liabilities are secured over vehicles with a net carrying value of R209 million (2012: R140,6 million). The instalment sale liabilities bear interest at rates varying from prime plus 2% to prime less 1,65% and are repayable over no more than five years. The carrying value approximates fair value. 3. Mortgage bond liabilities are secured over land and buildings with a net carrying value of R116,5 million (2012: R107,8 million). Certain of the mortgage bond liabilities bear interest at fixed rates. The carrying value of the fixed rate liabilities is R34,6 million (2012: R34,1 million) opposed to a fair value of R34,8 million (2012: R34,2 million). Group
Company
2013 R’000
2012 R’000
2013 R’000
2012 R’000
Borrowing facilities The group has the following undrawn committed borrowing facilities: Total bank borrowings capacity at year-end
267 500
304 000
–
–
Total bank borrowings at year-end
232 859
172 448
–
–
34 641
131 552
–
–
Remaining borrowing capacity
Facilities relating to bank borrowings of R49,3 million in relation to United Bulk are being negotiated. Borrowing capacity of the group is sufficient to fund the ongoing asset-base finance requirements.
OneLogix Integrated Annual Report 2013
81
Group
Company
2013 R’000
2012 R’000
2013 R’000
2012 R’000
Deferred taxation is calculated on all temporary differences under the liability method using a principal tax rate of 28% (2012: 28%). The movement on deferred taxation is as follows: At the beginning of the year Income statement movement Charged to other comprehensive income On acquisition of subsidiaries On disposal of subsidiary Income statement movement – discontinued operation Adjustment in respect of prior year
(24 691) (4 136) – (20 544) (757) – (3)
(19 588) (4 556) (760) – – 213 –
– – –
– – –
– – –
– – –
At the end of the year
50 131
(24 691)
–
–
The deferred tax liability balance comprises: Capital allowances
(57 583)
(30 480)
–
–
(57 583)
(30 480)
–
–
7 225 227
5 487 302
– –
– –
7 452
5 789
–
–
(50 131)
24 691
–
–
20. Deferred taxation
The deferred tax asset balance comprises: Accruals and other Tax losses carried forward
Deferred tax liability (net)
The tax losses are attributable to various subsidiaries that are expected to generate taxable profits in the foreseeable future. Group 2013 R’000
Company 2012 R’000
2013 R’000
2012 R’000
556 989 779 772 655 618 010 839 993
– – – – – – – – 1 437
– – – – – – – – 993
136 211
1 437
993
21. Trade and other payables Trade payables Bonus accrual Leave pay accrual Payroll-related accrual Workmen’s compensation accrual Audit fee accrual VAT payable Accruals for other liabilities and charges Unclaimed capital distributions and dividends
84 14 10 6 2 2 6 26 1
313 957 355 063 805 433 817 908 437
156 088
82 13 8 3 2 2 7 13
Trade payables are non-interest bearing and are generally on 30-day terms. Refer to note 27.5 for the contractual maturity analysis.
OneLogix Integrated Annual Report 2013
82
Notes to the annual financial statements (continued) for the year ended 31 May 2013 Group
Company
2013 R’000
2012 R’000
2013 R’000
2012 R’000
54 418 –
35 499 2 502
– –
– –
54 418
38 001
–
–
22 466 45 374
11 596 14 464
– –
– –
67 840
26 060
–
–
22. Commitments Capital commitments Capital expenditure contracted at the balance sheet date but not recognised in the financial statements is as follows: Vehicles Land and buildings
Operating lease commitments The future minimum lease payments under non-cancellable operating leases are as follows: Not later than one year Later than one year and not later than five years
Operating lease commitments – group company as lessee The group leases various properties for use as vehicle storage facilities and for operational requirements under non-cancellable operating lease agreements. The lease terms are between one and five years, and the majority of the lease agreements are renewable at the end of the lease period at market rate. The general lease period for these leases is three years. The group also leases plant and equipment under cancellable operating lease agreements. The group is required to give a six-month notice for the termination of these agreements. The lease expenditure charged to the statement of comprehensive income during the year is disclosed in note 2. Group
Company
2013 R’000
2012 R’000
2013 R’000
2012 R’000
92 536
90 420
–
–
47 603 3 451 1 577 255 (1 015) 541
41 2 1 (5
519 283 577 973) – 541
– – – – – –
– – – – – –
(448) (6 109) 7 734
(733) (12 149) 36 996
– 13 992 444
– (32 923) (4 375)
146 125
154 481
14 436
(37 298)
23. Cash generated from operations Reconciliation of operating profit to cash flows from operating activities: Operating profit Adjustments for: Depreciation of property, plant and equipment Amortisation of intangible assets Share-based compensation Loss/(profit) on disposal of property, plant and equipment Insurance proceeds Non-cash flow expense of royalty prepayment Changes in working capital (excluding the effects of acquisition and disposal of subsidiaries): Increase in inventories (Increase)/decrease in trade and other receivables Increase/(decrease) in trade and other payables
OneLogix Integrated Annual Report 2013
83
Group 2013 R’000
2012 R’000
759 1 429 191 1 433 757 4 174 2 689 (333) (9 395) (274)
– – – – – – – – – –
Net fair value of net assets disposed Profit on the disposal of subsidiary Cash in subsidiary disposed of
1 430 8 495 (1 433)
– – –
Net cash inflow from disposal
8 492
–
Cash proceeds (net of transaction costs) Cash in subsidiary disposed of
9 925 (1 433)
– –
Net cash inflow from disposal
8 492
–
23. Cash generated from operations (continued) 23.1 Net cash inflow from disposal of subsidiary Fair value of net assets disposed: Plant, property and equipment (note 8) Goodwill (note 9) Intangible assets (note 9) Bank and cash Deferred tax (note 20) Inventories Trade and other receivables Taxation Trade and other payables Current portion of borrowings
24. Related party transactions 24.1 Related parties included the following: • subsidiaries (refer to note 25); • directors (refer to directors’ report and note 24.4); and • the company has no controlling shareholder as it is widely held.
24.2 The group entered into a five-year leasehold agreement with Miradel Street Investments (Pty) Limited, a company owned by NJ Bester with effect 1 June 2007. The leasehold improvements approximated R4,8 million and the monthly rental commenced at R40 000 per month escalating annually at 6%. The leasehold agreement relates to the rental of 40 000 m2 of land for vehicle storage in Pomona, Kempton Park. This lease has been extended on a six-month notice period cancellable by either party.
24.3 OneLogix Group Share Trust advanced R1 002 959 to GM Glass, a director of OneLogix Group Limited, in April 2008, in order to procure shares in the company. This loan incurs interest at the prime overdraft rate less 3% and is secured by the shares as well as the provident fund of GM Glass. The outstanding balance at 31 May 2013 was RNil (2012: R1 427 844). The loan was repaid in April 2013. Provident fund contribution R’000
Incentive R’000
Gross salary R’000
Other R’000
Total R’000
24.4 Directors’ remuneration 2013 Executive NJ Bester GM Glass IK Lourens CV McCulloch
144 196 163 387
1 1 1 1
630 120 630 630
890
6 010
1 1 1 1
911 174 904 668
29 26 37 30
6 657
122
3 2 3 3
714 516 734 715
13 679
OneLogix Integrated Annual Report 2013
84
Notes to the annual financial statements (continued) for the year ended 31 May 2013 Provident fund contribution R’000
Incentive R’000
Gross salary R’000
Other R’000
Total R’000
24. Related party transactions (continued) 24.4 Directors’ remuneration (continued) 2012 Executive NJ Bester GM Glass IK Lourens CV McCulloch
131 140 132 362
1 1 1 1
500 000 500 500
765
5 500
1 1 1 1
737 106 747 506
26 21 30 28
6 096
105
12 466
2013 R’000
2012 R’000
67 83 52 96 49
– 68 64 54 31
347
217
Non-executive directors: LJ Sennelo AJ Grant JG Modibane SM Pityana AB Ally or alternate DF Hirshowitz
3 2 3 3
394 267 409 396
Company
Executive directors Gross salaries Non-executive directors Fees Paid by subsidiaries
2013 R’000
2012 R’000
13 679
12 466
347
217
14 026 (14 026)
12 683 (12 683)
–
–
The executive directors are considered to be the only key management and prescribed officers. Total earnings of executive directors are based on a cost to company package. Group
24.5 BEE service fee paid to Izingwe Holdings (Pty) Limited
Company
2013 R’000
2012 R’000
2013 R’000
2012 R’000
–
166
–
–
101 23
95 353
– –
– –
124
448
–
–
Izingwe is a shareholder of the company and its directors are also directors of the company.
24.6 Fees paid to Java Capital (Pty) Limited Sponsor fees Legal and advisory fees
Java Capital is a shareholder, and Andrew Brooking is a non-executive director of OneLogix Group Limited and a director of Java Capital.
24.7 Refer to note 25 for the details of loans receivable from the company’s subsidiary.
OneLogix Integrated Annual Report 2013
85
25. Interest in subsidiaries and associates Capital contribution to subsidiaries in respect of equity-settled Shares share-based at cost payment R’000 R’000
Net receivable 2013 R’000
Net receivable 2012 R’000
7 287
85 439
99 431
–
–
–
–
100
–
–
–
–
75
75
–
–
–
–
1 000
100
100
–
–
–
–
ZIM
32 000
100
100
–
–
–
–
OneLogix Durban Property Company (Pty) Limited
RSA
1 000
100
100
–
–
–
–
Road Sea (Pty) Limited
RSA
500
100
100
–
–
–
–
Starzone Investments (Pty) Limited
RSA
1 000
100
100
–
–
–
–
RFB Logistics (Pty) Limited
RSA
100
100
100
–
–
–
–
Country
Issued ordinary shares
% held 2013
% held 2012
Details of companies are reflected below: Directly held: Subsidiary of OneLogix Group Limited: OneLogix (Pty) Limited
RSA
1 000
100
100
44 116
Indirectly held: Subsidiaries of OneLogix (Pty) Limited: PostNet Holdings (Pty) Limited
RSA
100
100
100
Net Express (Pty) Limited
RSA
200
100
Commercial Vehicle Delivery Services (Pty) Limited
RSA
1 000
OneLogix Pomona Property Company (Pty) Limited
RSA
Vehicle Delivery Services Zimbabwe (Pvt) Limited
PM Hire (Pty) Limited
RSA
100
100
100
–
–
–
–
Magscene (Pty) Limited
RSA
1 000
0
80
–
–
–
–
Atlas Panelbeaters (Pty) Limited
RSA
100
65
65
–
–
–
–
Flaviosolve Investments (Pty) Limited
RSA
100
100
100
–
–
–
–
OneLogix Projex (Pty) Limited
RSA
1 000
90
80
–
–
–
–
Middle of the Road (Pty) Limited
RSA
100
74
74
–
–
–
–
Quasar Software Development (Pty) Limited
RSA
200
55
–
–
–
–
–
OneLogix Integrated Annual Report 2013
86
Notes to the annual financial statements (continued) for the year ended 31 May 2013 25. Interest in subsidiaries and associates (continued) Capital contribution to subsidiaries in respect of equity-settled Shares share-based at cost payment R’000 R’000
Net receivable 2013 R’000
Net receivable 2012 R’000
–
–
–
–
–
–
–
100
–
–
–
–
–
–
–
–
–
44 116
7 287
85 439
99 431
Country
Issued ordinary shares
% held 2013
% held 2012
RSA Tankers (Pty) Limited trading as United Bulk
RSA
100
60
–
–
Subsidiary of PostNet Holdings (Pty) Limited: PostNet Southern Africa (Pty) Limited
RSA
100
100
100
PostNet Advertising (Pty) Limited
RSA
100
100
Indirectly held Associate of OneLogix (Pty) Limited Drive Report (Pty) Limited
RSA
100
40
Subsidiary of PostNet Southern Africa (Pty) Limited:
All subsidiary companies have a 31 May year-end except for Vehicle Delivery Services Zimbabwe (Pvt) Limited which has a 31 December year-end due to regulatory requirements in Zimbabwe. The results of this entity are consolidated for the twelve months ended 31 May.
Reconciliation of net receivable from OneLogix (Pty) Limited Cumulative preference shares and accrued preference dividend (refer to note 12) Loan to OneLogix (Pty) Limited (refer to note 14)
2013 R’000
2012 R’000
71 748 13 691
66 508 32 923
85 439
99 431
Total preference dividends accrued for the year amounted to R5,2 million (2012: R8,0 million). Interest earned on the loan to the company’s subsidiary for the year amounted to R2,2 million (2012: R0,1 million).
26. Business combination On 1 February 2013 the group acquired 60% of the share capital of RSA Tankers (Pty) Limited trading as United Bulk for R28,2 million. United Bulk is operational within the Specialised Transport segment of the group and the board identified this business based on its expansion and growth potential. As a result of the acquisition, the group is expected to diversify its niche logistics services and increase its presence in the market. The goodwill of R17,4 million arising from the acquisition is mainly attributable to synergies the group is expecting to establish between its various logistics businesses together with the specialist knowledge and experience of senior management and the workforce in this specialised logistics field. The goodwill is not expected to be deductible for income tax purposes. The following table summarises the consideration paid for United Bulk, the fair value of assets acquired, liabilities assumed and the non-controlling interest at the acquisition date.
OneLogix Integrated Annual Report 2013
87
2013 R’000
26. Business combination (continued) Total consideration paid Cash Overdraft assumed
55 000 2 621
Total cash outflow on acquisition Less repayment of loan due to previous shareholder Less overdraft assumed
57 621 (26 784) (2 621)
Considerations paid for investment
28 216
Recognised amounts of identifiable assets acquired and liabilities assumed: Bank and cash Plant, property and equipment (refer to note 8) Intangible assets (refer to note 9) Inventories Trade and other receivables Trade and other payables Deferred tax Borrowings Taxation
(2 621) 90 871 18 738 846 25 607 (14 430) (20 232) (79 771) (737)
Total identifiable net assets Non-controlling interests Goodwill
18 271 (7 461) 17 406
Total
28 216
Acquisition related costs for the acquisition amounted to R0,4 million which has been expensed in operating expenses. The fair value of the acquired identifiable intangible assets of R18,7 million relates to customer relationships and has been valued based on the final purchase price allocation. The value of the non-controlling interest in United Bulk, an unlisted company, was measured by using the proportionate share of the identifiable net assets. Had United Bulk been consolidated from 1 June 2012, the consolidated statement of comprehensive income would have reflected an increase in revenue of R121,4 million and profit of R5,5 million. The group also acquired 55% of the share capital of Quasar Software Development (Pty) Limited for R1,5 million on 1 June 2012. The purchase price allocation was made as follows: Intangible assets of R1,1 million, other assets of R0,5 million, liabilities of R0,8 million and deferred tax liabilities R0,3 million. A non-controlling interest of R0,1 million and goodwill of R0,3 million was recognised on acquisition. 2013 R’000 Summary of subsidiaries acquired: Total goodwill recognised Total intangibles Total deferred tax
17 719 19 854 20 544
Total cash flows on acquisition of subsidiaries net of cash: RSA Tankers (Pty) Limited Quasar Software Development (Pty) Limited
57 621 1 473 59 094
OneLogix Integrated Annual Report 2013
88
Notes to the annual financial statements (continued) for the year ended 31 May 2013 26. Business combination (continued) 26.1 Transactions with non-controlling interest The amalgamation of RFB (Pty) Limited and OneLogix Projex (Pty) Limited from 1 March 2013 resulted in OneLogix (Pty) Limited acquiring a further 10% shareholding in OneLogix Projex (Pty) Limited. The consideration of the additional shareholding was the portion of the net assets contributed by OneLogix (Pty) Limited in the intra-group transaction. In the prior year OneLogix (Pty) Limited, acquired a 10% shareholding in OneLogix Projex (Pty) Limited from Bowden & Co, a minority shareholder, for a total of R1,5 million. Details of the net assets acquired relating to the acquisitions referred to above are as follows: 2013 R’000
2012 R’000
Purchase consideration: – Cash paid – Net assets contributed on behalf of the non-controlling interest
– 2 540
1 500 –
Total purchase consideration Carrying value of non-controlling interests
2 540 (138)
1 500 1
Amount recognised in transactions with non-controlling interest reserve
2 402
1 501
Refer to note 27.5 for the detail of the put option liability of R16,2 million over the non-controlling interest of 40% in United Bulk.
27. Financial instruments 27.1 Introduction The group’s principal financial instruments comprise cash and cash equivalents, bank loans and overdrafts, instalment sale agreements, loans to and from subsidiary companies and unlisted investments. The main reason for these instruments is to finance the group’s operations. Other financial instruments such as trade receivables, trade payables and foreign exchange contracts arise directly as a consequence of the group’s operations. The main risks arising from the group’s financial instruments are credit risk, market risks (currency risk and interest rate risk) and liquidity risk. The board reviews and agrees policies for managing each of these risks which are summarised below.
27.2 Credit risk The most significant exposure to credit risk is in trade receivables and cash investments. The group only deposits short-term cash surpluses with banks of a high credit rating. The majority of customers have been contractually tied for some years and have proven credit risk ratings. The group policy is to evaluate credit worthiness of customers on an ongoing basis and renegotiate terms with these customers where the risk may be higher. We subscribe to a credit bureau that we utilise to evaluate the customer base as and when required. The group has experienced no significant default by its customers during the current year. The group has a policy of insuring trade receivables that require a high amount of credit in relation to the margin achieved. At 31 May 2013, the group did not consider there to be any significant credit risk that was not adequately provided for. Refer to note 14 for quantitative analysis of credit risk. The carrying amounts of financial assets included in the group’s balance sheet represent the group’s exposure to credit risk in relation to these assets. The profile of credit risk exposure consists mainly of motor manufacturers, clearing and forwarding agents and retailers.
27.3 Market risk and sensitivity analysis The group has used a sensitivity analysis technique that measures the estimated change to the income statement of either an instantaneous increase or decrease of 1% (100 basis points) in market interest rates or a 10% strengthening or weakening in the Rand against all other currencies, from the rates applicable at 31 May 2013, for each class of financial instrument. This analysis is for illustrative purposes only, as in practice market rates rarely change in isolation. Interest rate risk The group monitors its exposure to changeable interest rates and generally enters into agreements that are linked to market rates relative to the underlying asset or liability. The interest rate sensitivity analysis is based on the assumption that changes in the market interest rates affect the interest income or expense of variable interest financial instruments only.
OneLogix Integrated Annual Report 2013
89
Increase/ decrease in basis points
Effect on profit before tax on interest rate increase R’000
Effect on profit before tax on interest rate decrease R’000
Group 2013
100
(1 469)
1 469
2012
100
(358)
358
Company 2013
100
653
(653)
2012
100
808
(808)
Year
27. Financial instruments (continued) 27.3 Market risk and sensitivity analysis (continued)
Group foreign currency risk The currency risk sensitivity analysis assumes that all net investment and cash flow hedges are highly effective. Under this assumption, with a 10% weakening or strengthening of the Rand against all other currencies, profit before tax would have increased by RNil (2012: R0,4 million) or decreased by RNil (2012: increased by R0,4 million), respectively. During the current year the group disposed of Magscene (Pty) Limited and therefore the group had no further exposure to foreign currency risk. Other price risks As at 31 May 2013, hypothetical changes in other risk variables would not significantly affect the price of financial instruments at that date. Fuel price risks are contractually covered with customers.
27.4 Liquidity risk The group monitors risk to a shortage of funds by using strict working capital models and projected cash flow modelling. The cash flows from trade receivables and trade payables are well matched in that payment terms agreed with customers are replicated with suppliers. The group enforces current trade and credit terms to ensure a constant level of liquidity. The table below summarises the maturity profile of the group’s financial liabilities at 31 May 2013 based on contractual undiscounted cash flows.
27.5 Maturity profile of financial liabilities Instalment sale liabilities R’000
Mortgage bond liabilities R’000
Put option liability R’000
Vendor liability R’000
Trade payables R’000
Other payables and accruals R’000
7 176
943
16 206
–
84 313
29 341
71 103 60 492
9 901 11 459
– –
9 000 –
– –
– –
55 759 –
25 415 19 014
– –
– –
– –
– –
Total
194 530
66 732
16 206
9 000
84 313
29 341
Carrying amount per statement of financial position
174 984
48 875
16 206
9 000
84 313
29 341
Group at 31 May 2013 Within one month Later than one month but not later than one year Between one and two years Later than two years but not later than five years Later than five years
OneLogix Integrated Annual Report 2013
90
Notes to the annual financial statements (continued) for the year ended 31 May 2013 27. Financial instruments (continued) 27.5 Maturity profile of financial liabilities (continued) Finance charges of R19,5 million (2012: R15,0 million) and R17,9 million (2012: R18,1 million) are included in the gross cash outflows for instalment sale liabilities and mortgage bond liabilities respectively. The put option liability relates to a put over the 40% non-controlling interest in RSA Tankers (Pty) Limited. Also refer to note 2.1 in the accounting policies. The fair value of the put option liability was determined based on the transaction price paid for the 60% interest acquired in RSA Tankers (Pty) Limited after an adjustment of 15% relating to a control premium was made.
Instalment sale liabilities R’000 Group at 31 May 2012 Within one month Later than one month but not later than one year Between one and two years Later than two years but not later than five years Later than five years
5 46 42 42
668 010 639 522 –
Trade payables R’000
Other payables and accruals R’000
Foreign exchange contracts R’000
826 086 912 335 542
82 556 – – – –
17 450 – – – –
776 3 047 – – –
Mortgage bond liabilities R’000
9 9 26 22
Total
136 839
68 701
82 556
17 450
3 823
Carrying amount as per statement of financial position
121 804
50 644
82 556
17 450
3 823
Forward exchange contracts as at 31 May 2013 consisted of five monthly contracts for 60 000 British Pounds each. These contracts were taken out by Magscene (Pty) Limited to cover the settlement of foreign suppliers of imported magazines. The amount shown above is the total outflow relating to the foreign exchange contracts. The estimated amount of foreign currency to be received based on year-end market rates is RNil (2012: R4,0 million). The derivatives have been separately disclosed as the gross amounts are material. The carrying value is insignificant in the prior year and has been included in other receivables.
27.6 Capital risk management The group’s objectives when managing capital are to safeguard the group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust this capital structure, the group may issue new shares, pay a dividend to shareholders, return capital to shareholders or sell assets to reduce debt. The group monitors capital on the basis of the gearing ratio and considers a ratio of 40 – 50% as an optimal gearing ratio. The ratio is calculated as total borrowings (including current and non-current borrowings as shown on the balance sheet) dividend by total capital. Total capital is calculated as ‘equity’ as shown in the balance sheet plus total borrowings. The gearing ratio for 2013 is 41% (2012: 39,5%). There has been no change to the group’s approach to capital management during the year. The group is subject to externally imposed capital requirements arising in the ordinary course of securing financing facilities from debt providers and has complied with these requirements.
27.7 Net fair values The carrying amounts of financial instruments approximated their fair values due to the short-term maturities of these assets and liabilities.
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91
28. Share-based compensation The group has an equity-settled share-based compensation scheme for the benefit of qualifying employees. The OneLogix BEE Share Trust holds 5 937 500 OneLogix Group Limited shares on behalf of group employees who will receive these shares unconditionally upon vesting in November 2013. The employees will not be required to pay for the shares. Employees of the scheme will receive these shares if they are not disqualified in terms of schemes rules on the vesting date. The group has no legal or constructive obligation to repurchase or settle the awards in cash, nor has the intention to do so on or after the vesting date. The fair value of the shares issued to the OneLogix BEE Share Trust was determined using the quoted share price of R1,36 share on the conversion of the BEE shareholding into OneLogix Group Limited shares. On the modification date, the group transferred the cash-settled liability to equity. The difference between the fair value of the shares issued and the cash liability transferred to equity will be recognised as an expense as employees provide services to the group over the remaining vesting period with the corresponding credit recognised in equity. In terms of the rules, should an employee leave prior to the conversion date in November 2013 they will forfeit their shares. The forfeited shares will be allocated to the remaining employees resulting in all shares held by the Trust being awarded to employees. The group recognised a total expense of R1,6 million (2012: R1,6 million) related to the share-based payment scheme. At 31 May 2013 the group has a recorded share-based payment equity reserve of R7,3 million (2012: R5,7 million).
29. Employee share trust The group established a share trust in 2001. The share trust was set up to facilitate the allocation of shares to employees. The shares are held in the name of the trust purely for administration purposes however they are controlled by the employee, who may dispose of the shares at any point in time, except during closed trading periods. All employee benefits in respect of the above shares vested immediately on allocation. Shares disposed of are at the election of the employee through a broker to the open market.
Maximum number of ordinary shares permitted to share incentive scheme as approved by shareholders Number of shares held by the trust on behalf of employees
Number of shares 2013
Number of shares 2012
29 590 888 1 082 188
29 590 888 5 664 225
30. Subsequent events A further dividend of 5 cents per share was approved on 26 August 2013 and will be paid on 7 October 2013. No other material fact or circumstance has occurred between year-end and the date of this report which has a material impact on the financial position of the company or the group.
OneLogix Integrated Annual Report 2013
Key facts In 2009 Morné Nel, presented a proposition to OneLogix to purchase an existing heavy commercial panelbeating business in Springs. His business plan suggested turnaround possibilities and a logical fit for the group. His positive entrepreneurial attitude, business sense, integrity and determination prevailed, and Atlas Panelbeaters was purchased by OneLogix in 2010. With Morné on board as a shareholder and managing director, the OneLogix model of offering a management platform to assist acquired businesses to expand and fully realise their potential was put into action. Investment in new capital equipment, upgraded systems and procedures (including implementation of the QSA system), updated health and safety processes, staff education and enhanced work conditions all had the knock on effect of improved staff morale and productivity. Trust, team work, commitment and mutual respect became the order of the day, to the extent that turnover has increased by well over 200% since acquisition. Today Atlas is one of the largest heavy duty panelbeaters in South Africa, performing work for all the major equipment manufacturers throughout the country. With the right ingredients in place the OneLogix model works!
Undertake work for the following OEM’s directly: Volvo, Scania, DAF, Mercedes-Benz and Freightliner Perform all of Volvo’s warranty work including cab conversions and co-operate with Swedish engineers on developing bulk reinforcing for African conditions Undertake warranty repairs for Volvo, Scania, Freightliner, Mercedes-Benz, Fuso, DAF, MAN, VW, UD, Renault and Iveco On panels of all major insurance companies including Santam, Zurich, 1Com, Alexander Forbes, Marsh, Guardrisk and AON 2 spray booths perform work for Volvo, Freightliner, NAN, DAF and Renault 2 cab bench jigs and state of the art chassis straightening systems that meet OEM standards
Shareholder information Shareholder analysis ......................................... 94 Shareholders’ diary ........................................... 95 Notice of annual general meeting .................... 96 Form of proxy ....................................................101 Definitions ........................................................ 104 Contact details................................................. IBC
Key facts Chris Cloete founded QSA in 1996. The original QSA product was a sophisticated time share accounting package. Demand from the logistics industry for a more suitable accounting package stimulated Chris to spend many long nights developing a unique transport-related accounting software package. OneLogix discovered this gem of a package in 2003. It was found to be particularly useful for fleet-based operators, as it enabled the monitoring of aspects such as fuel and tyre consumption, workshop and spares management, fixed asset register control and the ability for full profitability reporting per truck. Together with Chris and his team, specific adaptations were developed for OneLogix to the extent that the QSA system became critical to the operations and is presently utilised by five of the group companies. In order to secure the existing and future development of QSA, OneLogix purchased a majority stake in the business in 2013. Together with OneLogix, QSA has now entered an investment phase which will ultimately ensure that one of the best kept secrets of the transport industry realises its full market potential.
8 107 lines of code 96 installations in place Over 400 users Monitoring of over 2 200 trucks
94
Shareholder analysis at 31 May 2013 Number of ordinary shareholders
%
At 31 May 2013 Directors Other individuals Treasury shares held by OneLogix Group BEE Trust Institutions and other companies
7 1 420 1 277
0,4 83,3 0,1 16,2
Total
1 705
Number of ordinary shares 470 436 500 829
56,2 17,0 2,6 24,2
100,0
231 595 235
100,0
203 839 541 122
11,9 49,2 31,7 7,2
83 672 3 025 494 14 381 108 214 104 961
– 1,3 6,2 92,5
Total
1 705
100,0
231 595 235
100,0
At 31 May 2012 Directors Other individuals Treasury shares held by share trust Institutions and other companies
7 1 027 1 204
0,6 82,9 0,1 16,4
Total
1 239
Size of holdings 1 – 999 1 000 – 9 999 10 000 – 99 999 100 000 shares and over
Size of holdings 1 – 999 1 000 – 9 999 10 000 – 99 999 100 000 shares and over Total
130 39 5 56
132 38 5 54
176 318 937 162
%
629 365 937 662
101 805 500 829
57,3 16,6 2,6 23,5
100,0
231 595 235
100,0
124 548 444 123
10,0 44,2 35,8 10,0
54 713 2 027 042 12 238 116 217 275 364
– 0,9 5,3 93,8
1 239
100,0
231 595 235
100,0
Izingwe Holdings (Pty) Limited is the only shareholder (excluding directors) holding 5% or more of the listed ordinary shares in the company at 31 May 2013. The shareholding is 10,25% of the issued share capital. At year-end shareholders holding 94 399 077 shares were classified as public shareholders (being 99,6% of the total number of shareholders and 40,8% of the total number of issued shares) and eight shareholders holding 137 196 158 shares were classified as non-public shareholders (being 0,4% of the total shareholders and 59,2% of the issued shares).
OneLogix Integrated Annual Report 2013
Shareholders’ diary
95
for the year ended 31 May 2013 Financial year-end
31 May
Announcement of interim results
26 February 2013
Announcement of annual results
26 August 2013
Annual report Annual general meeting
21 October 2013 18 November 2013
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Notice of annual general meeting OneLogix Group Limited Registration number 1998/004519/06 (‘OneLogix’ or ‘the company’) (Incorporated in the Republic of South Africa) Share code: OLG
ISIN: ZAE 000026399
Notice is hereby given that the annual general meeting of shareholders of OneLogix will be held at the offices of the company at 46 Tulbagh Road, Pomona, Kempton Park, Gauteng on Monday, 18 November 2013 at 10:00 for the following purposes: 1.
to consider the annual consolidated financial statements for the year ended 31 May 2013;
2.
to transact such other business as may be transacted at an annual general meeting of a company including the re-appointment of the auditors, the Audit and Risk Committee and re-election of retiring directors; and
3.
to consider and, if deemed fit, to pass, with or without modification, the special and ordinary resolutions set out below, in the manner required by the South African Companies Act, 2008, as amended:
3.1
Special resolution number 1: Share repurchases ‘Resolved that the directors be authorised pursuant inter alia to the company’s memorandum of incorporation, until this authority lapses at the next annual general meeting of the company, unless it is then renewed at the next annual general meeting of the company and provided that this authority shall not extend beyond 15 months from date of passing this special resolution, for the company or any subsidiary of the company to acquire shares of the company, subject to the Listings Requirements of the JSE Limited (‘JSE’) on the following bases: 1. repurchases of shares must be effected through the order book operated by the JSE trading system, and done without any prior arrangement between the company and the counter-party; 2. at any point in time the company may only appoint one agent to effect repurchases on its behalf; 3. the company (or any subsidiary) must be authorised thereto by its memorandum of incorporation; 4. the number of shares which may be acquired pursuant to this authority in any financial year (which commenced 1 June 2013) may not in the aggregate exceed 20% (twenty percent), or 10% (ten percent) where the acquisition is effected by a subsidiary, of the company’s share capital as at the date of passing this special resolution; 5. repurchases of shares may not be made at a price more than 10% (ten percent) above the weighted average of the market value on the JSE of the shares in question for the five business days immediately preceding the repurchase; 6. repurchases may not take place during a prohibited period (as defined in paragraph 3.67 of the Listings Requirements of the JSE), unless a repurchase programme (where the dates and quantities of shares to be repurchased during the prohibited period are fixed) is in place and full details thereof are announced on SENS prior to the commencement of the prohibited period; 7. after the company has acquired shares which constitute, on a cumulative basis, 3% (three percent) of the number of shares in issue (at the time that authority from shareholders for the repurchase is granted), the company shall publish an announcement to such effect, or any other announcements that may be required in such regard in terms of the Listings Requirements of the JSE which may be applicable from time to time; and 8. the company’s sponsor shall confirm the adequacy of the company’s working capital for purposes of undertaking the repurchase of shares in writing to the JSE prior to entering the market to proceed with the repurchase.’ In accordance with the Listings Requirements of the JSE, the directors record that: Although there is no immediate intention to effect a repurchase of securities of the company, the directors would utilise the general authority to repurchase securities as and when suitable opportunities present themselves, which opportunities may require expeditious and immediate action. The directors undertake that, after considering the maximum number of securities which may be repurchased and the price at which the repurchases may take place pursuant to the buyback general authority, for a period of 12 months after the date of notice of this annual general meeting: • the company and the group will be able in the ordinary course of business to pay their debts; • the consolidated assets of the company and of the group fairly valued in accordance with International Financial Reporting Standards, will exceed the consolidated liabilities of the company and of the group after the buyback; and • the working capital, share capital and reserves of the company and of the group will be adequate for the purposes of the business of the company and its subsidiaries.
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The following additional information, some of which may appear elsewhere in the integrated annual report of which this notice forms part, is provided in terms of paragraph 11.26 of the Listings Requirements of the JSE for purposes of this general authority: • directors and management – pages 26 to 29; • major shareholders – page 94; • directors’ interests in ordinary shares – page 53; and • share capital of the company – page 79. Litigation statement The directors, whose names appear on pages 26 and 27 of the integrated annual report of which this notice forms part, are not aware of any legal or arbitration proceedings, including proceedings that are pending or threatened, that may have or have had in the recent past (being at least the previous 12 (twelve) months) a material effect on the group’s financial position. Directors’ responsibility statement Directors, whose names appear on pages 26 and 27 of the integrated annual report, collectively and individually, accept full responsibility for the accuracy of the information pertaining to this special resolution and certify that, to the best of their knowledge and belief, there are no facts that have been omitted which would make any statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and that the special resolution contains all information required in terms of the Listings Requirements of the JSE. Material changes Other than the facts and developments reported on in the integrated annual report, there have been no material changes in the affairs or financial position of the company and its subsidiaries since the date of signature of the audit report for the year ended 31 May 2013 and up to the date of this notice. Reason for and effect of special resolution number 1 The reason for special resolution number 1 is to afford directors of the company or a subsidiary of the company general authority to affect a buyback of the company’s shares on the JSE. The effect of the resolution will be that the directors will have the authority, subject to the rules and requirements of the JSE, to effect acquisitions of the company’s shares on the JSE.
3.2
Special resolution number 2: Non-executive directors remuneration 2013/2014 ‘Resolved that the remuneration of the non-executive directors for the financial year ending 31 May 2014, as set out here under, be and is hereby confirmed and approved: • board Chairperson: R35 200 per meeting attended; • non-executive directors: R9 900 per meeting attended; • Audit and Risk Committee Chairperson: R23 750 per meeting attended; • Audit and Risk Committee members: R15 625 per meeting attended; • Remuneration Committee members: R9 900 per meeting attended; and • Social and Ethics Committee members: R9 900 per meeting attended.’ Reason for and effect of special resolution number 2 The reason for and effect of special resolution number 2 is to obtain preapproval of shareholders for remuneration payable to non-executive directors for the forthcoming financial year.
3.3
Special resolution number 3: Financial assistance to group inter-related companies ‘Resolved that, to the extent required by the Companies act, the board of directors of the company may, subject to compliance with the requirements of the company’s Memorandum of Incorporation, the Companies Act and the Listings Requirements, each as presently constituted and as amended from time to time, authorise the company to provide direct or indirect financial assistance, as contemplated in section 45 of the Companies Act by way of loans, guarantees, the provision of security or otherwise, to any of its present or future subsidiaries and/or any other company or corporation that is or becomes related or inter-related (as defined in the Companies Act) to the company for any purpose or in connection with any matter, such authority to endure until the next annual general meeting provided that such authority shall not extend beyond two years, and further provided that in as much as the company’s provision of financial assistance to its subsidiaries will at any and all times be in excess of one length of 1% of the company’s net worth, the company hereby provides notice to its shareholders of that fact.’ OneLogix Integrated Annual Report 2013
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Notice of annual general meeting (continued) In order for special resolution number 3 to be adopted, the support of at least 75% of the total number of votes exercisable by shareholders, present in person or by proxy, is required to pass this resolution. Reason for and effect of special resolution number 3 The company, when the need arises, provides loans and guarantees loans or other obligations of its subsidiaries. The company would like the ability to continue to provide such financial assistance and if necessary, also in other circumstances, in accordance with section 45 of the Companies Act. This authority is necessary for the company to provide financial assistance in appropriate circumstances. Under the Companies Act, the company will, however, require the special resolution referred to above to be adopted, provided that the board of directors of the company be satisfied that the terms under which the financial assistance is proposed to be given are fair and reasonable to the company and, immediately after providing the financial assistance, the company would satisfy the solvency and liquidity test contemplated in the companies act. In the circumstances and in order to, inter alia, ensure that the company’s directors subsidiaries and other relate and inter-related companies and corporations have access to financing and/or financial backing from the company (as opposes to banks), it is necessary to obtain the approval of shareholders, as set out in special resolution number 3. Therefore, the reason for, and effect of, special resolution number 3 is to permit the company to provide direct or indirect financial assistance (within the meaning attributed to that term in section 45 of the Act) to the entities referred to in special resolution number 3 above and persons.
3.4
Ordinary resolution number 1: Issue of shares for cash ‘Resolved that the directors be authorised pursuant inter alia to the company’s memorandum of incorporation, until this authority lapses at the next annual general meeting of the company, unless it is then renewed at the next annual general meeting of the company provided that it shall not extend beyond 15 months, to allot and issue ordinary shares for cash subject to the rules and requirements of the JSE Limited (‘JSE’) on the following bases: 1. the allotment and issue of the shares must be made to persons qualifying as public shareholders as defined in the Listings Requirements of the JSE; 2. the shares which are the subject of the issue for cash must be of a class already in issue, or where this is not the case, must be limited to such shares or rights that are convertible into a class already in issue; 3. the number of shares issued for cash shall not exceed 34 739 285, being 15% (fifteen percent) of the company’s issued share capital of ordinary shares as at the date of this notice of annual general meeting. Any shares issued under this authority prior to the authority lapsing shall be deducted from the 34 739 285 shares of the company authorised to be issued in terms of this authority. In the event of a sub-division or consolidation of shares prior to this authority lapsing, the existing authority shall be adjusted accordingly to represent the same allocation ratio; 4. the maximum discount at which ordinary shares may be issued is 10% (ten percent) of the weighted average traded price on the JSE of those shares over the 30 business days prior to the date that the price of the issue is agreed between the company and the party subscribing for the shares; and 5. after the company has issued shares for cash which represent, on a cumulative basis within a financial year, 5% (five percent) or more of the number of shares in issue prior to that issue, the company shall publish an announcement containing full details of the issue, (including the number of shares issued, the average discount to the weighted average traded price of the shares over the 30 days prior to the date that the price of the issue is determined and the effect of the issue on net asset value per share, net tangible asset value per share, earnings per share, headline earnings per share, and if applicable, diluted earnings per share and diluted headline earnings per share) or any other announcements that may be required in such regard in terms of the Listings Requirements of the JSE which may be applicable from time to time.’ In terms of the Listings Requirements of the JSE a 75% (seventy five percent) majority of the votes cast by shareholders present or represented by proxy at the annual general meeting must be cast in favour of ordinary resolution number 1 for it to be approved.
3.5
Ordinary resolution number 2: Unissued ordinary shares ‘Resolved that the authorised and unissued ordinary share capital of the company be and is hereby placed under the control of the directors of the company which directors are, subject to the rules and regulations of the JSE Limited and the provisions of the Companies Act of 2008 as amended, authorised to allot and issue any of such shares at such time or times, to such person or persons, company or companies and upon such terms and conditions as they may determine, such authority to remain in force until the next annual general meeting of the company.’
3.6
Ordinary resolution number 3: Re-election AJ Grant as a director of the company ‘Resolved that AJ Grant be re-elected as a director of the company.’
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A brief curriculum vitae is set out on page 27 of the annual report of which this notice forms part.
3.7
Ordinary resolution number 4: Re-election of SM Pityana as a director of the company ‘Resolved that SM Pityana be re-elected as a director of the company.’ A brief curriculum vitae is set out on page 26 of the annual report of which this notice forms part.
3.8
Ordinary resolution number 5: Re-appointment of members of the Audit and Risk committee ‘Resolved that the following be re-appointed as members of the Audit and Risk committee: 5.1 AJ Grant; 5.2 LJ Sennelo; and 5.3 AC Brooking.’ A brief curriculum vitae in respect of each committee member is set out on page 27 of the annual report of which this notice forms part.
3.9
Ordinary resolution number 6: Re-appointment of auditors ‘Resolved that PricewaterhouseCoopers Inc., and Pietro Calicchio as the individual auditor, be reappointed as auditors of the company.’
3.10 Ordinary resolution number 7: Signature of documentation ‘Resolved that any director or the company secretary of the company be and is hereby authorised to sign all such documentation and do all such things as may be necessary for or incidental to the implementation of special resolution numbers 1, 2, and 3 and ordinary resolution numbers 1, 2, 3, 4, 5 and 6 which are passed by the members in accordance with and subject to the terms thereof.
Voting and proxies A shareholder of the company entitled to attend and vote at the annual general meeting is entitled to appoint one or more proxies (who need not be a shareholder of the company) to attend, vote and speak in his/her stead. On a show of hands, every shareholder of the company present in person or represented by proxy shall have one vote only. On a poll, every shareholder of the company present in person or represented by proxy shall have one vote for every share held in the company by such shareholder. A form of proxy is attached for the convenience of any shareholder holding OneLogix shares who cannot attend the annual general meeting. Forms of proxy may also be obtained on request from the company’s registered office. The completed forms of proxy must be deposited at or posted to the office of the transfer secretaries of the company, Computershare Investor Services (Pty) Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) to be received at least 48 hours prior to the meeting. Any member who completes and lodges a form of proxy will nevertheless be entitled to attend and vote in person at the annual general meeting should the member subsequently decide to do so. Shareholders who have already dematerialised their shares through a Central Securities Depository Participant (‘CSDP’) or broker rather than through own-name registration, and who wish to attend the annual general meeting must instruct their CSDP or broker to issue them with the necessary authority to attend. Dematerialised shareholders, who have elected own-name registration in the sub-register through a CSDP and who are unable to attend but wish to vote at the annual general meeting, should complete and lodge the attached form of proxy with the transfer secretaries of the company. Dematerialised shareholders, who have not elected own-name registration in the sub-register through a CSDP and who are unable to attend but wish to vote at the annual general meeting, should timeously provide their CSDP or broker with their voting instructions in terms of the custody agreement entered into between the shareholder and his CSDP or broker. Important dates to note in respect of this notice: Last day to trade in order to be eligible to participate in and vote at the annual general meeting Record date for voting purposes (“voting record date”) Last day to lodge forms of proxy by 10:00 on Annual general meeting held at 10:00 on
Friday, 1 November 2013 Friday, 8 November 2013 Thursday, 14 November 2013 Monday, 18 November 2013 OneLogix Integrated Annual Report 2013
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Notice of annual general meeting (continued) Electronic participation Shareholders or their proxies may participate in the meeting by way of telephone conference call. Shareholders or their proxies who wish to participate in the annual general meeting via the teleconference facility will be required to advise the company thereof by no later than 48 hours prior to the annual general meeting by submitting, by email to company secretary at
[email protected] or by fax to +27 11 327 7149, for the attention of Neville Toerien, relevant contact details including email address, cellular number and landline, as well as full details of the shareholder’s title to the shares issued by the company and proof of identity, in the form of copies of identity documents and share certificates (in the case of certificated shareholders), and (in the case of dematerialised shareholders) written confirmation from the shareholder’s CSDP confirming the shareholder’s title to the dematerialised shares. Upon receipt of the required information, the shareholder concerned will be provided with a secure code and instructions to access the electronic communication during the annual general meeting. Shareholders who wish to participate in the annual general meeting by way of telephone conference call must note that they will not be able to vote during the annual general meeting. Such shareholders, should they wish to have their vote counted at the annual general meeting, must, to the extent applicable,(i) complete the form of proxy; or (ii) contact their CSDP or broker, in both instances, as set out above. By order of the board
Probity Business Services (Pty) Limited Company secretary 26 August 2013 Registered address
Transfer secretaries
46 Tulbagh Road
Computershare Investor Services (Pty) Limited
Pomona
70 Marshall Street
Kempton Park
Johannesburg
1620
(PO Box 61051, Marshalltown, 2107)
(PostNet Suite 10, Private Bag X27, Kempton Park, 1620)
OneLogix Integrated Annual Report 2013
Form of proxy
101
OneLogix Group Limited Registration number 1998/004519/06 (‘OneLogix’ or ‘the company’) (Incorporated in the Republic of South Africa) Share code: OLG
ISIN: ZAE 000026399
For use by the holders of the company’s certificated ordinary shares (‘certified shareholders’) and/or dematerialised ordinary shares held through a Central Securities Depository Participant (‘CSDP’) or broker who have selected own-name registration (‘own-name dematerialised shareholders’) at the annual general meeting of the company to be held at 10:00 on Monday, 18 November 2013, or at any adjournment thereof if required. Additional forms of proxy are available from the transfer secretaries of the company. Not for use by holders of the company’s dematerialised ordinary shares who have not selected own-name registration. Such shareholders must contact their CSDP or broker timeously if they wish to attend and vote at the annual general meeting and request that they be issued with the necessary authorisation to do so or provide the CSDP or broker timeously with their voting instructions should they not wish to attend the annual general meeting in order for the CSDP or broker to vote in accordance with their instructions at the annual general meeting. I/We
(Name in block letters)
of
(Address)
being the registered holder of
ordinary shares in the capital of the company hereby appoint
1.
or failing him/her
2.
or failing him/her
3. the Chairperson of the meeting as my/our proxy to act for me/us on my/our behalf at the annual general meeting, or any adjournment thereof, which will be held for the purpose of considering and, if deemed fit, passing with or without modification, the ordinary and special resolutions as detailed in the notice of annual general meeting, and to vote for and/or against such resolutions and/or abstain from voting in respect of the ordinary shares registered in my/our name(s), in accordance with the following instructions: Number of votes In favour of
Against
Abstain
To pass special resolutions: 1. To affect share repurchases 2. To approve non-executive directors’ remuneration 2013/2014 3. To approve the provision of financial assistance to group inter-related companies To pass ordinary resolutions: 1. To issue for cash the authorised but unissued shares 2. To place the unissued shares under the control of the directors 3. To re-elect AJ Grant as a director of the company 4. To re-elect SM Pityana as a director of the company 5. To re-appoint the following directors to the Audit and Risk Committee for the year ending 31 May 2014: 5.1 AJ Grant 5.2 LJ Sennelo 5.3 AC Brooking 6. To re-appoint PricewaterhouseCoopers Inc. as auditors of the company, with Pietro Calicchio as individual auditor 7. To authorise the signature of documentation (Indicate instructions to proxy in the spaces provided above.) Unless otherwise instructed, my proxy may vote as he thinks fit. Signed this Signature
day of
2013 Assisted by (if applicable)
Please read the notes on the reverse OneLogix Integrated Annual Report 2013
102
Notes to the form of proxy 1.
Each shareholder is entitled to appoint one or more proxies (none of whom need be a shareholder of the company) to attend, speak and vote in place of that shareholder at the annual general meeting.
2.
Shareholder(s) that are certificated or own-name dematerialised shareholders may insert the name of a proxy or the names of two alternative proxies of the member’s choice in the space/s provided, with or without deleting ‘the Chairperson of the meeting’, but any such deletion must be initialled by the shareholder(s). The person whose name stands first on the form of proxy and who is present at the annual general meeting will be entitled to act as proxy to the exclusion of those whose names follow. If no proxy is named on a lodged form of proxy the chairperson shall be deemed to be appointed as the proxy.
3.
A shareholder’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable by the shareholder in the appropriate box provided. Failure to comply with the above will be deemed to authorise the proxy, in the case of any proxy other than the Chairperson, to vote or abstain from voting as deemed fit and in the case of the Chairperson to vote in favour of the resolution.
4.
A shareholder or his/her proxy is not obliged to use all the votes exercisable by the shareholder, but the total of the votes cast or abstained may not exceed the total of the votes exercisable in respect of the shares held by the shareholder.
5.
Forms of proxy must be lodged at or posted to Computershare Investor Services (Pty) Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) to be received no later than 48 hours prior to the meeting.
6.
The completion and lodging of this form of proxy will not preclude the relevant shareholder from attending the annual general meeting and speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof, should such shareholder wish to do so. Where there are joint holders of shares, the vote of the first joint holder who tenders a vote, as determined by the order in which the names stand in the register of members, will be accepted.
7.
The Chairperson of the general meeting may reject or accept any form of proxy which is completed and/or received otherwise than in accordance with these notes, provided that, in respect of acceptances, the chairperson is satisfied as to the manner in which the shareholder concerned wishes to vote.
8.
Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be attached to this form of proxy unless previously recorded by the company or Computershare Investor Services (Pty) Limited or waived by the Chairperson of the general meeting.
9.
Any alteration or correction made to this form of proxy must be initialled by the signatory/ies.
10. A minor must be assisted by his/her parent guardian unless the relevant documents establishing his/her legal capacity are produced or have been registered by Computershare Investor Services (Pty) Limited. 11. Where there are joint holders of any shares, only that holder whose name appears first in the register in respect of such shares need sign this form of proxy.
OneLogix Integrated Annual Report 2013
Notes
103
OneLogix Integrated Annual Report 2013
104
Definitions ‘Atlas Panelbeaters’
Atlas Panelbeaters (Pty) Limited
‘B-BBEE’
Broad-based black economic empowerment
‘OneLogix BEE Trust’
The OneLogix Group BEE Trust which holds 2,56% of the issued share capital of OneLogix
‘the board’
The board of directors of OneLogix Group Limited
‘Companies Act’
South African Companies Act No 71 of 2008
‘CEO’
Chief Executive Officer of OneLogix (Ian Lourens)
‘COO’
Chief Operations Officer of OneLogix (Cameron McCulloch)
‘CVDS’
Commercial Vehicle Delivery Services (Pty) Limited
‘Drive Report’
Drive Report (Pty) Limited
‘FD’
Financial Director of OneLogix (Geoff Glass)
‘the group’
OneLogix Group Limited and its subsidiaries, associates and affiliates
‘Izingwe’
Izingwe Holdings (Pty) Limited, the group’s B-BBEE partner holding 10,25% of the issued share capital of OneLogix
‘JSE’
JSE Limited, the official securities exchange of South Africa
‘King III Report’ or ‘King III’
King Report on Corporate Governance for South Africa 2009
‘Magscene’
Magscene (Pty) Limited
‘OEM’
Original Equipment Manufacturer, which refers to automotive parts, specifically replacement parts made by the manufacturer of the original part
‘OneLogix’ or ‘the company’
OneLogix Group Limited listed on the JSE in the Transportation Services Sector
‘OneLogix Projex’
OneLogix Projex (Pty) Limited
‘Other – Logistics Services’
Non-reportable segment including the businesses comprising Atlas Panelbeaters, QSA and Drive Report
‘PostNet’
PostNet Southern Africa (Pty) Limited
‘QSA’
Quasar Software Developments (Pty) Limited
‘Retail’
Reportable segment comprising PostNet
‘RFB’
RFB Logistics (Pty) Limited
‘SENS’
Stock Exchange News Service, the official information dissemination platform of the JSE Limited
‘SHEQ’
Safety, Health, Environment and Quality
‘Specialised Transport’
Reportable segment comprising VDS, CVDS, OneLogix Projex, and United Bulk
‘the previous year’ or ‘the prior year’
The year ended 31 May 2012
‘the year’ or ‘the year under review’
The year ended 31 May 2013
‘United Bulk’
United Bulk (Pty) Limited
‘VDS’
Vehicle Delivery Services, a division of OneLogix (Pty) Limited
Financial ‘EPS’
Earnings per share
‘HEPS’
Headline earnings per share (as calculated based on SAICA Circular 8/2009)
‘NAV’
Net asset value
‘NTAV’
Net tangible asset value
OneLogix Integrated Annual Report 2013
Contact details OneLogix Group Limited Company registration number: 1998/004519/06 JSE code: OLG ISIN number: ZAE000026399 Business address and registered office 46 Tulbagh Road Pomona Kempton Park PostNet Suite 10 Private Bag x27 Kempton Park 1620 Telephone: +27 11 396-9040 Facsimile: +27 11 396-9050 Company secretary Probity Business Services (Pty) Limited 3rd Floor The Mall Offices 11 Cradock Avenue Rosebank PO Box 85392 Emmarentia 2029 Telephone: +27 11 327 7146 Facsimile: +27 11 327 7149 Auditors PricewaterhouseCoopers Inc. Director: J Potgieter Registered Auditor 2 Eglin Road Sunninghill 2157 Private Bag X36 Sunninghill 2157 Telephone: +27 11 797 4000 Facsimile: +27 11 797 5800
Investor relations and sustainability Ian Lourens (CEO) 46 Tulbagh Road Pomona Kempton Park PostNet Suite 10 Private Bag x27 Kempton Park 1620 Telephone: +27 11 396 9040 Facsimile: +27 11 396 9050 Transfer secretaries Computershare Investor Services (Pty) Limited 70 Marshall Street Johannesburg PO Box 61051 Marshalltown 2107 Telephone: +27 11 370 5000 Facsimile: +27 11 370 5271 Sponsor Java Capital (Pty) Limited (a Sponsor registered with JSE Limited) 2 Arnold Road Rosebank PO Box 471917 Parklands 2121 Telephone: +27 11 283 0000 Facsimile: +27 11 283 0065 Primary bankers Nedbank Limited Business Banking: East Gauteng 1st Floor Emerald Place Stoneridge Office Park 8 Greenstone Place Edenvale 1645 Telephone: +27 11 458 4000 Facsimile:+27 11 500 8333
Head Office 46 Tulbagh Road, Pomona, Kempton Park PostNet Suite 10, Private Bag x27, Kempton Park, 1620 Telephone +27 11 396 9040 Facsimile +27 11 396 9050 www.onelogix.com
For more information please visit our website at http://www.onelogix.com/index. php/2013-02-18-09-03-18/annual-reports
