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Motus Holdings Limited
(Previously Motus Holdings Proprietary Limited)
Incorporated in the Republic of South Africa
Registration number 2017/451730/06
Share code: MTH ISIN: ZAE000261913
“Motus” or “the Company”
PRE-LISTING STATEMENT
This Pre-Listing Statement is issued in compliance with the Listings Requirements of the JSE.
The definitions and interpretations commencing on page 13 of this Pre-Listing Statement apply, mutatis mutandis,
throughout this entire Pre-Listing Statement.
This Pre-Listing Statement is not an invitation to subscribe for shares in Motus, but is issued in compliance with the
Listings Requirements of the JSE for the purpose of providing information to Imperial Shareholders in South Africa and
other jurisdictions with regard to the business and affairs of Motus as at the time of Listing as a result of the Unbundling
as detailed in the Imperial Circular. This Pre-Listing Statement does not constitute, envisage or represent an offer to the
public, nor does it constitute a prospectus, in each case as contemplated in the Companies Act.
This Pre-Listing Statement has been prepared on the assumption that the resolutions proposed in the notice of general
meeting forming part of the Imperial Circular, which is mailed together with this Pre-Listing Statement, will be passed at
the general meeting of shareholders of Imperial to be held on or about Tuesday, 30 October 2018, and to the extent
applicable, will be registered, and that the Unbundling shall become effective and be implemented.
The Motus directors, whose names are set out on page 19 of this Pre-Listing Statement, collectively and individually,
accept full responsibility for the accuracy of the information provided in this Pre-Listing Statement and certify that, to the
best of their knowledge and belief, there are no other facts, the omission of which would make any statement in this Pre-
Listing Statement false or misleading, and confirm that they have made all reasonable enquiries in this regard and confirm
that this Pre-Listing Statement contains all information required by the Listings Requirements.
The JSE has agreed, subject to the fulfilment of all the conditions precedent as reflected in the Imperial Circular, to the
listing of all the issued ordinary shares of Motus in the Specialty Retailers sector on the Main Board of the JSE under the
share code “MTH” with effect from the commencement of business on Thursday, 22 November 2018.
As at the date of this Pre-Listing Statement: (i) the authorised stated capital of Motus is: (a) 394999 000 ordinary shares with
no par value, (b) 10000 000 deferred ordinary shares with no par value, (c) 40 000 000 preference shares with no par value,
and (d) 2 000 000 redeemable preference shares with no par value; and (ii) the issued stated capital of Motus is 201971450
ordinary shares with no par value. On the commencement of its listing: (i) the authorised stated capital of Motus will be the
same as the confirmed numbers as at the date of this Pre-Listing Statement; and (ii) the issued stated capital of Motus will
be: (a) 201971 450 ordinary shares with no par value, and (b) 7 699 360 deferred ordinary shares with no par value. All the
ordinary shares in Motus rank pari passu in all respects, there being no conversion or exchange rights attaching thereto and
have equal rights to participate in capital, dividend and profit distributions by Motus.
The joint financial advisors and transaction sponsor, independent reporting accountants and auditors, legal advisors and
transfer secretaries whose reports and/or names are included in this Pre-Listing Statement, have given and have not
withdrawn their consent to the inclusion of their names and/or reports in this Pre-Listing Statement in the form and context
in which they appear.
Joint financial advisor and
transaction sponsor
Legal advisors as to
South African law Joint financial advisor
Legal advisor as to the
laws of the United States
Independent reporting
accountants and auditors Transfer secretaries
This Pre-Listing Statement is available in English only. Copies may be obtained from Imperial, Motus and Standard Bank,
whose details are set out in the “Corporate information and advisors” section of this Pre-Listing Statement as well as on
www.imperial.co.za/pdf/unbundling/motus-prelisting-circular.pdf and www.motuscorp.co.za/investors
Date of issue: Thursday, 27 September 2018
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Disclaimer
The release, publication or distribution of this Pre-Listing Statement in certain jurisdictions may be restricted
by law and therefore persons in any such jurisdictions into which this Pre-Listing Statement is released,
published or distributed should inform themselves about and observe such restrictions. Any failure to comply
with the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. This
Pre-Listing Statement does not constitute an offer to sell or issue, or the solicitation of an offer to purchase or
to subscribe for shares or other securities or a solicitation of any vote or approval in any jurisdiction in which
such offer or solicitation would be unlawful.
The Motus Shares are expected to be issued and distributed in a transaction meeting the conditions of Staff
Legal Bulletin No. 4 of the staff of the US Securities and Exchange Commission for “spin-off” transactions and,
accordingly, all Foreign Shareholders located in the United States are eligible to, if the Unbundling is implemented,
receive the Motus Shares without registration under the US Securities Act.
The Motus Shares to be distributed in connection with the Unbundling have not been, and will not be,
registered under the United States Securities Act of 1933, as amended, or any other United States state
securities laws. These securities have not been approved or disapproved by the US Securities and Exchange
Commission or any other United States regulatory authority, nor have any of the foregoing authorities passed
upon or endorsed the merits of the Unbundling of the securities or the accuracy or adequacy of this document.
Any representation to the contrary is a criminal offence in the United States.
The Unbundling (a) will not constitute an "offer to the public" within the meaning of the European Union
Directive 2003/21/EC, as amended, or an "offer of transferable securities to the public" within the meaning of
section 102b(1) of the UK Financial Services and Markets Act 2000, and (b) does not contemplate the
admission to trading of the Motus Shares on a regulated market in the UK or the European Union. Accordingly,
Foreign Shareholders located in the UK are eligible to vote on resolutions to be proposed at the General
Meeting and to, subsequently, if the Unbundling is implemented, receive the Motus Shares without further
action being taken by Imperial or Motus.
Tax
The summary contained in Annexure 12 of the Pre-Listing Statement is a general guide and is not intended
to constitute a complete analysis of the tax consequences of the Unbundling. It is not intended to be, nor
should it be considered to be, legal or tax advice. Shareholders should, therefore, consult their own tax
advisors on the tax consequences to them of the Unbundling in both South Africa and their jurisdiction of
residence, for which none of Imperial, Motus or their advisors will be held responsible.
Presentation of financial information
Unless otherwise indicated, the financial information in this Pre-Listing Statement has been prepared in
accordance with IFRS issued by the International Accounting Standards Board, as amended from time to time
(formerly, the International Accounting Standards). IFRS differs in certain significant respects from US GAAP.
The report of historical financial information of Motus as at and for the financial periods ended 30 June 2016,
2017 and 2018 (“Report of Historical Financial Information of Motus”), is set out in Annexure 1 to this Pre-
Listing Statement.
References to defined terms, names and dates
Unless otherwise stated or the context clearly indicates otherwise, terms used in this Pre-Listing Statement
shall have the glossary meanings stated in the “Definitions and Interpretations” section of this Pre-Listing
Statement. Unless the context otherwise requires, references to “Motus” or the “Company” are to the company
and its consolidated subsidiaries. References to any “year” are to the financial year ended 30 June, unless
otherwise stated.
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CORPORATE INFORMATION AND ADVISORS
Company secretary and registered office Corporate information for Imperial
Rohan Venter (BCom, LLM)
1 Van Buuren Road
Corner Geldenhuis and Van Dort Streets
Bedfordview, 2007
(PO Box 1719, Edenvale, 1610)
Imperial Place
Jeppe Quondam
79 Boeing Road East
Bedfordview, 2007
(PO Box 3013, Edenvale, 1610)
Joint financial advisors and transaction sponsor Legal advisors as to South African law
The Standard Bank of South Africa Limited
(Registration number 1962/000738/06)
30 Baker Street
Rosebank
Johannesburg, 2196
(PO Box 61344, Marshalltown, 2107)
Tugendhaft Wapnick Banchetti and Partners
(Partnership number 8704)
20th Floor, Sandton City Office Tower
5th Street
Sandown, 2196
(PO Box 786728, Sandton, 2146)
Joint financial advisors
J.P. Morgan Chase Bank, N.A. (Johannesburg Branch)
1 Fricker Road, corner Hurlingham Road
Johannesburg, 2196
(Private Bag X9936, Sandton, 2146, South Africa)
Bowman Gilfillan Inc.
(Registration number 1998/021409/21)
15 Alice Lane
Sandton, 2146
(PO Box 785812, Sandton, 2146)
Independent reporting accountants and auditors Legal advisor as to the laws of the United States
Deloitte & Touche
(Practice number 902276)
Deloitte Place, The Woodlands
20 Woodlands Drive
Woodmead
Sandton
(Private Bag X6, Gallo Manor, Sandton, 2052)
Freshfields Bruckhaus Deringer LLP
65 Fleet Street
London, EC4Y 1HS
United Kingdom
Transfer secretaries Sponsor
Computershare Investor Services
Proprietary Limited
(Registration number 2004/003647/07)
1st Floor Rosebank Towers
15 Biermann Avenue
Rosebank
Johannesburg, 2196
(PO Box 61051, Marshalltown, 2107)
The Standard Bank of South Africa Limited
(Registration number 1962/000738/06)
30 Baker Street
Rosebank
Johannesburg, 2196
(PO Box 61344, Marshalltown, 2107)
Place and date of incorporation of Motus:
Johannesburg, South Africa on 12 October 2017
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CONTENTS
Page
CORPORATE INFORMATION AND ADVISORS 3
FORWARD-LOOKING STATEMENTS 7
SALIENT FEATURES 8
IMPORTANT DATES AND TIMES 12
DEFINITIONS AND INTERPRETATIONS 13
PRE-LISTING STATEMENT 19
Section 1: Introduction 19
Section 2: The Listing and Unbundling of Motus 20
2.1 The Disposal 20
2.2 The Listing 20
2.3 Rationale for the Listing and Unbundling 20
2.4 The Unbundling 21
2.5 Receipt of Motus Shares 22
2.6 Strate and trading shares on the JSE 22
2.7 Additional copies of the Pre-Listing Statement 23
Section 3: Information on Motus 24
3.1 General overview 24
3.2 Motus business segments 24
3.3 Key investment highlights 26
3.4 Business strategy 27
3.5 Automotive industry 29
Section 4: Management’s discussion and analysis
of financial conditions and results of operations 33
4.1 Financial performance and key operating metrics for Motus 33
4.2 Segmental performance 36
4.3 Portfolio and organisational optimisation 38
4.4 Liquidity and capital resources 38
4.5 Dividend guideline 38
Section 5: Risk factors 39
5.1 Risks related to Motus’ business 39
5.2 Risks related to South Africa 44
5.3 Risks related to the international markets in which Motus operates 47
5.4 Risks related to the Unbundling for Motus 47
5.5 Risks related to Motus Shares 49
Section 6: Management and Corporate Governance 52
6.1 Directors of Motus 52
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6.2 Directors of key subsidiaries and senior management 56
6.3 Changes to the Board 59
6.4 Chief Financial Officer 59
6.5 Appointment and qualification of directors 59
6.6 Remuneration of directors 60
6.7 Directors’ interests 62
6.8 Service agreements of directors 63
6.9 Directors’ declarations 63
6.10 Borrowing powers 64
6.11 King IV and corporate governance 64
Section 7: Stated capital
65
7.1 Authorised and issued stated capital 65
7.2 Major and controlling shareholders 65
7.3 Alteration to stated capital 66
7.4 Consolidations during the financial periods ended 30 June 2016, 30 June 2017 and 30 June 2018 66
7.5 Shares issued during the three years preceding the Last Practicable Date 66
7.6 Listing on any exchange other than the JSE 66
7.7 Rights attaching to Motus Shares and power to issue shares 66
7.8 Issue of additional shares and pre-emptive rights 68
7.9 Impact of the Unbundling on the Imperial BEE arrangements through Ukhamba 69
7.10 Changes in capital or objects and powers of Motus 69
7.11 Variation of rights 70
7.12 Rights of minority shareholders and directors’ duties 70
7.13 Type of shares that can be issued, for example preferred,
deferred, other special rights or restrictions 70
Section 8: Financial information
71
8.1 Historical financial information of Motus 71
8.2 Independent reporting accountants and auditors’ reports 71
8.3 Pro forma financial effects of the Listing 71
8.4 Material commitments, lease payments and contingent liabilities 72
8.5 Borrowings 72
8.6 Loans receivable 72
8.7 Loans payable 72
8.8 Loans to directors or managers 72
8.9 New Accounting Standards 72
Section 9: Motus activities
73
9.1 Principle immovable properties 73
9.2 Material borrowings and inter-company loans 73
9.3 Material acquisitions 73
9.4 Property disposed of or to be disposed of or acquired 73
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9.5 Material changes 73
9.6 Adequacy of working capital 73
9.7 Commissions and royalties 73
Section 10: Additional information
74
10.2 Promoters’ and other interests 74
10.3 Government protection and investment encouragement law 74
10.4 Exchange control 74
10.5 Regulatory environment 75
10.6 Litigation 75
10.7 Material contracts 75
10.8 Experts’ consents 75
10.9 Expenses and listing fees 75
10.10
Disclosure of conflict 75
10.11 Directors’ responsibility statement 76
10.12
Documents available for inspection 76
Annexure 1
Report of the historical financial information of
Motus for the three years ended 30 June 2018 77
Annexure 2
Independent reporting accountants and auditors’
report on the report of the historical financial information for Motus for the
three years ended 30 June 2016, 2017, 2018 161
Annexure 3
Pro forma financial information of Motus 168
Annexure 4
Independent reporting accountant’s assurance report on the compilation of
pro forma financial information included in a pre-listing statement 174
Annexure 5
Details regarding principal properties occupied 176
Annexure 6
Subsidiary companies 189
Annexure 7
Directorships of Motus directors 196
Annexure 8
Relevant provisions from the Memorandum of Incorporation of Motus 202
Annexure 9
King IV and corporate governance 219
Annexure 10
Shareholder resolutions 229
Annexure 11
Regulatory environment 230
Annexure 12
Tax considerations 233
Annexure 13
Details of inter-company loans as at the Last Practicable Date 236
Annexure 14
The salient features of the New Share Incentive Schemes 238
Annexure 15
Information on Ukhamba 244
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FORWARD-LOOKING STATEMENTS
This Pre-Listing Statement contains statements about Motus that are or may be forward-looking statements.
All statements, other than statements of historical fact, are, or may be deemed to be, forward-looking
statements, including, without limitation, those concerning: strategy; the economic outlook for the industry;
cash costs; operating results; growth prospects and outlook for operations, individually or in the aggregate;
statements concerning Motus’ expected future regulatory environment; liquidity, capital resources and
expenditure; and the outcome and consequences of any pending litigation proceedings. These forward-
looking statements are not based on historical facts, but rather reflect current expectations concerning future
results and events and generally may be identified by the use of forward-looking words or phrases such as
“believe”, “aim”, “expect”, “anticipate”, “intend”, “foresee”, “forecast”, “likely”, “should”, “planned”, “may”,
“estimated”, “potential” or similar words and phrases.
Examples of forward-looking statements include statements regarding a future financial position or future
profits, cash flows, corporate strategy, estimates of capital expenditures, acquisition strategy, or future capital
expenditure levels, and other economic factors, such as, amongst other things, interest and exchange rates.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and
depend on circumstances that may or may not occur in the future. The Company cautions that forward-
looking statements are not guarantees of future performance. Actual results, financial and operating
conditions, liquidity and the developments within the industry in which the Company operates may differ
materially from those made in, or suggested by, the forward-looking statements contained in this Pre-Listing
Statement.
All these forward-looking statements are based on estimates and assumptions, all of which estimates and
assumptions, although the Company may believe them to be reasonable, are inherently uncertain. Such
estimates, assumptions or statements may not eventuate. Many factors (including factors not yet known to the
Company, or not currently considered material), could cause the actual results or matters, performance or
achievements to be materially different from any future results, performance or achievements expressed or
implied in those estimates, statements or assumptions.
Prospective investors should keep in mind that any forward-looking statement made in this Pre-Listing
Statement or elsewhere is applicable only at the date on which such forward-looking statement is made. New
factors that could cause the business of the Company or other matters to which such forward-looking
statements relate, not to develop as expected, may emerge from time to time, and it is not possible to predict
all of them. Further, the extent to which any factor or combination of factors may cause actual results or
matters to differ materially from those contained in any forward-looking statement are not known. The Company
has no duty, and does not intend, to update or revise the forward-looking statements contained in this Pre-
Listing Statement after the date of this Pre-Listing Statement, except as may be required by law.
Any forward-looking statement in this Pre-Listing Statement has not been reviewed nor reported on by the
company’s external auditors.
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SALIENT FEATURES
This summary contains the salient features of Motus and the Listing and Unbundling set out in this Pre-Listing
Statement, which should be read in its entirety for a complete understanding thereof.
I. EVOLUTION OF IMPERIAL HOLDINGS
Founded in 1948 as a motor dealership in Johannesburg, South Africa, and listed on the JSE in 1987,
Imperial evolved into one of the country’s largest diversified conglomerates. Imperial navigated pivotal
political, social and economic shifts, to grow into a globally significant importer, distributor and dealer of
motor vehicles and associated products and services, while concurrently expanding into business areas
associated with the transport of goods.
In 2008, a major portfolio restructuring was implemented with an emphasis on retaining and investing in
businesses with the potential to generate higher yields on capital and defensive annuity income streams.
A landmark development in Imperial’s growth trajectory was the acquisition of CIC Holdings in 2010,
a consumer packaged goods distribution business active in the SADC region, which initiated and
accelerated the company’s expansion into the African Regions.
Imperial’s decentralised business model facilitated and encouraged the acquisition, development and
growth of large and small businesses alike, and sought to balance a strong entrepreneurial culture with
appropriate financial control and sound governance. By 2014, as a diversified, multi-national industrial
services and retail group, it employed around 52 000 people and generated revenues in excess of
R100 billion, with a wide range of vertically integrated businesses in the logistics, automotive and
industrial, and financial services sectors.
A strategic evaluation revealed that Imperial was invested in a vast portfolio of businesses and assets,
some of which were standalone, unrelated to Imperial’s core capabilities, underperforming, sub-scale or
low return on effort. Conversely, an assessment of Imperial’s portfolio confirmed those businesses and
assets that had the most promising prospects within the two chosen sectors of mobility – logistics and
automotive value chains.
From late 2014, with a strong focus on strategic clarity, a fundamental transformation was initiated to
unlock intrinsic value within Imperial. Touching every part of the organisation, the changes sought to
retain the entrepreneurial creativity and capital management excellence that had underpinned Imperial’s
past success, while ensuring that the structure, strategies, and value propositions of its divisions were
clarified, simplified and focused, for sustainable competitive advantage, growth and returns.
Substantial portfolio optimisation saw Imperial disposing of assets that did not fit Imperial and underlying
business unit’s strategies or did not generate sufficient returns on capital or executive effort, and acquiring
those that did. Since 2014, as many as 55 businesses and 90 properties were sold, releasing capital of
R7.0 billion, and R5.7 billion of this was invested in acquiring 17 companies.
With effect from 1 July 2016 and 1 January 2017 respectively, Imperial consolidated its logistics and
automotive operating companies and assets within two large, self-sufficient, multi-national companies,
Imperial Logistics and Motus, each with its own Board of directors, CEO, Executive Committee and
increasingly self-sustaining balance sheets. Numerous executive management changes were made to
accommodate the new structure and the succession for retiring executives.
Similarly, the internal separation necessitated a realignment of Imperial’s governance structure and two
strong operating Boards were established. To further entrench the independence and focus of Imperial
Logistics and Motus, the functions of the Imperial head office were systematically devolved to the
two businesses. From 1 July 2017, Imperial’s Executive Committee was disbanded and its authorities
devolved to the divisional Boards, which have since presided over the implementation of exemplary
governance standards.
Over the intervening period, Imperial Logistics and Motus have continued to restructure internally for
effectiveness, and to position their businesses for sustainable competitiveness. The latter has included
thorough consideration of the cyclical and structural dynamics, and specifically the disruptive change
expected, in the logistics and automotive sectors. Pursuant to more efficient capital and funding
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structures, significant effort ensured that each business achieved appropriately geared independent
and self-sustaining balance sheets as evidenced by the June 2018 results.
It is noteworthy that in the 70th year of Imperial’s existence, it has reached the culmination of the far-
reaching changes to the portfolios, strategies, structures and management of its businesses, each of
which are comparable to the governance, executive, operating, control and reporting standards of major
public companies.
II. RATIONALE FOR THE LISTING AND UNBUNDLING OF MOTUS
The strategic decision to separate the business operations and management of Imperial will provide
shareholders with the opportunity to participate directly in Imperial Logistics and/or Motus.
The Unbundling will be implemented through:
• a distribution in specie of the issued ordinary shares in Motus to Imperial Ordinary Shareholders on a
one-for-one basis in terms of section 46 of the Companies Act and section 46 of the Income Tax Act; and
• the simultaneous Listing of Motus on the main Board of the JSE.
The transformation and development of Imperial in recent years has been directed at value creation
through strategic clarity, managerial focus and shareholder insight. The first has been achieved through
portfolio rationalisation, the second through organisation structure and the third through disclosure. This
approach has confirmed the absence of operational synergies between Imperial Logistics and Motus and
resulted in the rapid establishment of two large independent businesses. Both are managed and reported
on separately, with separate CEOs, Boards of directors and executive Committees, with decreasing
functional support from the holding company. As mentioned, each business achieved appropriately geared
independent and self-sustaining balance sheets as evidenced by the results to 30
June 2018.
In light of the above, the role of Imperial as the custodian of governance and the provider of capital to the
businesses is no longer necessary. Consequently, and after due consideration to whether the long-term
prospects of Imperial Logistics and Motus will be enhanced by them being separately listed, the Board
of directors of Imperial approved the external separation of the two businesses through the unbundling of
Motus. The Unbundling will enable each of the two businesses to operate in a more focused and efficient
manner, allowing each of the businesses to achieve their respective strategic goals, be separately
accountable to debt and equity providers and unlocking value for shareholders over the long term. The
Unbundling will also provide shareholders with the opportunity to participate directly in Imperial Logistics
and/or Motus.
The Transaction will be underpinned by the following:
• Enhance strategic focus and independence.
• Improve operational efficiency mainly through the reduction in complexity, duplication of processes,
and costs over time.
• Enable Shareholders to participate directly in Imperial Logistics and/or Motus.
• Provide focused capital and funding structures.
• Enhance shareholder understanding and insight of each business and its sub-divisions.
III. MOTUS
a. Overview
Motus is a diversified (non-manufacturing) business in the automotive sector with unrivalled scale
and scope in South Africa, and a selected international presence, primarily in the UK and Australia.
Motus’ unique business model is fully integrated across the automotive value chain through its
four key business segments, namely; Import and Distribution, Retail and Rental, Motor-Related
Financial Services and Aftermarket Parts. This business model provides diversified service offerings
underpinned by significant annuity earnings, maximises revenue and income opportunities, and
provides returns in excess of WACC, enabling Motus to maintain sustainable free cash flows and
pay an attractive Dividend.
b. Key investment highlights
Supported by over 18 300 employees and as southern Africa’s largest automotive group, Motus’
key investment highlights include:
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• Unique, fully integrated business model across the automotive value chain: Import and
Distribution, Retail and Rental, Motor Related Financial Services and Aftermarket Parts.
• A leading position in South Africa and selected international presence (UK and Australia).
• Access to annuity income streams, high free cash flow generation and best-in-class ROIC,
providing a platform for an attractive Dividend yield.
• Unrivalled scale in South Africa underpins a differentiated value proposition to OEMs, customers
and business partners, providing multiple customer touch points supporting resilience and
customer loyalty through the entire vehicle ownership cycle.
• Defined organic growth trajectory through portfolio optimisation, continuous operational
enhancements and innovation, with a selective acquisition strategy outside South Africa
leveraging best-in-class expertise.
• Highly experienced management team with deep industry knowledge of regional and global
markets, and a proven track record with years of collective experience, including a strong
independent board.
c. Strategy
Motus is positioned to maintain its leading automotive retail market share in South Africa and grow
in selected international markets. Motus aims to sustain best-in-class earnings, targeted returns
and high free cash flow generation, providing a platform for a consistent Dividend pay-out through
the cycle.
Motus has a strategic focus on deepening its competitiveness and relevance across the automotive
value chain, by driving organic growth through optimisation and innovation, with selective acquisitive
growth outside South Africa.
The achievement of its vision and related aspirations for financial performance, market performance
and innovation is supported by clearly defined strategic initiatives at a group and segment level.
d. High level financial performance for Motus
Summarised statement of profit or loss
Audited Reviewed Reviewed
(ZAR’m) FY2018 FY2017 FY2016
Revenue 77 659 66 129 65 538
Net operating expenses (72 713) (61 202) (61 018)
Adjusted EBITDA 4 946 4 927 4 520
Depreciation, amortisation and impairments (1 353) (1 588) (1 228)
Operating profit 3 593 3 339 3 292
Operating profit margin 4.6% 5.0% 5.0%
Net finance costs (737) (889) (675)
Pre-tax profit
1
3 210 2 019 2 374
Income tax (897) (671) (677)
Profit after tax 2 313 1 310 1 503
Attributable to owners of Motus 2 346 1 569 1 493
Attributable to non-controlling interests (33) (259) 10
The above excludes discontinued operations, disclosed in Annexure 1, except for profit after tax, attributable to owners
of Motus and profit attributable to non-controlling interests.
Above table includes items of an exceptional nature.
FY2017 included a foreign exchange loss of R388 million which resulted from the unwinding of uneconomical and
excessive forward cover mainly in Renault and FY2018 included a net profit on disposal of property amounting to
R617million.
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Summarised statement of financial position
Audited Reviewed Reviewed
(ZAR’m) FY2018 FY2017 FY2016
Goodwill and intangible assets 1 230 798 895
Property plant and equipment 6 786 6 465 6 888
Vehicles for hire 3 924 3 859 3 391
Adjusted net working capital 6731 8 235 8 193
Deferred funds (2724) (2807) (2949)
Other net assets 1 597 2 175 2 337
Net debt (5900) (6 803) (6746)
Shareholders’ equity (11644) (11922) (12009)
The above excludes discontinued operations as disclosed in Annexure 1
The figures disclosed above are an extract from the Motus Consolidated Financial Statements,
the basis of which are different to Imperial's published results for Motus, prepared on the following
basis.
• US GAAP common control principles have been applied. This requires that the group structure
applicable at 30 June 2018 and consolidation processes used to prepare the 30 June 2018
figures are also applied to 2016 and 2017 even though the group structure at 30 June 2018
was not in place for June 2017 and 2016. As a result, various businesses held in other areas
of the group (for example, certain properties held by the group head office) are included in the
consolidated Motus results for 2015 and 2016.
• The Motus Statement of Profit or Loss is prepared on a continuing basis including exceptional
for 2016 and 2017.
• In Imperial inter-divisional transactions are eliminated including sales by the Motus operation
to Logistics. In the Motus Pre-Listing Statement results these sales would be seen as sales to
third parties.
• The Motus statement of Financial Position is prepared, splitting the assets and liabilities between
current and non-current, whereas for Imperial it is prepared in the order of liquidity. This requires
the reallocation of assets and liabilities from within the Statement of Financial Position, leading to
differences between asset and liability line items when compared to Imperial's published results
for Motus. This has no impact on equity.
IV. SHARE INCENTIVE SCHEMES
Motus has adopted share incentive schemes (namely, the SAR Scheme, the DBP and the CSP) in which
schemes its directors and key senior management will be eligible to participate, the salient features of
which are set out in Annexure 14.
V. DIVIDEND GUIDELINE
Motus’ guideline in respect of the 2019 annual Dividend pay-out ratio is 45% of HEPS.
VI. RISK FACTORS
Section 5 entitled “Risk factors” describes certain risk factors that should be considered together with
other information contained in this Pre-Listing Statement.
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IMPORTANT DATES AND TIMES
The definitions and interpretations commencing on page 11 of this Pre-Listing Statement apply, mutatis
mutandis, to this “Important dates and times” section.
2018
Abridged Pre-Listing Statement published on SENS Wednesday, 26 September
Pre-Listing Statement posted to Shareholders Thursday, 27 September
Publication of finalisation information Wednesday, 14 November
Last day to trade for Imperial Ordinary Shareholders to be entitled to
participate in the Unbundling Wednesday, 21 November
Listing of Motus Shares on the JSE under the share code MTH and
ISIN ZAE000261913 expected at commencement of trade Thursday, 22 November
Imperial Ordinary Shares commence trading “ex” entitlement to Motus Shares Thursday, 22 November
Record Date for the Unbundling Monday, 26 November
Accounts at CSDPs/Brokers updated Tuesday, 27 November
Notes:
These dates and times are subject to change. Any material changes to the above dates will be released on SENS and published in
the South African press.
All times shown in this Pre-Listing Statement are South African times.
Imperial Shares may not be Dematerialised or rematerialised between Thursday, 22 November 2018 and Monday, 26 November2018
both days inclusive.
4
Full details of the Unbundling are set out the Imperial Circular, which has been issued together with this Pre-Listing Statement.
13
DEFINITIONS AND INTERPRETATIONS
In this Pre-Listing Statement and the documents attached hereto, unless the context indicates otherwise the
words in the first column have the meanings stated opposite them in the second column, words in the singular
include the plural and vice versa, words importing the masculine include the other two, and words incorporating
persons include juristic persons and associations of persons.
“AAAS” Africa Automotive Aftermarket Solutions, a division of Motus Holdings Limited,
constituting a significant portion of the Aftermarket Parts segment;
“ Adjusted net working
capital”
Consists of inventories, trade and other receivables, derivative instruments,
provisions and trade and other payables;
“Adjusted EBITDA” earnings before interest, taxation, depreciation, amortisation, profit or loss on
disposal of investments and on disposal of property, plant and equipment,
investment properties and intangible assets, before currency losses and other
non-operating items;
“AUD” Australian Dollar, the official currency of Australia;
“Authorised Dealer” a financial institution or bank authorised to deal in foreign exchange;
“B-BBEE” Broad-Based Black Economic Empowerment;
“B-BBEE Act” the South African Broad-based Black Economic Empowerment Act, No. 53 of
2003, as amended;
“B-BBEE Codes” the South African Codes of Good Practice on Broad-Based Black Economic
Empowerment issued under the B-BBEE Act from time to time;
“Board” or “Directors” the board of directors of Motus, as constituted from time to time comprising, as at
the date of this Pre-Listing Statement, the directors reflected on page 19 of this
Pre-Listing Statement;
“Broker” any person registered as a broking member in equities in terms of the rules of the
JSE in accordance with the provisions of the Financial Markets Act;
“Business Day” any day on which banks are generally open for business in South Africa other than
a Saturday, Sunday or official public holiday in South Africa;
“c.” Circa(from Latin, meaning ‘around, about’) signifies “approximately”;
“CAT” Central African Time;
“CEO” Chief Executive Officer;
“Certificated Shares” shares which have not been dematerialised, title to which is represented by share
certificates or other documents of title;
“CFO” Chief Financial Officer;
“CGT” capital gains tax as levied in terms of schedule 8 of the Income Tax Act;
“CIPC” the South African Companies and Intellectual Property Commission;
“Companies Act” the South African Companies Act, No. 71 of 2008, as amended;
“CMA” South Africa, Namibia, Lesotho and Swaziland, known collectively as the common
monetary area;
“CSDP” a central securities depository participant as defined in section 1 of the Financial
Markets Act;
“CSP” Motus Conditional Share Plan constituted and regulated by the rules of the CSP,
dated 17 September 2018;
14
“DBP” Motus Deferred Bonus Plan constituted and regulated by the rules of the DBP,
17September 2018;
“Deloitte & Touche” or
“ independent reporting
accountants and
auditors”
Deloitte & Touche (practice number 902276), registered auditors, the independent
reporting accountants and external auditors of Motus;
“Dematerialised”or
“Dematerialising”
the process whereby physical share certificates are replaced with electronic
records evidencing ownership of shares in accordance with the rules of Strate
and for trading on the JSE;
“ Dematerialised
Shareholders”
holders of dematerialised shares;
“ Dematerialised
Shares”
shares which have been dematerialised;
“Disposal” the disposal by Imperial to Motus, as at the last practicable date, of the transferring
assets in terms of asset-for-share transactions in accordance with the provisions
of sections 42 of the Income Tax Act;
“Dividends” dividends, distributions or other amounts declared and payable in respect of any
shares referred to in this Pre-Listing Statement;
“Dividend Tax” dividend withholding tax payable in respect of any Dividend in terms of Part VIII
of the Income Tax Act;
“Documents of title” share certificates, certified transfer deeds, balance receipts and other documents
of title to shares acceptable to Imperial;
“EBIT” earnings before interest and taxation;
“EPS” earnings per share;
“ Exchange Control
Regulations”
the Exchange Control Regulations of South Africa, 1961, as amended, promulgated
in terms of section 9 of the South African Currency and Exchanges Act, No. 9 of
1933, as amended;
“ Existing Share
Schemes”
collectively, the SAR Scheme, the DBP and the CSP;
“Executive Directors” the executive directors of the Company;
“Financial Markets Act” the South African Financial Markets Act, No. 19 of 2012, as amended;
“Foreign Shareholders” An Imperial Shareholder who has a registered address outside South Africa, or
who is resident, domiciled or located in, or who is a citizen of, a country other than
South Africa;
“FY” financial year ending 30 June;
“GDP” gross domestic product;
“General Meeting” the general meeting of Imperial Shareholders convened in terms of the notice of
general meeting attached to and forming part of the Imperial Circular, which
meeting is expected to take place at 10:00 on Tuesday, 30 October 2018 in the
Training Room at Hyundai Head Office, Cnr Lucas and Norman Road, Bedfordview,
Johannesburg Gauteng;
“HEPS” headline earnings per share;
“IFRS” International Financial Reporting Standards as issued by the International
Accounting Standards Board from time to time;
15
“ Imperial” or “Imperial
Holdings”
Imperial Holdings Limited, a public company with limited liability incorporated in
accordance with the laws of South Africa with registration number 1946/021048/06
and listed on the JSE, and its direct and indirect subsidiaries and associated
companies from time to time;
“Imperial Board” the board of directors of Imperial, as constituted from time to time comprising, as
at the date of this Pre-Listing Statement;
“Imperial Circular” the bound circular addressed to Imperial Shareholders dated Thursday,
27September 2018 in relation to the Unbundling and related matters, including all
annexures and attachments thereto;
“Imperial Logistics” the logistics operations of Imperial excluding all automotive businesses (Motus),
being all the logistics operations of Imperial, which will comprise the sole business
of Imperial post the Listing and Unbundling of Motus, and result in Imperial
Logistics specifically and solely being an integrated outsourced logistics service
provider with a diversified presence across Africa and Europe;
“ Imperial
Shareholders”
holders of: (i) Imperial Ordinary Shares; and (ii) deferred ordinary shares in the
share capital of Imperial;
“ Imperial Ordinary
Shareholders”
holders of Imperial Ordinary Shares;
“ Imperial Ordinary
Shares”
ordinary shares in the share capital of Imperial;
“Income Tax Act” the South African Income Tax Act, No. 58 of 1962, as amended;
“IOCA” the International Organisation of Motor Vehicle Manufacturers;
“JSE” the stock exchange operated by the JSE Limited, a public company incorporated
in South Africa registration number 2005/022939/06 and licensed as an exchange
under the Financial Markets Act;
“King IV” the King Code of Governance Principles and the King Report on Governance for
South Africa, as published on 1 November 2016;
“Last day to trade” or
“LDT”
the last Business Day to trade in a security in order to settle by the Record Date to
be able to qualify or participate in an event. All trades done from commencement
of trade on LDT + 1 will exclude entitlements;
“Last Practicable Date” the last practicable date prior to the finalisation of this Pre-Listing Statement, being
Wednesday, 19 September 2018;
“List Date” the date on which Motus Shares are listed on the JSE, which date is anticipated to
be on or about Thursday, 22 November 2018;
“Listing” the proposed listing by way of introduction of the entire issued stated capital of
Motus on the JSE, which listing is anticipated to commence with the commencement
of trade on the List Date;
“ Listings
Requirements”
the listings requirements of the JSE, as amended from time to time;
“local OEMs” local OEMs include but are not limited to, Mercedes Benz South Africa Proprietary
Limited, Toyota South Africa Proprietary Limited, and Volkswagen South Africa
Proprietary Limited;
“ Memorandum of
Incorporation” or “MOI”
the memorandum of incorporation of Motus;
“ Motus” or “the
Company”
Motus Holdings Limited, a company with limited liability incorporated in
accordance with the laws of South Africa with registration number 2017/451730/06
and to be listed on the JSE on List Date, and its direct and indirect subsidiaries
and associated companies from time to time;
16
“ Motus Deferred
Shares”
Deferred ordinary shares of no par value in the stated capital of Motus;
“Motus Group Limited” a company currently known as Imperial Group Limited (currently undergoing a
name change) with limited liability incorporated in accordance with the laws of
South Africa with registration number 1983/009088/06;
“Motus Shareholders” holders of Motus Shares from time to time;
“Motus Shares” ordinary shares in the stated capital of Motus;
“NAAMSA” National Association of Automobile Manufacturers of South Africa;
“NAV” net asset value;
“NTAV” net tangible asset value;
“Net debt” net interest-bearing debt includes total interest-bearing borrowings less cash
resources;
“Non-resident” a person who is not considered a resident of South Africa for tax purposes;
“Other net assets” other net assets includes goodwill and intangible assets, property, plant and
equipment, vehicles for hire, adjusted net working capital, less deferred funds,
net debt and shareholders equity;
“OEMs” original equipment manufacturers in the automotive industry;
“Ordinary shares” ordinary shares of no par value constituting part of the authorised stated capital of
the Company;
“ Own-
namedematerialised
shareholder”
a beneficial owner of dematerialised shares who has instructed his CSDP to enter
his own name in the CSDP’s sub-register;
“Preference shares” non-redeemable, cumulative, non-participating preference shares with no par
value in the stated capital of Motus;
“Pre-Listing Statement” this bound document dated Thursday, 27 September 2018, including all annexures
and attachments hereto;
“Prime rate” the publicly quoted benchmark interest rate per annum at which commercial
banks in South Africa lend to private and corporate clients;
“Record Date” the last date on which an Imperial Ordinary Shareholder must be recorded in the
Imperial register in order to participate in the Unbundling, expected to be Monday,
26 November 2018;
“ Redeemable
preference shares”
redeemable preference shares with no par value in the stated capital of Motus;
“ Regent’s VAPS
business”
Regent’s VAPS business comprises subsidiaries previously owned by Regent
retained within the Motus-Related Financial Services division on sale of Regent to
Hollard, rebranded as MSure Proprietary Limited;
“ROIC” the return on invested capital, calculated based on taxed operating profit plus
income from associates divided by the 12-month average invested capital (total
equity and Net Debt);
“SAEM” the South Africa Automotive Export Manual;
“SARB” the financial surveillance department of the South African Reserve Bank;
“SAR” Share Appreciation right;
“SARS” the South African Revenue Service;
“SAR Scheme” Motus Share Appreciation Right Scheme, as constituted and regulated by the
rules of the SAR Scheme, dated 17 September 2018;
17
“SAVRALA” Southern African Vehicle Rental and Leasing Association representing
organisations involved in car and truck hire or fleet management;
“Section 112 disposal” the disposal of the whole or the greater part of the undertaking or assets of a
company as contemplated and governed by section 112 of the Companies Act;
“Securities Act” the United States Securities Act, 1933, as amended;
“ Securities Exchange
Act”
the United States Securities Exchange Act, 1934, as amended;
“SENS” the Stock Exchange News Service of the JSE;
“ Separation
Agreement”
the separation agreement entered into between, inter alia, Imperial and Motus in
relation to, inter alia, the Unbundling, in order to regulate certain matters between
Imperial and Motus and their respective subsidiaries after the effective date of the
Unbundling, as may be amended from time to time;
“Shareholders” collectively, registered holders of Imperial Ordinary Shares and Motus Shares as
reflected on the shareholder register and the sub-register maintained by a CSDP
or Broker;
“South Africa” the Republic of South Africa;
“Standard Bank” The Standard Bank of South Africa Limited, a public limited liability company
incorporated in accordance with the laws of South Africa with registration number:
1962/000738/06, acting through its corporate and investment banking division;
“Strate” Strate Proprietary Limited, a private company incorporated in South Africa as an
electronic settlement environment for transactions to be settled and transfer of
ownership to be recorded electronically, with registration number 1998/022242/07;
“STT” securities transfer tax levied in terms of the Securities Transfer Tax Act, No. 25 of
2007;
“Subsidiaries” shall have the meaning ascribed thereto in the Companies Act;
“SUV” sports utility vehicle;
“takeover regulations” chapter 5 of the regulations published in terms of sections 120 and 223 of the
Companies Act;
“TFCOE” total fixed cost of employment;
“Transaction” collectively, the Disposal, Listing and Unbundling;
“Transaction sponsor” Standard Bank;
“Transfer secretaries” or
“Computershare”
Computershare Investor Services Proprietary Limited, a private company
incorporated in South Africa with registration number 2004/003647/07, and the
transfer secretaries to Motus;
“Treasury shares” equity shares of the Company held:
(i) by a subsidiary and/or
(ii) by a trust, through a scheme and/or other entity, where the equity shares in
the company are controlled by the applicant issuer from a voting perspective,
the votes of which will not be taken into account for purposes of resolutions
proposed pursuant to the provisions of the Listings Requirements;
“TRP” the Takeover Regulation Panel established in terms of section 196 of the
Companies Act;
“Transferring assets” all of the shares in the transferring subsidiaries, the material shares as disclosed
in Annexure 6;
18
“Ukhamba” Ukhamba Holdings Proprietary Limited (RF), a private company with limited
liability incorporated in accordance with the laws of South Africa with registration
number 1998/017702/07; of which full details have been included in Annexure 15
to this Pre-Listing Statement;
“Unbundling” the proposed distribution of 201 971 450 Motus Shares held by Imperial and
comprising 100% of the issued stated capital of Motus, to Imperial Ordinary
Shareholders in the ratio of 1 Motus Share for every 1 Imperial Ordinary Share
held (subject to the rounding convention applied by the JSE), in terms of section
46 of the Income Tax Act, and which is to be regarded as a section 112 disposal
for Imperial;
“UK” the United Kingdom of Great Britain and Northern Ireland;
“UK pound sterling” or
“£”
United Kingdom pound sterling, the official currency of the United Kingdom;
“United States” or “US” the United States of America including its territories and possessions, any state of
the United States and the District of Columbia;
“US dollar” or “USD” or
“$”
United States Dollar, the official currency of the United States;
“VAPS” value-added products and services;
“VAT” value-added tax levied in terms of the South African Value-Added Tax Act,
89 of 1991;
“VWAP” volume weighted average price, being the total value of the securities traded for
the period divided by the total number of securities traded for the period;
“WACC” the weighted average cost of capital for each sub-division of Motus, calculated by
making appropriate country/regional risk adjustments for the cost of equity and
pricing for the cost of debt depending on jurisdiction. The Motus WACC calculation
is a weighted average of the respective sub-divisional WACCs; and
“ZAR” or “Rand” or “R” South African Rand, the official currency of South Africa.
19
Motus Holdings Limited
(Previously Motus Holdings Proprietary Limited)
Incorporated in the Republic of South Africa
Registration number 2017/451730/06
Share code: MTH ISIN: ZAE000261913
“Motus” or “the Company”
Directors
Executive
Non-executive
Osman Suluman Arbee (CEO) Graham Wayne Dempster (Chairman)*
Ockert Jacobus Janse Van Rensburg (CFO and acting CEO) Ashley Tugendhaft (Deputy Chairman)
Phumzile Langeni*
Thembisa Skweyiya*
Roderick John Alwyn Sparks*
* Independent
PRE-LISTING STATEMENT
SECTION 1
INTRODUCTION
1.1 The Imperial Board has resolved to proceed with the steps required to implement the separation
of Motus from Imperial so that Motus will be an independent publicly traded company. The
separation will be achieved by way of Imperial making a pro rata distribution to Imperial Ordinary
Shareholders registered as such in its register at the close of business on the Record Date. Imperial
will distribute, on a pro rata basis one Motus Share for every one Imperial Share, reflected as being
held by that Imperial Ordinary Shareholder on the Record Date. The Unbundling will be effected in
terms of section 46 of the Companies Act, section 46 of the Income Tax Act and otherwise on the
terms and conditions set out in this Pre-Listing Statement. As of List Date, Imperial and Motus will
become independent publicly traded companies and will have separate public ownership, boards
of directors and management.
1.2 The purpose of the Pre-Listing Statement is to provide Imperial Shareholders with information
regarding the terms and conditions pertaining to the Listing and Unbundling and information
regarding Motus.
20
SECTION 2
THE LISTING AND UNBUNDLING OF MOTUS
2.1 The Disposal
Prior to the Listing and Unbundling, Imperial disposed of the transferring assets to its wholly-owned
subsidiary, Motus, in terms of asset-for-share transactions in accordance with the provisions of
section 42 of the Income Tax Act in order to give effect to the Listing and Unbundling. As at the Last
Practicable Date, Motus holds all of the automotive interests of Imperial, as set out below:
Motus Corporation
Proprietary Limited
Motus Capital
Proprietary Limited
Motus
Holdings Limited
Motus
Group Limited
100% 100% 100%
Motus comprises the following subsidiaries:
• Motus Corporation Proprietary Limited: the holding company of the South African subsidiaries,
comprising the Import and Distribution operations, Motor-Related Financial Services and certain
retail dealerships.
• Motus Capital Proprietary Limited: the domestic treasury management company and holding
company of the international subsidiaries.
• Motus Group Limited: the Retail and Rental operations and Aftermarket Parts. Currently named
Imperial Group Limited.
2.2 The Listing
The JSE has granted Motus, subject to the Unbundling becoming unconditional and being
implemented, a listing in the Specialty Retailers sector on the main board of the JSE, under the
abbreviated name ‘Motus’, with effect from the commencement of trading on Thursday, 22 November
2018. For this purpose, this Pre-Listing Statement is being sent to the holders of ordinary shares,
deferred ordinary share and non-redeemable, cumulative, non-participating preference shares in
Imperial together with the Imperial Circular and should be read in conjunction with each other.
2.3 Rationale for the Listing and Unbundling
The transformation and development of Imperial in recent years has been directed at value creation
through strategic clarity (portfolio rationalisation), managerial focus (organisation structure) and
shareholder insight (disclosure). Progress has exceeded our expectations, and has confirmed the
absence of operational synergies between Imperial Logistics and Motus. Both divisions are now
managed and reported on separately, with separate CEOs, Boards Of Directors And Executive
Committees, and have self-sufficient balance sheets with decreasing functional support from the
holding company.
After considering whether the long-term prospects of Imperial Logistics and Motus will be enhanced
by them being separately listed, the Imperial Board believes that the separation of the two divisions
will enable the component parts of Imperial’s businesses to operate in a more focused and efficient
manner, thereby allowing each of the businesses to achieve their respective strategic goals and
unlocking value for Shareholders over the long term. The Transaction will be underpinned by the
following:
21
2. 3 .1 Strategic focus and independence
• Providing the platform to pursue independent strategic initiatives, with enhanced
flexibility and efficiency.
• Enhancing the ability to mitigate and manage specific risks and challenges faced by
each business unit and proactively react to changes within the specific market segments
and economic landscapes in which they operate.
• Enabling management teams to express entrepreneurial flair, including the identification
and execution of acquisition opportunities, locally and abroad, with direct responsibility
and accountability for performance and growth.
2.3.2 Improved operational efficiency mainly through the reduction in complexity,
duplication of processes and costs over time
• Managing separate operating entities, completely independent of one another, which
enhances streamlined activities and operations.
• In-depth asset focus.
2.3.3 Focused capital and funding structures
• Providing respective management teams with direct access and accountability to equity
and debt capital markets, each with the appropriate capital structure to support their
strategies on a long-term sustainable basis, and the ability to raise funding independently.
• On implementation of the Transaction, Imperial Logistics and Motus will have self-
sufficient capital structures, with an optimal mix of debt and equity on a standalone basis
and within the industries in which they operate (target net debt to equity of between 55%
and 75%), to facilitate growth, provide flexibility and maintain sufficient liquidity and
headroom.
In this context, Imperial has secured sufficient commitments from funders amounting
to R7 billion term funding and is in the process of securing approximately R3 billion of
short term funding for Motus. In addition to the ZAR funding some GBP 38 million and
USD 30 million of term facilities are also being renewed. The funding is being secured at
competitive market related rates and allows for Motus to operate on a standalone basis,
post the Unbundling. The term funding would be repayable within a period of 3 years
to 5 years. These facilities are unsecured and is used for general corporate purposes,
working capital and acquisitions. As an automotive retailer Motus make use of extensive
floorplan arrangements from OEMs in the UK, Australia and South Africa and from banks
in South Africa to fund vehicle purchases and those facilities are secured by the vehicles
in question.
2.3.4 Enhanced shareholder understanding and insight of each business and its
sub-divisions
• Providing greater insight to investors with regard to the nature of the activities and
geographies within which Imperial Logistics and Motus operate, and the potential
value of each business, and facilitating discretionary investment in independent and
dedicated business units with greater comparability to focused peers.
2.4 The Unbundling
The Unbundling will be governed by and will be carried out in accordance with section 46 of the
Companies Act and section 46 of the Income Tax Act. It will be regarded as a pro rata distribution
of Motus Shares by Imperial to Imperial Ordinary Shareholders. Under section 46 of the Companies
Act, a pro rata distribution of Motus Shares must be approved by the Imperial Board and can be
given effect to only if it reasonably appears that:
2.4 .1 the assets of Imperial, as fairly valued, equal or exceed the liabilities of Imperial, as fairly
valued; and
2.4.2 Imperial will be able to pay its debts as they become due in the ordinary course of business
for a period of 12 months after the distribution is implemented.
The Companies Act requires that the Imperial Board acknowledges, by resolution, that it is satisfied
that the above requirements are fulfilled in order for the Unbundling to proceed. The entire issued
stated capital of Motus will be unbundled to existing Imperial Ordinary Shareholders by way of a
22
distribution in specie in accordance with section 46 of the Companies Act, section 46 of the Income
Tax Act and the Listings Requirements. The stated capital of Motus will be set such that the Motus
Shares are unbundled in a ratio of 1:1 with Imperial Ordinary Shares.
The Unbundling will further be regarded as a disposal of the whole or a greater part of the assets
or undertakings of Imperial, as contemplated in section 112 of the Companies Act. The Unbundling
therefore requires the prior approval of Imperial Shareholders by way of special resolution passed
in terms of section 115 of the Companies Act, and Imperial has sent out a notice of General Meeting
to its shareholders for the purposes of obtaining such approval at that meeting.
The SARB has granted the necessary regulatory approvals for the distribution in specie. The
Unbundling will be governed by, and construed in accordance with, the laws of South Africa.
The Imperial Board gave its in-principle approval for the Unbundling on 21 June 2018 and passed
the resolutions necessary to implement the Unbundling on 17 September 2018. On 21 June 2018,
Imperial announced the Unbundling and the intention to list Motus’ Shares on the JSE. Motus’
Shares are expected to list on the JSE on Thursday, 22 November 2018.
2.5 Receipt of Motus Shares
For the purposes of the Unbundling, Imperial Ordinary Shareholders will be delivered their respective
Motus Shares in dematerialised form only. Accordingly, all Imperial Ordinary Shareholders must
appoint a CSDP under the terms of the Financial Markets Act, directly or through a Broker, to
receive Motus Shares on their behalf. Should an Imperial Ordinary Shareholder require a physical
share certificate of its Motus Shares, it will have to materialise its Motus Shares following the Listing
and should contact its CSDP to do so. There are risks associated with holding shares in certificated
form, including the risk of loss or tainted scrip, which is no longer covered by the JSE Guarantee
Fund. All Imperial Ordinary Shareholders who elect to convert their Dematerialised Shares into
Certificated Shares will have to dematerialise their shares should they wish to trade them in
accordance with the rules of Strate (see paragraph 2.6 below).
The Motus Shares accruing to any unknown/untraceable certificated Imperial Ordinary Shareholders
will be transferred to Computershare and held in accordance with the relevant custody agreement.
Should such Imperial Ordinary Shareholder wish to claim their Motus Shares, it will have to give
an instruction to their CSDP/Broker/Custodian to receive the Motus Shares from Computershare,
who will verify the holding and validity of the shares to be transferred. The transfer secretaries
shall require supporting documentation (and an indemnity form to be completed) and will advise
the Imperial Ordinary Shareholder accordingly. Beneficial ownership will be recorded on a sub-
register with the transfer secretary (known as the nominee sub-register) but held in aggregate
with Computershare in dematerialised format. The Motus Shares will then be transferred into such
account with the CSDP or broker as may have been specified by the relevant Imperial Ordinary
Shareholder concerned provided that such account must be within South Africa in the case of a
resident but may in the case of a non-resident be inside or outside of South Africa.
Documents of title in respect of Imperial Ordinary Shares held are not required to be surrendered
in order to receive the Motus Shares.
Non-resident Imperial Ordinary Shareholders must satisfy themselves as to the full observance
of the laws of their country or territory of residence in relation to all aspects of this Pre-Listing
Statement that may affect them, including the Unbundling, as well as consider the Exchange
Control Regulations, summarised in Paragraph 10.4 and Annexure 12.
Motus and Imperial do not accept responsibility, and will not be held liable, for any action of,
or omission by, any CSDP or Broker including, without limitation, any failure on the part of the
CSDP or Broker of any beneficial owner of Imperial Ordinary Shares to notify such beneficial
owner of the details set out in the Imperial Circular and the Pre-Listing Statement.
2.6 Strate and trading shares on the JSE
Shares may only be traded on the JSE in electronic form (Dematerialised Shares) and will be
trading for electronic settlement via Strate immediately following the Listing.
Strate is a system of “paperless” transfer of securities. If investors have any doubt as to the
mechanics of Strate they should consult their Broker, CSDP or other appropriate advisor, and they
are referred to the Strate website at http://www.strate.co.za.
23
The contents of this website are not incorporated by reference and do not form part of this Pre-
Listing Statement and should not be relied upon for the purposes of forming an investment decision.
Some of the principal features of Strate are as follows:
2.6.1 electronic records of ownership replace share certificates and physical delivery of
certificates;
2.6.2 trades executed on the JSE must be settled within three Business Days;
2.6.3 all investors owning Dematerialised Shares or wishing to trade their securities on the JSE
are required to appoint either a Broker or a CSDP to act on their behalf and to handle their
settlement requirements; and
2.6.4 unless investors owning Dematerialised Shares specifically request their CSDP to register
them as an “own name” shareholder (which entails a fee), their CSDP’s or Broker’s nominee
company, holding shares on their behalf, will be the shareholder of the relevant company
and not the investor. Subject to the agreement between the investor and the CSDP or Broker
(or the CSDP’s or Broker’s nominee company), generally in terms of the rules of Strate,
the investor is entitled to instruct the CSDP or Broker (or the CSDP’s or Broker’s nominee
company) as to how it wishes to exercise the rights attaching to the Motus Shares and/or to
attend and vote at shareholders’ meetings.
2.7 Additional copies of the Pre-Listing Statement
Additional copies of the Pre-Listing Statement may be obtained during normal business hours
from Thursday, 27 September 2018 from Imperial’s and Motus’ registered office and the offices of
the transaction sponsor, the addresses of which are set out in the “Corporation Information and
Advisors” section of this Pre-Listing Statement as well as on www.imperial.co.za/pdf/unbundling/
motus-prelisting-circular.pdf and motuscorp.co.za/investors.
24
SECTION 3
INFORMATION ON MOTUS
3.1 General overview
Motus is a multinational, vertically integrated automotive group, operating across the industry value
chain of motor related services, namely:
• Import and Distribution;
• Retail and Rental;
• Motor-Related Financial Services; and
• Aftermarket Parts
The group operates in the southern African markets and internationally primarily through dealerships
in the UK and Australia. It creates value through integration across the entire automotive value
chain for a broad range of the world’s most respected brands.
In South Africa, Motus’ retail market share was 19.9% as at 30 June 2018. The segment retails over
100 000 new vehicles annually which represents approximately one in five new vehicles in South Africa
as well as 90 000 pre-owned vehicles. Motus’ value proposition is underpinned by consistent superior
routes-to-market through quality marketing, high levels of customer satisfaction and strategically
located dealerships situated in the economic hubs of South Africa.
The disposal of non-strategic businesses and acquisitions into selected international markets over
the past few years has contributed to the strategic, managerial and customer focus within four
clearly defined business segments, namely; Import and Distribution, Retail and Rental, Motor-
Related Financial Services and Aftermarket Parts. Motus has the scale, expertise and relationships
with OEMs and customers, to respond effectively to a continually evolving motor industry.
Motus’ recent portfolio and organisational optimisation has included:
• Acquiring the remaining 10% shareholding in Associated Motor Holdings Proprietary Limited in
February 2016 to consolidate its importation business.
• Consolidating as a single automotive group in January 2017, with its four clearly defined business
segments: Import and Distribution, Retail and Rental, Motor-Related Financial Services as well
as Aftermarket Parts.
• Expanding the Retail and Rental segment in the UK with the acquisition of Pentagon Motor
Holdings Limited in September 2017, and in Australia with the acquisition of SWT Group
Proprietary Limited in October 2017.
• Expanding the Motor-Related Financial Services segment by integrating Regent’s VAPS business
(subsequently rebranded as MSure) from June 2017.
• Expanding the Aftermarket Parts segment with the acquisition of a 60% stake in Taiwanese
wholesale distributor, ARCO Motor Industry Company Limited, in March 2018.
• Restructuring and disposing of 31 non-strategic businesses and 36 properties, and closure of
15 non-strategic and underperforming dealerships in FY2017.
• Sharpening strategic, managerial and customer focus to improve intra-segmental collaboration
and efficiencies, and reduce complexity, costs and capital employed.
• Simplifying reporting structures and consolidating back-office functions, including centralising
shared services (ongoing).
3.2 Motus business segments
3. 2.1 Import and Distribution
Motus is the exclusive South African importer and distributor of Hyundai, Kia, Renault and
Mitsubishi motor vehicles and parts, which collectively have an estimated 15% market
share in South Africa. The segment operates in South Africa and neighbouring countries
with approximately 80 000 vehicles imported annually. The Import and Distribution segment
provides a differentiated value proposition to the dealership model and enhances the
revenue potential of the entire value chain.
25
3.2.2 Retail and Rental
South Africa
Motus represents 23 OEMs through 356 vehicle dealerships, including 104 pre-owned
dealerships, 232 passenger vehicle dealerships and 20 commercial vehicle dealerships.
Motus has longstanding importer and retail partnerships with OEMs.
Motus operates a centralised finance and insurance model across its dealer network which
executes on the financial services strategy of the group and acts as a channel for products
and services sourced from the Motor-Related Financial Services business.
The car rental segment operates under the Europcar and Tempest brands. Each brand has
different target markets, operating through 118 car rental outlets in South Africa and 16 in
neighbouring countries. Motus’ car rental market share in South Africa was more than 25%
as at 30 June 2018.
The Retail and Rental segment’s unrivalled footprint of strategically located dealerships,
largely in growing urban areas, underpins its leading market share.
United Kingdom
Motus has 84 commercial vehicle dealerships and 28 passenger vehicle dealerships in
the UK post the recent acquisition of Pentagon Motor Holdings Limited, which added
an additional 21 dealerships to Motus’ footprint. Going forward, continued organic and
acquisitive expansion in both Commercial and Passenger vehicle retail sectors will be
considered in the UK.
Australia
The group operates 30 passenger vehicle dealerships in Australia, post the recent
acquisition of SWT Group Proprietary Limited, which added 16 dealerships in the greater
Melbourne area. Further selective expansion in the Australian market will be driven by the
introduction of additional brands across existing dealerships.
3.2.3 Motor-Related Financial Services
Motor-Related Financial Services develops and distributes innovative vehicle related
financial products and services through importers and distributors, dealers, vehicle finance
houses, call centres and digital channels. The segment is a manager and administrator of
Service, Maintenance and Warranty plans and develops and sells value added products and
services to more than 730 000 clients. The segment is also a provider of fleet management
services to corporate customers including fleet maintenance, fines management and
licensing and registration services.
Innovation and unlocking efficiencies and customer potential within existing and new
channels represent a significant growth and profit opportunity for the business. Motus has
invested in technology to leverage consumer data, gathered through its interaction with
its suppliers and customers respectively. This data enables Motus to offer personalised
services, an enhanced customer experience and better retention.
The Motor-Related Financial Services segment complements and leverages the automotive
value chain, providing high-margin annuity earnings. This is achieved by creating and
selling relevant and innovative products and services. The segment’s ability to analyse
Motus’ proprietary data (including sales, prices, residual values, and service schedules and
parts failure rates) enables the accurate pricing of its offerings, cents per km profiling for
the fleet business, and management of claims costs. Through its leading Warranty, Service
and Maintenance plans, the segment unlocks revenue for Motus’ Import and Distribution
and Rental and Retail segments by bringing customers back to its dealerships.
3.2.4 Aftermarket Parts
Motus is the distributor, wholesaler and retailer of accessories and parts for out-of-warranty
vehicles, through 35 owned branches, 43 owned retail stores and a network of 720
franchised outlets.
26
Aftermarket Parts franchise base comprises:
• Resellers: Midas, Transerve and Team Car; and
• Specialised workshops: ADCO, CBS, Motolek, Battery Hub and Silverton.
The Aftermarket Parts segments’ large national and growing international footprint enables
it to leverage its buying power to distribute and sell competitively priced products for a
continually growing car parc (number of registered vehicles) of vehicles out of warranty.
Expanding into Africa through acquisitions constitutes a significant opportunity for this
business. Increased participation in this segment will include vertical integration in order
to eliminate intermediaries in the wholesale supply chain. Motus recently acquired 60% of
ARCO Motor Industry Company Limited in Taiwan to support this strategy.
3.3 Key investment highlights
3.3.1 Leading position in South Africa and selected international presence (UK
and Australia)
Motus is a diversified non-manufacturing business in the automotive sector.
Motus has unrivalled scale and scope in South Africa, and a growing international presence
primarily in the UK and Australia.
3.3.2 Unique fully integrated business model across the automotive value chain
Motus operates across its four business segments namely; Import and Distribution, Retail
and Rental, Motor-Related Financial Services and Aftermarket Parts. Motus’ participation
in all aspects of vehicle ownership, use and maintenance provides the opportunity to grow
the proportion of revenue and operating profit that is not impacted by new vehicle sales.
Its full value chain exposure also enables Motus to cross-sell and leverage synergies and
efficiencies across its businesses, giving further protection against cyclical pressures.
Motus’ strong market position, multi-faceted diversification and integration across the
automotive value chain provides resilience through the cycle.
Import and Distribution
Imports and distributes passenger, light commercial vehicles and parts, to serve a network
of dealerships, car rental companies, fleets and government institutions in South Africa.
Retail and Rental
Sells passenger and commercial vehicles across all segments which include entry level,
SUVs, luxury, light commercial and heavy-duty vehicles. Rents passenger, SUVs and light
commercial vehicles.
Motor-Related Financial Services
Manages and administers service, maintenance and warranty plans. Develops and sells
value-added products and services. Provides fleet management services. Deploys call
centres and an innovation hub.
Aftermarket Parts
Distributes, wholesales and retails accessories and aftermarket parts for vehicles through
franchised outlets and specialised workshops.
Motus’ fully integrated business model and diversified service offering should enable the
Company to maintain earnings and margins throughout the cycle. Motus’ operating profit
margins are proven to remain largely stable despite ZAR volatility.
3.3.3 Access to annuity income streams, high free cash flow generation and best
in class ROIC
With its leading market share in South Africa, underpinned by annuity income streams, and
its growth prospects in selected international markets, Motus is positioned to sustain high
free cash flows, best-in-class earnings and targeted returns, providing a platform for a
consistent Dividend pay-out throughout the cycle.
With proven financial discipline, supported by extensive experience and expertise
in finance, treasury and accounting to ensure accurate and timely reporting, tight cost
controls, responsive management and high operational governance standards.
27
3.3.4 Unrivalled scale in South Africa underpins a differentiated value proposition
Motus’ unrivalled scale in South Africa, and its multiple customer touch points across the
vehicle ownership cycle, underpins a differentiated value proposition to OEMs, customers
and business partners.
Longstanding importer and retail partnerships with OEMs demonstrate Motus’ strategic
focus on being the OEMs partner of choice, offering a consistently superior route-to-market
through quality marketing, high levels of customer satisfaction and strategically located
dealerships.
Currently no competitors enjoy Motus’ scale or scope in the South African market. Motus
is positioned to maintain its leading market share in South Africa and grow in selected
international markets. Motus demonstrates strong competitive positions within each of
its business segments, which encompasses the entire automotive value chain except
manufacturing. In South Africa, Motus’ strong market position and fully integrated business
model enables Motus to diversify and maximise its earnings across the automotive value
chain.
3.3.5 Defined organic growth trajectory through portfolio optimisation,
continuous operational enhancements and innovation, with a selective
acquisition strategy outside South Africa
Strategic focus on driving organic growth through optimisation, innovation and enhanced
financial performance, with selective acquisitive growth outside South Africa, leveraging
best-in-class expertise.
3.3.6 Highly experienced management team and a strong independent Board
Motus has a highly experienced leadership team with deep industry and market knowledge
and a proven track record as detailed in section 6 of the Pre-Listing Statement.
The team demonstrates a wealth of collective years of service within Motus. Key management
will remain in place post the Listing and Unbundling.
3.4 Business strategy
Motus’ founding objective is to penetrate the automotive value chain excluding manufacturing, with
competitive products and services that maximise the share of the customer’s vehicle expenditure
and engender loyalty. Motus’ physical and online retail outlets and support facilities are located in
areas that ensure optimal customer access and organisation efficiency.
Motus aims to create value for its customers and build market share through relevant, innovative
products and exceptional service at competitive prices. The Company aims to deliver returns
to Shareholders through operational alignment, collaboration across the supply chain, and the
reduction of complexity, duplication, expenses and capital employed, while managing currency
risk. Motus’ progress and performance is delivered by a diverse complement of highly competent
and experienced individuals and teams.
Motus has a strategic focus on deepening its competitiveness and relevance across the automotive
value chain, by driving organic growth through optimisation and innovation, with selective acquisitive
growth outside South Africa.
The achievement of its vision and related aspirations for financial performance, market performance
and innovation is supported by clearly defined strategic initiatives at a group and segment level.
Motus’ strategic objectives are underpinned by its strategic pillars which include:
Optimise the portfolio by evaluating the relevance of the markets Motus competes in:
• exit or disposing of businesses that are non-strategic and that do not enhance the competitive
advantage or those with low return on effort;
• ensuring a meaningful presence in selected international markets;
• maintaining market leadership in South Africa by strengthening the core business, optimising
each business segment and driving further integration across the value chain, while remaining
relevant through innovation and strategic partnerships;
28
• providing exceptional customer service at each stage of the value chain to remain the partner
of choice for OEMs and business partners; understand customer mobility needs through data
analysis, develop personalised services and engender loyalty (for instance, through new loyalty
programmes and the project under way to achieve single view of customer behaviour and
preferences in the medium-term);
• leading innovation and showcase the evolving mobility experience in partnership with OEMs,
such as showrooms in shopping malls and virtual showrooms;
• consolidating pre-owned dealer brands, and roll out additional importer pre-owned brands, and
consolidate online presence to drive sales in this growing market;
• in Import and Distribution, providing offers and promotions to drive volume; this will generate
annuity income through service parts, panel parts, workshop servicing and financial services;
• in Retail and Rental, revising dealership commission structures to increase sales productivity
and improve customer service;
• in Motor-Related Financial Services, unlocking efficiencies and customer potential within existing
and new channels, by expanding offerings in the owned and independent dealership networks;
and grow the VAPS business through joint ventures with companies able to provide significant
channels to market;
• in Aftermarket Parts, increasing efficiency through an integrated regional hub distribution system
supported by an off-shore centralised distribution centre; improve the availability of products at
the point-of-sale, and enhance premium, value and entry brand offerings; and
• driving transformation, seeking additional joint ventures with B-BBEE partners to ensure
competitiveness in certain market segments (with a holding company structure in place to
facilitate this); and support socio-economic development initiatives, such as partnering black
entrepreneurs in the workshop market.
Grow competitive market share and achieve economies of scale in selected international markets
through acquisitions that complement Motus’ existing networks and benefit from the transfer of
expertise:
• In the UK, grow organically and acquisitively in commercial and passenger retail;
• In Australia, grow acquisitively, introducing volume brands to the existing dealership network,
and grow in pre-owned market;
• In both markets, explore opportunities to offer tailored financial services offerings, by leveraging
South African expertise and systems (with adjustments to comply with local regulations);
• In Aftermarket Parts, grow significantly through acquisitions in selected markets in sub-Saharan
Africa and partnerships with local players, and acquire suppliers in the Far East (mainly China
and Taiwan), to boost buying power and achieve vertical integration, eliminating intermediaries
in the wholesale supply chain to capture full channel margin;
• Enhance financial performance;
• Meet and exceed OEM sales and customer service targets to maximise incentives and rebate;
• Grow non-vehicle revenue streams (Motor-Related Financial Services and Aftermarket Parts);
• Reduce costs by improving distribution of new, pre-owned and rental vehicles and parts, and
by combining functions (where sensible) and streamlining processes;
• Continue to drive operational alignment and collaboration across the automotive value chain, to
reduce complexity, duplication, expenses and capital employed;
• Maintain a strong focus on managing currency risk;
• Target 20%-25% operating income from markets outside South Africa.
Drive innovation
• While innovation is a strategic priority in each business segment, the Motor-Related Financial
Services segment operates as Motus’ Innovation Hub, based on its proven expertise, proprietary
data, partnerships with technology developers, and ability to predict and respond to mobility-
related trends;
• Align continuously with digital, mobility and automation trends and changing customer needs
by working with OEMs to deliver innovative mobility solutions to customers;
• Systematically enhance customer value propositions, as traditional offerings shift to mobility
solutions, and enhance customer access to Motus’ offerings through digital platforms;
29
• Identify new ways to monetise market insights;
• Ensure IT systems support efficiency, connectivity and networking across Motus; and
• Ensure overall business agility to respond effectively to disruptive change.
Improve technology solutions
• Improve technology solutions to realise efficiencies, drive new growth opportunities and
strengthen competitive advantage; the rationalisation and upgrading of fragmented legacy
systems, and standardisation (where applicable), is continuing through:
– Expanding Motor-Related Financial Services data warehouses and data lakes;
– Developing a new platform in Aftermarket Parts to leverage synergies by combining the
parts business; and
– Expanding strategic IT capability to support business insight, reporting and innovation in
sales platforms, social media, data gathering and analytics.
Invest in human capital and change management:
• Attract, develop, retain and reward high-potential individuals committed to building a career in
the automotive industry, with the mind-set, skillsets, flexibility and responsiveness for significant
change;
• Provide effective performance management to align employee capabilities and expectations
with business objectives and career opportunities;
• Incentivise management to ensure sustainable performance through the cycle; with management
incentives focused on financial and non-financial targets (specifically for employment equity);
• Ensure a strong focus on transformation and succession at a management level; and
• Simplify reporting structures for effective delegation and accountability, and drive the ongoing
implementation of reliable core data and best-in-class practices to optimise recruitment, training,
mentoring, and staff transfers across business segments and employee engagement.
3.5 Automotive industry
3.5.1 Global trends
The global automotive industry is evolving with new technologies, concepts and emerging
entrants redefining how consumers buy, own, use, and drive cars. Some of the most
prominent automotive trends taking place are an increase in the popularity of alternative
powertrains (versus battery electric vehicles), autonomous vehicles and the movement
towards usage-based transportation methods.
While the long-term future of alternative powertrains and fully autonomous cars will likely
redefine the vehicle itself and how it is manufactured, these trends will require significant
investment in infrastructure, and the resolution of a number of issues, such as effective
driving policies and regulations. It is the parallel path of new ownership and mobility
business models that may transform the automotive industry more.
Mobility-as-a-Service (MaaS) describes a shift away from personally-owned modes of
transportation and towards mobility solutions that are consumed as a service. Mobility
fleet operators are likely to continue growing by leveraging their networks to provide more
tailored services. Dealers and vehicle finance could also undergo a change, with greater
emphasis on offering fewer highly customised vehicles, a shift toward fleet management and
a change in personal vehicle ownership. In addition, shorter usage cycles could reduce the
supplies in the aftermarket space. The consumers’ ownership journey is seen as follows:
Pre-purchase phase
• Consumers research the vehicle purchase decision extensively via a number of different
channels and sources including digital, dealerships and the general media;
• As a result, OEMs and dealers have a considerable opportunity to influence a purchase
decision;
• Consumers visit at least two dealers before they buy (reduced from five dealers over
the last two years), reinforcing the need for dealers to make every interaction count; and
• While printed content and digital channels are important influences in the purchasing
decision, the salesperson on the dealer floor remains pivotal.
30
Purchase phase
• Ease of purchase and convenience remain important for customers in their purchasing
experience;
• While many aspects of the purchasing process are becoming increasingly digitised, the
test drive and dealership interaction with the customer is still an important part of the
customer experience; and
• The top three aspects consumers dislike about the purchase process include the overall
time it takes, the amount of paperwork involved, and tailored specification of the vehicle
to accommodate OEM extras.
Post-purchase phase
• Dealers are continuing to cultivate the opportunity to communicate with their customers
to build effective, long-term relationships and encourage loyalty and advocacy over
time; and
• Digital touchpoints are only meeting, not exceeding, customer expectations, which
presents an opportunity for differentiation in a very crowded market.
The pace at which these changes filter into Motus’ businesses will vary across markets.
While in the UK and Australia regulations and market readiness may result in material
shifts taking place in the short to medium term; in South Africa, limited infrastructure may
prevent an imminent transformation in the industry. In this regard, Motus could benefit from
its position in the UK and Australia to extract learnings that could be leveraged in the South
African context.
In addition, Motus is well positioned, due to its scale and scope, expertise and relationships,
to anticipate the changes and respond with the necessary innovations. Specifically, its
strong relationships with OEMs will support its ability to respond quickly to their changing
requirements. Furthermore, the financial services business has a proven track record in
improving customer engagement through innovative channel and product development,
underpinned by its data analytics capabilities.
3.5.2 Global vehicle market
According to the South Africa Export Manual published by the Automotive Industry Export
Council in 2018 (“South African Export Manual”), total global new vehicle sales, as reported
by OICA
1
, increased by 3.1% to 96.8 million units in 2017, compared to the 93.91 million
units sold in 2016. The global new vehicle market performed well in 2017, with established
economies maintaining growth, while developing markets such as Russia and Brazil
returned to growth, following declines in 2016. Demand for vehicles remains high. South
Africa, with 557 701 vehicles sold in 2017, was ranked 24
th
in the world in terms of global
vehicle sales with a market share of 0.58%
1
.
1
International Organization of Motor Vehicle Manufacturers or “Organisation Internationale des Constructeurs d’Automobiles” (OICA)
2
South Africa Export Manual 2018, prepared on behalf of the SA Automotive Industry Export Council
31
3.5.3 Overview of car parc where Motus operates
With a motorisation rate of 176/1 000
2
(lower than many other emerging markets), South
Africa’s vehicle market could be categorised as an immature parc, where there is room for
further market penetration.
Australia and the UK’s motor vehicle market is substantially larger than South Africa’s, both
in terms of sales and car parc, complemented by a high motorisation rate.
Country
Total vehicle
sales 2016
Total vehicle
sales 2017
Motorisation
rate/1 000 people
Vehicle
parc (m)
Australia 1 178 133 1 188 677 718 17.2
South Africa 547 546 557 701 176 12.2
UK 3 123 755 2 955 182 587 38.2
Global 93 905 634 96 804 390 182 1 282.3
Source: The SA Automotive Export Manual 2018.
3.5.4 South Africa
3.5.4.1 Overview
According to the South Africa Export Manual, the automotive industry is one of
the most important sectors in South Africa, contributing more than 6% to the
country’s GDP and accounting for more than 13% of South Africa’s total export
value, making it a crucial cog in the economy. The South African automotive
supply chain includes manufacturing, distribution, retail, finance, insurance and
maintenance and servicing. Motus currently operates in all segments of the value
chain other than manufacturing.
South Africa’s vehicle demand is met by a range of imported and locally manufactured
vehicles. The country has one of the most competitive trading environments in
the world and in 2017 offered no fewer than 53 passenger car brands and 3 236
model derivatives for consumers to select from, and in the light commercial vehicle
segment, 34 brands with 698 model derivatives to choose from
2
.
South Africa had a vehicle parc of 12.21 million at the end of 2017, of which
7.17 million or 58.7% comprised passenger cars – the average age of the
passenger car parc in 2017 was nine years and six months, and for the commercial
vehicle parc, nine years and 10 months
2
. A relatively old vehicle parc could signal
a potential replacement cycle on the cusp.
3.5.4.2 Underlying macroeconomics
On 20 September 2018, the Monetary Policy Committee of the South African
Reserve Bank (“MPC”) held the repo rate unchanged at 6.5% in line with market
expectations. The MPC has forecast inflation to remain within the 3.0% – 6.0%
target band until the end of 2020 and adjusted the CPI average and GDP
growth for 2018 to 5.3% and 0.7%, respectively, from a previous 4.8% and 1.2%
estimate. The growth forecast for 2019 and 2020 is unchanged at 1.9% and 2.0%
respectively.
3.5.4.3 Vehicle sales
South Africa’s domestic new vehicle sales are closely correlated with the overall
performance of the economy and business and consumer confidence levels. According
to OICA
1
, South African new vehicle sales increased in 2017, reversing a three-year
downward trend that started in 2014. The 2017 aggregate sales figure, however, was
significantly below the all-time high of 714 315 units posted 11 years ago.
1
International Organization of Motor Vehicle Manufacturers or “Organisation Internationale des Constructeurs d’Automobiles” (OICA)
2
South Africa Export Manual 2018, prepared on behalf of the SA Automotive Industry Export Council
32
According to NAAMSA
3
, domestic new vehicle sales for the eight months
ended August 2018, declined marginally by 0.2% year-on-year, relative to the
corresponding period in 2017. The Motus total South African retail market share
at 30 June 2018 was 19.9%.
3.5.4.4 Rental
Business tourism continues to drive the growth of car rental and passenger
volumes between South African airports are a proxy for understanding the
demand for rented cars. Over the past 12 months to June 2018, South Africa saw
over 10.5 million passenger arrivals
2
.
South Africa’s car rental market is mature, with a number of global brands having
established a presence in the country. The industry is driven by the good road
infrastructure to many key tourist destinations.
Motus car rental has a market share of more than 25% at 30 June 2018. Motus
continued to lead through its Europcar and Tempest brands, which are household
names within car rental in South Africa.
Although the entry of peer-to-peer platforms such as Uber did not have a
significant impact on car rental during the review period, they did affect short-term
corporate travel, where visitors to cities stayed for shorter periods such as one
day. To compete with new technologies and companies such as Uber, car rental
players implemented their own strategies such as chauffeur-driven services, and
we continue to engage with new entrants to this market.
3.5.5 United Kingdom
3.5.5.1 Overview
The automotive industry is a vital part of the UK economy accounting for more
than £80 billion turnover. The UK automotive market has experienced a shift in
market segment over the past decade, and the most popular vehicle choices are
superminis, small family cars and SUVs (dual purpose).
Despite Brexit-related consumer concerns, the UK new car market has remained
stable, and Motus’ UK operations have performed in line with expectations.
Motus has 84 commercial vehicle dealerships and, through the recent acquisition
of the Pentagon Group, 28 passenger vehicle dealerships in the UK. Going
forward, continued organic and acquisitive expansion in both commercial and
passenger vehicle retail sectors will be considered.
3.5.6 Australia
3.5.6 .1 Overview
Motus’ Australian operations consist of 30 passenger vehicle dealerships in
New South Wales and in Victoria. Further selective expansion in the Australian
market will be driven by the introduction of new profitable brands across existing
dealerships and newly acquired franchises.
The Australian new vehicle market has shown steady growth over the past decade,
with rising consumer confidence, population growth and low unemployment all
having a direct impact. SUV sales continue to drive the passenger vehicle market
due to the wide range of SUVs now being offered by manufacturers in the country.
2
South Africa Export Manual 2018, prepared on behalf of the SA Automotive Industry Export Council
3
NAAMSA quarterly reports
4
http://www.airports.co.za/airports/or-tambo-international/statistics/aircraft
33
SECTION 4
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF
OPERATIONS
Overview
The following information should be read in conjunction with our reviewed and audited consolidated financial
statements as of and for the years ended 30 June 2016, 2017 and 2018. The statements have been prepared
in accordance with International Financial Reporting Standards (“IFRS”) and its interpretations adopted by
the International Accounting Standards Board in issue and effective for Motus at 30 June 2018 and the SAICA
Financial Reporting Guides, as issued by the Accounting Practices Committee, Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council, as amended and the JSE Listings
Requirements, in line with the accounting policies of Motus which are supported by prudent judgments
andestimates.
Motus businesses did not historically constitute a combined legal group. The historical financial statements
of Motus are prepared on the assumption that the Company and its subsidiaries; Motus Capital Proprietary
Limited, Motus Group Limited and Motus Corporation Proprietary Limited traded together as a combined
legal group for the years ended 30 June 2018, 30 June 2017 and 30 June 2016.
In 2017, the rationalisation of Imperial’s portfolio and the clarification of strategy resulted in the assembly and
consolidation of Imperial’s entire logistics and vehicle operating companies and assets within two increasingly
self-sufficient divisions each under its own board, CEO and Executive Committee. By the 2017 year-end,
Motus was formed with four clearly defined business segments namely; Import and Distribution, Retail and
Rental, Motor-Related Financial Services and Aftermarket Parts. The objective of the formation and structuring
of Motus, under one collaborative leadership team, was to enhance returns by reducing duplication,
complexity, costs and capital employed, unlocking intra-divisional efficiencies and more deeply penetrating
the automotive value chain, while maintaining market share.
4.1 Financial performance and key operating metrics for Motus
4.1.1 Summary of Motus’ financial performance based on the results in Annexure 1
Summarised statement of profit or loss
Summarised statement of profit or loss
Audited Reviewed Reviewed
(ZAR’m) FY2018 FY2017 FY2016
Revenue 77 659 66 129 65 538
Net operating expenses (72 713) (61 202) (61 018)
Adjusted EBITDA 4 946 4 927 4 520
Depreciation, amortisation and impairments (1 353) (1 588) (1 228)
Operating profit 3 593 3 339 3 292
Operating profit margin 4.6% 5.0% 5.0%
Net finance costs (737) (889) (675)
Pre-tax profit
1
3 210 2 019 2 374
Income tax (897) (671) (677)
Profit after tax 2 313 1 310 1 503
Attributable to owners of Motus 2 346 1 569 1 493
Attributable to non-controlling interests (33) (259) 10
The above excludes discontinued operations, disclosed in Annexure 1 except for profit after tax, attributable to
owners of Motus and attributable to non-controlling interests.
FY2017 included a foreign exchange loss of R388 million which resulted from the unwinding of uneconomical
and excessive forward cover mainly in Renault and FY2018 included a net profit on disposal of property
amounting to R617 million.
34
Summarised statement of financial position
Audited Reviewed Reviewed
(ZAR’m) FY2018 FY2017 FY2016
Goodwill and intangible assets 1 230 798 895
Property, plant and equipment 6 786 6 465 6 888
Vehicles for hire 3 924 3 859 3 391
Adjusted net working capital 6731 8 235 8 193
Deferred funds (2724) (2807) (2949)
Other net assets 1 597 2 175 2 337
Net debt (5900) (6 803) (6 746)
Shareholders equity (11644) (11 922) (12009)
The above excludes discontinued operations as disclosed in Annexure 1.
Summarised statement of cash flows
Audited Reviewed Reviewed
(ZAR’m) FY2018 FY2017 FY2016
Cash flows from operating activities 4 301 1 337 (545)
Cash flows from investing activities 61 (222) (376)
Cash flows from financing activities* (4 204) (762) 634
* Dividend payments included above 3 140 1 197 1 274
FY 2018
Revenue increased by 17% year-on-year, with positive contributions by all four operating
segments, notwithstanding challenging economic and trading conditions. This was mainly
due to competitive vehicle pricing and a strong improvement in entry-level and small SUV
vehicle sales in South Africa as consumers are trading down. As a result, luxury brand sales
declined by 20% during the year. The acquisitions in the UK and Australia contributed
positively to revenue, but at lower margins.
The Import and Distribution segment’s revenue increased by 11% mainly due to increased
volumes sold of lower margin vehicles, a change in the mix of vehicles sold and price
increases. The Retail and Rental segment’s revenue increased by 18% which was mainly
due to the acquisitions in Australia and the UK and higher South African volumes of low
margin vehicles. Aftermarket Parts segment reported an increase in revenue of 8% mainly
due to price increases, aggressive sales and marketing activities and recent acquisitions.
During the period, in South Africa, Motus grew unit vehicle sales by 7% whilst national
vehicle unit sales as reported by NAAMSA increased by 2%.
Operating profit increased by 8%, as all four business segments recorded growth in
operating profit during the period and achieved a 5% increase from organic growth, before
acquisitions. The Import and Distribution segment increased by 7% mainly due to improved
performances in Hyundai, Kia and Renault as well as Africa distributors. The retail and rental
segment operating profit increased by 14% year-on-year mainly due to the acquisition of
businesses and the higher operational profit in dealerships selling importer brands. Financial
Services operating profit increased by 7% year-on-year, mainly attributable to higher fund
income, partially offset by lower bank alliance profits. Aftermarket Parts operating profit
increased by 10% mainly due to higher margins, as well as recent acquisitions.
Net finance costs declined by 17%, mainly due to an improved working capital position
across the segments as well as the recapitalisation of Renault in the Import and Distribution
segment.
Profit on sale of properties increased, mainly due to the sale of a property in Australia,
realising a profit of R616 million, as well as R104 million arising from several other disposals.
35
Profit before tax increased by 59%, impacted by the profit on sale of the Australia property
and a significant reduction in foreign exchange losses from 2017. This was largely due to
the unwinding of excessive and uneconomical forward cover in Renault. The reduction in
net finance costs also boosted performance.
Excluding the profit on sale of properties, PBT is up 30% mainly due to higher profit from
operations, lower interest as a result of the positive movement in working capital, lower
forex losses, coupled with the improvement in operating profit.
Effective tax rate reduced from 34% to 28%. The effective tax rate was positively affected
by the lower tax rate in jurisdictions where expansion occurred, mainly UK and Taiwan. The
Renault losses in the prior year did not result in tax benefits, as no additional deferred tax
assets were created in the statutory entity.
Cash flows were impacted by higher profitability coupled with lower working capital,
which resulted in higher cash generated from operations and higher dividends paid to
shareholders.
Acquisitions
• During the year, Motus acquired Pentagon Motor Holdings, which operates 38 passenger
and light commercial vehicle franchises from 21 prime retail dealerships in the UK,
for £26 million (R479 million), effective 1 September 2017. Pentagon supports Motus’
strategy to deploy capital and its vehicle retail expertise in pursuit of growth beyond South
Africa, and it complements our existing commercial vehicle business in the UK. This
acquisition performed satisfactorily despite the UK passenger market being depressed
by the convergence of declining UK passenger vehicle sales, market realignment from
diesel vehicles and Vauxhall changing ownership from General Motors to the French
PSA group.
• Motus acquired 75% of Australian-based SWT Group Proprietary Limited, which
operates 16 dealerships, for AUD24,2 million (R261 million), effective 1 October 2017.
This acquisition performed in line with expectations during the period and complements
our existing dealership footprint in Australia.
• Motus acquired 60% of ARCO Motor Industry Company Limited, a distributor of motor
vehicle engine parts based in Taiwan for USD15 million (R185 million). The acquisition
is in line with our strategy to shorten the supply chain in sourcing products for our route-
to-market network in Africa, thereby eliminating costs and improving efficiency in the
supply chain.
Disposals
• 32 non-strategic properties were disposed of during the year for R1.3 billion.
FY 2017
Revenue increased by 1%, despite volume reductions in the Import and Distribution
segment and the Retail and Rental segment, this was offset by selling price increases.
Aftermarket parts increased revenue by 6% year-on-year mainly due to price increases,
Motor-Related Financial Services revenue increased by 5% mainly due to higher volumes
on vehicles for hire, as well as new innovative product launches.
Operating profit increased by 1%, mainly due to solid operating profit growth in Financial
Services and Aftermarket Parts, offsetting lower volumes in vehicle sales of Importer
and Distribution, as well as Retail and Retail segments. The lower vehicle volumes were
largely offset by increases in selling prices and improvements in the cost structures of the
businesses post amalgamation of the vehicle retail operations.
Net finance costs increased by 32%, mainly as a result of the higher working capital levels
during the current financial year.
A foreign exchange loss of R416 million was realised. R388 million of this loss relates to
the unwinding of uneconomical and excessive forward cover, mainly in Renault, caused by
a volatile Rand exchange rate, excessive ordering in a slowing market and delayed model
launches.
36
Profit before tax decreased by 15%, mainly due to higher interest as a result of the higher
investment in working capital, offset by marginally higher operating profit.
Cash flows were impacted by higher profitability, which provided the ability to sustain
higher inventory levels during the vehicle volume retraction cycle and higher working
capital levels.
4.2 Segmental performance
Outlined below is the summarised financial performance of the respective business units for
FY2016, FY2017 and FY2018 as extracted from Annexure 1 to this Pre-Listing Statement.
4. 2.1 Import and Distribution
Summarised income statement
Audited Reviewed Reviewed
(ZAR’m) FY2018 FY2017 FY2016
Revenue 20 128 18 172 18 331
Operating profit 788 736 927
Operating profit margin 3.9% 4.1% 5.1%
Net finance costs (347) (285) (254)
Profit/(loss) before tax 393 (190) 416
The above excludes discontinued operations.
FY 2018
Revenue and operating profit from this segment increased by 11% and 7% respectively,
as sales volumes increased by 11% (Hyundai up 4%, Kia up 22% and Renault up 22%
per NAAMSA) with our vehicle mix aligned to market demand resulting from pressure on
consumer affordability.
The Motus importer segment market share increased from 14% in the prior year to 15%.
FY 2017
Revenue and operating profit declined by 1% and 21% respectively, impacted by the
disposal of industrial equipment businesses and lower vehicle sales volumes due to
market contraction. This was partially offset by solid performances from Hyundai and Kia,
enhanced by a change in the vehicle mix and price increases.
The Profit before tax was impacted by a once-off loss of R388 million relating to the unwinding
of uneconomical and excessive forward cover, mainly in Renault.
The Motus importer segment market share was maintained at 14% compared to the prior
year.
4.2.2 Retail and Rental
Summarised income statement
Audited Reviewed Reviewed
(ZAR’m) FY2018 FY2017 FY2016
Revenue 62 759 53 362 55 132
Operating profit 1 687 1 478 1 426
Operating profit margin 2.7% 2.8% 2.6%
Net finance costs (429) (356) (464)
Profit before tax 1 818 1 127 948
The above excludes discontinued operations.
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FY 2018
The Retail and Rental operations recorded a strong performance, increasing revenue and
operating profit by 18% and 14% respectively, supported by an increase in overall vehicle
sales volumes, despite subdued trading conditions in South Africa and challenging trading
conditions in the UK. New and pre-owned retail sales volumes increased by 33% and 15%
respectively. In South Africa, margins were enhanced by a realignment of the importer
dealership operating model to unlock value.
FY 2017
Due to subdued vehicle sales volumes and slowing consumer demand, the Retail and
Rental segment recorded a decrease in revenue of 3%. Operating profit, however, increased
by 4% assisted by price increases and cost containment.
4.2.3 Motor-Related Financial Services
Summarised income statement
Audited Reviewed Reviewed
(ZAR’m) FY2018 FY2017 FY2016
Revenue 2 166 2 036 1 944
Operating profit 889 833 757
Operating profit margin 41.0% 40.9% 38.9%
Net finance costs (49) (10) 5
Profit before tax 824 812 720
The above excludes discontinued operations.
FY 2018
Motor-Related Financial Services grew revenue and operating profit by 6% and 7%
respectively, supported by higher profitability in service, maintenance and warranty funds,
and positive growth in the newly branded MSure VAPS operations.
We continue to focus on growing the synergies within the retail motor segments and
improving the sales penetration of our products into other channels.
FY 2017
Despite lower vehicle sales, the Motor-Related Financial Services business improved
revenue by 5% and operating profit by 10%.
4.2.4 Aftermarket Parts
Summarised income statement
Audited Reviewed Reviewed
(ZAR’m) FY2018 FY2017 FY2016
Revenue 6 632 6 153 5 824
Operating profit 447 406 382
Operating profit margin 6.7% 6.6% 6.6%
Net finance costs (68) (69) (48)
Profit before tax 190 364 369
The above excludes discontinued operations.
FY 2018
Revenue and operating profit grew by 8% and 10% respectively. The acquisition of 60% of
ARCO contributed positively to the performance in the second half of the year.
Profit before tax was negatively impacted by an impairment of R173 million arising from the
disposals of Jurgens Proprietary Limited.
FY2017
Revenue and operating profit improved by 6%, enhanced by price increases and a change
in the sales mix.
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4.3 Portfolio and organisational optimisation
Details of Motus’ portfolio and organisational optimisation are set out in paragraph 3.1 of the Pre-
Listing Statement.
4.4 Liquidity and capital resources
On implementation of the Transaction, Imperial Logistics and Motus are expected to have self-
sufficient capital structures, with an optimal mix of debt and equity on a standalone basis and within
the industries in which they operate (targeted net debt to equity ratio for Motus of between 55% and
75%), to facilitate growth, provide flexibility and maintain sufficient liquidity and headroom.
In this context, Imperial has secured sufficient commitments from their debt arrangers with respect
to the debt restructure required for Imperial Logistics and Motus to operate on a standalone basis,
post the Unbundling and Listing.
4.5 Dividend guideline
Motus may make distributions from time to time, provided that any such distribution is pursuant to
an existing legal obligation of the Company or a court order or has been authorised by resolution
of the Board and (save in the case of a pro rata distribution to all shareholders (except one which
results in shareholders holding shares in an unlisted entity which requires the sanction of an
ordinary resolution), cash Dividends paid out of retained income has been sanctioned by ordinary
resolution, and provided further that:
• dividends be paid to shareholders registered as at a date subsequent to the date of declaration
or date of confirmation of the Dividend, whichever is the later;
• it reasonably appears that the Company will satisfy the ‘solvency and liquidity’ test as set out in
the Companies Act immediately after completing the proposed distribution; and
• no obligation is imposed, if it is a distribution of capital, that the Company is entitled to require
it to be subscribed for again.
The Company must complete any such distribution fully within 120 Business Days after the Board
acknowledges that the ‘solvency and liquidity’ test has been applied as aforesaid, failing which it
must again comply with the aforegoing.
All unclaimed distributions may be invested or otherwise made use of by the Directors for the
benefit of the Company until claimed, provided that distributions unclaimed for a period of 3 (three)
years from the date on which they were declared, in terms of the laws of prescription, may be
declared forfeited by the directors for the benefit of the Company. The directors may at any time
annul such forfeiture upon such conditions (if any) as they think fit. All unclaimed monies, other
than distributions, that are due to any Shareholder/s shall be held by the Company in trust for
an indefinite period subject, however, to the laws of prescription until lawfully claimed by such
Shareholder/s.
Under South African law, Motus will be entitled to pay a Dividend or similar payment to the
shareholders only if the ‘solvency and liquidity’ test set out in the Companies Act is met, and the
Company is permitted to do so in terms of its Memorandum of Incorporation.
There is no arrangement under which future Dividends are waived or agreed to be waived.
Dividend distributions to owners of Motus are recognised as a liability in the period in which the
dividends are approved and declared. Interim and final dividends are accrued when approved
by the Board. The Board confirms that the solvency and liquidity test as contemplated by the
Companies Act will be duly considered, applied and satisfied before a dividend is declared. Motus
aims to achieve a dividend pay-out ratio of 45% of HEPS in 2019.
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SECTION 5
RISK FACTORS
In addition to the other information included in this Pre-Listing Statement, the considerations listed below
could have a material adverse effect on Motus’ business, financial condition or results of operations, resulting
in a decline in the trading price of Motus’ ordinary shares. The risks set forth below comprise inherent material
risks as a result of the business Motus operates in. However, there may be additional risks that Motus does
not currently know of or that Motus currently deems immaterial based on the information available to it. These
factors should be considered carefully, together with the information and financial data set forth in this
document.
5.1 Risks related to Motus’ business
5.1.1 Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in the market prices.
Please refer to paragraph 5.2 and 5.3 of the Pre-Listing Statement for further details of the
market risks in the markets in which Motus operates.
5.1.2 Brand and OEM dependency risk
Motus has five distribution agreements with international vehicle manufacturers in the
Import and Distribution segment, and 23 franchise agreements with local OEMs in the
Retail and Rental segment. Non-compliance with sales targets, operating models and
quality standards in these agreements could affect Motus’ status as an exclusive importer,
distributor and/or retailer of global brands and, while the Group does not depend on any
single vehicle manufacturer, the termination or non-renewal of these agreements could
have a material adverse effect on Motus’ reputation, operations and financial performance.
This, in turn, could negatively impact on Motus’ ability to deliver superior service to
customers, its operations and financial performance.
Brand dependence
Motus’ vehicle sales are dependent on its OEM suppliers’ own financial condition, vehicle
design, production and distribution capabilities and the OEM brand equity and, to some
extent, their advertising spend. Any significant decline in this brand equity or the underlying
advertising spend has the potential to negatively impact Motus’ sales.
Product recalls
Motus is not liable for product recalls as instructed by the OEM supplier. There is a risk,
however, that a product recall will affect the reputation of and consumer demand for the
OEM brand, with a resulting potential adverse impact on Motus’ future vehicle sales in
respect of that brand.
Motus relies on key suppliers and strategic partners for continuation of its operations
Motus relies on ongoing commercial relationships with key suppliers other than OEMs and
strategic partners to deliver superior service to its customers. The loss of any significant
supplier, whether through its bankruptcy, business interruption, failure to maintain/secure
the relationship, breach of any contractual provisions or terms of trade and/or litigation,
could impact Motus’ operations and financial performance.
5.1.3 Competition risk
Motus faces high levels of competition risk from direct peers in the markets in which it
operates. The automotive sector is a highly competitive market.
5.1.4 Seasonality risk
Motus’ car rental business can be seasonal, particularly in the Western Cape, South Africa.
The car rental business has historically experienced an increase in revenue over the
summer months, driven by tourism. A significant decrease in South African tourism would
likely have an adverse effect on car rental revenue and profitability.
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5.1.5 Disruption risk
The motor industry is vulnerable to high levels of disruption. This disruption could be
brought about by new entrants, changes in traditional vehicle ownership models (as a
result of MaaS “Mobility as a Service”), or the emergence of digital mobility offerings.
Motus’ business model could be impacted in international markets by social forces such as
urbanisation and the development of reliable public transport infrastructure.
5.1.6 Regulatory and compliance risk
As a multinational business, Motus is subject to a wide range of legislation, which is
monitored on an ongoing basis. Any breach of compliance with this legislation could result
in fines or sanctions that affect Motus’ profitability and may have adverse reputational
consequences.
Monitoring the changes in legislative environments and interpretations of law is of key
importance and may have uncertain consequences for the Motus business model and
operations in its chosen markets. In South Africa, political and policy uncertainty may have
implications on the Group’s Financial Services Provider (FSP) licences with the business
which the Group requires to facilitate/introduce credit providers to its customers. This
uncertainty may also have an effect on credit providers, who may be impacted in their
ability to extend credit, hence suppressing consumer’s ability to buy new cars.
Motus’ transition to being a public, listed company will involve changes to its corporate
governance and legal and compliance practices
The Company is in the process of implementing the practices, procedures and governance
structures appropriate for a public company listed on the JSE. The Company has appointed
independent, non-executive directors and adopted the King IV governance practices
and policies described in this Pre-Listing Statement. Ownership of Motus has vested with
Imperial, a JSE-listed company and Motus has complied with good governance practices
as a subsidiary of such a listed entity and has a history of operating under these governance
structures, practices and policies as applicable to an unlisted subsidiary of a listed parent
company.
Motus is in the process of reviewing its internal compliance framework and plans to further
align its internal compliance function, including updating its code of ethics and other
compliance policies. The internal compliance function will be based on existing structures,
but may require further adjustments or modifications as it is implemented. Additionally,
compliance with the increased accounting and reporting requirements and obligations
associated with being a listed company will require close management attention and could
result in increased legal and related costs.
Motus’ failure to successfully adapt its management approach to its new public-company
status, as well as the increased demand on financial and management resources that will
result from being a public company, could have an effect on its business, financial condition
and results of operations.
5.1.7 New customer or customer retention risk
Motus depends on its ability to attract and retain customers, which could be adversely
affected by macroeconomic conditions and/or the demand environment in the automotive
sector as described above and the Group’s competitiveness in the marketplace. Failure
to attract and retain customers would have a material adverse effect on Motus’ financial
performance.
Credit extension and client affordability in the retail markets
Motus’ revenue growth (including Motor-Related Financial Services) is affected by the
ability of customers to access credit and the appetite of financial institutions to lend in
the automotive sector. Increased level of consumer indebtedness could limit the ability
of consumers to increase their aggregate borrowings (or the willingness of lenders to
lend), which could in turn adversely affect demand for cars in the markets in which Motus
operates, which could have an adverse effect on Motus’ financial performance.
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5.1.8 Transformation risk
The risk that Motus may not be competitive, sustainable and revenue may be adversely
affected and/or loss of customers, due to transformation goals not being achieved.
B-BBEE status of South African-based operations
Changes to the B-BBEE Codes requires accelerated transformation, specifically higher
levels of black ownership in Motus’ South African businesses. Failure to achieve set targets
may impact on the competitiveness and sustainability of these businesses through reduced
ability to originate new business and maintain existing relationships, for example when
dealing with state-owned enterprises in South Africa. Motus in certain cases has contract
agreements with state-owned enterprises and the conditions of the contract may include
B-BBEE standards. Failure to achieve the set targets as stipulated in the B-BBEE codes
may impact the future renewal of those contracts.
5.1.9 Technology risk
Technology risk is the risk associated with the use, ownership, operation, involvement,
influence and adoption of information technology (IT) within Motus. It consists of IT-related
events and conditions that could potentially impact the business. It would include risks
arising from changes, updates or alterations made to the IT infrastructure, systems or
applications that could affect service reliability and availability.
Motus relies on technology in its business and any technology disruption or delay in
implementing new technology could have adverse effects
Motus relies on software and other information technology to manage various critical
aspects of its business. These include managing procurement, processing orders,
managing warehouses, dealer management systems and financial and insurance systems.
Any disruption to this technology could negatively impact our customer service levels,
decrease sales volumes and result in increased costs. Motus has invested and continues
to invest in technology security initiatives, business continuity, and disaster recovery plans.
However, these measures cannot fully insulate Motus from technology disruption that could
impair operations and profits. Motus is not reliant on any centralised IT functions at Imperial
Holdings, and has the ability to self-provide where necessary.
5.1.10 People risk
The risk of inadequate and ineffective practices for the recruitment, development,
management, retention of employees and contractors and/or inability to attract top talent
to the Company.
Succession and talent management
The limited pool of qualified skills in South Africa constrains Motus’ ability to access the
talent needed to resource the divisional growth strategies. Besides leadership skills, Motus’
businesses depend on specialised technical and customer facing skills, which need to be
developed and retained.
Motus’ ability to operate or expand effectively depends largely on the experience, skills
and performance of its senior management team and technically skilled employees. Motus
cannot be certain that the services of its senior management and a sufficient number of its
technically skilled employees will continue to be available to it. Any senior management
departures or unavailability (due to death, injury, illness or other reasons) or technically
skilled worker shortages could adversely affect Motus’ operational efficiency and customer
relationships.
If the Company is not able to hire and retain appropriate management and technically
skilled personnel, or if there are insufficient succession plans in place, this could have an
effect on its business, results or operations and financial position.
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5.1.11 Strategy and execution risk
The risk of unanticipated consequences of strategic decisions taken and/or poor execution
of strategic objectives.
The growth strategy may not achieve the anticipated results
The future success of Motus will depend on Motus’ ability to grow the business, including
through increasing sales, expanding brands, making strategic acquisitions, and achieving
improved operating efficiencies as we continue to expand our customer base. The growth
and innovation strategies require significant commitments of management resources and
capital investments and may not grow net sales at the rate we expect or not at all. As a
result, we may not be able to recover the costs incurred in developing new projects and
initiatives or to realise their intended or projected benefits, which could have a material
adverse effect on the business, financial condition, or results of operations.
Acquisition and business integration
Motus may selectively pursue opportunities to supplement organic growth with strategic
acquisitions. Such opportunities may take the form of the acquisition of other companies or
through joint ventures. Any such acquisition or joint venture may change the scale of Motus’
business and operations and may expose it to new geographic, political, social, operating,
financial, legal, regulatory and contractual risks, for example:
• Motus may have difficulty integrating and assimilating the operations and personnel of any
acquired companies, realising anticipated synergies and maximising the financial and strategic
position of the combined enterprise, and maintaining standards, policies and controls;
• the integration may disrupt Motus’ ongoing business and its relationships with employees
(who may be subject to consolidation), suppliers and contractors;
• an acquisition may divert management’s attention from Motus’ day-to-day business;
• the acquired business may have undetected liabilities which may be significant; and
• in addition, to the extent Motus participates in the development of a project through a
joint venture, there could be disagreements, legal or otherwise, or divergent interests or
goals among the parties, which could jeopardise the success of the project.
There can be no assurance that any acquisition will achieve the results intended or whether
there will be a pipeline of suitable acquisitions. Any problems experienced by Motus in
connection with an acquisition or joint venture as a result of one or more of these or other
factors could have a material adverse effect on one or more of Motus’ businesses, operating
results and financial condition.
Expansion in existing and into new territories
The growth of Motus is dependent on the expansion and growth in existing and new
territories. As part of its growth strategy, Motus will evaluate a number of geographic
locations for expansion, mainly in the UK and Australia, but its ability to successfully do so
is dependent on a number of factors, including the availability of key staff, funding and the
reception from the local markets.
Leased premises
Motus leases a number of properties that it uses to facilitate its business activities.
Continuation of these leases will be subject to complying with the terms of these leases.
The Board is confident that extension of these leases will be successfully negotiated but
may not be able to obtain terms as favourable as its current terms which could have an
adverse effect on Motus’ business and results of operations.
5.1.12 Legal risk
The exposure to adverse consequences due to non-compliance with legal or statutory
responsibilities and/or inaccurately drafted contracts and their execution, as well as the
absence of written agreements or inadequate agreements. This includes the exposure to
new laws as well as changes in interpretations of existing law by appropriate authorities
and exceeding authority as contained in the contract. This applies to the full scope of Motus
activities and may also include others acting on behalf of Motus.
43
Adverse judgments or settlements resulting from legal proceedings in the ordinary course
of business could reduce profits or limit the ability to operate the business
In the ordinary course of business, we may be involved in various legal proceedings. The
outcome of these proceedings cannot be predicted. If any of these proceedings were to
be determined adversely to Motus or a settlement involving a payment of a material sum of
money were to occur, it could materially and adversely affect our profits or ability to operate
our business. Additionally, we could become the subject of future claims by third parties,
including our employees, suppliers, customers, and other counterparties, our investors, or
regulators. Any significant adverse judgments or settlements would reduce our profits and
could limit our ability to operate our business. Further, we may incur costs related to claims
for which we have appropriate third-party indemnity, but such third parties may fail to fulfil
their contractual obligations.
Motus may be subject to or affected by product liability claims relating to its products
Motus may be exposed to liability claims in the event that the products it sells cause injury or
death. The Board believes that it has sufficient primary or excess umbrella liability insurance
to cover product liability claims. However, Motus’ current insurance may not continue to
be available at a reasonable cost or, if available, may not be adequate to cover all of its
liabilities. Motus generally seeks contractual indemnification and insurance coverage from
parties supplying products to it. However, this indemnification or insurance coverage is
limited, as a practical matter, to the creditworthiness of the indemnifying party and the
insured limits of any insurance provided by suppliers. If Motus does not have adequate
insurance or contractual indemnification available, the liability related to defective products
could affect its results of operations.
5.1.13 Image and reputation risk
The risk of damage or potential damage to the businesses image or reputation which may
impair future profitability or sustainability.
Adverse publicity about Motus, lack of confidence in products, and other risks could
negatively affect our reputation and business
Maintaining a good reputation is critical to Motus’ business. Any event that damages our
reputation, justified or not, could quickly affect our revenues and profits. This includes
adverse publicity about the quality, safety or integrity of our products. Reports, whether
or not they are true, could severely harm our reputation, which could adversely affect our
financial performance.
5.1.14 Expense risk
The risk of unexpected changes in future expenses; unexpected cost associated with
operating our business and/or delays in the anticipated timing of activities related to cost
savings initiatives. This risk includes fluctuations in fuel costs and other transportation
costs that impacts the product prices and negatively affect customer confidence and
discretionary spending. This may impact Motus’ sales margins, operating expenses and
operating results.
Fluctuations in fuel costs and other transportation costs
The high cost of fuel can negatively affect consumer confidence and discretionary spending.
In addition, the high cost of fuel can also increase the price paid for products, as well as
the costs incurred to deliver products to customers. These factors, in turn, may have an
impact on the sales mix, changes in buying patterns and may negatively affect Motus’
sales, margins, operating expenses and operating results and in extreme cases, this could
accelerate the emergence of shared vehicle ownership models.
If one or more competitors implements a lower cost structure, they may be able to offer
lower prices to customers and Motus may be unable to adjust its cost structure in order to
compete profitably
We may not be able to realise some or all of our expected cost savings in the future.
A variety of factors could cause us not to realise some of the expected cost savings.
These include, among others, delays in the anticipated timing of activities related to our
44
cost savings initiatives, lack of sustainability in cost savings over time, and unexpected
costs associated with operating our business. All of these factors could negatively affect
our results of operations and financial condition, including by failing to offset any decreases
in our profitability.
5.1.15 Environmental, health and safety risk
The risk of loss, damage or injury to people from a hazard or accident; and/or an adverse
effect on the environment by effluents, emissions, wastes resources depletion, etc. arising
from all geographical locations Motus operates in.
Motus may be subject to significant environmental, health and safety costs. If Motus fails
to comply with requirements imposed by applicable law or other governmental regulations,
Motus could become subject to lawsuits, investigations and other liabilities and restrictions
on operations that could significantly and adversely affect the business
Motus’ operations face a broad range of international, national and local laws and regulations
relating to the protection of the environment or health and safety. These laws govern
numerous issues, including discharges to air, soil and water; the handling and disposal of
hazardous substances; the investigation and remediation of contamination resulting from
the release of petroleum products and other hazardous substances; employee health and
safety; and fleet safety.
5.2 Risks related to South Africa
5. 2.1 Market risk
South African exchange control regulations may restrict Motus’ ability to make foreign
investments and procure foreign denominated finance
As a South African resident company, Motus is subject to South Africa’s exchange control
regulations which effectively place limitations on the export of capital from the CMA. Although
there has been ongoing relaxation of exchange controls in recent years, these regulations
could hinder the ability of Motus to make foreign currency-denominated investments and
procure foreign currency denominated financing in future which could have a material
adverse effect on Motus’ business, financial condition, results of operations and prospects.
South Africa’s exchange control regulations restrict the export of capital from South Africa.
Transactions between South African residents (including companies) and non-residents of
the CMA are subject to exchange controls enforced by SARB. As a result, Motus’ ability
to raise and deploy capital outside the CMA is restricted. These restrictions could hinder
Motus’ financial and strategic flexibility, particularly its ability to raise funds outside South
Africa.
Currency exchange rate fluctuations
In recent years, the value of the Rand, as measured against foreign currencies, including
the US Dollar, Pound Sterling and the Euro, has been very volatile.
The Rand fluctuations or volatility could impact the pricing of new vehicles and therefore
the competitiveness and profitability of the vehicle import business. Although Motus applies
foreign exchange hedging practices governed by its foreign exchange hedging policy, it
remains exposed to fluctuations in foreign exchange rates.
Fluctuations in the exchange rate between the Rand and foreign currencies could have an
adverse impact on the foreign currency equivalent of the share price of the ordinary shares
and/or any cash Dividend or distributions made in respect of the ordinary shares.
5.2.2 Economic and socio-political risk
Economic, political or social instability affecting South Africa or regionally may reduce
demand for Motus’ products or have a material adverse effect on Motus’ business, financial
condition, results of operations and prospects
Political, social and economic conditions in South Africa may have a significant effect on
Motus’ business. It is also possible that the rating agencies could further downgrade South
Africa’s sovereign rating. Growth in inflation and continued interest rate hikes could have
an adverse impact on growth and business confidence. Tighter monetary policy could
45
also have an adverse impact on mortgage payments and the general sustainability of
household debt levels. These factors could have an adverse impact on the industry in
general, causing consumers to reduce expenditure. Adverse economic conditions could
hinder Motus’ growth strategies or otherwise have an adverse impact on its business,
financial condition, results of operations and prospects.
Sustained depreciation of the Rand has resulted in and could further result in the cost
of imported goods steadily increasing. The overall impact of this on the South African
economy and the increased prices of consumer goods in the other areas of the economy
could indirectly impact Motus adversely through a general increase in prices and a decline
in consumer discretionary income.
South Africa is also affected by persistent socio-economic challenges including in relation
to access to adequate education, healthcare, housing and other services, including water
and electricity. South Africa also has one of the highest HIV/AIDS infection rates in the
world. The exact impact of increased mortality rates due to HIV/AIDS-related deaths and
increases in employee-related costs (in terms of increased absenteeism, depressed morale
and reduced productivity, in addition to increased recruitment and replacement costs,
insurance premiums, benefits payments and other costs of providing treatment) on the cost
of doing business in South Africa and the potential growth in the economy is uncertain.
Furthermore, South Africa has experienced high levels of poverty and unemployment as
well as prolonged industrial action.
Although it is difficult to predict the effect of these problems on South African businesses
or the South African Government’s efforts to solve them, these problems, or the solutions
proposed, could impact the South African consumer or reduce their disposable income,
which in turn could reduce the amount spent by consumers and may have a material
adverse effect on Motus’ business, financial condition, results of operations and prospects.
Demand for new automobiles is cyclical and affected by general economic conditions, and
any reduction in demand would have a material effect on the Group’s business
The demand for new vehicles is cyclical, which in some years will lead to reduced margins
caused by oversupply. During economic downturns, new vehicle sales to customers tend
to decline due to weak demand. Other economic factors such as a significant increase in
the price of oil or the potential impact of environmental regulation, the taxation of engine
emissions road usage or fuel for vehicles and the effects of a decline in residual values
inflating the overall cost of vehicle ownership can all contribute to weak demand for new
vehicles. Changes in fuel taxation and fuel prices could significantly impact the sales of
new and used vehicles. In particular, increases in fuel taxation and prices could impact the
sales of vehicles with high fuel consumption characteristics.
There are risks associated with investing in emerging markets such as South Africa.
South Africa is generally considered by international investors to be an emerging market.
Emerging markets are typically thought to have certain characteristics and be subject to
many risks, including:
• adverse changes in economic and governmental policy;
• abrupt changes in currency values;
• high levels of inflation;
• relatively low levels of disposable consumer income;
• relatively high levels of crime;
• volatility in capital markets;
• relatively unstable institutions;
• unpredictable changes in the legal and regulatory environment;
• inconsistent application of existing laws and regulations;
• slow or insufficient legal remedies; and
• Ethical sourcing of product.
46
Motus cannot assure investors that political, economic, social and other developments in
South Africa will not have a material adverse effect on its business, financial condition,
results of operations and prospects or the value of the ordinary shares.
Risks relating to strike actions
South Africa has a highly unionised work force and is subject to planned legal strike action
and unplanned and illegal strike action from time to time. Such actions and in particular
prolonged and frequent strike action may have a negative impact on Motus and its customer
base.
5.2.3 Regulatory and compliance risk
Shareholders’ rights will be governed by South African law, which may differ in material
respects from the rights of shareholders under the laws of other jurisdictions
Motus is a public company incorporated under the laws of South Africa. The rights of
holders of ordinary shares are governed by the Company’s MOI and by South African law,
which could change.
Although South Africa has a reputable and robust legal system, it may not always be
possible for foreign investors to effect service of legal process, enforce judgments of courts
outside of South Africa or bring actions based on securities laws of jurisdictions other than
South Africa against Motus or its Board.
Motus and its executive officers are residents of South Africa. In addition, Motus’ assets
may be located either wholly or substantially within South Africa. As a result, it may not be
possible for investors to effect service of legal process outside of South Africa, upon the
Company, its Board and its executive officers. Moreover, it may not be possible for investors
to enforce against the Company, its Board or its executive officers, judgements obtained in
courts outside South Africa, based on the civil liability provisions of the securities laws of
those countries.
Policy uncertainty regarding constitutional matters
South Africa is currently undergoing policy uncertainty with respect to property ownership,
Motus is possibly impacted in two ways:
• Directly – Motus owns a substantiate property portfolio and may be subject to a review
of its property rights.
• Indirectly – the review of property rights could have a direct consequence on the
devaluation of property and land; the reduction of rights could have an prolonged
adverse impact on the current economically active population in consumer spending
patterns.
5.2.4 Expense risk
Motus’ operations in South Africa may face increased costs due to infrastructure challenges
impacting water and electricity tariff increases and may experience disruptions resulting
from electricity shutdowns, water and fuel shortages
South Africa has experienced national electricity shortages with intermittent, seasonal
power outages and the government has occasionally implemented electricity rationing
and planned blackouts. South Africa’s energy provider, Eskom, has advised that the
national power grid may remain under strain for a number of years until new power stations
come on-line, and regular power cuts remain a possibility during this time. While Motus
has back-up power generators which enable them to continue operating through power
supply interruptions, any extended period of planned or unplanned electrical power
supply interruptions could result in significantly increased energy or other utility costs,
associated with operating back-up power generators. Electricity tariffs charged by Eskom
have significantly increased in recent years. In addition, the costs of power may be volatile
due to increased market fluctuations in gas and electricity prices. If Motus is unable to
implement measures to mitigate any future increases in its energy or other utility costs or
power shortages, it could have a material adverse effect on Motus’ business, results of
operations and financial condition.
47
Motus as a South African business is dependent on monopoly government SOE infrastructure
providers. Failure of State-owned enterprises resulting in a lack of supply of basic utility
service is a concern as a there are no current alternative suppliers.
5.2.5 Tax risk
Changes in tax legislation
South Africa has a stable tax environment and the tax administration system is advanced
and transparent in many aspects. Changes in general corporate or other taxation
legislation could, however, affect Motus’ results of operations. Such government action may
be unpredictable and beyond Motus’ control and any adverse changes in government
policies could have an adverse effect on Motus’ business prospects, results of operation
and financial position and may cause the market price of the ordinary shares to decline.
Furthermore, compliance with the relevant taxation laws could come with a regulatory cost
and non-compliance could be subject to fines, penalties and/or legal action.
5.3 Risks related to the international markets in which Motus operates
Motus operates in international markets and may be subject to macroeconomic changes beyond
its control
Global economic factors that are beyond Motus’ control can directly affect its financial performance.
These factors include interest rates, rates of economic growth, fiscal and monetary policies of
governments, inflation, deflation, foreign exchange fluctuations, financial, banking or liquidity crisis,
consumer credit availability, consumer debt levels, unemployment trends, and other matters that
influence consumer confidence and spending, particularly in the automotive sector.
Motus’ profitability may also be adversely affected by fixed costs (including in particular those
relating to leased real property in its franchised dealer network) and the possible inability to scale
back operations within a time frame sufficient to match any decreases in revenue relating to
changes in market and economic conditions.
Motus’ business is exposed to the end consumer across all income levels and is therefore sensitive
to downturns in the economy, economic uncertainty and other factors affecting discretionary
consumer spending.
Since Motus operates internationally, it is exposed to a variety of general domestic and global
economic and business conditions that will impact on consumer spending. This includes, but is
not limited to, interest rates, exchange rates, local and international fiscal and monetary policy.
Prolonged unfavourable movements in any of the above factors may have an effect on Motus’
financial performance.
Motus has material operations in the United Kingdom and Australia and as such is affected by
adverse changes in these markets. For example, “Brexit” has increased uncertainty in the UK
and may have adverse effects which could adversely affect the demand for (or supply of) new
automobiles in the UK.
5.4 Risks related to the Unbundling for Motus
5.4.1 Strategy and execution risk
Motus may not realise the potential benefits from the Unbundling
Motus may not realise the potential benefits that it expects from its Unbundling from Imperial,
which benefits have been described in this Pre-Listing Statement. In addition, Motus will
incur costs and Motus will incur some negative effects from its separation from Imperial,
including loss of access to the Imperial brand from which it has benefited in the past.
Motus’ historical consolidated financial statements contained in this document are not
necessarily indicative of its future financial condition, future results of operations or future
cash flows, nor do they reflect what its financial condition, results of operations or cash
flows would have been as an independent public company during the periods presented
The historical consolidated financial statements of Motus included in this Pre-Listing
Statement do not reflect what its financial condition, results of operations or cash flows
would have been as an independent public company during the periods presented and
48
are not necessarily indicative of its future financial condition, future results of operations or
future cash flows. This is primarily a result of the following factors:
• Motus’ historical consolidated financial statements reflect charges for services
historically provided by Imperial, and those charges may be significantly different to the
comparable expenses Motus would have incurred as an independent company.
• Motus’ working capital requirements and cost of debt and other capital may be different
from that reflected in its historical consolidated financial statements.
• The historical consolidated financial statements may not fully reflect the increased
costs associated with being an independent public company, including changes that
will occur in Motus’ cost structure, management, financing arrangements and business
operations as a result of its Unbundling from Imperial, including all the costs related to
being an independent public company.
• The historical consolidated financial statements may not fully reflect the effects of certain
liabilities that will be incurred or assumed by Motus and may not fully reflect the effects of
certain assets that will be transferred to, and liabilities that will be assumed by Imperial.
Motus will not be able to rely on Imperial to fund its future capital requirements and financing
from other sources may not be available on favourable terms
In the past, Motus’ capital needs have been assisted by Imperial. However, following the
Unbundling, Imperial will no longer provide funds to finance Motus’ working capital or other
cash requirements. Motus’ future capital and funding requirements will depend on many
factors, including its revenues, which are primarily driven by Motus’ operations, its wages
and other fees, its rate of growth, its infrastructure investment and acquisition requirements.
Motus may need to raise additional funds through public or private equity or debt financing.
Motus may not be able to obtain financing with interest rates as favourable as those that
it could benefit from while a member of Imperial. In the unlikely event that Motus cannot
raise funds on acceptable terms, if and when needed, Motus may not be able to further
develop its business or invest in new products and services, take advantage of future
opportunities, respond to competitive pressures or unanticipated requirements or meet
its financing obligations, which could have a material adverse effect on Motus’ business,
financial condition, results of operations or cash flows.
5.4.2 Expense risk
Motus has no history operating as an independent public company. Motus will incur some
expenses to create the corporate infrastructure necessary to operate as an independent
public company, and will experience increased ongoing costs in connection with being an
independent public company
Motus has historically used Imperial’s corporate infrastructure to support many of its business
functions. The expenses related to establishing and maintaining this infrastructure have
historically been spread among all of the Imperial businesses. Following the Unbundling,
Motus will no longer have access to Imperial’s infrastructure, and will need to establish its
own. Imperial provided corporate communications, treasury and finance, investor relations,
internal audit, legal and tax advice, and compliance regarding internal controls. As an
independent, publicly traded company, and effective as of Motus’ separation from Imperial,
Motus will assume responsibility of the costs for these functions. Accordingly, Motus’
consolidated results of operations are not necessarily indicative of its future performance
and do not reflect what its financial performance would have been had Motus been an
independent publicly traded company during the periods presented.
The costs associated with performing or outsourcing these functions may exceed the
amounts reflected in Motus’ pro forma financial effects or an increase in the costs of
performing or outsourcing these functions could adversely affect Motus’ businesses,
financial conditions, results of operations or cash flows.
Motus’ accounting and other management systems and resources will have to meet the
financial reporting and other requirements to which it will be subject to, following the
Unbundling. Motus’ costs of operating as a public company will be material and will require
management to devote substantial time to complying with public company regulations.
49
Motus’ financial results previously were included within the consolidated results of Imperial,
and management believes that its reporting and control systems were appropriate for those
of subsidiaries of a public company. However, Motus was not directly subject to the reporting
and other requirements of the JSE. These reporting and other obligations will place additional
demands on Motus’ management, administrative, operational and accounting resources.
To comply with these requirements, management anticipates that Motus will need to
upgrade its systems, including information technology, implement additional financial and
management controls, reporting systems and procedures and hire additional accounting
and finance staff. Management expects to incur additional annual expenses related to
these steps. Management cannot be certain that any necessary upgrade of its financial
and management controls, reporting systems, information technology and procedures will
occur as expected, or that these management controls, reporting systems, information
technology or procedures ensure compliance with financial reporting requirements and
other rules that apply to reporting companies under the regulations of the JSE. Any failure
to achieve and maintain effective internal controls could have an adverse effect on one or
more of Motus’ reputation, businesses, and financial conditions, results of operations or
cash flows.
5.5 Risks related to Motus Shares
5.5.1 Market risk
Motus’ non-South African shareholders face additional investment risk from currency
exchange rate fluctuations since any dividends will be paid in Rand
Dividends or distributions with respect to Motus’ ordinary shares have historically been paid
in Rand and all Dividends have historically been paid directly to Imperial.
The US dollar or other currency equivalent of any Dividends or distributions with respect
to Motus’ ordinary shares, if any, will be adversely affected by potential future reductions
in the value of the Rand against the US dollar or other currencies. Although presently
considered to be extremely unlikely, one cannot rule out the possibility that there could be
future changes in South African exchange control regulations, such that Dividends paid out
of trading profits will not be freely transferable outside South Africa to shareholders who are
not residents of the CMA.
The price of the Motus Shares may be volatile in the future
The price of the Motus Shares may be volatile due to various factors in the future, including
operational performance, exchange rate fluctuations and macro economic and political
changes in the markets which Motus operates. Furthermore, any potential future equity
issuances by Motus could have an adverse effect on the market price of the shares, and
could also dilute future ownership of existing shareholders.
5.5.2 Regulatory and compliance risk
Shareholders outside South Africa may not be able to participate in future issues of securities
(including ordinary shares) carried out by or on behalf of Motus
Securities laws of certain jurisdictions may restrict Motus’ ability to allow participation
by certain shareholders in future issues of securities (including ordinary shares) carried
out by or on behalf of Motus. In particular, holders of Motus securities who are located in
the United States may not be able to participate in securities offerings by or on behalf of
Motus unless a Pre-Listing Statement under the Securities Act, is effective with respect to
such securities or an exemption from the registration requirements of the Securities Act is
available thereunder.
Securities laws of certain other jurisdictions may also restrict Motus’ ability to allow the
participation of all holders in such jurisdictions in future issues of securities carried out by
Motus. Holders who have a registered address or are resident in, or who are citizens of,
countries other than South Africa should consult their professional advisors as to whether
they require any governmental or other consent or approvals or need to observe any other
formalities to enable them to participate in any offering of Motus securities.
50
Investors in the United States and other jurisdictions outside South Africa may have difficulty
bringing actions, and enforcing judgments, against Motus, its directors and its executive
officers based on the civil liabilities provisions of the federal securities laws or other laws of
the United States or any state thereof or under the laws of other jurisdictions outside South
Africa
Motus is incorporated in South Africa, and its directors and executive officers (as well as
Motus’ independent registered public accounting firm) reside outside of the United States.
Substantially all of the assets of these persons and substantially all of the assets of Motus
are located outside the United States. As a result, it may not be possible for investors to
enforce action against these persons or Motus a judgment obtained in a United States court
predicated upon the civil liability provisions of the federal securities or other laws of the
United States or any state thereof. In addition, investors in other jurisdictions outside South
Africa may face similar difficulties.
A foreign judgment is not directly enforceable in South Africa, but constitutes a cause of
action which will be enforced by South African courts provided that:
• the court which pronounced the judgment had jurisdiction to entertain the case according
to the principles recognised by South African law with reference to the jurisdiction of
foreign courts;
• the judgment is final and conclusive (that is, it cannot be altered by the court which
pronounced it);
• the judgment has not lapsed;
• the recognition and enforcement of the judgment by South African courts would not
be contrary to public policy, including observance of the rules of natural justice which
require that the documents initiating the proceedings outside South Africa were properly
served on the defendant and that the defendant was given the right to be heard and
represented by counsel in a free and fair trial before an impartial tribunal;
• the judgment does not involve the enforcement of a penal or revenue law; and
• the enforcement of the judgment is not otherwise precluded by the provisions of the
Protection of Businesses Act, 99 of 1978, as amended of South Africa.
5.5.3 Liquidity risk
Investors may face liquidity risk in trading Motus’ ordinary shares on the JSE
Although the ordinary shares are expected to be listed on the JSE, there is no guarantee that
an active trading market for the ordinary shares will develop and continue after the listing.
In addition, the JSE may prove to offer less liquidity than other internationally-recognised
stock exchanges. Historically, trading volumes and liquidity of shares listed on the JSE have
been low in comparison with other major markets. If no active trading in the ordinary shares
develops and continues after the listing, this could have an effect on the liquidity and market
price of the ordinary shares, and the ability of a holder to sell a substantial number of Motus
ordinary shares on the JSE in a timely manner, especially in a large block trade.
5.5.4 Strategy and execution risk
Motus may not pay Dividends or make similar payments to its shareholders in the future and
any Dividend payments are subject to withholding tax
Motus may pay cash Dividends only if funds are available for that purpose. Whether funds
are available depends on a variety of factors, including the amount of cash available and
Motus’ capital expenditures (on both existing infrastructure as well as on other projects)
and other cash requirements existing at the time. Under South African law, Motus will be
entitled to pay a Dividend or similar payment to its shareholders only if it meets the solvency
and liquidity tests set out in the Companies Act and is permitted to do so in terms of the
memorandum of incorporation. Given these factors (including the capital and investment
needs of the business) and the Board’s discretion to declare a Dividend (including the
amount and timing thereof) cash Dividend or other similar payments may not be paid in
the
future. It should be noted that Dividends declared by South African resident companies
are subject to a 20% withholding tax.
51
The directors recognise the importance of maintaining a consistent and transparent Dividend
policy and will endeavour to avoid volatile swings in the Dividend profile by ensuring high
quality, medium-term strategic and financial planning. However, there is no assurance that
a Dividend will be paid in respect of any financial period, and any future Dividends will be
a function of the profitability and return on equity of Motus, the future organic or acquisitive
growth strategies which require capital investment, the need to strengthen the balance
sheet during periods of economic uncertainty and the Liquidity and Solvency tests.
Motus’ ordinary shares are subject to dilution upon the award of shares in terms of Motus’
share incentive schemes or issues of shares by the Board under their general authority
As of the date of this Pre-Listing Statement, Motus had an aggregate of 394 999 000
ordinary shares authorised to be issued and as of that date an aggregate of 201 971 450
ordinary shares were issued.
Motus plans to implement an employee share plan which will be authorised to issue up
to 5 (five) ordinary shares in Motus. No shares have yet been allocated under this plan,
but shares are expected to be allocated once this plan becomes effective, as set out in
Annexure 14 of this Pre-Listing Statement. Shareholders’ equity interests in Motus will
be diluted to the extent of future exercises or settlements of rights under this plan and
any additional rights. Motus Shares are also subject to dilution in the event that the Board
issues shares under its general authority to issue shares (which authority is limited to 5%
of the issued stated capital of Motus at the relevant time of issue and which authority shall
only remain in place until the next annual general meeting of Motus and any such issue is
otherwise subject to the Listings Requirements).
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SECTION 6
MANAGEMENT AND CORPORATE GOVERNANCE
6.1 Directors of Motus
The details of the Executive Directors of Motus are provided below:
Osman Suluman Arbee
Position: Chief Executive Officer
Qualifications: Bachelor of Accounting, Chartered Accountant (South Africa), Higher
Diploma Taxation
Appointed: October 2017
Years at Imperial: 14
Age: 59
Nationality: South African
Business address: 1 Van Buuren Road, Bedfordview
Committees: Invitee to the Social, Ethics and Sustainability Committee
Invitee to the Audit and Risk Committee
Invitee to the Nomination Committee
Invitee to the Remuneration Committee
Invitee to the Asset and Liability Committee
Other directorships: Refer to Annexure 7
Experience: Osman was appointed as the CEO of Motus on 1 March 2017. He has been
with Imperial since September 2004, and during this period, he has been the
CFO of Imperial, CEO of the then Car Rental and Tourism segment, and the
chairperson of the Aftermarket Parts and the Automotive Retail divisions.
Osman is a member of various Imperial subsidiary and divisional boards,
including the UK and Australia, chairman of the Imperial Medical Aid Fund and
a trustee of the Imperial and Ukhamba Community Development Trust. He was
appointed to the Imperial Board in July 2007 and served as CFO of Imperial
Holdings from 1 July 2013 to 28 February 2017. Prior to joining Imperial, Osman
was a senior partner at Deloitte & Touche where he spent 23 years in various
roles, which included being a board and executive committee member.
Ockert Jacobus Janse van Rensburg
Position: Chief Financial Officer
Qualifications: Bachelor of Commerce Accounting (Honours), Chartered Accountant (South
Africa), Higher Diploma Company Law
Appointed: October 2017
Years at Motus: 3
Age: 45
Nationality: South African
Business address: 1 Van Buuren Road, Bedfordview
Committees: Invitee to the Social, Ethics and Sustainability Committee
Invitee to the Audit and Risk Committee
Invitee to the Nomination Committee
Invitee to the Remuneration Committee
Invitee to the Asset and Liability Committee
Other directorships: Refer to Annexure 7
Experience: Ockert joined Imperial in January 2015 and was appointed as CFO of Motus
in January 2017. Prior to joining Imperial, he was the CFO of Foodcorp
Holdings, a multinational food manufacturer and distributor. Prior to joining
Foodcorp, he held the position as partner of PricewaterhouseCoopers Inc.
Ockert is a member of various Motus subsidiary and divisional boards,
including the UK and Australia, a trustee of the Group Medical Aid Fund and
Retirement funds.
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The details of the non-executive directors of Motus are provided below:
Graham Wayne Dempster
Position: Independent Non-Executive Chairman
Qualifications: Bachelor of Commerce Accounting (Honours), Chartered Accountant (South
Africa), Advanced Management Program (Harvard Business School)
Appointed: August 2018
Age: 63
Nationality: South African
Business address: 1 Van Buuren Road, Bedfordview
Committees: Chairman of the Nomination Committee
Chairman of the Asset and Liability Committee
Member of the Remuneration Committee
Invitee to the Audit and Risk Committee
Other directorships: Refer to Annexure 7
Experience: Graham was appointed to the Imperial Board on 24 February 2015 and is a
member of the Audit and Investment Committees of Imperial and the
Chairman of the Imperial Asset and Liability Committee. He is a non-executive
director of Telkom, Sun International, AECI and the Independent Non-
Executive Chairman of Long4Life Limited. Graham was an executive director
of Nedbank Group Limited and Nedbank Limited and retired in May 2014
with over 30 years’ service in the Nedbank Group.
Phumzile Langeni
Position: Independent Non-Executive Director
Qualifications: Bachelor of Commerce Accounting (Honours)
Appointed: August 2018
Age: 44
Nationality: South African
Business address: VDARA Suites, 1st Floor, 41 Rivonia Road, Sandhurst, Johannesburg
Committees: Member of the Nomination Committee
Member of the Remuneration Committee
Chairman of the Audit and Risk Committee
Member of the Social, Ethics and Sustainability Committee
Other directorships: Refer to Annexure 7
Experience: Phumzile is executive chairman of Afropulse Group Proprietary Limited, non-
executive chairman of the Mineworkers Investment Company Proprietary
Limited and Primedia Holdings. Phumzile also serves as an independent
non-executive director on some companies listed on the JSE, among others
Massmart Holdings Limited and Redefine Properties Limited. Phumzile was
appointed on 16 April 2018 by His Excellency Cyril Ramaphosa, the President
of the Republic of South Africa as one of four special investment envoys
tasked with raising US$100 billion over a five-year period. Phumzile previously
served as an economic adviser to the former Minister of Minerals and Energy,
Ms BP Sonjica. She was appointed to the Imperial Board in June 2004.
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Ashley (Oshy) Tugendhaft
Position: Non-Executive Director and Deputy Chairman
Qualifications: Bachelor of Arts, Legum Baccalaureus
Appointed: August 2018
Age: 70
Nationality: South African
Business address: 20th Floor, Sandton City Office Towers, Sandton, Johannesburg
Committees: Chairman of the Remuneration Committee
Member of the Nomination Committee
Other directorships: Refer to Annexure 7
Experience: Oshy is the Senior Partner of Tugendhaft Wapnick Banchetti & Partners, a
leading Johannesburg niche law firm. He is also a non-executive director and
chairman of Alviva Holdings Limited (formerly Pinnacle Technology Holdings
Limited). He was appointed to the Imperial Board in April 1998 and as deputy
chairperson in March 2008.
Th
embisa Skweyiya
Position: Independent Non-Executive Director
Qualifications: BProc, LLB, LLM, Higher Diploma Tax
Appointed: September 2018
Age: 45
Nationality: South African
Business address: 71 Pearl Reef, The Pearls, 6 Lagoon Drive, Umhlanga, Durban
Committees: Member of the Audit and Risk Committee
Experience: Thembisa is an admitted attorney to the New York State Bar, USA.
She is the past chairperson of Ukhamba Holdings, an empowerment
shareholder in Imperial. She is an executive director of Skweyiya Investment
Holdings Proprietary Limited and Theshka Proprietary Limited. She is currently
a director of Famous Brands Limited and Sumitomo Rubber South Africa.
Roderick (Roddy) John Alwyn Sparks
Position: Independent Non-Executive Director
Qualifications: Bachelor of Commerce (Honours), Chartered Accountant (South Africa),
Master of Business Administration
Appointed: September 2018
Age: 59
Nationality: South African
Business address: 14 Welbeloond Road, Constantia, 7806
Committees: Member of the Audit and Risk Committee
Experience: Roddy is a former managing director of Old Mutual South Africa and Old
Mutual Life Assurance Company (SA), and the former chairperson of Old
Mutual Unit Trusts, Old Mutual Specialised Finance and Old Mutual Asset
Managers (SA). He is a non-executive director of Truworths International, the
lead independent director of Trencor and chairs the board of advisers of the
University of Cape Town College of Accounting.
55
Directors who will join the Board on 2 January 2019 are below at whcih time Roderick (Roddy) John
Alwyn Sparks and Thembisa Skweyiya will retire from the Board;
Saleh Mayet
Position: Independent Non-Executive Director
Qualifications: Bachelor of Accounting, Chartered Accountant (South Africa)
Appointed from: January 2019
Age: 62
Nationality: South African
Business address: 1 Van Buuren Road, Bedfordview
Committees: Chairman of the Audit and Risk Committee
Member of the Social, Ethics and Sustainability Committee
Member of the Assets and Liabilities Committee
Other directorships: Refer to Annexure 7
Experience: Saleh is a non-executive director and finance professional with well over three
decades’ experience in the Anglo American group in South Africa and the United
Kingdom. Saleh retains extensive expertise across the full spectrum of corporate
activities, including strategy, driving value initiatives with key stakeholders. Saleh
is also a member of the SA CEO’s forum, providing key leadership, direction and
strategy to the South African corporate office and region.
Mfondiso Johnson Ntabankulu Njeke
Position: Independent Non-Executive Director
Qualifications: BCompt (Hons), Chartered Accountant (South Africa), HDip Tax Law
Appointed from: January 2019
Age: 60
Nationality: South African
Business address: 1 Van Buuren Road, Bedfordview
Committees: Chairman of the Social, Ethics and Sustainability Committee
Member of the Assets and Liabilities Committee
Other directorships: Refer to Annexure 7
Experience: Johnson is the lead independent director of Sasol Limited, independent
chairman of MMI Holdings Limited, a non-executive director of Datatech
Limited and the chairman of the Hollard Foundation Trust, and a board
member since 2009.
He is the chairman of Silver Unicorn Trading 33 Proprietary Limited and Silver
Unicorn Coal and Minerals Proprietary Limited. He is also a director of NM
Rothschild (SA) Proprietary Limited, Compass Group (SA) Proprietary
Limited, Teamcor Limited, First Lifestyle Holdings, Nkunzi Investment
Holdings Proprietary Limited and is lead independent director at Delta
Property Fund Limited since April 2017. He is also a director of the Council of
the University of Johannesburg, the South African Qualifications Authority
and the Black Management Forum Investment Company Limited.
Other directorships of each Director are detailed in Annexure 7.
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6.2 Directors of key subsidiaries and senior management
The details of the directors of key subsidiaries of Motus and senior management are provided
below:
Kerry Cassel
Position: Chief Executive Officer: Motor-Related Financial Services
Qualifications: Bachelor of Commerce Accounting (Honours), Chartered Accountant
(South Africa)
Appointed: January 2002
Years at Imperial/Motus: 16
Age: 45
Nationality: South African
Business address: 5 Boeing Road East, Elma Park, Edenvale
Experience: Kerry is the CEO of the Motor-Related Financial Services business
segment. Prior to joining Imperial in 2002, Kerry was an audit manager at
Deloitte & Touche. Kerry has held multiple senior positions within the
group over the course of her career. She was appointed as managing
director of LiquidCapital Proprietary Limited in April 2010, appointed to
the board of Associated Motor Holdings Proprietary Limited in July 2015
and was a member of Imperial Executive Committee.
Ray Levin
Position: Commercial Executive
Appointed: April 1998
Years at Imperial/Motus: 20
Age: 63
Nationality: South African
Business address: 1 Van Buuren Road, Bedfordview
Experience: Ray was appointed as Motus Commercial Executive in July 2017. Prior to
this appointment, Ray was the CEO of KIA Motors South Africa Proprietary
Limited. Ray served in this position for 19 years. He is one of the most
long-standing CEO’s in the South African Automotive industry. Ray has
managed to grow the business by expanding the KIA dealer footprint
from 0 to 80 dealerships across the country and significantly increasing
the KIA vehicle car parc in South Africa.
David Long
Position: Chief Information Officer
Qualifications: Bachelor of Science Computer Science, BSc (Hons) Operations
Research, Master of Business Administration
Appointed: July 2008
Years at Imperial/Motus: 10
Age: 56
Nationality: South African
Business address: 1 Van Buuren Road, Bedfordview
Experience: David is the Chief Information Officer (“CIO”) for Motus. David was
previously the CIO of the Imperial Retail and Rental and Aftermarket Parts
division for two years, and prior to that was a director of Resolve Solution
Partners (part of Imperial Logistics) for 15 years. Before founding Resolve,
David was involved in information systems and business strategy for a
number of South African based companies.
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Niall Lynch
Position: Managing Director: Hyundai SA Proprietary Limited
Qualifications: Bachelor of Commerce, Master of Business Studies
Appointed: January 2010
Years at Imperial/Motus: 8
Age: 42
Nationality: South African
Business address: Cnr Norman Road and Lucas Lane, Bedfordview
Experience: Niall took over as Managing Director of Hyundai Automotive South Africa
Proprietary Limited in 2016. Niall was previously the Managing Director of
Renault South Africa Proprietary Limited and before that held several
franchise director positions within the Retail and Rental segment.
Berlina Moroole
Position: Chief Internal Audit, Risk and Sustainability Officer
Qualifications: Bachelor of Commerce Accounting (Honours), Chartered Accountant
(South Africa)
Appointed: 1 June 2018
Age: 46
Nationality: South African
Business address: 1 Van Buuren Avenue, Bedfordview
Committees: Invitee to the Social, Ethics and Sustainability Committee
Invitee to the Audit and Risk Committee
Experience: Berlina was appointed as the Chief Internal Audit, Risk and Sustainability
Officer on 1 June 2018. Prior to joining Motus Corporation she held
several senior management roles at different companies including Liberty
Holding Limited from December 2013. During this period, she was the
Group Chief Risk Officer, Group Executive for Group Internal Audit
Services, Acting Group Executive for Human Capital and a trustee
member for Liberty Community Trust. Prior to joining Liberty she spent six
years at Deloitte & Touche as a partner and was an Advisory Audit
Committee member for UNFPA and Board member for Legal Aid South
Africa.
Philip Michaux
Position: Chief Executive Officer: Retail and Rental
Appointed: February 1981
Years at Imperial/Motus: 37
Age: 58
Nationality: South African
Business address: 1 Van Buuren Road, Bedfordview
Experience: Philip is the CEO of the Retail and Rental business segment. He started
his career in the motor industry in 1981 with Saficon Holdings Proprietary
Limited and has held various management positions within the industry
over the years. Imperial acquired Saficon in 1995, which resulted in him
joining Imperial. He was the Managing Director of Cargo Motors until
2006 at which time he was promoted to CEO of the Automotive Retail
division. He was appointed to the Imperial Executive Committee in
October 2011 and later on in May 2014 appointed as a Director of
Imperial. His portfolio was then expanded into the Vehicle Retail and
Rental Division from July 2014 which includes the UK and Australian
companies as well.
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Jaco Oosthuizen
Position: Managing Director: Renault SA Proprietary Limited
Qualifications: Bachelor of Commerce Accounting (Honours), Chartered Accountant
(South Africa)
Appointed: September 2001
Years at Imperial/Motus: 16
Age: 46
Nationality: South African
Business address: 12 Ernest Oppenheimer Avenue, Bruma
Experience: Jaco was appointed as Managing Director of Renault South Africa
Proprietary Limited effective 1 July 2017. Prior to joining Imperial in 2001,
Jaco was an audit manager at Deloitte & Touche. He joined the group in
the role of General Manager of the Motor-Related Financial Services
segment and held the positions of Managing Director of Daihatsu South
Africa Proprietary Limited and then Managing Director of Mitsubishi South
Africa Proprietary Limited during his tenure ahead of his current role.
Malcom Perrie
Position: Chief Executive Officer: Aftermarket Parts
Qualifications: Bachelor of Science in Engineering, Master of Business Administration
Appointed: April 2013
Years at Imperial/Motus: 5
Age: 59
Nationality: South African
Business address: 2 Gordon Avenue, Meadowview Business Estate, Linbro Park,
Johannesburg
Experience: Malcolm is the CEO of the Aftermarket Parts Segment. He began his
career at Telkom having completed a BSc (Electrical Engineering) degree
at the University of the Witwatersrand. He then entered the private sector
with BMI, an Industrial Market Research company after completing his
MBA, also from Wits. In 1989, he started his own Marketing and Consulting
Company which specialised in the automotive and engineering sectors.
Malcolm joined Imperial in 2013 as the Managing Director of Parts
Incorporated, a division of Aftermarket Solutions.
Michele Seroke
Position: Chief People Officer
Qualifications: Bachelor of Social Science
Appointed: August 2016
Years at Imperial/Motus: 2
Age: 47
Nationality: South African
Business address: 1 Van Buuren Road, Bedfordview
Experience: Michele was appointed as the Chief People Officer of Motus effective
1 July 2017. She first entered Imperial as Human Resources Director for
the Imperial Retail and Rental and Aftermarket Parts division in August
2016. Her career began in Eskom after obtaining her BSocSci degree
from the University of Cape Town. She has held strategic senior
management and executive positions in human resources, both locally
and internationally, at several organisations, including EskomHoldings
Limited, Productivity SA, ArcelorMittal South Africa Limited and
GeneralElectric South Africa Proprietary Limited.
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Gary Scott
Position: Managing Director: Kia Motors South Africa Proprietary Limited (“KIA”)
Qualifications: Bachelor of Commerce Accounting (Honours), Chartered Accountant
(South Africa)
Appointed: October 2002
Years at Imperial/Motus: 16
Age: 43
Nationality: South African
Business address: 5 Herman Road, Meadowdale
Experience: Gary joined KIA from Deloitte & Touche in 2002, where he qualified as a
CA (SA). His 16 years automotive experience includes stints in Finance,
Group Projects and Parts. He most recently served as Sales Director of
KIA from 2013 to 2017.
Corne Venter
Position: Chief Executive Officer: Car Rental Division
Qualifications: BCom Acc, BCom Hons, MCom
Appointed: April 2005
Years at Imperial/Motus: 13
Age: 42
Nationality: South African
Business address: 16 Ernest Oppenheimer Avenue, Bruma
Experience: Corne is the CEO of the Car Rental Division. Joining Imperial in 2005 as
Financial Director of Premier Motor Holdings, Corne has since held the
position of Managing Director of Premier Motor Holdings, Porter Motor
Group and Imperial Commercials. Corne serves as a Director of various
Imperial held companies and as a former trustee of the Imperial Pension
and Provident Fund.
6.3 Changes to the Board
The following changes occurred to the Motus Board over the past 12 months:
• Osman Arbee and Ockert Janse Van Rensburg were appointed as Executive Directors on
12 October 2017.
• Graham Dempster and Phumzile Langeni were appointed as Independent Non-Executive
Directors on 1 August 2018.
• Ashley Tugendhaft was appointed as non-executive Director on 1 August 2018; and
• Thembisa Skweyiya and Roddy Sparks were appointed as Independent Non-Executive Directors
on 17 September 2018.
The following changes will occur on 2 January 2019:
• Saleh Mayet and Mfondiso Johnson Ntabankulu Njeke will be appointed as Independent Non-
Executive Directors; and
• Thembisa Skweyiya and Roddy Sparks will resign as Independent Non-Executive Directors.
6.4 Chief Financial Officer
Ockert Janse Van Rensburg is the CFO of Motus. The Audit and Risk Committee of Imperial has
considered and satisfied itself of the appropriateness of his expertise and experience.
6.5 Appointment and qualification of Directors
The longest serving one-third of directors must retire from office at each annual general meeting of
Motus. Retiring directors may make themselves available for re-election and may be re-elected at
the annual general meeting at which they retire.
60
The Board may meet as it sees fit and set its own policies for adjourning and otherwise regulating
meetings. Any director authorised by the Board may call a meeting of the Board at any time and must
call a meeting if requested to do so by at least two directors. The Memorandum of Incorporation,
read with the Companies Act further provides for the following:
(i) If a Director has a personal financial interest in a matter to be considered at a meeting of the
Board, that director is obliged to disclose that interest, must leave the meeting after making
that disclosure and must not take part in the consideration of the matter. While absent from
such meeting, the interested director will nevertheless be regarded as being present for the
purposes of determining a quorum, but will not be regarded as being present for the purpose
of determining whether a resolution has sufficient support to be adopted. However, a director
who owns ordinary shares may vote his ordinary shares at a general meeting of shareholders
in a transaction in which the director is interested.
(ii) A director may not vote as a director to determine his own compensation. The shareholders
in a general meeting determine the fees for directors in their capacity as such, from time to
time. Any additional compensation, including compensation for additional services performed
by the director for Motus’ business or for other positions in Motus or its subsidiaries, must
be determined by a quorum of directors whose compensation would not be affected by the
decision.
(iii) The directors are not required to hold shares in Motus.
The Memorandum of Incorporation does not provide for a mandatory retirement age for directors.
6.6 Remuneration of directors
It is expected that the executive directors’ terms of service will reflect Motus’ principles of
compensation policy and will be competitive with those of similar companies. The terms of the
executive directors’ employment post the Listing and Unbundling will be as follows:
Executive directors Basic salary Travel allowance Benefits TFCOE
(R) (R) (R) (R)
OS Arbee 9 880 960 257 932 461 108 10 600 000
OJ Janse van Rensburg 4 948 162 144 000 407 838 5 500 000
Other remuneration.
In addition to the gross guaranteed remuneration payable, each executive director is entitled,
among other things, to the following benefits under their terms of service (i) participation in the
share incentive plan; and (ii) consideration for an annual (financial year) incentive bonus based
upon the fulfilment of certain targets set by the Board.
The annual bonus for the executive directors for the financial year ending 30 June 2019 will be
based on the incentive criteria set out below, prorated and adjusted for the period pre-Unbundling
and criteria for Motus prorated and adjusted for the period post-Unbundling. The criteria are as
follows:
OS Arbee (Chief Executive Officer)
• Motus HEPS growth.
• Motus achievement of ROIC target over WACC.
• Achievement of transformation, diversity and succession targets for Motus.
• Listing of Motus on the Johannesburg Stock Exchange.
• Discretionary.
• Strategy execution.
OJ Janse van Rensburg (Chief Financial Officer)
• Motus HEPS growth.
• Motus achievement of ROIC target over WACC.
• Achievement of transformation, diversity and succession targets for Motus.
• Compliance with Motus’ governance policies and structures.
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• Listing of Motus on the Johannesburg Stock Exchange.
• Discretionary.
• Strategy execution.
Incentives are limited to a maximum of 150% of TFCOE.
No fees have been paid to any third party in lieu of directors’ fees.
In recognition of the significant additional work and input required to achieve the portfolio
rationalisation, group-wide restructuring and successful Unbundling, the Board and the
Remuneration Committee have resolved to pay a special incentive to directors if the Unbundling is
successfully concluded as set out in the table below.
In anticipation of the Unbundling, Imperial has not in 2018 made an annual allocation of rights in
terms of the Existing Share Schemes, which is usually made in June of each year. The 2018 Motus
DBP awards in line with long-term incentive award benchmarks for executive Directors will be
made upon implementation of the Unbundling as set out in the table below.
In light of the proposed Unbundling of Motus, the Board decided to award CSP to certain members
of management who are viewed as essential to the continued success Motus. It is not intended
to repeat such awards in future as the awards are considered exceptional but warranted in
the circumstances to serve both as a retention tool and an incentive aligned to the interests of
shareholders. The CSP will be subject to performance criteria relating to Imperial Motus and will
vest over a three-year period commencing 15 September 2020, vesting 25% in 2020, 25% in 2021
and 50% in 2022.
CSP performance conditions:
Condition Weighting
• ROIC over WACC 20%
• Operating profit growth 20%
• Succession planning 15%
• Discretionary 10%
• HEPS vs peer group 35%
The unbundling CSP awards to directors are set out in the table below.
Awards to directors
DBP R’000 CSP R‘000
Unbundling
incentive
R’000
OS Arbee 10 600 30 000* 3 000
O Janse v Rensburg 5 500 17 500 3 000
* Vesting 40% in November 2020 and 60% in November 2021.
There will be no other variation in the remuneration receivable by any of the directors as a
consequence of the Listing.
Neither Motus nor any of its subsidiaries have, in the three years preceding the date of this Pre-Listing
Statement, paid (or agreed to pay) any amounts (whether in cash or in securities or otherwise) or
given any benefits to any director or to any company in which he is beneficially interested, directly
or indirectly, or of which he is a director (“the associate company”) or to any partnership, syndicate
or other association of which he is a member (“the associate entity”), to induce him to become, or to
qualify him as, a director or otherwise for services rendered by him or by the associate company or
the associate entity in connection with the promotion or formation of Motus or any of its subsidiaries.
Under the employment contracts, the employment of an executive director will continue until
terminated upon three months’ notice for the CEO and the CFO, or (ii) retirement thereof.
Motus can also terminate the executive director’s employment summarily for any reason recognised
by law as justifying summary termination.
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Remuneration of non-executive directors will from time to time be determined in accordance with
the provisions of section 66 of the Companies Act, as read with the MOI. The remuneration of non-
executive directors to the annual general meeting, is as follows:
July 2019
to AGM
July 2018
to June 2019
(R) (R)
6% increase
Board
Member 301 000 284 000
Chairman* 1 052 500 993 000
Deputy Chairman* 526 000 496 500
Lead Independent* 526 000 496 500
Audit and Risk Committee
Member 198 000 187 500
Chairman* 397 500 375 000
Remuneration Committee
Member 95 500 90 000
Chairman* 143 500 135 500
Nomination Committee
Member 95 500 90 000
Chairman* 143 500 135 500
Assets and Liabilities Committee
Member 128 000 120 500
Chairman* 192 000 181 000
Social Ethics and Sustainability Committee
Member 128 000 120 500
Chairman* 192000 181 500
Divisional Board
Divisional Board Member 179 000 168 500
Divisional Finance and Risk Committee Member 71 500 67 500
*Paid in addition to a members’ fee.
The Chairman will receive 1.5 times a members’ fee, unless otherwise provided.
6.7 Directors’ interests
All Motus Shares are currently held by Imperial. Therefore, no Motus Shares are held by its directors
or senior management.
The table below sets out, to the knowledge of Motus’ management, the total amount of Imperial
Ordinary Shares directly or indirectly owned by the directors and executive officers of Motus as of
the date of this Pre-Listing Statement.
Save as set out below, no director of Motus (and his associates) (including any person who may have
resigned as a director within the last 18 months) has any material beneficial interest, directly or indirectly,
in any transactions that were effected by Motus (1) during the current or immediately preceding financial
year, or (2) during an earlier financial year and remain in any respect outstanding or unperformed.
No director has had any material beneficial interest, either direct or indirect, in the Listing and no
promoter or director of Motus is or was a member of a partnership, syndicate or other association
of persons that has or had such an interest.
2018 Beneficial Non-beneficial Percentage (%)
Non-executive
GW Dempster 99 – 0.00
RJA Sparks 40 000 – 0.02
Executive
OS Arbee 161 476 – 0.08
OJ Janse van Rensburg 16 657 – 0.01
* The above directors will be entitled to Motus Shares in the anticipated ratio of 1:1 on the Record Date.
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Non-beneficial interests
No director has a non-beneficial interest in Imperial.
Dealings by directors in Imperial Ordinary Shares over the past 12 months
SAR
exercise
SAR
exercise
Sale of
non-
beneficial
interest
DBP
vesting
SAR
exercise Sale
23 Aug 17 24 Aug 17 25 Aug 17 18 Sep 17 29 Nov 17 29 Nov 17
OS Arbee 4 425 5117 – 18 579 – –
OJ Janse van
Rensburg – – – 2 800 – –
6.8 Service agreements of directors
6.8.1 Employment agreements have been concluded with OS Arbee and OJ Janse van Rensburg
as the executive directors, which include standard termination and other provisions for
contracts of this nature.
6.8.2 No restraint of trade payments have been paid or are payable to any directors.
6.8.3 Executive directors will be allocated rights in the Motus CSP scheme upon Unbundling
with a view to retaining them and to incentivise the Directors to achieve key performance
targets.
6.9 Directors’ declarations
None of the directors of Motus and none of the directors of its major subsidiaries:
(i) have been declared bankrupt, insolvent or have entered into any individual voluntary
compromise arrangements;
(ii) have been directors with an executive function of any company put under, or proposed to
be put under, any business rescue plans, or that is or was the subject of an application for
business rescue, any notices in terms of section 129(7) of the Companies Act, receiverships,
compulsory liquidations, creditors voluntary liquidations, administrations, company voluntary
arrangements or any compromise or arrangements with creditors generally or any class of
creditors, at the time of such event or within the 12 months preceding any such event;
(iii) have been partners in a partnership that was the subject of any compulsory liquidation,
administration or partnership voluntary arrangement, at the time of such event or within the
12 months preceding any such event;
(iv) have entered into any receiverships of any asset(s) or of a partnership where such directors
are or were partners during the preceding 12 months;
(v) have been publicly criticised by a statutory or regulatory authority, including recognised
professional bodies, or been disqualified by a court from acting as a director of a company or
from acting in the management or conduct of the affairs of any company;
(vi) have been involved in any offence of dishonesty;
(vii) have been removed from an office of trust, on the grounds of misconduct, involving dishonesty;
or
(viii) have been the subject of any court order declaring him delinquent or placing him under
probation in terms of section 162 of the Companies Act and/or section 47 of the Close
Corporations Act, No. 69 of 1984 or been disqualified by a court to act as a director in terms
of section 219 of the Companies Act.
All the directors have submitted the director’s declarations to the JSE in compliance with Schedule 13
of the Listings Requirements.
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6.10 Borrowing powers
In terms of the MOI, the directors may exercise all the powers of Motus to borrow money and to
give all or any part of its property as security whether outright or as security for any debt, liability
or obligation of Motus or of any third party. Motus has unlimited borrowing powers. Furthermore,
the Board may create and issue debt instruments as contemplated in section 43(1)(a) of the
Companies Act, on such terms and conditions and in such manner as the Board may from time to
time determine, in accordance with the requirements of section 43 of the Companies Act, provided
that, for so long as the Company is listed on the JSE, a debt instrument issued by the Motus may not
grant special privileges regarding attending and voting at general meetings and the appointment
of directors, as contemplated in the Listings Requirements.
The Directors’ borrowing powers may only be changed by special resolution of the Shareholders
amending the Memorandum of Incorporation.
The borrowing powers of the directors have not been exceeded by the directors since the
incorporation of Motus.
6.11 King IV and Corporate Governance
Shareholders are referred to Annexure 9, which concerns the application of King IV and other
corporate governance principles to Motus.
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SECTION 7
STATED CAPITAL
7.1 Authorised and issued stated capital
As at the List Date, the authorised and issued stated capital of Motus will be as set out below:
Authorised stated capital Number of shares
Ordinary shares 394 999 000
Deferred ordinary shares 10 000 000
Preference shares 40000 000
Redeemable preference shares 2 000 000
Issued
Ordinary shares
1
201971 450
Deferred ordinary shares
2
7 699 360
Notes:
Imperial Corporate Services Proprietary Limited, in which company’s issued stated capital Motus holds B shares, will
receive 3 185 000 ordinary shares pursuant to the Unbundling, which ordinary shares are to be used for the sole purpose
of settlement of the Company’s obligations in terms of the Existing Share Schemes and are to be accounted for as
treasury shares.
The deferred ordinary shares will be issued as per Annexure 15 after the Imperial Shareholder Approval of the Unbundling
transaction.
7.1.1 As at the time of the Listing:
• the stated capital of Motus will amount to c.R23 billion;
• no debentures will have been created or issued by Motus other than the Motus Deferred
Shares which will be issued to Ukhamba following approval by Imperial Shareholders of
the Unbundling; and
• all listed ordinary shares in issue will be fully paid up and freely transferable.
7.1.2 On the Listing date all listed ordinary shares in issue shall rank pari passu with each other
in all respects, including in respect of voting rights and Dividends.
7. 2 Major and controlling shareholders
As at the date of this Pre-Listing Statement, the entire issued stated capital of Motus is held by
Imperial. With effect from the Unbundling, the shareholders of Imperial as at the Record Date are
expected to be the same as the shareholders of Motus and what is set out below is a statement
in relation to Imperial’s current major shareholdings (which is expected to be Motus’ major
shareholding on Unbundling).
To the knowledge of management (1) Imperial is not directly or indirectly owned or controlled
(a) by another corporation or (b) by any foreign government; and (2) there are no arrangements
the operation of which may at a subsequent date result in a change in control of Imperial. To the
knowledge of Imperial’s management, there is no controlling shareholder of Imperial. As at the date
of this Pre-Listing Statement, Imperial is the sole shareholder of Motus.
There has been no history of any material change in the controlling shareholders and trading
objects of the Company’s and any of its subsidiaries during the past five years.
As at 30 June 2018, 76% of Imperial’s issued share capital was held by public shareholders.
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A list of the individuals and organisations holding, to the knowledge of management, directly or
indirectly, 3% or more of the issued ordinary share capital of Imperial as at the Last Practicable
Date, is set out below:
Shareholder Number of Shares (‘000) % of issued voting capital
Public Investment Corporation 23 078 013 11.43
Lazard Asset Management 21 018 893 10.41
M&G Investment Management 17 662 769 8.75
Ukhamba 15 056 029 7.45
Lynch Family Holdings 8 210 515 4.07
Dimensional Fund Advisors 7 246 084 3.59
BlackRock Investment Management 6 682 621 3.31
De Canha Family Holdings 6 200 673 3.07
To the knowledge of management, none of the above shareholders hold voting rights which are different from those held by
Imperial’s other shareholders.
None of the advisors of the Company had an interest in the issued share capital of the Company at the Last Practicable
Date.
7.3 Alteration to stated capital
In anticipation of the Listing and Unbundling, the authorised and issued stated capital of Motus was
increased by the creation of:
• 394 998 000 no par value ordinary shares and the issue to Imperial of 201 971 449 of these
shares;
• 10 000 000 (ten million) deferred ordinary no par value shares and the issue to Ukhamba
of 7 699 360 of these shares conditional upon the approval of the Unbundling by Imperial
Shareholders;
• 40 000 000 (forty million) non-redeemable non-participating no par value preference shares; and
• 2 000 000 (two million) redeemable non-participating no par value preference shares, which
form part of the Ukhamba empowerment structure.
7.4 Consolidations during the financial periods ended 30 June 2016, 30 June 2017
and 30 June 2018
There have not been any consolidations during the financial periods ended 30 June 2016, 2017
and 2018.
7.5 Shares issued during the three years preceding the Last Practicable Date
In the preceding three years Motus issued one share to Imperial pursuant to its incorporation.
Pursuant to the Listing the stated capital has been restructured as set out in paragraph 7.3 above.
Following such subscription, the stated capital account of Motus will be well in excess of the
minimum stated capital requirement prescribed by the JSE of R25 000 000.
7.6 Listing on any exchange other than JSE
As at the Listing date, Motus Shares will be listed only on the JSE.
7.7 Rights attaching to Motus Shares and power to issue shares
Motus Shares and Motus Deferred Shares
As at the date of the Listing, all authorised and issued Motus Shares will be of the same class and
will rank pari passu in every respect.
The Motus Deferred Shares (which are dealt with in paragraph 7.9 as read with Annexure 15)
issued by Motus to Ukhamba have the following key features:
• Will not be entitled to participate in, or receive, any dividends or capital distributions distributed
by the Company and/or any other payments made by the Company in terms of section 46 of the
Companies Act;
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• If any capitalisation or bonus issue is implemented by the Company, will be entitled to receive a
distribution of such number of Motus Deferred Shares, which together with the specified Motus
Deferred Shares and ordinary shares held by that holder of Motus Deferred Shares, will constitute
10.1% of the total issued stated capital of the Company after capitalisation or bonus issue
(excluding any treasury shares but including the additional Motus Deferred Shares issued);
• Will not, in a winding up, be entitled to participate in the profits or assets of the Company;
• Will rank pari passu with the ordinary shares in terms of voting, but will not be entitled to veto any
resolution that would otherwise have been capable of being passed by the required majority of
votes, collectively, of the holders of the ordinary shares and the Motus Deferred Shares;
• On 30 June of each year (for seven years) from 1 July 2018, 831 469 Motus Deferred Shares
shall be automatically converted to ordinary shares on a one-for-one basis;
• After 30 June 2025, the remaining Motus Deferred Shares shall: (i) not be capable of conversion.
(ii) shall confer one vote for every ordinary share held up to 100 votes and one vote for every
10 000 Motus Deferred Shares thereafter; and (iii) automatically convert to redeemable
preference shares.
Every ordinary and deferred shareholder of Motus, or representative of such shareholder, who is
present at a shareholders’ meeting has one vote on a show of hands, regardless of the number
of shares he holds or represents or the number of shareholders he represents. Every holder of an
ordinary share or deferred ordinary share is, on a poll, entitled to one vote per ordinary share held.
A vote on a show of hands may be demanded by:
• not less than five persons having the right to vote on that matter; or
• a person/s entitled to exercise not less than one-tenth of the total voting rights entitled to vote
on that matter; or
• the chairman of the meeting.
Neither the Companies Act nor Motus’ Memorandum of Incorporation provides for cumulative
voting.
Preference shares
The preference shares in the authorised stated capital of Motus have the following key features:
• Will rank prior to ordinary shares and any other class of shares not ranking prior to or pari passu
with the preference dividends, in respect of dividends or repayment of capital on winding-up;
• Will be entitled to an amount equal to their issue price together with all arrear preference
dividends calculated to the date of repayment of capital (in priority to any payment in respect
of any other class of shares not ranking prior to or pari passu with the preference dividends);
• Will be entitled to receive, out of the profits of the Company, a preference dividend calculated in
accordance with the terms of the preference shares (in priority to any payment in respect of any
other class of shares not ranking prior to or pari passu with the preference dividends);
• Will be entitled to receive notice of any meeting of the Company and to attend general meetings;
• Will not be entitled to vote any general meeting of the Company, unless: (i) the preference
dividend, or any part thereof, remains in arrear and unpaid after 6 (six) months from the relevant
calculation date; and (ii) a resolution of the Company is proposed which resolution directly affects
the rights attached to the preference shares or the interests of the preference shareholders,
including but not limited to a resolution for the winding-up of the Company or for the reduction
of its capital (other than a resolution for the reduction of any capital in lieu of a normal cash
dividend to the holders of ordinary shares in the Company;
• Will be entitled to receive an offer from the Company redeem the preference shares together
with any arrear preference dividends – if to the Company has implemented a sale of a major
undertaking or asset and which constitutes a Category 1 transaction as contemplated in the
Listings Requirements and failed to apply the cash proceeds of any such sale within a period
of 12 (twelve) months from the receipt thereof, to purchase tangible assets to be utilised by the
Company on behalf of it or its subsidiaries in the conduct of its/their business.
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Redeemable preference shares
The redeemable, non-participating preference shares in the authorised stated capital of Motus
have the following key features:
• Will only be issued in 2025, in exchange for uncoverted Defferred Shares;
• Will not, in a winding up, be entitled to participate in the profits or assets of the Company;
• Will not be entitled to any vote at meetings of the Company, except: (i) during a period when any
redemption payments thereon remain in arrear or unpaid after six months after the end of the
financial year when such payment accrued, or (ii) regarding resolutions proposed to amend the
preference, rights, limitations and other terms associated with such shares;
• Will, subject to section 46 of the Companies Act, be redeemable free of any consideration at the
option of the Company at any time.
General
As at the Last Practicable Date, there are no options issued over the securities in Motus and there
are no preferential rights in respect of these securities.
7.8 Issue of additional shares and pre-emptive rights
Shareholder approval is required for any issuance of additional shares, other than in the following
circumstances:
• A pro rata rights offer to all shareholders, provided that the shares subject to the offer are less
than 5% of the Company’s issued stated capital;
• Shares issued in settlement of employee share scheme liabilities;
• A capitalisation issue in accordance with section 47 of the Companies Act;
• Motus Deferred Shares converting to Motus shares according to the fixed annual conversion
profile of 831 469 shares per year from June 2019 to June 2025.
Shareholders, by ordinary resolution passed by a 75% majority, may either convey a general or
specific authority to directors to issue shares for cash. A general authority is valid until the next
annual general meeting.
The Listings Requirements as read with the Memorandum of Incorporation require that any new
issue of equity shares by Motus must first be offered to existing shareholders in proportion to their
shareholding in the company unless, among other things, the issuance to new shareholders is:
• pursuant to a shareholder approved employee share incentive schemes;
• to raise cash through a general issuance at the discretion of the directors to the general public
(but not to related parties) of up to 30% of the issued stated capital in any one financial year at
an issue price with a discount not exceeding 10% of the 30-business-day weighted average
trading price prior to the date the application is made to the JSE to list the shares, provided that
a 75% majority of votes cast by shareholders at a general meeting must approve the granting
of such authority to the directors;
• to raise cash through a specific issuance of shares for cash, provided that a 75% majority of
shareholders, other than controlling shareholders, votes in favour of the resolution to issue the
shares at a general meeting;
• a capitalisation issue, an issue for an acquisition of assets (including another company) or an
amalgamation or merger in terms of the Companies Act; or
• in terms of option or conversion rights.
In terms of the Companies Act, an issue of equity shares by Motus must be approved by a special
resolution of Motus’ shareholders if the shares are issued, amongst other things, to:
• a director, future Director, prescribed officer, or future prescribed officer of the company;
• a person related or inter-related to the company, or to a director or prescribed officer of the
company, unless the issue of shares is, amongst other things;
• under an agreement underwriting the shares;
• in proportions to existing holdings, and on the same terms and conditions that have been offered
to all the shareholders of the company;
69
• pursuant to an employee share scheme that satisfies the requirements of section 97 of the
Companies Act; or
• pursuant to an offer to the public as defined in section 95(1)(h), read with section 96 of the
Companies Act.
Furthermore, in terms of the Companies Act, an issue of shares requires approval of the shareholders
by special resolution if the voting power of the class of shares that are issued or issuable as a result
of the transaction will be equal to or exceed 30% of the voting power of all the shares of that class
held by shareholders immediately before the transaction.
7.9 Impact of the Unbundling on the Imperial BEE arrangements through Ukhamba
Imperial implemented a B-BBEE equity ownership transaction with Ukhamba, the details of which
are summarised in Annexure 15. It is the intention for that same B-BBEE structure to be replicated
in Motus and for Ukhamba to be placed in the same economic position post the Unbundling as it
was in before the Unbundling, as is fully explained in Annexure 15.
In summary, but as more fully explained in detail in Annexure 15, Ukhamba presently holds 7,45%
of the issued share capital of Imperial, in a combination of Imperial Ordinary Shares (which had
over the years converted from deferred ordinary shares in Imperial), and deferred ordinary shares.
In respect of its holding of Imperial Ordinary Shares, Ukhamba will, in terms of the Unbundling,
be in the same position as the other Imperial Ordinary Shareholders, in that it will receive, on a
one for one basis, Motus Shares. However, in order to ensure that Ukhamba is placed in the same
economic position as it was prior to the Unbundling, it is also necessary for Ukhamba to receive
the same number of Motus Deferred Shares as are equivalent to the number of deferred ordinary
shares in Imperial that it holds. The Motus Deferred Shares will be identical in every respect to
the deferred ordinary shares in Imperial that are presently held by Ukhamba, thus ensuring that
Ukhamba’s position in respect of Imperial and Motus, on a combined basis, is identical to the
position which it presently enjoys in respect of Imperial, and at the same time ensuring that, through
Ukhamba, the B-BBEE status of Motus will be the same as that of Imperial.
In order to accommodate that position, Ukhamba will, as set out in Annexure 15, immediately after
the Unbundling is approved by the Imperial Shareholders, subscribe for Motus Deferred Shares
for no monetary consideration. These shares, together with the Motus Shares which Ukhamba
will receive pursuant to the Unbundling will give Ukhamba a 7,45% interest in Motus, thereby
enabling it to enjoy identical rights to those which it enjoys in relation to the corresponding shares
in Imperial. In that same way, Motus will achieve a 10.1% B-BBEE status, emulating the same status
that Imperial presently enjoys via Ukhamba.
At the Last Practicable Date, Ukhamba held 15 056 029 Imperial Ordinary Shares and 7 699
360 deferred ordinary shares in Imperial. In terms of the Unbundling, Ukhamba will receive 15
056
029 Motus Shares if Ukhamba still holds the same number of Imperial Ordinary Shares at
close of business on the Record Date. In order to ensure that Ukhamba is not disadvantaged by
the Unbundling and, correspondingly, that Motus achieves the same B-BBEE status that Imperial
presently enjoys via Ukhamba, Ukhamba will, immediately after the Unbundling is approved
by the Imperial Shareholders, subscribe for 7 699 360 Motus Deferred Shares for no monetary
consideration.
Motus Deferred Shares convert into Motus Shares at a fixed rate of 831 469 shares per annum with
the first conversion taking place on or before 30 June 2019 and the last conversion taking place on
or before 30 June 2025.
The rights attaching to the Motus Deferred Shares are dealt with in paragraph 7.7 and Annexure 15.
7.10 Changes in capital or objects and powers of Motus
The Motus Shareholders may, by the passing of a special resolution in accordance with the
provisions of the Companies Act:
• increase Motus’ authorised stated capital;
• divide all or any part of Motus’ stated capital into shares of larger amounts than Motus’ existing
shares or consolidate and reduce the number of the issued no par value shares, if any;
70
• subdivide all or any portion of Motus’ shares into shares of a smaller amount than is fixed by
Motus’ Memorandum of Incorporation;
• reduce Motus’ authorised stated capital and, if required by law, its issued stated capital, stated
capital and any capital redemption reserve fund or any share premium account;
• alter the provisions of Motus’ Memorandum of Incorporation with respect to the objects and
powers of the company; and
• subject to the provisions of the Companies Act or any other South African law governing
companies and the requirements of the JSE and any other stock exchange upon which the
shares of Motus may be quoted or listed from time to time, allow Motus to acquire shares issued
by itself or in any subsidiary of the company from time to time, and provided that:
– the directors may resolve that any return of capital made to all or any shareholders whose
registered addresses are outside South Africa will, subject to any Exchange Control
Regulations then in force, be paid in such other currencies as may be stipulated by the
directors. The directors may also stipulate the date for converting Rand to those currencies
and the provisional rate of exchange, provided that the date for conversion must be within a
period of 30 days prior to the date of payment; and
– all unclaimed amounts due as a result of a reduction of capital or any consolidation or
subdivision of capital may be invested or otherwise made use of by the directors for the
benefit of Motus until claimed.
7.11 Variation of rights
All or any of the rights, privileges or conditions attached to Motus’ ordinary shares may be varied
by a special resolution of Motus passed in accordance with the provisions of the Companies Act;
provided that in circumstances where a shareholder dissents to such variation which materially and
adversely affects his rights, that shareholder shall be entitled to be paid the fair value for his shares
in accordance with the provisions of section 37(8) of the Companies Act as read with the appraisal
remedies provided for in section 164 of the Companies Act.
7.12 Rights of minority shareholders and directors’ duties
Majority shareholders of South African companies have no fiduciary obligations under South African
common law to non-controlling shareholders. However, under the Companies Act, a shareholder
may, under certain circumstances, seek relief from the court if he has been unfairly prejudiced by
the company. There may also be common law personal actions available to a shareholder of a
company.
In South Africa, the common law and the Companies Act impose on directors’ duties to, among
other things, act with care, skill and diligence and to conduct the company’s affairs honestly and in
the best interests of the company.
7.13 Type of shares that can be issued, for example preferred, deferred, other special
rights or restrictions
Please refer to the table as set out in paragraph 7.1 and paragraph 7.7 of the Pre-Listing Statement,
for all shares that can be issued under the Memorandum of Incorporation.
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SECTION 8
FINANCIAL INFORMATION
8.1 Historical financial information of Motus
The historical financial information of Motus as at and for the years ended 30 June 2016, 2017 and
2018 is set out in Annexure 1 to this Pre-Listing Statement.
8.2 Independent reporting accountants and auditors’ reports
The independent reporting accountants and auditors’ reports on the historical financial information
of the Motus as at and for the years ended 30 June 2016, 2017 and 2018 is set out in Annexure 2
to this Pre-Listing Statement.
8.3 Pro forma financial effects of the Listing
Based on Motus’ consolidated audited results for the 12 months ended 30 June 2018 (extracted
from the Report of Audited Historical Financial Information of Motus), the pro forma financial effects
of the Listing on the EPS, HEPS, diluted EPS, diluted HEPS, NAV and NTAV of Motus are set out
below.
These financial effects are prepared for illustrative purposes only in order to assist shareholders
to assess the impact of the Listing and, because of their nature, may not give a fair presentation
of Motus’ financial position after the Listing nor the effect of the Unbundling on Motus’ results of
operations.
The summarised pro forma financial effects have been prepared in accordance with the recognition
and measurement principles of IFRS, the accounting policies adopted by Motus as at 30 June 2018
and the Revised SAICA Guide on Pro Forma Financial Information and the Listings Requirements.
The pro forma financial effects are the responsibility of the Board. The material assumptions used
in the preparation of the pro forma financial effects are set out in Annexure 3.
Results
before pro
forma
effects
Increased
costs of
share
schemes
Increased
costs as
listed
entity
Decreased
funding
costs
Treasury
shares
to be
received
by Motus
Issue to
Ukhamba
Reallocation
of debt to
long term
Dividend
declared
Results
after pro
forma
effects
NAV per ordinary
share (cents)
5 762 (9) – – 18 – – (201) 5 747
NTAV per ordinary
share (cents)
5 153 (9) – – 18 – – (201) 5 118
EPS basic (cents)
1162 (1) (11) 5 – (88) – – 1101
EPS diluted
(cents)
1162 (1) (11) 5 – (88) – – 1076
HEPS basic
(cents)
986 (1) (11) 5 – (88) – – 920
HEPS diluted
(cents)
986 (1) (11) 5 – (88) – – 899
Shares in issue,
net of shares
repurchased
202.0 – – – (2.2) (4.0) – – 195.8
Weighted average
shares in issue for
basic
1
202.0 – – – (2.2) (4.0) – – 195.8
Weighted average
shares in issue for
diluted
1
202.0 – – – (2.2) 0.5 – – 200.3
Notes:
Assumed to be the number of shares in issue at date of transaction.
72
8.3.1 Details of the pro forma financial effects of the unbundling on Motus’ Consolidated
Statement of Profit or Loss and Consolidated Statement of Financial Position for the year
ended 30June2018 are contained in Annexure 3.
8.3.2 The independent reporting accountants’ report on the aforementioned pro forma financial
effects and the pro forma Consolidated Statement of Profit or Loss and the pro forma
Consolidated Statement of Financial Position of Motus is set out in Annexure 4.
8.4 Material commitments, lease payments and contingent liabilities
As at the Last Practicable Date, Motus had no material commitments, lease payments or contingent
liabilities.
8.5 Borrowings
Details of material borrowings as at the Last Practicable Date are set out in Annexure 13 to this
Pre-Listing Statement.
8.6 Loans receivable
As at the Last Practicable Date, there are no material loan receivables outstanding.
As at the Last Practicable Date there are no loans made nor security furnished by Motus to or for
the benefit of any director or manager or any associate of any director or manager of Motus, which
remains outstanding.
8.7 Loans payable
As at the Last Practicable Date, there is no loan capital outstanding other than that presented in
Annexure 1 to this Pre-Listing Statement.
8.8 Loans to directors or managers
Motus has not made any loans to, or furnished any security for the benefit of, any director or
manager of Motus (or of any associate of any such director or manager).
8.9 New Accounting Standards
The following changes to the accounting standards are applicable.
IFRS 9 Financial Instruments The group anticipates that the application of IFRS 9 will have
no material impact on amounts reported in respect of the group’s financial assets and financial
liabilities. This standard is effected 30 June 2019.
IFRS 15 Revenue A detailed review of the potential impact of IFRS 15 has been finalised. The
group has a substantial number of long-term contracts in the Motor-Related Financial Services
business and all material contracts have been assessed for any impact in terms of the five-step
approach. This review shows that there will not be a material impact on the current measurement of
revenue. This standard is effected 30 June 2019.
IFRS 16 Leases The initial assessment is in the process of being performed and it is estimated
that the right of use asset and lease liability will be recognised on adoption of the standard in 2020.
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SECTION 9
MOTUS ACTIVITIES
9.1 Principal immovable properties
The situation, area and tenure, including, in the case of leasehold property, the rental and unexpired
term of the leases, of the principal immovable properties occupied by Motus are detailed in
Annexure 5.
A full list of all principal immovable properties are available for inspection at the Company’s
registered office.
9.2 Material borrowings and inter-company loans
All Motus inter-company balances, before elimination on consolidation, are disclosed in Annexure 13.
Save for the inter-company balances referred to in Annexure 13 above, there are no material inter-
company financial and other transactions that have not been eliminated from the consolidated
results of Motus.
9.3 Material acquisitions
Motus has not undertaken any material acquisitions within the last three years (valued at more than
5% of the NAV of Motus, post Unbundling) and is not currently contemplating any potential material
acquisitions.
9.4 Property disposed of or to be disposed of or acquired
Motus has not disposed of any material property (valued at more than 10% of the NAV of Motus, post
Unbundling) during the last three years and is not currently contemplating any material disposals.
9.5 Material changes
Save as a consequence of the Disposal, between 30 June 2018 and the Last Practicable Date,
there were no material changes in the Company’s or its subsidiaries financial or trading position.
9.6 Adequacy of working capital
The directors have considered the position of Motus and its subsidiaries and are of the opinion that:
9.6.1 Motus and its subsidiaries will be able in the ordinary course of business to pay their debts
for a period of 12 months after the date of approval of this Pre-Listing Statement;
9.6.2 the consolidated assets of Motus and its subsidiaries, fairly valued, will be in excess of the
consolidated liabilities of Motus and its subsidiaries for a period of 12 months after the date
of approval of this Pre-Listing Statement;
9.6.3 the stated capital and reserves of Motus and its subsidiaries will be adequate for ordinary
business purposes for a period of 12 months after the date of approval of this Pre-Listing
Statement; and
9.6.4 the working capital available to Motus is adequate for the present requirements of Motus,
that is, for a period of 12 months from the date of issue of this Pre-Listing Statement.
9.7 Commissions and royalties
There have been no commissions, discounts, brokerages or other special terms granted during
the three years preceding the Last Practicable Date in connection with the issue or sale of any
securities, stock or debentures in the capital of Motus, where this has not been disclosed in any
financial statements.
There are no royalties payable or items of a similar nature in respect of Motus and any of its major
subsidiaries.
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SECTION 10
ADDITIONAL INFORMATION
10.1 Listing on the JSE
The JSE has granted Motus a listing by way of introduction of all its issued ordinary shares on the
JSE main board under the abbreviated name “Motus”, share code “MTH” and ISIN: ZAE000261913
with effect from the commencement of trade on Thursday, 22 November 2018. Motus will be listed
in the ‘Specialty Retailers’ sector.
10.2 Promoters’ and other interests
No amount has been paid or proposed to be paid in the three years preceding the Last Practicable
Date to any promoter, or to any partnership, syndicate or other association of which that promoter
is or was a member, nor has any cash or security been paid nor proposed, nor any other benefit
given nor proposed to any such promoter, partnership, syndicate or other association in the
aforementioned three year period.
No director or promoter has any material beneficial interest, direct or indirect, in the promotion of
Motus.
No commissions were paid, or accrued as payable, by Motus within the three years preceding the
date of this Pre-Listing Statement in respect of any underwriting.
No commissions, discounts, brokerages or other special terms have been granted by Motus within
the three years preceding the date of this Pre-Listing Statement in connection with the issue or sale
of any securities, stock or debentures in the capital of Motus.
10.3 Government protection and investment encouragement law
There is no government protection or investment encouragement law affecting Motus or its
subsidiaries.
10.4 Exchange control
10.4.1 This Pre-Listing Statement is not an invitation to the public to subscribe for shares in Motus
and does not amount to a prospectus. Should Motus in future issue shares to shareholders,
shareholders should ensure that they comply with the Exchange Control Regulations, to
the extent that those regulations may be applicable to them. In this regard, the Exchange
Control Regulations currently provide that:
10.4.1.1 a former resident of the CMA who has emigrated, may use emigrant blocked
funds to subscribe for Shares;
10.4.1.2 all payments in respect of subscriptions for shares by an emigrant, using emigrant
blocked funds, must be made through the Authorised Dealer in foreign exchange
controlling the blocked assets;
10.4.1.3 any shares issued pursuant to the use of emigrant blocked funds, will be credited
to their blocked share accounts at the CSDP controlling their blocked portfolios;
10.4.1.4 any shares subsequently re-materialised and issued in Certificated form, will be
endorsed “Non-Resident” and will be sent to the Authorised Dealer in foreign
exchange through whom the payment was \\made; and
10.4.1.5 if applicable, refund monies payable in respect of unsuccessful applications
or partly successful applications, as the case may be, for shares in terms of a
prospectus, emanating from emigrant blocked accounts, will be returned to the
Authorised Dealer in foreign exchange through whom the payments were made,
for credit to such applicants’ blocked accounts.
10.4.2 Shareholders resident outside the CMA should note that, where the unbundled shares or any
future shares issued by Motus are subsequently re-materialised and issued in certificated
form, such share certificates will be endorsed “Non-Resident” in terms of the Exchange
Control Regulations.
75
10.5 Regulatory environment
Motus is compliant with various regulatory statutes. Please refer to Annexure 11 for more details.
10.6 Litigation
There are no material legal or arbitration proceedings (including any such proceedings that are
pending or threatened) of which Motus is aware, which may have, or have during the 12 months
preceding the Last Practicable Date had, a material effect on the financial position of Motus.
10.7 Material contracts
No material contracts have been entered into by Motus, being restrictive funding arrangement
and/or contracts entered into other than in the ordinary course of business and (1) within the two
years prior to the date of this Pre-Listing Statement or, (2) at any other time where such agreement
contains an obligation or settlement that is material to Motus as at the date of this Pre-Listing
Statement.
10.8 Experts’ consents
The independent reporting accountants and auditors and each of the experts, whose names
appear in the “Corporate information and advisors” section of this Pre-Listing Statement, have
given and have not, prior to the formal approval of this Pre-Listing Statement by the JSE, withdrawn
their written consents to the inclusion of their names and capacities stated, and where applicable,
to their reports, being included in this Pre-Listing Statement.
10.9 Expenses and listing fees
The estimated costs of the Listing and Unbundling, including the fees payable to professional
advisors, are approximately R146 067 000 and will be borne by Imperial. Full details of these costs
are set out in the Imperial Circular dated Thursday, 27 September 2018 and which is available
on the Imperial website at www.imperial.co.za/pdf/unbundling/unbundling-of-motus-circular.pdf
(inclusive of VAT), payable to the JSE in relation to the Listing, are set out below:
Expense R’000
JSE documentation fees JSE 93
JSE Listing fees JSE 1 700
Total 1 793
10.10 Disclosure of conflict
Shareholders are advised that Standard Bank acts as joint financial advisor and Transaction
sponsor to Motus in relation to the Listing. In its capacity as Transaction sponsor, Standard Bank
does not believe that there is any matter that would impact on its ability to exercise reasonable care
and judgement to achieve and maintain independence and objectivity in professional dealings in
relation to the Company and that would impact on its ability to act within the Code of Conduct as
set out in the Listings Requirements.
It has various internal procedures in place to ensure that its ability to act independently as
Transaction sponsor is not compromised.
Pursuant to these internal procedures, Standard Bank has a compliance control room that identifies
and manages conflicts risks and ensures that strict “Chinese walls” are maintained to ensure that
as JSE sponsor, it is able to act independently from other divisions within the bank. Standard Bank
also enforces and implements physical and logical access restrictions to information, which is
limited to deal teams for whom the information is relevant, for the purpose of fulfilling the client
mandate.
76
10.11 Directors’ responsibility statement
The directors, whose names are set out herein on page 19
of this Pre-Listing Statement, collectively
and individually, accept full responsibility for the accuracy of the information given 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 this Pre-Listing Statement contains all information required by law and
the Listings Requirements.
10.12 Documents available for inspection
Copies of the following documents will be available for inspection at the registered offices of
Imperial and Motus and the transaction sponsor set out under the “Corporate information and
advisors” section of the Pre-Listing Statement during normal business hours on Business Days
from the date of issue of the Pre-Listing Statement:
• the MOI of Motus;
• the MOI’s of Motus, Motus Corporation Proprietary Limited, Motus Group Proprietary Limited
and Motus Capital Proprietary Limited;
• the historical financial information of Motus as at and for the years ended 30 June 2016, 2017
and 2018 as set out in Annexure 1 to this Pre-Listing Statement;
• the independent reporting accountants and auditors’ report on the historical financial information
of Motus as reproduced in Annexure 2 to this Pre-Listing Statement;
• the independent reporting accountants and auditors’ report on the pro forma financial information
of Motus as reproduced in Annexure 4 to this Pre-Listing Statement;
• written consent letters by experts and advisors, as referred to in Paragraph 10.8 above;
• OS Arbee and OJ Janse van Rensburg’s employment contracts;
• the rules of the SAR Scheme, DBP and CSP;
• the Separation Agreement; and
• a signed copy of this Pre-Listing Statement.
Signed at Johannesburg on Tuesday, 27 September 2018 by Ockert Jacobus Janse van Rensburg on behalf
of all of the directors of the Company in terms of resolution of the Board.
By order of the Board
27 September 2018
Ockert Jacobus Janse van Rensburg
Chief Financial Officer and Acting Chief Executive Officer
77
ANNEXURE 1
REPORT OF THE HISTORICAL FINANCIAL INFORMATION OF MOTUS FOR THE
THREE YEARS ENDED 30 JUNE 2018
MOTUS HOLDINGS LIMITED
CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 30 June 2018
2017/451730/06
The reports and statements set out below comprise the consolidated and Company financial statements for
the year ended 30June2018; presented to the shareholder. Motus’ independent external auditors, Deloitte
& Touche have audited the Company and consolidated financial statements for 30 June 2018 and reviewed
the 30June2017 and 30 June 2016 consolidated financial statements as presented in Annexure 2 of the
Pre-Listing Statement.
78
CONTENTS
Page
Directors’ responsibility and approval 79
Certificate by the Company Secretary 80
Directors’ Report 81
Audit and Risk Committee Report 85
Consolidated statements of financial position 92
Consolidated statements of profit or loss 93
Consolidated statements of other comprehensive income 94
Consolidated statements of changes in equity 95
Consolidated statements of cash flows 98
Notes to the consolidated financial statements 99
Company financial statements 155
Annexure A – Interests in subsidiaries 157
Corporate information 160
PREPARER OF THE COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS
The Company and consolidated financial statements have been prepared under the supervision of
Mr.OJJanse van Rensburg CA(SA).
OJ Janse van Rensburg
Chief Financial Officer and Acting Chief Executive Officer
20 September 2018
79
DIRECTORS’ RESPONSIBILITY AND APPROVAL
The directors of Motus Holdings Limited (“Motus”) are responsible for the maintenance of adequate
accounting records and the preparation and integrity of the financial statements for Motus and the underlying
Company and related information. The Company and consolidated financial statements have been prepared
in accordance with International Financial Reporting Standards (“IFRS”) and its interpretations adopted by
the International Accounting Standards Board in issue and effective for Motus at 30 June 2018 and the
SAICA Financial Reporting Guides, as issued by the Accounting Practices Committee, Financial Reporting
Pronouncements as issued by the Financial Reporting Standards Council, and the JSE Listing Requirements.
Motus’ independent external auditors, Deloitte & Touche have audited the Company and consolidated
financial statements for 30June2018 and reviewed the 30 June 2017 and 30 June 2016 consolidated financial
statements, in conformity with International Standards on Auditing and their unmodified report appears as per
Annexure 2 of the Pre-Listing Statement.
The directors are also responsible for the systems of internal control. These are designed to provide
reasonable, but not absolute, assurance as to the reliability of the financial statements, and to adequately
safeguard, verify and maintain accountability for assets, and to prevent and detect material misstatements
and losses. The systems are implemented and monitored by suitably trained personnel with an appropriate
segregation of authority and duties. Nothing has come to the attention of the directors to indicate that any
material breakdown in the functioning of these controls, procedures and systems has occurred during the
year under review.
The Company and consolidated financial statements are prepared on a going concern basis. Nothing has
come to the attention of the directors to indicate that Motus and the underlying companies will not remain a
going concern for the foreseeable future.
The financial statements set out on pages 92 to 156 were approved by the Board of Directors and issued on
20 September 2018 and are signed on their behalf by:
GW Dempster OJ Janse van Rensburg
Chairman Chief Financial Officer and Acting Chief Executive Office
The financial statements are available on the Motus website www.motuscorp.co.za
80
CERTIFICATE BY THE COMPANY SECRETARY
In my capacity as Company Secretary, I hereby confirm that, in respect of the period under review, the
Company has lodged with the CIPC all such returns and notices as are required in terms of the section 88(2)
(e) Companies Act of South Africa, No. 71 of 2008, as amended and that all such returns are true, correct
and up to date.
RA Venter
Company Secretary
20 September 2018
81
DIRECTORS’ REPORT
NATURE OF BUSINESS
Motus Holdings Limited (“Motus”) is a South African based holding company with a selected international
presence mainly in the United Kingdom (“UK”), Australia and Southern Africa. Through its subsidiaries
and associates, it operates as a diversified (non-manufacturing) business in the automotive sector. Motus
participates in the entire automotive value chain through its four business segments namely: Import and
Distribution, Retail and Rental, Motor-Related Financial Services and Aftermarket Parts.
The activities of Motus’ business segments are described below:
• Import and Distribution: Exclusive South African importer of International vehicle brands such as Hyundai,
Kia, Renault and Mitsubishi.
• Retail and Rental: Retails passenger and commercial vehicles in South Africa, the UK and Australia. Rents
vehicles through car rental outlets in South Africa and neighbouring countries.
• Motor-Related Financial Services: Manages and administers service, maintenance and warranty plans for
vehicles and develops and sells value added products. Provides fleet management services and deploys
an innovation hub.
• Aftermarket Parts: Distributor, wholesaler and retailer of accessories and aftermarket parts for vehicles
through owned branches, retail stores, a network of franchised outlets and specialised workshops.
DATE OF INCORPORATION
Motus Holdings Limited was incorporated in the Republic of South Africa on 12 October 2017.
ULTIMATE SHAREHOLDER
Motus is a wholly owned subsidiary of Imperial Holdings Limited, which is the ultimate shareholder and the
JSE listed entity, as at the date of this report.
FINANCIAL RESULTS AND REVIEW
The Board of Directors of Imperial Holdings Limited (“Imperial”) resolved in the board meeting on 21June2018,
to proceed with the Unbundling of Imperial’s operations into two businesses namely; the logistics business
known as “Imperial Logistics” and the automotive business known as “Motus”.
On 12 October 2017, Motus Holdings Limited (“Motus”) was formed as a wholly owned subsidiary of Imperial.
Effective 31 May 2018, MotusCorporation Proprietary Limited, Motus Capital Proprietary Limited and Imperial
Group Limited (referred to as Motus Group Limited) were transferred to Motus as wholly owned subsidiaries
in terms of an asset-for-share transaction following the transfer from Imperial of all automotive related interests
to these subsidiaries prior to this date.
The Unbundling will be effected through; a proposed distribution in specie of the shares in Motus to
shareholders in terms of section 46 of the Companies Act of South Africa No. 71 of 2008, as amended and
section 46 of the Income Tax Act of South Africa, No. 58 of 1962; and the simultaneous listing of Motus on the
main board of the Johannesburg Stock Exchange (“JSE”).
Motus has had a profitable year despite facing challenging economic and market conditions in South Africa.
The Australian market has performed well despite a competitive environment, whilst Brexit in the UK has
created challenges in that market.
Net attributable profit to the owners of Motus for the year amounted to R2 346 million (2017: R1569 million;
2016: R1 493 million). Basic earnings per share for the year was 1 162 cents (2017: 777 cents; 2016: 739cents).
Significant non-operating transactions affecting the Motus results comprise of:
• Profit on sale of properties R720 million (2017: R40 million; 2016: R8 million).
• Impairment of properties R103 million (2017: R9 million; 2016: R7 million).
The financial results of Motus are set out on pages 92 to 156 and the segment report of profit or loss and
financial position appear on pages 106and112, respectively.
There has been no trading in the underlying holding company since incorporation in October 2017.
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DIVIDENDS
Dividends of R3139 million (1 554 cents per share) were paid to the owners of Motus during the current
financial year; 2017: R1145 million (567cents per share); 2016: R1 133 million (561 cents per share).
DIRECTORS
The composition of the Board of Directors for the year and to the date of this report is as follows:
Executive directors
Appointment date Nationality
OS Arbee 12 October 2017 South African
OJ Janse van Rensburg 12 October 2017 South African
Non-executive director
Appointment date Nationality
A Tugendhaft 01 August 2018 South African
Independent non-executive directors
Appointment date Nationality
GW Dempster (Chairman) 01 August 2018 South African
P Langeni 01 August 2018 South African
RJA Sparks 17 September 2018 South African
T Skweyiya 17 September 2018 South African
Board diversity
Gender
Male 5
Female 2
Demographics
Black South African 4
White South African 3
Independence
Executive 2
Independent non-executive 4
Non-executive (not independent) 1
The remuneration paid to directors and interests of directors, are disclosed in notes 6.1 to 6.4, respectively to
the consolidated financial statements.
The Board of Directors has satisfied itself that the Chief Financial Officer, Mr. OJ Janse van Rensburg has
the appropriate qualifications, expertise and experience with which to fulfil his duties. In addition, the Board
has satisfied itself that the composition, experience and skills set of the finance function have met the Motus
requirements.
COMPANY SECRETARY
The Company Secretary is Mr. RA Venter. The Board of Directors has satisfied itself that, Mr. RA Venter has
the appropriate qualifications, expertise and experience with which to fulfil his duties.
The Company Secretary’s contact details, and the business and postal addresses of Motus appear on
page160.
AUDITORS
Deloitte & Touche was appointed as auditors of Motus and will continue in office in accordance with
section94(7) of the Companies Act of SouthAfrica No. 71 of 2008.
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SUBSIDIARIES, ASSOCIATES AND JOINTS VENTURES
Details of interests in subsidiaries are shown in Annexure A – Interests in subsidiaries. Details of interests in
associates and joint ventures are shown in note 8.5 Investments in associates and joint ventures. Significant
acquisitions, disposals and changes in shareholding during the year were as follows:
Acquisitions
Year ended 30 June 2018
Motus acquired the following subsidiaries:
• With effect from August 2017:
– Motus acquired 100% in Pentagon Motor Holdings Limited in the United Kingdom.
• With effect from September 2017:
– Motus acquired 75% in SWT Group Proprietary Limited in Australia.
• With effect from March 2018:
– Motus acquired 60% in ARCO Motor Industry Company Limited in Taiwan.
STATED CAPITAL
Motus adopted a new Memorandum of Incorporation (MOI) and amended its stated capital during the year
in accordance with the provisions of the Companies Act of South Africa No. 71 of 2008. Further details of the
authorised and issued stated capital of the company is provided in note5.1 Stated capital of the consolidated
financial statements. 201 971450 ordinary shares were in issue as at 30 June 2018.
CAPITAL EXPENDITURE
As a result of significant disposals of property, plant and equipment, and intangible assets during the year,
net cash generated amounted to R756 million. In the prior year’s, net capital expenditure amounting to
R609million (2016: R545million) was incurred. During the current year, proceeds on disposals of R1368million
(2017:R383 million; 2016: R236 million) were received.
Rm
Audited
2018
Reviewed
2017*
Reviewed
2016*
Replacement capital expenditure
Property, plant and equipment (216) (344) (250)
Intangible assets (6) (6) (2)
Total (222) (350) (252)
Proceeds from disposals
Property, plant and equipment 1 367 379 236
Intangible assets 1 4 –
Total 1 368 383 236
Net replacement capital expenditure
Property, plant and equipment 1 151 35 (14)
Intangible assets (5) (2) (2)
Total 1 146 33 (16)
Expansion capital expenditure
Property, plant and equipment (363) (613) (462)
Intangible assets (27) (29) (67)
Total (390) (642) (529)
Net capital expenditure
Property, plant and equipment 788 (578) (476)
Intangible assets (32) (31) (69)
Total 756 (609) (545)
* The amounts disclosed relate to continuing operations only. Refer to note 10.1 Loss from discontinued operations, for certain disclosures
relating to discontinued operations.
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Capital expenditure does not include vehicles for hire. Vehicles for hire is treated as an operating asset and
is disclosed in note 3.4. Vehicles for hire, net capital expenditure from continuing operations, amounted to
R1079 million (2017: R1708 million; 2016: R1489 million). Details on future commitments are provided in
note 7.3 Capital expenditure commitments.
Net capital expenditure incurred on discontinued operations amounts to 2018: Rnil (2017: Rnil;
2016: R18million). Net capital expenditure incurred on vehicles for hire for discontinued operations amounts
to 2018: Rnil (2017: Rnil; 2016: R122 million).
EVENTS AFTER THE REPORTING PERIOD
Following the proposed and approved Unbundling of Motus from Imperial, a distribution in specie of the
shares in Motus to shareholders in terms of section 46 of the Companies Act of South Africa No. 71 of 2008,
as amended and section 46 of the Income Tax Act of South Africa, No. 58 of1962 will be made by Imperial.
On 17 September 2018 Motus Holdings Limited declared a net dividend of R407 million (202 cents) to its
shareholder.
GOING CONCERN
The directors have reviewed the Group and Company budgets, cash flow forecasts, and the solvency and
liquidity positions and have satisfied themselves that Motus and the underlying Company are in a sound
financial position and that they have access to adequate resources to meet their foreseeable obligations.
Management monitors the cash requirements on an ongoing basis for uncertainties which may arise, and take
appropriate action where necessary. These uncertainties include economic uncertainties which may affect
the business’ ability to meet its objectives in terms of sales growth, improvement in margins and working
capital requirements.
The Consolidated statement of financial position as at 30 June 2018 reports a positive equity balance, prior
to consideration of non-controlling interests of R11 640 million (2017: R12 196 million; 2016: R11 979 million).
The Consolidated statement of financial position as at 30 June 2018 reports cash and cash equivalents of
R1187 million (2017: R943 million; 2016: R613 million) and a position of solvency of Motus where assets well
exceed liabilities by R11 644 million (2017: R11 922 million; 2016: R12009 million).
On the basis of this review, the Motus directors have concluded that there is a reasonable expectation that
Motus will continue to meet its obligations as they fall due for at least the next 12 months from the date of
approval of these financial statements. The directors consider it appropriate to adopt the going concern
assumption in preparing the consolidated and Company financial statements.
BORROWING POWERS
In terms of the MOI, the borrowing powers of the Company are unlimited. Any borrowings by Motus, were
they to be made, would be subject to the provisions of Motus’ treasury policy and the Companies Act of South
Africa No. 71 of 2008, as amended. The details of borrowings appear in note 4.1 Interest-bearing debt to the
consolidated financial statements.
SPECIAL RESOLUTIONS
The Company passed the following special resolutions, the nature of which might be significant to the
shareholder in their appreciation of the state of affairs of Motus, as follows:
• Increase of the Authorised Stated Capital;
• Creation of new classes of shares;
• Converting Motus Holdings Limited from a private company to a public company as at 18 May 2018;
• Authorisation of the adoption of a new MOI approved by the JSE;
• Approving Non-Executive Directors’ fees payable for the periods July 2018 to June 2019 and July 2019 to
the next annual general meeting;
• General authority to repurchase Company securities;
• Authority to issue ordinary shares;
• Authority to provide financial assistance in terms of section 44 of the Companies Act of South Africa No.
71 of 2008; and
• Authority to provide financial assistance in terms of section 45 of the Companies Act of South Africa No.
71 of 2008.
A register of special resolutions passed is available to the shareholder on request. There were no other
special resolutions passed by subsidiary companies during the year under review that affect the understanding
of the Company and its subsidiaries.
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AUDIT AND RISK COMMITTEE REPORT
The Audit and Risk Committee has pleasure in submitting this report, which has been approved by the Board
and has been prepared incorporating the recommendations of the King Code of Corporate Governance
(King IV).
In summary, this committee assists the Board in its responsibilities covering the:
• internal and external audit processes for Motus, taking into account the significant risk;
• adequacy and functioning of the Motus’ internal controls; and
• integrity of the financial reporting.
The Audit and Risk Committee has performed all the duties required.
MEMBERS OF THE AUDIT AND RISK COMMITTEE AND ATTENDANCE OF THE MEETINGS
As Motus is a wholly owned subsidiary of Imperial, the Audit Committee of Imperial covered the requirements
of Motus in their mandate, and through the fulfilment of their duties in the year under consideration, as
required under section 94(7) of the Companies Act of South Africa No. 71 of 2008.
The Audit and Risk Committee consists of the independent non-executive directors listed below and meets at
least four times per annum in accordance with its charter.
All members act independently as described in the Companies Act of South Africa No. 71 of 2008. The
members of the Audit and Risk Committee for the year ended 30 June 2018 comprised Mr. RJA Sparks
(Chairman), Mr. G Dempster, Mrs. T Skweyiya, Ms. P Langeni, (“the Audit and Risk Committee”), all of whom
are independent non-executive directors of Imperial.
On the basis that Motus is unbundled it will form a new Audit and Risk Committee comprising independent
non-executive directors.
During the year under review, four meetings were held and attendance of those meetings is set out in the
table below.
Meetings attended
RJA Sparks (Chairman) (Member since 2006) 4
GW Dempster (Member since 2015) 4
T Skweyiya (Member since 2014) 4
P Langeni (Member since 2005) 4
RM Kgosana and Y Waja resigned as directors and members of the Audit and Risk Committee during the
year.
The head of the internal audit department and external auditors, in their capacities as auditors to Motus,
attend and report at all Audit and Risk Committee meetings. Motus’ risk management function is also
represented by the head of risk. Executive directors and relevant senior financial managers attend meetings
by invitation. In addition, the chairman and deputy chairman of the Board attend all meetings.
ROLE OF THE AUDIT AND RISK COMMITTEE
The Audit and Risk Committee has adopted a formal charter, approved by the Board, setting out its duties
and responsibilities as prescribed in the Companies Act of South Africa, No. 71 of 2008 and incorporating
additional duties delegated to it by the Board.
The Audit and Risk Committee:
• fulfils the duties that are assigned to it by the Companies Act of South Africa No. 71 of 2008 and as
governed by other legislative requirements, including the statutory Audit Committee functions required for
subsidiary companies;
• assists the Board in overseeing the quality and integrity of Motus’ integrated reporting process, including
the financial statements, sustainability reporting and announcements in respect of the financial results;
• ensures that an effective control environment in Motus is maintained;
• reviews and recommends to the Board of Directors, the financial statements;
86
• provides the Chief Financial Officer, external auditors and the head of internal audit with unrestricted
access to the Audit and Risk Committee and its chairman as is required in relation to any matter falling
within the ambit of the Audit and Risk Committee;
• meets with the external auditors, senior managers and executive directors as the Audit and Risk Committee
may elect;
• meets confidentially with the internal and external auditors without other executive Board members and
the Company’s Chief Financial Officer being present;
• oversees the activities of, and ensures coordination between, the activities of the internal and external
auditors;
• receives and deals with any complaints concerning accounting practices, internal audit or the content and
audit of its financial statements or related matters;
• conducts annual reviews of the Audit and Risk Committee’s work and terms of reference; and
• assesses the performance and effectiveness of the Audit and Risk Committee and its members on a
regular basis.
FINANCE RISK REVIEW COMMITTEES (FRRCS)
Due to the size and diverse nature of Motus, the Audit and Risk Committee has established divisional FRRCs
which perform the functions of the Audit and Risk Committee at the divisions. These FRRCs are chaired by an
independent person to the underlying business and who reports to the Imperial Audit and Risk Committee.
Ms. P Langeni has chaired the Motus FRRC for the year under review.
EXECUTION OF FUNCTIONS DURING THE YEAR
The Audit and Risk Committee is satisfied that, for the 2018 financial year, it has performed all the functions
required to be performed by an Audit and Risk Committee as set out in the Companies Act of South Africa
No. 71 of 2008 and the Audit and Risk Committee’s terms of reference.
The Audit and Risk Committee discharged its functions in terms of the charter and ascribed to it in terms of
the Companies Act of South Africa No. 71 of2008 during the year under review as follows:
EXTERNAL AUDIT
The Audit and Risk Committee among other matters:
• nominated Deloitte & Touche and Mr. JM Bierman as the external auditor and designated auditor,
respectively to the shareholder for appointment as auditor for the financial year ended 30 June 2018,
and ensured that the appointment complied with all applicable legal and regulatory requirements for the
appointment of an auditor;
• nominated the external auditor for each material subsidiary company for re-appointment;
• reviewed the audit effectiveness and evaluated the external auditor’s internal quality control procedures;
• obtained an annual confirmation from the auditor that their independence was not impaired;
• maintained a policy setting out the categories of non-audit services that the external auditor may and may
not provide, split between permitted, permissible and prohibited services;
• approved non-audit services with Deloitte & Touche on an individual basis prior to any engagement,
in accordance with the Audit and Risk Committee’s policy. Non-audit services are generally limited to
assignments that are closely related to the annual audit or where the work is of such a nature that a detailed
understanding of Motus is required. Fees for audit related services and non-audit services incurred during
the year amounted to R2 million (2017: R1 million; 2016: R1 million);
• approved the external audit engagement letter, the plan and the budgeted audit fees payable to the
external auditor;
• the Audit and Risk Committee has satisfied itself as to the qualifications and competence of Deloitte &
Touche;
• obtained assurances from the external auditor that adequate accounting records were being maintained
by the Company and its material subsidiaries;
• considered whether any reportable irregularities were identified and reported by the external auditor in
terms of the Auditing Profession Act No. 26 of 2005;
• considered any reported control weaknesses, management’s response for their improvement and
assessed their impact on the general control environment;
87
• considered the tenure of the external auditor and found it to be appropriate; and
• noted the requirement relating to mandatory audit firm rotation and that this will be implemented at the
appropriate time.
The Audit and Risk Committee is satisfied that Deloitte & Touche is independent of Motus after taking the
following factors into account:
• representations made by Deloitte & Touche to the Audit and Risk Committee;
• the auditor does not, except as external auditor or in rendering permitted non-audit services, receive any
remuneration or other benefits from the Company;
• the auditors’ independence was not impaired by any consultancy, advisory or other work undertaken by
the auditor;
• There have not been any significant changes in management which may mitigate the attendant risk of
familiarity between the external audit and management;
• Deloitte & Touche has been the auditor of the Company since incorporation in October 2017 and
Mr. JM Bierman was appointed for the year ended 30 June 2018. As required by section 92 of the
Companies Act of South Africa No. 71 of 20018, the lead audit partner is required to be rotated every five
years;
• In compliance with the of the JSE Limited Listings Requirements (paragraph 3.84(h)(iii)) the Audit and
Risk Committee obtained and considered all information listed in paragraph 22.15(h) of the Listings
Requirements of the JSE in its assessment of the suitability of Deloitte & Touche for re-appointment;
• the auditor’s independence was not prejudiced as a result of any previous appointment as auditor; and
• the criteria specified for independence by the Independent Regulatory Board for Auditors and international
regulatory bodies.
INTERNAL AUDIT
The Audit and Risk Committee:
• reviewed and approved the internal audit charter and annual audit plan and evaluated the independence,
effectiveness and performance of the internal audit department and compliance with its charter;
• considered the reports of the internal auditor on Motus’ systems of internal control including financial
controls, business risk management and maintenance of effective internal control systems;
• received assurance that proper and adequate accounting records were maintained and that the systems
safeguarded the assets against unauthorised use or disposal thereof; and
• reviewed significant issues raised by the internal audit processes and the adequacy of corrective action
in response to significant internal audit findings.
The head of internal audit reports functionally to the chair of the Audit and Risk Committee and administratively
to the Chief Financial Officer. The Audit and Risk Committee considered and was satisfied with the effectiveness
of the internal audit function and monitored adherence to the annual internal audit plan.
COMBINED ASSURANCE AND RISK MANAGEMENT OVERSIGHT
The Audit and Risk Committee has reviewed the combined assurance model and has satisfied itself as to
its completeness. The Audit and Risk Committee is also satisfied that Motus has augmented the assurance
coverage obtained from management, and from external and internal assurance providers, in accordance
with an appropriate combined assurance model.
The Audit and Risk Committee has an interest in risk management as a result of its responsibility for internal
controls. The Audit and Risk Committee has therefore also satisfied itself that the level of unmitigated risks,
both individually and in totality, are within the risk appetite of Motus, and that there is sufficient assurance
provided to manage risks and the control environment through both internal and external assurance providers.
ADEQUACY AND FUNCTIONING OF THE INTERNAL CONTROLS
The Audit and Risk Committee reviewed the plans and work outputs of the internal auditors and concluded
that these were adequate to address all significant financial risks facing the business.
As noted above, it also reviewed the reporting around the adequacy of the internal controls and based on
this concluded that there had been no material breakdowns in internal control, including financial controls,
business risk management and the maintenance of effective material control systems.
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FINANCIAL REPORTING
The Audit and Risk Committee ensures that the financial reporting to stakeholders fairly presents the state of
affairs of Motus which includes the financial statements.
The Audit and Risk Committee amongst other matters:
• confirmed the going concern as the basis of preparation of the financial statements;
• examined and reviewed the financial statements, as well as all other financial information disclosed prior
to the submission to the Board for their approval and then for disclosure to stakeholders;
• ensured that the financial statements fairly present the financial position of the Company and of Motus
as at the end of the financial year and the results of operations and cash flows for the financial year and
considered the basis on which the Company and Motus was determined to be a going concern;
• considered the appropriateness of the accounting policies adopted and changes thereto;
• reviewed the external auditor’s audit report and key audit matters included;
• reviewed the representation letter relating to the financial statements which was signed by management;
• considered any problems identified and reviewed any significant legal and tax matters that could have a
material impact on the financial statements; and
• considered accounting treatments, significant unusual transactions and accounting judgements.
PROACTIVE MONITORING
The Audit and Risk Committee hereby confirms that it has considered the findings contained in the Proactive
Monitoring reports when preparing the financial statements for the year ended 30 June 2018.
KEY AUDIT MATTERS
The Audit and Risk Committee has considered the key audit matters as outlined in the external auditor’s report
as presented in Annexure 2 of the Pre-Listing Statement. These matters have been covered in the significant
areas of judgement below.
SIGNIFICANT AREAS OF JUDGEMENT
In arriving at the figures disclosed in the financial statements there are many areas where judgement is
needed. These are outlined in note 1.5 Critical accounting judgements, estimates and assumptions to the
financial statements. The Audit and Risk Committee has considered the quantum of the assets and liabilities
on the statement of financial position and other items that require significant judgement and decided to
expand on the following:
• Deferred funds – measurements and revenue recognition;
• Inventory provision;
• Fair value measurement of financial instruments;
• Residual value of tangible assets;
• Impairment of assets;
• Allocation of separately identifiable intangible assets on business combinations;
• Unbundling and separate listing of Motus;
• Valuation of subsidiaries acquired within Motus; and
• Common control.
In making its assessment in each of the above areas the FRRCs and the Audit and Risk Committee examined
the external auditor’s report and questioned senior management in arriving at their conclusions. The Audit and
Risk Committee reviewed the disclosures, and considered the procedures undertaken by the Directors and
were satisfied that sufficiently robust processes were followed with regard to the judgements outlined below.
Deferred funds – measurement and revenue recognition
Service, maintenance and warranty contracts are sold with vehicles to cover the cash cost of future
expenditure over specified periods. Revenue from vehicle maintenance plans is recognised based on
an established pattern of when vehicle maintenance services are performed over the period of the plan.
Revenue is adjusted to cater for expected future expenditure which is determined based on historical trends
and includes forecasted inflationary adjustments on an annual basis. Significant judgements are applied to
determine the stage-of-completion of the plan, known as burn rates of contracts.
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Inventory provision
A provision is raised against new, used and demonstration vehicles for loss in the value of inventory held,
likely to be incurred through obsolescence, damage, and future expected movement in net realisable value.
Based on historical information, a provision of 5% is raised on new inventory over a year old and between
5% – 20% on used inventory over 90 days old, to account for the risk in net realisable value. There has been
no change in the assumptions applied in the calculation of the inventory provision in the historic periods
presented.
Fair value measurement of financial instruments
When the fair value of financial assets and financial liabilities recorded in the consolidated statement of financial
position cannot be measured based on quoted prices in an active market, their fair value is measured using
the discounted cash flow (DCF) valuation techniques. The inputs to these models are taken from observable
markets, but where this is not feasible, a degree of judgement is required in establishing these fair values.
Discount rates are calculated with reference to observable market data. Assumed profitability is based on
historical performance adjusted for expected growth (refer to note 9.3 Fair value measurement on financial
instruments).
Residual value of tangible assets
To arrive at the residual value of a building in present day values, the usage of the building and its forecasted
residual value at the end of its useful life needs to be assessed and thereafter present valued. The determination
of forecasted residual values requires the use of capitalisation rates (which vary between 9% – 15%) and
discount factors which require a high level of judgement. In arriving at estimated residual values, Motus
considers the existing condition of the asset, the expected condition of the assets at the end of its useful life,
technological innovations, product life cycles, maintenance programs and projected disposal values.
Motus re-assesses the residual values of its assets on an annual basis. Actual residual values can vary from
those previously estimated.
Impairment of assets
Goodwill and other indefinite useful life intangible assets are assessed annually for impairment. The key
assumptions used are cash flow projections, growth rates and discount rates applied. The growth rates and
cash flow projections are approved by Directors. The discount rates are established by an independent
expert taking into account the geographic and other risk factors relating to the particular cash-generating
unit being assessed. For the purpose of impairment testing, goodwill is allocated to each of Motus’
cash-generating units (or groups of cash-generating units) that are expected to benefit from the synergies of
the business combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or when there
is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less
than its carrying amount, the impairment loss is first allocated to the goodwill and then to the other assets of
the unit on a pro rata basis on the carrying amount of each asset in the unit.
Properties are valued over a five-year cycle, or earlier should an impairment indicator arise, with approximately
20% of the property portfolio being valued annually. The valuation is done by an internal expert using the
income approach method.
Allocation of separately identifiable intangible assets on business combinations
For the acquisitions of Pentagon Motor Holdings Limited and SWT Group Proprietary Limited, Motus used
external specialists in the evaluation of the estimates and judgements applied in identifying intangible assets
and the fair value thereof.
The full excess purchase price is recognised as goodwill, as the distribution lights with the Original Equipment
Manufacturer (OEM) only transfer upon certain terms and conditions being met and do not automatically
transfer as a part of the acquisition. These assets are not controlled resources that are separable in nature as
the right cannot be sold separately, transferred, licensed or rented/ exchanged.
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Unbundling and separate listing of Motus
At the Imperial Board of Directors meeting on 21 June 2018, it was agreed to proceed with the proposed
Unbundling and separate listing of the Motus operations subject to shareholder approval. Motus has been
restructured to ensure all of the subsidiaries are now owned by Motus Holdings Limited which will be
unbundled to shareholders. For every share owned in Imperial, a share in Motus Holdings Limited will be
received by shareholders.
Valuation of subsidiaries acquired within Motus
Subsidiaries were acquired within Motus as a part of the legal restructure, thus ensuring that all automotive
businesses held by Motus, were accounted for at fair value. The fair value was determined using an earnings
before interest, tax, depreciation and amortisation (“EBITDA”) multiple approach, giving consideration to
prevailing market conditions and peers. The enterprise value arrived at was adjusted for equity loans (where
applicable), net debt, non-controlling interests and investments in associates to calculate the resultant equity
value. Refer to note 2 Investments in subsidiaries in the Company financial statements.
Common control
The abovementioned restructuring resulted in the creation of a profit on sale by the selling entity and a
premium paid by the acquiring entity above the net asset value of the entities sold and is included as a
negative common control reserve in equity and is not reflected as an asset.
Motus Holdings Limited acquired its subsidiaries from Imperial Holdings Limited at fair value and settled the
purchase price through a share issue. Motus Holdings Limited reflected the common control reserve as a
reduction to equity offsetting the share issue which was made at fair value.
QUALITY OF EARNINGS
The reconciliation of the attributable profits to headline earnings is outlined in note 5.2 Earnings per share.
There were no other material once off income or expense items that affected the operating profit.
RISK MANAGEMENT AND INFORMATION TECHNOLOGY (IT) GOVERNANCE
The Audit and Risk Committee reviewed the policies on risk assessment, including fraud risks and IT risks as
they pertain to financial reporting and the going concern assessment, and found them to be sound.
LEGAL AND REGULATORY REQUIREMENTS
To the extent that these may have an impact on the financial statements, the Audit and Risk Committee:
• reviewed legal matters that could have a material impact on Motus;
• reviewed the adequacy and effectiveness of Motus’ procedures, including its risk management framework,
to ensure compliance with legal and regulatory responsibilities;
• monitored complaints received via Motus’ whistleblowing service; and
• considered reports provided by management, internal audit and the external auditors regarding compliance
with legal and regulatory requirements.
EXPERTISE AND EXPERIENCE OF THE CHIEF FINANCIAL OFFICER AND THE FINANCE FUNCTION
As required by 3.84(h) of the JSE Limited Listings Requirements, the Audit and Risk Committee has satisfied
itself that the Chief Financial Officer, Mr. OJ Janse van Rensburg, has the appropriate expertise and experience.
In addition, the Audit and Risk Committee satisfied itself that the composition, experience and skills set of the
finance function met Motus’ requirements.
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SUBSIDIARY COMPANIES
The functions of the Audit and Risk Committee are also performed for each subsidiary company that has
not appointed an Audit and Risk Committee, on the basis that the Audit and Risk Committee delegates the
performance of such functions to sub-committees referred to as Finance Risk Review Committees.
Divisional Finance Risk Review Committees have been constituted and these committees report significant
issues to the Motus Audit and Risk Committee. Each divisional Finance Risk Review Committees is chaired
by an independent chairman with no operational role in the divisions.
Having achieved its objectives, the Audit and Risk Committee has recommended the consolidated and
Company financial statements for the year ended 30June 2018 for approval to the Board. The Board has
subsequently approved the reports, which will be open for discussion at the forthcoming Annual General
Meeting.
R Sparks
Chairman
20 September 2018
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CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
at 30 June 2018
Rm Notes
Audited
2018
Reviewed
2017
Reviewed
2016
ASSETS
Non-current assets 9 799 9 207 9 613
Goodwill 8.3 953 539 585
Intangible assets 8.4 277 259 310
Investments in associates and joint ventures 8.5 348 299 309
Property, plant and equipment 3.2 6 786 6 465 6 888
Deferred tax 2.7 782 811 930
Investments and other financial instruments 8.7 653 834 591
Current assets 26 682 24 736 23 426
Inventories 3.3.1 15 633 15 325 14 982
Vehicles for hire 3.4 3 924 3 859 3 391
Taxation 135 37 50
Trade and other receivables 3.3.3 4 821 3 890 4 095
Derivative financial assets 432 272 27
Cash resources 4.2 1 737 1 353 881
Total assets from continuing operations 36 481 33 943 33 039
Assets classified as held-for-sale 10.3 235 633 998
Total assets 36 716 34 576 34 037
EQUITY AND LIABILITIES
Capital and reserves
Stated capital 5.1 23 358 23 358 23 358
Common control reserve (19 753) (19 753) (19 684)
Hedge accounting reserve 198 (34) (147)
Other reserves (716) (683) (675)
Retained income 8 553 9 308 9 127
Attributable to owners of Motus 11 640 12 196 11 979
Non-controlling interests 8.6 4
(274) 30
Total equity 11 644 11 922 12 009
Liabilities
Non-current liabilities 1 914 1 851 2 069
Deferred funds 1 447 1 510 1 599
Deferred tax 2.7 31 19 41
Interest-bearing debt 4.1 81 20 45
Provisions 7.1 301 168 293
Other financial liabilities 54 134 91
Current liabilities 23 137 20 803 19 794
Provisions 7.1 373 409 158
Deferred funds 1 277 1 297 1 350
Trade and other payables 3.3.2 13 435 10 450 10 020
Derivative financial liabilities 46 225 440
Taxation 450 286 244
Interest-bearing debt 4.1 7 556 8 136 7 582
Total liabilities from continuing operations 25 051 22 654 21 683
Liabilities classified as held-for-sale 10.3 21 – 165
Total liabilities 25 072 22 654 22 028
Total equity and liabilities 36 716 34 576 34 037
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CONSOLIDATED STATEMENTS OF PROFIT OR LOSS
for the year ended 30 June 2018
Rm Notes
Audited
2018
Reviewed
2017
Reviewed
2016
CONTINUING OPERATIONS
Revenue 2.2 77 659 66 129 65 538
Net operating expenses 2.3 (72 713) (61 202) (61 018)
Earnings before interest, taxation, depreciation and
amortisation 4 946 4 927 4 520
Depreciation, amortisation and impairments (1 353) (1 588) (1 228)
Operating profit 3 593 3 339 3 292
Profit on sale of properties, net of impairments 617 31 1
Amortisation of intangible assets arising on business
combinations 8.4 (15) (16) (94)
Net foreign exchange losses (43) (416) (98)
Other non-operating items 2.4 (244) (81) (126)
Profit before net financing costs 3 908 2 857 2 975
Finance costs (803) (947) (750)
Finance income 66 58 75
Profit before share of results of associates and joint
ventures 3 171 1 968 2 300
Share of results of associates and joint ventures 39 51 74
Profit before tax 3 210 2 019 2 374
Income tax expense 2.6 (897) (671) (677)
Profit for the year from continuing operations 2 313 1 348 1 697
DISCONTINUED OPERATIONS
Loss for the year from discontinued operations 10.1 – (38) (194)
Profit for the year 2 313 1 310 1 503
Net profit attributable to:
Owners of Motus 2 346 1 569 1 493
Continuing operations 2 346 1 605 1 685
Discontinued operations – (36) (192)
Non-controlling interests (33) (259) 10
Continuing operations (33) (257) 12
Discontinued operations – (2) (2)
2 313 1 310 1 503
Earnings per share (cents)
Continuing operations 1 162 797 836
– Basic 1 162 797 836
– Diluted 1 162 797 836
Discontinued operations – (20) (97)
– Basic – (20) (97)
– Diluted – (20) (97)
Total earnings per share 5.2 1 162 777 739
– Basic 1 162 777 739
– Diluted 1 162 777 739
94
CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME
for the year ended 30 June 2018
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Net profit for the year 2 313 1 310 1 503
Other comprehensive income/ (loss) 231 97 (387)
Items that may be reclassified subsequently to profit or loss 231 97 (387)
Exchange gains/ (losses) arising on translation of foreign
operations 9 (69) (66)
Movement in hedge accounting reserve (net of tax) 222 166 (321)
– Effective portion of the change in the fair value of the cashflow
hedges 292 322 (400)
– Amounts reclassified from hedge accounting reserve to inventory 11 (90) (9)
– Deferred tax relating to the hedge accounting reserve movements (81) (66) 88
Total comprehensive income for the year 2 544 1 407 1 116
Total comprehensive income attributable to:
Owners of Motus 2 579 1 613 1 176
Non-controlling interests (35) (206) (60)
2 544 1 407 1 116
95
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
for the year ended 30 June 2018
Rm
Stated
capital
Common
control
reserve
Hedge
accounting
reserve
Share-
based
payment
reserve
Foreign
translation
reserve
Premium
paid on
purchase
of non-
controlling
interests
Changes
in net
assets of
associates
and joint
ventures
Total other
reserves
Retained
income
Attributable
to owners
of Motus
Non-
controlling
interests
Total
equity
As at 30 June 2016 Reviewed
Opening balance as at 1 July 2015 23 358 (20 119) 69 (62) (218) (87) (2) (369) 8 828 11 767 916 12 683
Total comprehensive income for
theyear – – (233) – (84) – – (84) 1 493 1 176 (60) 1 116
Attributable profit for the year – – – – – – – – 1 493 1 493 10 1 503
Other comprehensive income – – (233) – (84) – – (84) – (317) (70) (387)
Common control recognised on
purchase of subsidiaries – 435 – – – – – – – 435 – 435
Incremental interest purchased from
non-controlling interests – – – – – (243) – (243) – (243) (660) (903)
Additional investment by non-
controlling interests – – –
– – – – – – – 21 21
Net acquisitions/ (disposals) of
non-controlling interests – – – – – 39 – 39 – 39 (57) (18)
Realisation of the disposal of
subsidiaries – – 17 – – – 2 2 (19) – – –
Hedge premiums paid on share-
based equity – – – (66) – – – (66) – (66) – (66)
Share-based equity costs charged
to the statement of profit or loss – – – 58 – – – 58 – 58 4 62
Dividends paid – – – – – – – – (1 133) (1 133) (141) (1 274)
Transfers to other reserves – – – 2 (15) 1 – (12) 7 (5) 2 (3)
Other movements – – – – – – – – (49) (49) 5 (44)
Closing balance 23 358 (19 684) (147) (68) (317) (290) – (675) 9 127 11 979 30 12 009
96
Rm
Stated
capital
Common
control
reserve
Hedge
accounting
reserve
Share-
based
payment
reserve
Foreign
translation
reserve
Premium
paid on
purchase
of non-
controlling
interests
Changes
in net
assets of
associates
and joint
ventures
Total other
reserves
Retained
income
Attributable
to owners
of Motus
Non-
controlling
interests
Total
equity
As at 30 June 2017 Reviewed
Opening balance as at 1 July 2016 23 358 (19 684) (147) (68) (317) (290) – (675) 9 127 11 979 30 12 009
Total comprehensive income for
theyear – – 113 – (69) – – (69) 1 569 1 613 (206) 1 407
Attributable profit for the year – – – – – – – – 1 569 1 569 (259) 1 310
Other comprehensive income – – 113 – (69) – – (69) – 44 53 97
Common control recognised on
purchase of subsidiaries – (69) – – – – – – – (69) – (69)
Incremental interest purchased
from non-controlling interests – – – – – (62) – (62) – (62) (15) (77)
Interest sold to non-controlling
interests –
– – – – – – – – – (19) (19)
Net acquisitions/ (disposals) of
non-controlling interests – – – – – 52 – 52 – 52 (13) 39
Realisation of the disposal of
subsidiaries – – – 2 – – – 2 (2) – – –
Hedge premiums paid on share-
based equity – – – (26) – – – (26) – (26) – (26)
Share-based equity costs charged
to the statement of profit or loss – – – 60 – – – 60 – 60 – 60
Dividends paid – – – – – – – – (1 145) (1 145) (52) (1 197)
Transfers to other reserves – – – 35 – – – 35 (35) – – –
Other movements – – – – – – – – (206) (206) 1 (205)
Closing balance 23 358 (19 753) (34) 3 (386) (300) – (683) 9 308 12 196 (274) 11 922
97
Rm
Stated
capital
Common
control
reserve
Hedge
accounting
reserve
Share-
based
payment
reserve
Foreign
translation
reserve
Premium
paid on
purchase
of non-
controlling
interests
Changes
in net
assets of
associates
and joint
ventures
Total other
reserves
Retained
income
Attributable
to owners
of Motus
Non-
controlling
interests
Total
equity
As at 30 June 2018 Audited
Opening balance as at 1 July 2017 23 358 (19 753) (34) 3 (386) (300) – (683) 9 308 12 196 (274) 11 922
Total comprehensive income for
theyear – – 232 – 1 – – 1 2 346 2 579 (35) 2 544
Attributable profit for the year – – – – – – – – 2 346 2 346 (33) 2 313
Other comprehensive income – – 232 – 1 – – 1 – 233 (2) 231
Incremental interest purchased
from non-controlling interests – – – – – (23) – (23) – (23) (12) (35)
Additional investment by non-
controlling interests – – – – – – – – – – 220 220
Net acquisitions/ (disposals) of
non-controlling interests –
– – – – 1 – 1 – 1 109 110
Hedge premiums paid on share-
based equity – – – (215) – – – (215) – (215) – (215)
Share-based equity costs charged
to the statement of profit or loss – – – 121 – – – 121 – 121 – 121
Dividends paid – – – – – – – – (3 139) (3 139) (1) (3 140)
Transfers to other reserves – – – 75 – 15 – 90 (90) – – –
Other movements – – – – (8) – – (8) 128 120 (3) 117
Closing balance 23 358 (19 753) 198 (16) (393) (307) – (716) 8 553 11 640 4 11 644
98
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the year ended 30 June 2018
Rm Notes
Audited
2018*
Reviewed
2017*
Reviewed
2016*
CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers 77 131 65 483 65 424
Cash paid to suppliers and employees (70 383) (61 211) (63 007)
Cash generated by operations before interest, tax
paid and capital expenditure on vehicles for hire 2.5 6 748 4 272 2 417
Finance costs paid (803) (958) (817)
Finance income received 66 58 81
Dividend income 230 270 186
Tax paid (861) (597) (801)
Cash generated by operations before capital
expenditure on vehicles for hire 5 380 3 045 1 066
Net capital expenditure – vehicles for hire (1 079) (1 708) (1 611)
– Additions (4 345) (4 539) (4 311)
– Proceeds on disposals 3 266 2 831 2 700
4 301 1 337 (545)
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash (utilised on)/ generated by acquisitions 8.2 (731) 33 (93)
Net cash utilised on/ (generated by) disposals 10.2 57 (6) 194
Additions to property, plant, equipment and
intangibleassets (612) (992) (806)
Proceeds on disposal of property, plant and
equipment and intangible assets 1 368 383 243
Movements in investments in associates (45) 527 94
Additions at cost (65) (48) (5)
Loans (extended to)/ repaid by associates (47) 52 (17)
Share of dividends from associates 23 49 71
Proceeds on sale of associates 44 474 45
Increase/ (decrease) in investments 18 (181) 15
Advances/ (repayments) of other loans 6 187
(23)
Increase in other receivables – (173) –
61 (222) (376)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid to equity holders of Motus (3 139) (1 145) (1 133)
Dividends paid to non-controlling interests (1) (52) (141)
Net acquisition of non-controlling interests (35) (96) (903)
Capital raised from non-controlling interests 220 – 21
Movement in other financial liabilities (20) 36 47
Issue of preference shares to non-controlling interests 40 – –
Increase/ (decrease) in floorplan facilities 81 (15) 81
Advances/ (repayments) in unsecured loans (1 350) 510 2 662
(4 204) (762) 634
Net increase/ (decrease) in cash and cash equivalents 158 353 (287)
Effects of exchange rate changes on cash and cash
equivalents 86 (23) 11
Cash and cash equivalents at beginning of the year 943 613 889
Cash and cash equivalents at end of the year 4.2 1 187 943 613
* Includes cash flows from continuing and discontinued operations.
99
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Index
Page
1. Accounting framework and critical
judgements 100
1.1 Basis of preparation 100
1.2 Basis of preparation – common
control transactions 100
1.3 Going concern 102
1.4 Accounting policies 102
1.5 Critical accounting judgements,
estimates and assumptions 102
1.6 Events after the reporting period 104
1.7 Segment information 105
2. Returns 106
2.1 Segment profit or loss 106
2.2 Revenue 107
2.3 Net operating expenses 107
2.4 Other non-operating items 108
2.5 Cash generated by operations
beforeinterest, tax paid and capital
expenditure on vehicles for hire 109
2.6 Current taxation 110
2.7 Deferred tax 111
3. Operations 112
3.1 Segment financial position 112
3.2 Property, plant and equipment 113
3.3 Net working capital 115
3.4 Vehicles for hire 118
3.5 Hedge accounting reserve 118
4. Funding 120
4.1 Interest-bearing debt 120
4.2 Cash resources 122
5. Shareholders’ interest 123
5.1 Stated capital 123
5.2 Earnings per share 124
Page
6. Our people 126
6.1 Directors’ remuneration and
prescribed officers 126
6.2 Share appreciation rights 127
6.3 Deferred bonus plan 129
6.4 Directors’ interest in shares 130
6.5 Key management 131
7. Provisions and commitments 131
7.1 Provisions 131
7.2 Leases 132
7.3 Capital expenditure commitments 133
7.4 Contingent liabilities 134
8. Our Group 134
8.1
Business combinations 134
8.2 Acquisitions of subsidiaries 137
8.3 Goodwill 137
8.4 Intangible assets 140
8.5 Investments in associates and joint
ventures 142
8.6 Non-controlling interests 144
8.7 Investments and other financial
instruments 146
8.8 Related parties 146
9. Financial management 148
9.1 Financial risk factors 148
9.2 Liquidity risk 148
9.3 Fair value measurement of financial
instruments 149
10. Discontinued operations/
Held-for-sale 151
10.1 Loss from discontinued operations 151
10.2 Disposals of subsidiaries 152
10.3 Assets and liabilities classified as
held-for-sale 153
11. New issued standards not yet
effective 154
100
1. ACCOUNTING FRAMEWORK AND CRITICAL JUDGEMENTS
1.1 Basis of preparation
The consolidated and Company financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board (IASB) and comply with the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee, Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council (FRSC), the JSE Listings Requirements. The requirements of IFRS
1:
First-time Adoption of International Financial Reporting Standards have not been presented as
the Group’s financial statements are extracted from its shareholder and its underlying subsidiaries
financial statements which have historically been prepared under IFRS.
The preparation of the financial statements in conformity with IFRS requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the process
of applying Motus’ accounting policies. Estimates and underlying assumptions are reviewed on
an ongoing basis, and revisions to accounting estimates are recognised in the period in which the
estimates are revised. The actual results could differ from these estimates. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant
to the financial statements have been disclosed in note 1.5 Critical accounting judgements,
estimates and assumptions.
The financial statements are presented in South African Rand (ZAR), the functional currency
of Motus and the Company and all amounts are rounded to the nearest million, except where
otherwise indicated. Foreign currency exchange rates used in the conversion of foreign currencies
into Rands are set out below:
Closing rates Average rates
2018 2017 2016 2018 2017 2016
US Dollar 13.71 13.06 14.70 12.86 13.58 14.51
British Pound 18.10 17.02 19.58 17.31 17.23 21.47
Australian Dollar 10.13 10.04 10.95 9.97 10.24 10.56
Euro 16.01 14.92 16.32 15.34 14.81 16.10
The consolidated and Company financial statements have been prepared on the historical cost
basis, except for the following material items included in the statement of financial position that are
measured as described below:
• Derivative financial instruments are measured at fair value;
• Common control is measured as the differential in the purchase consideration paid on historical
acquisitions and that of Motus; and
• Investments in preference shares (refer to note 8.7 Investments and other financial instruments)
are measured at fair value.
1.2 Basis of preparation – common control transactions
Motus businesses did not historically constitute a combined legal group. The historical financial
statements of Motus are prepared on the assumption that the Company and its subsidiaries; Motus
Capital Proprietary Limited, Motus Group Limited and Motus Corporation Proprietary Limited
traded together as a separate legal group for the years ended 30 June 2018, 30 June 2017 and
30 June
2016.
IFRS does not provide guidance on the accounting for common control transactions. In the absence
of specific guidance relating to common control transactions, entities should select an appropriate
accounting policy using the hierarchy described in IAS 8: Accounting policies, changes in
accounting estimates and errors. The hierarchy permits the consideration of pronouncements of
other standard-setting bodies.
The acquisition by Motus Holdings Limited of Motus Corporation Proprietary Limited, Motus Group
Limited and Motus Capital Proprietary Limited meets the definition of a common control transaction
as all the combining entities are ultimately controlled by the same party, being Imperial Holdings
Limited, before and after the combination, and that control is not transitory.
101
The following principles of US GAAP have been applied to the transfer of assets between entities
under common control:
• When accounting for a transfer of assets or exchange of shares between entities under common
control, the entity that receives the net assets or the equity interests shall initially measure the
recognised assets and liabilities transferred at their carrying amounts in the accounts of the
transferring entity at the date of transfer. If the carrying amounts of the assets and liabilities
transferred differ from the historical cost of the parent of the entities under common control, for
example, because fair value adjustments in business combinations have been recognised on
consolidation; then the financial statements of the receiving entity shall reflect the transferred
assets and liabilities at the historical cost of Imperial.
• As a result, the receiving entity effectively applies pushdown accounting in its consolidated
financial statements.
• There is no change in basis for the net assets received because there is no change in control
over the net assets or equity interests from the parent’s perspective. Any difference between
any proceeds transferred and the carrying amounts of the net assets received is recognised
in equity as a common control reserve arising on common control transactions in the receiving
entity’s consolidated financial statements. No additional goodwill is created.
• Any increases or decreases in ownership interests in subsidiaries without a change in control are
recognised as equity transactions. The carrying amounts of Motus’ interests and the non-controlling
interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any
differences between the amount by which the non-controlling interests are adjusted and the fair
value of the consideration paid or received are recognised directly in equity and attributed to owners
of the company. These changes in ownership that have occurred in the respective historical financial
years is reflected as such to present the legal ownership applicable for that period.
• The equity method of accounting for associates is adopted in the consolidated financial
statements. In applying the equity method, account is taken of Motus’ share of accumulated
retained earnings and movements in reserves from the effective dates on which the companies
became associates and up to the effective dates of disposal. In the event of associates making
losses, Motus recognises the losses to the extent of Motus’ exposure.
• Transactions with parties external to Motus where a change in shareholding occurred have
been accounted for at the effective date of change in shareholding. Subsidiaries and associates
which were sold to parties external to Motus have had their share of assets and profits included
in the consolidated results when legal ownership was held.
• Acquisitions from parties external to Motus have had their share of assets and profits included
in the consolidated results for the periods post effective date, however, the purchase price
utilised in acquiring Motus Corporation Proprietary Limited, Motus Capital Proprietary Limited,
and Motus Group Limited which includes an amount for these newly acquired subsidiaries has
been utilised in determining the common control for the periods 30 June 2015 onwards or when
the business was incorporated.
Comparative financial information of Motus for the three years ended 30 June 2018 has been
prepared based on the net asset values relating to the statutory entities including all fair values
of business combinations that were acquired by Motus Holdings Limited and is not directly
comparable to previously published information of Imperial.
The comparative financial information comprises of:
• Motus Corporation Proprietary Limited and its subsidiaries and associates;
• Motus Capital Proprietary Limited and its subsidiaries;
• Motus Group Limited; and
• Subsidiaries of Imperial Holdings Limited as acquired by Motus Holdings Limited and its
subsidiaries, effective 30 April 2018.
The above financial information has previously been reported as part of the annual financial
statements of Imperial Holdings Limited in the comparative period, which were prepared in
accordance with IFRS.
Any intergroup restructurings that took place between the above-mentioned companies during the
periods presented, have been eliminated to present the consolidated historical financial information
as it would be structured in the newly listed entity.
102
1.3 Going concern
The directors consider it appropriate to adopt the going concern basis in preparing the consolidated
and Company financial statements. Based on their review of the consolidated and Company
budgets, cash flows and solvency and liquidity positions as at 30 June 2018, the Motus Board
reasonably believes that Motus has adequate resources to continue in operation for the foreseeable
future. Refer to the Directors’ report for further going concern disclosure.
1.4 Accounting polices
Accounting policies for which no choice is permitted in terms of International Financial Reporting
Standards have been included only if management concluded that the disclosure would assist
users in understanding the financial statements as a whole and considering the materiality of the
item being discussed. Accounting policies which are not applicable from time to time, have been
removed, but will be included if the type of transaction occurs in future or becomes material to
the understanding of the financial statements. Accounting policies that refer to “consolidated” or
“Group” apply equally to the Company financial statements where relevant.
No new, revised or amended standards which had a material impact were implemented during the
financial reporting period ended 30 June 2018.
1.5 Critical accounting judgements, estimates and assumptions
Deferred funds – measurement and revenue recognition
Service, maintenance and warranty contracts are sold with vehicles to cover the cash cost of future
expenditure over specified periods. Revenue from vehicle maintenance plans is recognised based
on an established pattern of when vehicle maintenance services are performed over the period
of the plan. Revenue is adjusted to cater for expected future expenditure which is determined
based on historical trends and includes forecasted inflationary adjustments on an annual basis.
Significant judgements made to determine the stage-of-completion of the plan, known as burn
rates of contracts, include:
• Vehicles parts inflation;
• Foreign currency movements;
• Wholesale date;
• Policy sale date; and
• Contract duration and mileage.
The balance of the unearned revenue is recognised in profit or loss on termination when the contract
mileage has been reached or when the contract expires.
This deferred fund balance includes a liability which is required to cover contractual costs of service,
maintenance and warranty work to be carried out in the future and the unearned margin to be
recognised over the life of the plans. Actuarial experts are used to determine the inputs required to
establish the adequacy of the reserve and the resulting revenue to be recognised and the final liability.
Funds for which there are insufficient claims history are recognised to the extent of the claims
incurred until termination.
Inventory provision
A provision is raised against new, used and demonstration vehicles for loss in the value of inventory
held, likely to be incurred through obsolescence, damage, and future expected movement in net
realisable value. Based on historical information, a provision of 5% is raised on new inventory
over a year old and between 5% – 20% on used inventory over 90 days old, to account for the
uncertainty in net realisable value. There has been no change in the assumptions applied in the
calculation of the inventory provision in the historic periods presented.
103
Fair value measurement of financial instruments
When the fair value of financial assets and financial liabilities recorded in the consolidated statement
of financial position cannot be measured based on quoted prices in an active market, their fair
value is measured using the discounted cash flow (DCF) valuation techniques. The inputs to these
models are taken from observable markets, but where this is not feasible, a degree of judgement is
required in establishing these fair values.
Discount rates are calculated with reference to observable market data. Assumed profitability
is based on historical performance adjusted for expected growth (refer to note 9.3 Fair value
measurement on financial instruments).
Significant financial instruments referred to above are:
• Derivative financial instruments measured at fair value; and
• Preference shares measured at fair value.
Trade receivables and trade payables are considered to approximate fair value due to their short-
term nature and thus no fair value adjustment is recognised.
Residual value of tangible assets
To arrive at the residual value of a building in today’s values, the usage of the building and its
forecasted residual value at the end of its useful life needs to be assessed and thereafter present
valued. The determination of forecasted residual values requires the use of capitalisation rates,
which vary between 9.0% and 15.0% (2017: 9.0% and 14.5%; 2016: 9.0% and 14.5%) and discount
factors which require a high level of judgement. In arriving at estimated residual values, Motus
considers the existing condition of the asset, the expected condition of the assets at the end of
its useful life, technological innovations, product life cycles, maintenance programs and projected
disposal values.
Motus re-assesses the residual values of its assets on an annual basis. Actual residual values can
vary from those previously estimated.
Impairment of assets
Goodwill and other indefinite useful life intangible assets are assessed annually for impairment.
The key assumptions used are cash flow projections, growth rates and discount rates applied. The
growth rates and cash flow projections are approved by senior management. The discount rates
are established by an independent expert taking into account the geographic and other risk factors
relating to the particular cash-generating unit being assessed. For the purpose of impairment
testing, goodwill is allocated to each of Motus’ cash-generating units (or groups of cash-generating
units) that are expected to benefit from the synergies of the business combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or when
there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating
unit is less than its carrying amount, the impairment loss is first allocated to the goodwill and then to the
other assets of the unit on a pro rata basis on the carrying amount of each asset in the unit.
Properties are valued over a five-year cycle, or earlier should an impairment indicator arise, with
approximately 20% of the property portfolio being valued annually. The valuation is done by an
internal expert using the income approach method.
Key inputs utilised in the valuation:
• Rental growth per annum: The property valuators approximated future escalations in rental
income to 5.4% (2017: 5.4%; 2016: 5.0%), taking into account various micro-economic and
macro-economic factors. At the level of individual properties, the rate is adjusted for conditions
contractual or other, that are specific to the building under consideration;
• Discount rate: An average discount rate of 5.3% (2017: 5.3%; 2016: 5.9%), over the medium to
long-term was used; and
• Capitalisation rate: Determined by taking into account the quality of the properties under
consideration. This rate is determined with reference to market transactions of comparable
properties, and takes the prevailing interest rates and risk into consideration. The rates used
vary between 9.3% and 15.0% (2017: 9.3% and 15.0%; 2016: 9.3% and 14.5%).
104
Other assumptions used:
• Net rental income used is the current pre-tax rental given normal arms length market conditions,
after deducting property maintenance and running costs;
• The useful life of refurbishments is considered to be five years; and
• Economic useful life: 20 – 25 years. Buildings occupied for five years or longer, are assumed to
have been occupied for five years.
Based on the calculations performed, the recoverable amount was lower than the carrying value and
an impairment loss of R103 million (2017: R8 million; 2016: R7 million) on property was recognised
in the following segments:
• Import and Distribution – R8 million (2017: Rnil; 2016: Rnil); and
• Retail and Rental – R95 million (2017: R9 million; 2016: R7 million).
Allocation of separately identifiable intangible assets on business combinations
For the acquisitions of Pentagon Motor Holdings Limited and SWT Group Proprietary Limited,
Motus used external specialists in the evaluation of the estimates and judgements applied in
identifying intangible assets and the fair value thereof. The most significant of these estimates is
the determination of the Purchase Price Allocation Valuation (PPAV) which encompasses:
• Identifying the assets and liabilities acquired and determining their fair values;
• Determining any resultant goodwill and previously unrecorded intangible assets to be recognised
on acquisition; and
• Assessing the useful lives of these intangible assets in order to calculate the annual amortisation
expense.
The full excess purchase price is recognised as goodwill, as the distribution rights with the OEM
only transfer upon certain terms and conditions being met and do not automatically transfer as a
part of the acquisition. These assets are not controlled resources that are separable in nature as
the right cannot be sold separately, transferred, licensed or rented/ exchanged.
Key sources of estimation and uncertainty
Future cash flows
Motus tests its fixed assets for impairment when indicators of impairment exist, and goodwill and
indeterminate assets are tested annually. The recoverable amounts of assets (including goodwill),
individual CGUs and groups of CGUs are based on Motus’ best estimate of the future cash flows
relating to those assets or CGUs, discounted to reflect the time value of money and the risks
specific to the asset, group of assets under consideration.
1.6 Events after the reporting period
The Unbundling of Motus Holdings Limited and its subsidiaries from Imperial Holdings Limited will
be effected through a distribution in specie to shareholders in terms of section 46 of the Companies
Act of South Africa No. 71 of 2008 as amended, and section 46 of the Income Tax Act of South
Africa No. 58 of 1962.
On 17 September 2018 Motus Holdings Limited declared a net dividend of R407 million (202 cents)
to its shareholder.
105
1.7 Segment information
Operating segments are reported in a manner consistent with the internal reporting requirements
of Motus as provided to the chief operating decision maker. The chief operating decision maker
is responsible for allocating resources and assessing performance of the operating segments.
The operating companies have been allocated to each operating business segment based on
management’s assessment of their core operating activities, nature of the revenue streams and
where they participate in the automotive value chain. Due to the integrated businesses of Retail and
Rental wherein vehicles are sold to the retail business at the end of the rental term, this is regarded
as one operating segment and accordingly no business segments have been aggregated.
Central costs are allocated to the segment which derives the benefits from the costs.
Segment profit or loss is reported for continued and discontinued operations. Segment revenue
reflects both sales to external parties and intragroup transactions across segments which are
eliminated under head office and eliminations.
The products and services of each of the business segments are described below:
• Import and Distribution: The sale of imported of International vehicle brands such as Hyundai,
Kia, Renault and Mitsubishi.
• Retail and Rental: The sale of new and used passenger and commercial vehicles, parts and
after-sales servicing thereof. Rents vehicles through various outlets.
• Motor-Related Financial Services: Manages and administers service, maintenance and warranty
plans for vehicles and develops and sells value added products. Provides fleet management
services and deploys an innovation hub.
• Aftermarket Parts: Distributor, wholesaler and retailer of accessories and aftermarket parts.
Other financial definitions include:
• Depreciation, amortisation and impairments includes depreciation, amortisation, impairments
and profits on disposals of property, plant, equipment and intangible assets. Impairment on
goodwill is not included;
• Operating assets are all assets less loans receivable, taxation assets, cash and cash equivalents
and assets classified as held-for-sale;
• Operating liabilities are all liabilities less all interest-bearing debt, taxation liabilities and liabilities
directly associated to assets classified as held-for-sale;
• Adjusted net working capital consists of inventories, trade and other receivables, derivative
instruments, provisions and trade and other payables;
• Net debt includes total interest-bearing debt less cash resources;
• Net capital expenditure includes expansion and net replacement expenditure of property, plant,
equipment, intangible assets and vehicles for hire; and
• Adjusted non-current assets include all non-current assets excluding financial instruments
(including loans to associates) and deferred tax.
106
2. RETURNS
2.1 Segment profit or loss
Motus
(3)
Import and
Distribution
Retail and
Rental
Motor-Related
Financial Services
Aftermarket
Parts
Head Office and
Eliminations Discontinued
Rm 2018
(1)
2017
(2)
2016
(2)
2018
(1)
2017
(2)
2016
(2)
2018
(1)
2017
(2)
2016
(2)
2018
(1)
2017
(2)
2016
(2)
2018
(1)
2017
(2)
2016
(2)
2018
(1)
2017
(2)
2016
(2)
2018
(1)
2017
(2)
2016
(2)
PROFIT or LOSS
Revenue 77 659 66 129 65 538 20 128 18 172 18 331 62 759 53 362 55 132 2 166 2 036 1 944 6 632 6 153 5 824 (14 026) (13 594) (15 693) – 427 2 945
– South Africa 54 997 51 767 50 259 20 128 18 172 18 331 40 227 39 000 39 853 2 166 2 036 1 944 6 502 6 153 5 824 (14 026) (13 594) (15 693) – 315 2 722
– International 22 662 14 362 15 279 – – – 22 532 14 362 15 279 – – – 130 – – – – – – 112 223
Operating profit 3 593 3 339 3 292 788
736 927 1 687 1 478 1 426 889 833 757 447 406 382 (218) (114) (200) – (2) 102
– South Africa 3 189 2 985 2 962 788 736 927 1 312 1 124 1 096 889 833 757 420 406 382 (220) (114) (200) – (3) 105
– International 404 354 330 – – – 375 354 330 – – – 27 – – 2 – – – 1 (3)
Depreciation, amortisation and
impairments (751) (1 573) (1 321) (515) (622) (653) (182) (721) (686) (174) (183) (150) (40) (41) (39) 160 (6) 207 – – (157)
– South Africa (1 268) (1 512) (1 230) (515) (622) (653) (699) (660) (596) (174) (183) (150) (40) (41) (39) 160 (6) 208 – – (156)
– International 517 (61) (91) – – – 517 (61) (90) – – – – – – – – (1) – – (1)
Net finance costs (737) (889) (675) (347) (285)
(254) (429) (356) (464) (49) (10) 5 (68) (69) (48) 156 (169) 86 – (11) (61)
– South Africa (620) (820) (600) (347) (285) (254) (314) (287) (389) (49) (10) 5 (66) (69) (48) 156 (169) 86 – (10) (59)
– International (117) (69) (75) – – – (115) (69) (75) – – – (2) – – – – – – (1) (2)
Profit/ (loss) before tax 3 210 2 019 2 374 393 (190) 416 1 818 1 127 948 824 812 720 190 364 369 (15) (94) (79) – (16) 10
– South Africa 2 318 1 747 2 140 393 (190) 416 953 855 714 824 812 720 164 364 369 (16) (94) (79) – (13) 6
– International 892 272 234 – – – 865 272 234 – – – 26 – – 1 – – – (3) 4
Income tax expense (897) (671) (677) (143)
(159) (164) (509) (298) (294) (165) (140) (129) (84) (89) (94) 4 15 4 – 6 (16)
Additional segment information
Analysis by revenue type
Sale of goods 68 933 58 468 58 425 7 920 6 274 6 457 54 928 46 280 46 668 – – – 6 604 6 055 5 795 (519) (141) (495) – 371 2 156
Rendering of services 8 726 7 661 7 113 222 201 192 7 209 6 689 5 934 1 098 823 784 2 2 1 195 (54) 202 – 50 656
77 659 66 129 65 538 8 142 6 475 6 649 62 137 52 969 52 602 1 098 823 784 6 606 6 057 5 796 (324) (195) (293) – 421 2 812
Inter-group revenue – – – 11 986 11 697 11 682 622 393 2 530 1 068 1 213 1 160 26 96 28 (13 702) (13 399) (15 400) – 6 133
77 659 66 129 65 538 20 128 18 172 18 331 62 759 53 362 55 132 2 166 2 036 1 944 6 632 6 153 5 824 (14 026) (13 594) (15 693) – 427 2 945
Analysis of depreciation,
amortisation and impairments (751) (1 573) (1 321)
(515) (622) (653) (182) (721) (686) (174) (183) (150) (40) (41) (39) 160 (6) 207 – – (157)
Depreciation and amortisation (1 340) (1 588) (1 228) (527) (637) (540) (760) (690) (662) (173) (184) (144) (39) (37) (34) 159 (40) 152 – – (117)
Profit on disposals and impairments 604 31 1 12 15 2 585 (20) (5) (1) 1 (6) 6 1 – 2 34 10 – – 5
Amortisation and impairment of
intangible assets arising on
business combinations (15) (16) (94) – – (115) (7) (11) (19) – – – (7) (5) (5) (1) – 45 – – (45)
Employee costs (6 425) (5 781) (5 755) (732) (524) (626) (4 669) (4 402) (4 375) (409) (298) (288) (713) (641) (575) 98 84 109 – (115) (435)
Operating lease charges (559) (329) (322) (43) (30) (29) (462) (315) (301) (13) (8) (8) (113) (81) (85) 72 105 101 – (10) (81)
Impairment of other financial assets 173 – – – – – – – – – – – 173 – – – – – – – –
Associate income included in
pre-tax profits 39 51 74 12 (6) (25) 8 3 4 4 5 49 15 39 42 – 10 4 – – 2
Operating profit margin 4,6% 5,0% 5,0% 3,9% 4,1% 5,1% 2,7% 2,8% 2,6% 41,0% 40,9% 38,9% 6,7% 6,6% 6,6% – – – – – –
(1)
2018 Audited;
(2)
2017 and 2016 Reviewed.
(3)
Relates to continuing operations
107
2.2 Revenue
Included in revenue are net invoiced sales to customers for goods and services, rentals from
vehicles for hire, revenue from service, maintenance and warranty contracts and commissions.
Where Motus acts as an agent and is remunerated on a commission basis, the commission is
included in revenue. Where Motus acts as principal, the total value of business handled is included
in revenue.
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership
have been transferred, when delivery has been made and title has passed, when the amount of the
revenue and the related costs can be reliably measured and the entity retains neither continuing
managerial involvement to the degree usually associated with ownership nor effective control over
the goods sold.
Guaranteed buyback arrangements where significant risks and rewards of ownership have not
transferred to the purchaser, is accounted for as a lease. Rental income from operating leases is
recognised on a straight-line basis over the term of the relevant lease.
Revenue from vehicle maintenance plans is recognised based on an established pattern, when
vehicle maintenance services are performed over the life of the plan. Revenue is adjusted to cater
for expected future expenditure which is determined based on historical trends and includes
forecasted inflationary adjustments on an annual basis.
Rm
Audited
2018
Reviewed
2017*
Reviewed
2016*
External revenue
Sale of goods 68 933 58 468 58 425
Rendering of services 8 726 7 661 7 113
Total revenue 77 659 66 129 65 538
* The amounts disclosed in the notes to the statements of profit or loss relate to continuing operations only. Refer to note 10.1
Loss from discontinued operations, for certain disclosures relating to discontinued operations.
Revenue received from Motus’ associates and joint ventures and revenue between Group entities
is disclosed in note 8.8 Related parties.
2.3 Net operating expenses
Rm
Audited
2018
Reviewed
2017*
Reviewed
2016*
Direct cost of sales (61 683) (51 786) (51 500)
Auditors’ remuneration (36) (29) (25)
Dividend income 230 270 186
Unrealised gains on preference share arrangements 67 29 70
Employee costs (including directors) (6 127) (5 508) (5 428)
Contributions to retirement funds (298) (273) (327)
Operating lease charges (559) (329) (322)
Other operating expenses (4 307) (3 576) (3 672)
Total net operating expenses (72 713) (61 202) (61 018)
* The amounts disclosed in the notes to the statements of profit or loss relate to continuing operations only. Refer to note 10.1
Loss from discontinued operations, for certain disclosures relating to discontinued operations.
108
2.4 Other non-operating items
Rm
Audited
2018
Reviewed
2017*
Reviewed
2016*
Business acquisition costs 7 3 1
Fair value loss/ (gains) on derivatives – 6 (7)
Gain on derecognition of financial instruments (5) – –
Impairment of goodwill 63 18 183
Impairment of other financial assets 173 – –
Impairment of associates and joint ventures 8 39 106
Other non-operating items (2) 15 (157)
Total 244 81 126
* The amounts disclosed in the notes to the statement of profit or loss relate to continuing operations only. Refer to note 10.1
Loss from discontinued operations, for certain disclosures relating to discontinued operations
109
2.5 Cash generated by operations before interest, tax paid and capital expenditure
on vehicles for hire
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Profit before net financing costs 3 908 2 824 2 858
– Continuing operations 3908 2857 2 975
– Discontinued operations – (33) (117)
Adjusted for:
Depreciation, amortisation, impairments and recoupments 1 353 1 588 1 340
– Continuing operations 1353 1588 1 228
– Discontinued operations – – 112
Profit on disposal of properties, net of impairment (617) (31) (1)
Amortisation/ (impairments) of intangible assets arising
onbusinesscombinations 15 16 94
Impairment of goodwill 63 18 228
– Continuing operations 63 18 183
– Discontinued operations – – 45
Profit on acquisitions of subsidiaries – 79 –
(Profit)/ loss on disposals of subsidiaries (4) 84 (17)
Impairment on assets of disposal group – – 40
Re-measurement of assets held-for-sale – (49) –
Impairment of investments in associates and joint ventures 8 39 106
Profit on disposal of investments in associates and
jointventures (1) (82) (17)
Impairment of other financial assets 173 – –
Dividend income (230) (270) (186)
Unrealised gains on preference share arrangements (67) (29) (70)
Recognition of share-based payment expenses costs 90 56 60
Foreign exchange loss recognised on disposal of
assets held-for-sale 13 – –
Net movement in deferred funds (175) (229) (70)
Re-measurement of foreign exchange derivatives – 6 (6)
Net movement in provisions 78 192 126
Cash generated by operations before changes in
working capital 4 607 4 212
4 485
Decrease/ (increase) in inventories 1 841 (799) (232)
Increase in trade and other receivables (353) (417) (44)
Decrease in derivative financial assets 132 22 51
Increase/ (decrease) in trade and other payables 700 1 422 (1 885)
(Decrease)/ increase in derivative financial liabilities (179) (168) 42
Cash generated by operations before interest, tax
paid and capital expenditure on vehicles for hire 6 748 4 272 2 417
110
2.6 Current taxation
Rm
Audited
2018
Reviewed
2017*
Reviewed
2016*
Income Tax (939) (668) (880)
Current year (955) (625) (743)
Prior year over/(under) provision 21 (36) (140)
Capital gains tax (5) (7) 3
Deferred taxation charge/ (release) 42 (3) 203
Current year 48 19 109
Prior year over/(under) provision 13 10 121
Impairments (19) (32) (27)
Income tax expense (897) (671) (677)
Reconciliation of effective tax rate (%)
South African normal tax rate 28.0 28.0 28.0
Adjusted for:
Impairment of goodwill 0.6 0.1 2.0
Impairment of other financial assets 1. 5 – –
Impairment on investments in associates
and joint ventures – 0.4 –
Dividends received (1.9) (3.7) (3.0)
Profit on sale of properties (0.9) (0.4) –
Impairment of intangible assets arising
on business combination – – 1.4
Assessed losses not recognised 1.9 6.8 –
Prior year’s taxation (1.0) 1.2 0.8
Impairment of deferred tax assets 0.6 1.6 1.1
Foreign tax rate differential – (0.6) (0.6)
Other (0.5) 0.7 (0.2)
Effective tax rate ** 28.3 34.1 29.5
* The amounts disclosed in the notes to the statements of profit or loss relate to continuing operations only. Refer to note 10.1
Loss from discontinued operations, for certain disclosures relating to discontinued operations.
** Effective tax is calculated on profit before tax excluding the share of income from associates and joint ventures.
Rm
Audited
2018
Reviewed
2017*
Reviewed
2016*
Taxation paid
Amounts payable at beginning of the year (net) (249) (194) (91)
Charge per the statement of profit or loss (excluding
deferred taxation) (939) (668) (880)
Net (acquisitions)/ disposals of subsidiaries (3) – 12
Direct current tax charge from share-based equity 31 6 (2)
Translation of foreign entities (15) (4) (11)
Amounts payable at end of the year (Net) 314 249 194
(861) (611) (778)
* The amounts disclosed in the notes to the statements of profit or loss relate to continuing operations only. Refer to note 10.1
Loss from discontinued operations, for certain disclosures relating to discontinued operations.
111
2.7 Deferred tax
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset and
where it relates to taxes levied by the same revenue authority and legal entity. A deferred tax asset is
recognised to the extent that it is probable that future taxable profits will be available against which
the unused tax losses and unused credits can be utilised. Future taxable profits are estimated
based on business plans which include estimates and assumptions regarding economic growth,
interest, inflation rates, tax rates and competitive forces. The deferred tax assets are reviewed at
the end of the reporting period and adjusted taking into consideration the current and forecast
results. Deferred tax assets were impaired where entities do not show signs of profitability in the
foreseeable future. There are no deductible temporary differences, unused tax losses, unused tax
credits and permanent differences that will expire from tax authorities.
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Reconciliation of movement
Balance receivable at beginning of the year 792 889 589
Current year charge
Per the statement of profit or loss 42 (3) 203
Amounts recognised in hedge accounting reserve (81) (66) 88
Net (disposals)/ acquisitions of subsidiaries (11) (26) 19
Translation of foreign entities 9 (2) 10
Re-classification to businesses held-for-sale – – (20)
Balance receivable at end of the year 751 792 889
Comprising:
Deferred tax assets 782 811 930
Deferred tax liabilities (31) (19) (41)
751 792 889
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Analysis of deferred tax
Property, plant and equipment (145) (107) (78)
Intangible assets (31) (27) (30)
Vehicles for hire (42) (37) (34)
Inventories 129 172 200
Deferred funds 398 415 419
Provisions 230 176 154
Tax losses 125 141 146
Other 87 59 112
751 792 889
There are no taxable temporary differences relating to investments in subsidiaries, investments in
associates and joint ventures for which deferred tax liabilities have not been recognised.
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Estimated taxation losses
Unused tax losses available for set-off against future
taxable income 1 796 1 699 1 020
Deferred tax asset recognised in respect of such losses (446) (418) (528)
Remaining tax losses not recognised 1 350 1 281 492
112
3. OPERATIONS
3.1 Segment financial position
Motus Holdings
(3)
Import and Distribution Retail and Rental
Motor-Related
Financial Services Aftermarket Parts
Head Office
and Eliminations
Rm 2018
(1)
2017
(2)
2016
(2)
2018
(1)
2017
(2)
2016
(2)
2018
(1)
2017
(2)
2016
(2)
2018
(1)
2017
(2)
2016
(2)
2018
(1)
2017
(2)
2016
(2)
2018
(1)
2017
(2)
2016
(2)
FINANCIAL POSITION
Assets
Goodwill and intangible assets 1 230 798 895 122 110 133 649 355 422 4 9 – 455 364 366 – (40) (26)
Property, plant and equipment 6 786 6 465 6 888 682 685 1 019 5 590 5 279 5 668 109 106 10 420 413 207 (15) (18) (16)
Vehicles for hire 3 924 3 859 3 391 1 685 1 991 1 534 2 231 1 959 1 723 1 732 1 915 1 071 – – – (1 724) (2 006) (937)
Carrying value of associates and joint ventures 260 156 185 27 21 (56) 53 29 23 52 61 62 122 119 111 6 (74) 45
Investments and other financial instruments 653 834 591 4 4 4
– – 27 653 655 217 – 173 – (4) 2 343
Inventories 15 633 15 325 14 982 3 798 5 445 5 145 10 167 8 350 8 457 270 397 436 1 446 1 121 1 111 (48) 12 (167)
Trade and other receivables
(4)
5 253 4 162 4 122 2 649 1 977 1 645 3 131 2 295 2 274 453 682 907 691 592 608 (1 671) (1 384) (1 312)
Cash resources 1 737 1 353 881 398 446 258 808 409 269 73 207 17 204 13 14 254 278 323
Operating assets 35 476 32 952 31 935 9 365 10 679 9 682 22 629 18 676 18 863 3 346 4 032 2 720 3 338 2 795 2 417 (3 202) (3 230) (1 747)
– South Africa 26 130 27 203 25 228 9 365 10 059 9 058 13 627 13 619 13 206 3 346 4 032 2 720 2 994 2 774 2 402 (3 202) (3 179) (2 158)
– International 9 346 5 749 6 707 – 620 624 9 002 5 057 5 657 – – – 344 21 15 – 51 411
Total assets from continuing operations 36 481 33 943 33 039 10 928 12 223 14 824
23 320 21 699 22 468 6 315 5 765 5 324 3 357 2 643 2 174 (7 439) (8 387) (11 751)
Liabilities
Deferred funds 2 724 2 808 2 949 – – – – – – 2 895 2 975 3 108 – – – (171) (167) (159)
Trade and other payables
(4)
13 481 10 675 10 460 5 491 5 146 4 236 9 061 6 538 6 770 631 636 450 1 075 943 902 (2 777) (2 588) (1 898)
Provisions 674 577 451 275 66 46 374 398 341 78 111 148 52 44 38 (105) (42) (122)
Other financial liabilities 54 134 91 10 102 67 43 11 – – – 10 1 5 51 – 16 (37)
Operating liabilities 16 933 14 194 13 951 5 776 5 314 4 349 9 478 6 947 7 111 3 604 3 722 3 716 1 128 992 991 (3 053) (2 781) (2 216)
– South Africa 11 803 11 167 10 721 5 776 5 105 4 097 4 388 4 132 4 136 3 604 3 722 3 716 1 089 989 988
(3 054) (2 781) (2 216)
– International 5 130 3 027 3 230 – 209 252 5 090 2 815 2 975 – – – 39 3 3 1 – –
Total liabilities from continuing operations 25 051 22 654 22 028 8 032 9 682 11 606 15 923 14 137 17 067 5 264 4 517 4 332 2 351 1 663 1 181 (6 519) (7 345) (12 158)
Adjusted net working capital 6 731 8 235 8 193 681 2 210 2 508 3 863 3 709 3 620 14 332 745 1 010 726 779 1 163 1 258 541
– South Africa 5 263 7 386 7 210 681 2 210 2 508 2 461 2 871 2 630 14 332 745 943 716 769 1 164 1 257 558
– International 1,468 849 983 – – – 1,402 838 990 – – – 67 10 10 (1) 1 (17)
Net debt 5 900 6 803 6 746 1 099 2 895 2 098 4 648 3 796 5 384
(1 426) (1 450) (1 237) 945 555 352 634 1 007 149
– South Africa 5 047 6 391 6 036 1 099 2 895 2 098 3 677 3 409 4 691 (1 426) (1 450) (1 237) 1 086 555 352 611 982 132
– International 853 412 710 – – – 971 387 693 – – – (141) – – 23 25 17
Net capital expenditure (323) (781) (668) (124) 186 3 (170) (744) (406) 8 (91) 163 (15) (20) (20) (22) (112) (408)
– South Africa (909) (459) (392) (124) 201 30 (757) (599) (297) 8 (91) 163 (15) (19) (18) (21) 49 (270)
– International 586 (322) (276) – (15) (27) 587 (145) (109) – – – – (1) (2) (1) (161) (138)
Adjusted non-current assets 8 276 7 418 7 968 831 816 1 096 6 292 5 663 6 113 165 176 72 997 896 684 (9) (132) 3
– South Africa 6 355 6 461 6 725 831 816
1 096 4 468 4 705 4 870 165 176 72 900 896 684 (9) (132) 3
– International 1 921 958 1 243 – – – 1 824 958 1 243 – – – 97 – – – – –
(1)
2018 Audited;
(2)
2017 and 2016 Reviewed.
(3)
Relates to continuing operations.
(4)
Includes amounts pertaining to derivative financial instruments.
113
3.2 Property, plant and equipment
Property, plant and equipment mainly comprises of the following:
• Vehicle dealerships;
• Workshops;
• Depots;
• Admin buildings;
• Leasehold improvements;
• Equipment;
• Furniture; and
• Motor vehicles.
Land is stated at cost less accumulated impairment and is not depreciated. All other assets are
stated at cost less accumulated depreciation and accumulated impairment losses.
Depreciation is recognised so as to write off the cost of assets less their residual values over
their useful lives, using the straight-line method. Assets that are classified as held-for-sale are not
depreciated. The estimated useful lives, residual values and depreciation methods are reviewed
at the end of each reporting period, with the effect of any changes in estimate accounted for on a
prospective basis. Depreciation commences when the assets are ready for their intended use and
is recognised in profit or loss.
Depreciation is calculated on a straight-line basis to write off the cost of each component of an
asset to its residual value over its estimated useful life as follows:
• Land – Indefinite;
• Buildings – 20 years;
• Leasehold Improvement – the lesser of the lease period or 5 years;
• Equipment and furniture – 3 to 10 years; and
• Motor vehicles – 3 to 5 years.
Rm
Land, buildings
and leasehold
improvements
Equipment
and furniture Motor vehicles
Audited
Total
As at 30 June 2018
Cost 6 798 1 798 276 8 872
Accumulated depreciation
and impairments (610) (1 345) (131) (2 086)
Carrying amount 6 188 453 145 6 786
Net carrying value at the
beginning of the year 5 869 426 170 6 465
Movement during the year
Acquisition of subsidiaries 287 48 9 344
Additions 317 172 90 579
Proceeds on disposal (1 285) (15) (67) (1 367)
Profit/ (loss) on disposal 720 (7) 3 716
Depreciation (49) (177) (61) (287)
Impairments (103) (1) – (104)
Currency adjustments 47 7 1 55
Re-classification from
held-for-sale for disposal 620 – – 620
Re-classification to
held-for-sale (235) – – (235)
Closing balance 6 188 453 145 6 786
114
Rm
Land, buildings
and leasehold
improvements
Equipment
and furniture Motor vehicles
Reviewed
Total
As at 30 June 2017
Cost 6 258 1 542 295 8 095
Accumulated depreciation
and impairments (389) (1 116) (125) (1 630)
Carrying amount 5 869 426 170 6 465
Net carrying value at the
beginning of the year 6 223 484 181 6 888
Movement during the year
Disposal of subsidiaries (5) (59) – (64)
Additions 564 179 210 953
Proceeds on disposal (199) (12) (168) (379)
Profit/ (loss) on disposal 40 (13) 4 31
Depreciation (34) (185) (57) (276)
(Impairments)/ reversal of
impairment (8) 3 – (5)
Currency adjustments (118) (13) – (131)
Re-classification from
held-for-sale for disposal 33 48 – 81
Re-classifications to held-
for-sale (627) (6) – (633)
Closing balance 5 869 426 170 6 465
Rm
Land, buildings
and leasehold
improvements
Equipment
and furniture Motor vehicles
Reviewed
Total
As at 30 June 2016
Cost 6 604 1 565 313 8 482
Accumulated depreciation
and impairments (381) (1 081) (132) (1 594)
Carrying amount 6 223 484 181 6 888
Net carrying value at the
beginning of the year 5 926 462 188 6 576
Movement during the year
Disposal of subsidiaries (70) (17) (18) (105)
Additions 303 214 194 711
Proceeds on disposal (75) (16) (145) (236)
Profit/ (loss) on disposal 8 (2) 2 8
Depreciation (34) (183) (65) (282)
Impairments (7) (4) – (11)
Currency adjustments 116 3 6 125
Re-classification from
held-for-sale for disposal 169 36 19 224
Re-classifications to held-
for-sale (113) (9) – (122)
Closing balance 6 223 484 181 6 888
115
Investment properties
Included in property, plant and equipment is R165 million (2017: R269 million; 2016: R182 million)
relating to property which is primarily owned occupied but for which a portion is sublet. This property
is measured in accordance with principles as described above for property, plant and equipment.
The property is valued in accordance with the Directors' valuation and has not been performed
by a qualified independent valuer. The fair value of the property amounts to R218 million
(2017:
R311 million; 2016: R182 million).
Rental income amounting to R22 million (2017: R38 million; 2016: R24 million) was earned during
the year and direct costs of R8 million (2017: R10 million; 2016: R10 million) were incurred.
Impairment losses recognised during the year
During 2018, the impairment loss of R103 million (2017: R8 million; 2016: R7 million) represented
the write down of properties to their recoverable amounts when compared to the internal valuations
performed. The impairment loss arose from higher capitalisation rates on lower grade dealerships
resulting in a charge in the current year. The process and parameters used are outlined in note 1.5
Critical accounting judgements estimates and assumptions.
Security
Property, plant and equipment with a carrying value of R42 million (2017: R34 million;
2016: R34 million) has been encumbered as security for interest-bearing debt (refer to note 4.1
Interest-bearing debt).
3.3 Net working capital
Assets that Motus expects to realise, or intends to sell or consume in its normal operating cycle;
would include inventory and trade and other receivables. The operating cycles for these assets are
generally not more than twelve months. Certain vehicles for hire have an operating cycle of more
than 12 months but are classified as current. In general, the vehicles for hire operating cycle does
not exceed 12 months. Vehicles that have reached the end of their useful lives as vehicles for hire
are re-classified to inventories.
3.3.1 Inventories
The cost of inventory is determined as follows:
• Vehicles – specific cost;
• Parts and accessories – weighted average cost;
• Work in progress includes direct costs and a proportion of overheads; and
• Other – first in, first out.
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
New vehicles 7 902 8 642 8 724
Demonstration vehicles 1 781 1 558 1 482
Used vehicles 3 477 2 969 2 581
Parts, accessories and finished goods 2 426 2 105 2 146
Work in progress 31 35 33
Other 16 16 16
Total inventory 15 633 15 325 14 982
Inventories carried at net realisable value
included above 3 554 4 640 4 168
Inventory expensed to profit or loss during
the year 61 683 51 786 51 500
116
Security
The carrying value of inventories that have been encumbered as security amount to
R605 million (2017: R814 million; 2016: R1 371 million) for interest-bearing borrowings
(refer to note 4.1 Interest-bearing debt).
3.3.2 Trade and other payables
The directors consider that the carrying amount of the trade and other payables
approximates their fair value, as the carrying amount is based on contractual rights and
obligations and is short-term in nature. Refer to note 9 Financial management for Motus’
financial risk management policies.
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Trade payables 5 445 4 470 4 073
Other accruals 3 247 3 161 2 753
Secured floorplans from franchisor 4 597 2 705 3 102
Deferred income 146 114 92
Total trade and other payables 13 435 10 450 10 020
No interest is charged on the trade payables for the first 60 days from the date of the
invoice. Thereafter, interest is charged as per the suppliers’ terms and conditions on the
applicable supplier’s outstanding balance. Motus has financial risk management policies
in place to ensure that all payables are paid within the credit timeframe. The average credit
period taken for trade purchases is 30 days.
Secured floorplans from franchisor is made up of interest-bearing and interest-free portions.
The amounts outstanding become interest-bearing after 14 to 21 days. These terms and
conditions are outlined by the OEM and vary between franchises. Floorplans which are
interest-free and within the specified OEM period are classified as trade payables and
floorplans over the specified period have been classified as interest-bearing debt. Refer to
note 4.1 Interest-bearing debt.
3.3.3 Trade and other receivables
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Trade receivables 3 759 2 740 2 970
Gross receivables 3 961 2 930 3 103
Provision for doubtful debts (202) (190) (133)
Other receivables 1 062 1 150 1 125
Total trade and other receivables 4 821 3 890 4 095
Credit risk
Credit risk, or the risk of counterparties defaulting, is controlled by the application of credit
approvals, limits and monitoring procedures. Where needed, Motus obtains appropriate
collateral to mitigate risk. Counterparty credit limits are in place and are reviewed and
approved by the respective subsidiary boards.
Trade accounts receivable consist of a large, widespread customer base. Group companies
monitor the financial position of their customers on an ongoing basis. Creditworthiness
of trade receivables is assessed when credit is first extended and is reviewed regularly
thereafter. The granting of credit is controlled by the application of account limits. Where
considered appropriate, use is made of credit guarantee insurance.
117
Risk exposures arise from the supply of vehicles and equipment to external dealerships and
customers. Where vehicles are supplied to external dealerships these are generally covered
by a dealer floorplan with a bank, and will usually settle within credit terms, and exposure to
credit risk is therefore minimised. When dealing with external customers, the sale of a vehicle
is required to be fully financed before delivery, thereby mitigating the credit risk.
Risk exposures arise from the granting of credit to customers for parts and vehicle rental.
The risk is managed by monthly review of trade receivables ageing. The risk is mitigated
by stringent background checks and credit limits being imposed on all new customers,
continuous review of credit limits, as well as taking legal action against defaulting customers.
The carrying amount of trade and other receivables represents the maximum credit
exposure at 30 June. None were given as collateral for any security provided.
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Trade receivables, not past due 3 171 2 156 2 413
Past due receivables 790 774 690
Less than one month 514 461 440
Between one and three months 163 129 129
More than three months 82 131 98
More than one year 31 53 23
Total gross trade receivables 3 961 2 930 3 103
Based on past experience, Motus believes that no impairment is necessary in respect of
trade receivables not past due as the amount relates to customers that have a good track
record with Motus, and there has been no objective evidence to the contrary.
Included in trade receivables are receivables which are past the original expected
collection date (past due) at the reporting date. There has not, however, been a significant
change in credit quality and the amounts are still considered recoverable. Those which are
not considered to be recoverable have been included in the provision for doubtful debts.
A summarised age analysis of past due trade receivables is set out above.
The overdue trade receivables ageing profile above is considered typical of the various
industries in which certain of our businesses operate. Given this, and the nature of the
related counterparties, these amounts are considered recoverable.
Before these trade receivables can be impaired, they are evaluated for the possibility of any
recovery, which includes an examination of the length of time they have been outstanding.
Provision is made for bad debts on trade accounts receivable. The directors do not
consider there to be any material credit risk exposure not already covered by a doubtful
debt provision.
There is no significant concentration of risk in respect of any particular customer or industry
segment. There is no single customer whose revenue streams exceed 5% of Motus’ revenue.
The movement in the provision for doubtful debts for the year was:
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Carrying value at the beginning of the year (190) (133) (169)
Net (acquisitions)/ disposals of subsidiaries (3) 5 20
Amounts reversed to profit or loss – 2 2
(Charged)/ released to profit or loss (78) (106) 5
Amounts utilised during the year 71 48 –
Currency adjustments (2) 3 –
Re-classifications (from)/ to assets held-for-sale – (9) 9
Carrying value at the end of the year (202) (190) (133)
118
Aging of impaired receivables:
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Less than three months (90) (58) (70)
More than three months (112) (132) (63)
(202) (190) (133)
3.4 Vehicles for hire
Depreciation is calculated on a straight-line basis to write off the cost of the vehicle to its residual
value over its estimated useful life of between one to five years. Vehicles for hire are re-classified to
inventories at their carrying amount when they cease to be rented and become available for sale.
Vehicles for hire have an operating life cycle of 12 months. Whilst extensions are available, they are
not provided for a prolonged period of time.
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Cost 4 670 4 572 3 876
Accumulated depreciation (746) (713) (485)
Carrying amount 3 924 3 859 3 391
Net carrying value at the beginning of the year 3 859 3 391 3 552
Movements during the year:
Disposal of subsidiaries – – (736)
Additions 4 345 4 539 4 017
Proceeds on disposal (3 266) (2 831) (2 528)
Profit on disposal – 1 –
Depreciation (1 009) (1 242) (861)
Currency adjustments – (1) 2
Re-classifications to inventories (5) 2 (55)
Closing balance 3 924 3 859 3 391
Security
Certain vehicles for hire have been encumbered as security for interest-bearing debt as follows:
2018: R414 million (2017: R441 million; 2016: R429 million), refer to note 4.1 Interest-bearing debt.
3.5 Hedge accounting reserve
Motus enters into forward exchange contracts and options in order to hedge its exposure to foreign
exchange risk. These are classified as cash flow hedges where hedging criteria is met. Motus
does not use derivative financial instruments for speculative purposes. Changes in the fair value
of derivative instruments that are not formally designated in a hedge relationship are recognised
immediately in profit or loss. Level 2 financial instruments are fair valued using future cash flows
estimated based on forward exchange rates (from observable forward exchange rates at the end of
the reporting period) and contract forward rates, discounted at the rate that reflects the credit risk
of the various counterparties at the date of entering in to the contract. The cash flow hedge reserve
comprises the effective portion or the cumulative net change in the fair value of cash flow hedging
instruments related to hedged transactions that have not yet matured, net of taxation. Derivative
instruments that are designated as hedges are as follows:
As at 30 June 2018, R232 million has been recognised in other comprehensive income
(2017:
R113 million, 2016: (R233 million)). It is anticipated that the sale of the vehicles will take
place in the next 12 months, at which time the amount of deferred equity will be reclassified to profit
or loss.
119
Currency risk
This is the risk of losses arising from the effects of adverse movements in exchange rates on net foreign
currency asset or liability positions. The policy of Motus is to maintain a fully covered foreign exchange
risk position in respect of foreign currency commitments. The exception to this is Renault South Africa
Proprietary Limited where the impact of any currency movements are shared jointly with the OEM.
Motus has entered into certain financial instruments authorised by Assets and Liabilities Committee
(ALCO) to cover currency risk to the importation of inventories at 30 June and specific foreign
commitments not yet due. Hyundai Automotive South Africa Proprietary Limited, Kia South Africa
Proprietary Limited and Mitsubishi Motors South Africa Proprietary Limited enter into hedging
instruments for all firm commitments, and for on a seven-month rolling hedging strategy.
Automotive spare parts may be settled in the spot markets and where specific South African
Exchange Control authorisation has been obtained from authorised dealers in foreign exchange,
up to 75% of forecast annual sales can be covered. The day-to-day management of foreign
exchange risk is performed on a decentralised basis by the various business units within Motus’
hedging policies and guidelines. Trade-related import exposures are managed through the use of
natural hedges arising from foreign assets, as well as forward exchange contracts and the option
structures authorised by ALCO.
The details of these contracts are as follows:
Foreign currency
Foreign
amount
(millions)
Average
exchange
Contract
value
Rm
Market
value
Rm
2018
Bought
US Dollar 252 13.45 3 227 3 480
Euro 164 15.45 2 564 2 677
Pound Sterling – 17.61 5 5
Japanese Yen 681 0.12 79 86
5 875 6 248
2017
Bought
US Dollar 74 13.52 996 996
Euro 155 14.59 2 267 2 341
Pound Sterling 1 16.73 9 9
Japanese Yen 482 0.12 58 57
3 330 3 403
2016
Bought
US Dollar 123 15.09 1 866 1 775
Euro 176 17.33 3 048 2 903
Pound Sterling 2 20.40 38 35
Japanese Yen 340 0.13 46 47
4 998 4 760
Fair value is calculated as the difference between the contracted value and the value to maturity.
Foreign exchange sensitivity
The impact from a 10% movement in the value of
the Rand would approximately have a R450 million
(2017: R245 million; 2016: R343 million) impact on Motus’ profit or loss on realisation. The 10%
sensitivity rate is based on the Directors’ assessment of a reasonable possible change in foreign
exchange rates over the foreseeable future, with regards to market value.
The sensitivity of profits to changes in exchange rates is a result of the foreign exchange gains or
losses on re-measurement of foreign denominated financial assets and liabilities translated at spot
rates offset by equivalent gains or losses in currency derivatives.
120
4. FUNDING
4.1 Interest-bearing debt
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Long-term
Non-redeemable, non-participating, cumulative
preference shares 40 – –
Call borrowings 41 – 20
Loans secured by mortgage bonds over fixed property – 20 25
81 20 45
Short-term
Floorplans 1 320 962 1 027
Unsecured loans 5 686 6 764 6 222
Bank overdrafts 550 410 333
Less: Current portion of interest-bearing debt (7 556) (8 136) (7 582)
Long-term borrowings 81 20 45
Included in floorplans are the Wesbank and Standard bank facilities relating to vehicles for hire.
The values which are as follows: 2018: R198 million Wesbank and Standard Bank R216 million
(2017: Wesbank R283 million and Standard Bank R149 million; 2016: Wesbank R429 million and
Standard Bank Rnil).
These facilities are repayable within 12 months and bear the following interest:
• Wesbank – prime interest rate in South Africa less 2.0%; and
• Standard Bank – prime interest rate in South Africa less 1.9%.
Included in interest-bearing debt is non-redeemable, non-participating, cumulative preference
shares relating to Renault South Africa Proprietary Limited. The preference shares are classified
as non-current debt as they are repayable on 15 January 2021 to Renault SAS France. These bear
interest at a rate of 58.6% of the prime interest rate in South Africa and is due monthly.
Interest rate analysis
Current
year interest
rates
(%)
Audited
2018
Reviewed
2017
Reviewed
2016
Fixed
Loans secured by mortgage bonds
overfixed property 11.8 – 20 25
Unsecured loan 0.5 – 9.0 5 – –
Variable linked
Unsecured loans 0.5 – 11.8 5 681 6 764 6 222
Floorplans 3.4 – 12.0 1 320 962 1 027
Call borrowings 4.0 – 10.5 41 – 20
Convertible, non-redeemable
preferenceshare 5.7 40 – –
Bank overdrafts 1.0 – 11.3 550 410 333
7 637 8 156 7 627
121
Details of encumbered assets
Rm
Carrying
value
of debt
secured
Carrying
value of
encum-
bered
assets
Property,
plant and
equipment
Vehicles
for hire Inventories
Debt instruments
Mortgage bonds – 42 42 – –
Floorplans 1 320 1 019 – 414 605
2018 1 320 1 061 42 414 605
2017 962 1 289 34 441 814
2016 1 047 1 834 34 429 1 371
Maturity analysis of interest-bearing borrowings by denominated currency
Rm
One to
five years
Less than
one year
% of total
2018
Audited
2018
Reviewed
2017
Reviewed
2016
SA Rand 81 4 804 63% 4 885 7 114 6 573
Euro – 1 428 19% 1 428 – –
British Pound – 237 3% 237 365 418
US Dollar – 224 3% 224 64 78
Australian Dollar – 781 11% 781 471 542
Other – 82 1% 82 142 16
81 7 556 100% 7 637 8 156 7 627
Borrowing facilities
Borrowing facilities have been managed by Imperial as at 30 June 2018. These facilities are being
replaced by Motus, following the proposed and approved Unbundling of Motus from Imperial.
In terms of the MOI, the borrowing powers of Motus is unlimited. The balance of Motus’ funding
requirements (after floorplans and banking facilities) is dealt with through an intercompany loan
with Imperial.
Interest rate risk
Borrowings issued at floating rates expose Motus to cash flow and interest rate risk, while fixed
rate borrowings expose Motus to fair value interest rate risk. Cash flow interest rate risk arises from
movements in market rates relative to the agreed lending rates on contractual debt instruments.
Motus analyses the impact on profit or loss of defined interest rate shifts – taking into consideration
refinancing, renewal of existing positions, alternative financing and hedging. The ALCO reviews
appropriate exposure levels and implement hedges where required.
Upon Unbundling, external sources of funding will be obtained and utilised after which Motus aims
to have a mix of 50% floating and 50% fixed rate debt.
Motus’ treasury follows a centralised cash management process including cash management
systems across bank accounts in South Africa to minimise risk and related interest costs. Motus’
offshore cash management is managed by the treasury departments in the respective businesses.
122
Interest rate sensitivity
The interest rate profile of total borrowings is reflected above.
If interest rates had been 1% higher/ lower (holding all other variables constant), Motus’ profit/ loss
would decrease/ increase by R20 million (2017: R18 million; 2016: R24 million). This is attributable
to Motus’ exposure to interest rates on its variable rate borrowings which have not been fixed
through the use of fixed-for-floating interest rate swap instruments.
This analysis was prepared on the assumption that the amount outstanding at the end of the year
was outstanding for the entire year.
Capital management
Motus’ objectives when managing capital are to safeguard its ability to continue as a going concern
in order to provide returns and growth for shareholders and benefits for other stakeholders. Motus
maintains an appropriate mix of equity and equity like instruments and debt in order to optimise
the weighted average cost of capital (WACC) within an appropriate risk profile. Capital allocation
is evaluated against the expected and forecast return on invested capital against the appropriate
WACC for that division or business.
Consistent with others in the industry, Motus monitors capital on the basis of its gearing ratio. This
ratio is calculated as net debt divided by total equity. Net debt is calculated as total borrowings
less cash resources.
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Interest-bearing debt 7 637 8 156 7 627
Less: Cash resources (1 737) (1 353) (881)
Net debt 5 900 6 803 6 746
Total equity 11 644 11 922 12 009
Gearing ratio 51% 57% 56%
There were no re-classifications of financial assets or financial liabilities that occurred during the
year. There were no financial assets or liabilities settled or extinguished which did not meet the
de-recognition requirements.
4.2 Cash resources
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Deposits and funds at call 1 726 1 177 867
Cash on hand and at bank 11 176 14
Total cash resources 1 737 1 353 881
Effective interest rates 0.0% – 6.0% 0.0% – 6.5% 0.0% – 6.5%
Cash and cash equivalents are the Motus’ short-term cash resources and overdrafts readily
converted into cash under Motus’ cash management facility and is calculated as follows:
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Cash resources 1 737 1 353 881
Bank overdrafts (550) (410) (333)
Re-classified to held-for-sale – – 65
Total cash and cash equivalents 1 187 943 613
123
Credit risk
It is Motus’ policy to deposit short-term cash with reputable financial institutions with investment
grade credit ratings assigned by international or recognised credit-rating agencies or counterparties
authorised by the Investment Committee.
The carrying amount of these cash resources represents the maximum credit exposure on 30 June.
None of the financial assets above were given as collateral for any security provided.
5. SHAREHOLDERS’ INTEREST
5.1 Stated capital
Ordinary shares
The ordinary shares carry one vote per share and are entitled to an ordinary dividend.
Deferred ordinary shares
The deferred ordinary shares carry one vote per share and are not entitled to dividends. Holders
of deferred ordinary shares have the right to receive a fixed number of ordinary shares on
predetermined dates.
Preference shares
Preference shares are non-redeemable, cumulative, non-participating, no par value preference
shares in the stated capital of the Company. Preference shares carry one vote per share. Each
preference share ranks with regards to dividends and repayment of capital, prior to ordinary shares.
Redeemable preference shares
Preference shares that are redeemable, non-participating, no par value preference shares in the
stated capital of the Company. Redeemable preference shares do not confer on the holder the right
to vote at meetings of the Company, except where a dividend or any part of any such dividend on
such share or redemption payment remains in arrears and unpaid. Each preference share ranks
with regards to dividends and repayment of capital, prior to ordinary shares.
Directors interests in issued stated capital
The aggregate shareholdings of the directors in the issued ordinary stated capital of Motus are
outlined in note 6.4 Directors’ interest in shares.
Authorised stated capital
394 999 000 ordinary shares of no par value
10 000 000 deferred ordinary shares of no par value
40 000 000 preference shares of no par value
2 000 000 redeemable preference shares of no par value
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Issued and fully paid stated capital
201971450 ordinary shares of no par value 23 358 23 358 23 358
23 358 23 358 23 358
Motus Holdings Limited was incorporated in the current year. For purposes of common control,
issued stated capital was reinstated for the comparative periods.
124
5.2 Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing net profit attributable to owners of Motus by the
weighted average number of ordinary shares in issue during the year, net of shares repurchased.
Diluted earnings per share
For diluted earnings per share, the weighted average number of ordinary shares in issue, net of
shares repurchased, is adjusted for the dilutive effect of potential ordinary shares under the share
incentive schemes and an associate’s obligation to deliver shares. Potential ordinary shares are
treated as dilutive when their conversion to ordinary shares would decrease basic earnings per
share. The effect of anti-dilutive potential ordinary shares is excluded from the calculation of diluted
earnings per share. No adjustments were made to reported earnings attributable to shareholders
in the computation of diluted earnings per share.
No dilutive instruments have been issued as at reporting date and accordingly there is no dilutive
impact on earnings per share.
Headline earnings per share
The presentation of headline earnings per share is mandated under the JSE Listings Requirements
and is calculated in accordance with Circular 4/2018 – Headline Earnings, as issued by the South
African Institute of Chartered Accountants (SAICA).
Cents
Audited
2018
Reviewed
2017
Reviewed
2016
Basic earnings per share 1 162 777 739
– Continuing 1 162 797 836
– Discontinued – (20) (97)
Diluted basic earnings per share 1 162 777 739
– Continuing 1 162 797 836
– Discontinued – (20) (97)
Headline earnings per share 986 826 914
– Continuing 986 846 1 011
– Discontinued – (20) (97)
Diluted headline earnings per share 986 826 914
– Continuing 986 846 1 011
– Discontinued – (20) (97)
Net asset value (NAV) per ordinary share 5 762 6 038 5 930
Tangible net asset value (TNAV) per ordinary share 5 153 5 643 5 487
Weighted average number of ordinary shares
The weighted average number of ordinary shares used in the calculations is as follows:
Millions
Audited
2018
Reviewed
2017
Reviewed
2016
Weighted average number of ordinary shares for
basic and diluted 202 202 202
125
Basic earnings
The profit used in the calculation of basic earnings per share is as follows:
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Profit attributable to the owners of the parent 2 346 1 569 1 493
Loss from discontinued operations – 36 192
Profit for the purposes of basic and diluted earnings
per share from continuing operations 2 346 1 605 1 685
Headline earnings
Headline earnings are determined as follows:
Rm Gross* Tax
Audited
2018
Reviewed
2017
Reviewed
2016
Earnings used in the
calculation of basic
earnings per share 2 346 1 569 1 493
Adjusted for:
– Impairment of property,
plant and equipment 103 (18) 85 4 8
– Impairment of intangible
assets – – – 22 30
– Recoupment for disposal
of property, plant and
equipment (716) 208 (508) (25) (6)
– Loss on disposal of
intangible assets 5 (1) 4 – –
– Impairment of goodwill 63 – 63 18 183
– Impairment loss on assets
of disposal groups (3) – (3) (20) 47
– Impairment of investments
in associates and joint
ventures 8 – 8 39 106
– (Profit)/ loss on disposal
of subsidiaries and
businesses (4) – (4) 62 (14)
Headline earnings 1 991 1 669 1 847
Discontinued operations – 38 194
Continuing operations 1 991 1 707 2 041
*Gross amounts include pre-tax values including amounts pertaining to non-controlling interests in shares.
126
6. OUR PEOPLE
6.1 Directors’ remuneration and prescribed officers
R’000 Salary Bonus
Retirement
and medical
contributions
Directors’
fees
Total 2018
Audited
(3)
Total 2017
Reviewed
Total 2016
Reviewed
Expected
value of
long-term
incentive
awards
made in
2018
(2)
Expected
value of
long-term
incentive
awards
made in
2017
(1)
Expected
value of
long-term
incentive
awards
made in
2016
(1)
Executive Directors
OS Arbee
(4)
9232 12 065 451 – 21 748 15644 13560 – 8345 6 090
O Janse van
Rensburg 4101 4 100 399 – 8 600 6375 3375 – 4699 2 650
Total executive
directors 13333 16 165 850 – 30 348 22019 16935 – 13044 8 740
Non-Executive
Directors
GW Dempster
(4)
– – – 1 180 1 180 818 614 – – –
A Tugendhaft
(4)
– – – 1019 1019 961 907 – – –
P Langeni
(4)
– – – 975 975 683 546 – – –
RJA Sparks
(4)
– – – 1 835 1 835 1 639 1 129 – – –
T Skweyiya
(4)
– – – 634 634 526 471 – – –
Total non-executive
directors – – – 5 643 5 643 4 627 3 667 – – –
Prescribed Officers
PB Michaux 5 554 5 760 445 – 11 759 10 550 9 600 – 4 854 5 270
K Cassel 3 317 3 496 502 – 7 315 7 522 1 465 – 3 068 4 993
Total prescribed
officers 8 871 9 256 947 – 19 074 18 072 11 065 – 7 922 10 263
(1) This represents the expected value of all long-term incentive awards made in the reporting year. The expected value is calculated using a Black-Scholes valuation model.
(2) 2018 allocations will only be determined and allocated after Unbundling.
(3) All directors and prescribed officers are employed under standard employment contracts.
(4) Directors' remuneration paid/ payable by Imperial for the years presented.
127
6.2 Share appreciation rights
The selected participants receive annual grants of Share Appreciation Rights (SARs), which are
conditional rights to receive shares equal to the difference between the exercise price and the
grant price. On the proposed Unbundling, they will be settled in the shares of Motus only. Vesting
of rights is subject to performance conditions being met and participants remaining employed with
Motus for the vesting period. These performance conditions will be based on the combined values
of both Imperial and Motus. The value created will that will need to be settled in shares will compare
the combined share prices of Imperial and Motus to the original strike price.
The fair values for the share-based payment expense is calculated using a Black-Scholes pricing
model. The inputs into the model established at the grant dates and which have not changed were
as follows:
2017 2016 2015 2014
Volatility (%) 35.6 34.0 32.0 28.4
Weighted average share price (Rand) 152.65 127.77 174.65 193.77
Weighted average exercise price (Rand) 152.65 127.77 174.65 193.77
Weighted average fair value (Rand) 44.25 39.08 48.76 46.67
Expected life (years) 4.3 4.4 4.3 4.3
Average risk-free rate (%) 7.6 8.8 7.5 7.8
Expected dividend yield (%) 4.0 3.8 3.5 4.3
*No share appreciation rights were issued during 2018.
The volatilities were determined by calculating the historical volatility of the Imperial’s share price
over the previous three years. The expected life is determined by the rules of the schemes which
dictate the final expiry date. No share appreciation rights were issued as at 30 June 2018.
Details of rights by year of grant
Number of
rights
Average
exercise
price (Rand)
Expiry
date
Grant date
Exercisable rights 912 547
June 2012 163 647 170.57 June 2019
June 2013 374 476 195.20 June 2020
June 2014 374 424 193.77 June 2020
October 2015 1 252 235 174.65 June 2021
June 2016 2217 740 127.77 June 2022
June 2017 2 447 016 152.65 June 2023
Total unexercised rights at the end of the year 6 829 538
128
Movement in the number of rights
Audited 2018 Reviewed 2017 Reviewed 2016
Number
of rights
Weighted
average
exercise
price
(Rand)
Number
of rights
Weighted
average
exercise
price
(Rand)
Number
of rights
Weighted
average
exercise
price
(Rand)
Rights granted at
beginning of the year 9 597 681 160.70 4 977 173 178.75 4 683 937 182.65
Rights allocated during
the year relating to the
prior year – – 2 959 944 127.77 629 338 174.65
Allocated during the year – – 2 494 425 152.65 284 683 127.77
Exercised during the
year (2017 270) 179.16 (137 115) 116.68 (144 622) 143.77
Forfeited during the year (750 873) 173.89 (696 746) 187.33 (476 163) 184.95
Unexercised rights at
end of the year 6 829 538 153.79 9 597 681 160.70 4 977 173 178.75
There are no options that expired during the year.
The share appreciation rights for Executive Directors and Prescribed Officers are set out below.
Allocation
date
Price on
allocation
date (R)
Vesting
date
Number
of rights*
Number
of rights
exercised
Number
of rights
forfeited
Number
of rights
remaining
OS Arbee
15-Jun-11 116.59 02-Jun-18 23 377 (23 377) – –
26-Jun-12 170.57 02-Jun-19 40770 (40 770) – –
15-Jun-13 195.20 10-Jun-20 49 986 – – 49 986
OJ Janse van Rensburg
15-Jun-14 180.02 10-Jun-21 30 347 (21 871) (8 476) –
06-Oct-15 174.65 23-Jun-22 35 910 – – 35 910
18-May-16 127.77 30-Jun-21 57 975 – – 57 975
21-Jun-17 152.65 30-Jun-22 91 188 – – 91 188
PB Michaux
13-Jun-12 170.57 02-Jun-19 28 467 (28467) – –
11-Jun-13 195.20 10-Jun-20 32918 (32 918) – –
K Cassel
06-Oct-15 174.65 23-Jun-22 22458 – – 22 458
18-May-16 127.77 30-Jun-21 87230 – – 87 230
21-Jun-17 152.65 30-Jun-22 125352 – – 125 352
* The number of rights that will eventually vest is subject to the achievement of performance conditions linked to core
EPS targets relative to a peer group of 20 JSE listed companies and return on invested capital (ROIC) targets relative to
weighted cost of capital. The rights vested could be fewer than the number granted.
129
Net gains on share options
R’000
Audited
2018
Reviewed
2017
Reviewed
2016
OS Arbee 8 520 4 511 1 564
OJ Janse van Rensburg 1 132 – –
PB Michaux 6 207 753 1 108
K Cassel 1 214 – –
17 073 5 264 2 672
6.3 Deferred bonus plan
These rights entitle participants to invest in Imperial shares which, if held for three years, will be
matched by Imperial on a one-for-one basis by the allocation of an equal number of Imperial shares
for no consideration. After the proposed Unbundling, they will be settled in both Imperial and
Motus shares by Motus. For every right granted the participants will receive an Imperial share and
a Motus
share.
The fair values for the share-based payment expense is calculated using a Black-Scholes pricing
model. The inputs into the model established at the grant dates and which have not changed were
as follows:
2017 2016 2015 2014
Volatility (%) 35.6 34.0 32.0 28.4
Weighted average share price (Rand) 152.65 127.77 174.65 193.77
Weighted average fair value (Rand) 134.09 112.76 156.08 168.45
Expected life (years) 3.2 3.3 3.2 3.2
Average risk-free rate (%) 7.6 8.8 7.5 7.8
Expected dividend yield (%) 4.0 3.8 3.5 4.3
* No deferred bonus plans were issued during 2018.
The volatilities were determined by calculating the historical volatility of the Imperial’s share price
over the previous three years. The expected life is determined by the rules of the schemes which
dictate the final expiry date. No deferred bonus plans were issued as at 30 June 2018.
Details of rights taken up and to be vested by year of grant
Number of
rights
Expiry
date
Rights Taken Up
September 2015 127 344 September 2018
September 2016 194 222 September 2019
September 2017 160 892 September 2020
Total unexercised rights at the end of the year 482 458
130
Movement in the number of rights granted
2018
Number of
rights
2017
Number of
rights
2016
Number of
rights
Rights granted at beginning of the year 443 475 291 719 197 543
Allocated during the year 164 331 204 256 138 281
Exercised during the year (121 909) (46 684) (42 116)
Forfeited during the year (3 439) (5 816) (1 989)
Unexercised rights at end of the year 482 458 443 475 291 719
The deferred bonus plans for Executive Directors are set out below. The Prescribed Officers do not
hold any rights to Deferred Bonus Plans.
Executive
Director
Allocation
date Vesting date
Number
of shares
committed
to the plan
Vested
during the
year
Balance
remaining
OS Arbee
13-Jun-14 15-Sep-17 30 965 (30 965) –
06-Oct-15 15-Sep-18 36 416 – 36 416
18-May-16 16-Sep-19 54 003 – 54 003
21-Jun-17 16-Sep-20 62 234 – 62 234
OJ Janse van Rensburg
13-Jun-14 15-Sep-17 2 800 (2 800) –
06-Oct-15 15-Sep-18 3 277 – 3 277
18-May-16 16-Sep-19 5 421 – 5 421
21-Jun-17 16-Sep-20 7 959 – 7 959
Net gains or losses on rights is included in note 6.2 Share appreciation rights above. No deferred
bonus plans were awarded as at 30 June 2018.
6.4 Directors’ interests in shares
The beneficial and non-beneficial interests of directors and prescribed officers in the ordinary
shares of Motus were:
Audited
2018
Reviewed
2017
Reviewed
2016
Executive Directors
OS Arbee 161 476 134 850 121 771
OJ Janse van Rensburg 16 657 11 498 6 077
Non-executive Directors
RJA Sparks 40 000 60 000 60 000
Prescribed Officers
PB Michaux 95 931 95 931 57 519
K Cassel 11 288 11 288 5 188
325 352 313 567 250 555
All shares disclosed in 2018 are beneficial shares directly held by directors. In the prior year
2
0 000 (2016: 20 000) non-beneficial shares were held indirectly by directors. There have been no
changes in directors’ interest in contracts up to and including the date of approval and issue of the
financial statements.
131
6.5 Key management
Key management personnel are directors and those executives having authority and responsibility
for planning, directing and controlling the activities of Motus. Directors of Motus and certain senior
management personnel have been classified as key management personnel.
Remuneration paid to key management personnel is as follows:
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Salaries and allowances 48 33 28
Bonuses 46 39 12
Contributions to retirement funds 4 3 4
Directors’ fees 6 5 4
Share-based expense 90 56 64
Other benefits 1 1 1
195 137 113
Number of key management personnel 17 15 15
Net gains on share options and cash retention
bonuses 24 6 4
Details relating to the remuneration of executive and non-executive directors and prescribed
officers, as well as information pertaining to Directors’ and Prescribed Officers’ interest in the stated
capital of the Company, share options outstanding and benefits in terms of share options exercised
are disclosed in note 6.2 Share appreciation rights to 6.4 Directors’ interests in shares above.
Motus has many different operations, where Motus’ personnel may be transacting. Transactions
entered into during the year with key management personnel were on terms and conditions no
more favourable than those available to other employees, customers or suppliers and include
transactions in respect of the employee option plans, contracts of employment and reimbursement
of expenses, as well as other transactions. Key management has to report any transactions with
Motus in excess of R100 000. The total value of the goods and services supplied to or from key
management on an arm’s length basis amounted to:
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Total value of the goods and services supplied to
or from key management 4 6 7
The Directors have confirmed that they held no interest in any transaction of any significance with
Motus or any of its subsidiaries. Accordingly, a conflict of interest with regard to directors’ interest
in contracts does not exist.
During 2018, Motus paid for services amounting to R3 million, on an arm’s length basis from a firm
of attorneys in which Mr A Tugendhaft has an interest.
Mr N Lynch is part of the key management of Motus and is an indirect beneficiary of Lynch Family
Holdings, a shareholder of Imperial.
7. PROVISIONS AND COMMITMENTS
7.1 Provisions
Maintenance and warranty provision
Present obligations arising under maintenance and warranty contracts, not funded by the OEM, are
recognised and measured as provisions.
132
Onerous contracts
Present obligations arising under onerous contracts are recognised and measured as provisions.
An onerous contract is considered to exist where Motus has a contract under which the unavoidable
cost of meeting the obligation under the contract exceeds the economic benefits expected from
the contract.
Other provisions
Other provisions mainly include present obligations arising under certain contracts with vehicle
manufacturers which attract an interest component as a mechanism to derive profit sharing amounts
on these contracts. Interest is thus recorded within funds which will be released on termination and
a portion paid over to the vehicle manufacturers as a profit share arrangement.
Rm
Maintenance
and warranty
Onerous
contracts Other
Audited
2018
Reviewed
2017
Reviewed
2016
At 30 June
Carrying value at
beginning of the
year 86 185 306 577 451 341
Charged to profit
or loss (5) 86 57 138 140 145
Amount raised – 86 103 189 160 215
Unused amounts
reversed (5) – (46) (51) (20) (70)
Amounts (utilised)/
raised (6) (6) (29) (41) 1 (36)
Disposal of
subsidiaries – – – – (9) (4)
Currency
adjustments – – – – (6) 5
Carrying value at
end of the year 75 265 334 674 577 451
Maturity profile
Less than one year 58 102 213 373 409 158
One to five years 17 163 121 301 168 293
75 265 334 674 577 451
7. 2 Leases
Motus has entered into various operating lease agreements on properties, motor vehicles and
equipment.
• Leases on properties are contracted for periods between 1 and 25 years with renewal options
of between 1 and 15 years. Rental escalations on properties vary between 1% and 20% per
annum;
• Motor vehicle leases are contracted for periods between 1 and 60 months with rentals linked to
the prime interest rate; and
• Leases on plant and equipment are contracted for periods between 1 and 3 years with rentals
linked to the prime interest rate.
Motus has entered into operating lease agreement whereby a property is being leased to an
external party for a period of seven years. The rental charge escalates at 7% per annum and tenant
has the option to renew the lease for another five years. Rental income for these leases is disclosed
in note 3.2 Property, plant and equipment.
133
Lease charges incurred during the year amounted to:
Rm
Audited
2018
Reviewed
2017*
Reviewed
2016*
Property 508 287 278
Plant and equipment 24 18 19
Vehicles 27 23 24
Other – 1 1
Total lease charges 559 329 322
* The amounts disclosed in the notes to the statements of profit or loss relate to continuing operations only. Refer to note 10.1
Loss from discontinued operations, for certain disclosures relating to discontinued operations.
There are no lease charges contingent upon turnover.
At 30 June future non-cancellable minimum lease rentals are payable during the following financial
years:
Rm
More than
five years
One to
five years
Less than
one year
Audited
2018
Reviewed
2017
Reviewed
2016
Operating lease
payables
Property 613 765 322 1 700 783 924
Plant and equipment – 3 3 6 7 4
Vehicles – 20 66 86 42 207
613 788 391 1 792 832 1 135
Operating lease
receivables
Property 117 139 33 289 148 51
Plant and equipment – – – – 1 522
117 139 33 289 149 573
7.3 Capital expenditure commitments
The commitments are substantially for the replacement of vehicles for hire and the construction of
buildings to be used by Motus, which will be financed from proceeds from disposals and existing
facilities.
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Contracted 32 77 402
Authorised by Directors but not contracted 311 11 39
343 88 441
134
7.4 Contingent liabilities
Details regarding financial guarantees issued are disclosed below. Motus does not recognise
contingent liabilities in the statement of financial position until future events indicate that it is
probable that an outflow of resources will take place and a reliable estimate can be made, at which
time a provision is raised.
Financial guarantees
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Letters of credit 2 567 2 606 1 404
Guarantees 1 128 3 228 3 123
Uvundlu Investment Proprietary Limited 5 60 116
As part of the sale of Uvundlu Investment
Proprietary Limited in 2016, Motus has issued
aguarantee to bankers in respect of their rental
book. The exposure is based on the lower of
R144million or 60% of Uvundlu’s utilisation of
thefacility over a three-year period.
3 700 5 894 4 643
Litigation
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Subsidiary companies have received summons’
for claims. Motus and its legal advisors believe
that these claims are possible to succeed but not
probable. 22 1 40
22 1 40
Except for the above claims, there is no current or pending litigation that is considered likely to have
a material adverse effect on Motus.
8. OUR GROUP
8.1 Business combinations
Business combinations during the year
Acquisitions during the reporting period
A number of businesses were acquired during the year to complement existing businesses. An
assessment of control was performed by Motus based on whether Motus has the practical ability to
direct the relevant activities unilaterally. In making the judgement, the relative size and dispersion of
other vote holders, potential voting rights held by them or others and rights from other contractual
arrangements were considered. After the assessment, Motus concluded that it did have a dominant
interest to direct the relevant activities of the subsidiaries acquired.
135
The fair value of assets acquired and liabilities assumed at the acquisition date were as follows.
Business
acquired Nature of business
Operating
segment
Effective
Date
Interest
acquired
(%)
Purchase
consideration
transferred
Rm
Pentagon Motor
Holdings Limited
Vehicle dealership
group operating in
the UK
Retail and
Rental
August 2017 100 479
SWT Group
Proprietary
Limited
Vehicle dealership
group operating in
Australia
Retail and
Rental
September
2017
75 261
ARCO Motor
Industry
Company Limited
Distributor of motor
vehicle engine parts
inTaiwan
Aftermarket
parts
March 2018 60 185
ARCO Motor Industry Company Limited’s financial year end is 31 December as stipulated by local
legislation and due to the timing of the acquisition could not be amended.
Rm
Pentagon
Motor
Holdings
Limited
SWT Group
Proprietary
Limited
ARCO Motor
Industry
Company
Limited
Individually
immaterial
acquisitions Total
Fair value of assets acquired and liabilities assumed at date of acquisition:
Assets
Intangible assets 2 – 43 7 52
Property, plant and
equipment 338 26 4 7 375
Inventories 1 758 255 51 41 2 105
Taxation 12 11 – – 23
Trade and other receivables 427 55 25 12 519
Cash resources 75 23 120 – 218
2 612 370 243 67 3 292
Liabilities
Trade and other payables 2 230 58 26 10 2 324
Interest-bearing debt 69 240 – 1 310
Taxation 4 8 15 – 27
2 303 306 41 11 2 661
Acquiree's fair value of net
assets at acquisition 309 64 202 56 631
Non-controlling interests (19) (16) (81) – (116)
Net assets acquired 290 48 121 56 515
Purchase consideration
transferred 479 261 185 67 992
Cash paid 479 261 185 67 992
Goodwill 189 213 64 11 477
Reasons for the acquisition
Motus acquired a 100% shareholding in Pentagon Motor Holding Limited (UK). This acquisition is
in line with Motus’ strategic intent to expand its presence into selected international markets. The
Pentagon acquisition has resulted in a presence in the passenger vehicle market in the UK where
Motus, prior to this acquisition, only had a presence in the
commercial vehicle market in the UK.
136
Motus acquired a 75% shareholding in SWT Group Proprietary Limited (Australia). This acquisition
is in line with Motus’ strategic intent to expand its presence into selected international markets. This
acquisition has further expanded the Motus presence in the passenger vehicle market in Australia.
With effect from March 2018, Motus acquired 60% in ARCO Motor Industry Company Limited
(ARCO) (Taiwan). ARCO is a wholesale distributor of Aftermarket parts and the acquisition thereof
is in line with Motus’ strategic intent to expand its presence into selected international markets.
Impact of the acquisitions on the results of Motus
From the dates of acquisition, the businesses acquired during the year contributed revenue of
R8 194 million, operating profit of R119 million and after-tax profit of R38 million.
Had the businesses been acquired at the beginning of the year their contributions would have been
as follows: Revenue R10 070 million, operating profit R132 million and profit after tax R44 million.
Separately identifiable intangible assets
As at the acquisition date the fair value of the separately identifiable intangible assets for ARCO was
R42 million. This fair value, which is classified as level 3 in the fair value hierarchy, was determined
using the Multi-period Excess Earnings Method (MEEM) valuation technique for contract based
intangible assets and the Relief-from-royalty method for the brand name.
The significant unobservable valuation inputs were as follows:
Brand name
Discount rate 16.9%
Royalty rate 1.8%
Contact based intangible assets
Weighted average discount rates 14.5 – 14.9%
Terminal growth rates 2.0%
The assumptions used in arriving at projected cash flows were based on past experience and
adjusted for any expected changes.
For the acquisitions of Pentagon Motor Holdings Limited and SWT Group Proprietary Limited,
Motus used external specialists in the evaluation of the estimates and judgements applied in
identifying intangible assets and the fair value thereof. The most significant of these estimates is
the determination of the Purchase Price Allocation Valuation (PPAV) which encompasses:
• Identifying the assets and liabilities acquired and determining their fair values;
• Determining any resultant goodwill and previously unrecorded intangible assets to be recognised
on acquisition; and
• Assessing the useful lives of these intangible assets in order to calculate the annual amortisation
expense.
The full excess purchase price is recognised as goodwill, as the distribution rights with the OEM
only transfer upon certain terms and conditions being met and do not automatically transfer as a
part of the acquisition. These assets are not controlled resources that are separable in nature as
the right cannot be sold separately, transferred, licensed or rented/ exchanged.
Other details
The ARCO acquisition had gross contractual receivables of R526 million with R7 million as doubtful.
Non-controlling interests have been calculated based on the proportionate share of the fair value
acquiree’s net assets. The fair value of the net assets was determined using an earnings multiple
that was adjusted for prevailing market conditions.
137
8.2 Acquisition of subsidiaries
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Non-current assets 853 20 159
Goodwill 447 – (15)
Intangible assets 53 – 30
Investments in associates and joint ventures – – 120
Property, plant and equipment 353 20 24
Current assets 2 678 47 161
Inventories 1 976 31 73
Cash resources 213 – 63
Trade and other receivables 489 16 25
Non-current liabilities (3) – (9)
Deferred tax (3) – (9)
Current liabilities (2 469) (179) 306
Trade and other payables (2 183) (13) (11)
Interest-bearing (debt)/ receivable (283) (166) 319
Taxation (3) – (2)
Common control reserve – – (436)
Non-controlling interests (115) – (25)
Purchase consideration transferred 944 (112) 156
Loss recognised on acquisition – 79 –
Cash utilised on/ (generated by) acquisitions 944 (33) 156
Cash resources acquired (213) – (63)
Net cash utilised on/ (generated by) acquisitions 731 (33) 93
8.3 Goodwill
Goodwill is allocated to the cash-generating unit (CGU) that is expected to benefit from the
acquisition. Goodwill is measured and managed at an operating entity level.
None of the goodwill arising on the acquisitions is expected to be deductible for tax purposes
(2017: Rnil; 2016: Rnil)
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Net carrying value at the beginning of the year 539 585 818
Movement during the year
Acquisitions/ (disposals) of subsidiaries 447 (28) (33)
Impairments (63) (18) (183)
Currency adjustments 30 (28) 11
Re-classifications to held-for-sale – 28 (28)
Net carrying value at end of the year 953 539 585
138
The carrying value of goodwill has been allocated to the following CGUs for impairment testing:
Carrying amount
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Retail and Rental
Imperial Commercials UK Proprietary Limited 67 63 73
S&B Commercials PLC 58 55 63
Orwell Trucks Limited 62 58 67
Pentagon Motor Holdings Limited 158 – –
SWT Group Proprietary Limited 212 – –
Aftermarket Parts
Africa Automotive Aftermarket Parts Solutions
(AAAS, previously Midas) 185 202 202
ARCO Motor Industry Company Limited 65 – –
Beekman Super Canopies Proprietary Limited 76 76 76
883 454 481
Immaterial goodwill amounts 70 85 104
Carrying value of goodwill 953 539 585
Goodwill impairment testing
Impairment of goodwill arises when the recoverable amount of the CGU, including goodwill is less
than the carrying value. The recoverable amount is determined as the greater of the fair value less
costs to sell or the value in use. The Directors have determined the recoverable amount using
the value in use method in assessing goodwill for impairment purposes and which uses cashflow
projection based on budgets approved by the Directors for a five-year period.
A summary of the related assumptions used in determining the recoverable amounts are:
Pre-tax discount rate Terminal growth rate
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Audited
2018
Reviewed
2017
Reviewed
2016
Retail and Rental
Imperial Commercials UK
Proprietary Limited 10.9 10.9 11.3 2.5 2.5 2.5
S&B Commercials PLC 10.7 9.9 10.2 2.5 2.5 2.5
Orwell Trucks Limited 10.6 10.6 10.6 2.5 2.5 2.5
Pentagon Motor Holdings
Limited 10.7 – – 2.5 – –
SWT Group Proprietary
Limited 13.5 – – 2.3 – –
Aftermarket Parts
Africa Automotive
Aftermarket Parts
Solutions (AAAS,
previously Midas) 18.0 18.6 17.2 5.3 5.4 5.4
ARCO Motor Industry
Company Limited 18.4 – – 2.0 – –
Beekman Super Canopies
Proprietary Limited 1 7. 9 18.7 19.7 5.3 5.4 5.4
139
The following material CGU’s provided for an impairment of goodwill during the year:
CGU Description of CGU
Business
segment
Goodwill
impaired
Rm
Terminal
growth
rate
%
Pre-tax
discount
rate used
%
Afintaparts Commercial vehicle
parts distribution
Aftermarket Parts 17 5.3% 19.4%
Europcar Van
Rental
Short term rental of
commercial vehicles
Retail and Rental 26 5.0% 18.3%
43
Key assumptions applied are as follows:
Cash flow projections:
The value in use is calculated using the forecasted cash inflows and outflows which are expected
to be derived from continuing use of the CGU and its ultimate disposal. Cash flow projections for
financial forecasts are based on expected revenue, operating margins, working capital requirements
and capital expenditure, which were approved by Directors.
The expected revenues were based on market share assumptions, volume growth and price
increases. No significant change in market share was assumed during the forecasted period of
five years and is based on the average market share in the period immediately before the forecast
period. Volume growth was based on average growth experienced in recent years. The exchange
rates used in the cash flow projections were consistent with external sources of information.
Operating margins reflect past experience but are adjusted for any expected changes for the
individual CGU.
In arriving at the future cash flows, assumptions applied are market share assumptions, operating
margins and the impact of foreign exchange rates.
Growth rates:
Growth rates applied are determined based on future trends within the industry, geographic location
and past experience within the operating divisions. Growth rates can fluctuate from year to year
based on the assumptions used to determine these rates.
Motus used steady growth rates to extrapolate revenues beyond the forecasted period, which were
consistent with publicly available information relating to long-term average growth rates for each of
the markets in which each of the respective CGUs operates.
Discount rates:
The discount rates present the current market assessment of the risks for each CGU, taking into
consideration the time value of money and individual risks of the underlying assets that have not
been incorporated in the cash flow projections. The discount rate calculations are derived from the
CGU’s weighted average cost of capital and takes into account both the cost of debt and the cost
of equity.
Cost of equity was arrived at by using the capital asset pricing model (CAPM) which, where
necessary, takes into account an equity risk premium and a small stock premium. The CAPM uses
market betas of comparable entities in arriving at the cost of equity. The cost of debt is based on
the interest-bearing debt the CGU is obliged to service.
The debt to equity ratio was determined by applying market value weights based on theoretical
target gearing levels, giving consideration to industry averages and using data of comparable
entities.
Change in key assumptions:
The estimated recoverable amounts of the all CGUs, with the exception of SWT Group Proprietary
Limited, exceeded their carrying values by approximately R3 737 million and due to this significant
headroom, they are not impacted by a 10% variation to management’s estimates when comparing
the carrying value to the recoverable amount.
140
The headroom on SWT Group Proprietary Limited as at 30 June 2018, using management
assumptions as disclosed, is R15 million. The impact as at 30 June 2018 of either a 10% increase
or 10% decrease would be as follows:
Rm 10% increase 10% decrease
Pre-tax discount rates 7 (6)
Terminal growth rates 55 (72)
8.4 Intangible assets
The assumptions regarding estimated useful lives for the financial year were as follows:
• Customer lists, contracts and networks: 10 years; and
• Computer software: 2 years.
Rm
Customer
lists,
contracts
and networks
Computer
software
Audited
total
As at 30 June 2018
Cost 353 267 620
Accumulated depreciation and impairment (156) (187) (343)
Carrying amount 197 80 277
Net carrying value at the beginning of the year 161 98 259
Movement during the year
Acquisition of subsidiaries 51 1 52
Additions 2 31 33
Proceeds on disposal – (1) (1)
Loss on disposal – (5) (5)
Amortisation – (44) (44)
Amortisation of intangible assets arising on
business combinations (15) – (15)
Currency adjustments 4 – 4
Re-classifications (6) – (6)
Net carrying value at the end of the year 197 80 277
Included in customer lists, contracts and networks are the distribution rights relating to Renault
South Africa Proprietary Limited of R107 million (2017: R107 million, 2016: R107 million). The
distribution rights are regarded as having an indeterminate useful life as there is no foreseeable
limit to the period over which the operations of Renault South Africa Proprietary Limited will not
generate net cash inflows. An intangible asset will be regarded as having an indeterminate useful
life when there is no foreseeable limit to the period over which the asset is expected to generate net
cash inflows for the entity. These distribution rights therefore have an indeterminate useful life and
are not amortised, but tested annually for impairment.
No impairment loss was recognised on these distribution rights as at 30 June 2018.
141
Rm
Customer
lists,
contracts
and networks
Computer
software
Reviewed
total
As at 30 June 2017
Cost 250 269 519
Accumulated depreciation and impairment (89) (171) (260)
Carrying amount 161 98 259
Net carrying value at the beginning of the year 182 128 310
Movement during the year
Disposal of subsidiaries – (5) (5)
Additions – 35 35
Proceeds on disposal – (5) (5)
Amortisation – (34) (34)
Impairments – (30) (30)
Amortisation of intangible assets arising on
business combinations (16) – (16)
Currency adjustments (5) – (5)
Re-classifications – 10 10
Assets held-for-sale – (1) (1)
Net carrying value at the end of the year 161 98 259
Rm
Customer
lists,
contracts
and networks
Computer
software
Reviewed
total
As at 30 June 2016
Cost 300 254 554
Accumulated depreciation and impairment (118) (126) (244)
Carrying amount 182 128 310
Net carrying value at the beginning of the year 326 102 428
Movement during the year
Acquisitions/ (disposals) of subsidiaries 30 (1) 29
Additions – 69 69
Amortisation – (36) (36)
Impairments (36) (6) (42)
Amortisation of intangible assets arising on
business combinations (94) – (94)
Currency adjustments 1 – 1
Re-classifications (45) – (45)
Net carrying value at the end of the year 182 128 310
142
8.5 Investments in associates and joint ventures
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Shares at cost 108 101 162
Share of post-acquisition reserves 152 55 23
Carrying value of associates and joint ventures 260 156 185
Indebtedness by associates and joint ventures 88 143 124
Less than one year 4 13 24
More than one year – – 7
More than five years 84 130 93
Net investment in associates and joint ventures 348 299 309
The following equity accounted associates are material to Motus.
Ukhamba Holdings Limited
NGK Spark Plugs South Africa
Proprietary Limited
Nature of relationship with
Motus
Black empowerment partner who
currently owns ordinary and
deferred ordinary Motus shares
Associate that manufactures
and sells spark plugs and other
parts
Principal place of business/
Country of incorporation
South Africa South Africa
Year end 30 June 31 March
Ownership interest/ Voting
rights held
46.9%* 25.0%
*The Motus share to be created on Unbundling.
There has been no change in shareholding for the above associates in the historic periods presented.
Investments in joint ventures are equity accounted. An assessment of control was performed by
Motus based on whether Motus has the practical ability to direct the relevant activities unilaterally.
In making the judgement, the relative size and dispersion of other vote holders, potential voting
rights held by them or others and rights from other contractual arrangements were considered.
After the assessment, Motus concluded that it did not have a dominant interest to direct the relevant
activities of the associates and joint ventures acquired.
The following is summarised financial information for these associates, based on their respective
consolidated financial statements prepared in accordance with IFRS, modified for fair value
adjustments made at the time of acquisition and differences in accounting policies.
143
Ukhamba Holdings Limited
NGK Spark Plugs South Africa
Proprietary Limited
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Audited
2018
Reviewed
2017
Reviewed
2016
Revenue – – – 542 516 468
Net (loss)/ profit for
the year (65) (168) (82) 54 67 69
Other comprehensive
income/ (loss) 378 120 (438) – – –
Total
comprehensive
income/ (loss) 313 (48) (520) 54 67 69
Current assets 73 76 72 344 314 335
Total assets 4 087 3 370 3 290 394 359 361
Current liabilities 1 9 6 146 109 98
Total liabilities 2 229 1 806 1 774 150 110 100
Total equity 1 858 1 564 1 516 244 249 261
Group’s proportional
interest in net assets
of investee at
beginning of the year 367 355 459 62 65 56
Share of total
comprehensive
income/ (loss) 73 (12) (122) 13 17 17
Dividends paid to/
(received from)
associate (5) 24 18 – (20) (8)
Group’s proportional
interest in net assets
of investee 435 367 355 75
62 65
Reversal of fair value
adjustment on shares
and losses that
exceed Motus’ net
interest in the
associate (435) (367) (355) – – –
Carrying value of
the interest in the
investee at the end
of the year – – – 75 62 65
The unrecognised losses on Ukhamba Holdings Limited for the year under amounted to R64 million
(2017: R161 million; 2016: R85 million).
144
Immaterial associates and joint ventures
The following summarised financial information for Motus’ interest in immaterial associates and joint
ventures is based on the amounts reported in Motus’ consolidated financial statements:
Associates Joint Ventures
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Audited
2018
Reviewed
2017
Reviewed
2016
Net profit/ (loss)
forthe year 71 88 10 1 (20) (95)
Other comprehensive
income/ (loss) 1 – – – (1) –
Total
comprehensive
income/ (loss) 72 88 10 1 (21) (95)
Carrying value
ofinterest in
immaterial
associates 254 205 216 19 32 28
Where restrictions exist on Motus’ ability to remit funds due to regulatory restrictions or other
circumstances from associates and joint ventures, cash dividends are recognised as funds become
available.
The unrecognised profits on these associates amounted to R23 million (2017: Rnil million;
2016:
Rnil million).
8.6 Non-controlling interests
The following subsidiaries have non-controlling interests that are material to Motus:
Subsidiary
Principal place
of business
Operating
segment
Ownership interest
held by NCI (%)
2018 2017 2016
Renault South Africa
Proprietary Limited South Africa
Import and
Distribution 40 40 40
ARCO Motor Industry
Company Limited Taiwan Aftermarket Parts 40 – –
SWT Group Proprietary
Limited Australia Retail and Rental 25 – –
The following is summarised financial information for abovementioned companies based on their
respective consolidated financial statements prepared in accordance with IFRS, modified for
fair value adjustments made at time of acquisition and differences in accounting policies. The
information is before inter-company eliminations with other entities in Motus.
145
Renault South Africa
Proprietary Limited
ARCO
Motor
Industry
Limited
SWT
Group
Proprietary
Limited
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Audited
2018*
Audited
2018*
Revenue 4 663 4 142 3 929 130 1 404
Net profit for the year (88) (462) (146) 21 21
Net profit attributable to
non-controlling interests (35) (185) (58) 8 5
Other comprehensive (loss)/
income (25) 130 (112) 17 (4)
Total comprehensive
(loss)/ income (113) (332) (258) 38 17
Income attributable to
non-controlling interests (45) (133) (103) 15 4
Total current assets 2 042 2 304 2 268 247 352
Total assets 2 265 2 533 2 512 252 394
Total current liabilities 1 404 1 244 1 343 43 313
Total liabilities 2 362 3 067 2 713 43 313
Total equity (97) (534) (201) 209 81
Equity attributable to non-
controlling interests (39) (214) (80) 84 20
Purchase price allocation
attributable to non-
controlling interest – – – 13 –
Total non-controlling interest (39) (214) (80) 97 20
Capital injected by non-
controlling interests 220 – –
Cash paid for non-controlling
interests – – – – 18
*Acquisitions made in the current year.
No dividends were paid to the abovementioned non-controlling interests for the periods presented.
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Total comprehensive (loss)/ income (16) (72) 21
Carrying value of interest in immaterial non-
controlling interest (75) (60) 110
There are no material subsidiaries that are not consolidated.
146
8.7 Investments and other financial instruments
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Preference shares (Level 3 in the fair value
hierarchy) 637 648 333
Listed investments 15 1 106
Other non-current financial assets – 6 100
Total 653 834 591
Effective interest rates on loans – 8.0% 7.8%
A receivable, amounting to R173 million, arising on the sale of a subsidiary in the prior year was
derecognised in the current year.
The preference shares are preference shares in Hollard relating to cell captive arrangements.
Investment revenue received from preference shares has been disclosed in note 2.3 Operating
profit, as fair value gains on cell captive arrangements. The shares are carried at fair value. The
asset has been assessed for impairment based on the historical and forecast dividends received
and no impairment is required. During the financial year, Motus did not acquire additional preference
shares in Hollard.
8.8 Related parties
Subsidiaries, associates, joint ventures, Motus pension and provident funds, and directors and
prescribed officers are defined as key management and are considered to be related parties.
Refer to note 6.5 Key management for disclose on related party transaction. During the year, the
Company and its subsidiaries, associates and joint ventures, in the ordinary course of business,
entered into various sale and purchase transactions with each other including:
• Sale of new vehicles and parts between Importers, Dealerships and Car Rental;
• Servicing of vehicles under vehicle plans by the Dealerships;
• Administration by Motor-related Financial Services of the vehicle plans sold by the Importers
and Dealerships; and
• Administration fees, interest, dividends and rental income.
These transactions are eliminated on consolidation and accordingly are not disclosed below. These
transactions occurred under terms that are no less favorable than those arranged with third parties.
Revenues between Group entities
The following intra-group revenue has been eliminated:
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Sale of goods 17 926 16 213 14 983
Rendering of services 2 403 1 121 2 164
Total revenue 20 329 17 334 17 147
Subsidiaries
Details of interests in principal subsidiaries are disclosed in Annexure A – Interests in subsidiaries.
Transactions with Imperial outside Motus
Included in total revenue is the revenue earned from businesses held within the Imperial Logistics
division amounting to R279 million (2017: R280 million; 2016: R599 million).
Included in trade receivables are amounts owed by Imperial and its subsidiaries amounting to
R9 million (2017: R10 million; 2016: R4 million). Included in trade payables are amounts owed by
Imperial and its subsidiaries amounting to R14 million (2017: R33 million; 2016: R14 million).
147
The following amounts are due to Imperial and its subsidiaries and are included in note 4.1 Interest-
bearing debt:
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Brian Porter Holdings Proprietary Limited 26 26 26
Imperial Capital Proprietary Limited 360 132 151
Imperial Finance Division 5 284 5 632 5 054
Imperial Mobility Finance BV – 204 284
Murnau Holdings Proprietary Limited 12 12 12
Premier Auto Kimberley Proprietary Limited (1) (1) (1)
Tannery Panelbeaters Proprietary Limited (2) (2) (2)
Total 5 679 6 003 5 524
Interest incurred on the above amounts due to Imperial and its subsidiaries and which has been
included in Finance costs as per the Consolidated statements of profit or loss amounts to:
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Imperial Capital Proprietary Limited 3 6 5
Imperial Finance Division 553 696 595
Imperial Mobility Finance BV 4 8 12
Total 560 710 612
Included in operating expenses are administration fees paid to Imperial and its subsidiaries
amounting to R163 million (2017: R128 million; 2016: R109 million).
Dividends amounting to R3 139 million (2017: R1 145 million; 2016: R1 133 million) were paid to
Imperial.
Associates and joint ventures
Details of investments in associates and joint ventures that are material to Motus are disclosed in
note 8.5. Investments in associates and joint ventures.
The following intra-group revenue has been included:
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Sale of goods 61 79 91
Rendering of services 11 19 26
Total 72 98 117
The following amounts are due and are included in Other financial liabilities:
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Lereko Motors Proprietary Limited 35 6 (15)
Car Hire Brokers Proprietary Limited 11 11 11
Total 46 17 (4)
148
9. FINANCIAL MANAGEMENT
9.1 Financial risk factors
The Motus’ treasury activities are aligned to the Company’s decentralised business model and
ALCO’s strategies. ALCO is a board subcommittee responsible for implementing best practice asset
and liability risk management with its main objectives being the management of liquidity, interest
rate, price and foreign exchange risk. The ALCO meets every quarter and follows a comprehensive
risk management process. The treasury department implements the ALCO risk management
policies and directives and provides financial risk management services to the various divisional
businesses, coordinates access to domestic and international financial markets for bank as well as
debt capital markets funding. The treasury department monitors and manages the financial risks
relating to the operations of Motus through internal risk reports which analyse exposures by degree
and magnitude of risks. These risks include market risk (including foreign exchange risk, interest
rate risk, and credit risk) and liquidity risk.
The day-to-day management of foreign exchange risk and credit risk is performed on a decentralised
basis by the various business units within the Motus’ hedging policies and guidelines.
Motus seeks to minimise the effects of these risks by matching assets and liabilities as far as
possible or by using derivative financial instruments to hedge the foreign exchange risk exposures.
Motus’ objectives, policies and processes for measuring and managing these risks are detailed in
the following notes:
Note
Currency risk 3.5
Interest rate risk 4.1
Credit risk 3.3.3 & 4.2
Liquidity risk 9.2
9.2 Liquidity risk
Liquidity risk arises should Motus have insufficient funds or marketable assets available to fulfil its
future cash flow obligations. Motus’ liquidity risk management framework is designed to identify,
measure and manage liquidity risk such that sufficient liquid resources are always available to fund
operations and commitments.
The responsibility for liquidity risk management rests with the ALCO, which has developed an
appropriate liquidity risk management framework for the management of Motus’ short, medium and
long-term funding requirements. Motus manages liquidity risk by monitoring forecast cash flows
in compliance with loan covenants and ensuring that adequate unutilised borrowing facilities are
maintained. Appropriate probability factors are applied to cash flow forecasts, when forecasts are
not certain. Monthly, quarterly and five-year cash flows are updated on a regular basis.
Upon Unbundling, external sources of funding will be obtained and utilised after which Motus
endeavors to have between 55% to 75% of its debt of a long-term nature.
The undiscounted cash flows of Motus’ financial assets fall into the following maturity profiles:
Rm
Contractual
cash flows
Less than
one year
One to
five years
More than
five years
Preference shares 637 260 – 377
Listed investments 15 8 5 2
Derivative financial assets 432 432
Trade and other receivables
(1)
4 210 4 210 – –
2018 5 294 4 910 5 379
2017 4 519 4 171 – 348
2016 4 202 3 897 – 305
(1) Trade and other receivables exclude Value Added Tax amounting to 2018: R117 million (2017: R148 million; 2016:
R229 million) and prepaid expenditure amounting to R493 million (2017: R329 million; 2016: R282 million) as it is not a
financial instrument.
149
The undiscounted cash flows of Motus’ financial liabilities fall into the following maturity profiles:
Rm
Contractual
cashflows
Less than
one year
One to
five years
More than
five years
Interest-bearing debt 7 637 7 556 41 40
Derivative financial liabilities 46 46
Other financial liabilities 54 44 – 10
Trade payables and other
payables
(1)
12 707 12 707 – –
2018 20 444 20 353 41 50
2017 17 986 17 866 85 35
2016 17 228 17 131 56 41
(1) Trade and other payables excluded Value Added Tax amounting to R157 million (2017: R186 million; 2016: R147 million)
and staff related costs amounting to R571 million (2017: R793 million; 2016: R802 million) as it is not a financial instrument.
9.3 Fair value measurement of financial instruments
9. 3 .1 Fair value hierarchy
Financial instruments measured at fair value are grouped into the following levels based on
the significance of the inputs used in determining fair value:
Level 1: Fair value is derived from quoted prices (unadjusted) in active markets for identical
instruments.
Level 2: Fair value is derived through the use of valuation techniques based on observable
inputs, either directly or indirectly.
Level 3: Fair value is derived through the use of valuation techniques using inputs not
based on observable market data.
Rm
Audited
2018
Carrying
value Level 1 Level 2 Level 3
At
amortised
cost
Reviewed
2017
Carrying
value
Reviewed
2016
Carrying
value
Financial assets
Preference shares 637 – – 637 – 648 333
Listed investments 15 15 – – – 1 106
Other non-current financial
assets – – – – – 6 100
Loans and other receivables 1 – – – 1 179 52
Trade and other receivables 4 210 – – – 4 210 3 412 3 584
– Trade receivables 3 759 – – – 3 759 2 740 2 970
– Other receivables 451 – – – 451 672 614
Derivative financial asset 432 – 432 – – 272 27
Cash resources 1 737 – – – 1 737 1 353 881
7 032 15 432 637 5 948 5 871 5 083
150
Financial liabilities
Audited
2018
Carrying
value Level 1 Level 2 Level 3
At
amortised
cost
Reviewed
2017
Carrying
value
Reviewed
2016
Carrying
value
Interest-bearing debt 7 637 – – – 7 637 8 156 7 627
Other financial liabilities 54 – – – 54 133 91
Trade and other payables 12 707 – – – 12 707 9 472 9 070
– T rade payables and
accruals 5 445 – – – 5 445 4 470 4 073
– Other accruals 2 519 – – – 2 519 2 182 1 803
– Secured floorplans from
franchisor 4 597 – – – 4 597 2 705 3 102
– Deferred income 146 – – – 146 115 92
Derivative financial liability 46 – 46 – – 225 440
20 444 – 46 – 20 398 17 986 17 228
9.3.2 Level 3 sensitivity information
The fair values of the level 3 financial assets of R637 million (2017: R648 million;
2016:
R333 million) which consists of the fair value of the preference shares and the
accrued dividend income were estimated by applying a cash flow projection technique.
Cash flow projections are based on expected dividends receivable. These cash flow
projections cover a five-year forecast period, which are then extrapolated into perpetuity
using a discount rate of 17% (2017: 14%; 2016: nil%).
The fair value measurement is based on significant inputs that are not observable in the
market. Key assumptions used in the valuations includes the assumed probability of
achieving profits targets and the discount rates applied. The assumed profitabilities were
based on historical performances but adjusted for expected growth.
The following table shows how the fair value of the level 3 financial liabilities as at 30
June 2018
would change if the significant assumptions were to be replaced by a reasonable possible
alternative.
Financial
instrument
Valuation
technique
Main
assumption
Carrying
value
Rm
Increase
in assets/
liabilities
Rm
Decrease
in assets/
liabilities
Rm
Preference
shares
Cash flow
projection
Present value of
expected cash
flows 637 13 (13)
Movement in level 3 financial instruments carried at fair value
The following table shows a reconciliation of the opening and closing balances of level 3
financial instruments carried at fair value at 30 June 2018:
Financial assets
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Carrying value at the beginning of the year 648 333 188
Preference shares acquired – 255 –
Movements in dividends receivable (78) 31 75
Fair valued through profit or loss as
unrealised gains 67 29 70
Carrying value at the end of the year 637 648 333
Transfers between hierarchy levels
There were no transfers between the fair value hierarchies during the current and the prior
year.
151
10. DISCONTINUED OPERATIONS/ HELD-FOR-SALE
10.1 Loss from discontinued operations
The Board took a decision to dispose of operations that are no longer considered to be aligned
with the Motus strategy. In terms of IFRS 5: Non-current assets held-for-sale and discontinued
operations, these businesses have been presented as discontinued operations in the Motus
statement of profit or loss.
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
The loss from discontinued operations is
analysed as follows:
Revenue – 427 2 945
Loss after taxation for the year is as follows:
Operating (loss)/ profit – (2) 102
Exceptional items – (28) (188)
Impairment of goodwill – – (45)
Foreign exchange (losses)/ gains – (3) 12
Share of result of associates and joint ventures – – 2
Net finance costs – (11) (61)
Loss before tax – (44) (178)
Income tax expense – 6 (16)
Loss from discontinued operations – (38) (194)
Operating (loss)/ profit is calculated after
charging:
Depreciation, amortisation, impairment and loss
on disposal – – (112)
Employee costs (including directors) – (115) (435)
Operating lease charges – (10) (81)
Cash flows from discontinued operations –
Cash flows utilised in operating activities – (39) (198)
Cash flows utilised in investing activities – (2) (134)
Cash flows generated from/ (utilised in)
infinancing activities – 28 (45)
Net decrease in cash and cash equivalents – (13) (377)
152
10.2 Disposal of subsidiaries
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Non-current assets 17 195 184
Goodwill – 28 18
Intangible assets – 5 1
Investments in associates and joint ventures – 51 2
Property, plant and equipment 9 84 129
Deferred tax 8 26 –
Investments and other financial assets – 1 34
Current assets 98 364 1 466
Inventories 29 199 346
Vehicles for hire – – 736
Cash resources – 25 140
Trade and other receivables 69 138 244
Taxation – 2 –
Non-current liabilities – – (28)
Deferred tax – – (28)
Current liabilities (57) (495) (1 262)
Provisions – (9) (4)
Trade and other payables (53) (127) (407)
Interest-bearing debt (4) (359) (837)
Taxation – – (14)
Net reserves transferred – 52 39
Non-controlling interests (5) (13) (82)
Net assets disposed 53 103 317
Profit/ (loss) on disposal of subsidiaries 4 (84) 17
Cash generated by disposals 57 19 334
Cash resources disposed – (25) (140)
Net cash generated by/ (received from) disposals 57 (6) 194
153
10.3 Assets and liabilities classified as held-for-sale
Assets and liabilities held-for-sale includes assets and liabilities relating to a discontinued operation
as referred to in note 10.1 Loss from discontinued operations and assets and liabilities considered
to be non-core. In the current year, the assets held-for-sale relate to dealership properties. As part
of the Motus strategy, all non-strategic properties will be disposed of. This disposal is expected to
occur within the next 12 months and has therefore been classified as held-for-sale. The proceeds
from disposal are expected to exceed or equal the net carrying amount of the assets.
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Major classes of assets comprising the assets
held-for-sale
Property, plant and equipment 235 633 122
Investments in associates and joint ventures – – 477
Deferred tax – – 20
Investments and other financial instruments – – 1
Inventories – – 216
Trade and other receivables – – 97
Cash resources – – 65
235 633 998
Major classes of liabilities directly associated
with the assets held-for-sale
Interest-bearing debt 21 – 125
Other financial liabilities – – 6
Provisions – – 34
21 – 165
The assets and liabilities held-for-sale arise from the following segments:
Rm
Audited
2018
Reviewed
2017
Reviewed
2016
Import and Distribution 58 149 98
Retail and Rental 126 417 202
Motor-Related Financial Services – – 474
Aftermarket Parts 30 67 59
214 633 833
154
11. NEW ISSUED STANDARDS NOT YET EFFECTIVE
The following new and revised International Financial Reporting Standards that could have an impact
on Motus’ future financial statements. Motus is in the process of considering the impact of the new and
revised International Financial Reporting Standards on its financial statements.
There are various other amendments and interpretations which have been issued. None of these are
expected to have a significant impact on Motus.
Pronouncement Title
IFRS 9: Financial
Instruments
The standard was issued in July 2014 to replace IAS 39: Financial Instruments:
Recognition and Measurement and becomes effective for accounting periods
beginning on or after 1 January 2018, and will be adopted by Motus on 1 July 2018.
IFRS 9 will not have a material impact on the initial classification and measurement of
Motus’ financial instruments, however additional impairments may be raised under
the estimated credit loss model relating to financial assets.
Motus’ doubtful debt provisions will be based on expected credit losses and not
incurred losses, but the effect will be immaterial. The implementation will also simplify
hedge accounting and result in increased disclosure.
IFRS 15:
Revenue from
Customers
The standard is effective for accounting periods beginning on or after 1 January 2018
and will be adopted by Motus on 1 July 2018.
Motus, especially in the Motor-Related Financial Services segment, has a substantial
number of long-term contracts in terms of the service, maintenance and warranty
plans. Each portfolio of contracts has been assessed for impact in terms of the five-
step approach.
IFRS 15 will not have a material impact on Motus.
IFRS 16: Leases The standard is effective for accounting periods beginning on or after 1 January 2019
and will be adopted by Motus on 1 July 2019 and replaces IAS 17: Leases.
IFRS 16 sets out a comprehensive model for the identification of lease arrangements
and their treatment in the financial statements of both lessees and lessors. IFRS 16
applies a control model for the identification of leases, distinguishing between leases
and service contracts on the basis of whether there is an identified asset controlled
by the customer.
IFRS 16 will primarily change lease accounting for lessees and is expected to have
a significant impact on Motus’ financial statements, as lease agreements will give
rise to the recognition of an asset representing the right to use the leased item and
a loan obligation for future lease payables. Lease costs will be recognised in the
form of depreciation of the right-of-use asset and interest on the lease liability. This
will directly increase the level of presentation and disclosure within the financial
statements.
Lessor accounting under IFRS 16 is similar to existing IAS 17 accounting and is not
expected to have a material impact for Motus.
Motus will be in a position to quantify the impact of the changes required by IFRS 16
early in the first quarter of the year commencing 1 July 2019. The manner in which
Motus elects to adopt IFRS 16 has yet to be decided.
155
COMPANY FINANCIAL STATEMENTS
Motus Holdings Limited was incorporated in the current year. As at 30 June 2018 there has been no trading.
Accordingly, a statement of comprehensive income, statement of cash flows and statement of changes in
equity have not been presented. Refer to note 5.1 Stated capital in the consolidated financial statements for
the stated capital and Annexure A for information on the principal subsidiaries of Motus Holdings Limited.
Notes included in the consolidated financial statements pertaining to related parties, going concern and
subsequent events are applicable to the company financial statements.
COMPANY STATEMENT OF FINANCIAL POSITION
at 30 June 2018
Rm Notes
Audited
2018
ASSETS
Non-current assets 22 860
Investments in subsidiaries 2 22 860
Current assets 498
Loans due by affiliated companies 3 498
Total assets 23 358
EQUITY AND LIABILITIES
Capital and reserves
Stated capital 4 23 358
Attributable to the owner of Motus 23 358
Total equity 23 358
Deferred taxation 5 –
Total liabilities –
Total equity and liabilities 23 358
156
NOTES TO THE COMPANY FINANCIAL STATEMENTS
for the period ended 30 June 2018
1. ACCOUNTING POLICIES
The company has adopted the accounting policies as outlined in the consolidated financial statements.
2. INVESTMENTS IN SUBSIDIARIES
Rm
Audited
2018
Motus Group Limited 8 808
Motus Capital Proprietary Limited 3 230
Total 22 860
The services of independent external advisors were utilised to determine the fair enterprise value of
Motus. A five-year cash flow projection was prepared per business segment and per geographical
region considered to be material by management.
A trading earnings before interest, tax, depreciation and amortisation (“EBITDA”) multiple approach
was utilised to perform the valuation, giving consideration to prevailing market conditions and peers.
The enterprise value arrived at was adjusted for equity loans, net debt, non-controlling interests, and
investments in associates to calculate the resultant equity value.
3. LOANS DUE FROM AFFILIATED COMPANIES
Rm
Audited
2018
Brietta Trading Proprietary Limited 161
Africa Automotive Aftermarket Solutions (a division of Motus Group Limited) 185
Total 498
The loans are interest free, unsecured with no fixed terms of repayment. Motus Holdings Limited has no
intention to recall the loans in the next twelve months.
4. STATED CAPITAL
Rm
Audited
2018
Ordinary stated capital issued 23 358
Total 23 358
During 2018, Motus Holdings Limited was formed as a wholly owned subsidiary of Imperial Holdings
Limited. Effective 31 May 2018, Motus Corporation Proprietary Limited, Motus Capital Proprietary Limited
and Motus Group Limited were transferred to Motus as wholly owned subsidiaries in terms of an asset-
for-share transaction, therefore giving rise to the stated capital.
For further disclosures on stated capital refer to note 5.1 Stated capital in the consolidated financial statements.
5. DEFERRED TAXATION
Arising on the acquisition of investments in subsidiaries are taxable temporary differences amounting to
R4 396 million as at 30 June 2018. These taxable temporary differences have not been recognised in
terms of IFRS 3: Business combinations.
157
Annexure A
INTERESTS IN SUBSIDIARIES
Motus is a diversified international group of companies that is a non-manufacturing service provider to the
automotive sector. The consolidated financial statements include the accounts of Motus Holdings Limited (the
Company) and all of its subsidiaries at 30 June 2018.
Motus holds majority voting rights in all of its subsidiaries. There are no significant judgements or assumptions
made in determining whether Motus has control, joint control or significant influence.
Motus has 79 wholly owned subsidiaries and 10 non-wholly owned subsidiaries as at 30 June 2018.
THE PRINCIPAL SUBSIDIARIES OF THE COMPANY AND THEIR ACTIVITIES ARE:
Subsidiary Place of
incorporation
Ownership
Interest
(%)
Nature of business
Motus Corporation
Proprietary
Limited
distributes passenger, light and heavy commercial
vehicles, automotive products, and motorcycles in
Southern Africa. It also sells service, maintenance and
warranty products and has investments in property
companies. Further details on the composition
of Motus Corporation Proprietary Limited and its
subsidiaries are provided below.
Motus Group
Limited
South Africa 100 Business conducted by Motus Group Limited
comprises of vehicle rental, motor trading, automotive
parts, property investments, and group services.
Details on the businesses included are provided
below.
Motus Capital
Proprietary
Limited
South Africa 100 Motus Capital Proprietary Limited is a registered
Domestic Treasury Management Company (DTMC).
It holds the interest in our operations in Africa, Dubai,
United Kingdom, Australia and Taiwan. Details on the
businesses included are provided below.
158
THE PRINCIPAL OPERATING SUBSIDIARIES OF MOTUS CORPORATION PROPRIETARY
LIMITED AND THEIR ACTIVITIES ARE:
Subsidiary
Place of
incorporation
Ownership
Interest
(%) Nature of business
Hyundai Auto
SouthAfrica
Proprietary
Limited
South Africa 100 Hyundai Auto South Africa Proprietary Limited is an
importer and distributor of Hyundai vehicles and parts
for Southern Africa. Motus has established a network
of dealerships in South Africa, Namibia and Botswana.
Renault
South Africa
Proprietary
Limited
South Africa 60 Renault South Africa Proprietary Limited, through
distribution agreements with Renault SAS France,
imports and distributes Renault motor vehicles and
parts in South Africa. Imperial Car Imports, a wholly
owned subsidiary of Motus has a 60% interest in
Renault South Africa Proprietary Limited.
Kia Motors
SouthAfrica
Proprietary
Limited
South Africa 100 Kia Motors South Africa Proprietary Limited is an
importer and distributor of Kia vehicles and parts for
South Africa.
THE PRINCIPAL BUSINESS OF MOTUS GROUP LIMITED:
Motus Group Limited is divisionalised as follows:
Division
Place of
incorporation Nature of business
Vehicle Retail South Africa The Vehicle Retail business within Motus Group Limited comprises
of motorcycles, passenger, light, medium and heavy (including
extra heavy) commercial vehicle dealerships in South Africa. The
franchise dealerships represent the major OEM brands.
Car Rental South Africa The Car Rental operations housed within Motus Group Limited
comprises of two business units: Car Rental (Europcar and Tempest)
and Used Car Sales (Auto Pedigree brand). This division operates
in SouthAfrica and neighbouring countries.
Aftermarket Parts South Africa The Aftermarket Parts business markets and distributes quality
automotive parts and accessories and D.I.Y products through
selected channels. The business comprises of the following
franchises; AAAS (previously Midas), Motolek, ADCO, CBS and
Auto Care & Diagnostics.
Finance South Africa Provides the treasury function of Motus.
159
THE PRINCIPAL OPERATING SUBSIDIARIES OF MOTUS CAPITAL PROPRIETARY LIMITED
AND THEIR ACTIVITIES ARE:
Subsidiary
Place of
incorporation
Ownership
Interest
(%) Nature of business
S&B Commercials
PLC
United Kingdom 100 Retail, distribution and servicing of commercial vehicles
through dealerships based in the United Kingdom.
Imperial Mobility
UK Proprietary
Limited
Commercials
United Kingdom 100 Imperial Commercial UK is involved in the commercial
vehicle market, from light to extra-heavy commercial
vehicles. It sells new and used vehicles as well as related
financial services, parts and servicing.
Pentagon Motor
Holdings Limited
United Kingdom 100 Retail and distribution of passenger vehicles in the
United Kingdom through 21 dealerships.
SWT Group
Proprietary
Limited
Australia 75 Retail and distribution of passenger vehicles in Australia
through 16 dealerships.
Australian
Automotive
Group Proprietary
Limited
Australia 100 Retail of passenger vehicles in Australia through 14
dealerships
NON-CONTROLLING INTEREST IN MOTUS’ ACTIVITIES
Subsidiaries with non-controlling shareholding are outlined in note 8.6 Non-controlling interests.
160
CORPORATE INFORMATION
Company registration number Company Secretary
Registration number: 2017/451730/06 Rohan Venter
Tel: +27(10) 493 4335
Business address and registered office Auditors
Motus Holdings Limited
1 Van Buuren Road
Corner Geldenhuis Road and Van Dort Street
Bedfordview
2008
PO Box 1719
Edenvale
1610
Deloitte & Touche
20 Woodlands Drive
The Woodlands
Woodmead
2052
Investor relations Principal bankers
Nicole Varty First National Bank Limited
Tel: +27(10) 493 4436 Nedbank Limited
Customer call centre Tip-off line
+27(10) 493 4335 0800 20 35 80
Selected websites
www.motuscorp.co.za
161
ANNEXURE 2
INDEPENDENT REPORTING ACCOUNTANTS AND AUDITORS’ REPORT ON
THE REPORT OF THE HISTORICAL FINANCIAL INFORMATION FOR MOTUS
FOR THE THREE YEARS ENDED 30 JUNE 2016, 2017 AND 2018
The Directors
Motus Holdings Limited
1 Van Buuren Road
Bedfordview
2008
Dear Sirs/Mesdames
INDEPENDENT REPORTING ACCOUNTANT’S REPORT ON THE HISTORICAL FINANCIAL INFORMATION
INCLUDED IN THE PRE-LISTING STATEMENT
Introduction
We have audited the historical financial information of Motus Holdings Limited (the Group or theCompany) in
respect of the year ended 30 June 2018 as presented in Annexure 1 of the Pre-Listing Statement, and we
have reviewed the historical financial information of the Group in respect of the years ended 30 June 2017
and 30June 2016 as presented in Annexure 1 of the Pre-ListingStatement.
Historical Financial Information for the Year Ended 30 June 2018
Opinion
The historical financial information in respect of the year ended 30 June 2018 comprises the consolidated and
separate statement of financial position as at the year-end date, and the consolidated statements of
comprehensive income, changes in equity and cash flows for the years then ended, and the notes, comprising
a summary of significant accounting policies and other explanatory information.
The historical financial information was prepared in accordance with the requirements of the JSE Listings
Requirements. The JSE Listings Requirements require the historical financial information to be prepared in
accordance with the conceptual framework, the measurement and recognition requirements of International
Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting
Practices Committee and Financial Pronouncements as issued by Financial Reporting Standards Council.
In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the
consolidated and separate statement of financial position of Motus Holdings Limited as at 30 June 2018, and
its consolidated statements of comprehensive income, changes in equity and cash flows for the year then
ended in accordance with International Financial Reporting Standards and the JSE Listings requirements.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the audit of the historical
financial information section of our report. We are independent of the Group in accordance with the
Independent Regulatory Board for Auditors Code of Professional Conduct for Registered Auditors (IRBA
Code) and other independence requirements applicable to performing audits of financial statements in South
Africa. We have fulfilled our other ethical responsibilities in accordance with the IRBA Code and in accordance
with other ethical requirements applicable to performing audits in South Africa. The IRBA Code is consistent
with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants
(Parts A and B). We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the Historical Financial Information for the year ended 30 June 2018. These matters were addressed in the
context of our audit of the Historical Financial Information for the year ended 30 June 2018 as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
162
Key audit matter How the matter was addressed in the audit
Valuation of deferred funds (Group)
The Group has a liability for deferred funds which
comprises the service, maintenance and warranty
funds, in terms of which they are obligated to repair
and other services over a specified period. At
30 June 2018 the value of the liability is R2.7billion
(2017: R2.8billion).
The determination of the adequacy of the reserves
and the recognition of the related revenue in
accordance with IAS 18 Revenue is complex. The
values recognised are based on expected earnings
curves, dependent upon forecasted burn rates
derived from key assumptions, including:
• vehicle parts inflation;
• foreign currency devaluation; and
• estimated usage of vehicles.
The directors have engaged experts to assist in
confirming the adequacy of the reserve recognised
for the service, maintenance and warranty contracts
in the deferred funds balance.
Due to the complexity of the abovementioned
actuarial assumptions and the associated risk that
the quantum of the reserves and relating revenue
realised is inappropriate, the deferred funds have
been identified as a key audit matter.
The disclosure related to the deferred funds is
contained in note 1.5.
We assessed and challenged the assumptions that
the Group made in valuing the deferred funds
balance comprising service, maintenance and
warranty funds, with a focus on the adequacy of the
reserves recognised and the appropriateness of the
related revenue release earned. This included:
• engaging an independent actuarial specialist to
evaluate the work performed by the directors’
expert, including:
– assessing the appropriateness of the models
utilised by the directors’ expert;
– assessing the independence, objectivity,
competence and experience of the directors’
expert and
– evaluating the reasonableness of the ranges
derived by the directors’ expert on the inputs
utilised;
• testing the inputs into the financial models, and
• comparing the sufficiency of the funds against
historical information and performing a
retrospective review thereon.
We are satisfied with the actuarial assumptions
applied and consequently with the measurement of
the reserves as at 30June2018. We are satisfied that
the relating revenue earned for the year is appropriate.
The related disclosure in the financial statements is
sufficient.
163
Key audit matter How the matter was addressed in the audit
Business combinations (Group)
The Group, in its stated strategy to diversify its
portfolio through acquisitions in mature markets has
expanded through the acquisition of Pentagon Motor
Holdings Limited in the United Kingdom and SWT
Group Proprietary Limited in Australia during the
current year.
The accounting for these acquisitions is governed by
IFRS 3 Business Combinations and requirements
under the standard can be complex and requires the
Directors to exercise judgement.
The most significant of these estimates is the
determination of the Purchase Price Allocation
Valuation (“PPAV”) which encompasses:
• Identifying the assets and liabilities acquired and
determining their fair values;
• Determining any resultant goodwill and previously
unrecorded intangible assets to be recognised on
acquisition, and
• Assessing the useful lives of acquired intangible
assets where separately identified.
The Directors engaged external experts to assist with
the identification of acquired assets and liabilities.
Due to the value of this acquisition and the level of
judgement and estimate involved in the PPAV, the
accounting for the business combination has been
identified as a key audit matter. Note 8.1 and Note 8.2
provides the relevant disclosure for the
abovementioned acquisitions.
Our audit work included the following:
• We assessed the carrying values of the acquired
assets and liabilities compared to the fair values
at acquisition date.
• Assessing the completeness of assets and
liabilities acquired.
• Involving our IFRS accounting specialists in
evaluating the judgements applied in consideration
of the treatment of the franchise agreements in the
respective territories.
• Re-computing the resulting goodwill to be
recognised on acquisition.
• We assessed whether the effective date of the
acquisition as determined by the Directors was
in compliance with IFRS 3 through inspection of
the salient terms and conditions of the purchase
agreement.
• Performing procedures to determine that
the acquisition was correctly included in the
consolidation from the effective date.
The PPAV’s and the accounting for the acquisitions
was assessed to be appropriate based on evidence
obtained.
We consider the disclosures related to the acquisition
to be appropriate.
164
Key audit matter How the matter was addressed in the audit
Business combinations (common control transactions) (Group)
The Group has undergone an internal
restructure with its shareholder in anticipation
of the unbundling of the business during the
2019 financial year. The restructure has
resulted in the alignment of a Motus statutory
structure with its previously managed, and
reported, operating segments. This has
included the sale and transfer of various
companies within the Group resulting in the
recording of inter-group gains which are
required to be eliminated for the purposes of
the consolidated financial statements in order
to reflect financial information at historical
values previously reported in the ultimate
shareholder’s annual financial statements.
Note1.2 provides the relevant disclosure on
common control.
To determine whether the restructure was accounted for
correctly in deriving historical cost, we focused our audit
procedures on the following areas:
• With the assistance of our IFRS accounting specialists,
we evaluated the accounting treatment adopted by
the directors for the different aspects of the internal
restructuring against the appropriate accounting
standards.
• We involved our internal corporate finance specialists
to review the valuation of the businesses which were
transferred and thereby independently assessed the
Director’s expert key judgements and assumptions.
• We involved our taxation specialists to review the tax
consequences of the restructuring in the underlying
statutory entities and the overall Group.
• We critically analysed the elimination of the inter-
group adjustments to determine whether appropriate
consolidation journal entries had been processed to
eliminate fair value adjustments so to accurately reflect
the results at the historical cost previously reported to the
ultimate shareholders.
Based on the results of these procedures, we are satisfied
that the internal restructuring has been accounted for in
accordance with the inter-group contracts and relevant
accounting standards and, all inter-group adjustments
arising on the restructure have been eliminated for Group
purposes.
The disclosure provided is appropriate.
165
Key audit matter How the matter was addressed in the audit
Valuation of investments (Company)
Sales and transfers of underlying statutory structures
were effected in concluding the abovementioned
internal restructure which resulted in the recognition
of the acquisition of R22,9 billion investments in
Motus Holdings Limited. Due to the judgements
utilised by the directors in determining the investment
value, the internal nature of the transaction, and the
quantum thereof, this has been identified as a key
audit matter. The judgements made in determining
the inputs included:
• in conjunction with the directors’ experts,
the appropriateness of the model utilised in
determining fair value;
• the identification of relevant cash-generating units
and geographical locations which required further
analysis;
• the consideration of the application of control
premium in determining fair value, and
• the identification of an appropriate peer set in the
respective geographies.
Refer to note 2 where disclosure regarding the
assumptions utilised has been included.
To assess the accuracy of the valuation and critically
evaluate the market relatedness thereof, we
performed the following audit procedures:
• We involved our internal corporate finance
specialists to review the Earnings Before Interest
Tax Depreciation and Amortisation (“EBITDA”)/
Enterprise Value multiples used in the valuation of
the businesses transferred and to independently
assess management’s expert.
• We analysed the cash flow projections utilised
in the determination of Enterprise Value against
30 June 2018 actual results and 30 June 2019
forecasts and assessed the appropriateness of
reclassifications between operating segments
and their related statutory entities for disclosure
purposes.
• Reviewed the accuracy of the underlying
calculations in deriving the equity value of
acquired businesses.
Based on the results of these procedures, we are
satisfied that the investments have been recognised
at fair value. The disclosure provided is appropriate.
Emphasis of Matter – Basis of Preparation – Common Control Transactions
We draw attention to note 1.2 to the consolidated financial statements for the year ended 30June2018, which
describes the basis of preparation with regards to common control transactions. Our opinion is not modified
in respect of this matter.
Directors’ responsibility for the Historical Financial Information
The Company’s directors are responsible for the preparation and fair presentation of the historical financial
information, for the year ended 30 June 2018, in accordance with the requirements of the JSE Listings
Requirements, and for such internal control as the directors determine is necessary to enable the preparation
of historical financial information that is free from material misstatement, whether due to fraud or error.
The JSE Listings Requirements require the historical financial information in respect of each annual period to
be prepared in accordance with the conceptual framework, the measurement and recognition requirements
of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting Standards
Council and also, as a minimum, to be presented and contain the disclosures required by the JSE Listings
Requirements.
In preparing the historical financial information, the directors are responsible for assessing the Group’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going-concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibility for the Audit of the Historical Financial Information for the year ended 30June2018
Our objectives are to obtain reasonable assurance about whether the historical financial information for the
year ended 30 June 2018 as a whole are free from material misstatement, whether due to fraud or error, and
to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of the historical financial information.
166
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional
scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the Directors.
• Conclude on the appropriateness of the directors’ use of the going-concern basis of accounting and
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as a
going concern.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for our
audit opinion.
• Evaluate the overall presentation, structure and content of the consolidated and separate financial
statements, including the disclosures, and whether the consolidated and separate financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the directors and Audit and Risk Committee regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
Review Report on the Historical Financial Information for the years ended 30 June 2017 and 30 June 2016
We have reviewed the historical financial information of the Group in respect of the years ended 30June 2017
and 30 June 2016 set out in Annexure 1, comprising the consolidated statement of financial position, and the
consolidated statements of comprehensive income, changes in equity and cash flows, and selected
explanatory notes for the periods then ended.
Responsibilities of the directors for the Historical Financial Information for the years ended 30June2017 and
30 June 2016
The Group’s directors are responsible for the preparation of the historical financial information for the years
ended 30 June 2017 and 30 June 2016, in accordance with the requirements of the JSEListings Requirements,
and for such internal control as the directors determine is necessary to enable the preparation of historical
financial information that is free from material misstatement, whether due to fraud or error.
The JSE Listings Requirements require the historical financial information in respect of each annual period to
be prepared in accordance with the conceptual framework, the measurement and recognition requirements
of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the
Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting Standards
Council and also, as a minimum, to be presented and contain the disclosures required by the JSE Listings
Requirements.
167
Auditor’s responsibility for the Review of Historical Financial Information for the years ended 30June2017
and 30 June 2016
Our responsibility is to express a conclusion on the historical financial information, for the years ended 30June
2017 and 30 June 2016, based on the review. We conducted our review in accordance with International
Standard on Review Engagements (ISRE) 2410, which applies to a review of historical financial information
performed by the independent auditor of the entity. ISRE 2410 requires us to conclude whether anything has
come to our attention that causes us to believe that the historical financial information is not prepared, in all
material respects, in accordance with the requirements of the JSE Listings Requirements. This standard also
requires us to comply with relevant ethical requirements.
A review of the historical financial information in accordance with ISRE 2410 is a limited assurance engagement.
We perform procedures, primarily consisting of making inquiries of the directors and others within the entity,
as appropriate, and applying analytical procedures; and evaluate the evidence obtained.
The procedures performed in a review are substantially less than and differ in nature from those performed in
an audit conducted in accordance with International Standards on Auditing. Accordingly, we do not express
an audit opinion on the historical financial information.
Conclusion on the Historical Financial Information
Based on our review, nothing has come to our attention that causes us to believe that the historical financial
information of Motus Holdings Limited for the years ended 30June 2017 and 30 June 2016 do not present
fairly, in all material respects, the financial position of the Group as at 30 June 2017 and 30 June 2016, and
its financial performance and cash flows for the period then ended, in accordance with the International
Financial Reporting Standards and the JSE Listing requirements.
Purpose of the report
The purpose of our report is for the Pre-Listing Statement of Motus Holdings Limited and is not to be used for
any other purpose. As a result, the historical financial information may not be suitable for another purpose.
Deloitte & Touche
Registered Auditor
Per: JM Bierman
Partner
20 September 2018
Deloitte & Touche
Deloitte Place
The Woodlands
20 Woodlands Drive
Woodmead
Sandton
168
ANNEXURE 3
PRO FORMA FINANCIAL INFORMATION OF MOTUS
Basis of preparation
The definitions and interpretations commencing on page 13 of the Pre-Listing Statement have been used
throughout this Annexure 3. The pro forma financial information should be read in conjunction with section 8
of the Pre-Listing Statement.
1. The table below sets out the financial effects of the Unbundling. The financial effects have been prepared
for illustrative purposes only, in order to enable Shareholders to assess the impact of the listing if it were
implemented on the dates indicated in the notes below.
2. The financial effects have been prepared using accounting policies that comply with IFRS and are
consistent with those applied by the Company in its audited report of historical financial information for
the year ended 30 June 2018. For a full understanding of Motus’ accounting policies, please refer to
Motus’ report of historical financial information for the year ended 30 June 2018, which can be found in
Annexure 1
3. Due to their pro forma nature, the financial effects may not fairly present the financial position or the effect
on earnings, equity or cash flows of Motus after the implementation of the listing.
4. The preparation of the Financial Effects is the responsibility of the directors. Consistent with the foregoing,
the pro forma Financial Effects set forth in the table below are based on available information and certain
assumptions and estimates, which the Board believe, are reasonable.
5. The pro forma figures below have been given no greater prominence than unadjusted financial figures,
are presented in a manner consistent with both the format and accounting policies adopted in the
historical financial information of Motus and adjustments have been quantified on the same basis as
would normally be calculated in preparing financial statements.
6. Refer to the accountants’ report on Pro forma financial effects in Annexure 4.
7. The pro forma consolidated statement of profit and loss is prepared on the assumption that the Unbundling
took place on 1 July 2017. The pro forma consolidated statement of financial position is prepared on the
assumption that the Unbundling took place on 30 June 2018.
8. The financial effects have been prepared in accordance with the JSE Listings Requirements and in
compliance with the SAICA Guide on Pro forma Financial Information.
The financial effects are based on the annual results in compliance with paragraph 8.25(a) of the JSE Listings
Requirements.
169
Pro forma consolidated statement of profit or loss
R million
Results
before pro
forma
effects
1
Increased
costs of
share
schemes
2
Increased
costs as
listed
entity
3
Decreased
funding
costs
4
Treasury
shares to
be received
by Motus
5
Issue to
Ukhamba
6
Reallocation
of debt to
long term
7
Net
dividend
declared
8
Results
after pro
forma
effects
Revenue 77 659 – – – – – – – 77 659
Net operating expenses (72713) (2) (31) – – (178) – – (72 924)
Earnings before interest, taxation,
depreciation, amortisation 4946 (2) (31) – – (178) – – 4 735
Depreciation, amortisation and impairments (1 353) (1 353)
Operating profit 3 593 (2) (31) – – (178) – – 3 382
Profit on sale of properties, net of impairments 617 – – – – – – – 617
Amortisation of intangible assets arising on
business combinations (15) – – – – – – – (15)
Net foreign exchange losses (43) – – – – – – – (43)
Other non-operating items (244) – – – – – – – (244)
Profit before net financing costs 3908 (2)
(31) – – (178) – – 3 697
Finance costs (803) – – 15 – – – – (788)
Finance income 66 – – – – – – – 66
Profit before share of results of associates
and joint ventures 3171 (2) (31) 15 – (178) – – 2 975
Share of results of associates and joint ventures 39 – – – – – – – 39
Profit before tax 3 210 (2) (31) 15 – (178) – – 3 014
Income tax expense (897) 1 9 (4) – – – – (891)
Profit for the year from continuing operations 2 313 (1) (22) 11 – (178) – – 2 123
Net profit attributable to:
Owners of Motus 2346 (1) (22) 11 – (178) – – 2 156
Non-controlling interests (33) – – – – – – – (33)
2 313 (1) (22) 11 – (178) – – 2 123
Earnings per share (cents)
Total earnings per share
– Basic 1 162 (1) (11) 5 – (88) – – 1 101
– Diluted 1 162 (1) (11) 5 – (88) – – 1 076
170
Notes to the pro forma consolidated statement of profit or loss:
The results have been extracted from the report of historical financial information for the 12 months ended 30 June 2018 without adjustment.
This is the transitional cost relating to the existing DBP share scheme as the settlements for 2019 and 2020 post Unbundling will be in shares of both Imperial and Motus. This requires the ongoing trueing up of the liability, in
respect of the Imperial shares to be delivered to the share price of the Imperial shares which is assumed to grow by 8% for the year. The impact of the increased liability will be reduced by the fair value benefit of the Imperial
shares resulting in an increased cost of R2 million, with the related tax impact of R1 million. The final impact could be higher if the combined share price immediately post the Unbundling is higher than the Imperial share price
immediately prior to the Unbundling. This assumes that the Unbundling is effective 1 July 2017.
This is the ongoing impact of the increased costs of being a separately listed entity being the difference between the administration fees (R119 million) no longer charged by the group head office and the additional costs of
being listed separately (R150 million). The tax impact of which is R9 million calculated at a tax rate of 28%. This assumes that the Unbundling is effective 1 July 2017. The actual listing costs of Motus are borne by Imperial.
4
Currently Motus has access to facilities which are utilised to fund the Imperial Group’s combined operations by advancing inter-group loans to the operating entities. After Unbundling, Imperial and Motus will have separate
facilities with an appropriate mix of long- and short-term repayment profiles. The actual impact on funding will depend on how Motus’ treasury department draws down on the facilities and the exact mix of funding. Based on
a similar funding mix to that currently in place, it is estimated that the blended cost of funding will decrease by R15 million and is of a continuing nature. The tax impact of which is at 28%.
5
When Motus is Unbundled, Imperial will receive one Motus share for every Imperial share owned as treasury shares. Motus will have rights to the Motus and Imperial shares to hedge its obligations to settle share incentive
schemes based on its share of the obligations. Motus’ share of the Imperial shares received will be classified as an investment and fair valued through profit or loss. The number of shares in issue will reduce by the Motus
shares received from Imperial and impact the weighted average shares in issue. This will result in an increase in EPS and HEPS and results in the adjustments to EPS and HEPS reflected in the table above not adding to the
total column. All Motus shares will be owned as treasury shares. 2156 457 shares will be transferred at an estimated value of R126.66 per share.
6
Motus will issue 5.8 million deferred ordinary shares to Ukhamba being a Black Economic Empowerment partner of Motus. These shares will be issued at their par value of 4 cents which is below their market value. As these
shares are issued to improve Motus’ Black Economic Empowerment credentials, there is a once off share-based equity cost that needs to be recognised of R178 million. The Motus deferred ordinary shares issued to Ukhamba
are included in the weighted average number of shares in issue, and Motus silences the total number of Motus shares owned by Ukhamba attributable to Motus based on its 46.9% shareholding.
7
Borrowing facilities have been managed by Imperial as at 30 June 2018. These facilities are being replaced by Motus, following the proposed and approved Unbundling of Motus from Imperial.
8
Final net dividend of R407 million declared to Imperial post year-end.
171
Earnings per share information for the year ended 30 June 2018
R million
Results
before pro
forma
effects
Increased
costs of
share
schemes
Increased
costs as
listed entity
Decreased
funding
costs
Treasury
shares to be
received by
Motus
Issue to
Ukhamba
Reallocation
of debt to
long term
Net
dividend
declared
Results after
pro forma
effects
Headline earnings reconciliation
Earnings 2346 (1) (22) 11 – (178) – – 2 156
Recoupment for the disposal of property, plant
and equipment (508) – – – – – – – (508)
Loss on disposal of intangible assets 4 – – – – – – – 4
Impairment of property, plant and equipment 85 – – – – – – – 85
Impairment of goodwill 63 – – – – – – – 63
Impairment of investment in associates and joint
ventures 8 – – – – – – – 8
(Profit)/loss on disposal of subsidiaries and
businesses (4) – – – – – – – (4)
Impairment loss on assets on disposal group (3) – – – – – – – (3)
Headline earnings 1991 (1) (22) 11 – (178) – – 1 801
Headline earnings per share (cents)
Total operations
– Basic 986 (1) (11)
5 – (88) – – 920
– Diluted 986 (1) (11) 5 – (88) – – 899
ADDITIONAL INFORMATION
Number of ordinary shares in issue (million)
– total shares 202.0 – – – – – – – 202.0
– net of shares repurchased 202.0 – – – (2.2) (4.0) – – 195.8
– weighted average for basic
1
202.0 – – – (2.2) (4.0) – – 195.8
– weighted average for diluted
1
202.0 – – – (2.2) 0.5 – – 200.3
Number of other shares (million)
– Deferred ordinary shares to convert to ordinary
shares 5.8 – – – – – – – 5.8
Notes:
Assumes number of shares in issue at the date of Unbundling.
172
Pro forma consolidated statement of financial position
R million
Results
before
pro forma
effects
1
Increased
costs of
share
schemes
2
Increased
costs as
listed entity
3
Decreased
funding
costs
4
Treasury
shares to be
received by
Motus
5
Issue to
Ukhamba
6
Reallocation
of debt to
long term
7
Net
dividend
declared
8
Results after
pro forma
effects
ASSETS
Non-current assets 9799 – – – 37 – – – 9 836
Goodwill 953 – – – – – – – 953
Intangible assets 277 – – – – – – – 277
Investment in associates and joint ventures 348 – – – – – – – 348
Property, plant and equipment 6 786 – – – – – – – 6 786
Deferred tax 782 – – – – – – – 782
Investments and other financial instruments 653 – – – 37 – – – 690
Current assets 26 682 – – – – – – – 26 682
Inventories 15 633 – – – – – – – 15 633
Vehicles for hire
3 924 – – – – – – – 3 924
Taxation 135 – – – – – – – 135
Trade and other receivables 4 821 – – – – – – – 4 821
Derivative financial assets 432 – – – – – – – 432
Cash resources 1 737 – – – – – – – 1 737
Assets classified as held-for-sale 235 – – – – – – – 235
Total assets 36 716 – – – 37 – – – 36 753
EQUITY AND LIABILITIES
Capital and reserves
Stated capital 23 358 – – – – – – – 23 358
Common control reserve (19 753) – – – 311 – – – (19 442)
Shares repurchased (treasury shares) – – – – (274) – – – (274)
Hedge accounting reserve 198 – – – – – – – 198
Other reserves (716) (18) – – – 178 – – (556)
Retained income 8 553 – – – – (178) – (407) 7 968
Attributable to owners of Motus 11
640 (18) – – 37 – – (407) 11 252
Non-controlling interests 4 – – – – – – – 4
Total equity 11644 (18) – – 37 – – (407) 11 256
173
R million
Results
before
pro forma
effects
1
Increased
costs of
share
schemes
2
Increased
costs as
listed entity
3
Decreased
funding
costs
4
Treasury
shares to be
received by
Motus
5
Issue to
Ukhamba
6
Reallocation
of debt to
long term
7
Net
dividend
declared
8
Results after
pro forma
effects
LIABILITIES
Non-current liabilities 1 914 18 – – – – 5 038 – 6 970
Deferred funds 1 447 – – – – – – – 1 447
Deferred tax 31 – – – – – – – 31
Interest-bearing debt 81 – – – – – 5 038 – 5 119
Provisions 301 – – – – – – – 301
Other financial liabilities 54 18 – – – – – – 72
Current liabilities 23 137 – – – – – (5 038) 407 18 506
Provisions 373 – – – – – – – 373
Deferred funds 1 277 – – – – – – –
1 277
Trade and other payables 13 435 – – – – – – – 13 435
Derivative financial liabilities 46 – – – – – – – 46
Taxation 450 – – – – – – – 450
Interest-bearing debt 7556 – – – – – (5 038) 407 2 925
Liabilities classified as held-for-sale 21 – – – – – – – 21
Total liabilities 25 072 18 – – – – – 407 25 497
Total equity and liabilities 36 716 – – – 37 – – – 36 753
NAV per ordinary share (cents) 5 762 (9) – – 18 – – (201) 5747
NTAV per ordinary share (cents) 5 153 (9) – – 18 – – (201) 5 118
Notes to the pro forma consolidated statement of financial position:
The results before pro forma effects have been extracted from the historical financial information for the twelve months ended 30 June 2018 without adjustment.
The initial liability of R18 million for delivery of Imperial shares to Motus participants is recognised against the share based equity reserve.
There is no impact on the financial position as the Unbundling is assumed to be 30 June 2018.
4
There is no impact on the financial position as the Unbundling is assumed to be 30 June 2018.
5
When Motus is Unbundled it will receive rights to both Motus and Imperial shares. Motus’ rights will attach through a new class of shares issued by a subsidiary of Imperial which will allow Motus to receive shares from that
subsidiary to settle share incentive schemes based on its share of the obligations. Motus’ share of the Imperial shares received will be classified as an investment and fair valued through profit or loss. The number of shares
in issue will reduce by the Motus shares received from Imperial and impact the weighted average shares in issue. This means that the adjustments to NAV and NTAV will not add to the total column.
6
Motus will issue 5.8 million deferred ordinary shares to Ukhamba being a Black Economic Empowerment partner of Motus. These shares will be issued at their par value of 4 cents which is below their market value. As these
shares are issued to improve Motus’ Black Economic Empowerment credentials, there is a once-off share based equity cost that needs to be recognised of R178 million.
7
Borrowing facilities have been managed by Imperial as at 30 June 2018 who has advanced funding to Motus on an inter-company loan. These facilities are being replaced by Motus, following the proposed and approved
Unbundling of Motus from Imperial.
8
Final net dividend of R407 million declared to Imperial post year-end.
9
There are no other post balance sheet events which require adjustments to the pro forma financial effects.
174
ANNEXURE 4
INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE
COMPILATION OF PRO FORMA FINANCIAL INFORMATION INCLUDED IN A
PRE-LISTING STATEMENT
To the Directors of Motus Holdings Limited
1 Van Buuren Road
Bedfordview
2008
Dear Sirs/Mesdames
Report on the Assurance Engagement on the Compilation of Pro forma Financial Information Included
in a Pre-listing Statement
We have completed our assurance engagement to report on the compilation of pro forma financial information
of Motus Holdings Limited (the “Group”) by the Directors. The pro forma financial information, as set out in
paragraph 8.3 and Annexure 3 of the Pre-Listing Statement to be dated on or about 27 September 2018,
consists of the pro forma consolidated statement of profit or loss and the pro forma consolidated statement
of financial position and related notes. The pro forma financial information has been compiled on the basis of
the applicable criteria specified in the JSE Limited (JSE) Listings Requirements.
The pro forma financial information has been compiled by the Directors to illustrate the impact of the corporate
action or event, described in Section 2 of the Pre-Listing Statement, on the Group’s financial position as at
30June 2018, and the Group’s financial performance for the period then ended, as if the corporate action or
event had taken place at 30 June 2018 and 1 July 2017 respectively. As part of this process, information
about the Group’s financial position and financial performance has been extracted by the Directors from the
Group’s financial statements for the period ended 30 June 2018, on which an unmodified auditor’s report was
issued on 20 September 2018.
Directors’ Responsibility for the Pro Forma Financial Information
The Directors are responsible for compiling the pro forma financial information on the basis of the applicable
criteria specified in the JSE Listings Requirements and described in paragraph 8.3 and Annexure 3 of the
Pre-Listing Statement.
Our Independence and Quality Control
We have complied with the independence and other ethical requirements of the Code of Professional Conduct
for Registered Auditors issued by the Independent Regulatory Board for Auditors (IRBA Code), which is
founded on fundamental principles of integrity, objectivity, professional competence and due care,
confidentiality and professional behaviour. The IRBA Code is consistent with the International Ethics Standards
Board for Accountants Code of Ethics for Professional Accountants (Parts A and B).
The firm applies the International Standard on Quality Control 1, Quality Control for Firms that Perform Audits
and Reviews of Financial Statements, and Other Assurance and Related Services Engagements and
accordingly maintains a comprehensive system of quality control including documented policies and
procedures regarding compliance with ethical requirements, professional standards and applicable legal
and regulatory requirements.
Reporting Accountant’s Responsibility
Our responsibility is to express an opinion about whether the pro forma financial information has been
compiled, in all material respects, by the Directors on the basis specified in the JSE Listings Requirements
based on our procedures performed.
We conducted our engagement in accordance with the International Standard on Assurance Engagements
(ISAE) 3420, Assurance Engagements to Report on the Compilation of Pro forma Financial Information
Included in a Prospectus which is applicable to an engagement of this nature. This standard requires that we
comply with ethical requirements and plan and perform our procedures to obtain reasonable assurance
175
about whether the pro forma financial information has been compiled, in all material respects, on the basis
specified in the JSE Listings Requirements.
For purposes of this engagement, we are not responsible for updating or re-issuing any reports or opinions
on any historical financial information used in compiling the pro forma financial information, nor have we, in
the course of this engagement, performed an audit or review of the financial information used in compiling the
pro forma financial information.
The purpose of pro forma financial information included in a prospectus is solely to illustrate the impact of
a significant corporate action or event on unadjusted financial information of the entity as if the corporate
action or event had occurred or had been undertaken at an earlier date selected for purposes of the
illustration, we do not provide any assurance that the actual outcome of the event or transaction on or around
22 November 2018.
A reasonable assurance engagement to report on whether the pro forma financial information has been
compiled, in all material respects, on the basis of the applicable criteria involves performing procedures to
assess whether the applicable criteria used in the compilation of the pro forma financial information provides
a reasonable basis for presenting the significant effects directly attributable to the corporate action or event,
and to obtain sufficient appropriate evidence about whether:
• The related pro forma adjustments give appropriate effect to those criteria; and
• The pro forma financial information reflects the proper application of those adjustments to the unadjusted
financial information.
Our procedures selected depend on our judgement, having regard to our understanding of the nature of the
Group, the corporate action or event in respect of which the pro forma financial information has been compiled,
and other relevant engagement circumstances.
Our engagement also involves evaluating the overall presentation of the pro forma financial information.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the pro forma financial information has been compiled, in all material respects, on the basis of
the applicable criteria specified by the JSE Listings Requirements and described in paragraph 8.3 and
Annexure 3 of the Pre-Listing Statement.
Deloitte & Touche
Registered Auditor
Per: JM Bierman
Partner
20 September 2018
Deloitte & Touche
Deloitte Place
The Woodlands
20 Woodlands Drive
Woodmead
Sandton
176
ANNEXURE 5
DETAILS REGARDING PRINCIPAL PROPERTIES OCCUPIED
Principal immovable property owned by Motus are set out below:
Owner NBV (ZAR) Property Type Location Province Property Description
Date of
Purchase
Area
(sqm)
AMHA Properties
Proprietary Limited
242 452 729 Dealership Ford, Hyundai
and Isuzu
2-18 Blaxland Road, Ryde New South
Wales
Lot 4 DP 5873, Lot 3 DP 443926, Lot 2 DP
443925, Lot 17 DP 777986
2013 6 515
Kaalfontein Yard
Proprietary Limited
173 740 489 Bond Store & Auction House
– Motorvia & MFC (Nedbank)
Lindsey Road, Kaalfontein,
Kempton Park
Gauteng Erven 4 & 5 Witfontein Ext 9; Erven 6 – 8
Witfontein Ext 10 & the Remaining Extent of
the Farm Witfontein No. 11
2014 159 862
Motus Corporation
Proprietary Limited
161 365 718 Southgate 2 Bond Store 59 Beechgate Crescent,
Southgate Industrial Park,
Umbogintwini
KwaZulu-Natal Portion 9 of Erf 1 Umbogintwini 2007 290 503
AMHA Properties
Proprietary Limited
151 494 036 Dealership Ford, Renault and
Isuzu
17 Victoria Road, Castle Hill New South
Wales
Lot 1 DP 599607 2008 8 284
AMHA Properties
Proprietary Limited
136 979 474 Dealership Ford & Mitsubishi 780 Pittwater Road, Brookvale
and 15 Cater Road, Brookvale
New South
Wales
Lot 1 Deposited Plan 1068612 and Lot 34
DP9504
2006 7 656
Motus Group Limited 115 358 444 Dealership – Audi Sandton
(Also a Vodacom Mast)
Cnr Katherine Street &
Grayston Drive, Atholl, Sandton
Gauteng Erf 190 Atholl Ext 12 2013 7 230
Motus Group Limited 110 375 192 Dealership – Lindsay Saker
(VW & Audi)
Cnr Aliwal, Zastron & Wes
Burger Streets, Bloemfontein
Central
Free State Portion 1 of Erf 1930 Bloemfontein 2013 28 826
Motus Group Limited 100 950 862 Dealership – Mercedes Benz
Bedfordview (Lifestyle
Centre)
Concorde Road (Cnr Arbroath
Road), Bedfordview
Gauteng Erven 2027 and 2028 Bedfordview Ext 352
(Former Portion 1070 of the Farm
Elandsfontein No. 90)
2007 18 043
Motus Corporation
Proprietary Limited
91 965 239 Dealership – Kia & Hyundai
Constantia Kloof
Cnr Hendrik Potgieter Road &
Kweper Close, Constantia
Kloof, Roodepoort
Gauteng Erf 772 Constantia Kloof Ext 6; Erf 4951
– 4952 Weltevredenpark Ext 151
2013 22 285
Motus Corporation
Proprietary Limited
90 682 524 Dealership – Hyundai
Edenvale (Service
Reception, Commercial
Workshop & Stock Parking)
138 – 140 8th Avenue (Cnr
10th Street); 137 – 141 7th
Street, Edenvale
Gauteng Remaining Extent of Erf 33 Edenvale,
Portions 2 & 4 of Erf 33 Edenvale and
Portions 1 & 2 of Erf 34 Edenvale
1999, 2000,
2005 &
2006
4 955
Motus Group Limited 89 010 251 Dealership – Toyota,
Chrysler, Mitsubishi, Filling
Station – BP
Cnr Hyperama Link Street,
Dick Kemp Street & Edenvale
Road
Gauteng Erven 200 & 201 Meadowdale Ext 6 2011 18 549
AMHA Properties
Proprietary Limited 87 753 671 Dealership Ford
145-151 Main Street,
Blacktown
New South
Wales Lot 1 DP 1151328 2007 8 139
Motus Corporation
Proprietary Limited 87 638 719
Dealership – Hyundai Silver
Lakes
8 Bendeman Boulevard (off
Solomon Mahlangu Drive), Six
Fountains, Silver Lakes Gauteng Portion of Erf 1781 Equestria Ext 220 2014 19 002
177
Owner NBV (ZAR) Property Type Location Province Property Description
Date of
Purchase
Area
(sqm)
Motus Corporation
Proprietary Limited
85 236 859 Dealership – Fourways
Multifranchise (Kia &
Hyundai)
Cnr Cedar Road & Uranium
Street, Fourways
Gauteng Erven 2132 – 2134 Witkoppen Ext 134
(Formerly Portion 438 (a Portion of Portion
128) of the Farm Witkoppen No. 194)
2014 20 510
Direct Shelf 126
Proprietary Limited
81 392 470 Dealership – New Hyundai
Vereeniging (Under
construction)
Johannesburg Road (R82)
(Accessed from Imam Haroon
Road), Duncanville,
Vereeniging
Gauteng Erf 1059 & Portion 1 of Erf 1060 Duncanville
Ext 4
2014 7 714
Motus Group Limited 70 970 485 Dealership – Motus Toyota
Nelspruit (Includes Lexus)
Cnr R40 & Wille Street,
Riverside Park Ext 20, Nelspruit
Mpumalanga Erf 219 Riverside Park Ext 20 2011 25 672
Motus Group Limited 70 816 805 Dealership – Imperial Toyota
Parktown
Empire Road/M1 Fly-over,
Parktown, Johannesburg
Gauteng Portion 395 (a portion of Portion 106) of the
Farm Braamfontein No 53 IR
2008 15 754
Motus Group Limited 70 803 146 Dealership – Imperial Toyota
Langeberg
Cnr Brington Road and
Okavango Drive, Langeberg
Ridge, Kraaifontein
Western Cape Portion 179 of the Farm 311 Langeberg
(Cape RD)
2015 19 238
Motus Corporation
Proprietary Limited
65 543 662 Dealership – Hyundai East
Rand
1 Pond Road (Cnr North Rand
Road, Pond Road & Annabella
Road), Bardene, Boksburg
Gauteng Erf 629 Bardene Ext 18 2012 8 194
Motus Group Limited 64 750 222 Dealership – Imperial Toyota
Kempton Park
5 – 13 Spitfire Street, 25 – 27
Catalina Avenue, 8 – 14
Sunderland Street
Gauteng Erf 1051 Rhodesfield (Formerly Erven 47
– 51 & 53 – 58 Rhodesfield)
2010 11 913
IH Mobility Holdings
UK
61 813 413 Dealership Ashbourne Road, Mackworth,
Derby DE22 4NB
Derby Ashbourne Road, Mackworth, Derby DE22
4NB
2006 Not
specified
Motus Corporation
Proprietary Limited
60 942 801 Dealership – East Rand
Multifranchise
Cnr Rietfontein & Madeley
Roads, Jansen Park, Boksburg
Gauteng Portion 223 (a Portion of Portion 182) of the
Farm Driefontein No. 85 IR
2006 23 940
Motus Group Limited 58 601 755 Dealership – Land Rover,
Jaguar & Volvo Bloemfontein
Cnr Zastron, Hill & Wes Burger
Streets, Bloemfontein Central
Free State Erven 11336 & 24908 Bloemfontein
(Consolidated Erf 37114)
2013 5 051
Motus Group Limited 55 832 835 Commercial Dealership –
Mercedes Benz Boksburg
Delta Road, Hughes, Boksburg Gauteng Erven 159 – 164 Hughes Ext 21 & Portion
143 of the Farm Driefontein No. 85 IR
2005 20 451
Jurgens Properties
Australia Proprietary
Limited
54 428 183 Dealership 13 Sharnet Circuit, Paknham,
Melbourne, 3810, Victoria
Victoria Lot 2 – 708951X 2013 7 013
Motus Group Limited 53 492 537 Panel Shop & PDI Centre –
Imperial Auto Body
Springbok Ave, Jet Park,
Boksburg
Gauteng Portion 455 (of Portion 224) of the Farm
Klipfontein
2008 21 385
Motus Corporation
Proprietary Limited
53 044 065 Dealership – Kia Strijdom
Park
Cnr Malibongwe, CR Swart &
Langwe Drives, Strijdom Park,
Randburg
Gauteng Erf 78 Strijdom Park Ext 2 2010 1 635
Reeve Derby Limited 51 901 226 Dealership Chadderton Way and
Westhulme Way, Oldham, OL1
2QL
Oldham Chadderton Way and Westhulme Way,
Oldham, OL1 2QL
2005 1 831
Motus Corporation
Proprietary Limited 51 804 034 Warehousing – Renault PDC
3 Orlando Street, Spartan,
Kempton Park Gauteng Portion 115 of Erf 602 Spartan Ext 2 2015 15 041
178
Owner NBV (ZAR) Property Type Location Province Property Description
Date of
Purchase
Area
(sqm)
Motus Group Limited 51 162 824 Commercial Dealership –
MAN (Johannesburg Truck
and Bus)
83 Heidelberg Road, City Deep
Production Park, City Deep,
Johannesburg
Gauteng Erf 240 City Deep Ext 13 2012 20 689
Motus Corporation
Proprietary Limited
50 098 656 Dealership – Pinetown
Multifranchise
98 – 106 Josiah Gumede
Road, Pinetown Central,
Pinetown
KwaZulu-Natal Erf 32105 Pinetown 2012 8 880
Motus Corporation
Proprietary Limited
49 553 675 Dealership – Menlyn
Multifranchise (Kia &
Hyundai)
224 & 238 Garsfontein Road
(232 Bali Avenue), Menlyn,
Pretoria East
Gauteng Erf 761 Newlands Extention 1 2005 19 322
Motus Group Limited 49 463 090 Dealership – Imperial Toyota
Strijdompark
49 Highview Boulevard,
Ferndale, Randburg
Gauteng Erf 2060 Ferndale Ext 26 2017 8 515
Motus Corporation
Proprietary Limited
49 399 552 Warehousing – Kia PDC 9 Ronbex Road, Activia Park,
Germiston
Gauteng Remaining Extent of Erf 45 Activia Park 2011 24 445
Motus Corporation
Proprietary Limited
49 075 068 Dealership – Nelspruit
Multifranchise
Cnr R40 & Wille Street,
Riverside Park Ext 20, Nelspruit
Mpumalanga Erf 218 Riverside Park Ext 20 2010 29 494
Motus Corporation
Proprietary Limited
44 948 281 Dealership – Hatfield
Hyundai
1259, 1273 & 1277 Stanza
Bopape Street, Hatfield,
Pretoria
Gauteng Erf 809 Hatfield 2013 6 380
Motus Corporation
Proprietary Limited
44 890 634 Dealership – Hyundai
Boksburg (Includes Hyundai
Commercial)
37 North Rand Road (Cnr Elno
Street), Boksburg
Gauteng Erven 336 – 339 Hughes Ext 55 2006 28 100
Motus Group Limited 43 770 993 Imperial Technical Training
Academy Germiston
Dakota Crescent, Airport Park,
Germiston
Gauteng Erf 143 Airport Park Ext 4 2008 4 690
IH Mobility Holdings
UK
43 300 268 Dealership Faraday Road, Dorcan,
Swindon, SN3 5JY
Swindon Faraday Road, Dorcan, Swindon, SN3 5JY 2006 1 464
Motus Group Limited 42 898 172 Commercial Dealership
– Magnis Pretoria East
Rooiberg Street, N4 Gateway
Industrial Park, Pretoria East
Gauteng Erf 604 Willow Park Manor Ext 65 2012 17 364
Motus Corporation
Proprietary Limited
42 165 655 Dealership – Polokwane
Multifranchise
Cnr Nelson Mandela Drive &
N1, Polokwane Ext 27,
Polokwane
Limpopo Portion 4 of Erf 6471 Pietersburg Ext 27 2004 8 030
Motus Corporation
Proprietary Limited
42 104 847 Dealership – Tygerberg
Multifranchise (Kia &
Renault)
River’s Edge Business Park,
Winelands Close, Stikland,
Bellville
Western Cape Unit 17 SS River’s Edge Business Park &
Erven 40766 & 40768 Bellville (Also
Exclusive Use Areas P1 & P2)
2008 &
2015
8 618
Motus Corporation
Proprietary Limited
41 944 242 Dealership – Renault Tokai 197 Main Road, Retreat Western Cape Remaining Extent of Erf 83331 Cape Town 2013 4 335
Motus Group Limited 40 804 351 Dealership – Ford, Mazda,
Jaguar, Land Rover
Knysna Street, Eden Meander,
George
Western Cape Erf 26136 George 2013 7 500
Motus Group Limited 40 256 204 Commercial Dealership
– Mercurius Trucks
Polokwane
1 Corporate Park (N1), Marmer
Street, Magna Via, Polokwane
Limpopo Portion 43 of Erf 5658 Pietersburg Ext 12 2013 15 582
Motus Group Limited 40 162 164
Dealership – Lindsay Saker
Edenvale (VW)
Van Riebeeck Avenue (Cnr
Stoneridge Drive), Greenstone
Hill, Edenvale Gauteng Erven 1359 & 1360 Greenstone Hill Ext 32 2009 6 094
179
Owner NBV (ZAR) Property Type Location Province Property Description
Date of
Purchase
Area
(sqm)
Motus Corporation
Proprietary Limited
39 195 341 Warehouse – Hyundai PDC 76 Cavaleros Drive, Industries
West, Germiston
Gauteng Erf 127 Jupiter Ext 3 2009 14 218
Motus Group Limited 38 668 894 Dealership – BMW Vaalridge
Auto, Lindsay Saker, Auto
Pedigree
Cnr Troost Street & General
Smuts Road, Duncanville
Gauteng Erf 1025; Portion of the Remaining Extent of
Erf 643 Duncanville
2007 54 439
Motus Corporation
Proprietary Limited
38 663 329 Dealership – Centurion
Hyundai & Renault
Cnr John Vorster Drive & Oak
Avenue, Highveld, Centurion
Gauteng Erf 2996 Highveld Ext 35 2004 24 320
Motus Corporation
Proprietary Limited
38 021 425 Dealership – Roodepoort
Multifranchise
49 Ontdekkers Road,
Helderkruin, Roodepoort
Gauteng Erf 2325 Helderkruin Ext 30 2007 13 648
Reeve Derby Limited 35 917 189 Dealership 100 Savile Street, Sheffield, S4
7UD
Sheffield 100 Savile Street, Sheffield, S4 7UD 2007 6 500
Hyundai Automotive
South Africa
Proprietary Limited
35 872 756 Truck Assembly Plant –
Hyundai
Sasolburg Place, Apex, Benoni Gauteng Erven 398, 399, 400 & 407 Apex Ext 3 2000 31 926
IH Mobility Holdings
UK
35 681 554 Dealership Days Road, St Philips, Bristol,
Avon. BS2 0QP
Bristol Days Road, St Philips, Bristol, Avon. BS2
0QP
2006 Not
specified
Motus Group Limited 34 938 250 Dealership – Mercedes Benz
Klerksdorp & Auto Pedigree
N12 Provincial Road (Cnr Joe
Slovo Road & Platan Avenue)
North West Portion 572 of the Farm Townlands of
Klerksdorp No. 424 IP
2007 39 563
Motus Group Limited 33 977 244 Dealership – Mercedes Benz
East Rand Mall
Cnr North Rand & Oosthuizen
Roads, Bardene, Boksburg
Gauteng Erven 1201 & 1202 Bardene Ext 70 (Former
Portion 698 of the Farm Klipfontein)
2004 13 369
Motus Corporation
Proprietary Limited
33 782 791 Dealership – Vacant (Ex
Midrand Multifranchise)
Cnr Olifantsfontein & Pretoria
Roads, Midrand
Gauteng Erf 247 Randjespark Ext 79 2008 10 992
Motus Corporation
Proprietary Limited
33 483 145 Showroom – Kia Kempton
Park
6/8 Catalina Avenue (Cnr
Lodestar & Mustang Streets &
Catalina Avenue)
Gauteng Erven 246 & 271 Rhodesfield 2006 2 564
Motus Corporation
Proprietary Limited
33 343 138 Dealership – Edenvale
Multifranchise
Cnr Herman & Dick Kemp
Streets, Meadowdale,
Germiston
Gauteng Erf 5 Meadowdale 2007 12 800
Motus Group Limited 31 296 598 Office Building – Motus Head
Office
Cnr Geldenhuys & Van Dort
Streets, Bedfordview
Gauteng Erf 358 Bedfordview Ext 81 2014 3 123
Motus Corporation
Proprietary Limited
31 190 172 Dealership – Hyundai
Umhlanga
2 Jubilee Grove & 5/7 Solstice
Road, Gateway, Umhlanga
Rocks
KwaZulu-Natal Portions 11 & 12 of Erf 2689 Umhlanga
Rocks & Portion 15 of Erf 2483 Umhlanga
Rocks
2002 4 453
Reeve Derby Limited 30 493 882 Dealership Derby Road, Stretton, Burton,
DE13 0DF
Burton Derby Road, Stretton, Burton, DE13 0DF 2002 11 130
Motus Corporation
Proprietary Limited
29 780 544 Dealership – Paarden Eiland
Multifranchise
25 Kings Road (Cnr Section
Road), Brooklyn
Western Cape Erf 159992 Cape Town 2005 9 394
Motus Group Limited 29 573 334 Dealership – Lindsay Saker
East Rand (VW)
142 North Rand Road,
Bardene, Boksburg
Gauteng Consolidated Erf 1322 Bardene Ext 67
(Previously Erven 1198 & 1199 Bardene Ext
67)
2006 13 431
Motus Group Limited 29 408 510
Dealership – Lindsay Saker
Johannesburg (VW)
Mooi Street (Corner School
Street), Johannesburg CBD Gauteng
Erven 1090 – 1093 & 1252 City & Suburban
Ext 2
2000 &
2007 14 152
180
Owner NBV (ZAR) Property Type Location Province Property Description
Date of
Purchase
Area
(sqm)
Motus Corporation
Proprietary Limited
28 704 679 Dealership – Hyundai & Kia
Roodepoort
Cnr C R Swart & Ontdekkers
Roads, Wilro Park, Roodepoort
Gauteng Erf 2601 Wilropark Ext 11 & Remaining
Extent of Portion 213 (a Portion of Portion
40) of the Farm Roodepoort No. 237
2001 &
2004
16 835
Motus Group Limited 28 458 387 Commercial Dealership –
Mercedes Benz
Commercial & Imperial
Technical Training Academy
Cnr Dekema & Osborn Roads,
Wadeville
Gauteng Portion 208 of Erf 534 Wadeville Ext 2 2000 35 947
Motus Group Limited 27 951 814 Dealership – Isuzu Trucks
Isando
9 Brabazon Ave, Croydon,
Kempton Park
Gauteng Portion 7 of Erf 589 Croydon 2009 13 435
Motus Corporation
Proprietary Limited
27 626 682 Dealership – Umhlanga
Alpine Audi
Meridian Drive, Umhlanga
Rocks
KwaZulu-Natal Portion 18 of Erf 2518 Umhlanga Rocks 2005 3 647
Motus Group Limited 27 330 968 Commercial Dealership &
Old House converted to
offices – Hino Pomona
61 Maple Street, Pomona Gauteng Remaining Extent of Erf 2414 Pomona Ext
89
2009 12 716
Motus Group Limited 27 176 322 Dealership – Nissan Parow 396 Voortrekker Road, Parow
East
Western Cape Erf 7933 Parow 2012 6 025
Motus Corporation
Proprietary Limited
26 892 963 Dealership – Airport Park
Multifranchise
19 & 21 Dakota Crescent (Cnr
Russel & Cachet Streets &
Dakota Crescent), Airport Park,
Germiston
Gauteng Erven 139 & 140 Airport Park Ext 4 2007 8 536
Motus Corporation
Proprietary Limited
26 549 778 Dealership – Alberton
Multifranchise
50 Louis Trichardt Street (Cnr
Voortrekker Road), Alberton
Central, Alberton
Gauteng Remaining Extent of Portion 227 of the Farm
Elandsfontein No. 108 IR
2010 15 420
Motus Group Limited 26 317 381 Dealership – Nissan &
Mitsubishi East Rand Mall
Cnr Rondebult & Ravenswood
Roads, Jansen Park, Boksburg
Gauteng Portion 8 of Erf 241 Jansen Park Ext 12 &
Erven 292 – 293 Jansen Park Ext 25
2004 9 217
Direct Shelf 126
Proprietary Limited
26 297 023 Dealership – Hyundai
Vereeniging (Existing)
3 Rhodes Avenue (Cnr Rhodes
Avenue & Union Street),
Vereeniging
Gauteng Erf 1406 Vereeniging 2008 3 965
Motus Corporation
Proprietary
Limited
25 690 410 Dealership – Hyundai
Bloemfontein
183 Church Street (Cnr Church
& Krause Streets), Oranjesig,
Bloemfontein
Free State Erf 13441 Bloemfontein Ext 80 2007 7 713
Reeve Derby Limited 25 369 871 Dealership Pentagon Vauxhall, Greengate
Industrial Estate, Greenside
Way, Middleton, M24 1SA
Middleton Pentagon Vauxhall, Greengate
Industrial Estate, Greenside Way, Middleton,
M24 1SA
2001 1 818
Motus Group Limited 25 000 000 Dealearship – Mercedes
Benz M2 City
4 & 20 Droste Crescent, Droste
Park, Johannesburg
Gauteng Erven 67 & 68 Droste Park Ext 7 1999 15 387
Motus Corporation
Proprietary Limited
24 784 439 Mount Edgecombe Bond
Store
2 Hillhead Road, Mount
Edgecombe
KwaZulu-Natal Erf 369 Mount Edgecombe 2005 42 336
Motus Corporation
Proprietary Limited
23 870 421 Dealership – Hyundai Diep
River
118 Main Road, Plumstead Western Cape Remaining Extent of Erf 78643 Cape Town 2006 5 302
Motus Group Limited 23 820 416
Workshop – Merkel Motors
Tzaneen
8 Meser Street, Arbor Park,
Tzaneen Limpopo Portion 9 of Erf 2692 Tzaneen Ext 27 2005 1 685
181
Owner NBV (ZAR) Property Type Location Province Property Description
Date of
Purchase
Area
(sqm)
IH Mobility Holdings
UK
23 652 424 Dealership Park Road, Halesowen, West
Midlands. B63 2RL
Halesowen Park Road, Halesowen, West Midlands. B63
2RL
2006 Not
specified
Motus Corporation
Proprietary Limited
23 588 573 Offices & Parking – Liquid
Capital
140 Boeing Road East, Elma
Park, Bedfordview
Gauteng Erf 259 Elma Park Ext 11; Portions 847 &
1266 of the Farm Elandsfontein No. 90 IR
(Erven 2995 & 2996 Bedfordview Ext 572)
2005, 2006
& 2011
24 448
Motus Group Limited 22 769 954 Dealership – Honda East
Rand Mall & Auto Pedigree
Jan Smuts Street, Bardene,
Boksburg
Gauteng Erf 552 Bardene Ext 7 2000 12 106
Motus Group Limited 22 699 482 Dealership – Imperial Ford &
Mazda Germiston
Dakota Crescent, fronting onto
Russel Road, Airport Park,
Germiston
Gauteng Erf 134 Airport Park Ext 4 2007 16 512
Motus Group Limited 22 641 475 Dealership – Audi Fourways William Nicol Drive (Access
from Sunrise Boulevard),
Fourways
Gauteng Erf 1325 Lone Hill Ext 88 2005 4 380
Properties of Imperial
Proprietary Limited
22 000 000 Dealership – Isuzu, Opel 71 St Georges Street (Cnr
Church Street), Bloemfontein
Central
Free State Remaining Extent of Erf 24953 Bloemfontein 1997 5 551
Motus Group Limited 21 715 535 Dealership – Ford, Mazda,
Mitsubishi, Auto Pedigree
37 Transvaal Street, Paarden
Eiland
Western Cape Erf 110219 Cape Town 2005 14 893
Motus Group Limited 21 194 898 Commercial Dealership –
Magnis Samrand
61 Sterling Road, Samrand
Industrial Park, Midrand
Gauteng Erf 892 Kosmosdal Ext 12 2005 21 221
IH Mobility Holdings
UK
21 190 994 Dealership Boulevard Ind Estate, Beacon
Road, Beeston, Nottingham,
NG9 2JR
Nottingham Boulevard Ind Estate, Beacon Road,
Beeston, Nottingham, NG9 2JR
2006 1 485
Motus Group Limited 20 905 700 Dealership – Hyundai
Germiston
13 – 15 Dakota Crescent,
Airport Park, Germiston
Gauteng Remaining Extent of Erf 173 Airport Park Ext
4 (Consolidated Erven 135 – 138 Airport
Park Ext 4)
2015 9 868
Motus Corporation
Proprietary Limited
20 613 568 Dealership – Hyundai
Harbour View
6 – 28 Cato Street, Durban KwaZulu-Natal Erven 10379 – 10384 Durban & Portion 1 of
Erf 10385 Durban
2001 3 693
Reeve Derby Limited 20 496 034 Dealership Albert Street, Eccles,
Manchester, M30 0LN
Manchester Albert Street, Eccles, Manchester, M30 0LN 2013 2 270
Motus Group Limited 20 475 243 Panel Shop – BMW ARC
Bloemfontein
N8 Botshabelo/Bloemfontein
Road (Service Road), Estoire
AH, Bloemfontein
Free State Portion 1 of Erf 90 Estoire Settlement
Agricultural Holdings
2007 10 103
Motus Group Limited 20 310 251 Offices & PDI Centre – Auto
Pedigree Head Office
81 Steel Road, Spartan,
Kempton Park
Gauteng Erf 67 Spartan 2003 8 354
Motus Group Limited 20 213 603 Depot – Europcar Jet Park Geertsma Road, Jet Park,
Boksburg
Gauteng Erven 21 – 23 & 56 Jet Park 2000 31 239
Motus Corporation
Proprietary Limited
19 678 493 Dealership – Vacant (Future
Audi)
Cnr William Nicol Drive &
Bryanston Drive, Bryanston
Gauteng Portion 6 of Erf 77 Bryanston 2005 8 358
Motus Corporation
Proprietary Limited
19 316 217 Dealership – Umhlanga
Multifranchise
1 – 3 Meridian Drive,
Umhlanga Rocks
KwaZulu-Natal Ptn 18 of Erf 2689 Umhlanga Rocks 2001 7 479
Motus Corporation
Proprietary Limited 19 197 213
Dealership – Helderberg
Multifranchise
Cnr Old Paardevlei Road &
Broadway Boulevard, Somerset
West Western Cape Erf 15852 Somerset West 2005 8 760
182
Owner NBV (ZAR) Property Type Location Province Property Description
Date of
Purchase
Area
(sqm)
Motus Corporation
Proprietary Limited
18 971 449 Dealership – Cresta Hyundai Cnr Beyers Naude & Herder
Drives, Northcliff
Gauteng Portion 1 of Erf 1471 Northcliff Ext 4 2010 1 983
Motus Group Limited 18 649 073 Panel Shop – Imperial Auto
Body Cape Town
Michigan Place, Airport
Industria
Western Cape Erf 159589 Cape Town 1998 11 500
Motus Corporation
Proprietary Limited
18 600 181 Dealership – Hyundai
Zambezi
Visvanger Road (fronting onto
Sefako Makgatho Drive),
Montana Park, Pretoria
Gauteng Portion 4 of Erf 2173 Montana Park 2007 6 600
Motus Corporation
Proprietary Limited
18 175 512 Dealership – Tableview
Multifranchise
Cnr Koeberg & Blaauwberg
Roads, Milnerton
Western Cape Erf 20876 Milnerton 2007 6 757
Motus Corporation
Proprietary Limited
18 090 106 Dealership – Hyundai
Bedfordview
25 – 27 A & B Van Buuren
Road (Adjacent to the N3 on/
off ramp), Bedfordview
Gauteng Remaining Extent of Erf 214 Bedfordview
Ext 51, Portion 3 of Erf 1 Oriel & Portion 4 of
Erf 1 Oriel
2007 7 218
Motus Group Limited 17 745 121 Commercial Dealership –
Magnis Zululand
12 Betastraal Street, Alton,
Richards Bay
KwaZulu-Natal Erf 8753 Richards Bay Ext 28 2008 10 200
Motus Group Limited 17 373 658 Dealership – Honda
Westside
Cnr Jim Fouche & Hendrik
Potgieter Roads, Allens Nek,
Roodepoort
Gauteng Portion 2 of Erf 681 Allens Nek Ext 19 2003 11 002
Motus Corporation
Proprietary Limited
16 867 212 Dealership – Renault
Bryanston
Cnr Wedge Park Road &
William Nicol Drive, Bryanston
Gauteng Remaining Extent & Portion 2, both of Erf 81
Bryanston
2003 8 716
Pentagon Crysler
(Barnsley) Limited
16 735 029 Dealership Worth Way and Longcroft,
Keighley
Keighley Worth Way and Longcroft, Keighley 2015 1 532
IH Mobility Holdings
UK
16 714 182 Dealership Leek New Road, Cobridge,
Stoke On Trent ST6 2DE
Stoke Leek New Road, Cobridge, Stoke On Trent
ST6 2DE
2006 2 763
Motus Corporation
Proprietary Limited
16 527 130 Dealership – The Glen
Multifranchise
Boundary Road, Oakdene
Gauteng Portion 1 of Erf 730 Oakdene 2005 4 100
IH Mobility Holdings
UK
16 381 550 Dealership Land at Spinakker Road,
Gloucester
Gloucester Land at Spinakker Road, Gloucester 2017 2 769
Motus Corporation
Proprietary Limited
16 261 311 BKB Bond Store 1539 South Coast Road,
Durban
KwaZulu-Natal Portion 2 of Erf 14 Umlaas, Remaining
Extent of Portion 3 of Erf 14 Umlaas &
Remaining Extent of Erf 45 Umlaas
2005 19 459
Motus Group Limited 16 252 276 Dealership – Honda
Northcliff
8 & 10 Monkor Road, Kelland,
Northcliff
Gauteng Erven 57 & 58 Kelland 2004 3 560
Motus Group Limited 16 243 739 Dealership – Lindsay Saker
Alberton (VW)
Cnr Leonard Road &
Elandsfontein Drive, Alberton
Gauteng Erven 8 & 11 Newmarket Park 2002 10 545
Motus Corporation
Proprietary Limited
16 213 570 Dealership – Auto Pedigree 9 Dakota Crescent, Airport
Park, Germiston
Gauteng Erf 133 Airport Park Ext 4 2012 4 390
Motus Group Limited 16 172 355 Dealership – Lindsay Saker
Fourways (VW)
William Nicol Drive (Access
from Sunrise Boulevard),
Fourways
Gauteng Portion 2 of Erf 1180 Lone Hill Ext 56 2001 7 633
Motus Corporation
Proprietary Limited 16 126 801
Dealership – Hyundai
Edenvale (Showroom,
Workshop & Offices)
138 Van Riebeeck Avenue (Cnr
10th Street), Edenvale Gauteng Erf 616 Edenvale 2005 1 983
183
Owner NBV (ZAR) Property Type Location Province Property Description
Date of
Purchase
Area
(sqm)
IH Mobility Holdings
UK
15 992 913 Dealership Imperial Way, Commerce Park,
Frome, Somerset. BA11 2FD
Frome Imperial Way, Commerce Park, Frome,
Somerset. BA11 2FD
2008 1 107
Motus Corporation
Proprietary Limited
15 870 856 Dealership – Diep River
Multifranchise
193 – 195 Main Road, Diep
River
Western Cape Erf 78949 Cape Town 2011 1 953
Motus Group Limited 15 549 300 Panel Shop – Danmar
Westrand
1014 Anvil Road/278 Sifon
Street, Robertville, Roodepoort
Gauteng Erf 369 & 370 Robertville Ext 10 2010 8 714
Motus Corporation
Proprietary Limited
15 505 472 Dealership – Hyundai Airport
(Commercial Vehicles &
Workshop)
Cnr Catalina West &
Commando Streets,
Rhodesfield, Kempton Park
Gauteng Erf 1044 Rhodesfield 2006 3 435
Motus Corporation
Proprietary Limited
15 308 693 Dealership – Durban
Multifranchise
Cnr K E Masinga & Florence
Nzama Roads, Durban
KwaZulu-Natal Portion 1 of Erf 11391 Durban 2005 6 024
Motus Corporation
Proprietary Limited
15 226 811 Dealership – Renault
Northcliff
16/18 Monkor Road, Kelland,
Johannesburg
Gauteng Erven 61 & 62 Kelland 2004 4 690
Motus Corporation
Proprietary Limited
15 022 639 Workshop – Helderberg
Hyundai
83 Lourens Street (Cnr
Industria Street), Strand Halt,
Somerset West
Western Cape Erf 3749 Somerset West 2007 1 183
IH Mobility Holdings
UK
14 684 457 Dealership Fengate, Peterborough PE1
5XG
Peterborough Fengate, Peterborough PE1 5XG 2006 Not
specified
Pentagon Motor
Holdings Limited
14 480 928 Dealership Stores Road, Derby Derby Stores Road, Derby 2017 Not
specified
Motus Corporation
Proprietary Limited
14 471 896 Warehousing & converted
dwelling/office – EZ-go &
Sonax
147 Newmarket Street,
Northriding
Gauteng Erven 132 – 134 Hoogland Ext 20 2003 21 227
Motus Corporation
Proprietary Limited
14 341 947 Pinetown Bond Store
5 – 9 Westgate Place,
Mariannhill
KwaZulu-Natal Portion 1 of Erf 17773 Pinetown 2004 84 134
Motus Corporation
Proprietary Limited
14 084 297 Southgate 1 Bond Store 59 Beechgate Crescent,
Southgate Industrial Park,
Umbogintwini
KwaZulu-Natal Erf 80 Umbogintwini 2005 19 559
Motus Corporation
Proprietary Limited
13 937 170 Showroom – Helderberg
Hyundai
Cnr Lourens Street & N2,
Strand Halt, Somerset West
Western Cape Erf 18750 Somerset West 2010 2 998
Motus Group Limited 13 919 417 Dealership – Imperial Ford &
Mazda Kroonstad
2 & 4 Brand Street, Kroonstad Free State Portion 4 of Erf 5372 and Erf 1096
Kroonstad; Unit 1 – 2 SS Gresar
2005 &
2006
4 236
Motus Group Limited 13 657 053 Dealership – Isuzu & Opel 6, 8 & 12 Grey Ave (Cnr
Voortrekker Road)
Gauteng Erven 129, 130 & 1407 Vereeniging 2016 7 931
Motus Group Limited 13 651 784 Dealership – Lindsay Saker
Airport (VW)
Cnr Catalina, Wellington &
Sunderland Streets,
Rhodesfield, Kempton Park
Gauteng Erven 67 – 71, 74, 75 & 1032, all of
Rhodesfield
1999, 2005,
2006 &
2014
14 646
IH Mobility Holdings
UK
13 116 131 Dealership Wrexham Road, Rhostyllen,
Wrexham LL14 4DP
Wrexham Wrexham Road, Rhostyllen, Wrexham LL14
4DP
2006 Not
specified
Motus Group Limited 12 736 691
Showroom & Covered
Parking – Imperial Auto
Auctions
Herman Road, Meadowdale,
Germiston Gauteng
Remaining Extent of Portion 1 of Erf 198
Meadowdale 2002 6 153
184
Owner NBV (ZAR) Property Type Location Province Property Description
Date of
Purchase
Area
(sqm)
Motus Corporation
Proprietary Limited
12 731 256 Dealership – Brackenfell
Hyundai
Cnr Old Paarl & Sending
Roads, St Michaels,
Brackenfell
Western Cape Erf 10852 Brackenfell 1996 4 772
Motus Group Limited 12 682 591 Dealership – Imperial Toyota
Randburg
59 North Road (Cnr Bram
Fischer Drive), Randburg
Gauteng Erf 37 Kensington B 1995 4 067
Motus Corporation
Proprietary Limited
12 442 156 Dealership – Hyundai Cnr Saffier Crescent & York
Street South, Tamsui Industria,
George
Western Cape Erf 20244 George 2013 5 545
Motus Corporation
Proprietary Limited
12 394 084 Dealership – Hyundai The
Glen
Boundary Road, Oakdene Gauteng Portion 2 of Erf 730 Oakdene 2005 4 100
Motus Corporation
Proprietary Limited
12 289 748 Dealership – Hyundai 74 Voortrekker Road (Cnr Hof
Street), Bellville
Western Cape Erf 11225 Bellville 2004 7 225
Motus Corporation
Proprietary Limited
12 210 500 Warehouse – Hyundai PDC 88 Connaught Road,
Beaconvale, Parow
Western Cape Erf 24706 Parow 2013 4 462
Motus Group Limited 12 123 233 Dealership – Imperial Ford &
Mazda Kempton Park
Cnr Catalina & Wellington
Streets, Rhodesfield, Kempton
Park
Gauteng Erven 673 & 1043 Rhodesfield 2004 &
2006
7 912
Motus Corporation
Proprietary Limited
11 821 987 Dealership – Northcliff
Multifranchise
12/14 Monkor Road, Kelland,
Johannesburg
Gauteng Erven 59 & 60 Kelland 2004 3 479
Motus Group Limited 11 665 869 Panel Shop – Danmar Auto
Refurbishers
39 Earp Street/61 Ophir-
Booysens Road/14 Hillard
Street/30 Kimberley-Booysens
Road, Johannesburg
Gauteng Erven 259, 260, 414 & 538 Ophirton 2010 7 747
IH Mobility Holdings
UK
11 629 407 Dealership Barnard Road, Bowthorpe,
Norwich NR5 9JB
Norwich Barnard Road, Bowthorpe, Norwich NR5
9JB
2006 Not
specified
Motus Corporation
Proprietary Limited
11 619 053 Dealership – Renault
Fourways
Cnr Noon and Sunrise
Boulevard, Fourways
Gauteng Portion 1 of Erf 1180 Lonehill Ext 56 2007 2 504
Motus Corporation
Proprietary Limited
11 466 965 Dealership – Hyundai
Bryanston
2973 William Nicol Drive,
Bryanston
Gauteng Remaining Extent & Portion 3, both of Erf 80
Bryanston
2003 6 197
Motus Group Limited 11 225 721 Commercial Dealership –
Imperial Commercials
Polokwane
81 19th Street, Industria,
Pietersburg
Limpopo Erf 1486 Pietersburg Ext 3 2000 3 263
Motus Corporation
Proprietary Limited
11 063 913 Dealership – Bloemfontein
Multifranchise
89 Church Street, Oranjesig,
Bloemfontein
Free State Remaining Extent of Portion 1 & Portion 2,
both of Erf 1916 Bloemfontein
2001 7 064
Motus Corporation
Proprietary Limited
10 510 146 Dealership – Alberton
Multifranchise
5 & 7 Voortrekker Road, New
Redruth, Alberton
Gauteng Erven 692 & 985 New Redruth 2003 5 948
Motus Corporation
Proprietary Limited
10 449 500 Dealership – Proposed
Hyundai Brakpan
2 Beechwood Drive, Brakpan Gauteng Portion 2 of Erf 3111 Dalpark Ext 19 2016 11 787
Motus Group Limited 9 978 269
Commercial Dealership –
Imperial Truck Center (Hino)
18 Jan Van Riebeeck Drive
(Cnr Epping Avenue), Elsies
River Industrial, Goodwood Western Cape Erf 33989 Goodwood 2013 9 341
185
Owner NBV (ZAR) Property Type Location Province Property Description
Date of
Purchase
Area
(sqm)
Motus Group Limited 9 940 478 Dealership – Lindsay Saker
East Rand Mall (VW)
Annabella Road (fronting onto
Rondebult Road), Bardene,
Boksburg
Gauteng Erf 1259 Bardene Ext 47 (Consolidated
Erven 1107 & 1108)
2006 6 436
IH Mobility Holdings
UK
9 347 282 Dealership 8 South Wardpark Court,
Cumbernauld, Glasgow, G67
3HE
Cumbernauld 8 South Wardpark Court, Cumbernauld,
Glasgow, G67 3HE
2006 Not
specified
Motus Group Limited 9 303 926 Depot – Europcar Pomona &
Auction Nation
Corner Sim & Tulbagh Roads,
Pomona
Gauteng Portion 134 of the Farm Rietfontein No. 32
IR
1996 20 690
Motus Group Limited 9 300 266 Panel Shop – Danmar Benoni 3 Goud Road, Goedeburg Ext
22, Benoni
Gauteng Erf 262 Goedeburg Ext 22 2011 6 794
Motus Corporation
Proprietary Limited
9 149 879 Workshop – Hyundai PDI
Centre
Cnr Turf & Main Reef Roads,
Anderbolt, Boksburg
Gauteng Erf 56 Anderbolt Ext 15 2009 9 410
Motus Corporation
Proprietary Limited
8 956 648 Dealership – Hyundai
Pietermaritzburg
198 Greyling Street/193 Boom
Street, Pietermaritzburg
KwaZulu-Natal Remaining Extent of Erf 2119
Pietermaritzburg; Portions 4 & 5 of Erf 2119
Pietermaritzburg
2004 3 549
Motus Corporation
Proprietary Limited
8 918 634 Dealership – Eastgate
Kawasaki
15 Spartan Crescent, Eastgate
Ext 3, Sandton
Gauteng Erf 137 Eastgate Ext 3 2004 4 000
IH Mobility Holdings
UK
8 447 453 Dealership Factory Road, Sandycroft,
Deeside, Flintshire CH5 2QJ
Chester Factory Road, Sandycroft, Deeside,
Flintshire CH5 2QJ
2006 Not
specified
Motus Group Limited 8 426 408 Showroom – Auto Pedigree
Parow
4 Fritz Spilhaus Avenue, Parow,
Cape Town
Western Cape Erf 22429 Parow 2014 1 232
Motus Group Limited 8 101 775 Showroom – Auto Pedigree
Montana Park
2173 Veda Avenue, Montana
Park, Pretoria North
Gauteng Portion 6 of Erf 2173 Montana Park 2007 3 088
Motus Corporation
Proprietary Limited
7 592 767 Dealership – Pinetown
Renault
156 Josiah Gumede Road,
Pinetown Central, Pinetown
KwaZulu-Natal Erf 2250 Pinetown 2002 3 656
Motus Group Limited 7 588 505 Dealership – Imperial Ford &
Mazda Diep River
64 Main Road, Diep River Western Cape Erf 166178 Cape Town 2005 4 691
Motus Group Limited 7 282 187 Showroom – Auto Pedigree
Goodwood
Frans Conradie Drive, N1 City,
Goodwood, Cape Town
Western Cape Erf 39227 Goodwood 2005 3 587
Motus Group Limited 7 011 570 Dealership – Lindsay Saker
Vereeniging (VW & Audi)
Cnr Johannesburg (R82) &
General Smuts Roads,
Duncanville, Vereeniging
Gauteng Remaining Extent of Erf 1060 & Erven 1061
– 1062 Duncanville Ext 4
2014 22 374
Motus Group Limited 6 800 000 Commercial Dealership
– Magnis Bloemfontein
109 Fritz Stockenstrom Street
(Rear entrance from Harry
Watkins Street), Ooseinde
Free State Erven 19033 & 27943 Bloemfontein 2011 4 309
Motus Corporation
Proprietary Limited
6 745 621 Vacant land Meridian Drive, Umhlanga
Rocks
KwaZulu-Natal Portion 10 of Erf 2527 Umhlanga Rocks 2008 4 224
Motus Group Limited 6 722 091 Dealership – Imperial Toyota
Johannesburg
Cnr Kruger & Commissioner
Streets, Johannesburg CBD
Gauteng Erven 835 – 836; 841 – 842 & 1249 City &
Suburban
2000 &
2006
2 409
Motus Corporation
Proprietary Limited
6 702 942 Dealership – Hyundai
Heidelberg
3 Meyer Street (Cnr Meyer &
Smit Streets), Heidelberg
Gauteng Portion 1 of Erf 420 Heidelberg & Erf 6148
Heidelberg
2010 &
2012
2 974
Motus Group Limited 6 471 398 Vacant land
4 Wille Street (off R40),
Riverside Park, Nelspruit Mpumalanga
Remaining Extent of Erf 220 Riverside Park
Ext 20 2011 21 138
186
Owner NBV (ZAR) Property Type Location Province Property Description
Date of
Purchase
Area
(sqm)
Motus Corporation
Proprietary Limited
6 242 551 Training Centre – Kia 93/95 8th Avenue, Edenvale Gauteng Portions 9 & 11 of Erf 24 Edenvale 2006 1 982
Motus Corporation
Proprietary Limited
6 037 501 Dealership – Route 24
Renault
Cnr Herman & Kuschke Roads,
Meadowdale, Germiston
Gauteng Erf 184 Meadowdale Ext 3 2005 4 857
Motus Group Limited 5 606 268 Dealership – Auto Pedigree
Bloemfontein – Church Street
86 Church Street, Bloemfontein Free State Unit 37 SS Fernette 2008 3 026
Motus Group Limited 5 452 655 Showroom – Auto Pedigree
Kempton Park
3 Mars Street, Rhodesfield,
Kempton Park
Gauteng Erf 7 Rhodesfield 2005 1 358
Motus Corporation
Proprietary Limited
5 322 075 Dealership – George
Multifranchise
Cnr York Street & P.W. Botha
Boulevard, Tamsui Industria,
George
Western Cape Erf 14784 George 2001 6 492
Motus Group Limited 5 069 164 Dealership – Isuzu 90 Krogh Street, Makhado Limpopo Erf 3304 Louis Trichardt 2000 5 710
Motus Group Limited 5 000 000 Dealership – Imperial
Caravans Alberton
4, 8 & 10 Nansen Place/37
Purcell Street/119 & 125 South
Rand Service Road, Tulisa
Park, Johannesburg
Gauteng Erven 121 – 124; Portion 1 of Erf 126 &
Portion 1 of Erf 127, all of Tulisa Park
2012 6 075
Motus Corporation
Proprietary Limited
4 981 071 Offices (Converted House) 22 Boeing Road East,
Dunvegan, Edenvale
Gauteng Erf 403 Dunvegan 1995 1 122
Motus Corporation
Proprietary Limited
4 975 680 Showroom – Hyundai Airport 7 & 9 Catalina West Street (Cnr
Catalina West & Commando
Streets), Rhodesfield, Kempton
Park
Gauteng Erven 8 & 9 Rhodesfield 2005 3 312
Motus Group Limited 4 776 304 Dealership – Lindsay Saker
Welkom (VW & Audi)
5 Osprey Road (Cnr Jan
Hofmeyr & Arrarat Roads),
Welkom
Free State Erf 6 Welkom 1999 8 208
Motus Group Limited 4 214 978 Dealership – Nissan
Kimberley
1 Elliott Street (Cnr Elliott
Street, Cecil Sussman Road
(N12) & the Barkley West Road
(R31))
Northern Cape Remaining Extent of Erf 7368 Kimberley 2005 6 557
Motus Group Limited
3 250 000 Covered Parking – Auto
Pedigree Wholesalers
Anson Street, Rhodesfield,
Kempton Park
Gauteng Erven 30 & 31 Rhodesfield 2012 2 467
Motus Group Limited 3 069 811 Vacant land Knysna Street, Eden Meander,
George
Western Cape Erf 26137 George 2013 2 556
Motus Group Limited 3 000 000 Dealership – Vacant
(Formerly Isuzu & Auto
Pedigree)
2 Edison Boulevard (Cnr Jan
Van Riebeeck), Vanderbijl Park
Gauteng Erf 34 Vanderbijl Park Central East No. 6 2005 2 450
Motus Group Limited 2 607 116 Dealership – Vacant
(Formerly Cargo Motors –
Mercedes Benz)
Cnr Fourth Avenue & Twelfth
Street, Springs
Gauteng Erf 1908 and Remaining Extent of Erf 1239,
both of Springs
2003 4 444
Motus Group Limited 1 918 459 Manufacturing plant –
Jurgens Ci – Ga- Rankuwa
Main Road, Ga-Rankuwa
Industrial
Gauteng Erven 1 – 3 Ga-Rankuwa Industrial 2015 57 984
Motus Group Limited 1 840 007
Sectional Title Offices –
Vacant
Units 9 & 10, 130 Boeing Road
East, Bedfordview Gauteng Units 9 & 10 SS Scherre Park 2011 387
187
Owner NBV (ZAR) Property Type Location Province Property Description
Date of
Purchase
Area
(sqm)
Motus Group Limited 1 661 050 Commercial Dealership –
Volvo (Lereko)
63 19th Street (Cnr Ninth
Avenue)
Limpopo Erf 6041 Pietersburg Extension 3 1995 6 705
Motus Group Limited 1 506 758 Dealership – Auto Pedigree
Bloemfontein – Zastron Street
Zastron Street, Bloemfontein
CBD
Free State Erven 622 & 26460 Bloemfontein 2004 & 2014 2 573
Motus Group Limited 1 437 292 Showroom – Auto Pedigree
Pretoria North
470 Rachel De Beer Street
(Cnr Danie Theron Road)
Gauteng Remaining Extent of Erf 950 Pretoria North 1995 1 275
Motus Group Limited 1 435 739 Showroom – Auto Pedigree
Krugersdorp
137 Luipaard Street (Cnr
Birmingham Street),
Krugersdorp
Gauteng Erven 321 – 323 Luipaardsvlei 2013 991
Motus Group Limited 249 585 Showroom – Auto Pedigree
Plumstead
9 Main Road, Plumstead Western Cape Erf 91480 Plumstead 2005 1 335
Rob Ferreira Motors
Proprietary Limited 50 101
Engen Filling Station & Feast
Restaurant – Rob Ferreira
Motors Kaapschehoop Road, Nelspruit Mpumalanga
Portion 79 (a portion of Portion 47) of the
Farm Besters Last No. 311 JT 1988 3 278
188
Principal immovable property leased by Motus are set out below:
Owner Property Type Location
Net/Gross
Rental
Monthly
(Rands)
Unexpired
term of
lease in
Months Area(m
2
)
Thomas Family Trust Dealership South Africa Kimberley 200 000 46 4 695
Spearhead Property Holdings Limited Dealership South Africa Cape Town 209 481 17 1 687
Transnet Limited Stock Yard South Africa Cape Town 210 321 12 280
Noor Trust Dealership South Africa Durban 210 876 8 3 205
Acsa Durban Rental outlet South Africa Durban 214 122 9 522
SAT Properties Limited Dealership South Africa Durban 231 260 34 8 250
Growthpoint Management Services
Proprietary Limited
Dealership South Africa Pretoria 233 232 4 5 583
Micawber 239 Proprietary Limited Dealership South Africa Johannesburg 236 298 12 4 397
Broll Property Group Proprietary Limited Building South Africa Johannesburg 238 403 16 4 351
Arnold Properties Dealership South Africa Cape Town 241 999 15 1 921
Passenger Rail Agency of South Africa
(Prasa)
Dealership South Africa Cape Town 254 165 27 8 163
Glenfairprop Proprietary Limited Dealership South Africa Cape Town 258 685 48 1 755
JHI Properties Proprietary Limited Building South Africa Boksburg 265 624 22 5 490
Orcinus Properties Proprietary Limited Dealership South Africa Cape Town 266 485 21 1 341
Sunshine Investments Proprietary Limited Dealership South Africa Cape Town 275 000 56 2 257
ACSA Johannesburg Rental outlet South Africa Johannesburg 283 894 9 713
ACSA Cape Town Rental outlet South Africa Cape Town 294 707 9 697
Mille Inv 187 Proprietary Limited Dealership South Africa Wonderboom 294 996 78 3 443
Blend Property 10 Dealership South Africa Johannesburg 316 895 52 3 064
Gemgrow Properties Dealership South Africa Pretoria 337 903 51 3 653
Haloworx Inv Proprietary Limited Dealership South Africa Durban 344 011 8 2 489
Paciscor Beleggings Dealership South Africa Cape Town 346 130 41 2 751
M&F Giuricich Developments Proprietary
Limited
Dealership South Africa Pretoria 402 800 39 5 519
Growtpoint Properties Limited Dealership South Africa Johannesburg 448 965 2 4 944
SA Retail Properties Dealership South Africa Durban 602 000 8 6 186
Silver Leaf Property Fund Dealership South Africa Johannesburg 707 898 22 7 048
Truzen Trust Warehouse/
offices
South Africa Durban 890 197 6 14 570
ACSA Dealership South Africa Johannesburg 1 262 628 12 315
TVS Enterprises Proprietary Limited Dealership Australia Traralgon 235 173 109 4 692
Long Reef Group Proprietary Limited Dealership Australia Chullora 250 337 36 1 703
JILS Property Trust Dealership Australia Traralgon 256 817 114 5 500
TVS Enterprises Proprietary Limited Dealership Australia Traralgon 324 852 109 4 200
M & G Hoskins
Proprietary Limited Dealership Australia Arncliffe 421 694 32 2 200
Melrose Park Transport Proprietary Limited Service Centre Australia Melrose Park 493 929 102 13 000
Stoneace Proprietary Limited Parts
Warehouse
Australia Smithfield 540 668 55 20 600
TVS Enterprises Proprietary Limited Dealership Australia Traralgon 561 209 109 20 000
Taleb Property Proprietary Limited Parts
Warehouse
Australia Arncliffe 738 553 8 6 000
Watts of Lydney Dealership United Kingdom Gloucester 206 878 5 Not specified
Sutton Road Limited Dealership United Kingdom Mansfield 206 878 3 Not specified
H W Coates Limited Dealership United Kingdom Newmarket 237 462 131 Not specified
Charles Warner Properties Limited Dealership United Kingdom Lincoln 257 907 80 Not specified
Arkley Commercial Property Limited Dealership United Kingdom Thurrock 310 316 130 Not specified
Thomas Roberts Estates Limited Dealership United Kingdom Lincoln 355 829 80 Not specified
Clowes Development (UK) Limited Dealership United Kingdom Derby 377 896 67 Not specified
New Crown Sharpes Limited Dealership United Kingdom Nottingham 380 655 35 Not specified
Arkley Commercial Property Limited Dealership United Kingdom Welham Green 563 166 130 Not specified
Sheffield Parkway LLP Dealership United Kingdom Sheffield 648 726 109 Not specified
189
ANNEXURE 6
SUBSIDIARY COMPANIES
Name
Date of
incorporation
Place
incorporated
Registration
number
Issued/
stated
share
capital
Securities
held
directly
or
indirectly
by Motus Listed Main business
Date on which
company
became
subsidiary
360 Plus Proprietary Limited 25 October 2011 South Africa 2011/127388/07 2 100% No Specialist in the development
and administration of
automotive service and
maintenance plans for the
new and used motor industry
1 March 2016
Accordian Investments
Proprietary Limited
28 October 2003 South Africa 2003/027086/07 45 000 000 60% No Import and distribution of Tata
vehicles and parts for South
Africa.
1 April
2004
African Car Hire Swaziland
Proprietary Limited
6 February 1968 Swaziland 10/1968 4 75% No Car rental 6 February
1968
African Car Hire Lesotho
Proprietary Limited
18 February 2008 Lesotho 2008/180 1 000 100% No Car rental 18 February
2008
Alert Engine Parts (Namibia)
Proprietary Limited
10 November 1969 Namibia 69/16988/07 2 100% No Wholesale and retail trade;
repair of motor vehicles,
motor cycles and personal
and household goods; hotels
and restaurants
1 July
2015
Amalgamated Automobile
Distributors Proprietary Limited
13 March 1972 South Africa 1972/002784/07 4 006 100% No Importer and distributor of
motor vehicles and related
parts and accessories.
22 February
2017
Amalgamated Automobile
Holdings Proprietary Limited
16 January 2012 South Africa 2012/006810/07 100 100% No Property rental company and
the import and distribution of
car care products.
22 February
2017
AMC Tanzania Limited 11 September 2014 Tanzania 111142 10 000
100% No Automotive distribution 11 September
2014
AMH Africa Proprietary Limited 27 March 2014 South Africa 2014/063620/07 120 100% No Automotive distribution 27 November
2014
AMH Kenya Limited 19 June 2014 Kenya 2014/147924 100 99% No Automotive distribution 19 June 2014
Associated Motor Holdings
(Namibia) Proprietary Limited
29 March 2000 Namibia 2000/154 401 100% No Motor vehicle dealership 12 March 2013
AMH Tanzania Limited 16 June 2014 Tanzania 109070 10 000 99,99% No Investment holding company 16 June 2014
190
Name
Date of
incorporation
Place
incorporated
Registration
number
Issued/
stated
share
capital
Securities
held
directly
or
indirectly
by Motus Listed Main business
Date on which
company
became
subsidiary
AMHA Properties Proprietary
Limited
20 October 2006 Australia 112 289 534 100 100% No Property company 20 October
2006
Anvil Premium Finance
Proprietary Limited
28 January 1998 South Africa 1998/001411/07 100 100% No Financial services: Factored
Commissions
26 June 2007
ARCO Motor Industries Co
Limited
30 November 1981 Taiwan 10607115980 6 106 800 60% No Motor vehicle parts agent 1 March 2018
Associated Car Supplies Limited 14 May 2014 Zambia 122355 100 99% No Automotive distribution 14 May 2014
Associated Motors Holdings
Blantyre Limited
30 June 2014 Malawi 13726 50 99% No Automotive distribution 30 June 2014
Australian Automotive Group
Proprietary Limited
27 July 1999 Australia 088817912 155 870 996 100% No Automotive sales and
servicing
1 April 2005
Auto Pedigree Proprietary
Limited
14 April 1969 South Africa 1969/005581/07 10 100 100% No Insurance broker on behalf of
various insurance companies
14 April 1969
Automotive Distributors Africa
Limited
9 February 2015 UAE 170264 100 100% No Import and export conduit 9 February 2015
Automotive Distributors Africa
Limited
13 August 2015 South Africa 2015/286662/10 100 100% No Import and export conduit 13 August 2015
Banoscene Proprietary Limited 8 September 2015
South Africa 2015/319160/07 1 000 100% No Property company 8 September
2015
Beekman Super Canopies
Namibia Proprietary Limited
1 September 2012 Namibia 2012/0651 100 100% No Manufacture, distribution and
retailing of fibreglass
canopies and related parts
for the light commercial
vehicle market.
1 September
2012
Beekman Super Canopies
Proprietary Limited
10 May 2005 South Africa 2005/014249/07 20 000 100% No Manufacture, distribution and
retailing of fibreglass
canopies and related parts
for the light commercial
vehicle market
10 May 2005
Boundless Trade 154 Proprietary
Limited
12 October 2000 South Africa 2000/025968/07 200 100% No Trading and investment in its
widest form including
property owning
22 February
2017
Brietta Trading Proprietary
Limited
1 November 2007 South Africa 2007/031442/07 100 100% No Importer and distributor of
motor vehicles and related
services
4 March 2011
Crown Motors Group Limited 31 July 2014 Kenya 2014/154157 1 000 100% No Automotive distribution 31 July 2014
Direct Shelf 126 Proprietary
Limited 22 March 2000 South Africa 2000/005399/07 100 100% No
Trading and investment as
principal in its widest form 2 May 2000
191
Name
Date of
incorporation
Place
incorporated
Registration
number
Issued/
stated
share
capital
Securities
held
directly
or
indirectly
by Motus Listed Main business
Date on which
company
became
subsidiary
Europcar South Africa
Proprietary Limited
8 December 2017 South Africa 2017/243996/07 100 100% No Car rental 8 December
2017
F & I Management Solutions
Proprietary Limited
21 February 2008 South Africa 2008/004511/07 100 100% No To provide finance and
insurance products to motor
dealerships and their
customers
12 January
2010
Future Automobile Distributors
Proprietary Limited
24 February 2012 South Africa 2012/037781/07 120 100% No Importer and distributor of
motor vehicles and related
parts and accessories.
22 February
2017
Gippsland Motor Group
Proprietary Limited
23 February 2006 Australia 118 504 475 2 700 000 75% No Motor dealership 1 October 2017
HGK Investments Forty Three
Proprietary Limited
16 May 2011 Namibia 2011/0287 100 100% No Investment and development
in all sectors, including but
not limited to the sale of
non-insurance related
aftermarket products
12 July 2011
Humberside Tail Lifts Limited 7 February 2000 United Kingdom 03920482 100 000 100% No Commercial vehicle tail lift
aftersales
3 November
2015
Hyundai Automotive (Botswana)
Proprietary Limited
26 April 1999 Botswana 99/1458 16 000 100% No Network dealer for Hyundai
Automotive South Africa.
24 November
2016
Hyundai Automotive South Africa
Proprietary Limited
26 July 1999 South Africa 1999/015934/07
1 000 100% No Importer and distributor of
Hyundai vehicles and parts
for Southern Africa
15 February
2000
IH Mobility Holdings (UK) Limited 12 May 2005 United Kingdom 05560602 103 100% No Intermediate holding
company in the UK, involved
in the commercial vehicle
market, from light commercial
to medium, heavy and
extra-heavy commercial
vehicles. It sells new and
used vehicles and vans as
well as related financial
services, parts and servicing.
11 April 2006
Imperial Airport Car Rental
Namibia Proprietary Limited 30 October 2003 Namibia 2003/636 100 75% No Car rental
30 October
2003
192
Name
Date of
incorporation
Place
incorporated
Registration
number
Issued/
stated
share
capital
Securities
held
directly
or
indirectly
by Motus Listed Main business
Date on which
company
became
subsidiary
Imperial Car Imports Proprietary
Limited
9 July 1955 South Africa 1955/002111/07 5 000 100% No Imperial Car Imports has a
60% interest in Renault SA
Proprietary
Limited.
15 May 2000
Imperial Car Rental Botswana
Proprietary Limited
8 June 1988 Botswana 1988/564 100 99% No Car rental 8 June 1988
Imperial Commercials Limited 23 March 1960 United Kingdom 0653665 560 000 100% No Commercial vehicles
dealership network with
franchise agreements with
DAF Trucks, MAN, Isuzu
Truck (UK), Volkswagen,
Ford, Nissan and Fiat.
11 April 2006
Imperial Daihatsu Proprietary
Limited
3 October 1968 South Africa 1968/011636/07 1 000 000 100% No Importers of motor vehicles,
motor vehicle parts and
accessories
30 May 2000
Imperial Dealership Finance
Products And Services
Proprietary Limited
10 December 2004 South Africa 2004/035245/07 100 100% No Financial intermediary that
acts on behalf of various
insurance companies.
10 December
2004
Imperial Green Mobility
Proprietary Limited
15 July 2004 South Africa 2004/019749/07 900 100% No Golf cart distribution 1 February 2016
Imperial Motors Limited 19 February 1953 Malawi 310 5 000 51% No Auctioneers, valuators,
commissioning agents,
brokers, assessors of
insurance claims, arbitrators,
wholesale and retail general
merchants, exporters,
importers and manufacturers’
and wholesalers’
representatives
1 February 2016
Imperial Motors Zambia Limited 3 July 2014 Zambia 123935
10 000 90% No Automotive distribution 3 July 2014
Bumpa Auto Proprietary Limited
(K2017393047)
06 September 2017 South Africa 2017/393047/07 100 100% No Digital commerce platform 6 September
2017
Kaalfontein Yard Proprietary
Limited 1 August 2006 South Africa 2006/023937/07 1 000 100% No Warehouse property 1 July 2017
Kia Motors South Africa
Proprietary Limited
26 March 1968 South Africa 1968/003273/07 25 000 100% No Importer and distributor of Kia
vehicles and parts for South
Africa.
21 January
2000
Konvoi Proprietary Limited 18 May 2017 South Africa 2017/217199/07 1 000 100% No Empowerment holding
company
18 May 2017
Liquid Capital Proprietary
Limited 12 June 2001 South Africa 2001/012511/07 600 100% No
Financial and associated
services
30 January
2002
193
Name
Date of
incorporation
Place
incorporated
Registration
number
Issued/
stated
share
capital
Securities
held
directly
or
indirectly
by Motus Listed Main business
Date on which
company
became
subsidiary
Midas Limited 1 March 1968 South Africa 1968/002260/06 29 734 056 100% No Automotive aftermarkets parts
wholesaler and retailer
10 December
2008
Motor Compliance Solutions
Proprietary Limited
17 January 2001 South Africa 2001/000890/07 100 100% No Compliance solutions for
motor dealers (Insurance
broking services)
22 June 2017
Motor Happy Proprietary Limited 30 January 2014 South Africa 2014/020352/07 1 000 100% No Financial and associated
services
2 September
2014
Motus Australia Proprietary
Limited
29 March 2005 Australia 113 527 263 95 222 222 100% No Holding company for the retail
operations for Ford,
Mitsubishi and Renault,
through six dealerships in the
Sydney area.
29 March 2005
Motus Capital Proprietary Limited 13 April 2017 South Africa 2017/164032/07 300 100% No Domestic treasury
management company and
holding company of foreign
subsidiaries
13 April 2017
Motus Corporation Proprietary
Limited
17 February 1969 South Africa 1969/002321/07 500 000 100% No Holding company of South
African subsidiaries and
operations
23 June 2000
Motus Group Limited 25 August 1983 South Africa 1983/009088/06 165 100% No Holding company of Retail
and Rental and Aftermarket
Parts divisions
31 May 2018
Motus Wholesale Proprietary
Limited
21 April 2011
Australia 150568 157 12 100% No Online wholesaling business 21 April 2011
MSure Proprietary Limited 17 September 2002 South Africa 2002/022941/07 1 010 000 100% No Primarily engaged in the
business of selling and
administering warranties,
extend warranties and service
and maintenance plans
26 June 2017
National Automobile Parts
Association Limited
6 December 1971 South Africa 1971/013578/07 1 912 500 100% No Co-operative buying and
marketing organisation for
independent parts and
accessory outlets in Southern
Africa
10 December
2008
Orwell Trucks Limited 19 April 1991 United Kingdom 02603387 86 796 100% No Mercedes-Benz commercial
vehicle dealerships
12 February
2013
Paint Tech Maintenance
Proprietary Limited
25 February 2010 South Africa 2010/003758/07 100 100% No Administration of
Maintenance Contracts
23 June 2017
Pakenham Mega Motors
Proprietary Limited 12 January 2015 Australia 603 644 999 10 75% No Motor dealership 1 October 2017
194
Name
Date of
incorporation
Place
incorporated
Registration
number
Issued/
stated
share
capital
Securities
held
directly
or
indirectly
by Motus Listed Main business
Date on which
company
became
subsidiary
Pearl Automotive Proprietary
Limited
28 July 2000 South Africa 2000/017238/07 100 100% No Importation, sales and service
of MG Rover motor vehicles
for South Africa
1 September
2001
Pentagon (Huddersfield) Limited 10 January 2011 United Kingdom 7486004 350 000 100% No Motor dealership 1 September
2017
Pentagon (Nottingham) Limited 11 March 2011 United Kingdom 7561309 150 000 100% No Motor dealership 1 September
2017
Pentagon (Burton On Trent)
Limited
27 January 2005 United Kingdom 5344870 500 000 100% No Motor dealership 1 September
2017
Pentagon (Mazda) Limited 17 June 2015 United Kingdom 9643758 75 000 100% No Motor dealership 1 September
2017
Pentagon (Mitsubishi) Limited 17 June 2015 United Kingdom 9643736 75 000 100% No Motor dealership 1 September
2017
Pentagon (Oldham) Limited 5 October 2010 United Kingdom 7116762 250 000 100% No Motor dealership 1 September
2017
Pentagon Chrysler (Barnsley)
Limited
5 October 2010 United Kingdom 7116764 75000 100% No Motor dealership 1 September
2017
Pentagon Chrysler (Manchester)
Limited
26 October 2009 United Kingdom 07057305 75 000 100% No Motor dealership 1 September
2017
Pentagon Motor Holdings
Limited
13 April 2006 United Kingdom 5780177 10 578 452 100% No Motor dealership 1 September
2017
Reeve Derby Limited 6 December 2000
United Kingdom 4120259 2 201 731 100% No Motor dealership
1 September
2017
Reeve (Lincoln) Limited 13 January 2015 United Kingdom 05582303 1 000000 100% No Motor dealership 1 September
2017
Renault South Africa Proprietary
Limited
27 March 2001 South Africa 2001/006874/07 1 480 60% No Through distribution
agreements with Renault SAS
France, imports and
distributes Renault motor
vehicles and parts in South
Africa.
3 December
2013
S&B Commercials Plc 12 May 1982 United Kingdom 01635078 50 000 100% No
Mercedes-Benz Commercial
Vehicle dealerships located in
North London, Hertfordshire
and Essex.
5 September
2014
195
Name
Date of
incorporation
Place
incorporated
Registration
number
Issued/
stated
share
capital
Securities
held
directly
or
indirectly
by Motus Listed Main business
Date on which
company
became
subsidiary
SA Vehicle Maintenance
Proprietary Limited
23 May 2000 South Africa 2000/009578/07 100 100% No Financial Services, Insurance
and Vehicle Warranties and
Maintenance
26 June 2017
SWT Group Proprietary Limited 12 October 2004 Australia 111 336 531 7 420 691 75% No Holding company for the
operation of 16 vehicle
dealerships in Australia.
1 October 2017
Taylormade Truck Bodies
Proprietary Limited
30 January 2014 South Africa 2014/020351/07 100000 100% No Manufacture of trucks 13 March 2014
Tempest South Africa Proprietary
Limited
8 December 2017 South Africa 2017/232547/07 100 100% No Car rental 8 December
2017
Trarlagon Motor Group
Proprietary Limited
12 September 2013 Australia 165 775 977 100 75% No Motor dealership 1 October 2017
Twin Dragons Proprietary Limited 24 October 2000 South Africa 2000/027015/07 100 100% No Importers and distributors of
motor vehicles, motor vehicle
parts and
26 June 2004
Virtual Sales Proprietary Limited 5 December 2012 South Africa 2012/216905/07 100 100% No Online sales 5 December
2012
Vivien Investments One Hundred
And Forty Eight Proprietary
Limited
20 July 2015 Namibia 2015/0713 100 100% No Property investment company 20 July 2015
VSL Holdings Proprietary Limited 26 October 2015 Australia 608 947 913 1 000 75% No Holding company 1 October 2017
VSL Motors
Proprietary Limited 26 October 2015 Australia 608 951 551 100 75% No Motor dealership 1 October 2017
196
ANNEXURE 7
DIRECTORSHIPS OF MOTUS DIRECTORS
The companies and partnerships of which the Directors of the Company have been directors or partners at
any time during the previous five years preceding the Last Practicable Date are set out below:
Osman Suluman Arbee
Current Designation
Imperial Holdings Director
Kia Motors South Africa Director
Imperial Daihatsu Director
Motus Corporation Director
Amalgamated Automobile Distributors Director
Motus Group Director
Hyundai Automotive South Africa Director
Twin Dragons Automotive Director
Renault South Africa Director
Accordian Investments Director
Lereko Mobility Director
C2 Computer Investments Director
Kaalfontein Yard Director
Brietta Trading Director
Amalgamated Automobile Holdings Director
Future Automobile Distributors Director
Automotive Distributors Africa Limited (Incorporated In Jebel Ali Free Zone,
UAE) Director
Motus Capital Director
AA and Zayzay Properties Director
Motus Financial Services Director
Motus Holdings Director
Mbuhle Property CC Member
Previous
Durand And Bowden Director
Auto Pedigree Director
Springbok Atlas Director
Distribution and Warehousing Network Director
Jurgens CI Director
Goscor Cleaning Equipment Director
Silverton Travel Director
Life Green Group Director
Ibl Asset Finance And Services Director
Tourism Investment Corporation Director
Tourism Holdings Rental S A Director
Ukhamba Holdings Director
Executive Carport Director
Car Hire Brokers Director
Royal Administrators Director
Amasondo Fleet Services Director
Fuelogic Director
Giuricich Bros Construction Director
Lereko Motors Director
197
Africa Automotive Aftermarket Solutions Director
UGS Investment Holdings Director
Ukhamba Green Services Director
Pandae Storage Systems (SA) Director
Evergreen Turf Director
Imperial Capital Director
Elbow And Essiena Director
S A Instant Lawn Director
Gage Car Rental Director
Pandae Green Solutions Director
LGG Investment Holdings Director
Ockert Jacobus Janse Van Rensburg
Current Designation
Kia Motors South Africa Director
Imperial Daihatsu Director
Motus Corporation Director
Amalgamated Automobile Distributors Director
Motus Group Director
LOR Technologies Director
Hyundai Automotive South Africa Director
Carfind Director
Twin Dragons Automotive Director
Renault South Africa Director
C2 Computer Investments Director
Brietta Trading Director
Amalgamated Automobile Holdings Director
Future Automobile Distributors Director
AMH Africa Director
Automotive Distributors Africa Limited (Incorporated In Jebel Ali Free Zone,
UAE) Director
Motus Capital Director
Motus Financial Services Director
Motus Holdings Director
Previous
C2 Computer Investments
Company
Secretary
Nib 5 Share Block Director
Nib 6 Share Block Director
Chesterfield Place Home Owners Association Director
Foodcorp Director
Foodcorp Consumer Brands Director
New Foodcorp Holdings Director
Sales Pal Director
198
Graham Wayne Dempster
Current Designation
AECI Director
Imperial Holdings Director
Genbel Securities Director
Sun International Non-Executive Director
Telkom SA Non-Executive Director
Long4Life Non-Executive Director
Motus Holdings Non-Executive Director
Sanlam Investment Holdings Non-Executive Director
Previous
Nedbank Director
Nedbank Group Director
Sanlam Credit Conduit Director
Ashley (Oshy) Tugendaft
Current Designation
Imperial Holdings Director
Evergrowth Investments Director
Brinda Investments Director
Zonke-Unicode Director
Weba Investments Executor
Sandton Nominees Director
Alcari 595 Member
Alviva Holdings Non-Executive Director
Motus Holdings Non-Executive Director
Previous
African Phoenix Investments Director
Residual Debt Services Director
Phumzile Langeni
Current Designation
Imperial Holdings Non-Executive Director
The Ridge School Director
King Civil Engineering Contractors Director
SA Taxi Finance Holdings Director
Born Free Investments 55 Director
Summer Sun Trading 105 Director
Two Ships Trading 191 Director
Lloyd Vincent Investment Holdings Director
Afropulse Group Director
Primedia Non-Executive Director
Classic Number Trading 186 Director
Transaction Capital Non-Executive Director
Primedia Holdings Non-Executive Director
Libstar Holdings Director
Onicaphase Director
Mestotex Director
Cornwall Crescent Director
Tone Site Trading Director
199
Wise Whale Trading Director
Kumkani Africa Director
Massmart Holdings Non-Executive Director
Motus Corporation Non-Executive Director
Metrofile Holdings Non-Executive Director
Mineworkers Investment Company (RF) Non-Executive Director
Redefine Properties Non-Executive Director
Motus Holdings Non-Executive Director
Previous
S F F Association Director
SEF Director
Rencap Securities Director
RPC Astrapak Director
Transaction Capital Risk Services Director
Penquin Airtime Director
Ga-Phasha Platinum Mine Director
Lesego Platinum Mining Director
Gwen To Oxford 2 Director
St Mary’s School Waverley Foundation Director
Luxehold Director
Transaction Capital Risk Services Holdings Director
Kwazulu Natal Property Development Holdings Non-Executive Director
Peermont Global Holdings I Non-Executive Director
Peermont Global Non-Executive Director
Peermont Global Holdings II Non-Executive Director
Master Plastics Non-Executive Director
Thembisa Skweyiya
Current Designation
Rothschilds South Africa Proprietary Limited Non-Executive Director
Famous Brands Limited Non-Executive Director
Skweyiya Investment Holdings Non-Executive Director
Sumitomo Rubber South Africa Non-Executive Director
Imperial Holdings Limited Non-Executive Director
Previous
None
Roddy Sparks
Current Designation
Phembani Group Non-Executive Director
Truworths International Non-Executive Director
Imperial Holdings Limited Non-Executive Director
Trencor Non-Executive Director
FirstRand Investment Management Holdings Non-Executive Director
Previous
Old Mutual Life Assurance Company (South Africa) Limited Non-Executive Director
Old Mutual Asset Managers (South Africa) Limited Non-Executive Director
Old Mutual Unit Trust Limited Non-Executive Director
Old Mutual Life Assurance Company (Zimbabwe) Limited Non-Executive Director
200
Mfundiso Johnson Ntabankulu Njeke
Current Designation
MMI Group Director
Sasol Director
Corpclo 1934 Director
Dlondlobala Capital Director
4 Africa Exchange Director
Magola Properties Director
Old Acres Property Group Director
Ladomode Director
Abilia Trading 152 Director
Bethesda Fountain of Healing Association (NPC) Director
Hiroples Director
KSJ Global Properties Director
Nonkwali Investments Director
Mthakatye Property Investments Director
Bonds4Jobs (NPC) Director
Datatec Director
MMI Holdings Director
Moody’s Investor Service South Africa Director
Nkunzi Investment Holdings Director
Evening Star Trading 481 Director
Serengethi Properties Director
Inkaba Coal Director
Sameh Properties Director
Centuria 376 Director
NewShelf 1039 Director
E-Sync Director
Buena Vista Trading 194 Director
NewShelf 1089 Director
Cheetamark Director
Silver Unicorn Coal and Minerals Director
Previous
Barloworld Director
Metropolitan Life Director
Credit Guarantee Insurance Corporation of Africa Director
Master Currency Director
APM Terminals is Cape Town Director
Adcorp Holdings Director
Hanopoint Director
Arcelormittal South Africa Director
Compass Group Southern Africa Director
Firhold Director
AMEC Foster Wheeler South Africa Director
Mobile Telephone Network Holdings Director
Sandvik Mining RSA Director
Makhugiso Investments Director
MTN Group Director
Vunani Private Clients Stockbroking Director
IBL Asset Finance and Services Director
Business Against Crime South Africa Director
Equites Investments 1 Director
Kagiso Property Holdings Director
Thuthuka Education Upliftment Fund Director
Resilient Reit Director
Kagiso Enterprises Rural Private Equity Fund Director
Kadd Capital Director
201
Kagiso Strategic Investments Director
IPT Holdings Director
Equites Investments 1 Director
Kagiso Sizanani Capital (RF) Director
Brolink Director
Off the Shelf Investments 109 Director
Off the Shelf Investments 127 Director
Off the Shelf Investments 168 Director
Main Street 336 Director
Kagiso Infrastructure Investments Director
Kagiso Strategic Investments III Director
Infrastructure Empowerment Fund Managers Director
Saleh Mayet
Current Designation
Anglo American South Africa Investments Director
South Africa Coal Operations Director
Anglo American South Africa Director
Anglo Operations Director
Longboat Director
Vergelegen Wines Director
Longmeadow Home Farm Director
Resident Nominees Director
Anseld Holdings Director
Main Place Holdings Director
Fermain Nominees Director
Dido Nominees Director
Anglo American Zimele Director
Anglo American Group Employee Shareholder Nominees Director
Chamfron (Incorporated in the British Virgin Island) Director
High Ground Investments Director
Anglo South Africa Director
Balgo Nominees Director
Anglo American EMEA Shared Services Director
Newshelf 480 Director
Anglo South Africa Capital Director
Anglo Corporate Enterprises Director
Exxaro Resources Director
Anglo American Corporation of South Africa Director
Tenon Investment Holdings Director
Ambase Investment Africa (Zambia) Director
Anglo American SA Finance Director
Epoch Investment Holdings (RF) Director
Ambase Investment Africa (DRC) Director
Anglo Coal Investment Africa (Botswana) Director
Ambase Investment Africa (Tanzania) Director
Ambase Investment Africa (Botswana) Director
Ambase Investment Africa (Namibia) Director
Tarl Investment Holdings (RF) Director
Epoch Two Investment Holdings (RF) Director
Previous
Mbulwa Estate Director
Distribution and Warehousing Network Director
Anglo American Inyosi Coal Director
Scaw South Africa Director
202
ANNEXURE 8
RELEVANT PROVISIONS FROM THE MEMORANDUM OF INCORPORATION OF
MOTUS
The salient features of the Company’s MOI are set out below. Please note that the salient features do not
constitute an exhaustive summary of the provisions of the MOI but highlight certain key aspects only.
Accordingly, the MOI should be read in its entirety for a full appreciation of its contents.
Definitions
Act means the Companies Act, No. 71 of 2008, as amended, consolidated or re-enacted from time to time,
including all Schedules to such Act and the Regulations;
Director means a member of the Board, as contemplated in section 66, or an alternate director, and includes
any person occupying the position of a director or alternate director, by whatever name designated;
Republic means the Republic of South Africa;
Securities means any Shares, debentures or other instruments, irrespective of their form of title, issued or
authorised to be issued by the Company;
Share means one of the units into which the proprietary interest in the Company is divided;
1. COMPOSITION AND POWERS OF THE BOARD OF DIRECTORS
1.1 Number of Directors
1.1.1 Unless the minimum number of Directors, if any, that the Company must have to satisfy any
requirement in terms of the Act to appoint any Committee which it is obliged to appoint in
terms of the Act or this Memorandum of Incorporation is greater than 4 (four), the number
of Directors shall, unless otherwise determined by a unanimous resolution of all the
Shareholders, be not less than 4(four).
1.1.2 No person shall be appointed or elected as a Director if such person is in terms of the Act
or in terms of this Memorandum of Incorporation ineligible to serve or is disqualified from
serving as a Director.
1.1.3 The Directors shall be elected in terms of section68(1) by the persons entitled to exercise
voting rights in such an election, being the Shareholders of the Company and the holders
of any other Securities of the Company to the extent that the terms on which such Securities
were issued confer such rights. No appointment of a Director shall be valid if passed by
resolutions in accordance with section60.
1.2 Appointment and nomination of Directors
1. 2.1 If the number of Directors falls below the minimum number fixed in accordance with this
Memorandum of Incorporation, the remaining Directors must as soon as possible and
in any event not later than 3 (three) months from the date that the number falls below
such minimum, fill the vacancy/ies in accordance with Article 23.1.3 or convene a general
meeting for the purpose of filling the vacancies, and the failure by the Company to have the
minimum number of Directors during the said 3 (three) month period does not limit or negate
the authority of the Board or invalidate anything done by the Board while their number is
below the minimum number fixed in accordance with this Memorandum of Incorporation.
1.2.2 The Directors in office may act notwithstanding any vacancy in their body, but if after the
expiry of the 3 (three) month period contemplated in Article 23.2.1 their number remains
below the minimum number fixed in accordance with this Memorandum of Incorporation,
they may, for as long as their number is reduced below such minimum, act only for the
purpose of filling vacancies in their body in terms of section 68(3) or of summoning general
meetings of the Company, but not for any other purpose.
1.2.3 Any shareholder of the Company or Director in office has a right to nominate one or more
Directors in accordance with this Memorandum of Incorporation.
203
1.2.4 In any election of Directors–
1. 2.4.1 the election is to be conducted as a series of votes, each of which is on the
candidacy of a single individual to fill a single vacancy, with the series of votes
continuing until all vacancies on the Board have been filled; and
1.2.4.2 in each vote to fill a vacancy–
1.2.4.2.1 each vote entitled to be exercised may be exercised once; and
1.2.4.2.2 the vacancy is filled only if a majority of the votes exercised support
the candidate.
1.2.5 The Company shall only have elected Directors and there shall be no appointed or ex offıcio
Directors as contemplated in section66(4).
1.3 Eligibility, resignation and retirement of Directors
1. 3.1 Other than satisfying the qualification and eligibility requirements set out in section69, a
person need not satisfy any further eligibility requirements or qualifications to become or
remain a Director or a prescribed officer of the Company.
1.3.2 No Director shall be appointed for life or for an indefinite period and the Directors shall
rotate in accordance with the following provisions of this Article23.3.2–
1. 3. 2.1 at each annual general meeting referred to in Article18.4, 1/3(one third) of the
Directors for the time being, or if their number is not 3(three) or a multiple of
3(three), the number nearest to 1/3(one third), but not less than 1/3(one third),
shall retire from office;
1.3.2.2 the Directors to retire in every year shall be those who have been longest in office
since their last election, but as between persons who were elected as Directors
on the same day, those to retire shall, unless they otherwise agree among
themselves, be determined by lot;
1.3.2.3 a retiring Director shall be eligible for re-election;
1.3.2.4 the Company, at the general meeting at which a Director retires in the above
manner, or at any other general meeting, may fill the vacancy by electing a person
thereto, provided that the Company shall not be entitled to fill the vacancy by
means of a resolution passed in accordance with section60;
1.3.2.5 if at any meeting at which an election of Directors ought to take place the offices
of the retiring Directors are not filled, unless it is expressly resolved not to fill
such vacancies, the meeting shall stand adjourned and the further provisions of
this Memorandum of Incorporation, including Articles18.2 to 18.6 (inclusive) will
apply mutatis mutandis to such adjournment.
1.3.3 The Board shall, through its Nomination Committee (if such Nomination Committee has
been constituted in terms of Article30), provide the Shareholders with a recommendation
in the notice of the meeting at which the re-election of a retiring Director is proposed, as to
which retiring Directors are eligible for re-election, taking into account that Director’s past
performance and contribution.
1.3.4 A vacancy in the number of Directors shall only arise in the event of–
1. 3.4.1 any elected Director ceasing to hold office or becoming disqualified from holding
office as such for any reason; and/or
1.3.4.2 the Shareholders resolving to increase the number of elected Directors; and/or
1.3.4.3 any of the other circumstances contemplated in section70(1) arising.
1.4 Powers of the Board
1.4.1 The Board has the power to–
1.4.1.1 appoint or co-opt any person as Director, whether to fill any vacancy on the
Board on a temporary basis, as set out in section 68(3), or as an additional
Director provided that such appointment must be confirmed by the Shareholders,
in accordance with Article 23.1.3, at the next annual general meeting of the
Company, as required in terms of section70(3)(b)(i); and
204
1.4.1.2 exercise all of the powers and perform any of the functions of the Company, as
set out in section66(1),
and the powers of the Board in this regard are not limited or restricted by this Memorandum
of Incorporation.
1.4.2 The Directors may at any time and from time to time by power of attorney appoint any
person or persons to be the attorney or attorneys and agent(s) of the Company for such
purposes and with such powers, authorities and discretions (not exceeding those vested
in or exercisable by the Directors in terms of this Memorandum of Incorporation) and for
such period and subject to such conditions as the Directors may from time to time think fit.
Any such appointment may, if the Directors think fit, be made in favour of any company, the
members, directors, nominees or managers of any company or firm, or otherwise in favour
of any fluctuating body of persons, whether nominated directly or indirectly by the Directors.
Any such power of attorney may contain such provisions for the protection or convenience
of persons dealing with such attorneys and agents as the Directors think fit. Any such
attorneys or agents as aforesaid may be authorised by the Directors to sub-delegate all or
any of the powers, authorities and discretions for the time being vested in them.
1.4.3 Save as otherwise expressly provided herein, all cheques, promissory notes, bills of
exchange and other negotiable or transferable instruments, and all documents to be
executed by the Company, shall be signed, drawn, accepted, endorsed or executed, as
the case may be, in such manner as the Directors shall from time to time determine.
1.4.4 All acts performed by the Directors or by a Committee of Directors or by any person acting
as a Director or a member of a Committee shall, notwithstanding that it shall afterwards
be discovered that there was some defect in the appointment of the Directors or persons
acting as aforesaid, or that any of them were disqualified from office, be as valid as if
every such person had been duly appointed and was qualified and had continued to be a
Director or member of such Committee.
2. DIRECTORS’ COMPENSATION AND FINANCIAL ASSISTANCE
2.1 The Company may pay remuneration to the Directors for their services as Directors in accordance
with a special resolution approved by the Shareholders within the previous 2(two) years, as set out
in section66(8) and (9), and the power of the Company in this regard is not limited or restricted by
this Memorandum of Incorporation.
2.2 Any Director who–
2.2.1 serves on any executive or other Committee; or
2.2.2 devotes special attention to the business of the Company; or
2.2.3 goes or resides outside the Republic for the purpose of the Company; or
2.2.4 otherwise performs or binds himself to perform services which, in the opinion of the
Directors, are outside the scope of the ordinary duties of a Director, may be paid such extra
remuneration or allowances in addition to or in substitution of the remuneration to which he
may be entitled as a Director, as a disinterested quorum of the Directors may from time to
time determine.
2.3 he Directors may also be paid all their travelling and other expenses necessarily incurred by them
in connection with–
2. 3 .1 the business of the Company; and
2.3.2 attending meetings of the Directors or of Committees of the Directors of the Company.
2.4 The Board may, as contemplated in and subject to the requirements of section45, authorise the
Company to provide financial assistance to a Director, Prescribed Officer or other person referred
to in section45(2), and the power of the Board in this regard is not limited or restricted by this
Memorandum of Incorporation.
205
3. BORROWING POWERS
3
.1 Subject to the provisions of Article28.2 and the other provisions of this Memorandum of Incorporation,
the Directors may from time to time–
3.4.1 borrow for the purposes of the Company such sums as they think fit; and
3.4.2 secure the payment or repayment of any such sums, or any other sum, as they think fit,
whether by the creation and issue of Securities, mortgage or charge upon all or any of the
property or assets of the Company.
3.1 The Directors shall procure (but as regards subsidiaries of the Company only insofar as by the
exercise of voting and other rights or powers of control exercisable by the Company they can so
procure) that the aggregate principal amount at any one time outstanding in respect of moneys so
borrowed or raised by–
3.1.1 the Company; and
3.1.2 all the subsidiaries for the time being of the Company (excluding moneys borrowed or raised
by any of such companies from any other of such companies but including the principal
amount secured by any outstanding guarantees or suretyships given by the Company or
any of its subsidiaries for the time being for the indebtedness of any other company or
companies whatsoever and not already included in the aggregate amount of the moneys
so borrowed or raised), shall not exceed, to the extent applicable, the aggregate amount at
that time authorised to be borrowed or secured by the Company or the subsidiaries for the
time being of the Company (as the case may be).
4. DISTRIBUTIONS
4.1 Subject to the provisions of the Act, and particularly section46, the Company may make a proposed
distribution if such distribution–
4.1.1 is pursuant to an existing legal obligation of the Company, or a court order; or
4.1.2 is authorised by resolution of the Board in compliance with the JSE Listings Requirements.
4.2 No distribution shall bear interest against the Company, except as otherwise provided under the
conditions of issue of the Shares in respect of which such distribution is payable.
4.3 Distributions may be declared either free of or subject to the deduction of income tax and any other
tax or duty in respect of which the Company may be chargeable.
4.4 The Directors may from time to time declare and pay to the Shareholders such interim distributions
as the Directors consider to be appropriate.
4.5 All unclaimed distributions may be invested or otherwise made use of by the Directors for the
benefit of the Company until claimed, provided that distributions unclaimed for a period of 3 (three)
years from the date on which they were declared, in terms of the laws of prescription, may be
declared forfeited by the Directors for the benefit of the Company. The Directors may at any time
annul such forfeiture upon such conditions (if any) as they think fit. All unclaimed monies, other
than distributions, that are due to any Shareholder/s shall be held by the Company in trust for
an indefinite period subject, however, to the laws of prescription until lawfully claimed by such
Shareholder/s.
4.6 32.6 Any distribution, interest or other sum payable in cash to the holder of a Share may be paid
by cheque or warrant sent by post and addressed to–
4.6.1 the holder at his registered address; or
4.6.2 in the case of joint holders, the holder whose name appears first in the Securities Register
in respect of the share, at his registered address; or
4.6.3 such person and at such address as the holder or joint holders may in writing direct.
4.7 Every such cheque or warrant shall–
4.7.1 be made payable to the order of the person to whom it is addressed; and
4.7. 2 be sent at the risk of the holder or joint holders.
4.8 The Company shall not be responsible for the loss in transmission of any cheque or warrant or of
any document (whether similar to a cheque or warrant or not) sent by post as aforesaid.
206
4.9 A holder or any one of two or more joint holders, or his or their agent duly appointed in writing, may
give valid receipts for any distributions or other moneys paid in respect of a Share held by such
holder or joint holders.
4.10 When such cheque or warrant is paid, it shall discharge the Company of any further liability in
respect of the amount concerned.
4.11 A distribution may also be paid in any other way determined by the Directors, and if the directives
of the Directors in that regard are complied with, the Company shall not be liable for any loss or
damage which a Shareholder may suffer as a result thereof.
4.12 Without detracting from the ability of the Company to issue capitalisation Shares, any distribution
may be paid wholly or in part–
4.12.1 by the distribution of specific assets; or
4.12. 2 by the issue of Shares, debentures or securities of the Company or of any other company;
or
4.12. 3 in cash; or
4.12.4 in any other way which the Directors may at the time of declaring the distribution determine.
4.13 Where any difficulty arises in regard to such distribution, the Directors may settle that difficulty as
they think expedient, and in particular may fix the value which shall be placed on such specific
assets on distribution.
4.14 The Directors may–
4.14.1 determine that cash payments shall be made to any Shareholder on the basis of the value
so fixed in order to secure equality of distribution; and
4.14.2 vest any such assets in trustees upon such trusts for the benefit of the persons entitled to
the distribution as the Directors deem expedient.
4.15 Any distribution must be made payable to Shareholders registered as at a date subsequent to the
date of declaration thereof or the date of confirmation thereof, whichever is the later date.
4.16 Without limiting the provisions of Article32.1.2 above, all payments made to holders of Securities
listed on the JSE (“Listed Securities”) must be in accordance with the JSE Listings Requirements
and capital payments to holders of Listed Securities may not be made on the basis that it can be
called up again.
Motus Group Limited
“The salient features of the memorandum of incorporation (“MOI”) of Motus Group Limited, a major subsidiary
of the Company, are set out below. Please note that the salient features do not constitute an exhaustive
summary of the provisions of the MOI but highlight certain key aspects only. Accordingly, the MOI should be
read in its entirety for a full appreciation of its contents.
Definitions
“Act” means the Companies Act, No 71 of 2008, as amended, consolidated or re-enacted from
time to time, including all Schedules to such Act and the Regulations;
“Director” means a member of the Board as contemplated in section 66, or an alternate director,
and includes any person occupying the position of a director or alternate director, by whatever
name designated;
“Republic” means the Republic of South Africa;
“Securities” means any Shares, debentures or other instruments, irrespective of their form of title,
issued or authorised to be issued by the Company;
“Share” means one of the units into which the proprietary interest in the Company is divided;
207
5. COMPOSITION AND POWERS OF THE BOARD OF DIRECTORS
5.1 Number of Directors
5.1.1 In addition to the minimum number of Directors, if any, that the Company must have to
satisfy any requirement in terms of the Act to appoint any Committee which it is obliged to
appoint in terms of the Act or this Memorandum of Incorporation, the number of Directors
shall, unless otherwise determined by a unanimous resolution of all the Shareholders, be
not less than 4(four).
5.1.2 No person shall be appointed or elected as a Director if such person is in terms of the Act
or in terms of this Memorandum of Incorporation ineligible to serve or is disqualified from
serving as a Director.
5.1.3 The Directors shall be elected in terms of section68(1) by the persons entitled to exercise
voting rights in such an election, being the Shareholders of the Company and the holders
of any other Securities of the Company to the extent that the terms on which such Securities
were issued confer such rights. No appointment of a Director shall be valid if passed by
resolutions in accordance with section60.
5.1.4 Every person holding office as a Director, prescribed officer, company secretary or auditor
of the Company immediately before the effective date will, as contemplated in item 7(1) of
Schedule 5 to the Act, continue to hold that office.
5.2 Appointment and nomination of Directors
If the number of Directors falls below the minimum number fixed in accordance with this Memorandum
of Incorporation, the remaining Directors must as soon as possible and in any event not later
than 3 (three) months from the date that the number falls below such minimum, fill the vacancy/
ies in accordance with Article 23.1.3 or convene a general meeting for the purpose of filling the
vacancies, and the failure by the Company to have the minimum number of Directors during the
said 3 (three) month period does not limit or negate the authority of the Board or invalidate anything
done by the Board while their number is below the minimum number fixed in accordance with this
Memorandum of Incorporation.
5. 2.1 The Directors in office may act notwithstanding any vacancy in their body, but if after the
expiry of the 3 (three) month period contemplated in Article 23.2.1 their number remains
below the minimum number fixed in accordance with this Memorandum of Incorporation,
they may, for as long as their number is reduced below such minimum, act only for the
purpose of filling vacancies in their body in terms of section 68(3) or of summoning general
meetings of the Company, but not for any other purpose.
5.2.2 Any shareholder of the Company or Director in office has a right to nominate one or more
Directors in accordance with this Memorandum of Incorporation.
5.2.3 In any election of Directors–
5. 2.3.1 the election is to be conducted as a series of votes, each of which is on the
candidacy of a single individual to fill a single vacancy, with the series of votes
continuing until all vacancies on the Board have been filled; and
5.2.3.2 in each vote to fill a vacancy–
5.2.3.2.1 each vote entitled to be exercised may be exercised once; and
5.2.3.2.2 the vacancy is filled only if a majority of the votes exercised support
the candidate.
5.2.3.2.3 The Company shall only have elected Directors and there shall be no
appointed or ex offıcio Directors as contemplated in section66(4).
5.3 Eligibility, resignation and retirement of Directors
5. 3.1 In addition to satisfying the qualification and eligibility requirements set out in section69,
a person need not satisfy any further eligibility requirements or qualifications to become or
remain a Director or a prescribed officer of the Company.
5.3.2 No Director shall be appointed for life or for an indefinite period and the Directors shall
rotate in accordance with the following provisions of this Article23.3.2–
208
5. 3. 2.1 at each annual general meeting referred to in Article19.4, 1/3(one third) of the
Directors for the time being, or if their number is not 3(three) or a multiple of
3(three), the number nearest to 1/3(one third), but not less than 1/3(one third),
shall retire from office, provided that if a Director is appointed as an executive
Director or as an employee of the Company in any other capacity, he or she
shall not, while he or she continues to hold that position or office, be subject to
retirement by rotation and he shall not, in such case, be taken into account in
determining the rotation or retirement of Directors;
5.3.2.2 the Directors to retire in every year shall be those who have been longest in office
since their last election, but as between persons who were elected as Directors
on the same day, those to retire shall, unless they otherwise agree among
themselves, be determined by lot;
5.3.2.3 a retiring Director shall be eligible for re-election;
5.3.2.4 the Company, at the general meeting at which a Director retires in the above manner,
or at any other general meeting, may fill the vacancy by electing a person thereto;
5.3.2.5 if at any meeting at which an election of Directors ought to take place the offices
of the retiring Directors are not filled, unless it is expressly resolved not to fill
such vacancies, the meeting shall stand adjourned and the further provisions of
this Memorandum of Incorporation, including Articles19.2 to 19.6 (inclusive) will
apply mutatis mutandis to such adjournment.
5.3.3 The Board shall, through its Nomination Committee (if such Nomination Committee has
been constituted in terms of Article31), provide the Shareholders with a recommendation
in the notice of the meeting at which the re-election of a retiring Director is proposed, as to
which retiring Directors are eligible for re-election, taking into account that Director’s past
performance and contribution.
5.3.4 A vacancy in the number of Directors shall only arise in the event of–
5. 3.4 .1 any elected Director ceasing to hold office or becoming disqualified from holding
office as such for any reason; and/or
5.3.4.2 the Shareholders resolving to increase the number of elected Directors; and/or
5.3.4.3 any of the other circumstances contemplated in section70(1) arising.
5.4 Powers of the Board
5.4.1 The Board has the power to–
5.4.1.1 appoint or co-opt any person as Director, whether to fill any vacancy on the
Board on a temporary basis, as set out in section 68(3), or as an additional
Director provided that such appointment must be confirmed by the Shareholders,
in accordance with Article 23.1.3, at the next annual general meeting of the
Company, as required in terms of section70(3)(b)(i); and
5.4.1.2 exercise all of the powers and perform any of the functions of the Company, as set
out in section66(1), and the powers of the Board in this regard are not limited or
restricted by this Memorandum of Incorporation.
5.4.2 The Directors may at any time and from time to time by power of attorney appoint any
person or persons to be the attorney or attorneys and agent(s) of the Company for such
purposes and with such powers, authorities and discretions (not exceeding those vested
in or exercisable by the Directors in terms of this Memorandum of Incorporation) and for
such period and subject to such conditions as the Directors may from time to time think fit.
Any such appointment may, if the Directors think fit, be made in favour of any company, the
members, directors, nominees or managers of any company or firm, or otherwise in favour
of any fluctuating body of persons, whether nominated directly or indirectly by the Directors.
Any such power of attorney may contain such provisions for the protection or convenience
of persons dealing with such attorneys and agents as the Directors think fit. Any such
attorneys or agents as aforesaid may be authorised by the Directors to sub-delegate all or
any of the powers, authorities and discretions for the time being vested in them.
5.4.3 Save as otherwise expressly provided herein, all cheques, promissory notes, bills of
exchange and other negotiable or transferable instruments, and all documents to be
executed by the Company, shall be signed, drawn, accepted, endorsed or executed, as
the case may be, in such manner as the Directors shall from time to time determine.
209
5.4.4 All acts performed by the Directors or by a Committee of Directors or by any person acting
as a Director or a member of a Committee shall, notwithstanding that it shall afterwards
be discovered that there was some defect in the appointment of the Directors or persons
acting as aforesaid, or that any of them were disqualified from office, be as valid as if
every such person had been duly appointed and was qualified and had continued to be a
Director or member of such Committee.
6. DIRECTORS’ COMPENSATION AND FINANCIAL ASSISTANCE
6.1 The Company may pay remuneration to the Directors for their services as Directors in accordance
with a special resolution approved by the Shareholders within the previous 2(two) years, as set out
in section66(8) and (9), and the power of the Company in this regard is not limited or restricted by
this Memorandum of Incorporation.
6.2 Any Director who–
6. 2.1 serves on any executive or other Committee; or
6.2.2 devotes special attention to the business of the Company; or
6.2.3 goes or resides outside the Republic for the purpose of the Company; or
6.2.4 otherwise performs or binds himself to perform services which, in the opinion of the
Directors, are outside the scope of the ordinary duties of a Director, may be paid such extra
remuneration or allowances in addition to or in substitution of the remuneration to which he
may be entitled as a Director, as a disinterested quorum of the Directors may from time to
time determine.
6.3 The Directors may also be paid all their travelling and other expenses necessarily incurred by them
in connection with–
6.3.1 the business of the Company; and
6.3.2 attending meetings of the Directors or of Committees of the Directors of the Company.
6.4 The Board may, as contemplated in and subject to the requirements of section45, authorise the
Company to provide financial assistance to a Director, Prescribed Officer or other person referred
to in section45(2), and the power of the Board in this regard is not limited or restricted by this
Memorandum of Incorporation.
7. BORROWING POWERS
7.1 Subject to the provisions of Article28.2 and the other provisions of this Memorandum of Incorporation,
the Directors may from time to time–
7.1.1 borrow for the purposes of the Company such sums as they think fit; and
7.1.2 secure the payment or repayment of any such sums, or any other sum, as they think fit,
whether by the creation and issue of Securities, mortgage or charge upon all or any of the
property or assets of the Company.
7. 2 The Directors shall procure (but as regards subsidiaries of the Company only insofar as by the
exercise of voting and other rights or powers of control exercisable by the Company they can so
procure) that the aggregate principal amount at any one time outstanding in respect of moneys so
borrowed or raised by–
7. 2.1 the Company; and
7.2.2 all the subsidiaries for the time being of the Company (excluding moneys borrowed or raised
by any of such companies from any other of such companies but including the principal
amount secured by any outstanding guarantees or suretyships given by the Company or
any of its subsidiaries for the time being for the indebtedness of any other company or
companies whatsoever and not already included in the aggregate amount of the moneys
so borrowed or raised), shall not exceed, to the extent applicable, the aggregate amount at
that time authorised to be borrowed or secured by the Company or the subsidiaries for the
time being of the Company (as the case may be).
210
8. DISTRIBUTIONS
8.1 Subject to the provisions of the Act, and particularly section46, the Company may make a proposed
distribution if such distribution–
8.1.1 is pursuant to an existing legal obligation of the Company, or a court order; or
8.1.2 is authorised by resolution of the Board.
8.2 No distribution shall bear interest against the Company, except as otherwise provided under the
conditions of issue of the Shares in respect of which such distribution is payable.
8.3 Distributions may be declared either free of or subject to the deduction of income tax and any other
tax or duty in respect of which the Company may be chargeable.
8.4 The Directors may from time to time declare and pay to the Shareholders such interim distributions
as the Directors consider to be appropriate.
8.5 All unclaimed distributions may be invested or otherwise made use of by the Directors for the
benefit of the Company until claimed, provided that distributions unclaimed for a period of 3 (three)
years from the date on which they were declared, in terms of the laws of prescription, may be
declared forfeited by the Directors for the benefit of the Company. The Directors may at any time
annul such forfeiture upon such conditions (if any) as they think fit. All unclaimed monies, other
than distributions, that are due to any Shareholder/s shall be held by the Company in trust for
an indefinite period subject, however, to the laws of prescription until lawfully claimed by such
Shareholder/s.
8.6 Any distribution, interest or other sum payable in cash to the holder of a Share may be paid by
cheque or warrant sent by post and addressed to–
8.6 .1 the holder at his registered address; or
8.6.2 in the case of joint holders, the holder whose name appears first in the Securities Register
in respect of the share, at his registered address; or
8.6.3 such person and at such address as the holder or joint holders may in writing direct.
8.7 Every such cheque or warrant shall–
8.7.1 be made payable to the order of the person to whom it is addressed; and
8.7. 2 be sent at the risk of the holder or joint holders.
8.8 The Company shall not be responsible for the loss in transmission of any cheque or warrant or of
any document (whether similar to a cheque or warrant or not) sent by post as aforesaid.
8.9 A holder or any one of two or more joint holders, or his or their agent duly appointed in writing, may
give valid receipts for any distributions or other moneys paid in respect of a Share held by such
holder or joint holders.
8.10 When such cheque or warrant is paid, it shall discharge the Company of any further liability in
respect of the amount concerned.
8.11 A distribution may also be paid in any other way determined by the Directors, and if the directives
of the Directors in that regard are complied with, the Company shall not be liable for any loss or
damage which a Shareholder may suffer as a result thereof.
8.12 Without detracting from the ability of the Company to issue capitalisation Shares, any distribution
may be paid wholly or in part–
8.12.1 by the distribution of specific assets; or
8.12.2 by the issue of Shares, debentures or securities of the Company or of any other company;
or
8.12.3 in cash; or
8.12.4 in any other way which the Directors may at the time of declaring the distribution determine.
8.13 Where any difficulty arises in regard to such distribution, the Directors may settle that difficulty as
they think expedient, and in particular may fix the value which shall be placed on such specific
assets on distribution.
8.14 The Directors may–
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8.14.1 determine that cash payments shall be made to any Shareholder on the basis of the value
so fixed in order to secure equality of distribution; and
8.14.2 vest any such assets in trustees upon such trusts for the benefit of the persons entitled to
the distribution as the Directors deem expedient.
8.15 Any distribution must be made payable to Shareholders registered as at a date subsequent to the
date of declaration thereof or the date of confirmation thereof, whichever is the later date.
“The salient features of the memorandum of incorporation (“MOI”) of Motus Corporation Proprietary Limited,
a major subsidiary of the Company, are set out below. Please note that the salient features do not constitute
an exhaustive summary of the provisions of the MOI but highlight certain key aspects only. Accordingly, the
MOI should be read in its entirety for a full appreciation of its contents.
Definitions
Act means the Companies Act, No. 71 of 2008, as amended, consolidated or re-enacted from time
to time, including all Schedules to such Act and the Regulations;
Director means a member of the Board, as contemplated in section 66, or an alternate director,
and includes any person occupying the position of a director or alternate director, by whatever
name designated;
RSA means the Republic of South Africa;
Securities means any Shares, debentures or other instruments, irrespective of their form of title,
issued or authorised to be issued by the Company;
Share means one of the units into which the proprietary interest in the Company is divided and
“Shares” means, as the context requires, more than one such unit or all of them;
9. COMPOSITION AND POWERS OF THE BOARD OF DIRECTORS
9.1 In addition to the minimum number of Directors, if any, that the Company must have to satisfy any
requirement in terms of the Act to appoint any Committee which it is obliged to appoint in terms of
the Act or this Memorandum of Incorporation, is greater than 2 (two) the number of Directors shall,
unless otherwise determined by a special resolution of all the Shareholders, be not less than 2 (two)
and no person shall be appointed or elected as a Director if such person is in terms of the Act or
in terms of this Memorandum of Incorporation ineligible to serve or is disqualified from serving as
a Director.
9.2 The Directors shall be elected in terms of section68(1) by the persons entitled to exercise voting
rights in such an election, being the Shareholders of the Company and the holders of any other
Securities of the Company to the extent that the terms on which such Securities were issued confer
such rights.
9.3 Every person holding office as a Director, prescribed officer, company secretary or auditor of the
Company immediately before the effective date will, as contemplated in item 7(1) of Schedule 5 to
the Act, continue to hold office.
9.4 Subject to the provisions of clause 23.1.2, in any election of Directors –
9.4 .1 the election is to be conducted as a series of votes, each of which is on the candidacy
of a single individual to fill a single vacancy, with the series of votes continuing until all
vacancies on the Board have been filled; and
9.4.2 in each vote to fill a vacancy–
9.4 . 2.1 each vote entitled to be exercised may be exercised once in respect of each candidate;
9.4.2.2 the vacancy is filled only if a majority of the votes exercised support the candidate;
and
9.4.2.3 to the extent that there are more candidates who achieve a majority vote than
there are vacancies, then the vacancies shall be filled by those candidates with
the highest majorities,
provided only that, in the event that the Company only has 1 (one) Shareholder, the above
provisions of this clause 23.4 will not apply and the election of Directors shall take place in
such manner as the Shareholder shall determine.
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9.5 The Company shall only have elected Directors and there shall be no appointed or ex offıcio
Directors as contemplated in section66(4).
9.6 In addition to satisfying the qualification and eligibility requirements set out in section69, a person
need not satisfy any further eligibility requirements or qualifications to become or remain a Director
or a prescribed officer of the Company and specifically need not be a Shareholder.
9.7 No Director shall be appointed for life or for an indefinite period and the Directors shall rotate in
accordance with the following provisions of this Article–
9.7.1 at each annual general meeting referred to in Article17.4, 1/3(one third) of the Directors
for the time being, or if their number is not 3(three) or a multiple of 3(three), the number
nearest to 1/3(one third), but not less than 1/3(one third), shall retire from office, provided
that if a Director is appointed as an executive Director or as an employee of the Company
in any other capacity, he or she shall not, while he or she continues to hold that position or
office, be subject to retirement by rotation and he or she shall not, while he or she shall not,
in such case, be taken into account in determining the rotation or retirement of Directors.
The board of directors, through any nomination Committee, shall recommend eligibility of
any proposed director, taking into account past performance and contributions made;
9.7. 2 the Directors to retire in every year shall be those that have passed the age of 70 and those
who have been longest in office since their last election, but as between persons who were
elected as Directors on the same day, those to retire shall, unless they otherwise agree
among themselves, be determined by lot;
9.7. 3 a retiring Director shall be eligible for re-election;
9.7.4 the Company, at the general meeting at which a Director retires in the above manner, or at
any other general meeting, may fill the vacancy by electing a person thereto, provided that
the Company shall not be entitled to fill the vacancy by means of a resolution passed in
accordance with section60;
9.7. 5 if at any meeting at which an election of Directors ought to take place the offices of the retiring
Directors are not filled, unless it is expressly resolved not to fill such vacancies, the meeting
shall stand adjourned and the further provisions of this Memorandum of Incorporation,
including Articles17.4 to 17.6 (inclusive) will apply mutatis mutandis to such adjournment.
9.8 Should the number of Directors fall below the minimum provided for in clause 23.1, the remaining
Directors shall, as soon as possible, and in any event, no later than 3 (three) months from the date
that the number of the Directors falls below such minimum, fill the vacancies or call a general
meeting for purposes of filling the vacancies, provided that a failure by the Company to have the
minimum number of Directors during the 3 (three) month period referred to herein, shall not limit of
negate the authority of the Board or invalidate anything done by the Board or the Company. After
the expiry of the 3 (three) month period referred to herein, the remaining Directors shall only be
permitted to act for the purpose of filling vacancies or calling general meetings of Shareholders, in
terms of clause 23.9.
9.9 The Board has the power, subject to clause 23.16, to–
9.9.5.1 appoint or co-opt any person as Director, whether to fill any vacancy on the Board
on a temporary basis, as set out in section 68(3), or as an additional Director
provided that such appointment must be confirmed by the Shareholders, in
accordance with clause 23.2, at the next annual general meeting of the Company,
as required in terms of section70(3)(b)(i); and
9.9.5.2 exercise all of the powers and perform any of the functions of the Company, as set
out in section66(1), and the powers of the Board in this regard are not limited or
restricted by this Memorandum of Incorporation.
9.10 The Directors may at any time and from time to time by power of attorney appoint any person
or persons to be the attorney or attorneys and agent(s) of the Company for such purposes and
with such powers, authorities and discretions (not exceeding those vested in or exercisable by
the Directors in terms of this Memorandum of Incorporation) and for such period and subject
to such conditions as the Directors may from time to time think fit. Any such appointment may,
if the Directors think fit, be made in favour of any company, the members, directors, nominees
or managers of any company or firm, or otherwise in favour of any fluctuating body of persons,
whether nominated directly or indirectly by the Directors. Any such power of attorney may contain
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such provisions for the protection or convenience of persons dealing with such attorneys and
agents as the Directors think fit. Any such attorneys or agents as aforesaid may be authorised by
the Directors to sub-delegate all or any of the powers, authorities and discretions for the time being
vested in them.
9.11 Save as otherwise expressly provided herein, all cheques, promissory notes, bills of exchange and
other negotiable or transferable instruments, and all documents to be executed by the Company,
shall be signed, drawn, accepted, endorsed or executed, as the case may be, in such manner as
the Directors shall from time to time determine.
9.12 All acts performed by the Directors or by a Committee of Directors or by any person acting as a
Director or a member of a Committee shall, notwithstanding that it shall afterwards be discovered
that there was some defect in the appointment of the Directors or persons acting as aforesaid, or
that any of them were disqualified from office, be as valid as if every such person had been duly
appointed and was qualified and had continued to be a Director or member of such Committee.
9.13 A Director may hold any other office or place of profit under the Company (except that of auditor)
or any subsidiary of the Company in conjunction with the office of Director, for such period and on
such terms as to remuneration, appointment (in addition to the remuneration to which he may be
entitled as a Director) and otherwise as a disinterested quorum of the Directors may determine.
9.14 A Director of the Company may be or become a director or other officer of, or otherwise interested
in, any company promoted by the Company or in which the Company may be interested as
shareholder or otherwise and (except insofar as otherwise decided by the Directors) he shall not
be accountable for any remuneration or other benefits received by him as a director or officer of or
from his interest in such other company.
9.15 Each Director and each alternate Director, prescribed officer and member of any Committee of
the Board (whether or not such latter persons are also members of the Board) shall, subject to the
exemptions contained in section 75(2) and the qualification contained in section 75(3), comply with
all of the provisions of section 75 in the event that they (or any person who is a related person to
them) have a personal financial interest in any matter to be considered by the Board.
9.16 All Directors shall be elected by an ordinary resolution of the Shareholders, in accordance with the
clause 23.2, at a general or annual general meeting of the company. In addition, notwithstanding
any provision to the contrary in this Memorandum of Incorporation, the appointment of a director to
fill a casual vacancy or as an addition to the Board shall be confirmed by the Shareholders at the
next annual general meeting.
10. DIRECTORS’ COMPENSATION AND FINANCIAL ASSISTANCE
10.1 The Company may pay remuneration to the Directors for their services as Directors in accordance
with a special resolution approved by the Company’s Shareholders within the previous 2 (two)
years, as set out in section66(8) and (9), and the power of the Company in this regard is not limited
or restricted by this Memorandum of Incorporation, it being specifically recorded that remuneration
of Directors for services as employed executives shall not require special resolution approved by
the Company’s Shareholders.
10.2 The Directors may also be paid all their travelling and other expenses necessarily incurred by them
from anywhere outside of the province in which the meeting takes place in connection with–
10. 2.1 the business of the Company; and
10.2.2 attending meetings of the Directors or of Committees of the Directors of the Company.
10.3 The Board may, as contemplated in and subject to the requirements of section45, authorise the
Company to provide financial assistance to a Director, Prescribed Officer or other person referred
to in section45(2), and the power of the Board in this regard is not limited or restricted by this
Memorandum of Incorporation.
11. DISTRIBUTIONS
11.1 Subject to the provisions of the Act, and particularly section46, the Company may make a proposed
distribution if such distribution–
11.1.1 is pursuant to an existing legal obligation of the Company, or a court order; or
11.1.2 is authorised by resolution of the Board.
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11.2 No distribution shall bear interest against the Company, except as otherwise provided under the
conditions of issue of the Shares in respect of which such distribution is payable.
11.3 Distributions may be declared either free of or subject to the deduction of income tax and any other
tax or duty in respect of which the Company may be chargeable.
11.4 The Directors may from time to time declare and pay to the Shareholders such interim distributions
as the Directors consider to be appropriate.
11.5 Dividends shall be declared by the Company in accordance with the Act.
11.6 All unclaimed Dividends may be invested or otherwise made use of by the Directors for the benefit
of the Company until claimed, provided that unclaimed Dividends for a period of 3 (three) years
from the date on which they were declared, in terms of the laws of prescription, may be declared
forfeited by the Directors for the benefit of the Company. The Directors may at any time annul such
forfeiture upon such conditions (if any) as they think fit. All unclaimed monies (excluding Dividends)
that are due to any Shareholder/s shall be held by the Company in trust for an indefinite period
subject, however, to the laws of prescription, until lawfully claimed by such Shareholder/s.
11.7 Any distribution, interest or other sum payable in cash to the holder of a Share may be paid by
cheque or warrant sent by post and addressed to–
11.7.1 the holder at his registered address; or
11.7. 2 in the case of joint holders, the holder whose name appears first in the Securities Register
in respect of the share, at his registered address; or
11.7.3 such person and at such address as the holder or joint holders may in writing direct.
11.8 Every such cheque or warrant shall–
11.8 .1 be made payable to the order of the person to whom it is addressed; and
11.8.2 be sent at the risk of the holder or joint holders.
11.9 The Company shall not be responsible for the loss in transmission of any cheque or warrant or of
any document (whether similar to a cheque or warrant or not) sent by post as aforesaid.
11.10 A holder or any one of two or more joint holders, or his or their agent duly appointed in writing, may
give valid receipts for any distributions or other moneys paid in respect of a Share held by such
holder or joint holders.
11.11 When such cheque or warrant is paid, it shall discharge the Company of any further liability in
respect of the amount concerned.
11.12 A distribution may also be paid in any other way determined by the Directors, and if the directives
of the Directors in that regard are complied with, the Company shall not be liable for any loss or
damage which a Shareholder may suffer as a result thereof.
11.13 Without detracting from the ability of the Company to issue capitalisation Shares, but subject to the
provisions of this Memorandum of Incorporation any distribution may be paid wholly or in part–
11.13.1 by the distribution of specific assets; or
11.13. 2 by the issue of Shares, debentures or securities of the Company or of any other company; or
11.13.3 in cash; or
11.13.4 in any other way which the Directors may at the time of declaring the distribution determine.
11.14 Where any difficulty arises in regard to such distribution, the Directors may settle that difficulty as
they think expedient, and in particular may fix the value which shall be placed on such specific
assets on distribution.
11.15 The Directors may–
11.15.1 determine that cash payments shall be made to any Shareholder on the basis of the value
so fixed in order to secure equality of distribution; and
11.15. 2 vest any such assets in trustees upon such trusts for the benefit of the persons entitled to
the distribution as the Directors deem expedient.
11.16 Any distribution must be made payable to Shareholders registered as at a date subsequent to the
date of declaration thereof or the date of confirmation thereof, whichever is the later date.
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1. SPECIAL RIGHTS AND CONDITIONS ATTACHED TO THE DEFERRED ORDINARY NO PAR
VALUE SHARES
1.3 Interpretation
For the purposes of this Annexure A, the following terms shall have the meanings assigned to them
hereunder:
1.3.1 “the auditors” means the auditors for the time being of the Company;
1.3.2 “the Board” means the Board of directors of the Company;
1.3.3 “the Company” or “Motus” means Motus Holdings Limited, registration number
2017/451730/06;
1.3.4 “the conversion” means the conversion of deferred ordinary shares into ordinary shares
during the conversion period;
1.3.5 “conversion date” means 30 June of each year during the conversion period;
1.3.6 “conversion period” means the seven year period commencing on 1 July 2018;
1.3.7 “the converted shares” means, at any time, the cumulative total number of deferred ordinary
shares that have been converted into ordinary shares;
1.3.8 “CSDP” means a Central Securities Depository Participant, accepted as a participant in
terms of section 31 of the Financial Markets Act, 2012 (Act 19 of 2012), as amended;
1.3.9 “the deferred ordinary shares” means 10 000 000 deferred ordinary no par value shares in
the stated capital of the Company with the rights and restrictions as set out in this Article 1;
1.3.10 “the Group” means, collectively, the Company, its subsidiaries and associates;
1.3.11 “the Listings Requirements” means the Listings Requirements of the JSE;
1.3.12 “MOI” means the Memorandum of Incorporation of the Company;
1.3.13 “ordinary shares” means ordinary no par value shares in the stated capital of the Company;
1.3.14 “the specified deferred ordinary shares” means 5 820 283 deferred ordinary shares,
provided that any additional deferred ordinary shares acquired by the holders of the
deferred ordinary shares in terms of 1.5.3 and/or 1.5.4, shall be deemed to constitute part
of the specified deferred ordinary shares;
1.3.15 “treasury shares” means any ordinary shares which are owned by any subsidiary of the
Company.
1.4 Rights, privileges and conditions
The rights, privileges and conditions which attach to the deferred ordinary shares are set out in 1.5
to 1.19 hereof.
1.5 Issue price
Each deferred ordinary share was issued on the basis that:
1.5.1 if the issued ordinary shares in the capital of the Company are consolidated or subdivided,
the same shall apply, mutatis mutandis, to the deferred ordinary shares;
1.5.2 if any rights issue is implemented by the Company in respect of the ordinary shares, the
holders of the deferred ordinary shares shall not be entitled to participate in the rights issue;
1.5.3 if the Board so determines, and subject to the approval of the holders of the ordinary shares
in general meeting and of the JSE, if required, the holders of the deferred ordinary shares may
be given the right in respect of any rights issue as contemplated in 1.5.2, to subscribe free of
any consideration for that number of additional deferred ordinary shares, which together with
the specified deferred ordinary shares and the ordinary shares held by that holder of deferred
ordinary shares, will constitute 10.1% of the total issued stated capital of the Company after
the rights issue (excluding any treasury shares but including the deferred ordinary shares);
1.5.4 if any capitalisation or bonus issue is implemented by the Company, the holders of the
deferred ordinary shares shall be entitled and confined to a distribution from the Company
of so many additional deferred ordinary, which together with the specified deferred ordinary
shares and the ordinary shares held by that holder of deferred ordinary shares, will constitute
10.1% of the total issued stated capital of the Company after the capitalisation or bonus
issue (excluding any treasury shares but including the additional deferred ordinary shares).
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1.6 No participation in dividends or other distributions
Save as provided in 1.5.4 and 1.7, the deferred ordinary shares shall not participate in, or receive
any dividends or capital distributions distributed by the Company and/or any other payments made
by the Company in terms of Section 46 of the Act.
1.7 Rights on winding-up
The deferred ordinary shares shall confer on the holders thereof the right, in a winding-up, to
repayment of the par value thereof, pari passu with the holders of the ordinary shares, but no further
right to participate in the profits or assets of the Company.
1.8 Voting rights
1.8.1 The deferred ordinary shares shall rank pari passu in all respects with the ordinary shares
with respect to voting rights.
1.8.2 In accordance with 1.8.1, notwithstanding anything to the contrary which may be contained
in the MOI, the holders of the deferred ordinary shares shall not be entitled to veto any
resolution that would otherwise have been capable of being passed by the required majority
of votes, collectively, of the holders of the ordinary shares and the deferred ordinary shares.
1.9 Separate class
The deferred ordinary shares shall constitute a separate class of shares.
1.10 Variation of rights
All or any of the rights attaching to the deferred ordinary shares may only be modified, altered,
varied, added to or abrogated, with the prior written consent of the holders of at least 75% of the
issued deferred ordinary shares or the sanction of a resolution of the holders of the issued deferred
ordinary shares passed at a separate general meeting of such holders and at which members
holding in the aggregate not less than 75% of the total votes of all the holders of the deferred
ordinary shares entitled to vote at that meeting are present in person or by proxy and the resolution
has been passed by not less than 75% of the total votes to which the holders of the deferred
ordinary shares present in person or by proxy are entitled.
1.11 Meetings and quorum
Subject to 1.10, at every separate meeting of the holders of the deferred ordinary shares the
provisions of the MOI relating to general meetings of ordinary members shall apply mutatis mutandis,
except that a quorum at any such general meeting of the holders of the deferred ordinary shares
shall be a person or persons holding or representing by proxy at least 75% of the issued deferred
ordinary shares, provided that if at any adjournment of such meeting a quorum is not present, then
the provisions of the MOI relating to adjourned meetings shall, mutatis mutandis, apply.
1.12 Restriction on transfer
The holders of the deferred ordinary shares shall not, whether directly or indirectly, be entitled
to sell, alienate, or in any other manner dispose of, transfer, relinquish any rights to, beneficial or
otherwise, pledge, or in any other manner encumber, any of the deferred ordinary shares save to,
or in favour of the Company. In the event of the holder of any deferred ordinary shares breaching
the provisions hereof, then without prejudice to any other rights which the Company may have, the
deferred ordinary shares which are the subject matter of the breach shall no longer be eligible for
conversion in terms of 1.13 and the provisions of 1.15.3.1 to 1.15.3.3 shall be deemed to apply,
mutatis mutandis, in respect of the said deferred ordinary shares.
1.13 Conversion
On each conversion date, the specified deferred ordinary shares to which the conversion applies,
as provided in 1.15, shall automatically be converted into ordinary shares, on a one-for-one basis,
and the appropriate amendment shall be made to the custody agreement entered into between
each holder of the deferred ordinary shares and its CSDP or broker.
1.14 Ranking on conversion
Any ordinary shares so converted from deferred ordinary shares in terms of 1.13 shall rank from
the conversion date, pari passu in all respects with the other ordinary shares, and shall accordingly
qualify for any dividends or capital distributions declared by the Company after the conversion
date.
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1.15 Method of conversion
1.15.1 Subject to 1.15.2 and 1.15.3, on each conversion date 831,469 specified deferred ordinary
shares shall convert into ordinary shares.
1.15.2 In the event that the number of the specified deferred ordinary shares is increased consequent
upon the provisions of 1.5.3 and/or 1.5.4, then the number of specified deferred ordinary
shares for conversion in terms of 1.15.1 during the remainder of the conversion period shall
be proportionately increased to achieve the conversion of the remaining specified deferred
ordinary shares in equal tranches, as near as arithmetically possible, over that period.
1.15.3 At the end of the conversion period, the remaining deferred ordinary shares:
1.15.3.1 shall not be capable of conversion;
1.15.3.2 shall confer on each holder of the deferred ordinary shares, one vote for every
deferred ordinary share held up to 100 and thereafter, one vote for every ten
thousand deferred ordinary shares held;
1.15.3.3 shall automatically be converted into an equal number of redeemable, non-
participating no par value preference shares having the preferences, rights,
limitations and other terms set out in 1.15.4.
1.15.4. Every redeemable preference share referred to in 1.15.3.3 shall:
1.15.4.1 confer on the holder thereof the right, in a winding-up, to repayment of the par
value thereof (if any), pari passu with the holders of the ordinary shares, but no
further right to participate in the profits or assets of the Company;
1.15.4.2 not confer on the holder the right to vote at meetings of the Company except:
1.15.4.2.1 during any period determined as provided in 1.15.5, during which any
winding-up dividend or any part of any such dividend on such share
or any redemption payment thereon remains in arrear and unpaid; or
1.15.4.2.2 in regard to any resolution proposed to amend the preferences, rights,
limitations and other terms associated with such preference share;
1.15.4.3 subject to section 46 of the Act, be redeemable free of any consideration at the
option of the Company at any time, on the following terms and conditions:
1.15.4.3.1 notice of the exercise of such option shall be given by the Company
to the holder of the preference share in writing, whereupon such
preference share shall be regarded as redeemed and cancelled; and
1.15.4.3.2 upon receipt of such notice, the holder shall deliver the certificate of
such preference share to the Company at its registered office;
1.15.5 the period referred to in 1.15.4.2.1, if applicable at all, shall commence 6 months after the
end of the financial year of the Company in respect of which such dividend accrued or such
redemption payment became due.
1.16 Absence of limitations or restrictions
Nothing in this Annexure A, or arising out of the issue of the deferred ordinary shares, shall, or be
construed to prevent or preclude the Group, subject to any normal shareholder approvals which
may at any time be required (but without derogating from 1.8), from being able to carry on and
conduct its business as it deems fit, or restrict or limit the conduct of its business in any manner
whatsoever, nor to restrict or limit the Group, inter alia, in respect of any sales or other disposals of
any assets, material or otherwise, mergers, takeovers and acquisitions.
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1.17 Arbitration
Save as expressly otherwise provided in this Annexure A, any dispute between any of the holders
of the deferred ordinary shares and the Company shall be finally resolved in accordance with the
Rules (“the Rules”) of The Arbitration Foundation of South Africa (“AFSA”) and in accordance with
the following:
1.17.1 there shall be one arbitrator who shall be a judge, former judge or retired judge of the High
Court or the Supreme Court of Appeal of the High Court of the Republic of South Africa or
a senior counsel of at least ten years’ standing as such at the Johannesburg Bar;
1.17.2 the appointment of the arbitrator shall be agreed upon between the parties, but failing
agreement between them within a period of 14 days after the arbitration has been demanded,
either of the parties shall be entitled to request the chairman at the relevant time of AFSA
(or if AFSA shall not be in existence at the time, by the Chairman of the Johannesburg Bar
Council) or his representative to make the appointment and, in making his appointment, to
have regard to the nature of the dispute;
1.17.3 the arbitration shall be held at a venue agreed upon in writing by the parties or, failing such
agreement, at a venue in Sandton;
1.17.4 the decision of the arbitrator shall be subject to a right of appeal by either party in terms of
Article 22 of the Rules to an Arbitration Tribunal consisting of 3 arbitrators who shall:
1.17.4.1 be persons who hold the same qualifications and who have the same status as
the persons referred to in 1.17.1; and
1.17.4.2 be appointed in the manner referred to in 1.17.1 and 1.17.2;
1.17.5 the decision of the arbitrator or the Arbitration Tribunal, as the case may be, shall be final
and binding on the parties in the absence of a manifest error in calculation and shall be
carried into effect and may be made an order of competent jurisdiction. For this purpose,
each of the parties shall be deemed to have submitted itself to the jurisdiction of the South
Gauteng High Court and all appeal courts therefrom should either party wish to make the
arbitrator’s decision an order of that court;
1.17.6 the provisions of this Article 1.17:
1.17.6.1 constitute an irrevocable consent by the parties to the procedure envisaged in
this Article 1.17 and neither party shall be entitled to withdraw therefrom or claim
at any stage of the proceedings that it is not bound by such proceedings;
1.17.6.2 are severable from the rest of the MOI and shall remain in effect despite the
termination of or invalidity or alleged invalidity for any reason of any part of this
MOI; and
1.17.6.3 shall not preclude any party from instituting any injunctive proceedings in any
appropriate court of competent jurisdiction.
1.18 JSE Listings Requirements
The deferred ordinary shares are entirely subject to the provisions of the JSE Listings Requirements.
1.19 Restriction on issue of deferred ordinary shares
Subject to 1.5.3 and 1.5.4, the Company shall not allot and issue any further deferred ordinary
shares, except with the approval of shareholders in general meeting and the JSE.
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ANNEXURE 9
KING IV AND CORPORATE GOVERNANCE
I. INTRODUCTION
Motus is committed to high standards of corporate governance. The foundations for these standards
were instilled in Motus as a subsidiary of Imperial prior to the Unbundling.
As a wholly-owned subsidiary of Imperial, Motus did not directly apply the principles in King IV but
indirectly complied with the principles set out in the King IV as a subsidiary of Imperial. In this regard,
the Imperial Board of directors adopted the recommendations on good corporate governance contained
in King IV and implemented the King IV principles and recommendations across Imperial (including in
relation to Motus).
As indicated below, the Board has been reconstituted to be compliant with the principles set out in King
IV and, once unbundled, Motus will comply directly with the principles set out in King IV in the manner
set out in the remainder of this Annexure 9, including as set out in detail with reference to each of the
principles set out in King IV in the table inserted at the end of this Annexure 9.
The Company will apply high standards of accountability, transparency and integrity in the running of
the business and reporting to shareholders and other stakeholders. All policies and procedures will be
reviewed by the Board after the Unbundling.
Certain key features of Motus’ approach to corporate governance, which is guided by the overarching
principles of fairness, accountability, responsibility and transparency, are set out below. In addition,
special attention will be given to:
• providing stakeholders and the financial investment community with clear, concise, accurate and
timely information about the Company’s operations and results;
• reporting to Shareholders on an integrated basis on Motus’ financial and sustainability performance;
• ensuring appropriate business and financial risk management;
• ensuring that no director, management official or other employee of Motus may deal, directly or
indirectly, in Motus Shares on the basis of unpublished price-sensitive information regarding Motus,
or otherwise during any prohibited period; and
• recognition of the company’s social responsibility and providing assistance and development support
to the communities in which it operates, and to deserving institutions at large.
Motus will be directed by the principles incorporated in King IV in the running of its business and reporting
to shareholders and other stakeholders.
Motus will comply with Paragraph 3.84 of the JSE’s Listings Requirements upon the commencement of
Listing on the JSE.
II. COMPOSITION OF BOARD AND PROCEDURES RELATING TO NOMINATIONS OF
DIRECTORS
Directors are appointed based on their skills, experience and expected level of contribution to, and
impact on, the activities of the group. The Board decides on the appointment of directors based on
recommendations from the Nomination Committee. The Board adopted a formal Board Diversity Policy
(promoting both gender and race diversity), which recognises Motus’ obligation to be relevant in society
and embraces the benefits of having a diverse Board with differences in skills, regional and industry
experience, background, race and gender of Board Members.
In order to ensure a board with sufficient non-executive directors is in place at Listing, T Skweyiya and
RJA Sparks were appointed to the Board until new Directors, Messrs S Mayet and JJ Njeke, join on
2 January 2019.
220
Name Position [3.84b]
GW Dempster Chairman*
A Tugendhaft Deputy Chairman
P Langeni Non-executive Director*
T Skweyiya Non-executive Director*
+
RJA Sparks Non-executive Director*
+
S Mayet# Non-executive Director*
JJ Njeke# Non-executive Director*
OS Arbee CEO
OJ Janse van Rensburg CFO
* Independent
#
Appointed with effective date of 2 January 2019
+
Will resign on 2 January 2018
The responsibilities of the Board are clearlydefined in a written charter. TheBoard charter outlines a
clear balance of power and authority within the Board soas to ensure that no single Director has unfettered
powers of decision-making. The Board has also adopted a written policy governing the authority
delegated to group management and matters reserved for decision by theBoard.
The responsibilities of the Board include issues of strategic direction, business plans and annual budgets,
major acquisitions and disposals, changes to the Board and other matters that have a material effect on
the group or required by legislation.
III. SOCIAL, ETHICS AND SUSTAINABILITY COMMITTEE
Name Position
JJ Njeke Chairman
P Langeni Member
S Mayet Member
Invitees:
OS Arbee CEO
OJ Janse van Rensburg CFO
B Moroole Head: Internal Audit, Risk & Sustainability
The role of the Social, Ethics and Sustainability Committee encompasses all aspects of sustainability. The
Committee performs statutory duties, as set out in the Act, for the group and on behalf of subsidiary
companies. In addition to its statutory duties, it assists the group in discharging its social, ethics and
sustainability responsibilities and implementing practices consistent with good corporate citizenship,
with particular focus on the following:
• King IV.
• Motus’ sustainability commitments.
• Broad-based black economic empowerment (BBBEE) requirements, as described in the Department
of Trade and Industry’s Combined Generic Scorecard (excluding ownership targets) and associated
Codes of Good Practice.
• Imperial’s transformation commitments, as described in the group’s transformation strategy and
division-specific BBBEE plans.
• Environmental commitments, as described in Imperial’s environmental policy framework.
• Socio-economic development (SED) commitments, as described in Imperial’s SED policy.
• Motus’ code of ethics and corporate values.
Transformation remains a key focus area and the Committee will continue to guide Imperial in its goal of
increasingly reflecting the diversity of South Africa.
221
The Committee will comprise three non-executive Directors with executive Directors and other members
of the management of the company being invitees. It will be chaired by a non-executive Director. The
Social, Ethics and Sustainability Committee will not conduct any activities until it is fully constituted on
2 January 2019, the effective date of the appointment of JJ Njeke and S Mayet.
IV. AUDIT AND RISK COMMITTEE
Name Position
RJA Sparks Chairman
+
S Mayet Chairman*
P Langeni Member
MJN Njeke Member
T Skweyiya Member
+
Invitees:
OS Arbee CEO
OJ Janse van Rensburg CFO
GW Dempster Independent non-executive Director
+
Up to 2 January 2019
* From 2 January 2019
The group Audit and Risk Committee will comprise three independent non-executive Directors, one of
whom is appointed as chairman. The membership of the Committee will be tabled at the next AGM for
approval by shareholders.
Following its listing on the JSE and in terms of the Listings Requirements of the JSE, the audit Committee
of Motus will, in addition to its duties pursuant to Section 94 of the Companies Act:
ii. consider, on an annual basis, and satisfy itself of the appropriateness of the expertise and
experience of the CFO;
ii. ensure that Motus has established appropriate financial reporting procedures and that those
procedures are operating ; and
ii. request from the audit firm (and if necessary consult with the audit firm on) the information detailed
in paragraph 22.15(h) of the Listings Requirements of the JSE in their assessment of the suitability
for appointment of their current or a prospective audit firm and designated individual partner both
when they are appointed for the first time and thereafter annually for every re-appointment as well
as for an applicant issuer prior to listing.
Motus will confirm, by reporting to Shareholders in its annual report, that the Audit and Risk Committee
has executed the responsibilities as set out above.
V. NOMINATION COMMITTEE
Name Position
GW Dempster Chairman
A Tugendhaft Member
P Langeni Member
Invitees:
OS Arbee CEO
OJ Janse van Rensburg CFO
The Committee provides the Board with advice and guidance regarding:
• the development and implementation of formal succession plans for the Board, CEO and senior
management
• the establishment of formal processes and policies for the appointment of Directors, the identification
of suitable members for the Board and gender diversity of the Board
• induction and ongoing training and development of Directors.
The group chairman chairs the Committee.
222
VI. REMUNERATION COMMITTEE
Name Position
A Tugendhaft Chairman
GW Dempster Member
P Langeni Member
Invitees:
OS Arbee CEO
OJ Janse van Rensburg CFO
The Committee advises and guides the Board on:
• Accurate and transparent disclosure of Directors’ remuneration.
• The establishment and implementation of remuneration policies for non-executive Directors, executive
Directors and other executives, to ensure that the company remunerates Directors and executives
fairly and responsibly.
• Approval of the general composition of remuneration packages and the criteria for executive bonus
and incentive awards.
• Increases to non-executive Directors’ fees.
• Material changes to the group pension and provident funds and medical aid schemes when
appropriate.
• The administration of share-based incentive schemes.
The group chief executive officer (CEO) and chief financial officer (CFO) attend Committee meetings
by invitation and assist the Committee in its deliberations, except when issues relating to their own
remuneration and performance are discussed. No Director is able to decide his or her own remuneration.
VII. ASSET AND LIABILITIES COMMITTEE
Name Position
GW Dempster Chairman
S Mayet Member
JJ Njeke Member
Invitees:
OS Arbee CEO
OJ Janse van Rensburg CFO
WF Reitsma Head of Treasury
The Assets and Liabilities Committee (ALCO) is responsible for implementing best practice asset and
liability risk management policies. Its primary objective is to manage the liquidity, debt levels, interest rate
and exchange rate risk of the group within an acceptable risk profile.
The Assets and Liabilities Committee will not conduct any activities until it is fully constituted on 2 January
2019, the effective date of the appointment of JJ Njeke and S Mayet.
VIII. COMPANY SECRETARY
RA Venter – BComm, LLM, Admitted Attorney
Directors have unlimited access to the services of the company secretary, who is responsible to the
Board for ensuring that proper corporate governance principles are adhered to.
In terms of JSE Listings Requirements, the Board of Directors must consider the competence, qualifications
and experience of the company secretary annually. King IV also recommends that the company secretary
should maintain an arm’s-length relationship with the Board and that he should ideally not be a Director.
After conducting a formal review that formed part of the annual Board evaluation process, the Board
concluded that there were no direct or indirect relationships between the company secretary and any of
the Board members which could compromise an arm’s-length relationship with the Board of Directors.
The company secretary is not a Director of the company.
223
The competence and performance of the company secretary was reviewed based on interviews with all
Board members, which formed part of the Board review, the results of which is considered by the Board as a
whole.
The Board confirmed that the company secretary is adequately qualified and experienced.
IX. RISK MANAGEMENT
Refer to the Risk section of this Pre-Listing Statement in Section 7.
X. CORPORATE CITIZENSHIP
The increased scrutiny that comes with direct accountability to equity and debt capital markets, will require
Motus to establish its credibility as a separately listed company, based on reliable disclosure and guidance
on strategic and financial performance and, ultimately, delivering on it.
Relationships with key stakeholders such as shareholders and the investment community, debt providers and
ratings agencies, government and social partners will need to be deepened in some cases and separately
established in others; towards a credible reputation for strong and independent governance and effective
control processes, strategic clarity and delivery from leadership, and a reputation for ethical corporate
citizenship, with all its many facets.
As per King IV, Motus’ leadership will need to demonstrate integrated thinking, through defensible decisions
that harmonise the legitimate interests of stakeholders and align to the six capitals model for sustainable
value creation, while deepening the company’s reputation as an ethical and responsible corporate citizen that
responds adequately to the risks and opportunities in the “triple context” (social, economic and environmental).
224
XI. DETAILED NARRATIVE STATEMENT ON THE PROPOSED APPLICATION OF THE PRINCIPLES
SET OUT IN KING IV
The Board believes that Motus will comply with the principles of King IV, for the reasons set out in the following
table (as supplemented by the information provided above):
Principle Application/Explanation
Governance outcome: Ethical culture
1) 1.1 Ethical leadership
The governing body should lead ethically
and effectively.
The Board of Directors (“Board”) is the Governing Body
(“GB”) and committed to the good corporate governance
principles as set forth in King IV. The Board subscribes to
those generally accepted norms of conduct that find
application in society as a whole.
Motus has a written Code of Ethics and Code of Conduct
for the Group applies to all Directors.
2) 1.2 Organisation values, ethics and
culture
The governing body should govern the
ethics of theorganisation in a way that
supports the establishment of an ethical
culture.
Motus has a written Code of Ethics and Code of Conduct
for the Group and is a values-based organisation.
The Code of Ethics and Code of Conduct guide the
interaction between employees, clients, stakeholders,
suppliers and the communities within which it operates.
The Group’s management is responsible for the
implementation of the Code of Ethics and Code of Conduct
and report any material breaches to the Social, Ethics and
Sustainability Committee (SESC).
The content of and principles embodied in the Code of
Ethics and Code of Conduct are also integrated in employee
training.
3) 1.3 Responsible corporate citizenship
The governing body should ensure that
the organisation is and is seen to be a
responsible corporate citizen.
The Board oversees the governance and activities relating
to demonstrating that the Group is a good corporate citizen,
including compliance with the Constitution, laws, standards
and own policies and procedures, as well as consistency
with the Group’s purpose, strategy, and Code of Conduct
and Ethics.
The SESC approves the strategy and monitors the
implementation of the Group’s commitment to being a good
corporate citizen. The strategy and plan include the Group’s
impact on the environment and its ongoing corporate social
investment.
When engaging with stakeholders and various communities
Motus is committed to improving the material well-being of
societies in which it operates. Careful consideration is given
to the utilisation of energy, water and other environmental
resources to ensure an effective contribution to sustain the
environment for the future.
225
Principle Application/Explanation
Governance outcome: Performance and
value creation
4) 2.1 Strategy, implementation and
performance
The governing body should appreciate
that the organisation’s core purpose, its
risks and opportunities, strategy,
business model, performance and
sustainable development are all
inseparable elements of the value
creation process.
The Group has a clearly defined strategy with identified
risks and opportunities. The Board reviews the strategy in
conjunction with management.
• The Board has delegated to management the detailed
formulation and implementation of the strategy.
• The Board approves key performance measures and
targets for management.
• The Board oversees the implementation of the strategy
and plans by management.
• Management is responsible for the execution of strategy
within the limits prescribed by the Board in terms of
written limits of authority.
• The Audit and Risk Committee is tasked with the
governance of risks and mitigating controls in terms of a
written terms of reference.
5) 2.2 Reports and disclosure
The governing body should ensure that
reports issued by the organisation enable
stakeholders to make informed
assessments of the organisation’s
performance, and its short, medium and
long-term prospects.
The Board is assisted by the Audit and Risk Committee to
review the integrity of the Annual Integrated Report (“IR”).
The IR will include all relevant information to enable
stakeholders to make an informed assessment of Motus’
performance in the short, medium and long-term.
Governance outcome: Adequate and effective control – governing structures and delegation
6) 3.1 Role of the governing body
The governing body should serve as the
focal point and custodian of the
corporate governance in the
organisation.
The Board serves as the focal point and custodian of
corporate governance in the organisation. The Board has
adopted a Board Charter that governs its role, responsibilities
and accountability relating to corporate governance. The
Board is supported by various Board Committees which
have delegated responsibility to assist it to fulfil certain
specific functions. The Board Committees report to the
Board at every Board meeting.
7) 3.2 Composition of the governing body Composition of the governing body
The governing body should comprise the
appropriate balance of knowledge, skills,
experience, diversity and independence
for it to discharge its governance role
and responsibilities objectively and
effectively.
The Board is satisfied that its composition is appropriate
taking into account the size of the Group, requirements of
knowledge, skills, experience, independence, Committees,
quorum requirements and regulatory requirements.
The CEO and CFO are members of the Board.
The Board has set diversity targets.
A majority of Board members are independent non-
executive Directors.
A Nomination Committee, chaired by the Board chair has
been established with a formal charter, tasked with
recommending candidates to fill vacancies to the Board.
226
Principle Application/Explanation
The Board charter includes a formal and transparent
process for the nomination, election and appointment of
Directors to the Board.
Declarations of interests are tabled at every Board and
Committee meeting.
The Chair of the Board:
• Is an independent non-executive Director.
• Is not a member of the Audit and Risk Committee.
• Is a member of but not the Chair of the Remuneration
Committee.
8) 3.3 Committees of the governing body
The governing body should ensure that
its arrangements for delegation within its
own structures promote independent
judgement, and assist with balance of
power and the effective discharge of its
duties.
The composition of the Board and its Committees are in line
with King IV. There is a clear balance of power to ensure
that no individual has undue decision-making powers.
Each Committee has a formal charter, approved by the
Board, detailing its duties and responsibilities.
Each Committee has a minimum of three members and
sufficient capability and capacity to function effectively.
Any member of the Board is entitled to attend any Committee
meeting as an observer, and may allow management to
attend by standing or ad hoc invitation.
9) 3.4 Performance evaluations
The governing body should ensure that
the evaluation of its own performance
and that of its Committees, its chair and
its individual members, support
continued improvement in its
performance and effectiveness.
The Board will conduct a facilitated evaluation of the Board,
the Chairman, Board Committees and individual Directors
at least every two years. The Chairman, assisted by the
Company Secretary, will conduct the evaluation process in
the intervening years.
The company secretary performance will also be evaluated.
10) 3.5 Delegation to management
The governing body should ensure that
the appointment of, and delegation to,
management contribute to role clarity
and effective exercise of authority and
responsibilities.
The Board ensures that key functions are managed by
competent and appropriately qualified individuals and are
adequately resourced.
The Board has approved and implemented a Delegation of
Authority matrix, which details the powers and matters
reserved for the Board and those delegated to management.
The Board has appointed a CEO, who is responsible for
implementing strategy.
227
Principle Application/Explanation
Governance outcome: Adequate and effective control – governance functional areas
11) 4.1 Risk and opportunity governance
The governing body should govern risk in
a way that supports the organisation in
setting and achieving its strategic
objectives.
The Board, with the assistance of management and the
Audit and Risk Committee, recognises the key role of
appropriate group wide risk management in the strategy,
performance and sustainability of the Group.
The functions of Audit and Risk have been combined into a
single Committee, ensuring that there is coordination in
respect of the evaluation and reporting of risks.
The implementation of processes to ensure that the risks to
the sustainability of the business are identified and
managed within acceptable parameters is delegated to
management.
Management continuously identify, assess, mitigate and
manage risks within the existing operating environment.
Mitigating controls are in place to address identified risks,
which are monitored on a continuous basis.
12) 4.2 Technology and information
governance
The governing body should govern
technology and information in a way that
supports the organisation setting and
achieving its strategic objectives.
The Board, together with management and the Audit and
Risk Committee, oversees the governance of IT.
Technology and information have been identified as being
of key importance in relation to the achievement of the
Group’s strategy.
13) 4.3 Compliance governance
The governing body should govern
compliance with applicable laws and
adopted, non-binding rules, codes and
standards in a way that it supports the
organisation being ethical and a good
corporate citizen.
The Board, with the assistance of management and the
Audit and Risk Committee, ensures that the Group complies
with applicable laws and regulations as well as adopted
non-binding rules, codes and standards.
The Group has identified the laws, codes and standards
that impact its operations.
The Board has delegated the responsibility for implementing
compliance to management.
14) 4.4 Remuneration governance
The governing body should ensure that
the organisation remunerates fairly,
responsibly and transparently so as to
promote the achievement of strategic
objectives and positive outcomes in
short, medium and long term.
The Board is assisted by the Remuneration Committee in
the governance of all remuneration matters.
This Committee ensures the Group’s remuneration policy is
aligned with its strategy and the interests of stakeholders.
The Committee also reviews and approves remuneration of
executive Directors and senior management.
15) 4.5 Assurance
The governing body should ensure that
assurance services and functions enable
an effective control environment, and that
these support the integrity of information
for internal decision-making and of the
organisation’s external reports.
The Audit and Risk Committee oversees and manages the
group’s combined assurance approach.
The Board, assisted by the Audit and Risk Committee,
ensures that there is internal or external assurance of:
• the internal control environment;
• integrity of information for management decision
making; and
• external reporting.
228
Principle Application/Explanation
Governance outcome: Trust, good reputation and legitimacy
16) 5.1 Stakeholders
In the execution of its governance roles
and responsibilities, the governing body
should adopt a stakeholder-inclusive
approach that balances the needs,
interests and expectations of material
stakeholders in the best interests of the
organisation over time.
Key stakeholders are identified by management and the
Board.
Management pursue appropriate stakeholder relationships
with material stakeholders with a view to balance their
legitimate and reasonable needs, interests and expectations
and those of the Group.
The Board encourages proactive engagement with
shareholders.
17) 5.2 Responsibility of shareholders
The governing body of an institutional
investor organisation should ensure that
responsible investment is practiced by
the organisation to promote the good
governance and the creation of value by
the companies in which it invests.
N/A – only applicable institutional investment companies
229
ANNEXURE 10
SHAREHOLDER RESOLUTIONS
Below is an extract from resolutions of the shareholder of Motus, passed between 12 October 2017 and the
Last Practicable Date:
RESOLVED:
Ordinary Resolutions
• Authorising the issue of ordinary shares to Imperial in exchanges for assets
• Authorising the issue of Deferred Ordinary shares to Ukhamba Holdings
• Deloitte & Touche be appointed as auditors of the Company and Mr JM Bierman as designated partner
until the date of the next annual general meeting
• Election of Ms T Skweyiya to the Board
• Election of Mr RJA Sparks to the Board
• Election of Mr S Mayet to the Board
• Election of Mr JJ Njeke to the Board
• Establishment of Audit and Risk Committee
• Appointment of Mr RA Venter as the company secretary
• Confirmation of the Company’s remuneration policy
• Approval of the Deferred Bonus Plan
• Approval of the Share Appreciation Right Scheme
• Approval of the Conditional Share Plan
Special Resolutions
• Increase of the Authorised Stated Capital
• Creation of new classes of shares
• Adoption of a new MOI and converting the company from a private company to a public company
• Authorisation of the adoption of a new MOI approved by the JSE
• Approving Non-Executive Directors’ fees payable for the periods July 2018 to June 2019 and July 2019 to
the next annual general meeting
• General authority to repurchase Company securities
• Authority to issue ordinary shares
• Authority to issue shares for cash
• Authority to provide financial assistance in terms of section 44 of the Companies Act
• Authority to provide financial assistance in terms of section 45 of the Companies Act
230
ANNEXURE 11
REGULATORY ENVIRONMENT
xii. SARS
a Certain South African tax considerations
The discussion in this section sets out the material South African tax consequences of the purchase,
ownership and disposition of Motus’ shares under current South African law. Changes in the law
may change the tax treatment of Motus’ shares, possibly on a retroactive basis.
The following summary is not a comprehensive description of all of the tax considerations that
may be relevant to a decision to purchase, own or dispose of Motus’ ordinary shares and does not
cover tax consequences that depend upon particular tax circumstances. In particular, the following
summary addresses tax consequences for holders of ordinary shares who are not residents of,
or who do not have a permanent establishment in, South Africa and who hold ordinary shares as
capital assets (that is, for investment purposes). Motus recommends that the owner consult its tax
advisor about the consequences of holding Motus’ ordinary shares, as applicable, in its particular
situation.
b Withholding tax on Dividends
Under South African law, all Dividends declared by South African resident companies to non-
resident shareholders are subject to a 20% withholding tax. Generally, under the terms of the income
tax treaty entered into between South Africa and the United States (the “treaty”), the withholding
tax is limited to 5% of the gross amount of the Dividends if the beneficial owner of the shares is a
company holding directly at least 10% of the voting stock of the company paying the Dividends
and to 15% of the gross amount of the Dividends in all other cases.
No other tax is payable in South Africa by shareholders on Dividends paid to non-resident
shareholders.
c Income tax and capital gains tax
Non-resident holders of ordinary shares should generally not be subject to income or capital gains
tax in South Africa, with respect to the disposal of those ordinary shares, unless the non-resident
carried on business through a permanent establishment in South Africa, and the profits are realised
in the ordinary course of that business.
d Securities transfer tax (“STT”)
No securities transfer tax, or STT, is payable in South Africa with respect to the issue of a security.
STT is charged at a rate of 0.25% on the ‘taxable amount’ of the ‘transfer’ of every security issued
by a company incorporated in South Africa, or a company incorporated outside South Africa but
listed on an exchange in South Africa, subject to certain exemptions.
The word ‘transfer’ is broadly defined and includes the transfer, sale, assignment or cession or
disposal in any other manner of a security which results in a change in beneficial ownership. The
cancellation or redemption of a security is also regarded as a transfer unless the company is
being liquidated. However, the transfer of a security that does not result in a change in beneficial
ownership is not regarded as a ‘transfer’ for STT purposes.
STT is levied on the ‘taxable amount’ of a security. The taxable amount of a listed security is the
greater of the consideration for the security declared by the transferee or the closing price of that
security as traded on the stock exchange concerned. In the case of a transfer of a listed security,
either the member or the participant holding the security in custody, or where the listed security is
not held in custody, the company that issued the listed security, is liable for the tax. The tax must
be paid by the last day of the month following the transfer. The person concerned may recover the
STT from the person to whom the security is transferred.
231
xiii
. SARB
South African law provides for Exchange Control Regulations which, among other things, restrict the
outward flow of capital from the CMA. The Exchange Control Regulations, which are administered by
the Financial Surveillance Department of the SARB, are applied throughout South Africa and regulate
international transactions involving South African residents, including South African companies. The
South African government has committed itself to gradually relaxing exchange controls and various
relaxations have occurred in recent years.
SARB approval is required for Motus and its subsidiaries to receive and/or repay loans to non-residents
of the CMA. The loan will usually be approved where the interest rate in respect of third party foreign
denominated loans does not exceed the base lending rate plus 3% or; in the case of shareholders loans,
the base lending rate as determined by commercial banks in the country of denomination. The interest
rate in respect of Rand denominated loans may not exceed the base rate (i.e. prime rate plus 5% on third
party loans, or the base rate in the case of shareholders loans).
Motus and its subsidiaries will require SARB approval in order to provide guarantees for the obligations
of any of Motus’ subsidiaries with regard to funds obtained from non-residents of the CMA. Absent SARB
approval, income earned in South Africa by Motus cannot be used to repay or service foreign debts.
Transfers of funds from South Africa for the purchase of shares in offshore entities or for the creation or
expansion of business ventures offshore require exchange control approval. However, if the investment
is a new outward foreign direct investment where the total cost does not exceed R1 billion per company
per calendar year, the investment application may, without specific SARB approval, be processed by an
Authorised Dealer, subject to all existing criteria and reporting obligations.
A listing by a South African company on any stock exchange other than the JSE for the purpose of raising
capital needs permission from the SARB. Any such listing which would result in a South African company
being redomiciled also needs approval from the Minister of Finance.
Motus must obtain approval from the SARB regarding any capital raising involving a currency other than
the Rand. In connection with its approval, it is possible that the SARB may impose conditions on Motus’
use of the proceeds of any such capital raising, such as limits on Motus’ ability to retain the proceeds of
the capital raising outside South Africa or requirements that Motus seeks further SARB approval prior to
applying any such funds to a specific use.
xiv
. JSE LIMITED
The JSE was formed in 1887. The JSE provides facilities for the buying and selling of a wide range of
securities, including equity and corporate debt securities and warrants in respect of securities, as well
as Kruger Rands.
The JSE is a self-regulating organisation operating under the ultimate supervision of the Ministry of
Finance, through the Financial Services Board and its representative, the Registrar of Stock Exchanges.
Following the introduction of the Stock Exchanges Control Amendment Act, 54 of 1995, or the Stock
Exchange Act, which provides the statutory framework for the deregulation of the JSE, the JSE’s rules
were amended with effect from 8 November 1995. These amendments removed the restrictions on
corporate membership and allowed stockbrokers to form limited liability corporate entities. Members
were, for the first time, also required to keep client funds in trust accounts separate from members’ own
funds. Further rules to complete the deregulation of the JSE, as envisaged by the Stock Exchange Act,
were promulgated during 1996 to permit members of the JSE to trade either as agents or as principals in
any transaction in equities and to allow members to negotiate freely the brokerage commissions payable
on agency transactions in equities. With effect from 1996, screen trading commenced on the JSE. The
Financial Markets Act, 19 of 2012, consolidates and amends the laws relating to the regulation and
control of exchanges and securities trading, the regulation and control of central securities depositories
and the custody and administration of securities and the prohibition of insider trading.
South Africa was included in the Morgan Stanley Capital International Emerging Markets Free Index
and the International Finance Corporation Investable Index in March and April 1995, respectively. South
Africa has a significant representation in these emerging market indices.
The JSE has established a project named Share Transactions Totally Electronic, or Strate, which has
involved the dematerialisation of share certificates in a central securities depository and the introduction
of contractual, rolling, electronic settlement in order to increase the speed, certainty and efficiency
232
of settlement and to fall into line with international practice. Investors are given the choice of either
holding their securities in Dematerialised form in the central securities depositary or retaining their share
certificates. Shareholders who elect to retain their share certificates are not able to trade their shares on
the JSE, although they may trade their shares off-market. Settlement of Dematerialised Shares traded
electronically on the JSE is made three days after each trade (T+3).
xv
. COMPANIES ACT AND BUSINESS RESCUE PROCEEDINGS
Motus is subject to the applicable provisions of the Companies Act, which came into force on 1 May
2011. The Companies Act modernises and makes for a more flexible company law regime in South
Africa, though in doing so, it has created various areas of uncertainty. Other than with respect to the
transitional arrangements as provided for in schedule 5 (which provides, inter alia, for the continued
application of chapter 14 of the previous Companies Act, 1973 which regulates winding-up and liquidation
of companies), the Companies Act replaces the previous Companies Act 1973 in its entirety. The South
African common law relating to companies has nevertheless, to a large extent been preserved and has,
to some extent, been codified in the new Companies Act.
In terms of the Companies Act, subject to certain provisions set out in the transitional arrangements, every
pre-existing company that was, immediately before 1 May 2011, incorporated or registered in terms of
the Old Companies Act continues to exist as a company as if it had been incorporated and registered
in terms of the Companies Act, with the same name and registration number previously assigned to it.
The Companies Act extends shareholders’ rights against companies, Directors, prescribed officers and
Committee members will now face more extensive and stricter grounds for personal liability for their
actions in the company than they did under the Old Companies Act. The Companies Act introduces class
action suits against companies, Directors and company officers by persons whose rights are affected by
the company. Companies will thus face a greater risk of litigation and the costs thereof.
As a company listed on the JSE, Motus will be required to comply with the Listing Requirements, including
certain requirements relating to corporate governance. In this regard, Motus will be required to disclose
to its shareholders the extent of its compliance with the prevailing King IV Code of Corporate Governance
for South Africa and shall be obligated to disclose any instance of non-compliance with that code.
233
ANNEXURE 12
TAX CONSIDERATIONS
South African Taxation
For South African tax purposes and in the context of Imperial and Motus, an Unbundling transaction is defined
as a transaction in terms of which all of the equity shares of Motus, which is a resident, that are held by
Imperial, which is a resident, are distributed by Imperial to any shareholder of Imperial in accordance with the
effective interest of that shareholder in the shares of Imperial. In the current instance the Unbundling is to be
effected in the ratio of 1 Motus Share for every 1 Imperial share held at the close of business on the Record
Date, subject to the rounding convention applied by the JSE.
The Unbundling complies with the requirements of section 46 of the Income Tax Act. In view of the fact that
the shares in Motus will be listed on the JSE prior to the Unbundling, the requirement is that the unbundled
shares in Motus must constitute more than 25% of the equity shares in Motus in the case where no other
shareholder holds an equal or greater amount of equity shares in the unbundled company. Otherwise the
minimum threshold is 35%. Given the fact that the Motus Shares to be distributed by Imperial to the Imperial
Ordinary Shareholders will constitute the entire issued shares in the share capital of Motus, the relevant
requirements of the Unbundling provisions will thus be met.
Pursuant to the Unbundling provisions contained in section 46 of the Income Tax Act:
• the distribution by Imperial of the Motus Shares must be disregarded for Dividends tax purposes;
• the distribution of the Motus Shares will be disregarded by Imperial for purposes of determining its taxable
income or assessed loss;
• the contributed tax capital (“CTC”) of Imperial (effectively its share capital) will be deemed to be an amount
which bears to the CTC of Imperial immediately before the Unbundling the same ratio as the aggregate
market value, immediately after the Unbundling, of the Imperial Ordinary Shares bears to the aggregate
market value of the Imperial Ordinary Shares immediately before the distribution of the Motus Shares; and
• the CTC of Motus is equal to an amount which bears to the CTC of Imperial immediately before the
Unbundling the same ratio as the aggregate market value of the Motus Shares before the Unbundling
bears to the aggregate market value of the Imperial Ordinary Shares immediately before the Unbundling.
From an Imperial Ordinary Shareholder perspective, the following South African tax considerations apply:
• Imperial Ordinary Shareholders must allocate a portion of the existing expenditure and market value
attributable to the equity shares held in Imperial to the Motus Shares. Effectively, the new base cost or tax
value for the Motus Shares is determined in accordance with the ratio that the market value of the Motus
Shares, as at the end of the day after the Unbundling bears to the sum of the market value, as at the end
of that day, of the Imperial as well as the Motus Shares;
• the Motus Shares are deemed to have been acquired on the same date that the Imperial Ordinary
Shareholders acquired the Imperial Ordinary Shares;
• the Motus Shares must be deemed to have been acquired either as trading stock, if the Imperial Ordinary
Shares were held as trading stock or as capital assets, if the Imperial Ordinary Shares were held as capital
assets; and
• any expenditure now allocated to the Motus Shares for tax purposes must be deemed to have been
incurred on the date on which the expenditure was incurred in respect of the Imperial Ordinary Shares.
No STT is payable on the transfer of the Motus Shares by Imperial to its shareholders in terms of the Unbundling.
Imperial has not attempted to qualify the Unbundling as a tax free transaction to shareholders in terms of the
rule of any jurisdiction other than South Africa. Accordingly, the Unbundling of the Motus Shares may constitute
a taxable transaction in any such jurisdiction. Non-resident shareholders are advised to consult their
professional advisors as regards the tax treatment of the Unbundling in light of the tax laws in their respective
jurisdictions and double taxation agreements concluded between South Africa and their countries of tax
residence.
Both Imperial and Motus will remain resident companies for South African tax purposes.
234
US Federal Income Taxation
The following discussion is a summary of certain US federal income tax considerations under present law of
the ownership and disposition of ordinary shares, in each case, by a US Holder (as defined below). This
summary deals only with US Holders (as defined below) that use the US dollar as their functional currency
and that will hold their ordinary shares as capital assets. This summary does not address tax considerations
applicable to investors subject to special rules, such as persons that will own immediately after the Unbundling
10 per cent. or more by vote or value of the Company’s equity interests, certain financial institutions, dealers
or traders, insurance companies, tax exempt entities, persons holding their ordinary shares as part of a
hedge, straddle, conversion, constructive sale or other integrated transaction. It also does not address US
state and local tax considerations.
As used here, “US Holder” means a beneficial owner of ordinary shares that is, for US federal income tax
purposes, (i) a citizen or individual resident of the United States, (ii) a corporation or entity treated as such
created or organised under the laws of the United States, any State thereof, or the District of Columbia, (iii) a
trust subject to the control of a US person and the primary supervision of a US court or (iv) an estate the
income of which is subject to US federal income tax without regard to its source.
The tax consequences to a partner in a partnership (or other entity treated as a partnership for US federal
income tax purposes) acquiring, holding or disposing of ordinary shares generally will depend on the status
of the partner and the activities of the partnership. Partnerships holding ordinary shares should consult their
own tax advisers about the US federal income tax consequences to their partners of acquiring, owning and
disposing of ordinary shares.
This summary assumes, except where noted otherwise, that the Company is not a passive foreign investment
company (a “PFIC”) for US federal income tax purposes, which the Company believes to be the case for its
taxable year ended 30 June 2018, and believes will be the case for its current taxable year, as well as for the
foreseeable future. The Company’s possible status as a PFIC must be determined annually and therefore may
be subject to change. If the Company were to be a PFIC in any year, materially adverse consequences could
result for US Holders.
Each US Holder should read the disclosure regarding South African taxation and consider its possible
entitlement to the benefits of the income tax treaty between the United States and South Africa (the “Treaty”).
PFIC Considerations
The Company believes that will not be considered a PFIC in its current taxable year, and based on its
anticipated assets, income and activities, it does not believe it is likely to become a PFIC. If the Company
were a PFIC in any year during which a US Holder owns ordinary shares, the US Holder would be subject in
that and subsequent years to additional taxes on any excess distributions exceeding 125% of the average
amount received during the three preceding taxable years (or, if shorter, the US Holder’s holding period) and
on any gain from the disposition of the ordinary shares (regardless of whether the Company continued to be
a PFIC). Dividends on the ordinary shares also would not be eligible for the preferential tax rate applicable to
qualified dividend income. US Holders should consult their tax advisors about Motus’ PFIC classification and
any US tax consequences relevant to them if Motus were to be considered a PFIC.
Dividends
Distributions with respect to the ordinary shares, including taxes withheld therefrom, if any, generally will be
included in a US Holder’s gross income as foreign source ordinary dividend income when received. Any
dividends will not be eligible for the dividends received deduction generally allowed to US corporations.
Subject to certain generally applicable limitations, dividends paid by the Company will be eligible for the
preferential tax rate applicable to “qualified dividend income” received by certain non-corporate US Holders
if the Company qualifies for benefits under the Treaty, which Imperial expects to be the case. If any withholding
were required on distributions payable by the Company, US Holders should be able to claim a foreign tax
credit in respect of any such withholding subject to generally applicable limitations. Dividends received will
generally be included in net investment income for purposes of the Medicare tax applicable to certain non-
corporate US Holders.
Dividends paid in any currency other than US dollars will be includable in income in the US dollar amount
calculated by reference to the exchange rate in effect on the day the dividends are actually or constructively
received by the US Holder, regardless of whether the currency is converted into US dollars at that time. A US
Holder will have a basis in the currency received equal to the US dollar value on the date of receipt. Generally,
any gain or loss resulting from currency exchange fluctuations during the period from the date the dividend
235
is includable in the income of the US Holder to the date such payment is converted into US dollars (or the US
Holder otherwise disposes of the currency) will be exchange gain or loss and will be treated as US source
ordinary income or loss for foreign tax credit limitation purposes. If dividends received in a currency other
than US dollars are converted into US dollars on the day the dividends are received, the US Holder generally
will not be required to recognise the foreign currency gain or loss in respect of the dividend income.
Dispositions
A US Holder generally will recognise capital gain or loss on the sale or other disposition of ordinary shares in
an amount equal to the difference between the US Holder’s adjusted tax basis in the ordinary shares and the
US dollar value of the amount realised from the disposition. The gain or loss will be long-term capital gain or
loss if the holder has held the ordinary shares for more than one year. Deductions for capital losses are
subject to significant limitations. Gains will be included in net investment income for purposes of the Medicare
tax on net investment income generally applicable to certain non-corporate US holders.
A US Holder that receives a currency other than US dollars on the disposition of ordinary shares will realise
an amount equal to the US dollar value of the currency received at the spot rate on the date of sale (or, in the
case of cash basis and electing accrual basis US Holders, the settlement date). An accrual basis US Holder
that does not elect to determine the amount realised using the spot rate on the settlement date will recognise
foreign currency gain or loss equal to the difference between the US dollar value of the amount received
based on the spot exchange rates in effect on the date of sale or other disposition and the settlement date.
A US Holder will have a tax basis in the currency received equal to the US dollar value of the currency
received on the settlement date. Any gain or loss on a subsequent disposition or conversion of the currency
will be US source ordinary income or loss.
Reporting and Backup Withholding
Payments of dividends and other proceeds with respect to the ordinary shares may be reported to the IRS
unless the holder is a corporation or otherwise establishes a basis for exemption. Backup withholding may
apply to amounts subject to reporting if the holder fails to provide an accurate taxpayer identification number
or otherwise establish a basis for exemption. A US Holder can claim a credit against its US federal income
tax liability for amounts withheld under the backup withholding rules, and can claim a refund of amounts in
excess of its tax liability by timely providing the appropriate information to the IRS.
Certain US Holders are required to furnish to the IRS information with respect to investments in the ordinary
shares not held through an account with a financial institution. Investors who fail to report required information
could become subject to substantial penalties. Potential investors are encouraged to consult with their own
tax advisors about these and any other reporting obligations arising from their investment in the ordinary
shares.
THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT
MAY BE OF IMPORTANCE TO A PARTICULAR INVESTOR. EACH PROSPECTIVE INVESTOR IS URGED
TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN
THE ORDINARY SHARES IN THE INVESTOR’S OWN CIRCUMSTANCES.
236
ANNEXURE 13
DETAILS OF INTER-COMPANY LOANS AS AT THE LAST PRACTICABLE DATE:
Lending Entity Borrowing Entity
Loan
amount
(ZAR)
Currency
of loan
Loan
(Source
Currency)
Details of
loan
Secured/
Unsecured
Details of
terms
and conditions
of repayment
or renewal
Interest
rate
Details of
any
security
provided
Details of
any
conversion
or
redemption
rights
Details of
repayments
within the next
12 months
360 Proprietary
Limited
Motus Corporation
Proprietary Limited
96 021 010 ZAR ZAR Trading loan Unsecured Repayable on
demand
9.35% None None Internally
generated
cash flow
Amalgamated
Automobile
Distributors
Proprietary Limited
Motus Corporation
Proprietary Limited
54 881 659 ZAR ZAR Trading loan Unsecured Repayable on
demand
0.00% None None Internally
generated
cash flow
Imperial Car Imports
Proprietary Limited
Renault South Africa
Proprietary Limited
416 268 405 ZAR ZAR Trading loan Unsecured Repayable on
demand
10.50% None None Internally
generated
cash flow
Motus Capital
Proprietary Limited
IH Mobility Holdings
(UK) Limited
506 832 480 GBP GBP Replacement of
loans in relation to
S&B Commercials
Holdings Limited
Unsecured 60 days’ notice 3.15% None None Interest only
Motus Capital
Proprietary Limited
IH Mobility Holdings
(UK) Limited
199 112 760 GBP GBP Replacement of
external funding in
Pentagon Motor
Holdings Limited
Unsecured 60 days’ notice 3.13% None None Interest only
Motus Capital
Proprietary Limited
IH Mobility Holdings
(UK) Limited
72 404 640 GBP GBP Trading loan Unsecured 60 days’ notice 2.37% None None Interest only
Motus Capital
Proprietary Limited
IH Mobility Holdings
(UK) Limited
63 354 060 GBP GBP Trading loan Unsecured 60 days’ notice 2.50% None None Interest only
Motus Corporation
Proprietary Limited
Accordian Proprietary
Limited
182 978 778 ZAR ZAR Trading loan Unsecured Repayable on
demand
0.00% None None Internally
generated cash
flow
Motus Corporation
Proprietary Limited
Associated Motor
Holdings (Namibia)
Proprietary Limited
79 687 306 ZAR ZAR Trading loan Unsecured Repayable on
demand
0.00% None None Internally
generated cash
flow
237
Lending Entity Borrowing Entity
Loan
amount
(ZAR)
Currency
of loan
Loan
(Source
Currency)
Details of
loan
Secured/
Unsecured
Details of
terms
and conditions
of repayment
or renewal
Interest
rate
Details of
any
security
provided
Details of
any
conversion
or
redemption
rights
Details of
repayments
within the next
12 months
Motus Corporation
Proprietary Limited
Brietta Trading
Proprietary Limited
160 780 000 ZAR ZAR Trading loan Unsecured Repayable on
demand
0.00% None None Internally
generated cash
flow
Motus Corporation
Proprietary Limited
Hyundai Automotive
South Africa
Proprietary Limited
266 143 621 ZAR ZAR Trading loan Unsecured Repayable on
demand
10.00% None None Internally
generated cash
flow
Motus Corporation
Proprietary Limited
Imperial Car Imports
Proprietary Limited
392 841 128 ZAR ZAR Trading loan Unsecured Repayable on
demand
0.00% None None Internally
generated cash
flow
Motus Corporation
Proprietary Limited
Kia Motors South
Africa Proprietary
Limited
105 278 922 ZAR ZAR Trading loan Unsecured Repayable on
demand
10.00% None None Internally
generated cash
flow
Motus Corporation
Proprietary Limited
Pearl Automotive
Proprietary Limited
102 508 020 ZAR ZAR Trading loan Unsecured Repayable on
demand
9.35% None None Internally
generated cash
flow
Motus Group Limited
Imperial Airport Car
Rental Namibia
Proprietary Limited
94 648 917 ZAR ZAR Trading loan Unsecured Repayable on
demand
9.35% None None Internally
generated cash
flow
MSure Proprietary
Limited
Motus Corporation
Proprietary Limited
144 925 504 ZAR ZAR Trading loan Unsecured Repayable on
demand
9.35% None None Internally
generated cash
flow
Pearl Automotive
Proprietary Limited
Motus Corporation
Proprietary Limited
168 690 077 ZAR ZAR Trading loan Unsecured Repayable on
demand
5.00% None None Internally
generated cash
flow
Pearl Automotive
Proprietary Limited
Motus Corporation
Proprietary Limited
58 697 910 ZAR ZAR Trading loan Unsecured Repayable on
demand
5.00% None None Internally
generated cash
flow
SA Vehicle
Maintenance
Proprietary Limited
Motus Corporation
Proprietary Limited
56 576 733 ZAR ZAR Trading loan Unsecured Repayable on
demand
9.35% None None Internally
generated cash
flow
238
ANNEXURE 14
THE SALIENT FEATURES OF THE NEW SHARE INCENTIVE SCHEMES
Introduction
In line with global best practice and emerging South African practice, the Company has adopted three share
incentive plans, namely a Share Appreciation Right Scheme, a Conditional Share Plan and a Deferred Bonus Plan.
The Share Appreciation Right Scheme, Conditional Share Plan and Deferred Bonus Plan includes participation
by executive Directors and selected employees of Motus.
Purpose
The purpose of the share incentive plans is to recognise contributions made by selected Employees and to
provide for an incentive for their continuing relationship with Motus, by providing them with the opportunity of
receiving Shares in the Company, thereby providing Participants with an incentive to advance Motus’ interests
and to ensure that Motus attracts and retains the core competencies required for formulating and implementing
Motus’ business strategies going forward.
As the primary intent of the share incentive plans is to purchase Shares in the market to settle the benefits,
the share incentive plans will not be as dilutive as conventional share option schemes. The Employer
Companies may, on instruction of the Directors and as a fall-back provision only, pay any Participant under
the Share Appreciation Right Schemes or Conditional Share Plan an equivalent amount in cash in lieu of any
Shares. The Deferred Bonus Plan will always be settled in Shares.
The share incentive plans also support the principle of alignment of management and shareholder interests
with Performance Conditions governing the vesting of instruments.
Glossary of terms
“Allocated” for purposes of setting the scheme limits, one Share allocated per any one Share
Appreciation Right, Conditional Award or Matching Award granted, and “Allocate” or
“Allocating” shall have the corresponding meaning as the context indicates;
“Annual Bonus” the annual bonus earned in any 1 (one) year in terms of the Company’s short term
incentive scheme;
“Associates” any company, corporation or other similar entity in which the Company owns, directly or
indirectly, ordinary shares or securities of that company, corporation or entity, and that
company, corporation or entity is considered to be an associate in terms of IFRS (being
the International Financial Reporting Standards issued by the International Accounting
Standards Board from time to time);
“Board” the Board of directors for the time being of the Company, or any Committee thereof
(including the RemCom) to or upon whom the powers of the Board in respect of the SAR,
CSPA and/or DBP are delegated or are conferred upon in terms of the Company’s
memorandum of incorporation;
“Bonus Shares” a number of Shares acquired by a Participant with a portion of the after-tax component of
the Participant’s Annual Bonus in terms of the DBP;
“Business Day” any day on which the JSE is open for the transaction of business;
“Company” Motus Holdings Limited (Registration number 2017/451730/06);
“CSP” the Motus Holdings Limited Conditional Share Plan;
“Committed Shares” the number of Shares committed by a Participant as approved by the Board from time to
time;
“Conditional Award” Conditional award of a Share granted to a Participant in terms of the CSP;
“Date of Grant” the date with effect from which the Board resolves to grant a Share Appreciation Right or
Conditional Award to an Employee as is specified in the Letter of Grant;
“Date of Offer” the date with effect from which the Board resolves to grant a Matching Award to an
Employee as specified in the Offer, irrespective of the date on which the Offer is actually
accepted;
“DBP” the Motus Holdings Limited Deferred Bonus Plan;
“DBP Period” the period starting on the Date of Offer and ending on the Vesting Date as specified in the
Offer;
239
“Employee” a person eligible for participation in the SAR, CSP or the DBP, namely any senior
employee with significant managerial or other responsibility, including any director holding
salaried employment or office (as the case may be), of any Employer Company in the
Group but excluding any director serving on the RemCom and excluding any non-
executive director;
“Employer Company”a company in the Group which employs an Employee;
“Escrow Agent” the person or entity appointed by the Board from time to time to hold Bonus Shares and
Committed Shares in escrow on behalf of Participants;
“Exercise Date” the date on which a Share Appreciation Right is exercised by a Participant;
“Exercise Price” the Market Value of a Share on the Business Day immediately preceding the Exercise
Date;
“Grant” or “Granted” the grant to an Employee of a Share Appreciation Right or Conditional Award in terms of
the SAR or CSP;
“Grant Price” the Market Value of the Share on the Business Day immediately preceding the Date of
Grant of the Share Appreciation Right;
“Group” the Company and its direct and indirect Subsidiaries and Associates from time to time;
“Independent
Advisor”
an advisor, other than the auditors of the Company, chosen from the ranks of reputable
auditing firms;
“JSE” means the Johannesburg Stock Exchange Limited, a public company incorporated in
accordance with the laws of the Republic of South Africa under registration number
2005/022939/06, which is licensed as an exchange in terms of the Financial Markets Act
19 of 2012;
“Letter of Grant” a document delivered to an Employee which specifies the Performance Conditions to
which a Share Appreciation Right or CSP is subject;
“Market Value” in relation to a Share on any particular day, the volume weighted average price of a Share
as on that day and the preceding Business Day as quoted on the JSE;
“Matching Award” an award of Matching Shares made to a Participant under the DBP, which award is
conditional;
“Matching Shares” shares forming the subject matter of a Matching Award, being equal in value to the Market
Value (or number) of the Bonus Shares held on the Vesting Date;
“Offer” a document prepared by the Board inviting an Employee to participate in the DBP which
details the name of the Participant, the number of Bonus Shares and Matching Shares
relating to each Bonus Share, the DBP Period and any applicable conditions pertaining
thereto;
“Participant” an Employee to whom a Grant/Offer has been made and who has accepted such Grant/
Offer and includes the executor of his deceased estate, where applicable;
“Performance
Condition”
the condition specified in the Letter of Grant, to which a Share Appreciation Right is
subject, which Performance Conditions are determined by the Board;
“Performance Period”the period in respect of which Performance Conditions are to be satisfied as specified in
the Letter of Grant;
“RemCom” the Remuneration Committee of the Board;
“SAR Period” the period from the Date of Grant to 00:00 on the day stated in the Letter of Grant as
being the date on which the Share Appreciation Right will lapse;
“SAR” the Motus Holdings Limited Share Appreciation Right Scheme;
“Settlement” delivery of the required number of Shares to which a Participant is entitled pursuant to the
exercise of a Share Appreciation Right or the vesting of a Conditional Award or Matching
Award;
“Settlement Date” the date on which Settlement shall occur;
“Share Appreciation
Right”
a conditional right to receive Shares in terms of the SAR to the value of the difference
between the Exercise Price and the Grant Price of that number of Share Appreciation
Rights Granted based on the Market Value of the Shares as at the date of the Notice of
Exercise;
“Shares” ordinary shares with a par value of four cents each (or as adjusted) in the capital of the
Company;
“Subsidiaries” means a subsidiary company, as defined in section 3 of the Companies Act, 71 of 2008;
“Vesting Date” the date on which a Share Appreciation Right becomes exercisable on fulfilment of the
Performance Conditions or the date on which a Participant becomes entitled to a Share
under the CSP or a Matching Share in terms of the DBP as set out in the Offer, and “Vest”
and “Vested” shall be construed accordingly.
240
Salient features of the SAR, CSP and DBP
The SAR
Employees will receive annual Grants of Share Appreciation Rights, which are conditional rights to receive
Shares equal to the value of the difference between the Exercise Price and the Grant Price. Vesting of the
Share Appreciation Rights is subject to Performance Conditions. The duration and specific nature of the
Performance Conditions and Performance Period will be stated in the Letter of Grant sent to the Participant
and will be determined by the Board on an annual basis in respect of each new Grant of Share Appreciation
Rights.
The intended Performance Conditions for the SAR are the measurement of the Company’s Return on Invested
Capital (ROIC) and the growth in Headline Earnings Per Share (HEPS). The targets and measuring terms of
these conditions will be detailed in the Letter of Grant. After Vesting, the Share Appreciation Rights will
become exercisable. Upon exercise by a Participant, the relevant Employer Company will settle the value of
the difference between the Exercise Price and the Grant Price by delivering Shares, or alternatively, as a fall
back provision only, by settling the value in cash. Share Appreciation Rights not exercised within the SAR
Period will lapse.
The CSP
Employees will receive grants of Conditional Awards in exceptional cases. Vesting of the Conditional Awards
will be subject to fulfilment of performance conditions. The performance measurement and targets will be
determined by the RemCom on issue and specified in the Letter of Grant. It is intended that the performance
conditions will be linked to specific projects or long term strategic goals and performance. If the Performance
Conditions are satisfied, the Conditional Awards will Vest. If the Performance Conditions are not met, the
Participant will be informed of the reasons for non-fulfilment, and the Conditional Awards will lapse.
The DBP
Employees will be permitted to use a portion of the after-tax component of their Annual Bonus to acquire
Bonus Shares. A Matching Award of Shares will be made to the Participant after a set vesting period on the
condition that the Participant remains in the employ of an Employer Company and retains the Bonus Shares
over the DBP Period. The Bonus Shares and the Committed Shares shall be held for the benefit of the
Participant by the Escrow Agent for the duration of the DBP Period. The Participant remains the owner of the
Bonus Shares for the duration of the DBP Period and will enjoy all shareholder rights in respect of the Bonus
Shares. A portion or all of the Bonus Shares can be withdrawn from escrow at any stage before the expiry of
the DBP Period, but the Matching Award is forfeited to the extent of the Bonus Shares withdrawn from escrow
during the DBP Period.
Costs
All costs and expenses relating to the SAR, CSP, and DBP, including the costs of the appointed Administrator(s)
(the Costs) will be borne by the Group prior to the Vesting Date. Thereafter, the Costs will be borne by and
for the account of the relevant Participant, and may be set-off and/or against any proceeds due to the
Participant as at the time of any awards being settled. The Costs however do not include any taxes payable,
for which the Participant remains liable for at all times.
Eligibility
Executive Directors and Employees of the Group are eligible to participate in the SAR, the CSP and DBP. The
Employer Companies will periodically recommend to the Board which Employees it intends to incentivise by
the making of Offers and/or Grants whereupon the Board shall make an Offer or Grant to the Employee
concerned in respect of either the SAR, the CSP or the DBP.
Performance Conditions
The Vesting of Share Appreciation Rights and Conditional Awards will be subject to the achievement of
specified Performance Conditions. The Performance Conditions will be stated in a Letter of Grant.
The DBP is not subject to any Performance Conditions, but is subject to time- and employment-based vesting
conditions.
Limits
Overall Company limit
The aggregate number of Shares which may be Allocated under the SAR, DBP and any existing share
schemes operated by the Company shall not exceed 5% (five percent) of the number of issued ordinary
241
shares at any one time, which currently equates to 10 098 573 (ten million and ninety-eight thousand, five
hundred and seventy three) shares.
The limit referred to shall exclude the following:
• Shares purchased in the market in Settlement of the SAR, CSP, DBP and any other managerial share
schemes operated by the Company; and
• Shares Allocated under the SAR, CSP and the DBP and any other managerial share schemes operated
by the Company which are not subsequently Settled to a Participant as a result of the forfeiture thereof.
The aggregate overall Share limit does however include the actual number of new Shares issued by the
Company in Settlement of the SAR, the CSP, the DBP and any other managerial share schemes operated by
the Company.
Individual limit
The maximum number of Shares allocated in respect of all unvested Share Appreciation Rights Granted in
terms of the SAR, Conditional Awards granted in terms of the CSP, and Matching Awards granted in terms of
the DBP shall not exceed the limit determined from time to time by the Board, which number of Shares shall
not exceed) 0,5% (zero point five percent) of the issued ordinary share capital of the Company at any one
time.
Forfeiture of Grants and Matching Awards
The RemCom may exercise its discretion to determine that a Grant or Matching Award (as the case may be)
is subject to reduction or forfeiture (in whole or in part), effective the date of the determination of the reduction
or forfeiture, if:
i. there is reasonable evidence of misbehaviour or material error by the Participant; or
ii. the financial performance of the Group, the Company, the Employer Company or the relevant business unit
for any Financial Year in respect of which a Grant is based have subsequently appeared to be materially
inaccurate; or
iii. the Group, the Company, the Employer Company or the relevant business unit suffers a material downturn
in its financial performance, for which the Participant can be seen to have some liability; or
iv. the Group, the Company, the Employer Company or the relevant business unit suffers a material failure of
risk management, for which the Participant can be seen to have some liability, or in any other circumstances
if the Remuneration Committee determines that it is reasonable to subject the Grants of one or more
Participants to reduction or forfeiture.
The Remuneration Committee may postpone the Vesting Date in respect of any Participant if, at the Vesting
Date, there is an ongoing investigation, pending disciplinary or poor performance procedures, or other
procedure being carried on (or contemplated to be instituted) to determine whether the forfeiture provisions
apply in respect of a Participant, or the Remuneration Committee decides that further investigation is
warranted. In such event, the Vesting Date shall be deemed to be the date upon which the investigation or
procedure has been completed and the Remuneration Committee has determined that Participant’s SARs
shall not be forfeited.
Cessation of employment and death
Resignation or dismissal
If a Participant’s employment with an Employer Company terminates by reason of his resignation or dismissal
on grounds of misconduct, poor performance or proven dishonest or fraudulent conduct (whether such
cessation occurs as a result of notice given by him or otherwise or where he resigns to avoid dismissal on
grounds of misconduct, poor performance, or proven dishonest or fraudulent conduct) before the Vesting
Date, all unexercised (vested and unvested) Share Appreciation Rights, Conditional Awards and all conditional
Matching Awards shall lapse on such cessation.
Retirement
If a Participant retires while any portion of that Participant’s Share Appreciation Rights remain unexercised, or
Matching Award or Conditional Award remains unvested, the Participant shall be entitled to the same rights and
be subject to the same conditions under the SAR CSP, or the DBP as if he had continued to be an Employee.
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Retrenchment, death, ill health, disability or other reasons for cessation of employment
If a Participant ceases to be an Employee of an Employer Company after the Vesting Date by reason of
retrenchment, death, ill health, disability or other reasons for cessation of employment other than resignation
or dismissal or retirement, any Vested but unexercised Share Appreciation Rights may be exercised within 6
(six) months (or an extended period of up to 12 (twelve) months in the case of death) of the date of cessation
of employment, failing which the Share Appreciation Rights will lapse.
If a Participant ceases to be an Employee of an Employer Company prior to the Vesting Date by reason of one
of the scenarios listed above, a pro-rata portion of the unvested Share Appreciation Rights shall vest and be
exercised within 6 (six) months (or such extended period as the Board regard as appropriate) of the date of
cessation of employment or the date of death. The pro-rata portion of the Share Appreciation Rights that Vest
will reflect the number of months served since the Date of Grant and the extent to which the Performance
Conditions have been satisfied.
If a Participant ceases to be an Employee of an Employer Company prior to the Vesting Date by reason of one
of the scenarios listed above, a pro-rata portion of the unvested Conditional Awards shall vest on the date of
cessation of employment or the date of death. The pro-rata portion of the Conditional Award that Vests will
reflect the number of months served since the Date of Grant and the extent to which, in the opinion of the
Board, the Performance Conditions have been satisfied. Should the Participant cease to be an Employee of
an Employer Company, but on the same date is employed by another Employer Company, the Participant will
not be treated as ceasing to be an Employee as contemplated herein.
If a Participant ceases to be an Employee of an Employer Company prior to the Vesting Date by reason of one
of the scenarios listed above, a pro-rata portion of the unvested Matching Awards shall Vest on the date of
cessation of employment or death. The pro-rata portion of the Matching Awards that Vest will reflect the
number of months served since the Date of Offer and will be based on the number of Bonus Shares and the
Committed Shares held at the time of cessation of employment.
The balance of the unvested Share Appreciation Rights not permitted to be exercised, the unvested Matching
Awards, and the unvested Conditional Awards, will lapse.
Change of control and delisting
In the event that a change of control of the Company occurs before the Vesting Date, the Board may by
written notice to the Participant deem a pro-rata portion of the unvested Share Appreciation Rights, Conditional
Awards and/or Matching Awards to vest on the date of the occurrence of the change of control and permit the
exercise or vesting of such pro-rata portion within a time period to be determined by the Board.
The pro-rata portion of the Share Appreciation Rights, Conditional Awards and Matching Awards that vest will
reflect the number of months served since the Date of Grant or the Date of Offer to the date of the change of
control and the extent to which the Performance Conditions (where relevant) have, in the opinion of the Board,
been met or in the case of Matching Awards, the number of Bonus Shares and Committed Shares held at the
time of the change of control or delisting.
The portion of the Share Appreciation Rights, Conditional Awards and Matching Awards that do not vest early
will, if the Shares continue to be listed, continue to be subject to the terms of the Letter of Grant or Offer
relating thereto unless, the Board, in their absolute discretion, determines that the terms of the Letter of Grant
or Offer relating thereto are no longer appropriate, in which case the Board shall make such adjustment to the
number of Share Appreciation Rights, Conditional Awards and Matching Awards or take such other action as
may be required to place the Participants in no worse position than they were prior to the occurrence of the
change of control. If the Shares cease to be listed following such a change in control, the application of the
rules and procedures governing the “Variation in share capital” shall apply.
In the event of an Employer Company (other than the Company), ceasing to be a member (or in the case of
Conditional Awards only, a subsidiary) of the Group, the Board may take such action as they consider
appropriate to protect the interests of Participants, including converting Share Appreciation Rights, Conditional
Awards and/or Matching Awards into Grants in respect of shares in one or more other companies, reviewing
the time that has lapsed since the Date of Grant or Date of Offer and calculating the number of Shares to vest
in each Participant accordingly, provided that the Participants are no worse off.
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Variation in share capital
In the event of a rights issue, capitalisation issue, capital distribution, reduction or other variation of share
capital of the Company, subdivision of Shares, consolidation of Shares, the Shares ceasing being listed on
the JSE, the Company being put into liquidation for the purpose of reorganisation or any other event affecting
the share capital of the Company, Participants shall continue to participate in the SAR, the CSP and/or DBP,
however the Board may, where the Company’s value has been materially affected thereby, make such
adjustment to the number of Share Appreciation Rights, Conditional Awards, and Matching Awards or take
such other action as may be required, to place Participants in no worse position than they were prior to the
occurrence of the relevant event.
The Board shall notify the Participants of any adjustments which are made under this paragraph. Where
necessary, in respect of any such adjustments, the Independent Advisor, acting as experts and not as
arbitrators and whose decision shall be final and binding on all persons affected thereby, shall confirm to the
Board in writing that these are calculated on a non-prejudicial basis.
If the Company is placed into liquidation otherwise than for the purposes of reorganisation, the SAR, the CSP
and DBP shall ipso facto lapse as from the date of liquidation and any Share Appreciation Rights, Conditional
Awards or Matching Awards which have not yet vested shall ipso facto lapse from the date of liquidation. For
the purposes hereof “date of liquidation” shall mean the date upon which any application (whether provisional
or final) for the liquidation of the Company is granted by the relevant court, or in the case of the CSP and
Conditional awards, is lodged at the relevant court.
Amendments to the SAR and DBP
Amendments to the provisions of the SAR, the CSP and DBP relating to:
• eligibility to participate in the SAR, the CSP or DBP;
• the basis for determining Grants, the Grant Price or Exercise Price;
• the basis upon which Matching Awards are made;
• the basis for determining the Market Value and any amount payable by a Participant (where applicable);
• the adjustment of Grants and price, and Offers and price, in the event of a variation of capital of the
Company, as well as voting, Dividend, transfer and other rights, including those arising on liquidation of
the Company, attaching to Shares;
• the treatment of Share Appreciation Rights, Conditional Awards, and/or Matching Awards in the event of
a change in control;
• the limitations on benefits or maximum entitlements;
• the number of Shares which may be utilised for the SAR and CSP;
• the procedure to be adopted in respect of the vesting and exercise of Share Appreciation Rights,
Conditional Awards, and/or Matching Awards in the event of termination of employment and/or Retirement;
are subject to approval by ordinary resolution of 75% (seventy five percent) of the shareholders of the
Company in general meeting, and by the JSE to the extent (if any) required in terms of the Listings Requirements,
and/or compliance with any applicable statute, regulation, rules or Listings Requirements from time to time.
Any further minor amendments to the rules of the SAR, the CSP and DBP may be effected by the Board.
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ANNEXURE 15
INFORMATION ON UKHAMBA
Glossary of terms
Terms defined in the Pre-Listing Statement to which this annexure is attached shall apply herein and bear their
same meaning. Terms used herein that are not defined in the Pre-Listing Statement are defined below.
“A”shareholders the holders of the “A” shares;
“A”shares 19929012 ordinary no par value shares in the capital of Ukhamba, the terms and
conditions of which are governed by Schedule1 to the Ukhamba MOI;
“B”shares 17602084 ordinary no par value shares in the capital of Ukhamba, the terms and
conditions of which are governed by Schedule2 to the Ukhamba MOI;
beneficiaries beneficiaries of the Ukhamba Trust;
“C”shares 1000 ordinary no par value shares in the capital of Ukhamba, the terms and
conditions of which are governed by Schedule3 to the Ukhamba MOI;
“D”shares 19929012 ordinary no par value shares in the capital of Ukhamba, which will be
created in Ukhamba, upon the approval of the scheme, the terms and conditions of
which will be governed by Schedule4 to the Ukhamba MOI;
“E” shares
17602084 ordinary no par value shares in the capital of Ukhamba, which will be
created in Ukhamba, the terms and conditions of which will be governed by
Schedule5 to the Ukhamba MOI;
Imperial Deferred
Shares
deferred ordinary shares in Imperial of a par value of 4cents each held by Ukhamba,
which convert to Imperial shares in annual tranches over a period which will end on
30June2025;
IUC Trust the Imperial and Ukhamba Community Development Trust (trust registration
numberIT3821/04);
scheme the scheme of arrangement proposed by the Board of directors of Ukhamba between
Ukhamba and the “A”shareholders, in terms of section114(1)(b) of the Companies
Act, which, if approved and implemented, will result in the division of the “A”shares
into two separate classes of shares, comprising the “A”shares and the “D”shares,
consequent upon which the “A”shareholders will be allotted and issued on a one-for-
one basis, the “D”shares;
trading platform the platform for the trade of “A” shares and “D” shares on the counter trading page of
Equity Express Securities Exchange Proprietary Limited, a private company
incorporated in accordance with the laws of South Africa and licensed as an
exchange under the Financial Markets Act with registration number2015/197820/07;
Ukhamba MOI the memorandum of incorporation of Ukhamba as it will be amended pursuant to the
approval of the scheme; and
Ukhamba Trust the Ukhamba Trust (trust registration numberIT11896/98).
Background to Ukhamba
Ukhamba, is an investment holding company, formed by Imperial in 1998 as a venture between Imperial and
the Ukhamba Trust.
Imperial provided seed capital of R15000000.00 for the creation of Ukhamba which has enabled Ukhamba
since its establishment, to generate solid profits from its various businesses and investments.
From its inception, the shareholding of Ukhamba was held as follows:
• the Ukhamba Trust: 47.1%;
• Imperial: 46.9%; and
• the IUC Trust: 6%.
In 2004, in terms of a B-BBEE initiative, Imperial introduced Ukhamba as a B-BBEE shareholder to acquire a
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direct shareholding interest in Imperial. In order to facilitate that acquisition, Imperial created a separate class
of shares, namely, the Imperial Deferred Shares, representing 10.1% of the total shareholding of Imperial.
22 755 389 Imperial Deferred Shares were allotted and issued to Ukhamba at par. Imperial funded the
purchase of the Imperial Deferred Shares by Ukhamba.
The issue of the Imperial Deferred Shares to Ukhamba ensured that Imperial became a B-BBEE company
with 10.1% of its equity owned by B-BBEE participants and was the culmination of a long-term strategy by
Imperial to effect true B-BBEE, by economically empowering its many thousands of Black employees through
their participation in the Ukhamba Trust, to acquire an indirect shareholding in Imperial for free. In this regard,
the Ukhamba Trust gave some 15 575 black historically disadvantaged people who were employees of
Imperial an opportunity, for a consideration totally funded by after-tax bonuses awarded to them by Imperial
for that purpose, to acquire units in Ukhamba Trust, which in turn represented a shareholding in Ukhamba,
and through it, inter alia, an indirect shareholding in Imperial.
Conversion, however, of the Imperial Deferred Shares into Imperial Ordinary Shares was to take place by
means of a lengthy annual conversion formula-potentially 29years for conversion of all the Imperial Deferred
Shares into Imperial Ordinary Shares. Due to the uncertain pace and quantum of conversion of the Imperial
Deferred Shares, the beneficiaries indicated to Ukhamba and to Imperial, a desire for liquidity in order to
realise value for the units that they held in the Ukhamba Trust.
Accordingly, in order to expedite the conversion profile of all the Imperial Deferred Shares into Imperial
Ordinary Shares in the interests of the beneficiaries, Imperial in 2013 approached the Imperial Shareholders,
who agreed to an automatic conversion of the remaining Imperial Deferred Shares in 12equal tranches of
831469 shares each year commencing 30June2014 and ending 30June2025.
2013 restructure
At the same time, Ukhamba’s shareholding was restructured, which coincided with the establishment of the
trading platform, to comprise the following shares with the following rights:
the “A” shares, which are held by the “A” shareholders, representing a 53.1% interest in the underlying
Imperial Deferred Shares and Imperial Ordinary Shares held by Ukhamba, which are tradable on the trading
platform;
the “B”shares, which are held by Imperial, representing its 46.9% interest in the underlying Imperial Deferred
Shares and Imperial Ordinary Shares held by Ukhamba, and which are not tradable on the trading platform;
and
the “C”shares, which are be held by the Ukhamba Trust (47.1%), Imperial (46.9%) and the IUC Trust (6%),
representing their respective interests in Ukhamba’s minor investments.
Through the establishment of the trading platform, beneficiaries were given the opportunity to earn a return
on their units, notionally, to all intents and purposes, as if they held the “A”shares pro rata. Those beneficiaries
who retain their units will receive a distribution of Imperial Ordinary Shares in specie on expiry of the final
tranche of Imperial Deferred Shares converting into Imperial Ordinary Shares.
Impact of the Unbundling on Ukhamba
It is the intention to ensure that Ukhamba and its shareholders, and so too, Imperial and its shareholders, are
not disadvantaged in any way as a result of the Unbundling and accordingly to place Ukhamba in the same
economic position as it was prior thereto and to ensure that Motus becomes a B-BBEE company with 10.1%
of its equity owned by B-BBEE participants, emulating the same status in that respect as Imperial. In order to
achieve this, the Imperial B-BBEE structure will be replicated in Motus, in terms of which Ukhamba will, in
terms of the Unbundling, receive the same number of Motus shares as the number of Imperial Ordinary
Shares currently held by it. In addition, Ukhamba will subscribe for, and be allotted and issued by Motus, the
Motus Deferred Shares, equating to the same number of Imperial Deferred Shares currently held by it.
Ukhamba’s financial position will accordingly remain unchanged, in that, its present holding of Imperial
Ordinary Shares and Imperial Deferred Shares will now be represented by the combined holding of Imperial
Ordinary Shares, Imperial Deferred Shares, Motus shares and Motus Deferred Dhares. The Unbundling will,
therefore, have no financial impact on Ukhamba. At the same time, Motus will, in this way, become a B-BBEE
company with 10.1% of its equity owned by B-BBEE participants and it will subscribe for and be issued by
Ukhamba with the “E” shares, which will represent 46.9% interest in the underlying Motus Shares and Motus
Deferred Shares held by Ukhamba, and which are not tradable on the trading platform.
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In addition, to ensure that Ukhamba shareholders are placed in the same economic position as they were
prior to Unbundling, it is necessary to divide the “A”shares into two separate classes of shares, comprising
“A” shares and “D” shares. The “A” shares will continue to be representative of 53.1% of the underlying
shareholding of Ukhamba in the Imperial Ordinary Shares and the Imperial Deferred Shares. The “D”shares
will be representative of 53.1% of the underlying shareholding of Ukhamba in the Motus Shares and the Motus
Deferred Shares.
Scheme of arrangement
The division of the “A”shares into two separate classes of shares, constitutes a scheme between Ukhamba
and the “A” shareholders in terms of section 114(1)(b) of the Companies Act, which, if approved and
implemented, will result in the division of the “A”shares into two separate classes of shares, comprising the
“A”shares and the “D”shares, consequent upon which the “A”shareholders will be allotted and issued the
“D”shares on a one for one basis. As a result, “A”shareholders will be able to trade their “A”shares and
“D”shares on the trading platform, as separate instruments.
Approval of the scheme for the aforesaid division of the “A” shares and consequent amendments to the
Ukhamba MOI will be sought at a general meeting of “A” shareholders and a combined general meeting of
all shareholders of Ukhamba, which is anticipated to take place on 9 October 2018.
B-BBEE credentials
As the Imperial B-BBEE structure will be replicated in Motus upon Unbundling, from the outset Motus will have
approximately 10.1% Black equity ownership and will comply with relevant B-BBEE legislation which
verification it anticipates obtaining from an independent assessment by a recognised B-BBEE rating agency.
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