Integrated annual report ENDURING PARTNERSHIPS AND … · Industrial Agriculture Supply chain...

Our group �Our performance �

Governance and risk �Financial statements �

CargoCarriersIntegrated annual report 2016 3

Integrated annual report

ENDURING PARTNERSHIPS AND ADDING VALUE

CargoC

arriers integrated annual report 2016

4 CargoCarriersIntegrated annual report 2016

This integrated annual report is available online at www.cargocarriers.co.za.

We welcome feedback from stakeholders. To tell us what you thought of this report, or how you believe we can improve our reporting in future, please contact Diana Padayachee, group audit and risk manager, on: Tel: 011 485 8700/email: [email protected]

Scan this code with one of the many available QR reader apps on your smartphone to access our online report.

OUR VALUES / In the year reported we made a concerted effort to reinforce the importance of our group values among our people.

ABSOLUTE INTEGRITYAct with honesty in our daily tasks without compromising the truth.

LOYALTYCommitment and faithfulness to the company and our colleagues.

INNOVATIONTo find new and better ways of doing things in order to continuously improve our performance.

COMMITMENTDedication to the successful completion of tasks and responsibilities to ensure the growth and success of the company.

MUTUAL RESPECTProper regard for an individual’s dignity including fellow employees, suppliers and customers.

COMPETENCEApply the required knowledge and skills in order to carry out our duties successfully.

ACCOUNTABILITYTake responsibility for the successful completion of tasks assigned.

CONTENTS

[1 – 13]Our group �Performance at a glance 1

Group profile and where we operate 3

Business model 4

Our business strategy 6

Stakeholder engagement 10

Directorate 12

[14 – 33] Our performance �Chairperson’s statement 14

CEO and CFO’s report 16

Seven-year financial review and value added statement

19

Operational report 20 – 27

Social performance 28

Environmental performance 32

[34 – 45] Governance and risk �Group governance structure 34

Governance and risk 36 – 43

Social and ethics committee report 44

Remuneration report 45

[46 – 99] Financial statements �Directors’ responsibility for the financial statements

46

Declaration by the company secretary 46

Independent auditors’ report 47

Audit and risk committee report 48

Directors’ report 50

Statements of comprehensive income 54

Statements of financial position 55

Statements of changes in equity 56

Statements of cash flows 57

Accounting policies 58 – 71

Notes to the financial statements 72

[100 – 108] Shareholders’ information �Directorate 100

Notice of annual general meeting 102

Form of proxy 107

Corporate information IBC

Shareholders’ diary IBC

reduction in tyre cost

Overall reduction of

12.69%(Applicable to F&P)

chemicals

For more information on our social performance see page 28.

transformationBBBEE from Level 4 in 2016 to Level 3 in 2017

Sasolburg branch achieved preferred hauliers status for SQAS in May 2015

HOW WE ADDED VALUE IN 2016

Spend on learnerships and apprenticeships up by

51%

First female driver appointed in Sitanani Carriers (joint venture)

Industrial overview – page 22.

socialfuel and powders

All certifications maintained during the year: > ISO 9001:2008 quality

standard> ISO 14001:2004 environment

standard > OHSAS 18001:2007 safety

standard

HOW WE ADDED VALUE IN 2016

IT systems availability (servers and applications)

98%

Unlocking logistics and cost efficiency

environmental

Supply Chain Services overview – page 26. on-time delivery

All Fuel and Powder branches consistently

achieved above

97%

on-time delivery scores



Shareholders’ information �


Performance at a glance

OUR VISION / To be recognised as the preferred partner in supply chain and transport logistics solutions and rated as the leader in our selected specialised markets.

Industrial Agriculture Supply chain services

2016

2015 re-presented 626 725

592 098

Revenue from continuing operations (R000)

5.5%

2016

2015 155.1

97.8

Headline earnings per share (cents)

33.9%

2016

2015

2014

2013

2012

Cash on hand (R000)

Ó34.2%

116 341

84 780

58 152

134 412

180 349

Basic and diluted earnings per share from continuing operations (cents)

28.4%

2016

2015 136.5

170.4

2016

2015

2014

2013

2012

2 166

1 924

1 771

Net asset value per share (cents)

3.2%

2 279

2 331


Performance at a glance continued

About our group Cargo Carriers, a leading provider of supply chain and logistics services, has been in operation for almost 60 years. Our business model is driven by our commitment to innovative, cost-efficient, service-led solutions that are tailored to precise client needs.

We embrace the highest standards of ethical trading and corporate governance whilst adhering to internationally recognised standards of independently assured quality and environmental stewardship.

Cargo Carriers has been a JSE-listed company since 1987.

Management of operations is structured around strategic product specialisation and are divided into:> Chemicals and Steel> Fuel and Powders> Agriculture> Supply Chain Services

60years of keeping our promise to our clients

1 115(2015: 1 083) employees

Where we operate Our operations are located in South Africa and across sub-Saharan Africa. Our business’ geographic footprint is largely determined by our desire to deliver prompt, responsive service from strategically located points that keep us close to our customers.

Chemicals and Steel

Revenue

R281.7 million35%contribution to the group

Areas of operation• Gauteng • North West• Western Cape

Fuel and Powders

Revenue


Areas of operation• Free State • Eastern Cape• Northern Cape • Western Cape• Mpumalanga • Namibia• Lesotho • North West





Group profile and where we operate

● Fuel and Powders ● Chemicals and Steel ● Agriculture ● Supply Chain Services

Physical infrastructure provides a base of operations for our fleet of specialised vehicles and 1 115 employees. Continuous investment in our facilities and people enables us to deliver the quality and consistency that are the hallmark of all logistics solutions developed by Cargo Carriers.

SOUTH AFRICA

NamibiaZimbabwe

Zambia*

Botswana

Swaziland

Free State

North WestGauteng

Eastern Cape

Northern Cape

KwaZulu-Natal

Mpumalanga

Limpopo

Western Cape

Lesotho

Agriculture

Revenue


Areas of operation• Swaziland • Zimbabwe

Supply Chain Services

Revenue


Areas of operation• South Africa – National • Swaziland

Discontinued operation*

Revenue


* Relates to the sale of our Zambian operation


Business model

CAPITALS INPUTS STRATEGIC FOCUS AREAS

Financial

Strong balance sheet

Reinvestment of capital

Growing customer base

Operating profitability Customer focus

Intellectual

Superior IT processes

Solutions that add value

Extensive industry knowledge

Technical capability

Innovative customer solutions

Operational

Geographical footprint in South Africa and sub-Saharan Africa

Extensive fleet

Operating safely Delivering quality and

reliability Vehicle efficiency

Social

A loyal customer base

Preferential and empowered suppliers

Support communities in which we operate

Embracing and achieving transformation

Human

Talented workforce

Remuneration benchmarks

Continuous training

Attracting and retaining talent while addressing skills shortages

Strategic employee skills Broad-based black

economic empowerment

Environmental

Fuel, water and electricity consumption

Operating safely Occupational health and

safety Optimal vehicle loading

and routing





BUSINESS ACTIVITY OUTPUTS AND OUTCOMES

Deliver cost-effective transportation solutions to customers in specific industries:

Fuel and Powders

Chemicals and Steel

Agriculture

Supply Chain Services

Secure acquisitive and organic growth

Raise debt finance for potential acquisitions

Dividends paid

Enhance the value of capital assets

Maintain sustainable margins and profits

Continued improvement of IT systems and operational processes

Value-adding consulting

Employee skills development through focused and continuous training

Deliver enhanced and innovative service offering

Maintain effective and efficient operational environment

Create industry-specific solutions

Improving transport efficiency Fuel industry innovation of Bartech trailers

Improved payloads and fleet management

Build long-term relationships with transformed suppliers

Improve transformation outcomes

Foster enterprise development

Drive corporate and social investment

Informed and engaged stakeholders

Help set up sustainable SMMEs

Community development

Focus on employee skills development through focused training

Upskill graduates in the field of logistics through management trainee programmes

Trained and skilled workforce

Offer competitive remuneration

Develop talent and future leaders

Become and remain the employer of choice

Efficient fuel usage through ongoing fleet maintenance and driver training

Conscious and concerted effort to reduce water and electricity consumption

Compliance with international standards (ISO 14001)

Reduced carbon emissions by 32%

Maintained ISO 14001:2004 accreditation

CAPITALS INPUTS STRATEGIC FOCUS AREAS

Financial

Strong balance sheet

Reinvestment of capital

Growing customer base

Operating profitability Customer focus

Intellectual

Superior IT processes

Solutions that add value

Extensive industry knowledge

Technical capability

Innovative customer solutions

Operational

Geographical footprint in South Africa and sub-Saharan Africa

Extensive fleet

Operating safely Delivering quality and

reliability Vehicle efficiency

Social

A loyal customer base

Preferential and empowered suppliers

Support communities in which we operate


Human

Talented workforce

Remuneration benchmarks

Continuous training


Strategic employee skills Broad-based black

economic empowerment

Environmental

Fuel, water and electricity consumption

Operating safely Occupational health and

safety Optimal vehicle loading

and routing


Determining materialityThe determination of our most material issues is informed by:> Our strategic objectives> Our risk management

processes and management focus on opportunities

> Stakeholder engagement

Material issues are considered every month by the management committee. Their determination of what matters most to our business is, in turn, informed by information received from operational executives and by those responsible for our human, environmental and social capital and the management of the internal audit and risk functions.

The board of directors (the board) receives regular communication from the management committee on material issues. Ultimately, the board is responsible for determining group materiality while board committees determine materiality relevant to the areas described in their terms of reference. The board’s endorsement of the group’s annual determination of current materiality is implicit in its approval of the publication of this integrated annual report.

Our business strategy

Operating profitably



Delivering quality and reliability

1

2

3

4

5

Material issuesIn this report we deal with the issues that are most material to our stakeholders and to the achievement of our strategic objectives.

Operating safely





OUR KEY OBJECTIVE > OUR PERFORMANCE

Continuously improve safety

indicators

> Lost work day rate (LWDR) down by 62.5%

> Maintained OHSAS 18001:2007 accreditation

> Zero fatalities

Give investors satisfactory returns

while making appropriate investments

in the group’s people, assets and

capabilities

> Revenue R592.1 million from continuing operations (2015: R626.7 million)

> Profit before tax from continuing operations R44.4 million (2015: R37.9 million)

> Debt to equity ratio 13% (2015: 38%)

> Maintain strong balance sheet • Improved net asset value per share 2 351 cents (2015: 2 279 cents) • Liquidity (current assets/current liabilities 2.1 ratio (2015: 1.5 ratio)

Investment in people, assets and

capabilities

> Five new diesel mechanics underwent full-time training

> Three diesel mechanics completed four-year qualification

> Apprenticeship and learnership spend up by 51%

> Training investment up by 456%

> Number of employees 1 115 (2015: 1 083)

Improve employment

equity within the group and

enhance enterprise development

initiatives

> Moved from Level 4 to Level 3 BBBEE rating early in the new period

> Employment equity up by 17%

> Eight owner/drivers

Constantly deliver customer-centric service that adds

best-in-class value to our customers’

businesses

> Extensive investment in value-adding IT services and systems

> Introductory development programme (10 candidates)

> Management development programme (10 candidates)

1

3

5

OUR BUSINESS STRATEGY – PERFORMANCE ON KEY MATERIAL ISSUES

2

4


Our business strategy continued

Dependency on key customers

Strategic employee skills

Broad-based black economic empowerment

Retaining key customers

1

2

3

4

5

Risk assessmentOur strategic risks are regularly considered by the audit and risk committee of the board, which receives regular reports from the group audit and risk manager. The committee oversees the effectiveness of internal controls and the reporting, identification and mitigation of key risks. (For more on our risk management policies and procedures, see pages 36 to 43 corporate governance.)

Occupational health and safety risks





KEY RISK > DEFINED RISK AND MANAGEMENT RESPONSE

The company is committed to ensuring a safe working

environment for its most important asset,

its employees. The risk relates to employees being

exposed to or harmed by hazards in the workplace,

and all activities related to transporting goods to

customers.

Employee/operations/strategic risk > OHSAS 18001 accredited > Periodic hazard identification and risk assessment exercises > Reduced exposure through preventive and corrective action > A culture of “living SHEQ” > Training to aid accident prevention and response > Safety committee meetings at each site to address any safety-related risk

Some divisions within the group service a single customer base, resulting

in a sole customer risk. The sustainability of these divisions is at risk should

the customer not renew its contracts with them.

Customer risk > Focused quality services to our customers. ISO 9001 accredited > Customised vehicles to meet customers’ requirements > Meeting customers at their point of need and consistently delivering on expectations

The pool of suitable, qualified candidates

for many critical skills categories is limited, especially given the

context of employment equity.

Employee risk > Programmes and training facilities to address shortage of industry-specific critical skills

> Performance management systems to identify training needs to ensure that the existing skill sets of employees are of the highest standard

> Retention of key skills through market-related salaries and fostering a culture conducive to employee satisfaction

The BBBEE compliance landscape has changed

through the gazetting of the amended codes of

good practice, resulting in challenges in meeting

the stringent requirements that have been imposed.

Transformation risk > Our BBBEE steering committee ensures that transformation is strategised and prioritised. The committee is constantly looking at opportunities to improve all elements of the scorecard

> Our training school for diesel mechanic apprentices is at the forefront of our skills development

> Employment equity is managed on an ongoing basis and has shown steady increases over the years

> Our enterprise development initiative, ie the owner/driver scheme, has empowered drivers to own and run their own businesses

Retaining key customers

Loss of customer risk > Continuous focus on quality services to our customers. ISO 9001 accredited

> Innovative service offerings, E-POD and customised vehicles to meet client-specific needs

> Ongoing and prioritised customer relationship management

1

2

3

4

5

THE GROUP’S TOP RISKS 2016

Stakeholder engagement

STAKEHOLDER > ISSUES RAISED – WHAT MATTERS TO THEM

> MANAGEMENT RESPONSE

Regulators > Regulatory compliance > Environmental compliance > Safety and environmental challenges

> Managing and reporting on governance impacts and on societal and environmental stewardship

> Provide input, directly and/or through industry bodies and forums

> Representation on key industry bodies:• Road Freight Association (RFA)• Dangerous Goods Committee of

the Road Freight Association• Signatory to the Responsible

Care Programme of the Chemical and Allied Industries Association (CAIA)

Shareholders andproviders of debt capital

> Strategy and growth prospects > Profitability > ROI (share price and dividends) > Risk management

> Strategic, integrated business management and reporting

> Engagement through formal and informal interactions and regular management meetings

Employees > Career development > Security of employment > Development opportunities, recognition and reward

> Diversity and inclusion > Attraction and retention > Safety, health and wellness

> Leadership and executive development programmes

> Open-door policy throughout the group

> Workplace safety training prioritised

> Interactive lifestyle and wellness programmes in place

Stakeholder engagement informs our determination of our material issues and supports achievement of our key strategic objectives.





STAKEHOLDER > ISSUES RAISED – WHAT MATTERS TO THEM

> MANAGEMENT RESPONSE

Trade union > Wage negotiations > Conditions of employment > Safety, health and wellness

> Regular meetings at relevant levels > Open-door policy > Focus groups• Labour Relations Committee of

RFA• National Bargaining Council (NBC)

Public sector/industry > Skills development > Job creation > Diversity and inclusion > Skills shortages

> Focus on regular, ongoing and ad hoc engagements at various levels of public sector, entities which impact or affect our chosen industry sectors and our ability to create sustainable value for stakeholders

> Efforts to align economic, industrial, supplier, localisation and socioeconomic development objectives

Communities > Pioneering responsible corporate citizenship

> Enterprise development > Value we create through our business activities

> Corporate social investment

> Creating sustainable value for stakeholders, including the communities in which we operate

Customers > Innovation and integrated solutions > Operational excellence > Trust and reliability > Value delivery > Transformation

> Customer surveys to measure service and satisfaction levels

> Alignment with customer needs and objectives

> Strategic joint ventures > Innovation and partnerships > Customer contracts for further business opportunities

> Focus on building customer base

Major contractors,suppliers and businesspartners

> Sustainability > Financial stability > Governance and risk management

> Responsible corporate citizenship > Continual systematic formal and informal engagement

> BBBEE scores meet key customer requirements

> Supplier due diligence processes > Formal service level agreements in place

> Audits



Directorate

INDEPENDENT NON-EXECUTIVE DIRECTORS1. Siza Mzimela (50)ChairpersonBA (Economics and Statistics)Transnet Executive Development Programme, GIBS

2. Alistair Franklin (57)BA LLB, MA

3. Matsotso Vuso (43)BCom (Hons), CA(SA)

4. Vincent Raseroka (56)BA (Hons) cum laude

EXECUTIVE DIRECTORS5. Murray Bolton (58)Chief executive officerBCompt (Hons), CA(SA)

6. Garth Bolton (60)Executive director

7. Junaid Kriel (37)Chief financial officerBCom (Hons), CA(SA), Hons Management Practice

NON-EXECUTIVE DIRECTOR8. Beverley Fraser (55)BA

Shaneel Maharaj (41)CFO (resigned 30 November 2015)BCom (Hons), CA(SA), H Dip Tax

EXECUTIVE MANAGEMENT

1. Dawid Janse van Rensburg (56)Divisional director: IT and supply chain BEng, MCom Business Management, MEng

2. Pauline Legodi (47)Divisional director: human resourcesBA LLB

3. Andre Jansen van Vuuren (46)Divisional director: marketingRAU Transport Diploma

OTHER KEY FUNCTIONAL MANAGEMENT4. Mercia Maletswa (41)Group SHEQ managerBTech, Master’s of Management (SHE)

5. Diana Padayachee (40)Group audit and risk managerBCom

4

8

5 6

7

1 2 3

1

4

2

5

3





Analysis of the expertise and experience of the Cargo Carriers Limited executive and other key functional management as at 29 February 2016

Members withskills

Financial 2/5

Social 2/5

Technical/safety, health, environment and quality 4/5

Governance 4/5

Strategy 3/5

Committee experience 3/5

Employee management and development 2/5

Average length of service on Cargo Carriers board is

12.69 years

Independence of our board

> Executive directors (3)> Independent non-executive directors (4)> Non-executive directors (1)

12.5%

37.5%

50%

Independence of our board

Gender profile

> Females> Males

62%

38%

Gender profile

Board expertise and experience

> Legal > Financial> Technical > Reporting> Governance > Strategy> Committee experience > People and change management

14%

12% 11%

11%

12%

8%

16%

16%

Board expertise and experience

Executive management expertise and experience

> Financial> Social> Technical/safety, health, environment and quality> Governance> Strategy> Committee experience> Employee management and development

15%

10% 10%

10%

20%

20%

15%

Executive management expertise and experience

Analysis of the expertise and experience of the Cargo Carriers Limited board as at 29 February 2016

Members withskills

Legal 5/8

Financial 5/8

Technical 6/8

Reporting 4/8

Governance 8/8

Strategy 7/8

Committee experience 8/8

People and change management 6/8


Chairperson’s statement

Cargo Carriers faced notable challenges in a difficult year characterised by low economic growth, a depressed commodity cycle and an intense quest for cost savings across the business-to-business environment.

Within our industry, competitive pressures intensified. Low growth put pressure on volumes while corporate customers put pressure on margins.

In these circumstances, our core businesses in our domestic market put in a creditable performance.

The key to this was our ability to partner with our clients and contribute positively to their business outcomes.

Cargo Carriers‘ people form knowledgeable and cohesive teams. They are well trained and highly experienced. Their capacity to meet or beat customer expectations is an enduring source of competitive advantage.

Zambian exitIn the wider region, a strategic decision was taken to exit our Zambian investment in the subsidiary BHL in view of much changed prospects in this jurisdiction. Currency effects and falling demand from mining customers resulted in significant losses. Continuing uncertainty in this market and limited prospects of a rapid turnaround contributed to the decision to sell our equity stake.

Our commitment to our continent is undiminished. For many years, we have operated successfully across Africa and we continue to look for opportunities to serve these markets.

Highlights

> Satisfactory results in South Africa amid economic challenges

> Challenging year of doing business in Africa coupled with negative exchange rate impacts

> BEE scorecard improvement from Level 4 to 3> Sustained and improved levels of customer service> Commendable performance on health, safety and

environmental best practice> Continued investment in our people and technology

Siza Mzimela, chairperson





Acquisitive appetiteIn our home market, we continue to investigate opportunities for acquisitive growth. During the review period, one specific acquisition target was scrutinised in depth, though it was ultimately decided not to pursue the transaction.

Cargo Carriers has a strong balance sheet and the resources to conclude meaningful acquisitions should we identify a good operational and cultural fit. We remain alert to such opportunities.

InvestmentCargo Carriers is committed to the long haul and continues to invest in the future despite pressure on margins and profit.

We not only invest in vehicles and technology, we also invest in our people and their safety and our training investment is continuous. This is reflected in quality service, exceptional performance standards and high levels of contract retention.

Our values inform everything we do at Cargo Carriers. Reputation is important to us and our customers. Though efficiencies and economies were sought in challenging business conditions, there was no compromise on quality, safety and good environmental practice.

AppreciationI extend my thanks to our employees and managers for their unstinting efforts in a difficult year. They are a remarkable team and I am proud to be in their company.

I also acknowledge my debt to my fellow directors. I work with a knowledgeable and insightful board and thank them for their hard work and support.

We benefit from a stable team at a strategic level and there were only two changes to the board composition. Chief financial officer, Shaneel Maharaj, resigned to pursue new opportunities and I thank him for his contribution. His successor, Junaid Kriel, has now joined our team and I am proud to welcome him to the board.

The way ahead Difficult economic conditions may persist in 2017, but we are confident Cargo Carriers is well positioned to further improve its competitive position and achieve a return to growth.

Early in the new period, we received confirmation that our empowerment credentials have improved and we are now a Level 3 contributor to broad-based black economic empowerment. Further progress is anticipated as black ownership levels should soon be enhanced following the creation of an employee share ownership programme.

Transformation strengthens our business and creates the pre-conditions for ongoing commercial success in 2017 and beyond.

Siza MzimelaChairperson

31 May 2016Core business in our domestic market put in a credible performance.


CEO and CFO’s report

From left to right:

Murray Bolton, CEO

Junaid Kriel, CFO

The year in review

Performance> Improved profitability from continuing operations despite lower revenue> Severe foreign exchange impact from our Zambian operation> Successful conclusion of the sale of our Zambian operation, contributing

positively to future profitability and derisking our balance sheet

Value creation> Improved earnings per share from continuing operations> Improved net asset value per share

Financial health> Improved liquidity and cash flow> Significant reduction in debt





In 2016, Cargo Carriers faced an almost perfect storm of challenges – low economic growth – adverse currency effects – weak global commodity demand – disappointing infrastructure investment – rising costs – drought – corporate cost-cutting and intense margin pressure. In such circumstances, performance by core businesses is viewed as satisfactory as they continued to add value to customer relationships.

Partnering with customers became a key theme as corporates sought savings while maintaining service quality. Our skills, resources and specialist focus enabled us to deliver sustained value, resulting in high levels of contract retention in a highly competitive environment.

This robust response is not fully reflected by our financial results as once-off factors had significant impact. The most material was an unrealised foreign exchange loss of R36 million incurred on our 55% investment in Buks Haulage Limited (BHL) of Zambia.

AfricaThis business was severely affected by falling mining sector demand in Zambia and Namibia. Volume and rate pressures were compounded by currency effects as our vehicle fleet was financed in US dollars.

A strategic decision was taken to exit this investment and derisk our balance sheet exposure to

dollar-rand volatility. This interest in BHL was sold at year-end and the transaction was subsequently approved by the Zambian Competition and Consumer Protection Commission.

The Swaziland sugar cane market was severely impacted by drought conditions, which affected available tonnage. In the new period, competitive pressures in this market are expected to intensify.

Growth into sub-Saharan Africa (SSA) remains a strategic objective and we will continue to explore local partnerships, while being mindful of increased indigenisation by African countries.

South AfricaThe South African landscape continues to face economic challenges across all sectors in which we operate. Depressed demand for steel, sluggish infrastructure investment and reduced demand within the mining sector affected tonnages across our business verticals. The

drought in the agriculture sector affected our tonnage in the Sugar division.

Despite the lower commodity cycle in our domestic market, our operating divisions delivered a satisfactory contribution. This was achieved through continued focus on cost efficiency and implementation of new technology to improve client service levels and business outcomes.

Innovation and reinventionIn response, our teams innovated and reinvented. Key developments included:

> Smart routing improvements > New technology lowered the risk of spillage and contamination

> Simultaneous delivery of various types of fuel, improving discharge times

> Increased payloads > Safety enhancements to our steel fleet

> A review of the vehicle acquisition approach to create certainty around maintenance costs and improve cash flow

Unfortunately, some jobs were lost to contract “churn”, but there were no significant retrenchments. We continued to invest in equipment, technology and the development of our people.

Transformation initiatives, notably employment equity and skills development, resulted in an improved BBBEE status from Level 4 to Level 3.

Transformation initiatives, notably employment equity and skills development, resulted in an improved BBBEE status from Level 4 to Level 3.


CEO and CFO’s report continued

An employee share ownership programme (ESOP) is currently in process, with further improvement anticipated during the forthcoming financial period.

Financial performance Cargo Carriers maintained its reputation for financial prudence.

Basic and diluted earnings per share from continuing operations increased by 28.4% to 175.2 cents from 136.5 cents in the prior year.

Total revenue from continuing operations of R592 million was 5.5% lower than prior year revenue of R627 million. While revenue had fallen, profit for the year from continuing operations improved by 30.3% to R34.4 million from R26,4 million in the prior year.

Operating profit was severely affected by foreign exchange impacts from our Zambian operation (R26 million).

The group ended with a net increase in its cash position for the year of R46 million (excluding the discontinued operation).

The solvency ratio of the group being total assets divided by total liabilities improved slightly from 2.14 to 2.25 times.

Growth and the futureA focus on business retention, as well as some organic growth in the South African market, largely offset some of the contracts that came to an end across our African operations. Although the sale of our Zambian operation resulted in a decreased revenue contribution of R213 million, the profitability of the group going forward has been improved.

We continue to explore opportunities for acquisitive growth, either geographic or sectoral expansion, to complement our existing portfolio. Business conditions may remain difficult for some time. The strategy of innovation and close partnership with customers proved highly effective in 2016 and will continue to complement our strategic intent for organic growth.

AppreciationTeams across our business performed well in a challenging period. They not only showed resilience under pressure, they looked for new opportunities and sought new avenues for growth. We thank them for their dedication and ceaseless efforts at a very difficult time.

Customers, and providing the best possible service to them, are the company’s lifeblood. Despite the difficult economic conditions we have maintained customer loyalty.

This is despite the unregulated transport and logistics market, and procurement governance rules that discourage customer relationships. We thank our customers for their loyalty, and look forward to successful ongoing partnerships.

Senior management also benefited from the experience and strategic input of a highly capable board of directors. We thank all our directors for their guidance and wise counsel during difficult trading conditions.

Murray BoltonCEO

Junaid KrielCFO

31 May 2016





Seven-year financial review and value added statement

2016R000

2015Re-pre-sented*

R0002014R000

2013R000

2012R000

2011R000

2010R000

Financial reviewIncome and profit performance from continuing operations Turnover 592 098 619 804 911 375 721 321 593 895 538 298 443 812 Total turnover of associates and joint venture 236 452 234 231 257 074 251 267 226 401 161 781 146 996 Group’s share of turnover from associates and joint venture 96 028 100 011 103 869 99 076 84 306 57 632 54 518 Profit from operating activities before depreciation 71 799 71 137 131 664 90 306 73 454 60 272 62 487 Profit from operating activities 40 773 39 632 57 808 42 538 39 219 28 137 33 282 Profit before finance income and finance cost 44 372 42 873 66 519 53 361 45 904 38 222 38 918 Net finance costs 74 (4 958) (16 690) (13 592) (13 112) (11 417) (7 383)Total operations Profit before taxation 7 776 29 926 49 829 39 769 32 792 26 805 31 535

2016R000

2015R000

2014R000

2013R000

2012R000

2011R000

2010R000

Total equity 458 114 459 628 435 048 389 759 345 303 332 319 326 023 Capital employed** 558 750 655 464 649 523 676 562 569 968 513 994 447 577 Interest-bearing loans and borrowings 60 092 174 516 216 107 266 197 203 406 Total assets 824 311 862 215 853 021 862 970 699 100 624 739 540 876 – non-current assets 404 424 523 826 557 799 578 003 520 125 461 360 373 527 – current assets 283 157 317 590 283 520 234 029 174 590 160 267 164 100 – assets held for sale 136 730 20 799 11 702 50 938 4 385 3 112 3 249

Net interest-bearing loans and borrowings to total equity (%) – 8.7 22.9 46.5 42.1 34.3 7.6 Capital expenditure 44 752 53 269 64 133 80 618 77 644 123 373 64 862

Diluted earnings per share (cents) from continuing operations 175.2 136.5 234.4 136.3 64.9 86.1 128.0 Headline earnings per share (cents) 102.5 155.1 229.3 108.8 60.7 48.5 118.8 Revaluation of owner occupied properties 8.5 27.2 18.4 27.5 11.0 (11.3) 17.5 Revaluation of investment properties 13.5 5.3 36.0 38.7 17.0 2.4 44.4 Dividends per share (cents) – interim declared during the year 6.0 6.0 15.0 10.0 9.0 12.0 9.5 – final declared after year-end 20.0 20.0 40.0 20.0 8.0 5.0 20.0 Net asset value per share (cents) 2 351 2 279 2 166 1 924 1 771 1 706 1 681

Share price movement (cents) – high 1 865 2 540 2 100 1 095 1 075 1 230 850– low 1 109 1 228 1 060 900 900 750 640Closing share price on JSE (cents) 1 385 2 200 2 050 1 015 907 1 080 780

** Capital employed comprises equity, outside shareholders’ interest and non-current liabilities

Value added statement Value added comprises: 592 620 911 721 594 538 444 Turnover 1 1 9 9 4 6 1 Revaluation of investment properties (331) (370) (551) (428) (347) (311) (249)Cost of goods and services bought 262 251 369 302 251 233 196

Shared as follows: Employment costs 180 174 222 195 165 157 118 Government direct and deferred taxes 10 12 4 14 20 10 7 Interest paid to financial institutions 8 11 23 18 17 17 17 Dividends paid to shareholders – 9 7 4 3 6 4 Depreciation of property, plant and equipment 31 32 74 48 34 32 29 Profits retained 33 13 39 23 12 11 21

267 251 369 302 251 233 196* 2015 has been re-presented due to the sale of the Zambian operation (BHL)


Operational report

FUEL AND POWDERS

Both elements of the business felt the effects of the economic downturn. Volumes and margins came under pressure. Competition intensified. Despite these challenges a measure of growth was achieved.

In a challenging year, the Fuels business showed pleasing resilience.

In the prior period, the business was materially affected by the opening of Transnet’s new fuel pipeline between Durban and inland areas. Volumes came under sustained pressure.

Teams searched energetically for replacement volumes. Payload growth was secured by strengthening relationships with existing customers and achieving delivery efficiencies through optimum utilisation of new tanker technology.

These compartmentalised tankers enable product delivery times to be minimised. Electronic dipsticks ensure load integrity and proved to be a customer-pleasing innovation.

A policy of micro-management ensured maximum efficiency and safety day by day on all contracts. Intense focus delivered the anticipated benefits and the business secured a degree of organic growth. Further organic growth will be sought in 2017.

Cargo Carriers adds value in many sectors of the economy, including petrochemicals, construction, steel, agriculture and mining, while providing logistics support in specialised areas such as medical services. Where quality and reliability are demanded, we deliver.

Revenue

R219.5 millionThe Powders operation responded to demand pressures by reinventing its business. As a result, intense customer focus was achieved in the movement of cementitious products for cement companies along with a measure of growth.

In a highly competitive environment, Powders volumes were severely impacted by low private sector activity in the projects market and the slow pace

of infrastructure investment nationally. Despite this, new business was secured.

The size and duration of contracts fell as new entrants among the cement producers competed for volumes at a time of market contraction. Previously, this market was dominated by fixed-term contracts for significant volumes. In the opportunistic market of 2016, load requirements changed daily and some hauliers offered their

> Contribution to group

27%





industrial

12% increase in revenue per vehicle on own vehicles was achieved

as well as a 12% increase in kilometres per vehicle

ADDING VALUE THROUGH CONTINUOUS IMPROVEMENT

Business reinvention continued in the second half and cash flow efficiencies were pursued through electronic proof of delivery (EPOD) technology.

Late in the period, a major contract was won, creating potential for Eastern Cape growth. Though business conditions may remain challenging, the full-year benefit of our customer-centric strategy will hopefully deliver further organic growth in 2017.

services at discounted rates on a short-term basis in order to stave off financial disaster. Producers were thus able to take advantage of transport overcapacity.

Our operations reacted by becoming increasingly flexible and customer-focused. More frequent operational meetings with customers were held, information was shared and a shared quest for new savings from smart scheduling was launched.

Margin pressure intensified as did growing focus by our broader African customers on indigenisation. As a result, a significant Powders contract was lost. Costs had to be cut and the headcount reduced, mainly through attrition. Staff were moved to other work wherever possible and the Powders component of our Lesotho branch was closed.

On time delivery improvement above

97%


Operational report continued

CHEMICALS AND STEEL

Continual cost pressures create a customer retention challenge. Despite inflationary input cost pressures, customers across all operational areas expect logistics suppliers to absorb costs and create solutions.

Strategically, however, the operational environment created an opportunity for a well-resourced player like Cargo Carriers to secure a competitive advantage. To combat rising input costs, continued investment is needed in sophisticated systems to assist route optimisation, determine the timing and scheduling of deliveries and exploit “discount windows” along toll roads.

Efficiency gains like these reinforced relationships with customers and enabled acceptable performance against budget.

Skills development remained a priority and additional management training from controller level upwards was carried out across all business units.

The Chemicals operation achieved organic growth in the face of intense competitive pressure.

Teams exceeded expectations in a challenging year. Rising utility bills, high fuel prices and e-tolls had a severe impact at a time when customers are highly resistant to rate increases.

Volume growth was assisted in part by rising raw chemical imports into South Africa. In addition, we regained a significant contract at enhanced volumes. The contract called for the extension of Cargo Carriers’ footprint in Botswana and Namibia.

Our quality profile was spotlighted when our main Chemicals branch was awarded preferred haulier status in the South African Safety and Quality Assessment (SA SQAS), an audit required for hauliers who transport dangerous goods.

Ongoing challenges in the chemicals industry may result in continued margin pressure. However, further organic growth is projected for 2017.

Continued low demand for South African commodities had severe effects on mining customers and volumes fell, though the reduction was kept to single digits.

Expectations of further growth in 2017 – across all areas of activity – are underpinned by a culture of customer partnership. > Contribution to group

35%

Revenue

R281.7 million





industrial continued

30%increase in Fleet in our

Chemicals branch (Sasolburg) through organic growth

Increased training of staff by

15%year on year

Steel industry conditions may remain challenging in 2017, though initiatives to improve industry competitiveness will hopefully result in volume recovery.

One knock-on effect of subdued steel industry activity was lower demand for industrial gases, resulting in lower utilisation of our fleet hauling cryogenic tankers. This fall in demand was largely offset by a rise in gas deliveries to medical customers.

Cargo Carriers has a blue-chip customer base. Reputation is important to major companies like these and they trust the business to ensure safe, reliable outcomes and compliance with quality and environmental standards.

Cargo Carriers is seen as a potential source of competitive advantage, indicated by collaboration with customers on service level agreements to drive cost savings and efficiency gains.

Steel operations confronted much reduced capacity across an

embattled industry yet we were still able to make up the shortfall on projected volumes.

Performance was highly satisfactory in the context of much reduced capacity across the local steel industry. However, cheap steel imports and low local demand impacted volumes and revenue.

Activities came to a standstill for nearly three months as a result of industrial action at the premises of our steel industry customers. A concerted effort by the business enabled us to make up the volume shortfall by year-end.



SPECIALIST KNOWLEDGE AND FOCUS ON LOGISTICS SERVICES TO THE SUGARCANE SECTOR ENABLE CARGO CARRIERS TO OPERATE AS A PARTNER OF ITS CUSTOMERS.

This made it possible to achieve ongoing efficiency and service improvements in the loading and haulage of sugarcane from growers to the respective sugarcane mills. As a result, earnings improvements were achieved in the reporting period.

The effects of drought had a significant impact, especially in the last quarter.

However, dry operating conditions contributed to improved operational “velocity” in view of favourable underfoot conditions and good factory uptime, enabling delivery allocations to be met within a shortened harvesting season. The drought ultimately affected crop quality and yields, which will have a knock-on effect on the subsequent harvest.

Significant earnings turnaround was delivered by the Agriculture business as a result of service and efficiency improvements. The gains were achieved in spite of mounting competitive pressure and lower tonnages.


8%

Investment in modern equipment was maintained and the business successfully completed the transition from truck combinations to tractor combinations to assist a major Swaziland customer.

Investment in driver, technical and safety training was maintained. There were no serious injuries

Revenue

R64.5 millionServices to sugarcane customers are focused in Swaziland and Zimbabwe.

To combat rising costs in Zimbabwe, local inputs were sourced whenever possible. Currency effects were beneficial on translation of US dollar earnings into rand.





agriculture

3%growth amid a challenging

operating environment

Contract negotiation in 2016 highlighted the growing impact of policy considerations on cross-border business activities. Cargo Carriers will investigate the acquisition of local partners in regional jurisdictions and will carry out a review of its business model in the sugarcane sector.

the European Union (EU) following the lifting of EU sugar tariffs. World sugar prices remain volatile, prompting a rigorous cost reduction drive by SADC processors. All suppliers to the sector can expect continued margin pressure.

and no fatalities. Labour relations were good.

Business conditions in the sugarcane industry in 2017 are expected to remain difficult. In the face of low production as a result of drought, SADC producers are hoping to retain export quotas to



CARGOSOLUTIONS

Difficult trading conditions across the national economy were reflected by pressure on consulting services within the logistics industry. Many corporate customers questioned the need for outsourced services or delayed the roll out of major projects.

In these circumstances, we did well to retain all core customers while winning significant new business in the retail industry and public sector. This was the first major public sector account gain by CargoSolutions – now a Department of Trade and Industry-approved supplier. New customers were won in the Western Cape and KwaZulu-Natal.

2016 became a breakthrough year as Cargo Carriers successfully communicated its transformation from a provider of trucking services into a supply chain design specialist and leading provider of supply chain efficiencies.

The transition was showcased by work in the footwear and perishable produce sectors as we helped customers secure competitive advantage through inventory optimisation, waste reduction and stock replenishment over much reduced timeframes.

CargoSolutions won significant new business in the retail industry and public sector. Momentum was maintained as new systems and ongoing efficiencies contributed to prospects for further growth.


3%

Analysis and consultancy were followed by deployment of new systems that achieved the envisaged efficiencies. By year-end, tangible success in challenging conditions had ensured strong growth by our order book.

Jobs growth in specialist areas was achieved.

State-of-the-art computer systems support the consultancy offering while providing IT services to internal “customers” in the form of financial reports, commercial and

procurement data, business intelligence and management information.

The team achieved formal compliance with King III guidelines on IT governance through adoption of the COBIT5 framework. This ensures alignment of information management systems with strategic business goals while mitigating IT-related risks.

In the coming year, the business will seek continued growth as a specialist in transportation

Revenue

R26.4 million





supply chain services

IT network availability countrywide

86%+

Despite the intensely competitive environment, customer retention levels remained high and a significant new import contract was won in the clearing and forwarding sector.

Challenging market conditions in the subcontracting field are expected to persist into 2017. However, this creates growth opportunities for a strong brand with the capacity to deliver cost efficiencies to customers while supporting subcontractor partners who share Cargo Carriers’ commitment to quality and reliability.

planning and a trusted provider of warehousing and distribution solutions. Work will continue to further improve real-time visibility of delivery status to facilitate on-delivery payment – a key objective of many customers in a tough economy.

TradingOur activities in the trading environment and transport subcontracting arenas were impacted by continued pressure on volumes and rates across all categories of business. South Africa’s principal transport

corridors felt the effects of sluggish economic growth, while the downturn in the resources sector had material effects on volumes both within South Africa and on long-haul business across the region.

The challenge was to continually add value for subcontractor partners and customers through the strength of the Cargo Carriers brand and the service improvements and efficiencies made possible by our systems, our people and our quality focus.


Social performanceHuman capital

People are a key differentiator at Cargo Carriers. In an industry often subject to sudden change, our staff complement is largely stable. People have careers at Cargo, not jobs – even in semi-skilled categories. Our longest serving employee has been with the group for 46 years, 52 employees have been with us for 20 years or more and 79 have been staff members for 15 years and over.

People investment is continuous. In 2016, we achieved efficiencies by concentrating our effort on internal training, making intensive use of our accredited driver training instructors. External training spend fell by 16%, but the internal training investment rose by 456%.

Spending on learnerships and apprenticeships rose 51%. Five new diesel mechanic apprentices were inducted while three completed their four-year qualification.

Training and skills development are personalised to meet the needs of individual staff. The goal is constant personal development. This level of customisation makes our training programme a key contributor to succession planning across all supervisory and management grades.

In 2016, two groups successfully completed training for junior and middle management. Cargo follows a policy of promotion from within wherever possible. Creating a strong pipeline of possible

management candidates is therefore critical.

Our people development model calls for ongoing employee engagement, needs identification, interventions to address needs and progress measurement. The 2016 focus was on interventions to address areas for improvement identified by employee surveys in the prior year. A key issue was meaningful engagement between supervisors and workers. Progress here will be measured in 2017.

As an extension of our commitment to workplace safety, we also focus on initiatives to improve employee health and wellness. For example, the group runs a “Biggest Loser” challenge that not only covers weight loss, but blood sugar, cholesterol and blood pressure measurement and advice.

Our managers and supervisors are close to their people and industry. This contributes to a stable industrial relations climate. There is an immediate on-site response to grievances.

In a challenging year, 65 jobs were lost as a result of natural attrition. There was only one retrenchment.

People development is not a point-scoring exercise at Cargo Carriers. Rewarding loyalty, promoting from within and constant skills focus are integral to our culture. However, success with employment equity, training

and development became the basis early in the new period for an improved BEE status – up from Level 4 to Level 3. This achievement is gratifying, but we will not be resting on our laurels. Efforts will be stepped up going forward.

South African race representation as at 29 February 2016

> Black male> Black female> White male> White female

439

73

56

26

South African workforce profile as at 29 February 2016

> Top management> Senior management> Middle management> Junior management> Semi-skilled

456

2058

19

41

A strong people focus is built into our culture. People investment is continuous in line with the strategic goal of constant personal development. People have careers at Cargo Carriers, not jobs.





We care


Social performance continued

Transformation

Organisational transformation remains a strategic priority. This is reflected once again this year in the improvement to our BEE scorecard.

The incidence of black executives in top and senior management positions has remained consistent with the previous year while the profile of middle and junior management is improving. We will continue to focus on profile improvements in the coming year. The objective is to retain the skills we have while attracting new talent and transforming our skills base in line with our strategic targets.

Consistent improvement in skills development and preferential procurement over recent years has resulted in close to maximum scores being achieved in these scorecard categories.

Continued focus on enterprise and socioeconomic development has contributed to the achievement, yet again, of maximum scores on these scorecard elements.

We will therefore continue with our investment in people development, specifically our commitments to our training centre and to our suppliers through our owner/driver programme. Cargo Carriers supports the communities and industry it serves through a longstanding commitment to socioeconomic development.

We are long-term supporters of the National Bargaining Council’s Wellness Fund, an initiative to combat the spread of HIV/Aids and assist those living with HIV. The Wellness Fund and similar efforts

make a significant contribution to the health of drivers and workers, not only at Cargo Carriers but across our industry.

We also engage in specific interventions to meet urgent needs and in 2016 we partnered with Engen Petroleum and Oasis Water to assist drought-affected communities in the Vryheid area. Vehicles committed to this effort – Transporting Hope in a Tanker – delivered 288 000 litres of water to areas that had no rain for weeks.

The effort to improve our employees’ economic participation in our business was a key focus during 2016. An employee share ownership programme was approved by shareholders shortly after year-end and will be implemented in the coming months.

Transformation remains a strategic imperative. At the same time, an abiding priority is fuller economic participation by our employees in our business. Constant focus resulted in an improved black economic empowerment status to Level 3. Further improvement is anticipated with the launch of an employee share ownership programme*.

*Employee share ownership programme to be launched in the new financial period

Internal training investment

456%

Approved investment of employee share

ownership programme

R10million

Graduates from apprenticeship

programme

3





It is evident from table A that transformation is a key priority for the group. We have been consistently improving in all areas of the scorecard, which has culminated in the achievement of a Level 3 status for the 2016/2017 period.

Further to this, the board is currently working on an Employee share ownership programme (ESOP). Its implementation will result in ownership points increasing from 6.79 to 12.19 and

the overall score from 75.92 to 81.32 under the old transport sector codes.

Transitioning from the old transport sector code and provided that the proposed transport sector code does not differ materially from the amended generic codes, our Level 3 status for the current financial year translates directly to a Level 5 for the 2017/2018 period, with all priority elements being met.

Employment equity and skills development will continue to receive focused attention as we endeavour further to improve our contributions in these areas.Additionally, the board is investigating opportunities for BEE partnership at group level, with the anticipation of achieving a Level 4 status under the amended transport sector codes.

Four-year comparisonsTable A

2013 to 2014 2014 to 2015 2015 to 2016 2016 to 2017

Ownership 6.02 5.50 6.79 6.79Management control 6.43 6.60 7.42 7.42Employment equity 5.30 4.92 6.84 8.01Skills development 11.61 12.16 12.21 13.73Preferential procurement 18.87 17.74 19.51 19.97Enterprise development 15.00 15.00 15.00 15.00

Socioeconomic development 5.00 5.00 5.00 5.00

68.23 66.92 72.77 75.92

Level achieved Level 4 Level 4 Level 4 Level 3


Environmental performanceSafety, health, environment and quality

Concern for worker health and safety is embedded in the Cargo Carriers culture. The business continually invests in safety and a healthy and congenial workplace. Defensive driving techniques are strongly communicated and fuel efficiency encouraged by focusing on “green-band driving”. Driver behaviour is scrutinised through vehicle monitoring systems and, in some cases, on-board cameras.

In 2016, there were no driver and no worker fatalities. Road injuries per million kilometres eased lower to 0.196 (2015: 0.239), though accidents per 1 million kilometres rose marginally to 3.032 (2015: 2.624). The number of accident-free kilometres dropped to 329 775 (2015: 381 088).

The lost-time injury frequency rate (LTIFR) rose to 1.213 (2015: 0.794) while the lost work day rate (LWDR) fell to 15.526 (2015: 41.421).

Review of accident reports indicated that third parties were the primary cause of accidents and incidents.

Health is an abiding concern. Annual medical examinations are carried out to confirm staff’s fitness to work. The results assist branches to monitor drivers who are on chronic medication. Hygiene surveys are also conducted to ensure acceptable occupational exposure limits. Surveys include but are not limited to air quality, noise, lighting and ergonomics.

Loading and offloading operations are typically conducted within a closed system that protects workers from exposure to risk and hazardous substances. All drivers are provided with personal protective equipment.

Environmental managementEfforts to limit impacts and our carbon footprint are continual.

Total carbon emissions measured fell 32% to 27 867.87 tonnes CO2e (2015: 40 749.96 CO2e), largely a function of lower fleet utilisation. The revenue earning fleet covered 20.446 million kilometres (2015: 29.504 million kilometres), down 31%.

Environmental incidents per million kilometres eased higher, from zero in 2015 to 0.049.

We maintained all certifications during the year:

> ISO 9001:2008 quality standard > ISO 14001:2004 environment standard

> OHSAS 18001:2007 safety standard

Environmental management is built into operational practice at Cargo Carriers. We believe environmentally sensitive systems are safe and efficient systems that contribute to superior all-round performance by the business.

Total measured emissions 2016 – 27 867.87 CO2e

3%

4%

1%

> Revenue earning fleet> Non-revenue earning fleet> Stationary fuels> Electricity consumption

92%

Road injuries per million

kilometres decreased by

18%





Incidents statistics

Status 2016 2015

Category

Fatalities per 1 million kilometres ● 0.000 0.000

Road injuries per 1 million kilometres ● 0.196 0.239

Environmental incidents per 1 million kilometres ● 0.049 0.000

Accidents per 1 million kilometres ● 3.032 2.624

LTIFR per 200 000 hours (lost-time injury frequency rate) ● 1.213 0.794

LWDR per 200 000 hours (lost work day rate) ● 15.526 41.421

Accident-free kilometres ● 329 775 381 088

● Good ● Caution ● Alert

Carbon intensity

Period

Total scope 1, 2 and other non-Kyoto emissions

Revenue earning

fleet only

Description

Absolute emissions t/CO2e 2016 27 867.87 25 684.58

2015 40 749.96 37 731.82

CO2e per R million turnover 2016 62.75 57.83

2015 60.19 55.74

Kilometres travelled (’000) – CO2e per 1 000 kilometres 2016 1.36 1.26

2015 1.38 1.28

Revenue earning vehicles – CO2e per vehicle 2016 134.63 124.08

2015 122.01 112.97


Group governance structure

Responsibilities > The performance and affairs of the group, with full control over all underlying companies.

> Sound judgement and leadership with integrity in line with King III principles.

> Safeguarding Cargo Carriers’ sustainability. > The board has four subcommittees, each with a formal charter and principles that were observed during the year, that assist in discharging its responsibilities. These group committees, listed below, play an important role in enhancing good corporate governance and monitoring and reporting on internal control environments in order to give assurance to the positive performance of the company.

IndependenceSelf-evaluationNumber of independent non-executive directors 4/8

The chairperson is an independent non-executive director in line with the recommendations set out in King III.

The board performed an assessment of the independence of each independent non-executive director and concluded that all of them were indeed independent in line with the recommendations of King III. Notwithstanding the fact that Mr AE Franklin has served on the board for a period of more than nine years, the board remains of the opinion that his independence and judgement is not in any way impaired by his length of service.

Board composition

50%

> Non-executive and independent> Non-executive> Executive

38%

12%

THE BOARD

Mrs SP Mzimela# (51) – chairpersonMr AE Franklin# (58) Mrs MJ Vuso# (43) Mrs BB Fraser^ (55)Mr V Raseroka# (56)Mr MJ Bolton (58) – CEOMr GD Bolton (60) – executiveMr J Kriel (37) – CFO

# Independent non-executive director

^Non-executive director

Mrs MJ Vuso – chairpersonMrs SP MzimelaMr AE FranklinMr V Raseroka

Mr V Raseroka – chairpersonMr AE FranklinMrs MJ VusoMrs BB FraserMrs SP Mzimela

Mrs SP Mzimela – chairpersonMr AE FranklinMrs MJ VusoMrs BB FraserMr V Raseroka

Mrs MJ Vuso – chairpersonMrs BB FraserMr GD Bolton

Social and ethics

committee

Audit and risk

committee

Nominations committee

Cargo Carriers Limited board of directors

Remuneration committee





MEMBERS AND MEETINGS ATTENDANCE

> NUMBER OF INDEPENDENT NON-EXECUTIVE DIRECTORS

> RESPONSIBILITIES

Audit and risk committee (for the full report see page 48)

Matsotso Vuso (chairperson)Siza MzimelaAlistair FranklinVincent Raseroka

By invitationMurray BoltonGarth BoltonShaneel Maharaj*Junaid KrielDiana Padayachee* Resigned during the year under review

4/4

> Appointment and assessment of independence of the external auditor

> Financial statements and accounting practices

> Internal financial control > Risk management > Evaluation of CFO > Integrated reporting and combined assurance model

> The audit and risk committee considers comprehensive reports from:– the internal audit department – the external auditors

Remuneration committee (for the full report see page 45)

Vincent Raseroka (chairperson)Matsotso VusoAlistair FranklinBeverley Fraser

By invitationMurray Bolton

3/4

> Assessing executive and non-executive directors’ remuneration

> Determining short and long-term incentives for group executives

> Determining remuneration strategy for the group as a whole

Nominations committee

Siza Mzimela (chairperson)Matsotso VusoAlistair FranklinVincent RaserokaBeverley Fraser

By invitation Murray BoltonGarth Bolton

4/5

> Considering and investigating suitable candidates for board appointment

> Assessing balance of composition and skill on board

> Implementing induction training for new appointments who are inexperienced directors

Social and ethics committee (for the full report see page 44)

Matsotso Vuso (chairperson)Beverley FraserGarth Bolton

By invitationPauline LegodiDiana PadayacheeMercia Maletswa

1/3

Monitoring and reporting on: > Social and economic development > Good citizenship > Environmental issues > Health and public safety > Consumer relations > Labour and employment > Wellbeing of employees

COMMITTEES


Governance and risk

Ethical leadershipMeasuring ethics is a difficult science, as ethical conduct is an intangible with tangible consequences. Ethical management is informed by the group’s values as set out in the code of ethics (the code). The code is incorporated into the group’s policies and procedures manual to which all employees are required to comply.

The social and ethics committee has been tasked by the board to oversee ethics management within the group. It is assisted in this regard by the internal audit function.

The company has formalised detailed statements on ethics, health, safety and environmental issues which are incorporated into the accreditation in terms of ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007 standards. These have been in place for the full year, which accreditation is audited on a regular basis by international accreditation agencies.

We expect our directors to lead by example in conducting group business with the utmost integrity. The King III principles of responsibility, accountability, fairness and transparency are not, however, restricted to our board, and every employee is expected to behave in accordance with these. The code therefore applies to all directors and employees in the group. It is accordingly communicated to all employees at least once a year by email and on notice boards.

The board, assisted by the social and ethics committee, ensures that the code is considered in strategic and operational decisions. Cargo Carriers’ disciplinary codes and procedures further accord with the code and give effect to its tenets. Where breaches of the code have occurred, disciplinary action was taken.

The group’s anonymous fraud hotline (Tip-offs Anonymous FreeCall: 0800 204939) is managed by Deloitte. Information about the ethics hotline is communicated to employees and displayed in the branches. During the year under review, three allegations of fraud and corruption were received via the ethics hotline. All instances were investigated and appropriate action taken where necessary.

Corporate governanceStatement of complianceCargo Carriers’ board is committed to the principles of responsibility, accountability, fairness and transparency in accordance with the King reports on corporate governance and applicable laws, reflecting integrity in all business dealings. The board strives to integrate this responsible corporate citizenship into the group’s business strategy, audits and assessments and to embed sound corporate governance practices into daily operations and processes so as to ensure the long-term sustainability of the group.

In line with the King III report’s “apply or explain” approach, the directors will continue to state the extent to which the company applies good corporate governance principles to create and sustain value for stakeholders over the short, medium and long term, and to explain any non-application. Details of the company’s compliance with chapter 2 of King III are included in the integrated annual report, while details of the company’s compliance with the full 75 principles can be found on the company’s website, www.cargocarriers.co.za.

The board acknowledges that applying good corporate governance principles is a dynamic responsibility in line with developments in South Africa and internationally.

Cargo Carriers’ board and its committees are guided by individual charters, which are reviewed and updated annually in accordance with emerging guidelines and legislation. There is transparency and full disclosure from board committees to the board in the form of verbal reports by committee chairpersons on recent committee activities at board meetings, and the minutes of committee meetings are available to the board at any time.

The board is satisfied that all committees have complied with their respective responsibilities during the year.





MJ Bolton (58) – CEO and chairperson J Kriel (37) – CFOD Padayachee (40) – Group audit and risk manager

Tax committee

Tax committeeThe tax committee is a subcommittee of the audit and risk committee and is chaired by the CEO. This committee comprises the executive directors and management and the company’s auditors attend by invitation. This committee was established to ensure that the company complies with all relevant fiscal legislation and that the affairs of the group are handled in a tax-effective manner.

MJ Bolton (58) – CEO and chairpersonGD Bolton (60) – executiveJ Kriel (37) – CFOP Legodi (47) – human resourcesAB Jansen van Vuuren (46) – marketingDB Janse van Rensburg (56) – IT and supply chain

Management committee

The management committee meets on a monthly basis and is chaired by the CEO. The committee deals with all management issues of the group and ensures that policies are adhered to. It recommends to the board all strategies and policies and is responsible for their subsequent implementation. There is a detailed delegation of authority in place which manages theactivities of the committee members.

Meeting attendanceDetails of the directors’ attendance at board and committee meetings held during the year under review are set out below:

Non-executive directors Board Audit and risk Remuneration# Nominations# Social and ethics

SP Mzimela 9 4 3 2 –AE Franklin 7 3 3 2 –MJ Vuso 9 4 3 2 2V Raseroka 9 4 3 2 –

BB Fraser 9 2 (by invitation) 3 2 2

Executive directors Board Audit and risk Remuneration# Nominations# Social and ethics

MJ Bolton 9 4 (by invitation) 3 2 –GD Bolton 8 4 (by invitation) 3 2 1S Maharaj* 8 4 (by invitation) – – –

J Kriel^ 1 – – – –# Remuneration and nomination committee meetings were held electronically and telephonically.* Resigned with effect from 30 November 2015.^ Appointed with effect from 18 January 2016.

Governance and risk continued


The boardThe board ensures effective control over the group by continuously monitoring the implementation of strategies, policies and goals which are prepared by executive management based on the group’s core competencies, existing skills, overarching values and ultimate goal of value creation. Cargo Carriers’ unitary board comprises eight directors, three of whom are executives, one of whom is non-executive, and four of whom are independent non-executives. Brief curricula vitae of the directors are set out on page 100 of this integrated annual report.

The board meets quarterly with additional meetings as and when necessary. Attendance is set out on the previous page.

The responsibilities of the chairperson and CEO, and those of other non-executive and executive directors, are clearly separated to ensure a balance of power and prevent any one director from exercising unfettered discretion. The chairperson provides leadership and guidance to the board and encourages proper deliberation on all matters requiring the board’s attention while obtaining input from other directors. She plays an active role in setting the agenda for board meetings and presides over the group’s shareholder meetings.

The CEO is responsible for day-to-day operations and the controlled implementation of strategic and operational decisions. In this regard, he is assisted by the executive director and the CFO.

The independent non-executive directors are high merit individuals who objectively contribute a wide range of industry skills, knowledge and experience to the board’s decision-making process. These directors are not involved in the daily operations of the company. Board processesRotation of directorsIn terms of King III and the group’s memorandum of incorporation, one-third of the board’s non-executive directors must retire from office at each annual general meeting on a rotation basis. Retiring directors maymake themselves available for re-election, provided that they remain eligible as required by the memorandum of incorporation and in compliance with the CompaniesAct, 2008.

Accordingly, Mrs Siza Mzimela and Mr Alistair Franklin will offer themselves for re-election at the upcoming annual general meeting.

Succession planningThe board is responsible for succession planning. A formal succession plan is in the process of being finalised and is expected to be approved by the board for implementation during the current financial year.

Share dealings and conflicts of interestAll directors and senior executives with access to financial and any other price-sensitive information are prohibited from dealing in Cargo Carriers’ shares during “closed periods” as defined by the JSE, or when they are in possession of unpublished price-sensitive information. The company secretary informs all directors by email when the company enters a “closed period”.

At all other times directors are required to disclose any proposed share dealings in the company’s securities to the chairperson for approval. The group’s sponsor ensures that share dealings by directors are published on SENS.

No instances of non-compliance were reported during the year.

Support functionsIndependent adviceAll independent non-executive directors have unrestricted access to management at any time as well as to the group’s external auditors. Furthermore, all directors are entitled to seek independent professional advice on any matters pertaining to the group as they deem necessary and at the group’s expense.

Company secretaryArbor Capital Company Secretarial (Pty) Limited is the appointed company secretary and the board is satisfied that the individuals who perform the company secretarial function as well as the directors of Arbor Capital Company Secretarial (Pty) Limited are appropriately qualified, competent and experienced to fulfil this function. In accordance with the provisions of the JSE Listings Requirements and King III, the directors are furthermore satisfied that the company secretary has an arm’s length relationship with the board. This is based on the fact that as an external service provider, none of the directors or the employees





of Arbor Capital Company Secretarial (Pty) Limited sit on the Cargo Carriers board, are directly employed by the group or are able to be unduly influenced by members of the board in fulfilling the duties of the company secretary.

It is the responsibility of the company secretary to monitor changes and developments in corporate governance and, together with the executive directors, to keep the board updated in this regard. The board reviews any changes and appropriate measures are implemented to comply in such a way so as to support sustainable performance. The company secretary also ensures that the company is made aware of all current and applicable regulations and legislation and liaises closely with the group’s sponsor with regard to any legislation affecting the group’s listing on the JSE.

The company secretary is appointed and removed by the board. All directors have access to the advice and services of the company secretary and to company records, information, documents and property in order to participate meaningfully in board meetings. The certificate required to be signed in terms of section 88(2)(e) of the Companies Act appears on page 46 of this integrated annual report.

Risk managementHow we manage risk and leverage opportunityWe recognise that the management of business risk is vital to our continued growth and success. The group audit and risk manager is responsible for risk at group level and assists the board in this regard.

The board’s policy on risk management extends to all significant business risks that could undermine the achievement of the group’s business objectives. These include financial risk, operational risk including safety, health, fraud and corruption risk, and compliance risk.

Our overall system of risk management is designed to enable our divisions to adapt their risk management processes to their specific circumstances, while guided by standardised policies and guidelines on risk, and supported by group control and the audit and risk function. This flexible approach has ensured the commitment and buy-in of the group’s senior management and so entrenched risk management

as a basic operational practice. It further ensures that there is clear accountability for risk management, which is a key performance area of line managers throughout the group. The requisite risk and control capability of responsible management is assured through board challenge and appropriate management selection and skills development.

The process of risk management is designed to identify internal and external threats and opportunities to the business objective and to assist management in prioritising its response to those risks. Continuous monitoring of risk and control processes, across headline risk areas (group) and other business-specific risk areas (divisional), provides the basis for regular and exception reporting to business management, the audit and risk committee and the board. Output from the risk management process is used to plan internal audit activities.

Risk control frameworkRisk tolerance levels are set by the board as a determination of the levels of risk deemed acceptable, tolerable or unacceptable to the group, which includes determining the appropriate response to and responsibility for events that go beyond the determined risk appetite. This decision making takes account of:

> Stakeholder expectations > Financial strength > Attitude of the board and senior management to risk taking

> Business plan and strategy > Costs of risk control, financing (of losses) and risk management administration

Operating within risk tolerance levels provides management greater assurance that, overall, the group will remain within its approved risk appetite, which in turn provides a higher degree of comfort that the group will be well positioned to achieve its strategic objectives.

The audit and risk committee is responsible for overseeing the group’s risk management programme and reporting to the board, which retains ultimate responsibility for the control and mitigation of risk. The day-to-day responsibility for risk management resides with management.



Internal audit and controlsThe group has an internal audit department that reports directly to the audit and risk committee, with responsibility for reviewing and providing assurance on the adequacy and effectiveness of the internal control environment across all of Cargo Carriers’ operations. Internal audit follows a risk-based audit approach and its function is governed by a charter, which outlines its authority, independence, role in enterprise risk management, audit scope and audit planning, reporting and assessment. The function’s mandate and annual audit coverage plans have been approved by the audit and risk committee, to which the teams have unhindered access. The internal audit function also has unhindered access to the group chairperson.

The head of internal audit is responsible for reporting and following up on findings with management and the audit and risk committee on a regular basis. The internal audit team comprises appropriate, qualified and experienced employees supplemented, if necessary, by external practitioners on specified terms.

Internal audit projects were completed across a variety of financial, operational, strategic and compliance-related business processes in all divisions and functions.

A summary of audit results and risk management information was presented quarterly to the audit and risk committee and group senior management during the year.

External auditThe independent external auditors, Ernst & Young Inc., as recommended by the audit and risk committee and appointed by the group’s shareholders, are responsible for reporting on whether the annual financial statements are fairly presented in compliance with IFRS, the Companies Act and the JSE Listings Requirements. The preparation of the annual financial statements remains the responsibility of the directors. The audit and risk committee regularly meets with the external auditors and formally evaluates their independence annually.

IT governanceThe board acknowledges its overall responsibility for IT governance and business continuity. The IT director fulfils the role of chief information officer, and is a member of the management committee.

An IT governance framework aligned with COBIT5 is in the process of being implemented. The framework and individual policies are reviewed by the audit and risk committee on a regular basis. A business continuity and disaster recovery plan, fed by a risk analysis of business processes dependent on the IT systems, is in place.

The new systems rolled out during the year included: > New HR/payroll system

The new system which was selected in the prior financial year has been implemented after rigorous testing. The system, which will be used for all employees, will ensure the integrity of the wages pay-out process through deploying biometric fingerprint readers at all operations. This will further ease the task of capturing accurate wage-related data. The system, which also serves as salaries management system, contains other advanced HR modules such as recruitment, training, performance assessment, disciplinary, and is a big step forward in making all HR processes digital.

> Fixed assets software upgrade The existing fixed assets management system was

upgraded after an extensive review of alternatives. The benefits will be an enhanced user experience, and better integration capabilities. This should culminate in improved productivity.

> New operations management system The specification and acquisition of a new integrated

operation management system continues to be an area of focus. Requests for proposals have been issued to the market, and a shortlist of suppliers has been completed. The intention is for this integrated system to replace a number of existing and ageing standalone systems such as fleet management, vehicle tracking and fuel management over the next two-year period. We firmly believe that this system will provide our operations with a competitive advantage in the market.

Legal complianceThe board is responsible for ensuring compliance with laws and regulations. New legislation that impacts the group is discussed at board meetings.

Application of King III and the Companies ActChapter 2 of the company’s King III compliance checklist is set out on the following page. The full King III compliance checklist can be found on our website, www.cargocarriers.co.za.





Chapter 2: boards and directorsKing III reference

King III principle Status Commentary

2.1 The board should act as the focal point for and custodian of corporate governance.

The board is the focal point and custodian of corporate governance and ensures that the company applies the governance principles contained in King III. The board, assisted by the various board committees, continually aims to further entrench and strengthen recommended practices through the group’s governance structures, systems, processes and procedures.

2.2 The board should appreciate that strategy, risk, performance and sustainability are inseparable.

The board, in accordance with the board charter, and all committee terms of reference reviewed in line with King III, is responsible for aligning the strategic objectives, vision and mission with performance and sustainability considerations.

The group’s formalised risk management process takes into account the full range of risks including strategic and operational risk, as well as performance and sustainability.

2.3 The board should provide effective leadership based on an ethical foundation.

The board provides effective and responsible leadership and is committed to the highest levels of ethical standards. The board views corporate governance as a key driver of sustainability.

2.4 The board should ensure that the company is and is seen to be a responsible corporate citizen.

The board is responsible for ensuring that the group has due regard to not only the financial aspect of the business, but also the impact that business operations have on the environment and the society within which the group operates.

2.5 The board should ensure that the company’s ethics are managed effectively.

The social and ethics committee is tasked with ensuring that the company’s ethics are managed effectively. In addition to ensuring adherence to the code of ethics, the social and ethics committee aligns itself with the goals of the United Nations Global Compact Principles, the OECD Guidelines on Corruption and the Employment Equity Act.

2.6 The board should ensure that the company has an effective and independent audit committee.

All four of the independent non-executive directors sit on the audit and risk committee. The committee is chaired by Mrs MJ Vuso (CA(SA)) and the committee, as a whole, has experience in accounting, finance, commerce and law. The board is satisfied with their levels of independence in accordance with directors’ mandatory quarterly disclosures. The board is satisfied that the audit and risk committee is effective. The audit committee met four times during the financial year.

2.7 The board should be responsible for the governance of risk.

The board is responsible for the governance of risk and is assisted in this regard by the audit and risk committee. The audit and risk committee is responsible for assisting the board in fulfilling its oversight responsibilities with regard to the risk appetite of the company, the risk management and compliance framework and the governance structure that supports it.

The audit and risk committee has conducted an evaluation of governance risk and is satisfied with the effective management of risk.

2.8 The board should be responsible for information technology (IT) governance.

Ultimate responsibility for the company’s IT governance framework is borne by the board. The board has delegated the responsibility to the audit and risk committee which has overseen the drafting of an IT governance framework.



King III reference


2.9 The board should ensure that the company complies with applicable laws and considers adherence to non-binding rules, codes and standards.

The board ensures that the company complies with applicable laws and considers adherence to non-binding rules, codes and standards within South Africa. Legislative and regulatory compliance is overseen by the audit and risk committee.

2.10 The board should ensure that there is an effective risk-based internal audit.

The group has an internal audit department that reports directly to the audit and risk committee, with responsibility for reviewing and providing assurance on the adequacy and effectiveness of the internal control environment across all of Cargo Carriers’ operations.

2.11 The board should appreciate that stakeholders’ perceptions affect the company’s reputation.

The board is cognisant of the importance of stakeholders as a key driver of business success. The board accordingly strives to ensure a culture of transparency throughout the group’s operations.

2.12 The board should ensure the integrity of the company’s integrated annual report.

Management is responsible for the compilation of the integrated annual report. On recommendation of the audit and risk committee, the board considers and approves the integrated annual report.

2.13 The board should report on the effectiveness of the company’s system of internal controls.

The board continually ensures the soundness of the company’s system of internal controls through independent review by internal and external audit.

2.14 The board and its directors should act in the best interests of the company.

The board acknowledges its stewardship role and the directors know and understand their fiduciary duties. Directors’ interests are kept and updated on an ongoing basis. Directors act with independence of mind and strive to ensure that they are acting in the best interest of both the company and its stakeholders.

2.15 The board should consider business rescue proceedings or other turnaround mechanisms as soon as the company is financially distressed as defined in the Act.

The board is aware of the Companies Act requirements relating to business rescue proceedings and the group’s solvency and liquidity is assessed regularly by the audit and risk committee. The board is satisfied that the group remains both solvent and liquid and is able to continue as a going concern.

2.16 The board should elect a chairman of the board who is an independent non-executive director. The CEO of the company should not also fulfil the role of chairman of the board.

The chairperson, Siza Mzimela, is an independent non-executive chairperson and the roles of CEO and chairperson are clearly defined.

2.17 The board should appoint the chief executive officer and establish a framework for the delegation of authority.

The board has delegated authority to the CEO and other executive directors to run the day-to-day affairs of the company. A delegation of authority framework is reviewed regularly.

2.18 The board should comprise a balance of power, with a majority of non-executive directors. The majority of non-executive directors should be independent.

The board comprises a majority of non-executive directors. There are four independent non-executives, one non-executive and three executive directors on the board. The composition of the board ensures the balance of power with no single member having the majority influence.

Chapter 2: boards and directors continued





King III reference


2.19 Directors should be appointed through a formal process.

The nominations committee is responsible for recommending the appointment of any new director, which recommendation is then considered by the board as a whole. One-third of the non-executive directors retire on a rotational basis and brief curricula vitae of directors standing for re-election are included in the integrated annual report.

2.20 The induction and ongoing training and development of directors should be conducted through formal processes.

New appointees to the board are appropriately familiarised with the company and receive an induction pack. Directors are kept up to date through regular briefings and additional training is provided when it is considered to be needed.

2.21 The board should be assisted by a competent, suitably qualified and experienced company secretary.

Arbor Capital Company Secretarial (Pty) Limited (ACCS) is an independent company secretarial practice providing an outsourced company secretarial service to the company. ACCS maintains an arm’s length relationship with the board.

2.22 The evaluation of the board, its committees and the individual directors should be performed every year.

The board reviews its effectiveness on an annual basis. The assessment includes a review of each director, the board chairperson and the chairperson of the ARC.

2.23 The board should delegate certain functions to well- structured committees but without abdicating its own responsibilities.

The board has delegated certain functions to the following committees which assist it in discharging its duties and responsibilities:

> Audit and risk committee > Remuneration committee > Nominations committee > Social and ethics committee

These committees operate in accordance with written terms of reference that are reviewed and approved by the board annually and the board remains ultimately responsible for the discharge of these duties.

2.24 A governance framework should be agreed between the group and its subsidiary boards.

A governance framework between the group and its subsidiary companies is agreed and is in effect.

2.25 Companies should remunerate directors and executives fairly and responsibly.

The remuneration philosophy reflects Cargo Carriers’ commitment to best practice. The group’s remuneration committee determines the remuneration policy on executive and senior remuneration in line with the group’s remuneration philosophy and strategy. The total remuneration packages of the executive directors and senior management are subject to annual review and benchmarked against external market data, taking into account the size of the company, its market sector and business complexity. A detailed remuneration report is contained in the integrated annual report on page 45.

2.26 Companies should disclose the remuneration of each individual director and certain senior executives.

The remuneration of directors and prescribed officers is disclosed in the integrated annual report on page 73.

2.27 Shareholders should approve the company’s remuneration policy.

Shareholders consider and endorse, by way of a non-binding advisory vote, the company’s remuneration policy at the annual general meeting.

Chapter 2: boards and directors continued


Social and ethics committee report

The social and ethics committee is chaired by an independent non-executive director, Matsotso Vuso, and consists of one other non-executive director, Beverly Fraser, and an executive director, Garth Bolton. Pauline Legodi, Diana Padayachee and Mercia Maletswa, who are all members of the company’s senior management team, are permanent invitees to the committee’s meetings.

The social and ethics committee’s responsibilities are in line with legislated requirements and encompass monitoring and regulating the impact of the group on its stakeholders. Key areas of responsibility include ethics and code of conduct compliance; empowerment and transformation; labour and employment; environment, health and public safety; social and economic development and corporate citizenship. The committee’s role, however, remains that of an oversight and monitoring committee and it relies on management for the implementation of strategies and initiatives and reports to the board on progress made, the board being ultimately responsible for group sustainability.

The committee met twice during the year under review and carried out the following activities:

> Reviewed the annual work plan > Considered the group’s black economic empowerment status in light of the amended codes of good practice

> Discussed the group’s management of customer relationships and the incident management system

> Received reports on the group’s code of ethics and anti-corruption measures

> Discussed the group’s approach to the monitoring of human rights, child labour and any form of discrimination

> Received reports on the group’s compliance with the Employment Equity Act

> Received and reviewed reports on the group’s skills development initiatives

> Reviewed the group’s CSI and social responsibility initiatives

> Received reports on the group’s tip-off line > Received reports on collective bargaining and labour relationships

> Reviewed reports on the group’s environment and sustainability track record, discussed green initiatives adopted by the group and further initiatives that can be taken in this regard and noted the importance of encouraging the implementation of environment-friendly technologies

> Received reports on legal issues and risks

The committee is satisfied that overall principles laid down by the King Code of Governance for South Africa (King III) and the Companies Act 2008 have been adhered to during the year under review.

Matsotso Vuso Chairperson

31 May 2016





Remuneration report

The remuneration committee assists the board by ensuring group remuneration and recruitment are aligned with overall business strategy, thereby enabling Cargo Carriers to attract and retain personnel who will create long-term value for all stakeholders.

The committee comprises five non-executive directors, four of whom are independent non-executive directors, and is chaired by independent non-executive director, Vincent Raseroka.

In accordance with the committee’s charter, it is also responsible for the oversight of all aspects of remuneration and determining the group’s strategy in this regard. The charter was revised during the year.

Remuneration policy Cargo Carriers strives to remunerate its employees with market-related salaries. The committee is guided by one or more annual salary surveys produced by industry specialists. Positions/jobs are evaluated using a mechanism designed and provided by an external expert. This job-grading exercise is undertaken every two to three years. The committee, in consultation with management, designs all incentive schemes (long and short term) to:

> Promote growth in quality, sustainable earnings > Align shareholder and management objectives > Enhance the ability to recruit and retain key employees and management

Senior management salaries Guaranteed remuneration, on a cost-to-company basis, is aligned to the 50th percentile in line with the market information available from time to time.

The structure and basis for performance-based incentives are recommended by the committee and approved by the board from time to time, and aligned with company strategy and current shareholder and management objectives.

All increases, after being recommended by the CEO, have to be approved by the remuneration committee. Once an average overall increase is agreed to by the remuneration committee, the executive committee

determines individual application of these increases. Any variances are determined by higher or lower performance ratings based on regular formal reviews.

Non-executive directors’ fees are disclosed in note 4 to the annual financial statements. Below are the fees payable per meeting:

ChairpersonR

Other directors/members of

othercommittees

R

Board meetingRetainer per month (maximum) 18 333 8 333Attendance fee per meeting 12 000 10 800

Audit committeeRetainer per month (maximum) Nil NilAttendance fee per meeting 6 000 6 000

Remuneration and nominations committeesRetainer per month (maximum) Nil NilAttendance fee per meeting Nil Nil

Social and ethics committeeRetainer per month (maximum) Nil Nil

Attendance fee per meeting 2 500 2 500

Prescribed officersThe remuneration of prescribed officers (executive directors) and other key management for the year ended 29 February 2016 is disclosed in note 4 to the annual financial statements.

Vincent RaserokaChairperson

31 May 2016


Directors’ responsibility for the financial statements

Declaration by the company secretary

To the shareholders of Cargo Carriers LimitedThe directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa.

The directors’ responsibility includes: designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of these financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

The directors are satisfied that such internal control systems have been maintained during the year.

The directors have made an assessment of the group and company’s ability to continue as a going concern and there is no reason to believe that the group and company will not be going concerns in the year ahead.

In the terms of section 88(2)(e) of the Companies Act 71 of 2008 (as amended), we certify that to the best of our knowledge and belief the company has lodged with the Companies and Intellectual Property Commission all such returns as are required of a public company in terms of the Companies Act, in respect of the financial year ended 29 February 2016 and that all such returns are true, correct and up to date.

Arbor Capital Company Secretarial Services (Pty) LimitedCompany secretary

31 May 2016

The independent external auditors are responsible for reporting on whether the consolidated and separate financial statements are fairly presented in accordance with the applicable financial reporting framework.

The consolidated and separate financial statements of the group were approved by the board of directors and are signed on its behalf by:

SP Mzimela MJ BoltonChairperson Chief executive officer

31 May 2016





Independent auditors’ report

To the shareholders of Cargo Carriers Limited

Report on the annual financial statementsWe have audited the consolidated and separate financial statements of Cargo Carriers Limited set out on pages 54 to 99, which comprise the statements of financial position as at 29 February 2016, and the statements of comprehensive income, statements of changes in equity and statements of cash flows for the year then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.

Directors’ responsibility for the consolidated financial statementsThe company’s directors are responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of South Africa, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibilityOur responsibility is to express an opinion on these consolidated and separate financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated and separate financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OpinionIn our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of Cargo Carriers Limited as at 29 February 2016, and its consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards, and the requirements of the Companies Act of South Africa.

Other reports required by the Companies ActAs part of our audit of the consolidated and separate annual financial statements for the year ended 29 February 2016, we have read the directors’ report, the audit and risk committee report and the report of the company secretary for the purpose of identifying whether there are material inconsistencies between these reports and the audited consolidated and separate financial statements. These reports are the responsibility of the respective preparers. Based on reading these reports we have not identified material inconsistencies between these reports and the audited consolidated and separate financial statements. However, we have not audited these reports and accordingly do not express an opinion on these reports.

Report on other legal and regulatory requirementsIn terms of the IRBA Rule published in Government Gazette Number 39475 dated 4 December 2015, we report that Ernst & Young has been the auditor of Cargo Carriers Limited for an estimated 40 years.

Ernst & Young IncorporatedDirector – Sarel Jacobus Johannes StrydomRegistered AuditorChartered Accountant (SA)

102 Rivonia RoadJohannesburg

31 May 2016


Audit and risk committee report

The audit and risk committee is presenting its report for the financial year ended 29 February 2016. The committee’s duties and objectives are mandated by the board, with the specific inclusion of its responsibilities in terms of the Companies Act 71 of 2008 and the JSE Listings Requirements, which includes assisting the board through advising and making submissions on financial reporting, oversight of the risk management process and internal financial controls, external and internal audit functions and statutory and regulatory compliance of the company. This allows the committee to discharge its statutory and other board delegated duties as outlined in this report, in compliance with the committee’s terms of reference.

Terms of referenceThe audit committee has adopted formal terms of reference that have been approved by the board of directors, and has executed its duties during the past financial year in accordance with these terms of reference.

CompositionThe committee currently comprises four independent non-executive directors: Mrs MJ Vuso CA(SA)(chairperson), Advocate AE Franklin (BA, LLB, MA), Mr V Raseroka (BA (Hons)) and Mrs S Mzimela (BA). The JSE Listings Requirements allow for the group chairperson to be a member of the audit committee, provided that: (i) All members of the committee are independent (ii) The chairperson of the board does not chair the

audit committee(iii) The dual role as it relates to the chairperson of the

board is specifically disclosed to shareholders at the annual general meeting

(iv) Shareholders specifically approve the appointment of the chairperson to the audit committee

The above conditions being fulfilled during the year under review, Mrs S Mzimela continued to serve as a member of the audit and risk committee. The board values the skills and insight that Mrs Mzimela brings to the audit and risk committee and has accordingly requested her to make herself available for re-election as a member of the audit and risk committee in the current financial year.

Details of the audit and risk committee members are set out in the directors’ report. The chief executive officer, the executive director, the chief financial officer, the group audit and risk manager and representatives from the external auditors attend the committee meetings by invitation. The internal and external auditors have unrestricted access to the audit and risk committee.

MeetingsThe committee held four meetings during the period. Details of the audit and risk committee members’

attendance at meetings are set out on page 35 of this report. Closed sessions with key parties including group audit and risk, external audit, and management are held from time to time to ensure confidential discussions take place.

Statutory dutiesIn execution of its statutory duties during the past financial year, the audit and risk committee:

> Nominated for appointment as auditor, Ernst & Young Inc who, in our opinion, are independent of the company

> Determined the fees to be paid to Ernst & Young Inc as disclosed in note 1 to the financial statements

> Determined Ernst & Young Inc terms of engagement > Believes that the appointment of Ernst & Young Inc complies with the relevant provisions of the Companies Act and King III

> Received no complaints relating to the accounting practices and internal audit of the company, the content or auditing of its financial statements, the internal financial controls of the company, and any other related matters

> Made submissions to the board on matters concerning the company’s accounting policies, financial control, records and reporting and we concur that the adoption of the going concern premise in the preparation of the financial statements is appropriate

> Reviewed and approved non-audit services provided by the external auditors to the company and the group

> Reviewed the group’s legal and compliance matrix > Review the activities, scope, adequacy and effectiveness of the internal audit function

> Reviewed and considered the expertise and experience of the chief financial officer and the finance team

Delegated duties Oversight of risk managementThe committee has:

> Received assurance that the process and procedures followed by the group audit and risk manager are adequate to ensure that financial risks are identified and monitored

> Overseen the cooperation between the internal and external auditors and served as a link between the board of directors and these functions

The committee has satisfied itself that the following areas have been appropriately addressed:

> Financial reporting risks > Internal financial controls > Fraud risks as it relates to financial reporting > Reviewed tax and technology risks, in particular how they are managed





Assessment of the effectiveness of internal controlsThe committee performed the following review during the period:

> The effectiveness of the company’s system of internal financial controls including receiving assurance from management, internal audit and external audit

> Significant issues raised by the internal and external audit process

> Policies and procedures for preventing and detecting fraud

The audit plan for the 2016 financial year was completely executed during the current year.

During the year under review, an incident of fraud was discovered at one of Cargo Carriers’ associate companies, Buhle Betfu (Pty) Limited, whereby fraudulent payments to the value of approximately R5 000 000 were paid out of the associate’s bank account between March and December 2015. The breakdown in internal control procedures which enabled the fraud to be perpetrated have been corrected. Disciplinary action was taken against the managers in the associate’s finance function in connection with the breakdown of these procedures and their associated failure to immediately detect the fraudulent transaction and criminal charges have been laid against the perpetrator of the fraud.

Save for the above, there is nothing further that came to our attention to indicate that internal controls are not working effectively.

Regulatory complianceThe audit and risk committee has complied with all applicable legal and regulatory responsibilities.

External auditBased on processes followed and assurances received, nothing has come to our attention with regard to the external auditor’s independence. Details of the external auditor’s fees are set out in note 1. Based on our satisfaction with the results of the activities outlined above, we have recommended to the board that Ernst & Young Inc should be reappointed for 2016/2017.

Internal auditThe committee is mandated to ensure that the internal audit function is independent, properly resourced and effective within the group. The in-house group audit and risk function operates within a scope of an internal audit charter and an annual plan as approved by the committee. The committee assessed the performance of the group audit and risk manager and encourages cooperation between external and internal audit. The group audit and risk manager reported functionally to the audit and risk committee and had unrestricted access to the audit committee chairman.

Evaluation of effectiveness of the finance functionMr Junaid Kriel CA(SA) was appointed as the chief financial officer of the group with effect from 18 January 2016. The audit and risk committee is of the opinion that Mr Kriel possesses the appropriate expertise and experience to meet his responsibilities in this position. We are further satisfied with the experience of the group financial manager and general manager of finance. In making these assessments, we have obtained feedback from both external and internal audit. Based on the processes and assurances obtained, we believe that the accounting function is adequately resourced and effective.

Integrated reportingThe audit and risk committee fulfils an oversight role regarding the company’s integrated annual report and the reporting process. The committee considered the company’s sustainability information as disclosed in the integrated annual report and has assessed its consistency with operational and other information known to audit and risk committee members, and for consistency with the annual financial statements. The audit and risk committee discussed the sustainability information with management and the chairman of the social and ethics committee. The committee is satisfied that the sustainability information is reliable and consistent with the financial results.

The audit and risk committee has, at its meeting held on 12 May 2016, recommended the integrated annual report for approval by the board of directors.

Going concernBased on the results of the committee’s quarterly assessment of the solvency and liquidity of the group and the year-end going concern review, the committee is comfortable with its recommendation to the board regarding the annual financial statements and that the group will be a going concern for the upcoming financial year.

The audit and risk committee considers the financial statements of Cargo Carriers Limited and its subsidiaries to be a fair presentation of its financial position on 29 February 2016 and of the results of the operations, changes in equity and cash flows for the period then ended, in accordance with International Financial Reporting Standards and the Companies Act. The board’s statement on the going concern status of the company, as supported by the audit and risk committee, is set out on page 46 of this integrated annual report.

On behalf of the audit and risk committee

Mrs MJ VusoChairperson

31 May 2016


Directors’ report

The directors present their report for the year ended 29 February 2016.

Nature of businessThe group provides logistics and transport services, complemented by related IT solutions, to a broad range of customers within sub-Saharan Africa. The provision of these services is enabled by a highly skilled workforce, a decentralised infrastructure of operating branches, and significant logistics management and IT expertise.

Financial reportingThe directors are required by the Companies Act 71 of 2008 (as amended) (the Companies Act), to produce financial statements that fairly present the state of affairs of the group and company as at the end of the financial year and the profit or loss for that financial year, in conformity with International Financial Reporting Standards (IFRS) and the Companies Act.

The financial statements, as set out in this report, have been prepared by management in accordance with IFRS and the Companies Act and are based on appropriate accounting policies supported by reasonable and prudent judgement and estimates.

The directors are of the opinion that the financial statements fairly present the financial position of the group and company as at 29 February 2016 and the results of their operations and cash flows for the year under review.

The directors are satisfied that the group has adequate resources to continue in operational existence for the foreseeable future and, accordingly, continue to adopt the going concern basis in preparing the financial statements.

Share capitalAs at the financial year end, the authorised and issued share capital of the company was unchanged from the comparative period. Subsequent to year-end, shareholders approved the adoption by the company of an employee share participation plan, as detailed under “Events after the reporting period”. This resulted in an additional 1 052 632 ordinary shares being issued to EmployeeCo (Pty) Limited.

As at year-end, the shares of the company were held by the following categories of shareholders:

Number of shareholders

Number of shares Percentage

Public 727 4 135 371 20.7

Non-publicDirectors and associates 2 137 760 0.7

Shareholders holding more than 10% of issued shares 2 15 726 869 78.6

Total 731 20 000 000 100.0





The shares issued to EmployeeCo are held for the ultimate benefit of employees of Cargo Carriers and, accordingly, certain restrictions are placed on EmployeeCo’s ability to trade in these shares, resulting in EmployeeCo being deemed a non-public shareholder until such time as the shares held by it have fully vested and transferred to employees.

The following shareholders were the registered holders of 5% or more of the issued share capital of the company at year-end:

ShareholderNumber of

sharesPercentage

shareholding

Cargo Carriers Holdings (Pty) Limited 12 865 837 64.3BB Invest Co (Pty) Limited 2 861 032 14.3

Mr Allan Hurwitz 1 270 000 6.4

Holding companyCargo Carriers Holdings (Pty) Limited is the company’s ultimate holding company.

Share incentive trustThe share incentive trust held 593 710 (2015: 593 710) unallocated shares at year-end. At 29 February 2016, the trust had not entered into any agreements to sell shares to participants in terms of the trust deed and at year-end there were no outstanding or issued share options. Under the rules of the scheme, not more than one million shares may be issued to participants. To conform with the requirements of the Johannesburg Stock Exchange, the group consolidates the trust.

Results of operationsThe results of the operations are dealt with in the consolidated financial statements, segmental analysis and commentary.

Dividends Notice is hereby given that a gross final cash dividend (Number 50) of 20.0 cents per share (2015: 20.0 cents) has been declared for the year ended 29 February 2016. The dividend has been declared out of income reserves. The dividend will be subject to a dividend withholding tax rate of 15% or 3.0 cents per ordinary share. Shareholders, unless exempt or qualifying for a reduced withholding tax rate, will receive a net dividend of 17.0 cents per share.

Following the adoption of the employee share participation plan and the issue of shares to EmployeeCo, the shares of the company are held by the following categories of shareholders:

Number of shareholders

Number of shares Percentage

Public 727 4 135 371 19.6

Non-publicDirectors and associates 2 137 760 0.7Shareholders holding more than 10% of issued shares 2 15 726 869 74.7Employees on whom restrictions on trading are imposed 1 1 052 632 5.0

Total 732 21 052 632 100.0


Directors’ report continued

Cargo Carriers’ tax reference number is 9900156713 and the number of ordinary shares in issue at the declaration date is 21 052 632.

The salient dates for the dividend will be as follows:

Last date to trade cum dividend Friday, 17 June 2016

Shares commence trading ex dividend Monday, 20 June 2016

Record date (date shareholders recorded in share register) Friday, 24 June 2016

Payment date Monday, 27 June 2016

Share certificates may not be dematerialised or rematerialised between Monday, 20 June 2016 and Friday, 24 June 2016, both dates inclusive.

The directors confirm that the company will satisfy the solvency and liquidity test immediately after completing the distribution.

Net borrowingsThe net borrowings of the group and company are detailed in note 18 to the financial statements. The holding company has set the borrowing capacity of the company at 50% of equity plus non-controlling interest. The group is currently operating at 0% of set borrowing capacity, net of cash.

Special resolutions Special resolutions passed during the year relate to non-executive directors’ fees and a general authority for the company to enter into funding agreements, provide loans or any other financial assistance.

Directorate Pursuant to the resignation of Mr S Maharaj as chief financial officer with effect from 30 November 2015, Mr J Kriel was appointed chief financial officer with effect from 18 January 2016.

In terms of the company’s memorandum of incorporation (MOI), Mrs SP Mzimela and Mr AE Franklin retire from office at the forthcoming annual general meeting, but, being eligible, offer themselves for re-election. Neither director has a service contract with the company.

Directors’ interests in sharesThe direct and indirect interests of directors and their associates in the shares of the company as at the financial years ended February 2016 and February 2015 are as follows:

Beneficial

Director Direct IndirectTotal

sharesTotal

%

ExecutiveGD Bolton 87 388 3 216 459* 3 303 847 16.5MJ Bolton 50 372 3 216 459* 3 266 831 16.3Non-executiveBB Fraser – 3 216 459* 3 216 459 16.1

Total 137 760 9 649 377 9 787 137 48.9

Associate of directors

Cargo Carriers Holdings (Pty) Limited 12 865 837 – 12 865 837 64.3

* Held through Cargo Carriers Holdings (Pty) Limited





Directors’ remunerationThe remuneration paid to directors during the year ended 29 February 2016 is disclosed in note 4 to the annual financial statements.

Company secretaryArbor Capital Company Secretarial (Pty) Limited is the company secretary and is independent of the group. The business and postal addresses of the secretary are 54 Maxwell Drive, Woodmead, Johannesburg, 2157 and Suite #439, Private Bag X29, Gallo Manor, 2052.

Events after the reporting periodThe company entered into an agreement prior to year-end for the sale of its majority shareholding in BHL to BeefCo Limited, a related party to the minority shareholder of this subsidiary. The suspensive conditions of the sale were only fulfilled subsequent to year-end and the results of BHL are accordingly included as a discontinued operation section and disclosed as a disposal group held for sale within the annual financial statements.

The company entered into an agreement providing for the implementation of an employee share participation transaction through the creation and funding of a special purpose vehicle, EmployeeCo (Pty) Limited through which eligible employees of the group will collectively acquire an indirect 5% shareholding in Cargo Carriers. The special and ordinary resolutions required to approve the employee share participation transaction were approved by shareholders at a general meeting held on 5 May 2016.

Subsidiary companiesDetails of joint ventures and subsidiary companies are given in notes 9 and 10 to the financial statements.

Retirement benefitsThe group has a defined contribution provident fund, which is governed by the Pension Funds Act of 1956. All eligible employees of the group are members of this fund, other than those who are required by legislation to be members of another fund.

At year-end full provision had been made for all retirement benefits in the group. The group has no liability for any other post-retirement benefits.

Medical benefitsThe group contributes to the medical aid membership cost of current employees, but these benefits cease on retirement.

31 May 2016


Statements of comprehensive incomefor the year ended 29 February 2016

GROUP COMPANY

Note2016R000

2015Re-

presented R000

2016R000

2015R000

Continuing operations Revenue – transport services 585 714 618 012 460 985 468 231 – information technology and consulting services 2 365 1 793 2 365 1 792 – other income 4 019 6 921 6 200 6 277 592 098 626 725 469 550 476 300 Costs and expenses – operating and administration costs 1 340 305 381 930 276 640 274 111 – employment costs 1 179 994 173 658 155 531 149 389 – depreciation of property, plant and equipment 7.1 31 026 31 505 25 498 25 862

551 325 587 093 457 670 449 362 Profit from operating activities 1 40 773 39 632 11 880 26 938 Profit/(loss) on disposal of property, plant and equipment 1 810 (863) (809) 438 Impairment of assets 3 (3 438) (82) (11 779) (82)Revaluation of investment properties 7.2 1 485 1 265 770 895 Dividend income – – 1 344 3 078 Profits from associates and joint ventures 9 & 10 3 742 2 920 – –Profit before finance income and finance cost 44 372 42 873 1 406 31 267 Finance income 7 578 6 370 7 476 6 307 Finance expense 2 (7 504) (11 328) (5 570) (8 985)Profit before tax from continuing operations 44 446 37 915 3 312 28 589 Taxation 5 (10 052) (11 510) (3 923) (7 152)Profit/(loss) for the year from continuing operations 34 394 26 405 (611) 21 437 Discontinued operation(Loss)/ profit after tax from discontinued operation 11.3 (26 618) 3 521 – –Profit/(loss) for the year 7 776 29 926 (611) 21 437 Other comprehensive income: Items not to be reclassified to profit or loss in subsequent periods:Revaluation of owner occupied properties 7.1 2 512 6 052 2 512 6 052 Income tax effect 16 (362) (783) (362) (783)Other comprehensive income to be reclassified to profit or loss in subsequent periods:Exchange differences on translation of foreign operations (4 809) (1 615) – –Exchange differences on translation of foreign operations from continued operations 4 160 478 – –Exchange differences on translation of foreign operations from discontinued operation (8 969) (2 093) – –Other comprehensive income for the year, net of tax (2 659) 3 654 2 150 5 269 Total comprehensive income for the year, net of tax 5 117 33 580 1 538 26 706 Profit for the year from continuing activities attributable to: Equity holders of the parent 33 992 26 474 Non-controlling interest 402 (69)

34 394 26 405 Profit for the year from continuing and discontinued operation attributable to: Equity holders of the parent 19 352 28 411 Non-controlling interest (11 576) 1 515

7 776 29 926 Total comprehensive income, net of tax attributable to: Equity holders of the parent 20 729 33 649 Non-controlling interest (15 612) (69)

5 117 33 580 Basic and diluted earnings per ordinary share (cents) attributable to equity holders of the parent (continuing and discontinued operation) 6 99.8 146.4 Basic and diluted earnings per ordinary share (cents) attributable to equity holders of the parent (continuing operations only) 175.2 136.5 Headline earnings per share (cents) attributable to equity holders of the parent 6 102.5 155.1 Dividends per share (cents) – interim declared during the year 6.0 6.0 – final declared after year-end 20.0 20.0





Statements of financial positionat 29 February 2016

GROUP COMPANY

Note2016R000

2015R000

2016R000

2015R000

ASSETS Non-current assets 404 424 523 826 310 389 344 434Property, plant and equipment 7.1 337 192 448 146 292 798 308 764 Investment properties 7.2 26 520 25 735 11 845 11 775 Investment in associates 9 29 997 26 777 – –Investment in joint ventures 10 10 654 7 872 1 1 Investments in subsidiaries 11 – – 5 745 23 895 Deferred taxation 16 62 15 296 – –Current assets 283 157 317 590 260 117 242 369 Inventories 12 9 846 15 230 4 637 4 482 Loans to related parties 8 – – 8 186 6 028 Amounts owing by subsidiary companies 11 – – 47 461 42 404 Trade and other receivables 13 91 468 167 948 76 818 100 347 Cash and short-term deposits 14 180 349 134 412 123 015 88 362 Taxation 25.2 1 494 – – 746

Disposal group and non-current assets as held for sale 7.3 136 730 20 799 20 284 11 375

Total assets 824 311 862 215 590 790 598 178

EQUITY AND LIABILITIES Share capital 15 194 194 200 200 Non-distributable reserves 58 067 56 547 47 737 46 416 Distributable reserves 397 911 385 332 306 505 313 226 Equity attributable to equity holders of the parent 456 172 442 073 354 442 359 842 Non-controlling interest 1 942 17 555 – –

Total equity 458 114 459 628 354 442 359 842 Non-current liabilities 100 635 195 836 81 832 101 941Deferred taxation 16 71 766 95 232 59 967 62 509Contingent consideration 11.2 – 3 010 – 3 010 Employee benefit provisions 20 2 101 3 881 2 101 3 440 Interest-bearing loans and borrowings 17 26 768 93 713 19 764 32 982 Current liabilities 133 567 206 751 154 516 136 395 Trade and other payables 19 81 116 109 750 74 284 58 971 Employee benefit provisions 20 9 614 8 990 3 012 2 785 Interest-bearing loans and borrowings 17 33 324 80 803 20 826 32 663 Amounts owing to subsidiary companies 11 – – 46 910 41 977 Taxation 25.2 9 513 7 208 9 484 –Disposal group liabilities 7.4 131 995 – – –

Total equity and liabilities 824 311 862 215 590 790 598 178


Statements of changes in equityfor the year ended 29 February 2016

Share capital

R000

Asset revalu-

ation reserve*

R000

Foreign currency

trans-lation

reserve*R000

Other reserves*

R000

Distribu-table

reserveR000

Equity attribu-table to

equity holders

of the parent

R000

Non-con-

trolling interest

R000

Total equity

R000

GROUPBalance at 1 March 2014 194 50 881 865 50 368 212 420 202 14 846 435 048 Total comprehensive income – 5 269 (1 615) – 28 411 32 065 1 515 33 580 – profit for the year – – – – 28 411 28 411 1 515 29 926 – other comprehensive income/(loss) – 5 269 (1 615) – – 3 654 – 3 654 Transfer between reserves – – – (50) 50 – – –Dissolution of foreign subsidiary – – – – (73) (73) – (73)Purchase of negative equity from non-controlling interest – – – – (1 194) (1 194) 1 194 –Post-tax transfer of revaluation of investment properties – 1 147 – – (1 147) – – – Dividends paid (note 6) – – – – (8 927) (8 927) – (8 927)Balance at 28 February 2015 194 57 297 (750) – 385 332 442 073 17 555 459 628 Total comprehensive income – 2 150 (773) – 19 352 20 729 (15 612) 5 117 – profit for the year from continuing

operations – – – – 33 992 33 992 402 34 394 – loss for the year from discontinued

operation – – – – (14 640) (14 640) (11 978) (26 618)– other comprehensive income from

continuing operations – 2 150 4 160 – – 6 310 – 6 310– other comprehensive loss from

discontinued operation – – (4 933) – – (4 933) (4 036) (8 969)Rate change deferred tax – (1 197) – – – (1 197) – (1 197)Post tax transfer of revaluation of investment properties – 1 341 – – (1 341) – – –Dividends paid (note 6) – – – – (5 432) (5 432) – (5 432)Balance at 29 February 2016 194 59 590 (1 523) – 397 911 456 172 1 942 458 114

COMPANY Balance at 1 March 2014 200 40 370 – 50 301 716 342 336 – 342 336 Total comprehensive income – 5 269 – – 21 437 26 706 – 26 706 – profit for the year – – – – 21 437 21 437 – 21 437 – other comprehensive income – 5 269 – – – 5 269 – 5 269 Transfer between reserves – – – (50) 50 – – – Post-tax transfer of revaluation of investment properties – 777 – – (777) – – – Dividends paid (note 6) – – – – (9 200) (9 200) – (9 200)Balance at 28 February 2015 200 46 416 – – 313 226 359 842 – 359 842 Total comprehensive income – 2 150 – – (611) 1 538 – 1 538 – profit for the year – – – – (611) (611) – (611)– other comprehensive income – 2 150 – – – 2 150 – 2 150 Rate change deferred tax (1 454) (1 454) (1 454)Post-tax transfer of revaluation of investment properties – 626 – – (626) – – – Dividends expired 116 116 116 Dividends paid (note 6) – – – – (5 600) (5 600) – (5 600)Balance at 29 February 2016 200 47 737 – – 306 505 354 442 – 354 442 *Represents non-distributable reserves

Nature and purpose of reserves presented on the statement of changes in equityAsset revaluation reserveThis reserve is used to record increases in the revaluation of land and buildings and decreases to the extent that such decrease relates to an increase on the same asset previously recognised in other comprehensive income. Revaluations relating to investment properties are further transferred to this reserve from distributable reserves. This reserve is not available for distribution as dividends.Foreign currency translation reserveThe foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries. Other reserves Other reserves comprise the capital redemption reserve fund, which was created when preference shares in the group were redeemed. This balance has been transferred to distributable reserves.





Statements of cash flowsfor the year ended 29 February 2016

GROUP COMPANY

Note2016R000

2015R000

2016R000

2015R000

Cash receipts from customers 828 923 891 901 425 737 469 020 Cash paid to suppliers and employees (679 501) (746 777) (368 781) (406 943)

Cash generated by operations 25.1 149 423 145 124 56 956 62 077 Finance income received 12 523 6 378 7 476 6 307 Finance cost paid 2 (19 872) (18 351) (5 570) (8 985)Tax paid 25.2 (8 983) (10 254) 2 212 (580)Dividend paid 25.3 (5 432) (8 927) (5 600) (9 200)Dividend income received – – 1 344 3 078

Cash inflow from operating activities 127 659 113 970 56 818 52 697 Cash outflow from investing activities (15 542) (51 252) (2 043) (22 563)Payment of contingent consideration 11.2 – (3 251) – (3 251)Increase in loans to and from associates and joint ventures 9 & 10 (2 259) (3 974) (2 259) (3 743)Decrease in amounts owing by subsidiary companies 11 – – – (11 101)Purchase of property, plant and equipment 25.4 (44 752) (53 269) (10 745) (8 100)Proceeds from sale of property, plant and equipment 29 156 9 242 8 649 3 632 Proceeds from sale of investment property 2 312 – 2 312 –Cash outflow from financing activities (66 173) (41 591) (20 122) (32 454)Interest-bearing loans and borrowings repaid (104 317) (88 346) (34 881) (46 469)Interest-bearing loans and borrowings raised 38 144 46 755 9 826 6 262 (Decrease)/increase in amounts owing to/by subsidiary companies 11 – – 4 933 7 753

Increase/(decrease) in cash and cash equivalents 45 944 21 127 34 653 (2 320)Cash and cash equivalents at the beginning of the year 134 412 116 341 88 362 90 686 Less cash and cash equivalents at the end of the year included in disposal group (1 991) – – –Foreign exchange movement on cash balances 1 984 (3 056) – (4)

Cash and cash equivalents at the end of the year 14 180 349 134 412 123 015 88 362


Accounting policies

1. Corporate information The consolidated financial statements of Cargo Carriers Limited and its subsidiaries (the group) for the year

ended 29 February 2016 were authorised for issue in accordance with a resolution of the directors on 31 May 2016. Cargo Carriers Limited is a widely held company incorporated and domiciled in the Republic of South Africa whose shares are traded publicly on the JSE Limited.

The principal activities of the group are described on page 2.

2. Basis of preparation The consolidated financial statements are prepared in accordance with International Financial Reporting

Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and the requirements of the South African Companies Act 71 of 2008. The consolidated financial statements are prepared in accordance with the going concern principle under the historical cost basis, except as otherwise noted below, and are presented in the functional currency, the South African rand, and all values are rounded to the nearest thousand (R000) except where otherwise indicated.

3. Changes in accounting policies The accounting policies adopted are consistent with those of the previous year, except the group has adopted

the following standards and interpretations mandatory for financial years beginning on or after 1 March 2015.

Standard/amendment Key requirements Effective date

AIP IFRS 8 Operating Segments – Aggregation of operating segments

The group adopted the amendments to AIP IFRS 8 Operating Segments in the current period.

Key requirements and impactThe amendment clarifies that an entity must disclose the judgements made by management in applying the aggregation criteria in IFRS 8.12, including a brief description of operating segments that have been aggregated and the economic characteristics (eg sales and gross margins) used to assess whether the segments are similar.

Representation of the operating segment disclosureThe group’s segments are represented in a manner in which the chief operating decision-maker (CODM) manages the business, considering the impact of several business changes during the financial year. The industrial segment, which constitutes the largest segment, has been further split into the Fuel and Powders, and Chemicals and Steel segments. Furthermore, the recent exit from the aviation industry as well as the property segment not constituting more than 10% of the revenue, profit or assets of the combined operating segments, are no longer separately disclosed. Refer to note 26.

1 July 2014

AIP IFRS 8 Operating Segments – Reconciliation of the total of the reportable segments’ assets to the entity’s assets

The group adopted the amendments to AIP IFRS 8 Operating Segments in the current period.

Key requirements and impactThe amendment clarifies that the reconciliation of segment assets to total assets is required to be disclosed only if the reconciliation is reported to the chief operating decision-maker (CODM), similar to the required disclosure for segment liabilities.

This had no impact on the group’s segment disclosure as the total assets agree to the figure presented on the face of the statement of financial position.

1 January 2014

The accounting policies adopted are consistent with those of the previous year, except that the company has adopted those new/revised standards and interpretations mandatory for financial years beginning on or after 1 March 2015.

> IAS 19 Defined Benefit Plans – Employee Contributions – Amendments to IAS 19 – effective date 1 July 2014. > AIP IFRS 2 Share–based Payment – Definitions of vesting conditions – effective date 1 July 2014. > AIP IFRS 3 Business Combinations – Accounting for contingent consideration in a business combination – effective date 1 July 2014.





> AIP IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets – Revaluation method – proportionate restatement of accumulated depreciation/amortisation – effective date 1 July 2014.

> AIP IAS 24 Related Party Disclosures – Key management personnel – effective date 1 July 2014. > AIP IFRS 3 Business Combinations – Scope exceptions for joint venture– effective date 1 July 2014. > AIP IFRS 13 Fair Value Measurement – Scope of paragraph 52 (portfolio exception) – effective date 1 July 2014.

> AIP IAS 40 Investment Property – Interrelationship between IFRS 3 and IAS 40 (ancillary services) – effective date 1 July 2014.

There were minor improvements to other IFRS that have been adopted in the current year.

4. Significant accounting judgements and estimates In preparing the financial statements, management is required to make estimates and assumptions that affect

reported income, expenses, assets, liabilities and disclosure of contingent assets and liabilities. Use of available information and the application of judgement are inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the financial statements.

Significant judgements applied in preparing the financial statements relate to the: > Estimate of useful life and residual values of tangible assets (refer to accounting policy note 9.2 and financial statements note 7)

> Allowance for doubtful debts (refer to accounting policy note 18.4 and financial statements note 13) > Impairment of assets (refer to accounting policy note 20 and financial statements note 7) > Determining fair value of investment property (refer to financial statements note 7.2) > Revaluation of land and buildings (refer to financial statements note 7.1) > Determining the amount of deferred tax asset that can be recognised in respect of unused tax losses (refer to financial statements note 16)

> Assumptions utilised in purchase price allocation pertaining to business combinations (refer to financial statements note 25.5)

> Assessment of the long-term portion of employee benefits (refer to accounting policy note 15 and financial statements note 20)

> Materiality of subsidiaries, joint ventures and associates to the group as a whole as required by IFRS 12 Disclosure of Interests in Other Entities. Any contribution of total assets, total liabilities, revenue and profit before tax of the relevant subsidiary, joint venture or associate below 10% of the group as a whole is regarded as immaterial (refer to financial statements note 11.2)

5. Consolidation Basis of consolidation The consolidated financial statements comprise the financial statements of the group and its subsidiaries as

at 29 February 2016.

Subsidiaries are defined as those companies in which the group, either directly or indirectly, has control.

Control is achieved when the group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

Specifically, the group controls an investee if and only if the group has: > Power over the investee (ie existing rights that give it the current ability to direct the relevant activities of the investee)

> Exposure, or rights, to variable returns from its involvement with the investee > The ability to use its power over the investee to affect its returns

When the group has less than a majority of the voting or similar rights of an investee, the group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

> The contractual arrangement with the other vote holders of the investee > Rights arising from other contractual arrangements > The group’s voting rights and potential voting rights

The group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the group obtains control over the subsidiary and ceases when the group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the group gains control until the date the group ceases to control the subsidiary.

All intra-group balances, transactions, unrealised gains and losses resulting from intra-group transactions are eliminated in full.


Accounting policies continued

5. Consolidation continued Basis of consolidation continued Non-controlling interests represent the portion of profit or loss and net assets not held by the group and

are presented separately in the statement of comprehensive income and within equity in the consolidated statement of financial position, separately from parent shareholders’ equity. Total comprehensive income in a subsidiary is attributed to the non-controlling interest even if it results in a deficit balance.

The company carries its investments in subsidiaries at cost, less accumulated impairment losses in the company accounts. A change in the ownership interest of a subsidiary, without a loss in control, is accounted for as an equity transaction.

If the group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and other components of equity while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.

6. Investment in associates An associate is an entity in which the group has significant influence and over which the entity has neither

control (subsidiary) nor joint control (joint venture).

Investments in associates are equity accounted in the consolidated financial statements for the period in which the group exercises significant influence. Significant influence is typically assumed in instances where the group has an equity stake sufficiently material to enable it to participate in the financial and operating policies of the investee company concerned without controlling or joint controlling those policies.

Equity-accounted income represents the group’s proportionate share of profits of these companies and the share of taxation thereon, net of the group’s share of material unrealised inter-group profits and non-controlling interests. Losses incurred by associates (including impairment losses where necessary) are brought to account in the consolidated financial statements until the investment, including any long-term interest that, in substance, forms part of the investor’s net investment in the associate, in such associates is written down to a nominal value.

The group’s interest in an associate is carried in the statement of financial position at cost plus an amount that reflects its share of the net post-acquisition reserves. Goodwill relating to the associate is included in the carrying amount of the investment and is not amortised or separately tested for impairment. Where there has been a change recognised directly in equity of the associate, the group recognises its share of any changes and discloses this, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the group and the associates are eliminated to the extent of the interest in the associate.

After application of the equity method the group determines whether it is necessary to recognise any impairment loss with respect to the group’s net investment in the associate. The group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case the group calculates the amount of the impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in profit or loss.





The reporting dates of the associates, with the exception of TAB Charters (Pty) Limited (June year-end), are identical to that of the group and the associate’s accounting policies conform to those used by the group for like transactions and events in similar circumstances. Adjustments are made to the reporting period to bring it in line with the group where necessary.

The investment in associates is carried at cost less any impairment in the company accounts.

7. Investment in joint ventures The group has interests in two jointly controlled entities, whereby the venturers have a contractual arrangement

that establishes joint control over the economic activities of the entity. The agreement requires unanimous consent for financial and operating decisions among the venturers. The ventures are exposed to the net assets of the jointly controlled entities and therefore the joint arrangements are classified as joint ventures. The group recognises its interest in the joint ventures using the equity method.

Under the equity method, the investment in the joint venture is carried on the statement of financial position at cost plus post-acquisition changes in the group’s share of net assets of the joint venture. Goodwill relating to the joint venture is included in the carrying amount of the investment and is neither amortised nor individually tested for impairment.

The group’s share of the results of operations of the joint venture is reflected in profit or loss. When there has been a change recognised directly in the equity of the joint venture, the group recognises its share of any changes and discloses this, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the group and the joint venture are eliminated to the extent of the interest in the joint venture.

The group’s share of profits or losses in a joint venture is shown in profit or loss. This is the profit attributable to equity holders of the joint venture and, therefore, is profit after tax and non-controlling interests in the subsidiaries of the joint venture. The financial statements of the joint venture are prepared for the same reporting period as the group. When necessary, adjustments are made to bring the accounting policies in line with those of the group.

Upon loss of joint control, the group measures and recognises its remaining investment at its fair value. Any difference between the carrying amount of the former jointly controlled entity upon loss of joint control and the fair value of the remaining investment and proceeds from disposal are recognised in profit or loss. Where the remaining investment constitutes significant influence, it is accounted for as investment in an associate.

8. Taxation Current tax Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be

recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date. Current tax relating to items recognised in other comprehensive income or directly in equity is also recognised in other comprehensive income or equity and not in profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.



8. Taxation continued Deferred tax Deferred income tax is provided using the liability method on temporary differences at the reporting date

between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences except: > Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

> In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses, can be utilised except:

> Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

> In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply, based on the expected manner of recovery, in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

When there is a change in the expected manner of recovery that results in a change in the tax rate that is applicable, the deferred tax asset/liability is subsequently adjusted. This adjustment is treated as a change in accounting estimate in the period that it occurs and the resulting gain or loss is taken to profit or loss unless the adjustment to the underlying assets is taken to other comprehensive income or recognised directly in equity, in which case the tax effect follows the accounting treatment.

For capital gains tax (CGT) on “pre-valuation date” assets, SARS allows the group to select the most advantageous of the three “base cost” calculation methods allowed in the Income Tax Act. Management uses its judgement in selecting the calculation method that the deferred tax calculations are based on. The actual base cost used at final recovery of the asset might materially differ from those selected by management for the purposes of the deferred tax calculation in the current period. When there is a change in the base cost calculation method used, the adjustment is treated as a change in accounting estimate in the period that it occurs and the resulting gain or loss is taken to profit or loss unless the adjustment to the underlying assets is taken to other comprehensive income or recognised directly in equity, in which case the tax effect follows the accounting treatment.

Deferred tax items are recognised in correlation to the underlying transaction either in profit or loss, in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.





The group does not intend to settle current tax liabilities and assets on a net basis, nor to realise tax liabilities and assets simultaneously, as this is not how the group manages its tax affairs. With each entity in the group regarded as not having the right to set off current tax liabilities and assets and requirements of IAS 12.74(a) are not met for each entity and accordingly IAS 12.74(b)(i) requires the deferred tax amounts in each entity not to be set off.

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognised subsequently if new information becomes available and facts and circumstances have changed. The adjustment would either be treated as a reduction to goodwill (as long as it does not exceed goodwill), if it was incurred during the measurement period, or in profit or loss.

Value added tax Revenues, expenses and assets are recognised net of the amount of value added tax except:

> Where the value added tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the value added tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

> Receivables and payables that are stated with the amount of value added tax included.

The net amount of value added tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Dividend withholding tax (DWT) The dividend withholding tax that replaced secondary tax on companies (STC) on 1 April 2013 is a tax on

distributions to shareholders levied at 15%. It is a tax payable by the shareholders and not the company and no amount is therefore required to be provided.

9. Non-financial assets Investment properties Investment properties are initially recorded at cost, including transaction costs, and are subsequently stated at

fair value, which reflects market conditions at the reporting date. Gains or losses arising from changes in the fair values of investment properties are included in profit or loss in the period in which they arise. The after tax gains are transferred from distributable to non-distributable reserves until they are realised upon sale of investment properties or unless they offset prior year losses.

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no further economic benefit is expected from its use. Any gains or losses on the retirement or disposal of an investment property are recognised in profit or loss in the period incurred.

Transfers are made to investment property when, and only when, there is a change in use, evidenced by the end of the owner occupation, commencement of a long-term operating lease to another party or completion of construction or development.

For a transfer from investment property to owner occupied, the deemed cost of property for subsequent accounting is its fair value at the date of change in use. If the property occupied by the group as an owner occupied property becomes an investment property, any difference between the fair value of the property at the date of reclassification and its previous carrying amount is accounted for in accordance with the policy stated under property, plant and equipment.

The fair values of investment properties are determined by an independent valuer, on an open market basis. No assets held under operating lease have been classified as investment property.



9. Non-financial assets continued Property, plant and equipment Land and buildings are measured at fair value less accumulated depreciation on buildings and impairment

charged subsequent to the date of the revaluation.

Any revaluation surplus is credited to the asset revaluation reserve within the statement of changes in equity, through other comprehensive income, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except that a deficit directly offsetting a previous surplus on the same asset is directly offset against the surplus in the asset revaluation reserve. Valuations are performed frequently enough to ensure that the fair value of a revalued asset does not differ materially from its carrying amount.

Plant and equipment is stated at cost, excluding the costs of day-to-day servicing, less accumulated depreciation and accumulated impairment in value. Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repairs and maintenance costs are recognised in profit or loss as incurred. Refurbishment costs incurred on vehicles and trailers are expensed in full.

Buildings erected on leased land are considered to be owner occupied and are depreciated over the term of the lease. Owner occupied buildings are depreciated over their estimated useful lives to reduce the value to its residual value. Land is not depreciated.

Property, plant and equipment are depreciated on a straight-line basis at rates considered appropriate to depreciate the assets to their residual values, over their expected useful lives. Where significant components of an item have different useful lives to the item itself, these parts are depreciated separately if the component’s cost is significant in relation to the cost of the remainder of the asset.

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows: Buildings – owner occupied 1.5% – 10% per annum Leasehold land and buildings 2% per annum Leasehold improvements 10% per annum Vehicles and leased vehicles 7% – 25% per annum Plant, furniture and equipment 10% – 33% per annum Aircraft engine (hours) 6 000 hours

The carrying values of property, plant and equipment are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount is estimated as the higher of fair value less costs of disposal and value in use. An impairment loss is recognised in profit or loss whenever the carrying amount exceeds the recoverable amount and the assets are written down to their recoverable amount. Subsequent valuations may result in the impairment being reversed through profit or loss.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net proceeds on disposal and the carrying amount of property, plant and equipment is included in profit or loss. Any balance in the revaluation reserve relating to disposed property is transferred to distributable reserves.

The assets’ residual values, useful lives and methods of depreciation are reviewed and adjusted prospectively as a change in accounting estimate at each financial year-end if necessary.

10. Inventories Inventory is valued at the lower of cost, determined on the weighted average basis, and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and costs necessary to make the sale.





11. Foreign currency translation The group’s consolidated financial statements are presented in South African rand, which is also the parent

company’s functional currency. Each entity in the group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. The group uses the direct method of consolidation and on disposal of a foreign operation, the gain or loss that is reclassified to profit or loss reflects the amount that arises from using this method.

Transactions and balances Transactions in foreign currencies are initially recorded by the group entities at their respective functional

currency spot rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange at the reporting date.

All differences arising on settlement or translation of monetary items are taken to profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items is treated in line with the recognition of gain or loss on change in fair value of the item (ie translation differences on items whose fair value gain or loss is recognised in other comprehensive income or profit or loss is also recognised in other comprehensive income or profit or loss respectively).

Group companies On consolidation the assets and liabilities of foreign operations are translated into South African rand at the

rate of exchange prevailing at the reporting date and their profits or losses are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profit or loss.

12. Borrowing costs Borrowings costs directly attributable to the acquisition, construction or production of an asset that necessarily

takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

13. Leases The determination of whether an arrangement is, or contains, a lease is based on the substance of the

arrangement at inception date, whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is not explicitly specified in an arrangement.

Group as lessee Where the group assumes the significant risks and rewards of ownership of leased assets, these leases are

classified as finance leases.

Items of property, plant and equipment held under finance leases are capitalised at amounts equal at the commencement of the lease to the fair value of the leased assets or if lower, at the present value of the minimum lease payments using the interest rate implicit in the lease, and a corresponding liability is raised. Such assets are depreciated and impaired in terms of the accounting policy on property, plant and equipment stated above, or if shorter, over the term of the lease if there is no reasonable certainty that the group will obtain ownership by the end of the lease term.



13. Leases continued Group as lessee continued Lease payments are apportioned between finance charges and reduction of lease liability so as to achieve a

constant rate of interest on the remaining balance of the liability. Finance charges are recognised in profit or loss. All other leases are treated as operating leases and the relevant rentals are charged to profit or loss on a

straight-line basis over the lease term.

Group as lessor Leases where the group does not transfer substantially all the risks and benefits of ownership of the asset are

classified as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. Contingent rentals are recognised as revenue in the period in which they are earned.

14. Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the

revenue can be reliably measured, regardless of when payment is made. Revenue is measured at the fair value of the consideration received or receivable, excluding discounts, rebates, and other sales taxes or duty. The following specific recognition criteria must also be met before revenue is recognised:

Rendering of services Revenue from the transportation of goods is recognised on delivery of the goods. Revenue from the rendering

of information technology services is recognised by reference to the stage of completion. Stage of completion is measured by reference to labour hours incurred to date as a percentage of total estimated labour hours for each contract. Where the contract outcome cannot be measured reliably, revenue is recognised only to the extent of the expenses incurred that are recoverable. Revenue from the transportation of passengers via air is recognised on completion of scheduled flights.

Finance income Revenue is recognised as interest accrues using the effective interest rate method (that is the rate that exactly

discounts estimated future cash receipts through the expected life of the financial instrument to the net carrying amount of the financial asset).

Dividends Revenue is recognised when the group’s right to receive the payment is established.

Rental income Rental income arising from operating leases on investment properties is accounted for on a straight-line basis

over the lease terms. Rental income is included in revenue due to its operating nature.

15. Employee benefit obligations Defined contribution plan The group operates a defined contribution plan. The contribution payable to a defined contribution plan is in

proportion to the services rendered to the group by the employees and is recorded as an expense in profit or loss. Unpaid contributions are recorded as a liability.

The group’s legal or constructive obligation is limited to the agreed contributions into the separately administrated fund.

Other long-term employee benefits Employees are entitled to transfer unused annual leave days to be taken in subsequent periods or to be paid

out at termination of their employment.

The group provides for present value of the expected obligation and the related expense is included in profit or loss in the year that the service which entitles the employee to the benefit is rendered. Interest on the unwinding of the obligation is included in finance cost in profit or loss. Payments will be made out of operating capital as they fall due.

Short-term employee benefits Short-term employee benefits are employee benefits (other than termination benefits) that are expected to be

settled wholly before 12 months after the end of the annual reporting period in which the employees render the





related service. The group recognises a liability for the undiscounted amount of short-term employee benefits expected to be paid and the expense is included in personnel expenses in profit or loss in the period in which the services that entitle the employee to the benefit are rendered.

16. Provisions Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past

event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in profit or loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

17. Treasury shares Own equity instruments which are reacquired (treasury shares) are deducted from equity. No gain or loss is

recognised in the statement of comprehensive income on the purchase, sale, issue or cancellation of the group’s own equity instruments.

18. Financial instruments Initial recognition The group classifies financial instruments, or their component parts, on initial recognition as financial assets,

financial liabilities or equity instruments in accordance with the substance of the contractual arrangement. When a financial asset or financial liability is recognised initially, an entity shall measure it at its fair value plus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability.

All regular way purchases and sales of financial assets are recognised on the trade date, which is the date that the group commits to purchase the asset. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace.

Financial instruments recognised on the statement of financial position include loans receivable, cash and cash equivalents, trade and other receivables, trade and other payables, and interest-bearing loans and borrowings. Disclosure of financial instruments to which the company is party, is provided in the notes to the annual financial statements.

Subsequent measurement Financial assets are classified as either financial assets at fair value through profit or loss, loans and receivables,

held-to-maturity investments, or available-for-sale financial assets, as appropriate. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or financial liabilities at amortised cost. The classification depends on the purpose for which the instruments were acquired. Management determines the classification at initial recognition. Depending on classification, financial assets are subsequently measured as follows:

Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not

quoted in an active market. Such assets are subsequently measured at amortised cost using the effective interest rate (EIR), less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in profit or loss. The losses arising from impairment are recognised in profit or loss.

Held-to-maturity investments Held-to-maturity financial assets are non-derivative financial assets with fixed or determinable payments and

fixed maturities and are classified as held to maturity when the group has the positive intention and ability to hold it to maturity. After initial measurement held-to-maturity investments are measured at amortised cost using the effective interest method, less impairment.



18. Financial instruments continued Subsequent measurement continued Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading and financial assets

designated upon initial recognition at fair value through profit or loss and derivatives. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. These financial assets subsequently measured at fair value with changes in fair value recognised in profit or loss.

Available-for-sale investments Financial assets are classified as available for sale if they do not fall into any of the preceding three categories.

They are subsequently measured at fair value with unrealised gains or losses recognised in other comprehensive income in the available-for-sale reserve until the investment is derecognised, at which time the cumulative gain or loss is recognised in profit or loss, or determined to be impaired, at which time the cumulative loss is recognised in profit or loss and removed from the available-for-sale reserve.

After initial recognition, financial liabilities are measured as follows: > Financial liabilities at fair value through profit or loss are measured at fair value; and > Other financial liabilities are measured at amortised cost using the effective interest method.

Derecognition Financial assets (or, where applicable, parts of financial assets or parts of a group of similar financial assets)

are derecognised when: > The rights to receive cash flows from the asset have expired; or > The group has transferred its rights to receive cash flows from the assets and either, has transferred substantially all the risks and rewards of the assets, or has neither transferred nor retained substantially all risks and rewards of the assets, but has transferred control of the assets.

When the group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, and has neither transferred nor retained substantially all the risk and rewards of the asset nor transferred control of the asset, a new asset is recognised to the extent of the group’s continuing involvement in the asset.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the group could be required to repay.

When continuing involvement takes the form of a written and/or purchased option (including a cash-settled option or similar provision) on the transferred asset, the extent of the group’s continuing involvement is the amount of the transferred asset that the group may repurchase, except that in the case of a written put option (including a cash-settled option or similar provision) on an asset measured at fair value, the extent of the group’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount reported in the consolidated statement of

financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

Impairment of financial assets The group assesses at each reporting date whether there is objective evidence that a financial asset or group of

financial assets is impaired. Objective evidence of impairment of loans and receivables exists if at least one of the following events has occurred (objective evidence of impairment):

> The borrower is experiencing significant financial difficulty; > The borrower’s actions, such as default on interest or principal payments, lead to a breach of contact;





> The group, for reasons relating to the borrower’s financial difficulty, grants to the borrower a concession that the group would not otherwise have granted; or

> It becomes probable that the borrower will enter bankruptcy or other financial reorganisation.

If the group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment. If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments carried at amortised cost has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate.

The carrying amount of the asset is reduced through the use of an allowance account. The amount of the loss is recognised in profit or loss. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income in profit or loss.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed. The reversal does not result in a carrying amount of the financial asset that exceeds what the amortised cost would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.

If an available-for-sale asset is impaired, an amount comprising the difference between its cost (net of any principal payment and amortisation) and its current value, less any impairment loss previously recognised in profit or loss, is transferred from other comprehensive income to profit or loss. Reversals in respect of equity instruments classified as available for sale are not recognised in profit or loss; they are recognised in other comprehensive income. In the case of equity investments, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. In the case of debt instruments, impairment is assessed on the same criteria as financial assets carried at amortised cost.

Investments (other than investments in subsidiaries, associates and joint ventures) Investments, other than investments in subsidiaries, associates and joint ventures, are classified as available

for sale.

Unlisted investments are subsequently measured at fair value, unless this cannot be reliably established, in which case they are carried at cost, subject to an impairment review at each reporting date.

Cash and short-term deposits Cash and short-term deposits comprise cash on hand, deposits held at call with banks, other short-term, highly

liquid investments and bank overdrafts.

For cash flow purposes, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts.

Trade and other payables Trade and other payables are recognised initially at fair value, generally being their issue proceeds net of

transaction costs incurred, and are subsequently measured at amortised cost. Interest is recognised over the period of the borrowing, using the effective interest rate method.

Trade and other receivables Trade and other receivables are classified as loans and receivables. They are initially measured at fair value and

are subsequently carried at amortised cost using the effective interest rate method.

Interest-bearing loans and borrowings After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost

using the effective interest rate method.



18. Financial instruments continued Fair value measurement The group measures financial instruments such as derivatives, and non-financial assets such as investment

properties, at fair value at each reporting date. Also, fair values of financial instruments measured at amortised cost are disclosed in note 24.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

> In the principal market for the asset or liability; or > In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to or by the group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

> Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities > Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

> Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For the purpose of fair value disclosures, the group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

19. Segment recognition The segments are re-presented in a manner in which the chief operating decision maker (CODM) manages the

business, considering the impact of several business changes during the financial year. The industrial segment, which constitutes the largest segment has been further split into the Fuel and Powders, and Chemicals and Steel segments. Furthermore, the recent exit from the aviation industry as well as the property segment not constituting more than 10% of the revenue, profit or assets of the combined operating segments, are no longer separately disclosed.

20. Impairments of non-financial assets The group assesses at each reporting date whether there is an indication that an asset may be impaired. If any

such indication exists, or when annual impairment testing for an asset is required, the group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s value in use or its fair value less costs of disposal.

Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, an appropriate valuation model is used.

Impairment losses are recognised in profit or loss except for property previously revalued where the revaluation was taken directly to equity. In this case the impairment is also recognised in equity up to the amount of any previous revaluation.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the group makes an estimate of recoverable amount.





A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase.

21. Prescribed officers According to the regulations to the Companies Act, a prescribed officer is anyone who:

> Exercises general executive control over and management of the whole, or a significant portion, of the business and activities of the company; or

> Regularly participates to a material degree in the exercise of general executive control over and management of the whole, or a significant portion, of the business and activities of the company

The three executive directors of the group are considered to be the prescribed officers.

22. Non-current assets held for sale and discontinued operations Non-current assets and disposal groups classified as held for sale are measured at the lower of carrying amount

and fair value less costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

In the consolidated statement of comprehensive income of the reporting period, and of the comparable period of the previous year, income and expenses from discontinued operations are reported separate from income and expenses from continuing activities, down to the level of profit after taxes, even when the group retains a non-controlling interest in the subsidiary after the sale. The resulting profit or loss (after taxes) is reported separately in profit and loss.

Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortised.

23. IFRS and IFRIC interpretations issued not yet effective The group has not applied the following IFRS and IFRIC interpretations that have been issued but are not yet

effective:

IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture - Amendments to IFRS 10 and IAS 28

No effective date set

IFRS 11 Accounting for Acquisitions of Interests in Joint Operations - Amendments to IFRS 11 1 January 2016IAS 1 Disclosure Initiative - Amendments to IAS 1 1 January 2016IAS 27 - Equity Method in Separate Financial Statements - Amendments to IAS 27 1 January 2016AIP IFRS 5 Non-current Assets Held for Sale and Discontinued Operations - Changes in methods of disposal 1 January 2016AIP IFRS 7 Financial Instruments: Disclosures - Applicability of the offsetting disclosures to condensed interim financial statements 1 January 2016AIP IAS 34 Interim Financial Reporting - Disclosure of information 'elsewhere in the interim financial report' 1 January 2016IAS 7 Disclosure Initiative - Amendments to IAS 7 1 January 2017IAS 12 Recognition of Deferred Tax Assets for Unrealised Losses - Amendments to IAS 12 1 January 2017IFRS 15 Revenue from Contracts with Customers 1 January 2018IFRS 9 Financial Instruments 1 January 2018IFRS 16 Leases 1 January 2019

Effective for annual periods beginning on or after the date specified. Early adoption of these standards is permitted.

The group does not intend early adoption of any of the above new/revised standards and/or interpretations. The effect of adoption is uncertain at this stage.

72 CargoCarriersIntegrated annual report 201672 CargoCarriersIntegrated annual report 2016

Notes to the financial statementsfor the year ended 29 February 2016

GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

1. Profit from operating activities Profit is stated after crediting: Foreign exchange gains – realised 5 406 310 867 310 Foreign exchange gains – unrealised 1 369 4 557 – –Other income 4 019 6 921 6 200 6 277 – rental income from investment property 3 387 3 167 3 387 3 167 – vehicle hire from subsidiary companies – – 2 813 2 549 – aviation services 631 3 193 – –– carrier income – 561 – 561 Profit is stated after charging: Inventories written (back)/down (133) 437 66 199 Cost of sales 552 251 756 892 457 670 443 276 Foreign exchange loss – realised 393 – 1 369 –Foreign exchange loss – unrealised 7 20 771 – 837 Operating expenses on rental earning investment property 183 128 183 128 Operating lease expenses 5 011 4 743 4 401 3 765 – buildings 4 522 4 140 3 965 3 464 – equipment 489 603 437 301 Employment costs# 179 994 173 658 155 531 149 389 – salaries, wages and bonuses 161 367 156 709 137 604 133 391 – contributions to medical aid and retirement fund 18 627 16 949 17 927 15 998

# The group employs 1 115 (2015:1 083) people and the company employs 515 (2015: 522) people

2. Finance cost Secured loans 6 331 9 115 4 554 7 220 Bank and short-term borrowings 1 172 2 213 1 016 1 765

7 504 11 328 5 570 8 985

3. Impairment of assets Impairment of non-current assets (note 7.1) (3 438) (82) (1 786) (82)Impairment of investment and other assets – – (9 993) –

(3 438) (82) (11 779) (82)

Certain contracts in the agriculture segment were not renewed. The affected assets were assessed for impairment. The assessment was made in relation to the physical condition of the vehicles including the realisable value based on market research. The recoverable amount was calculated based on fair value less cost to sell.

The impairment of R9.9 million in the company relates to the inter-company loan to Cargo Carries Swaziland (Pty) Limited. Due to the uncertainty of business operations in Swaziland, coupled with the drought conditions, this loan has been impaired.





GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

4. Directors’ emoluments and key management Non-executive directorsBB Fraser – fees 169 137 169 137 AE Franklin – fees 171 150 171 150 V Raseroka – fees 189 80 189 80 SP Mzimela (chairperson) – fees 322 287 322 287 MJ Vuso – fees 194 172 194 172

1 044 827 1 044 827

Executive directorsGD Bolton 575 538 575 538 – salary 427 403 427 403 – bonus 36 34 36 34 – post-retirement, medical and other benefits 112 101 112 101 MJ Bolton 2 975 2 801 2 975 2 801 – salary 2 355 2 222 2 355 2 222 – bonus 196 185 196 185 – post-retirement, medical and other benefits 424 394 424 394 S Maharaj (resigned 30 November 2015) 1 253 1 808 1 253 1 808 – salary 977 1 229 977 1 229 – bonus – 262 – 262 – post-retirement, medical and other benefits 275 317 275 317 J Kriel (appointed 18 January 2016) 174 – 174 –– salary 174 – 174 –– post-retirement, medical and other benefits – – – –

Total directors’ emoluments 6 020 5 973 6 020 5 973

Other key management* 4 777 5 123 4 777 5 123 – salary 3 466 3 585 3 466 3 585 – bonus 289 413 289 413 – post-retirement, medical and other benefits 1 022 1 125 1 022 1 125

Refer to the remuneration report on page 45 of the annual financial statements for detail on the remuneration policy. * Key management personnel are those persons having authority and responsibility for planning, directing and controlling the

activities of the entity, directly or indirectly, including any director (whether executive or otherwise), of the entity.

Notes to the financial statements continuedfor the year ended 29 February 2016


GROUP COMPANY

2016R000

2015Re-

presentedR000

2016R000

2015R000

5. Taxation South African normal taxationCurrent – current year 10 179 416 7 685 –– dividend withholding tax 41 –– capital gains tax 333 – 333 –Deferred – attributable to income not yet taxable, expenses not

yet deductible and movement in assessed losses in the current year (5 708) 6 917 (4 364) 7 152

– capital gains tax rate adjustment 270 – 270 –Foreign taxationCurrent – current year 4 537 3 500 – –Deferred – attributable to income not yet taxable and expenses

not yet deductible in the current year 442 (271) – –– prior year – 906 – –

Total charge against profit for the year 10 052 11 510 3 923 7 152

Reconciliation of tax rate: % % % % Standard tax rate 28 28 28 28Profits from associates and joint ventures (8.6) (7.1)Traffic fines 0.9 1.7 2.0 0.5Donations 0.1 0.4 – –Penalties – 0.2 – –Asset revaluations (4.1) (2.2) (7.0) (3.5)Impairment 0.8 – 100.0 0.3Legal fees 4.8 0.2 14.0 –Consulting fees 2.0 – 6.0 –Withholding tax movement (1.6) (1.4) (5.0) (2.3)Learnership agreements (1.3) (2.7) (4.0) (4.3)Capital gains tax 1.7 – 36.0 0.4

Dividends received – (7.5) (11.0) (12.1)

Depreciation buildings 1.6 1.3 (18.0) (2.1)Assessed losses unrecognised previously (3.3) 31.1 (38.0) 24.2Stock write back – 1.1 – –Finance lease payments 0.1 – – –Rate change 3.6 – 15.0 (3.0)Foreign tax differential (1.9) – – –

Effective tax rate 22.7 43.1 118.0 26.3

The capital gains tax inclusion rate has changed from 67% to 80%. As a result, the deferred tax balance has been remeasured.





GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

6. Dividends, basic/diluted earnings and headline earnings per ordinary share DividendsNo 46 of 40.0 cents declared 20 May 2014 and paid 17 June 2014 – 7 763 – 8 000 No 47 of 6.0 cents declared 30 October 2014 and paid 8 December 2014 – 1 164 – 1 200 No 48 of 20.0 cents declared 12 June 2015 and paid 15 June 2015 3 880 – 4 000 –No 49 of 8.0 cents declared 4 December 2015 and paid 7 December 2015 1 552 – 1 600 –

Total ordinary dividends 5 432 8 927 5 600 9 200

Dividends per share (cents) – interim declared during the year 6.0 6.0

– final declared after year-end 20.0 20.0

Continuing and discontinued operations

2016R000

2015R000

The basic and diluted earnings per ordinary share are based on the net profit attributable to the equity holders of the parent for the year divided by 19.4 million (2015: 19.4 million) ordinary shares in issue during the year (cents) 99.8 146.4 Adjustments (cents)(Profit)/loss on disposal of property, plant and equipment (10.5) 1.9 Impairment of assets 19.5 12.7 Revaluation of investment properties (6.2) (5.9)Fair value gain on obtaining control of subsidiary –Deferred tax released due to the sale of the letting enterprise including the property –

Headline earnings per share (cents) 102.5 155.1

Basic and diluted earnings per share (cents) 99.8 146.4 Reconciliation between profit for the year and headline earningsProfit attributable to equity holders of the parent 19 352 28 411 Adjustment(Profit)/loss on disposal of property, plant and equipment (2 628) 518 – income tax effect 587 (145)Impairment of assets 5 242 2 469 – income tax effect (1 468) (691)Revaluation of investment properties (1 485) (1 265)– income tax effect 277 236

Headline earnings for the year 19 878 30 224



Note

Land and buildings

R000

Leasehold improve-

ments and pre-

fabricated buildings

R000 Vehicles

R000

Leased vehicles

R000

Plant, furniture

and equip-

mentR000

Total R000

7. Non-financial assets 7.1 Property, plant and equipment

GROUP 2016Beginning of the year – cost/fair value 109 840 8 358 406 386 209 939 46 784 781 307 – accumulated depreciation (5 668) (7 539) (237 819) (47 421) (34 714) (333 161)

Net book value 104 172 819 168 567 162 518 12 070 448 146

Current year’s movements – revaluation of owner occupied

properties 2 512 – – – – 2 512 – impairment 3 – – (5 242) – – (5 242)– additions – – 23 421 19 141 2 190 44 752 – foreign exchange differences (3 736) – (10 901) – (516) (15 154)– transfers and reclassification of

assets at net book value – – 71 194 (71 194) – –– non-current assets held for sale – – (3 626) – – (3 626)– disposals – – 2 452 956 (6 131) (2 723)

– depreciation (942) (147) (48 138) (8 464) (2 299) (59 990)

Disposal group held for sale (16 317) – (52 639) (2 112) (415) (71 482)

Balance at end of year 85 688 672 145 088 100 846 4 898 337 192

Made up as follows: – cost/fair value 91 673 8 358 274 485 124 691 31 283 530 490– accumulated depreciation (5 985) (7 686) (129 397) (23 845) (26 385) (193 298)

Net book value 85 688 672 145 088 100 846 4 898 337 192

GROUP COMPANY

2016 2015 2016 2015

Cost of owner occupied and investment properties 50 065 50 224 34 253 34 412





Note

Land and buildings

R000

Leasehold improve-

ments and pre-


R000 Vehicles

R000

Leased vehicles

R000

Plant, furniture

and equip-

mentR000

Total R000

7. Non-financial assets continued 7.1 Property, plant and equipment

continuedCOMPANY 2016Beginning of the year – cost/fair value 89 751 2 784 165 964 198 539 28 998 486 036 – accumulated depreciation (4 230) (1 873) (99 937) (47 069) (24 163) (177 272)

Net book value 85 521 911 66 027 151 470 4 835 308 764


properties 2 512 – – – – 2 512 – impairment 3 – – (1 786) – – (1 786)– transfers and reclassification of

assets at net book value – – 63 825 (63 825) – –– additions – – 848 8 230 1 667 10 745 – disposals at net book value – – (1 937) – – (1 938)– depreciation (582) (17) (16 167) (7 089) (1 644) (25 498)

Balance at end of year 87 451 894 110 810 88 786 4 858 292 798

Made up as follows: – cost/fair value 92 263 2 784 257 487 142 944 30 665 526 143– accumulated depreciation and

impairments (4 812) (1 890) (146 677) (54 158) (25 807) (233 344)

Net book value 87 451 894 110 810 88 786 4 858 292 798



Note

Land and buildings

R000

Leasehold improve-

ments and pre-


R000 Vehicles

R000

Leased vehicles

R000

Plant, furniture

and equip-

mentR000

Total R000

7. Non-financial assets continued 7.1 Property, plant and equipment

continuedGROUP 2015Beginning of the year – cost/fair value 90 035 8 282 411 177 239 753 45 553 794 800 – accumulated depreciation (4 864) (7 394) (219 495) (43 776) (32 179) (307 708)

Net book value 85 171 888 191 682 195 977 13 374 487 092


properties 6 052 – – – – 6 052 – impairment of non-current assets 3 – – (2 469) – – (2 469)– additions 14 695 76 31 199 5 258 2 041 53 269 – foreign exchange differences (930) – (4 116) (2 214) (93) (7 353)– transfers and reclassification of

assets at net book value – – 15 655 (15 655) – –– prior year non-current assets

held for sale – – – – – –– non-current assets held for sale – – (5 564) (3 533) – (9 097)– disposals at net book value – – (7 106) (2 585) (69) (9 760)– depreciation (816) (145) (50 714) (14 730) (3 183) (69 588)

Balance at the end of the year 104 172 819 168 567 162 518 12 070 448 146

Made up as follows: – cost/fair value 109 840 8 358 406 386 209 939 46 784 781 307 – accumulated depreciation (5 668) (7 539) (237 819) (47 421) (34 714) (333 161)

Net book value 104 172 819 168 567 162 518 12 070 448 146

COMPANY2015 Beginning of the year – cost/fair value 83 699 2 708 168 873 216 952 27 651 499 883 – accumulated depreciation (3 703) (1 858) (99 556) (43 257) (23 006) (171 380)

Net book value 79 996 850 69 317 173 695 4 645 328 503


properties 6 052 – – – – 6 052 – impairment of non-current assets 3 – – (82) – – (82)– transfers and reclassification of

assets at net book value – – 14 815 (14 815) – –– additions – 76 828 5 258 1 938 8 100 – non-current assets held for sale – – (4 753) – – (4 753)– disposals at net book value – – (3 115) (12) (67) (3 194)– depreciation (527) (15) (10 983) (12 656) (1 681) (25 862)

Balance at the end of the year 85 521 911 66 027 151 470 4 835 308 764

Made up as follows: – cost/fair value 89 751 2 784 165 964 198 539 28 998 486 036 – accumulated depreciation (4 230) (1 873) (99 937) (47 069) (24 163) (177 272)

Net book value 85 521 911 66 027 151 470 4 835 308 764

Refer to notes 11.3 and 24 for impairment details.





GROUP COMPANY

Note2016R000

2015R000

2016R000

2015R000

7. Non-financial assets continued7.2 Investment properties

Opening balance at 1 March 2015 25 735 24 470 11 775 10 880 Disposals at net book value (700) – (700) –Fair value adjustment 1 485 1 265 770 895

Closing balance at 29 February 2016 26 520 25 735 11 845 11 775

Rental income 3 387 3 167 3 387 3 167 Operating expenses (183) (128) (183) (128)

Net income from investment properties 3 204 3 039 3 204 3 039

Investment properties together with land and buildings were revalued by an independent valuator as at 29 February 2016 on an open market basis based on discounted cash flows, as supported by current market evidence. The independent valuer has reviewed and updated the valuations on an annual basis for the determination of the fair value of the investment properties. The current use does not differ significantly from the highest and best use. Refer to 24.7 for further detail on valuation assumptions used.

GROUP COMPANY

Note2016R000

2015R000

2016R000

2015R000

7.3 Disposal group and non-current assets held for saleProperty, plant and equipment 3 625 20 799 2 241 11 375 Disposal group held for sale 11.3 133 105 – 18 043 –

136 730 20 799 20 284 11 375

The Group intends to dispose of non-current assets classified as held for sale within the next 12 months. The property, plant and equipment that are no longer required have been classified as held for sale and a firm commitment exists to dispose of these assets.

The group has disposed of its investment in BHL after year-end. All assets in the subsidiary have been disclosed as held for sale.

GROUP COMPANY

Note2016R000

2015R000

2016R000

2015R000

7.4 Disposal group liabilitiesDisposal group held for sale 11.2 131 995 – – –

131 995 – – –



GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

8. Loans advanced to/(received by) related parties 8.1 Loan (receivable from)/owing to share trust – – (320) (219)

8.2 Loan to joint ventures – short term – – 8 506 6 247

– – 8 186 6 028

The group consolidates the share incentive trust. The surplus dividends receivable by the trust are being invested by the company.

The loans to joint ventures, Uzuko Carriers (Pty) Limited and Sitanani Carriers (Pty) Limited, are interest-free and have no fixed terms of repayment. The loan is payable on demand. Due to the short-term nature of this instrument, carrying amount approximates fair value.

9. Investments in associates The group has a 49.9% interest in Lugubhu Carriers (Pty) Ltd (LC), a 40.0% interest in Buhle Betfu Holdings (Pty) Ltd (BBH), and a 26% investment in TAB Charters (Pty) Ltd (TAB). LC and BBH are involved in contract sugar cane harvesting and transportation in Swaziland and South Africa. TAB operates its business from South Africa and is involved in the aircraft charter business.

The investment in Lugubhu Carriers (Pty) Ltd is held by Cargo Carriers (Swaziland) (Pty) Ltd (an indirect wholly owned subsidiary of Cargo Carriers Limited), the investment in Buhle Betfu Holdings (Pty) Ltd is held by Siyazama Sisonke (Pty) Ltd (a wholly owned subsidiary of Cargo Carriers Limited), and the investment in TAB is held by Executive Air (Pty) Ltd (a 79% owned subsidiary of Cargo Carriers Limited). These investments are all accounted for at cost in the respective holding companies.

GROUP

2016R000

2015R000

Lugubhu Carriers (Pty) Ltd Investment at cost 1 618 1 618 Post-acquisition losses (1 550) (1 550)Net loan in associate after impairment (68) (68)

Carrying value at year-end – –

Buhle Betfu Holdings (Pty) Ltd Investment at cost 3 405 3 405 Post-acquisition profits 17 880 14 456 Current year share of profits 4 095 3 424

Carrying value at year-end 25 380 21 285

TAB Charters (Pty) Ltd Net investment in associate 797 797Post-acquisition profits 4 696 4 295 Current year share of profits (876) 401

Carrying value at year-end 4 617 5 493

Total carrying value of investment in associates 29 997 26 777

Total share of profits from associates 3 219 3 825





Lugubhu Carriers (Pty) Limited

Buhle Betfu Holdings (Pty) Limited

TAB Charters (Pty) Limited

2016R000

2015R000

2016R000

2015R000

2016R000

2015R000

9. Investments in associates continuedStatement of financial positionNon-current assets 1 065 1 382 93 856 80 008 13 137 9 694 Current assets 1 624 1 614 42 352 36 152 12 853 16 230

Total assets 2 690 2 996 136 208 116 160 25 990 25 924

Equity (5 594) (5 259) 55 941 45 703 9 483 14 319 Non-current liabilities – – 44 525 58 580 1 368 1 401 Current liabilities 8 283 8 255 35 742 11 877 15 138 10 204

Total equity and liabilities 2 690 2 996 136 208 116 160 25 990 25 924

Income statement Revenue – – 161 320 171 044 25 276 37 222

(Loss)/profit before tax 335 (150) 15 041 12 010 (4 679) 2 144 Taxation (100) 45 (4 803) (3 451) 1 310 (600)

(Loss)/profit after tax (335) (105) 10 238 8 559 (3 369) 1 544

Share of (loss)/profit (49.9%/40%/26%) – – 4 095 3 424 (876) 401

Dividend income from associate – – – – – –Transactions with group – – – – – 3 193

The carrying value of the above investments does not exceed the directors’ valuation of the investments.

The group does not equity account losses from associates when the carrying value of the investment in associate is impaired to nil. The loans to associates are non-interest-bearing and are payable on demand.

The Group has no legal or constructive obligation to make payments on behalf of the associates, unless sureties or guarantees have been offered. (Refer to notes 22 and 23).

The transactions with Cargo Carriers relates to management fees, vehicle hire charges and other operating costs.



10. Investment in joint ventures The investment in joint ventures represents the shareholding of 50% (2015: 50%) in Sitanani Carriers (Pty) Limited and 50% (2015: 50%) in Uzuko Carriers (Pty) Limited. These arrangements represent Cargo’s relationship with fuel distributorship marketers in Mpumalanga and the Eastern Cape. The group has equal voting rights together with its joint venture counterpart and unanimous consent is required for decision-making purposes. These joint ventures are equity accounted in the group.

GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

Sitanani Carriers (Pty) Limited Investment at cost – – – –Post-acquisition profits (1 022) 110 – –Loan to joint venture 6 077 3 318 – –Current year share of losses (428) (1 132) – –Carrying value at year end 4 627 2 296 – –Uzuko Carriers (Pty) Limited Investment at cost – – – –Post-acquisition profits 2 647 2 420 – –Loan to joint venture 2 429 2 929 – –Current year share of profits 951 227 – –Carrying value at year-end 6 027 5 576 – –Total carrying value of investment in joint ventures 10 654 7 872 – –Total share of profits/(losses) from joint ventures 523 (905) – –

Sitanani Carriers (Pty) Limited

Uzuko Carriers (Pty) Limited

2016R000

2015R000

2016R000

2015R000

Statement of financial position Non-current assets 22 485 17 163 30 500 35 510 Property, plant and equipment 21 295 16 328 30 500 35 510Deferred tax 1 191 835Current assets 8 310 4 047 8 527 9 532Inventory 240 228 407 492Accounts receivable 6 028 3 819 8 120 4 720Bank 2 042 – – 4 320Total assets 30 795 21 210 39 027 45 043Equity (3 250) (2 370) 7 195 5 293Distributable reserves (3 226) (2 370) 7 195 5 293Non-distributable reserves (24) – –Non-current liabilities 14 332 12 499 28 058 39 510Borrowings 14 332 12 299 20 340 29 531Related party loan – 200 4 858 7 858Deferred tax – 2 861 2 121Current liabilities 19 713 11 080 3 774 240Accounts payable 19 713 11 050 2 710 240Bank overdraft 30 1 064 – Total equity and liabilities 30 795 21 210 39 027 45 043Income statement Revenue 27 638 23 062 22 218 40 125 (Loss)/profit before tax (1 212) (3 106) 2 642 645 Taxation 356 843 (740) (192)(Loss)/profit after tax (856) (2 263) 1 903 453 Share of joint ventures (loss)/profit (50%/50%) (428) (1 132) 951 227 Transactions with group 2 440 2 518 3 721 4 360 The carrying value of the investment does not exceed the directors’ valuation of the investment.The transactions with Cargo Carriers relates to management fees and other operating costs.The group does not equity-account losses from associates when the carrying value of the investment in associate is impaired to nil. It will, however, equity account losses to the extent that sureties or guarantees have been issued in favour of joint ventures (refer to note 24). The loans to associates are non-interest-bearing and payable on demand.





Cost of shares

Amounts owing by/(to) subsidiary

companies

% of shares

Issued share

capital 2016 R000

2015R000

2016R000

2015R000

11. Subsidiary companies 11.1 Investments in subsidiaries

Transport Cargo Carriers (Botswana)2• 100 2 – – (232) (29)Cargo Carriers (Swaziland) (working capital loan)22• 100 4 – – 28 753 38 340 Heavy Hauliers (Pvt) Limited#• 100 2 – – 4 552 1 442J & G Transport (Lesotho)## 100 200 1 335 1 335 (39 902) (37 075)J & G Transport (South Africa)• 100 100 – – – – Ezethu Logistics (Pty) Limited 100 100 1 000 1 000 7 542 (156)Cargo Carriers Namibia* 100 1 – – (47) (1 339)Buks Haulage Limited** 55 922 – 18 043 1 879 1 062 Information technology Two Inc Consulting 100 100 2 068 2 068 – –Property Cargo Carriers Alrode Properties (deregistered 2016) 100 1 600 – 107 – –Cargo Carriers Workshop Property (deregistered 2016) 100 2 – – – –Carrick (Swaziland)22• 100 2 – – – –Aviation Executive Air (Pty) Limited (South Africa) 79 154 – – 1 560 1 560Summer Sun Trading (Pty) Limited (South Africa) 63 1 000 – – 5 – Dormant/holding Cargo Carriers (Lesotho)##• 100 2 – – – – Cargo Carriers Management Services 100 3 501 4 4 (4) (4)Cargo Carriers Swaziland Holdings22• 100 10 – – – – Cargo Carriers Harvesting22• 100 10 – – – –Cargo Carriers Mozambique~• 100 1 – – – – GFLT Developments 85 1 000 1 1 (1) (1)Heavy Hauliers Limited**• 100 10 – – – – Heavy Hauliers Limited***• 100 2 – – – – Siyazama Sisonke Empowerment 100 200 3 405 3 405 (3 373) (3 373)

Cost of shares 7 813 25 963 – –Less: Impairment of Two Inc Consulting (2 068) (2 068) – –

Carrying value 29 February 5 745 23 895 551 427

Amounts owing by subsidiaries 47 461 42 404

Amounts owing to subsidiaries (46 910) (41 977)

Country of incorporation Currency of issued share capital 2 Botswana Pula 22 Swaziland Emalangeni # Zimbabwe US dollar ## Lesotho Maloti * Namibia Namibian dollar ** Zambia Zambian kwacha *** Malawi Malawian kwacha ~ Mozambique Mozambique metical

• Held indirectly Held indirectly



11. Subsidiary companies continued11.1 Investments in subsidiaries continued

The subsidiaries listed on the previous page are all wholly owned, with the exception of Executive Air (Pty) Limited (79%) and Buks Haulage Limited (55%). The group exercises effective control over all subsidiaries based on its majority shareholding and shareholders’ agreements which are in place. Executive Air owns 70% of the issued share capital in Summer Sun Trading (Pty) Limited which results in the group having an effective control of 63.1% in this company. Unless otherwise stated, all subsidiaries are (Pty) Limited companies and the issued share capital is stated in South African rand.

The loans to subsidiary companies include working capital and are non-interest-bearing. The amounts outstanding are payable on demand. Due to the short-term nature of this instrument, carrying amount approximates fair value.

The attributable aggregate income after taxation of the subsidiaries for the year ended 29 February 2016 is: > Profit: R13.2 million (2015: R39.4 million) > Loss: R35.1 million (2015: R2.7 million)

The application of IFRS 12 Disclosure of Interests in Other Entities requires the disclosure of additional detailed information regarding subsidiary with material non-controlling interest, material joint venture and associate individually, and immaterial joint ventures and associates in aggregate. For this purpose, the group has applied significant judgement and considers contributions below 10% from the relevant subsidiary, joint venture or associate of the group as a whole as being immaterial.

11.2 Investment in subsidiary with material non-controlling interest The Group’s 55% investment in Buks Haulage Limited (BHL) represents a subsidiary with material non-controlling interest in terms of IFRS 12 Disclosure of Interest in Other Entities. This subsidiary is an unlisted transport company based in Zambia and specialising in the transport of various commodities including, inter alia, copper concentrates, lime and sulphuric acid. BHL’s net contribution of total assets, total liabilities, revenue and profit after tax is disclosed below.

Buks Haulage Limited

2016R000

2015R000

Non-current assets 75 022 102 320 Property, plant and equipment 71 482 102 320 Deferred tax 3 540 –

Current assets 58 083 81 081 Inventory 5 948 6 683 Accounts receivable 50 144 57 980 Bank 1 991 16 417

Total assets 133 105 183 401

Non-current liabilities 92 951 102 433 Borrowings 92 951 96 540 Deferred tax – 5 892Current liabilities 39 044 46 963 Accounts payables 33 097 31 873

Tax 5 257 12 450

Provisions 690 2 639

Total liabilities 131 995 149 396

Revenue 213 579 286 703

Profit before tax (30 552) 7 512 Taxation 3 934 (3 991)

Profit after tax (26 618) 3 521

Profit attributable to no-controlling interest (11 978) 1 475

Accumulated non-controlling interest 4 781 (942)

Present value of contingent consideration – 3 010

The contingent consideration related to a profit warranty as part of the purchase consideration to the minority shareholders of BHL. The sale of Cargo Carriers Limited’s shareholding in BHL has been concluded on 20 May 2016, the result being that the contingent purchase consideration no longer applies.

The Zambian Competition Board approved the sale of the investment in Buks Haulage Limited after year-end. Refer to note 27 for further details.





11. Subsidiary companies continued11.3 Discontinued operations

Cargo Carriers Limited has received an offer to sell its 55% holding in Buks Haulage Limited. The company accepted the offer and the suspensive conditions have been met after year-end. The subsidiary is disclosed as a discontinued operation in the group financials as it is considered a major line of business.

The assets and liabilities associated with the sale have been disclosed as a disposal group in the group statement of financial position.

GROUP

2016R000

2015R000

Revenue 213 579 286 703 Costs and administrative expenses (235 721) (269 444)Profit/(loss) from operating activities (22 142) 17 259 Impairment (1 804) (2 387)(Loss)/profit on disposal of property, plant and equipment 817 (345)Net finance costs (7 423) (7 015)Profit/(loss) before tax from a discontinued operation (30 552) 7 512 Tax:Related to current pre-tax profit/(loss) 3 934 (3 991)

Profit/(loss) for the year from a discontinued operation (26 618) 3 521

Cash flows from discontinued operations Cash outflow from operations (41 674) (24 214)Cash inflow from investing activities 30 838 24 472 Cash (outflow)/inflow from financing activities (3 589) 6 983

Net (decrease)/increase of cash (14 426) 7 242 Cash at the beginning of the year 16 417 9 175

Cash at the end of the year 1 991 16 417

Basic and diluted earnings per ordinary share (cents) attributable to discontinued operation (75) 10

The major classes of assets and liabilities of Buks Haulage Limited classified as held for distribution to equity holders of the parent as at 29 February 2016 are reflected in note 11.2.

Write down of property, plant and equipmentPrior to classification as non-current assets held for sale, assets were assessed for impairment and an impairment loss as reflected in note 3 was recognised. Fair value measurement disclosures are recognised in note 24.

GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

12. Inventories Fuels, oils and lubricants 2 404 3 712 1 878 2 094 Tyres 1 251 1 548 654 517 Maintenance spares 6 192 9 970 2 105 1 871

Total inventories at the lower of cost and net realisable value 9 846 15 230 4 637 4 482

Total inventories at net realisable value 9 846 15 230 4 637 4 482



GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

13. Trade and other receivables Trade receivables 88 529 149 044 72 893 115 542 Impairments (8 354) (9 872) (1 031) (23 161)Trade receivables net of impairments 80 174 139 172 71 862 92 381 Sundry receivables 11 294 28 776 4 956 7 966 – Prepaid expenditure 2 020 2 556 1 946 1 695– Other receivables 7 528 24 645 3 010 6 271– Withholding tax receivable 1 747 1 576 – –

91 468 167 948 76 818 100 347

Trade receivables are non-interest-bearing and are generally on 30-day terms. Included in trade receivables are related parties as disclosed in note 23. Other receivables are non interest bearing and generally on 30 to 90-day terms. As at 29 February 2016, trade receivables, for the company, of R1.0 million (2015: R23.1 million) were impaired and fully provided for. See below for the movements in the provision for impairment of receivables.

Impairment provisions

GROUP R000

COMPANY R000

Balance at 1 March 2014 13 272 24 370 Increase in provision during the year 133 (536)Provision utilised (3 533) (673)Balance at 28 February 2015 9 872 23 161 Increase in provision during the year (1 098) –Provision utilised (2 616) (22 130)

Balance at 29 February 2016 8 354 1 031

As at 29 February 2016, the age analysis of trade receivables is as follows:

Past due but not impaired

Total R000

Neither past due

nor impaired

R000

0 to 30 daysR000

31 to 60 daysR000

61 to 90 daysR000

>90 daysR000

GROUP 2016 80 174 58 890 7 625 596 10 291 2 772 2015 139 172 118 380 12 099 1 820 1 911 4 962

COMPANY2016 71 862 54 008 14 491 987 2 375 –2015 92 381 77 792 6 278 1 609 1 050 5 652 Refer to note 22.4 on credit risk of trade receivables, which explains how the group manages and measures credit quality of trade receivables that are neither past due nor impaired.

GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

14. Cash and short-term deposits Cash at bank 99 397 53 144 42 158 7 187 Short-term investments on call 80 701 80 969 80 701 80 969 Cash on hand 250 299 156 206

180 349 134 412 123 015 88 362 Cash at bank earns interest based on daily bank deposit rates. Short-term investments on call are invested in the Stanlib extra income fund and is interest-bearing at market-related rates.





GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

15. Share capital Authorised – 25 000 000 ordinary shares of 1 cent each 250 250 250 250 Issued – 20 000 000 ordinary shares of 1 cent each 200 200 200 200 Treasury – 593 710 ordinary shares of 1 cent each (6) (6) – –

194 194 200 200

The unissued shares have been placed under the control of the directors. This authority expires at the next annual general meeting.

16. Deferred taxation The liability for deferred taxation is made up as follows: Non-financial assets 76 462 94 444 60 854 65 189 Prepayments 547 481 545 475 Provisions (3 529) (10 653) (1 432) (1 962)Estimated tax losses (1 775) (4 336) – (1 193)

71 705 79 936 59 967 62 509

Deferred tax asset (62) (15 296) (1 432) (3 156)Deferred tax liability 71 766 95 232 61 399 65 665

Net deferred tax liability 71 705 79 936 59 967 62 509

Reconciled as follows: Opening balance at 1 March 79 936 80 473 62 509 54 574 Current year deferred tax expense recognised in profit and loss (6 869) (1 306) (4 364) 7 152– accelerated wear and tear allowances (7 241) (8 409) (6 303) (36)– decrease in provisions 528 1 063 531 952 – decrease in assessed losses recognised 1 193 6 192 1 193 6 192 – increase in prepayments (1 349) (153) 215 45Current year deferred tax expense recognised in other comprehensive income 2 178 783 1 822 783Income tax effect of revaluation of owner occupied properties 362 783 362 783Income tax effect of property adjustments – – 1 190 –Rate change 1 816 – 270 –Change in estimated base cost for CGT purposes – – – –Foreign currency translation reserve – (713) – –Prior period adjustments – 699 – –Deferred tax related to disposal group (3 540) – – –

Closing balance at 29 February 71 705 79 936 59 967 62 509

The asset for deferred taxation has been raised on the assumption that future taxable profits will be available against which the associated unused tax losses and deductible temporary differences can be utilised. The group has a total of R28.0 million (2015: R29.6 million) unrecognised tax losses as at 28 February 2016.

The group does not intend to settle current tax liabilities and assets on a net basis, nor to realise tax liabilities and assets simultaneously. With each entity in the group regarded as having the right to set off current tax liabilities and tax assets the deferred tax amounts in each entity are set off.



GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

17. Interest-bearing loans and borrowings 17.1 Loans bear interest between prime and prime

less 1.0% with monthly repayment terms over a five-year period ending July 2018. The loans are secured by vehicles with a book value of R14.7 million (2015: R5.85 million) 13 836 3 320 – –

17.2 Loans bear interest at prime with monthly repayment terms over a five-year period ended August 2015. The loans are secured by vehicles with a book value of Rnil (2015: R5.99 million) – 1 260 – –

17.3 Loans bear interest between prime and prime less 1.0% with monthly repayment terms over a five-year period ended September 2016. The loans are secured by vehicles with a book value of R12.7 million (2015: R13.9 million) 1 609 6 528 1 609 6 528

17.4 Loans relating to foreign subsidiary acquired, which bears interest between 6.95% and 17% over a two to three-year period ended September 2015. The loans are secured by vehicles with a book value of Rnil (2015: R95.8 million) – 96 540 – –

17.5 Loans bear interest between prime and prime less 2.25% with monthly repayment terms over a five-year period ending October 2019. The loans are secured by vehicles with a book value of R82 million (2015: R146.8 million) 44 647 66 868 38 981 59 117

60 092 174 516 40 590 65 645 Current portion included under current liabilities (33 324) (80 803) (20 826) (32 663)

Non-current liabilities 26 768 93 713 19 764 32 982





18. Group borrowings and capital management The primary objective of the group’s capital management, which comprises equity attributable to the equity holders of the parent, is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value. The group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. The method to raise additional capital will be decided and approved by the board.

The borrowing powers of the company and its subsidiaries are as determined by the company’s holding company. These have been fixed at not more than 50% of total equity. No changes were made to the objectives, policies or processes for managing capital during the reporting period.

GROUP

2016R000

2015R000

Total equity 458 114 459 628

Borrowing capacity of the group at 50% of total equity 229 059 229 814

The extent to which the group’s borrowing capacity has been utilised at year-end was as follows: Interest-bearing loans and borrowings – non-current 26 768 93 713 Interest-bearing loans and borrowings – current 33 324 80 803

60 092 174 516 Cash and short-term deposits (180 349) (134 412)

Net interest-bearing loans and borrowings (120 258) 40 104

Borrowing capacity of the group utilised at year-end (0%) 17.5%

GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

19. Trade and other payables Trade payables 64 629 94 983 62 634 42 735 Vat payable 3 937 4 667 2 601 2 566 Sundry payables 12 550 10 101 9 049 13 670 Audit fee provision 2 459 2 523 1 779 1 469 Workman’s compensation 4 327 3 332 4 355 3 413 Other payables 5 765 4 246 2 916 8 788

81 116 109 751 74 284 58 971

Trade and other payables are non-interest-bearing and are generally on 30-day terms.



GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

20. Employee benefit provisions Leave pay – at 1 March 6 888 6 472 6 225 5 669 – increase in provision during the year 4 623 5 132 3 818 4 819 – amounts utilised during the year (6 013) (4 716) (4 930) (4 263)

– at 29 February 5 497 6 888 5 113 6 225 – classified as non-current (2 101) (3 881) (2 101) (3 440)

– current at 29 February 3 397 3 007 3 012 2 785

Statutory severance and retirement allowance – at 1 March 5 983 5 882 – –– increase in provision during the year 11 476 553 – –– amounts utilised during the year (11 242) (452) – –

– at 29 February 6 217 5 983 – –

Total provisions non-current 2 101 3 881 2 101 3 440

Total provisions current 9 614 8 990 3 012 2 785

Provisions listed above are dependent on the movement of staff. The expected timing of the outflow of cash outflows is not certain. Provision for severance pay represents severance allowance entitled to employees in certain foreign jurisdictions in accordance with basic conditions of service regulated by law in those areas.

Leave pay provision classified as non-current was calculated using the following assumptions: average leave days per employee expected to be taken, as well as forfeited, after 12 months and discounted by the risk-free rate as per the applicable RSA government bond.

GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

21. Commitments 21.1 Capital expenditure commitments

Approved by directors: – contracted for – – – –– not contracted for – – – –

– – – –

Budgeted capital expenditure for 2016 60 121 52 151 50 741 37 761

Capital commitments will be funded from existing cash resources and funds generated by operations as well as available finance facilities.

21.2 Finance lease commitments – within one year 33 324 80 803 20 826 32 663 – after one year, but not more than five years 26 768 93 713 19 764 32 982

60 092 174 516 40 590 65 645





Within 1 yearR000

1 to 5 yearsR000

TotalR000

21. Commitments continued21.2 Finance lease commitments continued

GROUP 2016Total of future minimum lease payments 37 472 30 285 67 755Less future finance charges (4 148) (3 517) (7 665)

Present value of future minimum lease payments 33 324 26 768 60 092

COMPANY 2016 Total of future minimum lease payments 23 578 22 031 45 608 Less future finance charges (2 751) (2 267) (5 019)


GROUP 2015 Total of future minimum lease payments 91 187 100 056 191 243 Less future finance charges (10 384) (6 343) (16 727)


COMPANY 2015 Total of future minimum lease payments 36 672 35 752 72 424 Less future finance charges (4 009) (2 770) (6 779)


The group has instalment sale agreements and finance leases for various items of property, plant and equipment. The terms of repayment are disclosed in note 17.

GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

21.3 Operating lease commitments – within one year 3 517 4 887 3 399 2 698 – after one year, but not more than five years 6 626 14 793 6 380 4 720

10 143 19 680 9 779 7 418

Operating lease payments are debited monthly in advance and are subject to annual escalation linked either to the consumer price index (CPI) or in terms of the contractual agreement. Significant operating leases relate primarily to the rental of property.

22. Contingency The company did not guarantee any bank facilities of subsidiary companies during the current year (2015: Rnil).

The company has provided the following guarantees and sureties at 29 February 2016: > Guarantees of R0.3 million (2015: R0.3 million) > Instalment sale facilities granted to joint ventures of R17.3 million (2015: R20.9 million) > Instalment sale, finance lease and loan facilities granted to subsidiary companies of R131.9 million (2015: R105.5 million)



23. Related-party transactions Terms and conditions of transactions with related parties Related-party transactions exist between the group, fellow subsidiaries, associates and joint ventures. All purchasing and selling transactions with related parties are concluded at arm’s length. Outstanding balances at year end are unsecured, interest free and settlement occurs in cash. There have been no guarantees provided or received for any related-party receivables or payables, except as referred to in note 22.

Details of the major shareholders of the company are disclosed in the directors’ report and all directors of the company have confirmed that they have no major interest in any contract of significance to the group which could result in a conflict of interest.

No share options have been granted to any of the members of the board of directors.

Dividend payments to shareholders and the holding company are disclosed in the directors’ report.

The following table provides the total amount of transactions, which have been entered into with related parties, other than those noted above, for the year ended 29 February 2016:

Sales to related

parties

Cost recovery from related

parties Purchases from related parties

Amounts owed to/(by) related parties

2016 R000

2015 R000

2016 R000

2015 R000

2016 R000

2015 R000

2016 R000

2015 R000

GROUP Related partyHallmark Motor Group 1 643 18 – 1 474 – 8 199 129 207 Bolton Footwear 715 371 – – – – 46 –Bulk Haulage Namibia – – – – – – – (8 636)

Hallmark Motor Group and Bolton Footwear are subsidiaries of the group’s ultimate holding company, Cargo Carriers Holdings (Pty) Limited. Bulk Haulage Namibia is a related party to a director of Buks Haulage Zambia. The debts are non-interest-bearing and payment terms are generally on 30 days.

Transactions with related parties

Amounts owed by related parties

Amounts owed to related parties

Relationship 2016 R000

2015 R000

2016 R000

2015 R000

2016 R000

2015 R000

COMPANYRelated partyCargo Carriers (Botswana) (Pty) Limited Subsidiary – 53 – – – –Cargo Carriers (Swaziland) (Pty) Limited Subsidiary 4 940 5 513 35 463 81 2 380 8 354 Heavy Hauliers (Pvt) Limited Subsidiary 576 1 878 1 680 3 341 4 328 –J & G Transport (Lesotho) (Pty) Limited Subsidiary – 7 404 – 1 151 – 311 J & G Transport (South Africa) (Pty) Limited Subsidiary – – – – – 79 Ezethu Logistics (Pty) Limited Subsidiary 1 625 9 514 8 176 15 662 – 350 Summer Sun Trading (Pty) Limited Subsidiary 84 102 5 5 – –Cargo Carriers Namibia (Pty) Limited Subsidiary 50 9 024 – 161 – –Buks Haulage Limited Subsidiary 1 175 2 683 1 871 1 156 – –Uzuko Carriers (Pty) Limited Joint venture 7 994 12 050 1 496 1 107 – 65 Sitanani Carriers (Pty) Limited Joint venture 3 884 5 082 2 407 3 220 – 8

20 326 53 303 51 096 25 884 6 708 9 167

Transactions with subsidiary companies comprise management fees and other transport-related services. The above related-party disclosure does not include loans to subsidiary companies which are reflected in note 11.

Refer to note 11 for the company’s equity interest in subsidiary companies.

Refer to notes 9 and 10 for the company’s equity interest in associates and joint venture companies respectively.

Payments made to directors and key management of the company is disclosed in note 4.

At year-end, inter-group loans payable to Cargo Carriers Limited by Cargo Carriers Swaziland (Pty) Limited and Ezethu Logistics (Pty) Limited have been subordinated.





24. Financial instruments 24.1 Introduction

The group’s principal financial instruments comprise bank loans and overdraft, finance leases and hire purchase contracts, loans to associates and joint ventures, cash and short-term deposits, loans and unlisted investments, amounts owing by subsidiary companies and amounts owing to subsidiary companies. The main purpose of these financial instruments is to raise finance for the group’s operations. The group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations.

The group does not normally enter into derivative transactions. It is, and has been throughout the year under review, the group’s policy that no trading in financial instruments shall be undertaken.

Listed below are the carrying values of all financial instruments within the group.

GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

Financial instrument classifications– Loans and receivables 268 877 273 584 195 909 180 743 – Financial liabilities at amortised cost 144 104 287 276 156 220 127 625

The main risks arising from the group’s financial instruments are credit risk, foreign currency risk, treasury and interest rate risk and liquidity risk. The board reviews and agrees policies for managing each of these risks and they are summarised below.

24.2 Credit risk The most significant exposure to credit risk is in trade debtors that amount to 76.5% (2015: 82.8%) of total accounts receivable at year-end, for which no collateral is held. The trade debtors comprise a large number of customers. The majority have been contractually tied for some years and have proven credit risk ratings. The group policy is to perform credit checks on all customers. Ratings are done on a regular basis via a debt rating agency. Trade debtors are presented net of impairments. At year-end, the group considered it had sufficient allowances to cover any significant risk exposure among debtors. The group only deposits cash surpluses with major banks of high-quality credit standing. Accordingly the group has no significant concentration of credit risk. Refer to note 13.

The carrying amounts of financial assets included in the statement of financial position represent the group’s maximum exposure to credit risk in relation to these assets.

24.3 Foreign currency risk The group policy is to avoid unnecessary exposure to foreign exchange rate fluctuations when entering into any foreign currency transaction. Forward exchange contracts will be used to mitigate the exposure to currency movements if required. No forward exchange contracts were concluded during the current and prior period.



24. Financial instruments continued24.3 Foreign currency risk continued

The year-end balances and rates are as follows:

Foreign currency

balance at 29 February

Foreign currency

balance at 28 February

Exchange rate at

29 February

Exchange rate at

28 February

2016US$000

2015US$000 2016 2015

GROUPBank and short-term deposits 1 319 4 103 R15.90/US$1 R11.60/US$1 Trade and other receivables 200 3 088 R15.90/US$1 R11.60/US$1 Trade and other payables (543) (2 306) R15.90/US$1 R11.60/US$1 Long-term loans – (8 219) R15.90/US$1 R11.60/US$1

Total foreign currency exposure 976 (3 333)

COMPANYBank and short-term deposits 250 901 R15.90/US$1 R11.60/US$1 Trade and other receivables – 112 R15.90/US$1 R11.60/US$1 Trade and other payables – – R15.90/US$1 R11.60/US$1

Total foreign currency exposure 250 1 013

Increase/(decrease)

in %

Effect on profit before tax

R000

Effect on equity

R000

GROUPSensitivity analysis2016 20% positive variance 3 104 2 235

20% negative variance (3 104) (2 235)

2015 4% positive variance 1 667 1 2004% negative variance (1 667) (1 200)

COMPANYSensitivity analysis2016 20% positive variance 795 572

20% negative variance (795) (572)

2015 4% positive variance 507 365 4% negative variance (507) (365)





24. Financial instruments continued24.4 Treasury and interest rate risk

Management regularly evaluates the company’s exposure to interest rate fluctuations and determines future gearing based on economic forecasts. As part of the process of managing the group’s interest rate risk, interest rate characteristics of new borrowings and the refinancing of existing borrowings are positioned according to expected movements in interest rates. Refer to note 17 of the financial statements for the potential exposure to interest rate fluctuations.

Increase/(decrease)

in basis points

Effect on profit before tax

R000

GROUPSensitivity analysis2016 50 basis points (230)

(50) basis points 230

2015 50 basis points (881) (50) basis points 881

COMPANYSensitivity analysis 2016 50 basis points (152)

(50) basis points 152

2015 50 basis points (244) (50) basis points 244

24.5 Liquidity risk The group monitors its risk of a shortage of funds using a recurring liquidity planning tool. This tool considers the maturity of both its financial investments and financial assets (eg accounts receivable and other financial assets) and projected cash flows from operations. The cash flows from debtors and creditors are reasonably well matched in that payments are made to creditors on the same terms and conditions given to customers. It is anticipated that the year-end position will be settled within a 45 to 60-day time frame.

The table below summarises the maturity profile of the group’s financial liabilities at 29 February 2016 based on contractual undiscounted payments.

On demand R000

Less than 1 year R000

1 to 5 years R000

Total R000

2016GROUP Interest-bearing loans and borrowings – 37 472 30 285 67 753Trade and other payables – 64 987 – 64 629 Other payables excluding VAT 12 550 – – 12 550

COMPANY Interest-bearing loans and borrowings – 23 578 22 031 45 608 Trade and other payables – 62 634 – 62 634Other payables excluding VAT 9 049 – – 9 046

2015 GROUP Interest-bearing loans and borrowings – 91 187 100 056 191 243 Trade and other payables – 78 635 – 78 635 Other payables excluding VAT 26 448 – – 26 448

COMPANY Interest-bearing loans and borrowings – 36 672 35 752 72 424 Trade and other payables – 42 954 – 42 954 Other payables excluding VAT 13 450 – – 13 450



24. Financial instruments continued24.6 Fair value of financial instruments

The carrying amounts of financial instruments approximate their fair values due to the short-term maturities of these assets and liabilities. The interest rates on long-term loans are market related, therefore, the fair values approximate the carrying values.

24.7 Fair value measurement The following table provides the fair value measurement hierarchy of the group’s assets and liabilities:

GROUP COMPANY

Fair value measurement

2016R000

2015R000

2016R000

2015R000

Non-current assets Property, plant and equipment Level 3 337 192 448 146 292 798 308 764 Investment properties Level 3 26 520 25 735 11 845 11 775 Non-current assets held for sale Level 3 136 730 20 799 2 241 11 375 Non-current liabilities Contingent consideration Level 3 – 3 010 – 3 010 Interest-bearing loans and borrowings Level 2 26 768 93 713 19 764 32 982

The fair value of the above financial assets and liabilities is included at the amount at which the assets could be exchanged and the liabilities settled in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used to estimate the fair values: Fair values of the group’s interest-bearing borrowings and loans were determined by using an amortised cost model using the applicable interest rate. The interest rate was assessed as being at fair value as it is comparable to other interest rates in the market.

Investment properties together with land and buildings were revalued by an independent valuator as at 29 February 2016 on an open market basis based on discounted cash flows and an investment valuation model, as supported by current market evidence. The inputs used for the valuation is the current net income of the property that is based on current market-related rentals adjusted for current operating costs, as well as a capitalisation rate that is determined by adjusting the prime base capitalisation rate indicator (R186) with a range of between 1.86% and 5.86% to obtain a rate that is reflective of the property risk profile. The valuation method is sensitive to changes in the capitalisation rate used to determine fair value. The independent valuer reviews and updates the valuations on an annual basis for the determination of the fair value of the investment properties. The current use does not differ significantly from the highest and best use.

Non-current assets held for sale at fair value were established by using the fair value that a willing seller will sell to a willing buyer in the current market as at 29 February 2016.

Fair value of the contingent consideration was determined by discounting the consideration to its present value by using the discount rate that reflects the risk inherent to the transaction.





GROUP COMPANY

2016R000

2015R000

2016R000

2015R000

25. Notes to the statement of cash flows25.1 Reconciliation of profit from operating activities

to cash generated by operations:Operating activities Profit before tax from continuing operations 40 773 39 632 11 880 26 938 Profit/(loss) before tax from discontinued operations (22 142) 16 570 – –

Profit before tax 18 631 56 202 11 880 26 938 Depreciation of property, plant and equipment 59 990 69 588 25 498 25 862 Notional interest on contingent consideration – 293 – 293 Foreign exchange movement on contingent consideration – 218 – 218 (Decrease)/increase in provisions (466) 517 (1 112) 556 Unrealised foreign exchange differences 43 330 19 629 (1 327) 33

Operating profit before working capital changes 121 485 146 447 34 939 53 900 Working capital changes 27 937 (1 323) 22 018 8 177 Increase/(decrease) in inventories (904) 1 759 (155) 945 (Increase)/decrease in trade and other receivables 23 247 (17 758) (34 800) 10 131 Increase/(decrease) in trade and other payables 6 606 27 015 56 973 (2 899)Foreign exchange movement (1 011) (12 339) – –

Cash generated from operations 149 423 145 124 56 956 62 077

25.2 Tax paid Tax prepaid at the beginning of the year (7 208) (2 101) 746 166 Withholding tax charge – 747 – –Current tax charge (15 051) (16 108) (8 018) –Tax payable/(receivable) at the end of the year (including BHL) 13 277 7 208 9 484 (746)

(8 983) (10 254) 2 212 580

25.3 Dividend paid Amounts unpaid at the beginning of the year – – – –Amounts charged per statement of changes in equity (5 432) (8 927) (5 600) (9 200)Amounts unpaid at the end of the changes in year – – – –

(5 432) (8 927) (5 600) (9 200)

25.4 Replacement of non-financial assets Land and buildings – 14 695 – –Leasehold improvements and prefabricated buildings – 76 – 76 Vehicles 23 421 31 199 848 828 Leased vehicles 19 141 5 258 8 230 5 258 Plant, furniture and equipment 2 190 2 041 1 667 1 938

44 752 53 269 10 745 8 100



GROUP Fuel andPowders

Chemicals and Steel Agriculture

SupplyChain

Services Continuing Discontinued Total

2016R000

2015R000

Re-pre-sented

2016R000

2015R000

Re-pre-sented

2016R000

2015R000

Re-pre-sented

2016R000

2015R000

Re-pre-sented

2016R000

2015R000

Re-pre-sented

2016R000

2015R000

Re-pre-sented

2016R000

2015R000

Re-pre-sented

26. Segment reportRevenue and other income 219 497 224 556 281 678 286 274 64 478 71 841 26 445 44 055 592 098 626 725 213 579 286 703 805 677 913 427 Profit/(loss) before interest 10 061 13 574 30 817 24 475 7 093 (1 465) (3 599) 6 288 44 372 42 873 (23 128) 18 518 21 244 61 391 Total assets 222 059 206 571 311 685 312 730 140 216 129 897 17 247 29 699 691 207 678 897 133 105 183 401 824 312 862 297 Total liabilities 75 240 77 040 105 608 116 631 47 510 48 445 5 844 11 076 234 202 253 191 131 995 149 396 366 197 402 587

GROUP Within

South Africa External to South Africa Total

2016R000

2015R000

2016R000

2015R000

2016R000

2015R000

Geographical segmentsRevenue 464 600 508 833 341 077 404 594 805 677 913 427 Non-current assets 607 694 608 450 215 862 253 848 824 312 862 297

The group operates nationally in South Africa and the Southern African Development Community (SADC) regions. For management purposes the group is split into four main operating divisions comprising Fuel and Powders, Chemical and Steel, Supply Chain Services and Agriculture, which reports to the CEO and executive director.

The group’s risks and rate of return are affected predominantly by differences in the products and services provided. Each segment represents a strategic business unit that offers different products and serves different markets. Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions with independent third parties. Segment revenue, segment expense and segment results include transfers between business segments. Those transfers are eliminated on consolidation. The basis of this segment report is to reflect those areas of business that are subject to differing risks. This may relate to risk factors such as the weather, consumption patterns, exchange rate volatility and the like.

The group, as indicated in note 7, will sell its shares in Buks Haulage Limited. The operations are disclosed in the discontinued segment. The discontinued operation was previously part of the Chemicals and Steel segment.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on the operating profit or loss and is measured consistently with operating profit or loss in the consolidated financial statements. There are no material inter-segment revenues. Revenue from two major customers amounted to R186.8 million (2015: R210.7 million). Operational sites beyond the borders of South Africa comprise Zambia, Swaziland, Lesotho, Namibia and Zimbabwe.

Head office expenses, assets and liabilities have been allocated on a reasonable basis to all segments as they are managed on a group basis.





27. Events after the reporting periodThe company entered into an agreement prior to year-end for the sale of its majority shareholding in BHL to BeefCo Limited, a related party to the minority shareholder of this subsidiary. The suspensive conditions of the sale were only fulfilled subsequent to year-end and the results of BHL are, accordingly, included as a discontinued operation section and disclosed as a disposal group held for sale within the annual financial statements.

The company entered into an agreement providing for the implementation of an employee share participation transaction through the creation and funding of a special purpose vehicle, EmployeeCo (Pty) Limited through which eligible employees of the group will collectively acquire an indirect 5% shareholding in Cargo Carriers. The special and ordinary resolutions required to approve the employee share participation transaction were approved by shareholders at a general meeting held on 5 May 2016.


Directorate

EXECUTIVE DIRECTORSMurray Bolton (58)Chief executive officerBCompt (Hons), CA(SA)Murray is a chartered accountant who graduated from the University of the Witwatersrand. He joined Cargo Carriers in 1985 as financial administration manager and, within two years, was appointed financial director. He later completed a Sloan Fellowship at the London Business School, was appointed joint CEO in 1992 and CEO in 2013.

Garth Bolton (60)Executive directorGarth has risen through the ranks at Cargo Carriers. He moved from contracts controller to branch manager to divisional manager to joint CEO and to executive director of Cargo Carriers in 2013. He also served as chairman of the Road Freight Association for two years and brings a wealth of experience at all levels of the industry to Cargo Carriers.

Junaid Kriel (37)Chief financial officerBCom (Hons), CA(SA)Hons Management PracticeJunaid is a qualified chartered accountant and has held several senior executive and managerial positions within the healthcare and recycling industries. He has joined the company from Redisa NPC where he served as chief operating officer.

multidisciplinary services ranging from engineering, business advisory and metering to energy optimisation solutions. She has extensive experience in assurance, project finance and financial restructuring gained from her association with companies including the Industrial Development Corporation, Transnet Group Audit Services, KPMG and Coopers & Lybrand (now PwC). Matsotso also serves as a trustee of Kagosano Trust.

Vincent Raseroka (56)BA (Hons) cum laude – Fisk University, USAVince rejoined the board on 18 July 2014, having previously served as a director of the group between 2005 and 2011. His extensive experience includes senior positions at SA Breweries, Shell Oil Company, Chevron South Africa, Cell C Service Provider, South African Airways, Telkom and Ellerines Holdings. Between 2005 and 2010 and again from May 2014 to the present, Vince has run his own private equity portfolio.

NON-EXECUTIVE DIRECTORBeverley Fraser (55)BABeverley graduated with a BA degree from the University of Cape Town, subsequently gaining considerable experience in the travel and tourism industry. She is currently directly involved in the ownership and management of retail franchise stores as well as a franchise motor vehicle retailing business.

INDEPENDENT NON-EXECUTIVE DIRECTORSSiza Mzimela (50)ChairpersonBA (Economics and Statistics)Transnet Executive Development Programme, GIBSSiza is an economics and statistics graduate, her career developing through Standard Bank, Total, and South African Express. She is the former group chief executive officer of South African Airways and is currently founding shareholder and executive director of Blue Crane Aviation Services. Siza also serves on the boards and audit committees of Ansys Limited and Africa Re (SA), among others. She was appointed chairperson of the board of Cargo Carriers Limited on 1 November 2013.

Alistair Franklin (57)BA LLB, MAAlistair graduated with a BA LLB degree from the University of Natal and obtained an MA degree from Oxford University. He was admitted to the Johannesburg Bar as an advocate in August 1985 and took silk on 17 November 2000. Areas of practice include commercial and pension fund litigation. He has periodically acted as a judge in the High Court in Johannesburg.

Matsotso Vuso (43)BCom (Hons), CA(SA)Matsotso is a chartered accountant who graduated from the University of Cape Town. She is the managing director of the Nyamezela Group of Companies which offers





EXECUTIVE MANAGEMENTDawid Janse van Rensburg (56)Divisional director: IT and supply chain BEng, MCom Business Management, MEngDawid holds a BEng (Electrical) degree from the University of Pretoria, a Master’s degree in Nuclear Engineering from Pennsylvania State University, USA, and an MCom in Business Management from Rand Afrikaans University. Dawid is a consultant with the International Goldratt Group and is a certified application expert with TOCICO (Theory of Constraints International Certification Organisation). Dawid heads up the operations of the CargoSolutions division.

Pauline Legodi (47)Divisional director: human resourcesBA LLBPauline joined Cargo Carriers in June 2010 as group human resources manager and was appointed director in July 2011. She holds an LLB degree from the University of South Africa (Unisa) as well as a BA (Social Work) degree from the University of Fort Hare.

and a Master’s of Management in Safety, Health and Environment (University of Southern Queensland). With more than 10 years’ experience in the SHEQ (safety, health, environment and quality) arena, Mercia is responsible for all aspects of the group’s SHEQ.

Diana Padayachee (40)Group audit and risk managerBComDiana joined the company in 2014. She holds a BCom degree from the University of South Africa (Unisa) and a diploma in technical financial accounting through the Institute of Certified Bookkeepers. With more than 10 years’ experience in the internal audit and risk management environment, Diana brings with her a wealth of experience and is responsible for managing the internal audit department, risk management and BBBEE.

Pauline is a member of the labour relations committee of the Road Freight Association. She is responsible for aligning human resources strategy to corporate strategy.

Andre Jansen van Vuuren (46)Divisional director: marketingRAU Transport DiplomaAndre joined Cargo Carriers in 2009. He holds a RAU Road Transport Diploma from the University of Johannesburg. With 20 years’ experience in logistics, gained in both the operational and marketing disciplines, Andre has a keen understanding of all aspects of the industry. He is responsible for customer service, internal and external marketing as well as sales.

OTHER KEY FUNCTIONAL MANAGEMENTMercia Maletswa (41)Group SHEQ managerBTech, Master’s of Management (SHE)Mercia joined Cargo Carriers in 2009. She holds a BTech in Environmental Health from Tshwane University of Technology


Notice of annual general meeting of the shareholders of the companyCARGO CARRIERS LIMITED(Registration number 1959/003254/06)Share code: CRGISIN: ZAE000001764(company or group)

Notice is hereby given that the 56th annual general meeting of shareholders of Cargo Carriers Limited will be held at the registered office of the company, which is situated at 11A Grace Road, Mountainview, Observatory, Johannesburg at 09:00 on Thursday, 21 July 2016 to consider, and if deemed fit, to pass, with or without modifications, the resolutions set out below.

Record dateThe record date for determining which shareholders are entitled to notice of the meeting is Friday, 3 June 2016 and the record date for the purposes of determining which shareholders are entitled to participate in and vote at the annual general meeting is Friday, 15 July 2016. Accordingly, the last day to trade in order to be eligible to vote at the annual general meeting will be Tuesday, 12 July 2016.

Attendance and votingShareholders holding certificated shares or dematerialised shares with “own name” registrationRegistered holders of certificated shares or of dematerialised shares with “own name” registration may attend the annual general meeting in person. Alternatively you may appoint a proxy to represent you at the annual general meeting of shareholders by completing the attached form of proxy in accordance with the instructions contained therein. The completed form of proxy must be lodged with or posted to the transfer secretaries, Computershare Investor Services (Pty) Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) to be received by them before 09:00 on Tuesday, 19 July 2016.

Shareholders holding dematerialised shares, other than those with “own name” registrationHolders of dematerialised shares held through a Central Securities Depository Participant (CSDP) or broker and who do not have “own name” registration, but who wish to attend the annual general meeting of shareholders, must timeously advise their CSDP or broker of their intention to attend and vote at the annual general meeting or to be re-presented by proxy thereat

and must obtain the necessary letter of representation from their CSDP or broker. Holders of dematerialised shares not registered in their name and who do not wish to attend the annual general meeting of shareholders, but would like their vote to be recorded at the meeting, should contact their CSDP or broker and furnish them with their voting instructions in order for the CSDP or broker to vote in accordance with their instructions at the annual general meeting. Holders of dematerialised shares not registered in their own name must not complete the form of proxy.

In terms of section 62(3)(e) of the Companies Act 71 of 2008 (the Companies Act):(i) A shareholder who is entitled to attend and vote at

the meeting is entitled to appoint one or more proxies to attend, participate in and vote at the meeting in his/her stead, by completing the form of proxy in accordance with the instructions set out therein.

(ii) A proxy need not be a shareholder of the company.(iii) Meeting participants (including shareholders and

proxies) are required to provide reasonably satisfactory identification before being entitled to attend or participate in a shareholders’ meeting: in this regard, all meeting participants will be required to provide identification satisfactory to the chairman of the meeting. Forms of identification include valid identity documents, driver’s licences and passports.

Electronic participation in the annual general meetingIn accordance with the provisions of section 61(10) of the Companies Act, the company intends to make provision for shareholders and their proxies to participate in the annual general meeting by way of telephone conference call. Shareholders wishing to do so:

> Must contact the company at +27 11 485 8700 by no later than 09:00 on Friday, 15 July 2016, to obtain a pin number and dial-in details for the conference call.

> Will be required to provide reasonably satisfactory identification.

> Will be billed separately by their own telephone service providers for the telephone call to participate in the meeting.

> Must submit their voting proxies to the transfer secretaries, Computershare Investor Services (Pty) Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107), by no later than 09:00 on





Tuesday, 19 July 2016. No changes to voting instructions after this time and date can be accepted unless the chairman of the meeting is satisfied as to the identification of the electronic participant.

1. Ordinary resolution number 1 – acceptance of annual financial statements

“RESOLVED THAT the consolidated audited annual financial statements for the year ended 29 February 2016, including the directors’ report, the independent auditors’ report and the audit committee report thereon, be and are hereby received and accepted.”

Explanatory note for ordinary resolution number 1 Ordinary resolution number 1 proposes to receive

and accept the group audited annual financial statements for the year ended 29 February 2016, including the directors’ report, the independent auditors’ report and the audit committee report thereon.

In order for this resolution to be adopted, the support of more than 50% of the voting rights exercised on the resolution by shareholders present or re-presented by proxy at the annual general meeting and entitled to exercise voting rights on the resolution is required.

2. Ordinary resolution number 2 – director appointment – J Kriel

“RESOLVED THAT the appointment of Mr J Kriel as an executive director of the company with effect from 18 January 2016 be and is hereby approved.”

Mr Kriel’s curriculum vitae is set out is set out on page 100 of this integrated annual report.

Explanatory note for ordinary resolution number 2 In accordance with the memorandum of

incorporation of the company, any director that is appointed by the board of directors after the conclusion of the company’s preceding annual general meeting is required to retire at the next meeting and may offer themselves for re-election.

In order for this resolution to be adopted, the support of more than 50% of the voting rights

exercised on the resolution by shareholders present or re-presented by proxy at the annual general meeting and entitled to exercise voting rights on the resolution is required.

3. Ordinary resolution number 3 – director retirement and re-election – Mr AE Franklin

“RESOLVED THAT Mr AE Franklin, which director retires in terms of the company’s memorandum of incorporation and, being eligible, offers himself for re-election as a director of the company be and is hereby approved.”

Mr Franklin’s curriculum vitae is set out on page 100 of this integrated annual report.

4. Ordinary resolution number 4 – director retirement and re-election – Mrs SP Mzimela

“RESOLVED THAT Mrs SP Mzimela, which director retires in terms of the company’s memorandum of incorporation and, being eligible, offers herself for re-election as a director of the company be and is hereby approved.”

Mrs Mzimela’s curriculum vitae is set out on page 100 of this integrated annual report.

Explanatory note for ordinary resolution numbers 3 and 4

In terms of clause 24.8.1 of the company’s memorandum of incorporation, at every annual general meeting at least one-third of the non-executive directors must retire by rotation and the directors to so retire shall be those who have been longest in office since their last election.

In order for these resolutions to be adopted, the support of more than 50% of the voting rights exercised on these resolutions by shareholders present or re-presented by proxy at the annual general meeting and entitled to exercise voting rights on the resolutions is required.

5. Ordinary resolution number 5 – approval of remuneration policy

“RESOLVED THAT the remuneration policy, a summary of which is set out on page 45 of this integrated annual report, be and is hereby approved.”


Notice of annual general meeting of the shareholders of the company continued

Explanatory note for ordinary resolution number 5 Chapter 2 of King III “Boards and directors”,

requires companies to table, every year, their remuneration policy to shareholders for a non-binding advisory vote at the annual general meeting. This vote enables shareholders to express their views on the remuneration policy adopted and on its implementation.

This ordinary resolution is of an advisory nature only and failure to pass this resolution will therefore not have any legal consequences relating to existing arrangements. The board will, however, take the outcome of the vote into consideration when considering the company’s remuneration policy.


6. Ordinary resolution number 6 – appointment and remuneration of auditors

“RESOLVED THAT Ernst & Young Inc. be appointed as the external auditor of the company and of the group, with Mr Gavin Weinreich as designated registered auditor, for the financial year ending 28 February 2017 and that Ernst & Young Inc.’s remuneration for the financial year then ending be determined by the audit committee.”

Explanatory note for ordinary resolution number 6 Ernst & Young Inc. has indicated its willingness

to continue as the company’s auditors until the next annual general meeting. The audit committee has satisfied itself as to the independence of Ernst & Young Inc. The audit committee has the power in terms of the Companies Act to approve the remuneration of the external auditors. The remuneration and non-audit fees paid to the auditors during the year ended 29 February 2016 are contained in note 19 to the annual financial statements.


7. Ordinary resolution number 7 – appointment of audit and risk committee member – Mrs MJ Vuso (chairperson)

“RESOLVED THAT in accordance with the provisions of section 94(2) of the Companies Act, Mrs MJ Vuso be and is hereby re-elected as a member of the audit committee to hold office until the next annual general meeting.”

Mrs Vuso’s curriculum vitae is set out on page 100 of this integrated annual report.

8. Ordinary resolution number 8 – appointment of audit and risk committee member – Mr AE Franklin

“RESOLVED THAT in accordance with the provisions of section 94(2) of the Companies Act and subject to his re-election as a director of the company pursuant to ordinary resolution number 3, Mr AE Franklin be and is hereby appointed as a member of the audit committee to hold office until the next annual general meeting.”

Mr Franklin’s curriculum vitae is set out on page 100 of this integrated annual report.

9. Ordinary resolution number 9 – appointment of audit and risk committee member – Mr V Raseroka

“RESOLVED THAT in accordance with the provisions of section 94(2) of the Companies Act, Mr V Raseroka be and is hereby re-elected as a member of the audit committee to hold office until the next annual general meeting.”

Mr Raseroka’s curriculum vitae is set out on page 100 of this integrated annual report.

10. Ordinary resolution number 10 – appointment of audit and risk committee member – Mrs SP Mzimela

“RESOLVED THAT in accordance with the provisions of section 94(2) of the Companies Act and subject to her re-election as a director of the company pursuant to ordinary resolution number 4, Mrs SP Mzimela be and is hereby re-elected as a member of the audit committee to hold office until the next annual general meeting.”

Mrs SP Mzimela’s curriculum vitae is set out on page 100 of this integrated annual report. Shareholders are reminded that Mrs Mzimela is the





current group chairperson. The board has, however, requested her to make herself available for re-election to the audit and risk committee in that they value the experience and insights she contributes to the committee.

Explanatory note for ordinary resolution numbers 7 to 10

Ordinary resolution numbers 7 to 10 are proposed to elect an audit committee in accordance with the provisions of section 94(2) of the Companies Act and the third King Report on Corporate Governance for South Africa (King III).

Section 94 of the Companies Act requires that, at each annual general meeting, shareholders of the company must elect an audit committee comprising at least three members to perform the duties and responsibilities stipulated in section 94(7) of the Companies Act and to perform such other duties and responsibilities as may from time to time be delegated to it by the board.

In order for these resolutions to be adopted, the support of more than 50% of the voting rights exercised on these resolutions by shareholders present or re-presented by proxy at the annual general meeting and entitled to exercise voting rights on the resolutions is required.

11. Ordinary resolution number 11 – general authority to allot and issue shares for cash

“RESOLVED THAT subject to the provisions of the Companies Act, the Listings Requirements of the JSE and the company’s memorandum of incorporation, as a general authority valid until the next annual general meeting of the company and provided that it shall not extend past 15 months from the date of this AGM, the authorised but unissued ordinary shares of the company be and are hereby placed under the control of the directors who are hereby authorised to allot, issue, grant options over or otherwise deal with or dispose of these shares to such persons at such times and on such terms and conditions and for such consideration, whether payable in cash or otherwise, as the directors may think fit, provided that:

> The shares which are the subject of the issue for cash must be of a class already in issue, or where this is not the case, must be limited to such equity securities or rights that are convertible into a class already in issue.

> This authority shall not endure beyond the next annual general meeting of the company nor shall it endure beyond 15 months from the date of this meeting.

> The such shares must be issued only to public shareholders (as defined by the Johannesburg Stock Exchange (JSE) in its Listings Requirements) and not to related parties.

> Upon any issue of shares which, together with prior issues during any financial year, will constitute 5% or more of the number of shares of the class in issue, the company shall by way of an announcement on Stock Exchange News Service (SENS), give full details thereof, including the effect on the net asset value of the company and earnings per share.

> The number of shares issued for cash shall not, in the current financial year, in aggregate, exceed 15% or 3 157 895 of the company’s issued ordinary shares (including securities which are compulsorily convertible into shares of that class).

> The maximum discount at which shares may be issued is 10% of the weighted average traded price of the company’s shares over the 30 business days prior to the date that the price of the issue is determined or agreed by the directors of the company.”

Explanatory note for ordinary resolution number 11

In terms of the JSE Listings Requirements, shareholders, by their approval of this resolution, grant a waiver of any pre-emptive rights to which ordinary shareholders may be entitled, in favour of the directors, for the allotment and issue of ordinary shares in the company for cash other than in the normal course by way of a rights offer, claw-back offer or pursuant to the company’s share incentive scheme or acquisitions utilising the ordinary shares as currency to discharge the purchase consideration.

In accordance with the JSE Listings Requirements, in order for this resolution to be adopted, the support of 75% of the voting rights exercised on this resolution by shareholders present or re-presented by proxy at the annual general meeting and entitled to exercise voting rights on the resolution is required.


Notice of annual general meeting of the shareholders of the company continued

12. Special resolution number 1 – non-executive directors’ remuneration

“RESOLVED THAT the fees payable to the non-executive directors for their services to the board and committees of the board, as set out below, be and are hereby approved with effect from 1 March 2016”.

Chairperson

Other directors/members

of other committees

Board meetingRetainer per month (maximum) R19 250 R8 750Attendance fee per meeting R12 600 R11 340

Audit committeeRetainer per month (maximum) Rnil RnilAttendance fee per meeting R6 300 R6 300

Other committeesRetainer per month (maximum) Rnil Rnil

Attendance fee per meeting R2 625 R2 625

Explanatory note for special resolution number 1 Section 66(8) (read with section 66(9)) of the

Companies Act provides that, to the extent permitted in the company’s memorandum of incorporation, the company may pay remuneration to its directors for their services as directors provided that such remuneration may only be paid in accordance with a special resolution approved by shareholders within the previous two years. The remuneration committee has considered the remuneration for non-executive directors and the board has accepted the recommendations of the remuneration committee.

In order for this resolution to be adopted, the support of at least 75% of the voting rights exercised on the resolution by shareholders present or re-presented by proxy at the annual general meeting and entitled to exercise voting rights on the resolution is required.

13. Special resolution number 2 – general authority to enter into funding agreements, provide loans or other financial assistance

“RESOLVED that in terms of section 45 of the Act, as amended, the company be and is hereby granted a general approval authorising the company and/or any one or more of its wholly owned subsidiaries to enter into direct or indirect funding agreements or to provide loans or financial assistance between any one or more of the subsidiaries from time to time, subject to the provisions of the JSE Listings Requirements, insofar as they relate to funding arrangements and as the directors in their discretion deem fit.”

Explanatory note for special resolution number 2 Section 45 of the Companies Act provides, among

other things, that, except to the extent that the memorandum of incorporation of a company provides otherwise, the board may authorise the company to provide direct or indirect financial assistance (which includes lending money, guaranteeing a loan or other obligation and securing any debt or obligation) to a related or inter-related company or corporation, including a subsidiary of the company incorporated in or outside of the Republic of South Africa, provided that such authorisation shall be made pursuant to a special resolution of the shareholders adopted within the previous two years, which approved such assistance either for the specific recipient or generally for a category of potential recipients and the specific recipient falls within that category.

In order for this resolution to be adopted, the support of at least 75% of the voting rights exercised on the resolution by shareholders present or re-presented by proxy at the annual general meeting and entitled to exercise voting rights on the resolution is required.

By order of the board

Arbor Capital Company Secretarial (Pty) LimitedCompany secretary

ObservatoryJohannesburg31 May 2016





Form of proxy

CARGO CARRIERS LIMITED(Registration number 1959/003254/06)

Share code: CRGISIN: ZAE000001764

(Cargo Carriers or the company)

FORM OF PROXY (for use by certificated and "own name" dematerialised shareholders only)

For use by certificated and “own name” registered dematerialised shareholders of the company (shareholders) at the annual general meeting of Cargo Carriers to be held at 09:00 on Thursday, 21 July 2016 at 11A Grace Road, Mountainview, Observatory, Johannesburg (the annual general meeting).

I/we (please print)

of (address)

being the holder/s of ordinary shares of R0.01 each in Cargo Carriers, appoint

1. or failing him,

2. or failing him,

3. the chairperson of the annual general meeting, as my/our proxy to act for me/us and on my/our behalf at the annual general meeting which will be held for the purpose of considering, and if deemed fit, passing, with or without modification, the resolutions to be proposed thereat and at any adjournment thereof; and to vote for and/or against the resolutions and/or abstain from voting in respect of the ordinary shares registered in my/our name/s, in accordance with the following instructions:

Number of votes

For Against Abstain

Ordinary resolution number 1 – acceptance of annual financial statements

Ordinary resolution number 2 – director appointment – J Kriel

Ordinary resolution number 3 – director retirement and re-election – AE Franklin

Ordinary resolution number 4 – director retirement and re-election – SP Mzimela

Ordinary resolution number 5 – approval of remuneration policy

Ordinary resolution number 6 – appointment and remuneration of auditors

Ordinary resolution number 7 – appointment of audit committee member – MJ Vuso

Ordinary resolution number 8 – appointment of audit committee member – AE Franklin

Ordinary resolution number 9 – appointment of audit committee member – V Raseroka

Ordinary resolution number 10 – appointment of audit committee member – SP Mzimela

Ordinary resolution number 11 – approval of general authority to issue shares for cash

Special resolution number 1 – approval of non-executive directors’ fees

Special resolution number 2 – approval of general authority to provide financial assistance

Signed at on 2016

Signature Assisted by me (where applicable)

Name Capacity Signature


Notes to form of proxy

1. Certificated shareholders and dematerialised shareholders with “own name” registration If you are a certificated shareholder or have dematerialised your shares with “own name”

registration and you are unable to attend the annual general meeting of Cargo Carriers shareholders to be held at 09:00 on Thursday, 21 July 2016 at the registered office of the company at 11A Grace Road, Mountainview, Observatory, Johannesburg and wish to be re-presented thereat, you must complete and return this form of proxy in accordance with the instructions contained herein and deliver it to the company at its registered address, 11A Grace Road, Mountainview, Observatory, 2198 or its postal address, Private Bag X555, Houghton, 2041 to be received by no later than 09:00 on Tuesday, 19 July 2016.

2. Dematerialised shareholders other than those with “own name” registration If you hold dematerialised shares in Cargo Carrier through a Central Securities Depository

Participant (CSDP) or broker other than with an “own name” registration, you must timeously advise your CSDP or broker of your intention to attend and vote at the annual general meeting or be re-presented by proxy thereat, in order for your CSDP or broker to provide you with the necessary authorisation to do so, or should you not wish to attend the annual general meeting in person, you must timeously provide your CSDP or broker with your voting instructions in order for the CSDP or broker to vote in accordance with your instruction at the annual general meeting.

Notes1. This form is for use by certificated shareholders and dematerialised shareholders with “own

name” registration whose shares are registered in their own names on the record date and who wish to appoint another person to represent them at the meeting. If duly authorised, companies and other corporate bodies who are shareholders having shares registered in their own names may appoint a proxy using this form, or may appoint a representative in accordance with the last paragraph below.

Other shareholders should not use this form. All beneficial holders who have dematerialised their shares through a CSDP or broker, and do not have their shares registered in their own name, must provide the CSDP or broker with their voting instructions. Alternatively, if they wish to attend the meeting in person, they should request the CSDP or broker to provide them with a letter of representation in terms of the custody agreement entered into between the beneficial owner and the CSDP or broker.

2. This form of proxy will not be effective at the meeting unless received by the transfer secretaries of the company, Computershare Investor Services (Pty) Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) not later than 09:00 on Tuesday, 19 July 2016.

3. This proxy shall apply to all the ordinary shares registered in the name of shareholders at the record date unless a lesser number of shares are inserted.

4. A shareholder may appoint one person as his proxy by inserting the name of such proxy in the space provided. Any such proxy need not be a shareholder of the company. If the name of the proxy is not inserted, the chairman of the meeting will be appointed as proxy. If more than one name is inserted, then the person whose name appears first on the form of proxy and who is present at the meeting will be entitled to act as proxy to the exclusion of any persons whose names follow. The proxy appointed in this form of proxy may delegate the authority given to him in this proxy by delivering to the company, in the manner required by these instructions, a further form of proxy which has been completed in a manner consistent with the authority given to the proxy of this form of proxy.

5. Unless revoked, the appointment of proxy in terms of this form of proxy remains valid until the end of the meeting even if the meeting or a part thereof is postponed or adjourned.

6. If 6.1 A shareholder does not indicate on this instrument that the proxy is to vote in favour of or

against or to abstain from voting on any resolution; or 6.2 The shareholder gives contrary instructions in relation to any matter; or 6.3 Any additional resolution/s which are properly put before the meeting; or 6.4 Any resolution listed in the form of proxy is modified or amended, the proxy shall be entitled to vote or abstain from voting, as he thinks fit, in relation to that

resolution or matter. If, however, the shareholder has provided further written instructions which accompany this form and which indicate how the proxy should vote or abstain from voting in any of the circumstances referred to in 6.1 to 6.4, then the proxy shall comply with those instructions.

7. If this proxy is signed by a person (signatory) on behalf of the shareholder, whether in terms of a power of attorney or otherwise, then this form of proxy will not be effective unless:

7.1 It is accompanied by a certified copy of the authority given by the shareholder to the signatory; or

7.2 The company has already received a certified copy of that authority.

8. The chairman of the meeting may, at his discretion, accept or reject any proxy form or other written appointment of a proxy which is received by the chairman prior to the time when the meeting deals with a resolution or matter to which the appointment of the proxy relates, even if that appointment of a proxy has not been completed and/or received in accordance with these instructions. However, the chairman shall not accept any such appointment of a proxy unless the chairman is satisfied that it reflects the intention of the shareholder appointing the proxy.

9. Any alterations made in this form of proxy must be initialled by the authorised signatory/ies.

10. This form of proxy is revoked if the shareholder who granted the proxy: 10.1 Delivers a copy of the revocation instrument to the company and to the proxy or proxies

concerned, so that it is received by the company by not later than 09:00 on Tuesday, 19 July 2016; or

10.2 Appoints a later, inconsistent appointment of proxy for the meeting; or 10.3 Attends the meeting in person.

11. If duly authorised, companies and other corporate bodies who are shareholders of the company having shares registered in their own name may, instead of completing this proxy form, appoint a representative to represent them and exercise all of their rights at the meeting by giving written notice of the appointment of that representative. This notice will not be effective at the meeting unless it is accompanied by a duly certified copy of the resolution/s or other authorities in terms of which that representative is appointed and is received by the company’s transfer secretaries, Computershare Investor Services (Pty) Limited, Ground Floor, 70 Marshall Street, Johannesburg, 2001 (PO Box 61051, Marshalltown, 2107) not later than 09:00 on Tuesday, 19 July 2016.

Summary of rights established by section 58 of the Companies Act 71 of 2008 (Companies Act), as required in terms of subsection 58(8)(b)(i)1. A shareholder may at any time appoint any individual, including a non-shareholder of the

company, as a proxy to participate in, speak and vote at a shareholders’ meeting on his or her behalf (section 58(1)(a)), or to give or withhold consent on behalf of the shareholder to a decision in terms of section 60 (shareholders acting other than at a meeting) (section 58(1)(b)).

2. A proxy appointment must be in writing, dated and signed by the shareholder, and remains valid for one year after the date on which it was signed or any longer or shorter period expressly set out in the appointment, unless it is revoked in terms of paragraph 6.3 or expires earlier in terms of paragraph 10.4 below (section 58(2)).

3. A shareholder may appoint two or more persons concurrently as proxies and may appoint more than one proxy to exercise voting rights attached to different securities held by the shareholder (section 58(3)(a)).

4. A proxy may delegate his or her authority to act on behalf of the shareholder to another person, subject to any restriction set out in the instrument appointing the proxy (proxy instrument) (section 58(3)(b)).

5. A copy of the proxy instrument must be delivered to the company, or to any other person acting on behalf of the company, before the proxy exercises any rights of the shareholder at a shareholders’ meeting (section 58(3)(c)) and in terms of the memorandum of incorporation (MOI) of the company at least 48 hours before the meeting commences.

6. Irrespective of the form of instrument used to appoint a proxy: 6.1 The appointment is suspended at any time and to the extent that the shareholder

chooses to act directly and in person in the exercise of any rights as a shareholder (section 58)4)(a)).

6.2 The appointment is revocable unless the proxy appointment expressly states otherwise (section 58(4)(b)).

6.3 If the appointment is revocable, a shareholder may revoke the proxy appointment by cancelling it in writing or by making a later, inconsistent appointment of a proxy, and delivering a copy of the revocation instrument to the proxy and to the company (section 58(4)(c)).

7. The revocation of a proxy appointment constitutes a complete and final cancellation of the proxy’s authority to act on behalf of the shareholder as of the later of the date stated in the revocation instrument, if any, or the date on which the revocation instrument was delivered as contemplated in paragraph 6.3 above (section 58(5)).

8. If the proxy instrument has been delivered to a company, as long as that appointment remains in effect, any notice required by the Companies Act or the company’s MOI to be delivered by the company to the shareholder must be delivered by the company to the shareholder (section 58(6)(a)), or the proxy or proxies, if the shareholder has directed the company to do so in writing and paid any reasonable fee charged by the company for doing so (section 58(6)(b)).

9. A proxy is entitled to exercise, or abstain from exercising, any voting right of the shareholder without direction, except to the extent that the MOI or proxy instrument provides otherwise (section 58(7)).

10. If a company issues an invitation to shareholders to appoint one or more persons named by the company as a proxy, or supplies a form of proxy instrument:

10.1 The invitation must be sent to every shareholder entitled to notice of the meeting at which the proxy is intended to be exercised (section 58(8)(a));

10.2 The invitation or form of proxy instrument supplied by the company must: 10.2.1 Bear a reasonably prominent summary of the rights established in section 58 of

the Companies Act (section 58(8)(b)(i)); 10.2.2 Contain adequate blank space, immediately preceding the name(s) of any

person(s) named in it, to enable a shareholder to write the name, and if desired, an alternative name of a proxy chosen by the shareholder (section 58(8)(b)(ii)); and

10.2.3 Provide adequate space for the shareholder to indicate whether the appointed proxy is to vote in favour of or against any resolution(s) to be put at the meeting, or is to abstain from voting (section 58(8)(b)(iii));

10.3 The company must not require that the proxy appointment be made irrevocable (section 58(8)(c)); and

The proxy appointment remains valid only until the end of the meeting.

Registration number1959/003254/06

Website addresswww.cargocarriers.co.za

JSE informationOrdinary share code: CRGISIN: ZAE 000001764Listed: 1987

Registered office11A Grace Road, MountainviewObservatory, Johannesburg, 2198(Private Bag X555, Houghton, 2041)

Company secretary Arbor Capital Company Secretarial (Pty) Limited54 Maxwell Drive, Woodmead, Johannesburg, 2193(Suite # 439, Private Bag X29, Gallo Manor, 2052)

BankersStandard Corporate and Merchant Bank Limited3 Simmonds StreetJohannesburg, 2001

Corporate information

Shareholders’ diary

LawyersWerksmans Attorneys155 Fifth Street, SandownJohannesburg, 2001

Transfer secretaries and central share depository participantComputershare Investor Services (Pty) Limited70 Marshall StreetJohannesburg, 2001(PO Box 61051, Marshalltown, 2107)

AuditorsErnst & Young Inc102 Rivonia RoadSandton, 2196

SponsorArbor Capital Sponsors (Pty) LimitedRegistration number: 2006/033725/07

Preparer of annual financial statementsThe annual financial statements were prepared under the supervision of the chief financial officer, Mr J Kriel CA(SA).

Final dividend payable 13 June 2016

Annual general meeting 21 July 2016

Interim report for the half-year to 31 August 2016and dividend announcement October 2016

www.cargocarriers.co.za

CargoC

arriers integrated annual report 2016

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