Spur Corporation Ltd
(Incorporated in the Republic of South Africa)
(Registration number 1998/000828/06)
Share code: SUR ISIN: ZAE000022653
(“the company”)
Spur Corporation LTD
NOTICE AND PROXY OF ANNUAL GENERAL MEETING AND
ABRIDGED (SUMMARISED AUDITED) CONSOLIDATED FINANCIAL
STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014
CONTENTS
Letter to shareholders
1
Notice of annual general meeting
2
Annexure 1: Abridged (summarised audited) consolidated financial statements
6
Annexure 2: Curricula vitae of directors up for re-election
26
Annexure 3: Directors nominated for election as members of the audit committee
27
Annexure 4: Summary of remuneration policy
28
Annexure 5: Non-executive directors’ emoluments
29
Annexure 6: Directors’ and prescribed officers’ interests in the shares of the company
29
Annexure 7: Shareholder analysis
30
Annexure 8: Share capital
31
Annexure 9: Material change statement
32
Annexure 10: Going concern
32
Annexure 11: Company information 32
Spur Corporation Limited proxy form
Included
LETTER TO SHAREHOLDERS
Dear Shareholder
NOTICE OF ANNUAL GENERAL MEETING AND PROXY
The booklet accompanying this letter is our detailed notice of annual general meeting for the Spur Corporation
annual general meeting to be held at 11:00 on Friday, 5 December 2014 at 14 Edison Way, Century Gate
Business Park, Century City, Cape Town (“the AGM”). We have also included abridged consolidated annual
financial statements with explanatory notes and commentary, and a proxy form. These documents comply with
the requirements of the Companies Act 71 of 2008 (as amended) (“the Act”) and the JSE Listings Requirements.
Printed copies of the full integrated annual report (incorporating a full set of audited financial statements) will only
be mailed to shareholders on request. Should you wish to receive a printed copy of the integrated annual report,
please forward an e-mail request to [email protected]. The full integrated annual report is available for download
on our website at www.spurcorporation.com.
Yours sincerely
Ronel van Dijk Company Secretary
13 October 2014
SPUR CORPORATION LTD NOTICE AND PROXY 2014
1
NOTICE OF ANNUAL GENERAL MEETING
Spur Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/000828/06)
Share code: SUR ISIN: ZAE 000022653
(“the company”)
NOTICE IS HEREBY GIVEN that the next annual general meeting of the shareholders of the company will be held
at 11:00 on Friday, 5 December 2014 at 14 Edison Way, Century Gate Business Park, Century City, Cape Town
to conduct the under-mentioned business and for the under-mentioned ordinary and special resolutions to be
proposed:
ORDINARY BUSINESS
To consider, and, if deemed fit, pass, the following ordinary resolutions (numbers 1 to 5), with or without
modification (in order to be adopted these resolutions require the support of more than 50% of the total
number of votes exercisable by shareholders present or represented by proxy at the meeting):
1. Ordinary Resolution Number 1: The adoption of the annual financial statements
“To receive and adopt the annual financial statements for the financial year ended 30 June 2014, the report of
the auditors therein and the directors’ report.”
2. Ordinary Resolution Number 2: The re-appointment of directors
“To re-elect the following directors who, in terms of the company’s Memorandum of Incorporation, retire at the
annual general meeting, but, being eligible, offer themselves for re-election:
2.1 Muzi Kuzwayo – independent non-executive director; and
2.2 Keith Madders – non-executive director.”
Brief biographies of the aforementioned directors are included in Annexure 2 to this report.
The appointments numbered 2.1 to 2.2 constitute separate ordinary resolutions and will be considered by
separate votes.
3. Ordinary Resolution Number 3: The re-appointment of the independent auditor and the designated auditor
“To re-appoint the firm KPMG Inc. as independent auditor, and Bronvin Heuvel as the individual designated
auditor, of the company for the ensuing period terminating on the conclusion of the next annual general
meeting of the company and to authorise the directors to determine the remuneration of the auditor for the
past year.”
4.Ordinary Resolution Number 4: The appointment of the audit committee for the ensuing year
“To elect, subsequent to the passing of resolution 2.1, the following directors, who are eligible and offer
themselves for election, to the audit committee for the ensuing year, as recommended by the board in
accordance with section 94(2) of the Companies Act (Act No. 71 of 2008), as amended (“the Act”):
4.1 Dean Hyde (chairman) – independent non-executive director;
4.2 Dineo Molefe – independent non-executive director;
4.3 Muzi Kuzwayo – independent non-executive director; and
4.4 Mntungwa Morojele – independent non-executive director.”
Brief biographies of the aforementioned directors are included in Annexure 3 to this report.
The appointments numbered 4.1 to 4.4 constitute separate ordinary resolutions and will be considered by
separate votes.
2
SPUR CORPORATION LTD NOTICE AND PROXY 2014
5. Ordinary resolution number 5: Endorsement of remuneration policy
“To endorse, by way of a non-binding advisory vote, the group’s remuneration policy as summarised in
Annexure 4 to this report.”
SPECIAL BUSINESS
To consider, and, if deemed fit, pass, the following special resolutions (numbers 1 to 3), with or without modification
(in order to be adopted these resolutions require the support of at least 75% of the total number of votes
exercisable by shareholders present or represented by proxy at the meeting):
6. Special Resolution Number 1: The authority to repurchase shares
“To authorise the company (or one of its subsidiaries) to repurchase or purchase, as the case may be, ordinary
shares issued by the company on such terms and conditions and in such amounts as the directors of the
company may from time to time determine, but subject always to the provisions of sections 46 and 48 of the
Act, the Listings Requirements of the JSE Ltd (“JSE Listings Requirements”) and the following limitations:
(i) that the repurchase of shares be effected through the order book operated by the JSE trading system
and be done without any prior understanding or arrangement between the company and the counterparty
(reported trades are prohibited);
(ii) that this authority shall not extend beyond 15 months from the date of this resolution or the date of the
next annual general meeting, whichever is the earlier date;
(iii) that authorisation thereto is given by the company’s Memorandum of Incorporation;
(iv) that an announcement be made giving such details as may be required in terms of the JSE Listings
Requirements when the company (or a subsidiary or subsidiaries collectively) has cumulatively
repurchased 3% of the initial number (the number of that class of share in issue at the time that the
general authority is granted) of the relevant class of securities and for each 3% in aggregate of the initial
number of that class acquired thereafter;
(v) at any one time, the company (or any subsidiary) may only appoint one agent to effect any repurchase on
behalf of the company or any subsidiary (as the case may be);
(vi) the repurchase of shares by the company or its subsidiaries will not take place during a prohibited period
as defined by the JSE Listings Requirements unless they have in place a repurchase programme where
the dates and quantities of securities to be traded during the relevant period are fixed (not subject to
any variation), and this programme has been submitted to the JSE in writing. The company must instruct
an independent third party, which makes its investment decisions in relation to the company’s securities
independently of, and uninfluenced by, the company, prior to commencement of the prohibited period to
execute the repurchase programme submitted to the JSE;
(vii) the repurchase of shares shall not, in the aggregate, in any one financial year, exceed 20% of the
company’s issued share capital at the time this authority is given; provided that a subsidiary of the
company (or subsidiaries of the company collectively) shall not hold in excess of 10% of the number of
shares issued by the company;
(viii)the repurchase of shares may not be made at a price greater than 10% above the weighted average
traded price of the market value of the shares as determined over the five business days immediately
preceding the date on which the transaction was effected; and
(ix) prior to entering the market to proceed with the repurchase, the board of the company shall have passed
a resolution that it has authorised the repurchase, that the company and its subsidiaries have passed
the solvency and liquidity tests as set out in section 4 of the Act and confirming that since the tests were
performed, there had been no material changes to the financial position of the group.”
The reason for this special resolution is, and the effect thereof will be, to grant, in terms of the provisions of
the Act and the JSE Listings Requirements, and subject to the terms and conditions embodied in the said
special resolution, a general authority to the directors to approve the acquisition by the company of its own
shares, or by a subsidiary (or subsidiaries) of the company of the company’s shares, which authority shall be
used by the directors at their discretion during the course of the period so authorised.
SPUR CORPORATION LTD NOTICE AND PROXY 2014
3
Disclosures required in terms of the JSE Listings Requirements
In terms of the JSE Listings Requirements, the following disclosures are required with reference to the
repurchase of the company’s shares as set out in special resolution number 1 above:
Statement of directors
As at the date of this report the company’s directors undertake that, after considering the effect of the
maximum repurchase permitted, they will not implement any such repurchase unless the provisions of
sections 4 and 48 of the Act will be complied with and for a period of 12 months after such general
repurchase:
(i) the company and the group will be able, in the ordinary course of business, to pay its debts;
(ii) the assets of the company and the group will be in excess of the liabilities of the company and the group,
recognised and measured in accordance with International Financial Reporting Standards;
(iii) the share capital and reserves of the company and the group will be adequate for ordinary business
purposes;
(iv) the working capital resources of the company and the group will be adequate for ordinary business
purposes; and
(v) the company and the group have complied with the applicable provisions of the Act and the JSE Listings
Requirements.
Directors’ responsibility statement
The directors, whose names are given in Annexure 11 to this report, collectively and individually, accept full
responsibility for the accuracy of the information pertaining to the above special resolution and certify that
to the best of their knowledge and belief there are no facts that have been omitted which would make any
statement false or misleading, and that all reasonable enquiries to ascertain such facts have been made and
that the above special resolution contains all information required by law and the JSE Listings Requirements.
Material changes
Other than the facts and developments reported on in this report, there have been no material changes in the
affairs, financial or trading position of the group since the signature date of this report and the posting date
thereof.
The following further disclosures required in terms of the JSE Listings Requirements are set out in accordance
with the reference pages in the report of which this notice forms part:
• Major shareholders of the company (refer Annexure 7 to this report)
• Share capital (refer Annexure 8 to this report)
7. Special Resolution Number 2: The authority to pay directors’ remuneration
“To approve the board’s recommendation in respect of remuneration of non-executive directors for services in
their capacity as directors (including services rendered on any board committee), as contemplated in section
66(9) of the Act, with effect from 1 July 2014, until the expiry of a period of 24 months from the date of
passing of this special resolution number 2 (or until amended by special resolution of shareholders prior to the
expiry of such period), which remuneration is, in the aggregate for each non-executive director, R375 000 per
annum as detailed in Annexure 5 to this report.”
The reason for and the effect of this special resolution is to enable the company to comply with the provisions
of sections 65(11)(h), 66(8) and 66(9) of the Act, which stipulate that, subsequent to the commencement
date of the Act on 1 May 2011, remuneration to directors for their services as directors may be paid only in
accordance with a special resolution approved by shareholders within the previous two years.
8. Special Resolution Number 3: The authority to provide financial assistance
“To authorise the directors in terms of, and subject to, the provisions of sections 44 and/or 45 of the Act
to cause the company to, from time to time, provide any direct and/or indirect financial assistance (whether
by way of loan, guarantee, the provision of security or otherwise) for a period of two years commencing on
the date of this special resolution to any of its present or future subsidiaries and/or any other company or
corporation which is or becomes related or inter-related to the company for any purpose or in connection with
any matter, including, but not limited to, the subscription of any option, or any securities issued or to be issued
by the company or a related or inter-related company or for the purchase of any securities of the company
or related or inter-related company; provided that the board is satisfied that immediately after providing the
financial assistance, the company will satisfy the solvency and liquidity tests contemplated in section 4 of the
4
SPUR CORPORATION LTD NOTICE AND PROXY 2014
Act, that the terms under which the financial assistance is proposed to be given, are fair and reasonable to the
company and that the conditions or restrictions in respect of the granting of the financial assistance which may
be set out in the company’s Memorandum of Incorporation have been satisfied.”
The reason for this special resolution is, and the effect thereof will be, to authorise the board to cause the
company to provide financial assistance to any entity which is related or inter-related to the company.
VOTING PROXIES
In terms of section 63(1) of the Act, before any person may attend or participate in a shareholders meeting such as
the meeting convened in terms of this notice of general meeting, that person must present reasonably satisfactory
identification and the person presiding at the meeting must be reasonably satisfied that the right of that person
to participate and vote, either as a shareholder, or as a proxy for a shareholder, has been reasonably verified. The
company will regard presentation of an original of a meeting participant’s valid driver’s license, identity document or
passport to be satisfactory identification.
On a show of hands every shareholder present in person or by proxy and if a member is a body corporate, its
representative, shall have one vote and on a poll every shareholder present in person or by proxy and if the person
is a body corporate, its representative, shall have one vote for every share held or represented by him.
A form of proxy is attached for completion by registered certificated shareholders and dematerialised shareholders
with own name registration who are unable to attend the annual general meeting in person.
Forms of proxy must be completed and received at the company’s transfer secretaries, Computershare Investor
Services (Pty) Ltd, 70 Marshall Street, Johannesburg, 2001 (Postal Address: PO Box 61051, Marshalltown, 2107)
(“Transfer Secretaries”) by no later than 11:00 on Thursday, 4 December 2014.
1.Registered certificated shareholders and dematerialised shareholders with own name registration who
complete and lodge forms of proxy will nevertheless be entitled to attend and vote in person at the annual
general meeting to the exclusion of their appointed proxy/(ies) should such member wish to so do.
2.Dematerialised shareholders, other than with own name registrations, must inform their CSDP or broker of
their intention to attend the annual general meeting and obtain the necessary authorisation from their CSDP
or broker to attend the annual general meeting or provide their CSDP or broker with their voting instructions
should they not be able to attend the annual general meeting in person but wish to be represented thereat.
This must be done in terms of the agreement entered into between the shareholder and the CSDP or broker
concerned.
Each shareholder is entitled to appoint one or more proxies (who need not be a shareholder of the company) to
attend, speak and vote in his/her stead.
Shares held by a share trust or scheme will not have their votes at the annual general meeting taken into account
for purposes of the resolutions proposed in terms of the JSE Listings Requirements. Shares held as treasury
shares will not have their votes taken into account at the annual general meeting.
RELEVANT DATES
Record date to determine which shareholders are entitled to receive the
notice of annual general meeting
Last day to trade in order to be eligible to attend and vote at the annual
general meeting
Record date to determine which shareholders are entitled to attend and vote
at the annual general meeting
Forms of proxy to be lodged by 11:00 on
Annual general meeting of the company to be held at 11:00 on
Results of the annual general meeting announced on SENS
Friday, 3 October 2014
Friday, 21 November 2014
Friday, 28 November 2014
Thursday, 4 December 2014
Friday, 5 December 2014
Friday, 5 December 2014
By order of the board
Ronel van Dijk COMPANY SECRETARY
Cape Town 9 October 2014
SPUR CORPORATION LTD NOTICE AND PROXY 2014
5
ANNEXURE 1: Abridged (summarised audited) consolidated financial statements
Abridged consolidated statement of
comprehensive income
for the year ended 30 June 2014
2014
R’000
Revenue
Cost of sales
Gross profit
Other income
Administration expenses
Core operations expenses
Distribution expenses
Impairment losses
Retail operating expenses
Operating profit before finance income
Net finance income
Share of loss of equity-accounted investee (net of income tax)
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income#:
Foreign currency translation differences for foreign operations
Reclassification of foreign currency (gain)/loss from other comprehensive
income to profit or loss on abandonment/deregistration of foreign operations
Foreign exchange gain/(loss) on net investments in foreign operations
Tax on other comprehensive income
732 636
(210 640)
521 996
40 606
(148 375)
(46 201)
(8 841)
(4 362)
(159 824)
194 999
7 251
(379)
201 871
(64 638)
137 233
Restated*
2013
R’000
671 552
(207 361)
464 191
55 940
(140 922)
(42 311)
(12 149)
(2 188)
(131 931)
190 630
5 909
–
196 539
(63 237)
133 302
5 621
8 348
17 913
25 071
(3 386)
879
(220)
842
(10 666)
2 666
Total comprehensive income for the year
142 854
151 215
Profit attributable to:
Owners of the company
Non-controlling interest
Profit for the year
136 331
902
137 233
132 624
678
133 302
Total comprehensive income attributable to:
Owners of the company
Non-controlling interest
Total comprehensive income for the year
142 932
(78)
142 854
151 317
(102)
151 215
159.20
159.20
154.05
154.05
Earnings per share (cents)
Basic earnings
Diluted earnings
* Restated due to the adoption of IFRS10 – refer note 1.
#
All items included in other comprehensive income are items that are, or may be, reclassified to profit or loss.
6
SPUR CORPORATION LTD NOTICE AND PROXY 2014
Reconciliation of
headline earnings
for the year ended 30 June 2014
2014
R’000
Profit attributable to ordinary shareholders
Headline earning adjustments:
Impairment of property, plant and equipment (refer to note 4)
Impairment of intangible assets (refer to note 4)
Loss/(profit) on disposal of property, plant and equipment (net of tax)
Profit on sale of subsidiary (refer to note 7)
Reclassification of foreign currency (gain)/loss from other comprehensive
income to profit or loss on abandonment/deregistration of foreign operation
(refer to note 8.1)
Headline earnings
136 331
2 313
1 866
233
(2 154)
(3 386)
135 203
Restated*
2013
R’000
132 624
1 750
–
(29)
–
842
135 187
* Restated due to the adoption of IFRS10 – refer note 1.
None of the above items has any tax or non-controlling interest consequences with the exception of:
– Gross impairment of property, plant and equipment comprises R2.496 million (2013: R2.188 million) with
an amount of R0.183 million (2013: R0.438 million) attributable to non-controlling interest.
– Gross loss/(profit) on disposal of property, plant and equipment comprises a loss of R0.444 million
(2013: profit of R0.040 million) adjusted for tax of R0.211 million (2013: R0.011 million).
SPUR CORPORATION LTD NOTICE AND PROXY 2014
7
Abridged consolidated statement of
financial position
at 30 June 2014
2014
R’000
Restated*
2013
R’000
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets and goodwill
Interest in equity-accounted investee
Loans receivable
Deferred tax
Leasing rights
Derivative financial assets
512 900
77 289
359 742
21
53 450
6 536
3 352
12 510
451 447
79 775
323 633
–
11 315
9 347
5 290
22 087
Current assets
Inventories
Tax receivable
Trade and other receivables
Loans receivable
Derivative financial assets
Cash and cash equivalents
225 071
12 132
10 719
82 650
5 447
22 157
91 966
244 766
17 156
8 134
83 502
5 447
15 703
114 824
TOTAL ASSETS
737 971
696 213
EQUITY
Total equity
Ordinary share capital
Share premium
Shares repurchased by subsidiaries
Foreign currency translation reserve
Retained earnings
Total equity attributable to equity holders of the parent
Non-controlling interest
519 620
1
6
(77 235)
25 235
575 670
523 677
(4 057)
472 526
1
6
(77 235)
18 634
536 060
477 466
(4 940)
82 526
–
10 909
319
1 776
69 522
90 236
423
12 048
–
5 481
72 284
Current liabilities
Bank overdrafts
Tax payable
Trade and other payables
Loans payable
Employee benefits
Shareholders for dividend
135 825
539
4 559
78 453
29 846
22 017
411
133 451
1 605
4 132
87 021
24 249
16 117
327
TOTAL EQUITY AND LIABILITIES
737 971
696 213
LIABILITIES
Non-current liabilities
Long-term loan payable
Employee benefits
Derivative financial liability
Operating lease liability
Deferred tax
* Restated due to the adoption of IFRS10 – refer note 1.
8
SPUR CORPORATION LTD NOTICE AND PROXY 2014
Abridged consolidated statement of
changes in equity
for the year ended 30 June 2014
Ordinary
share
capital
and share
premium
(net of
treasury
shares)
R’000
(60 503)
–
Balance at 1 July 2012 – restated (refer note 1)
Total comprehensive income for the year – restated
Retained
earnings
and nonOther controlling
reserves
interest
R’000
R’000
(59)
486 389
18 693
132 522
Total
R’000
425 827
151 215
Profit for the year – restated (refer note 1)
–
–
133 302
133 302
Other comprehensive income
–
18 693
(780)
17 913
(16 725)
–
(87 851)
(104 576)
–
–
(87 851)
(87 851)
(16 725)
–
–
(16 725)
–
–
60
60
–
–
60
60
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
Distributions to equity holders
Own shares acquired
Changes in ownership interests in subsidiaries
that do not result in a loss of control
Acquisition of controlling interest in subsidiary
(refer note 6.2)
Total transactions with owners
(16 725)
–
Balance at 30 June 2013 – restated
(77 228)
18 634
531 120
(87 791)
(104 516)
472 526
6 601
136 253
142 854
Total comprehensive income for the year
–
Profit for the year
–
–
137 233
137 233
Other comprehensive income
–
6 601
(980)
5 621
Transactions with owners, recorded directly in equity
Contributions by and distributions to owners
–
–
(96 766)
(96 766)
Distributions to equity holders
–
–
(96 766)
(96 766)
Changes in ownership interests in subsidiaries that
result in a loss of control
–
–
1 006
1 006
Disposal of controlling interest in subsidiary (refer note 7)
–
–
1 006
1 006
Total transactions with owners
–
–
Balance at 30 June 2014
(77 228)
25 235
(95 760)
(95 760)
571 613
519 620
SPUR CORPORATION LTD NOTICE AND PROXY 2014
9
Abridged consolidated statement
of cASH FLOWS
for the year ended 30 June 2014
2014
R’000
Cash flow from operating activities
Operating profit before working capital changes (refer note a)
Working capital changes
Cash generated from operations
Interest income received
Interest expense paid
Tax paid
Dividends paid
Net cash flow from operating activities
Cash flow from investing activities
Acquisition of interest in associate (refer note 5)
Acquisitions of subsidiaries, non-controlling interests and business
combinations (refer note 6)
Acquisition of treasury shares
Additions of property, plant and equipment
Cash inflow from share-based payment hedge (refer note 3)
Decrease in loans receivable
Loans advanced to franchisees
Loans advanced to Spur and Captain DoRegos Marketing Funds
Other loans advanced
Proceeds from disposal of property, plant and equipment
Net cash flow from investing activities
Cash flow from financing activities
Decrease in interest-bearing loans payable
Landlord contribution received
Loan repaid to non-controlling shareholders
Net cash flow from financing activities
Net movement in cash and cash equivalents
Effect of foreign exchange fluctuations
Net cash and cash equivalents at beginning of year
Net cash and cash equivalents at end of year
Restated*
2013
R’000
198 644
3 971
202 615
6 538
(225)
(66 891)
(96 682)
45 355
202 914
1 320
204 234
6 419
(510)
(60 675)
(88 444)
61 024
(36 650)
–
(35 380)
–
(10 082)
21 364
6 479
(2 303)
(8 103)
–
1 191
(63 484)
(5 092)
(16 725)
(13 628)
1 221
1 634
(4 837)
(7 091)
(445)
159
(44 804)
–
947
(4 617)
(3 670)
(1 907)
–
(169)
(2 076)
(21 799)
7
113 219
91 427
14 144
(282)
99 357
113 219
* Restated due to the adoption of IFRS10 – refer note 1.
Note
a)Includes a gross cash outflow of R23.357 million (2013: Rnil) in respect of the settlement of the share appreciation rights
granted in terms of the group’s long-term share-linked retention scheme (refer note 3).
10
SPUR CORPORATION LTD NOTICE AND PROXY 2014
supplementary
information
for the year ended 30 June 2014
2014
Restated*
2013
Shares in issue (000’s)#
85 633
85 633
Weighted average number of shares in issue (000’s)
85 633
86 090
Diluted weighted average number of shares in issue (000’s)
85 633
86 090
Headline earnings per share (cents)
157.89
157.03
Diluted headline earnings per share (cents)
157.89
157.03
Net asset value per share (cents)
606.80
551.80
Dividend per share (cents)
121.00
111.00
* Restated due to the adoption of IFRS10 – refer note 1.
#
Shares in issue less shares repurchased by a wholly owned subsidiary company and share incentive special purpose entity.
SPUR CORPORATION LTD NOTICE AND PROXY 2014
11
Abridged OPERATING
segment report
for the year ended 30 June 2014
2014
R’000
Restated*
2013
R’000
External revenue
Manufacturing and distribution (refer note a)
Franchise – Spur
Franchise – Panarottis
Franchise – John Dory’s
Franchise – Captain DoRegos
Franchise – The Hussar Grill (refer note b)
Retail – The Hussar Grill (refer note b)
Other South Africa
Total South African segments
Unallocated
Total South Africa
176 576
198 498
20 932
14 271
8 185
700
14 988
44 958
479 108
1 595
480 703
213 712
179 464
16 692
11 712
9 174
–
–
30 399
461 153
515
461 668
United Kingdom
Australia
Other International
Total International
157 565
79 366
15 002
251 933
118 353
79 157
12 374
209 884
TOTAL EXTERNAL REVENUE
732 636
671 552
Profit/(loss) before income tax
Manufacturing and distribution (refer note a)
Franchise – Spur
Franchise – Panarottis
Franchise – John Dory’s
Franchise – Captain DoRegos
Franchise – The Hussar Grill (refer note b)
Retail – The Hussar Grill (refer note b)
Other South Africa
Total South African segments
Unallocated – South Africa (refer note c)
Total South Africa
58 520
176 552
13 117
7 736
2 158
471
2 354
(160)
260 748
(60 020)
200 728
59 525
158 818
9 874
6 629
3 838
–
–
92
238 776
(34 889)
203 887
(2 232)
(157)
8 829
6 440
(4 918)
1 522
(1 006)
(1 513)
7 487
4 968
(12 316)
(7 348)
United Kingdom (refer note d)
Australia (refer note e)
Other International
Total International segments
Unallocated – International (refer note f)
Total International
Profit before income TAX and share of loss of
eQUity-accounted investee
Share of loss of equity-accounted investee (net of income tax)
Profit before income TAx
* Restated due to the adoption of IFRS10 – refer note 1.
12
SPUR CORPORATION LTD NOTICE AND PROXY 2014
202 250
(379)
201 871
196 539
–
196 539
Notes
a)Includes revenue of R22.724 million (2013: R72.625 million) and loss before income tax of R1.361 million (2013: profit
of R1.949 million) relating to the Captain DoRegos warehouse and distribution centre that was closed during the year (refer
note 9). Included in the current year are costs associated with the closure of the distribution centre amounting to R1.326
million in respect of retrenchment costs, losses on sales of property, plant and equipment and the impact of the increased
cost of working during the process of closing down the facility.
b)The Hussar Grill franchise division and three company-owned retail restaurants were acquired with effect from 1 January 2014.
Refer note 6.1 for more details.
c)Includes net interest income of R7.118 million (2013: R5.854 million). Includes a charge in respect of the cash-settled
share-based payments of R28.117 million (2013: R23.645 million) and a fair value gain in respect of the related economic
hedge of R17.922 million (2013: R34.357 million) (refer also note 3). The current year includes transaction costs for the
acquisition of The Hussar Grill of R1.620 million (refer also note 6.1) and costs of R0.495 million relating to the international
group restructure undertaken during the year (refer note 8.1). The prior year includes legal costs and professional fees of
R1.424 million relating to the dispute with the former non-controlling shareholder of subsidiary John Dory’s Franchise (Pty) Ltd
and the related Financial Services Board investigation (which investigation resulted in the company being vindicated of any
wrong doing).
d)The current year includes an impairment of franchise rights (intangible asset) amounting to R1.866 million and the accelerated
amortisation of leasing rights amounting to R1.612 million relating to Mohawk Spur Limited (refer note 4.1). The prior year
includes start-up and trading losses in respect of Two Rivers Spur (Staines, England), Rapid River Spur (Dublin, Ireland) and
Trinity Leasing in the amount of R2.773 million in aggregate (refer notes 6.2 and 8.2).
e)The current year includes an impairment loss of R2.496 million relating to the impairment of assets of the Panarottis in
Blacktown (Australia) (refer note 4.2) as well as a profit of R2.154 million on the disposal of the Panarottis in Tuggerah
(Australia) (refer note 7). The prior year includes an impairment loss in respect of the property, plant and equipment of the
Panarottis in Tuggerah amounting to R2.188 million (refer note 4.3).
f)Includes a foreign exchange loss of R0.687 million (2013: R5.676 million) and a gain of R3.386 million (2013: loss of
R0.842 million) relating to the reclassification of foreign exchange differences from other comprehensive income to profit on
abandonment/deregistration of foreign operations (refer note 8.1). The current year includes costs of R1.674 million relating to
the group restructure undertaken during the year (refer note 8.1). The prior year includes losses amounting to R1.052 million in
winding up certain of the group’s Australian equity-accounted associates which ceased trading in previous years.
SPUR CORPORATION LTD NOTICE AND PROXY 2014
13
Notes to the abridged (summarised audited)
consolidated annual financial statements
for the year ended 30 June 2014
1.
Basis of preparation
These abridged (summarised audited) financial statements for the year ended 30 June 2014 have
been extracted from the audited financial statements for the year then ended, but are not audited
themselves. The directors take full responsibility for the preparation of the abridged report and that
the financial information has been correctly extracted from the underlying audited financial statements.
These abridged (summarised audited) financial statements have been prepared in accordance with the
requirements of the JSE Ltd Listings Requirements for abridged reports and the requirements of the
South African Companies Act (Act No. 71 of 2008) as applicable to summarised financial statements.
The audited financial statements from which the abridged (summarised audited) financial statements are
extracted have been prepared in accordance with International Financial Reporting Standards (“IFRS”).
The group adopted IFRS10 – Consolidated Financial Statements during the year. The adoption of
IFRS10 has resulted in certain companies now being consolidated into the group’s results which
previously did not meet the definition of a subsidiary under the previous consolidation standard. The
applicable comparative amounts have also been restated. The impact on opening retained earnings for
the current period is an increase of R0.812 million (2013: R0.472 million). The impact on profit for the
period is an increase of R1.098 million (2013: R1.482 million). The impact on profit attributable
to ordinary shareholders is an increase of R0.362 million (2013: R0.340 million).
2.
Audit report
The financial statements from which this abridged report was extracted were audited by KPMG Inc., who
expressed an unmodified opinion thereon. The audited financial statements and the auditors’ report
thereon are available for inspection at the company’s registered office.
3.
Long-term share-linked employee retention scheme
In December 2013, the first tranche of the share appreciation rights granted in terms of the group’s
long-term share-linked retention scheme was settled in cash. This resulted in a gross cash outflow of
R23.357 million. Simultaneously, the economic hedging instrument utilised by the group matured which
resulted in a gross cash inflow of R19.920 million. During the year, the share-based payment expense
in respect of the scheme included in profit before income tax amounted to R28.117 million (2013:
23.645 million), while the gain on the related economic hedging financial instruments recognised in profit
before income tax amounted to a credit of R17.922 million (2013: R34.357 million).
14
SPUR CORPORATION LTD NOTICE AND PROXY 2014
4.
Impairments
4.1
Mohawk Spur in Wandsworth (UK)
As a result of historic trading losses, the group had impaired the property, plant and equipment of the
Mohawk Spur in Wandsworth in prior years. As a consequence of continuing trading losses, the carrying
value of the cash-generating unit was re-assessed for impairment at the reporting date. In this regard,
the group concluded that the franchise rights intangible asset of R1.866 million attributable to the
cash-generating was impaired at the reporting date and the full carrying value of the intangible asset has
been charged to profit or loss. Furthermore, in considering the ability of the entity in question to continue
trading, the group has accelerated the amortisation of the lease previously acquired by the group relating
to the entity, resulting in a further charge of R1.612 million to profit before income tax.
4.2
Panarottis in Blacktown (Australia)
As a consequence of sustained historic trading losses, the property, plant and equipment of the
Panarottis outlet in Blacktown, with a carrying value of R2.496 million at the reporting date, were
impaired in full.
4.3
Panarottis in Tuggerah (Australia) – prior year
As a consequence of sustained trading losses, the property, plant and equipment of the Panarottis outlet in
Tuggerah, with a carrying value of R2.188 million were impaired in full at the prior year reporting date.
5.
ACQUISITION OF INTEREST IN ASSOCIATE
Investment in Braviz Fine Foods (Pty) Ltd
With effect from 18 March 2014, a wholly owned subsidiary of the group, Spur Group (Pty) Ltd, acquired
a 30% ordinary shareholder’s interest in Braviz Fine Foods (Pty) Ltd, a start-up entity in the process of
establishing a rib processing plant in Johannesburg. The group intends to utilise the plant to supply ribs
to its existing franchise network.
As the group is able to exercise significant influence over the entity, but not control, it equity accounts
the investment.
2014
R’000
As at the effective date of the transaction:
Fair value of net liabilities of the associate
(684)
Group’s interest in fair value of net liabilities of the associate
Purchase consideration
Goodwill implicit in acquisition of interest in associate
(206)
400
606
Purchase consideration
Shareholder’s loan advanced to associate
Total cash outflow on acquisition of associate
400
36 250
36 650
The initial purchase consideration amounted to R0.400 million (comprising an amount for ordinary shares
of R300 which was settled in cash on the effective date, and initial directly attributable transaction costs of
R0.400 million). The group simultaneously advanced a loan in the amount of R36.250 million to the entity.
The loan bears interest at the prevailing prime overdraft rate of interest and has no formal repayment terms
(although any repayment of shareholder loans by the associate is to be made on a pro rata basis between the
respective shareholders). The loan is consequently considered part of the net investment in the associate.
The fair value of net liabilities at the effective date comprises the value of land, buildings under construction,
plant under construction, cash and shareholder loans. The group’s share of equity-accounted losses after tax
for the period from acquisition to the reporting date amounted to R0.379 million and arose primarily from
finance costs incurred by the associate on shareholder funding for the period subsequent to the effective date.
SPUR CORPORATION LTD NOTICE AND PROXY 2014
15
6.
business combinations
6.1
Acquisition of The Hussar Grill (Business combination)
With effect from 1 January 2014, a wholly owned subsidiary of the company, Spur Group (Pty) Ltd, acquired
the franchise business of The Hussar Grill as a going concern from The Hussar Grill Franchise Company (Pty)
Ltd. As part of the same transaction, three newly-incorporated wholly owned subsidiaries of Spur Group
(Pty) Ltd, Nickilor (Pty) Ltd, Opilor (Pty) Ltd and Opiset (Pty) Ltd acquired the businesses of The Hussar
Grill Rondebosch, The Hussar Grill Green Point and The Hussar Grill Camps Bay respectively from Hussar Grill
(Pty) Ltd, Milbloem 29 (Pty) Ltd and Ocean Crest Seafoods (Pty) Ltd respectively. The Hussar Grill Franchise
Company (Pty) Ltd previously owned the The Hussar Grill trademarks and related intellectual property and
had six franchised The Hussar Grill outlets located in the Western Cape of South Africa. The acquisition is
intended to give the group exposure to an upmarket specialist steakhouse chain.
2014
Franchise
R’000
The fair values of the identifiable assets and liabilities
acquired at the effective date were as follows:
Intangible assets
Inventory
Trade and other payables
Deferred tax
Fair value of net assets acquired
9 904
–
–
(1 849)
8 055
Purchase consideration
Fair value of net assets acquired
Goodwill arising on acquisition
21 000
8 055
12 945
2014
Retail
R’000
–
475
(95)
27
407
14 380
407
13 973
2014
Total
R’000
9 904
475
(95)
(1 822)
8 462
35 380
8 462
26 918
Intangible assets comprise the The Hussar Grill trademarks and related intellectual property. The fair
value was determined by an independent valuations expert utilising a discounted cash flow model.
Deferred tax was measured by applying the effective tax rate applicable to capital gains in South Africa to
the taxable temporary difference on initial recognition of the intangible assets.
Inventory comprises the raw materials of the retail restaurants acquired. The inventory was valued at
its replacement cost. Given the nature of the inventory, it is considered that the replacement cost is the
most likely value to approximate the fair value of the inventory.
Trade and other payables comprise largely employee obligations that the group was legally obliged to
assume in terms of current statutes. Deferred tax arising from the associated deductible temporary
difference has been calculated at the normal corporate tax rate in South Africa.
The purchase consideration was settled in cash on the effective date of the acquisition.
The goodwill attributable to the franchise division is primarily as a result of the brand’s reputation
and, given the limited current geographical footprint of the brand, the growth prospects arising from
the potential expansion of the brand nationally. The brand has won numerous prestigious restaurant
accolades in the recent past. The goodwill attributable to the retail division is largely due to trading profits
arising from existing and potential new customers who are expected to visit the restaurants as a result of
the restaurants’ reputation and standing within the communities in which they trade. The goodwill is not
deductible for tax purposes.
Transaction costs in the amount of R1.620 million relating to the financial and legal due diligence, legal and
consulting services are included in administration expenses in the statement of comprehensive income.
Subsequent to acquisition, the combined business contributed R15.688 million to revenue, R2.825 million
to profit before income tax and R2.034 million to profit.
Had the businesses been acquired with effect from 1 July 2013, it is estimated that group revenue would
have been R747.077 million, profit before income tax R205.391 million and profit R139.767 million.
16
SPUR CORPORATION LTD NOTICE AND PROXY 2014
6.2
Prior year acquisition of Trinity Leasing Ltd (acquisition of subsidiary) and current
year acquisition of non-controlling interest
During the prior year and with effect from 1 October 2012, a wholly owned subsidiary of the company, Spur
Corporation UK Ltd (“SCUK”), acquired a 90% interest in Trinity Leasing Ltd (“Trinity Leasing”), a company
incorporated and domiciled in the UK, for R0.538 million. Trinity Leasing owns the head lease of the
premises from which the former Arapaho Spur operated in Staines (England). Arapaho Spur was previously
owned and operated by the former master franchise rights holder for Spur in the UK, Trinity Leisure Ltd
(“Trinity Leisure”). The entity operating Arapaho Spur was liquidated by Trinity Leasing during the prior
year (prior to the acquisition) as a result of defaulting on its lease with Trinity Leasing. The group sought
to secure the location of the former Arapaho Spur and acquired Trinity Leasing to do so. The purchase
consideration was settled by way of a reduction in an existing loan receivable from Trinity Leisure, the former
shareholder of Trinity Leasing. Subsequent to the acquisition, the group commenced trading the Two Rivers
Spur from the site in October 2012.
2013
R’000
The fair values of the identifiable assets and liabilities acquired at the effective date
were as follows:
Property, plant and equipment
Inventory
Trade and other receivables
Leasing rights
Trade and other payables
Deferred tax
Fair value of net assets acquired
Fair value of net assets attributable to non-controlling interest
Purchase consideration
67
37
666
934
(844)
(262)
598
(60)
538
During the year and with effect from 7 November 2013, SCUK acquired the remaining 10% in Trinity Leasing
for no consideration, resulting in the group now owning 100% of Trinity Leasing. As a consequence, the
group recognised a reduction in non-controlling interest of R0.045 million with a corresponding increase in
retained earnings.
2014
R’000
The following summarises the changes in the group’s ownership interest in
Trinity Leasing:
Group’s ownership interest at 1 July 2013
Effect of increase in group’s ownership interest
Share of comprehensive income for the year
Group’s ownership interest at 30 June 2014
6.3
425
45
31
501
Prior year settlement of Captain DoRegos (business combination) contingent
consideration
With effect from 1 March 2012, a wholly owned subsidiary of the group, Spur Group (Pty) Ltd, acquired
100% of the Captain DoRegos franchise and distribution centre businesses as going concerns from an
unrelated party for R34.224 million of which R29.132 million was settled in cash on the effective date, and
the balance of R5.092 million, which was a contingent consideration, was settled in cash in the prior year.
SPUR CORPORATION LTD NOTICE AND PROXY 2014
17
7.
Disposal of subsidiary
Panarottis Tuggerah Partnership
With effect from 1 January 2014, a wholly owned subsidiary of the group, Panatug Pty Ltd, which was
previously the 80% partner of the Panarottis Tuggerah Partnership, agreed with the remaining 20%
partner, Avecor Investments (Pty) Ltd (“Avecor”), to dissolve the partnership in question. The partnership
previously operated the Panarottis restaurant in Tuggerah (Australia). As part of the same transaction,
Avecor effectively acquired the business of the Panarottis in Tuggerah as a going concern and concluded
a new franchise agreement with the group. This was done as part of the group’s strategy of divesting
from retail operations in Australia.
2014
R’000
As at the date of disposal, the carrying values of the assets/(liabilities) of the
partnership comprised:
Property, plant and equipment
Inventory
Trade and other receivables
Cash and cash equivalents
Trade and other payables
Operating lease liability
Loans payable (external to the group)
Loans payable (intragroup)
Carrying value of net liabilities of partnership at date of disposal
Attributable to non-controlling interest
Group’s share of net liabilities disposed of
18
197
1 170
406
(1 062)
(1 687)
(643)
(3 428)
(5 029)
1 006
(4 023)
In dissolving the partnership, the partners agreed to cede and assign the assets and
liabilities of the partnership in a manner other than in accordance with the partners’
respective ownership interests. Consequently, the selected assets and liabilities retained
are deemed to be part of the proceeds on the disposal.
Proceeds on disposal comprise:
Deferred sale consideration
Trade and other receivables of the partnership retained by the group
Cash and cash equivalents of the partnership retained by the group
Trade and other payables of the partnership retained by the group
Loans payable (intragroup) forgiven by the group
Total proceeds on disposal of subsidiary
1 744
395
406
(986)
(3 428)
(1 869)
The deferred sale consideration effectively amounts to an interest free loan.
The loan is repayable in fixed monthly instalments of at least AU$4 125 per month
with any balance on the loan being repayable on 5 October 2017 (unless the Panarottis
Tuggerah lease is renewed by Avecor, in which case the fixed monthly payments will
continue until the loan is repaid in full).
The loans payable (intragroup) forgiven by the group related to the group’s initial capital
loan funding of the partnership. As part of the dissolution of the partnership, the group
agreed to forgive its loan claim.
Profit on disposal of subsidiary is calculated as follows:
Proceeds on disposal of subsidiary
Group’s share of net liabilities disposed of
Profit on disposal of subsidiary
(1 869)
(4 023)
2 154
For the period to the effective date of disposal, the partnership contributed revenue of R6.050 million
(2013: R11.095 million) and earned a profit before income tax of R0.064 million (2013: loss of
R2.990 million which included an impairment loss on property, plant and equipment of R2.188 million).
18
SPUR CORPORATION LTD NOTICE AND PROXY 2014
8.
Other non-cash transactions
8.1
International group restructure
In June 2004, a wholly owned foreign subsidiary of the group, Vantini Spur Limited (“Vantini”), the
owner of the group’s international trademarks and intellectual property, granted a ten year usufruct of
the trademarks and intellectual property to another foreign wholly owned subsidiary of the group, Steak
Ranches International BV (“SRIBV”). SRIBV is the primary franchisor of the group’s brands outside of
South Africa.
During the period of 31 March 2014 to 30 June 2014, in anticipation of the expiration of the usufructury
rights referred to above, the group restructured certain of its international subsidiaries in order to
ensure the continued validity of franchise agreements concluded between SRIBV and its franchisees.
The restructure resulted in certain foreign subsidiaries commencing deregistration procedures or
becoming dormant, which resulted in foreign exchange gains on translation of these foreign operations
previously recognised in equity (FCTR) through other comprehensive income being recycled, through
other comprehensive income, back to profit in the amount of R3.386 million. Legal, consulting and other
advisory costs relating to the restructure amounted to R2.169 million for the year and are included in
profit before income tax for the year.
During the prior year, a dormant company, Larkspur Four Ltd, a wholly owned subsidiary of the group
which previously traded the Yellowstone Spur in Derby (UK), was deregistered. The restaurant had ceased
trading in December 2010. This resulted in the reclassification of foreign exchange losses on translation
of the foreign operation previously recognised in FCTR being recycled to profit or loss in the amount of
R0.842 million.
8.2
Prior year acquisition of leasing rights
During the prior year and with effect from 1 April 2013, a newly incorporated wholly owned
subsidiary of the group, Larkspur Eight Ltd (“LS8”), acquired the leasing rights of the former Iowa
Spur in Dublin (Ireland) from Liffey Valley Leasing Ltd (“LVL”) for €206 763 (the equivalent of
£177 000 or R2.453 million at the date of the transaction). Iowa Spur was previously owned and
operated by the former master franchise rights holder for Spur in the United Kingdom and Ireland,
Trinity Leisure Ltd (“Trinity Leisure”). LVL is also owned by Trinity Leisure. Iowa Spur ceased trading
in December 2012. The board believed that the site in question was a suitable site for a Spur
restaurant and thus acquired the lease from LVL. LS8 commenced trading Rapid River Spur from
the site in question in April 2013. The consideration for the lease acquired from LVL was settled
by way of reducing an existing loan receivable from Trinity Leisure.
9.
Closure of Captain DoRegos distribution centre
In November 2013, the group closed its Captain DoRegos warehouse and distribution centre in
Bloemfontein. The distribution operations were absorbed into the group’s existing outsourced logistics
network. One-off costs associated with the closure of the warehouse of R1.326 million are included in
profit before income tax for the year and related to retrenchment costs, losses on sales of property,
plant and equipment and the impact of the increased cost of working during the process of closing
down the facility.
SPUR CORPORATION LTD NOTICE AND PROXY 2014
19
10.
Financial instruments
Fair value of financial instruments:
• T he hedge forward derivative financial assets/(liabilities) utilised by the group to economically hedge
the impact of the share appreciation rights granted in terms of its long-term share-linked retention
scheme (refer note 3) are fair valued at each reporting date. The fair values of the contracts are
determined by an independent external professional financial instruments specialist using a BlackScholes (risk neutral pricing) option pricing model in a manner that is consistent with prior reporting
periods. The financial instruments in question are designated as level 2 financial instruments in
terms of the fair value hierarchy specified in IFRS13 – Fair Value Measurement, as the inputs into the
valuation model are derived from observable inputs for the assets/liabilities in question, but are not
quoted prices in active markets for identical assets/liabilities.
• T he loan advanced to the equity-accounted investee of R36.250 million as detailed in note 5 was
initially recognised at fair value at 18 March 2014 and is subsequently recognised at amortised cost.
In determining the fair value of the loan in question at initial recognition, the directors considered
the interest rates implicit in similar loans granted on similar terms and conditions between unrelated
market participants. The directors determined that the interest rate applicable to the loan in question
is commensurate with similar external loans between unrelated market participants and the nominal
value of the loan therefore approximated its fair value at initial recognition. The financial asset is
designated as a level 2 financial instrument in terms of the fair value hierarchy as the inputs into
the valuation model are derived from observable inputs for the asset in question, but are not quoted
prices in active markets for identical assets.
11.
Litigation and contingent liabilities
11.1
Income Tax in respect of Controlled Foreign Companies
As reported in the prior year, the South African Revenue Service (“SARS”) previously forwarded
correspondence to a wholly owned subsidiary of the group, Spur Group (Pty) Ltd, indicating its intention
to assess that company for additional income from the group’s controlled foreign companies. The
correspondence afforded the board of that company the opportunity to respond to the conclusions
drawn by SARS by 18 October 2012. Spur Group (Pty) Ltd duly responded to the queries and further
subsequent queries.
In finalisation of the matter, on 24 June 2013, SARS issued Spur Group (Pty) Ltd with additional
assessments in respect of the additional income relating to controlled foreign companies of the group in
the amount of R2.842 million (comprising income tax of R2.273 million and interest of R0.569 million) for
the 2009, 2010 and 2011 years of assessment. The board of that company objected to the assessments.
During the year, the objections were partially disallowed by SARS, resulting in reduced assessments
being issued amounting in aggregate to R1.993 million (comprising R1.561 million in income tax and
R0.432 million in interest). The assessments have been settled. The board of the company in question
has appealed SARS’ decision to partially disallow the objection and SARS has agreed to refer the
matter to alternate dispute resolution proceedings. These proceedings are expected to take place
on 13 November 2014. The board continues to be of the view that it is able to defend its position.
Consequently, a liability has not been raised in respect of the assessments issued, or the possible
liability arising from the same disputed issue for the 2012 to 2014 years of assessment.
11.2
Legal dispute with former Zambian franchisee
As reported in the prior year, in 2012 Steak Ranches Limited (“SRL”) instituted action against a wholly
owned subsidiary of the group, Steak Ranches International BV (“SRIBV”), a company incorporated and
domiciled in The Netherlands, for allegedly repudiating a franchise agreement previously concluded
between the parties. SRL is an unrelated entity incorporated and domiciled in Zambia. SRIBV previously
concluded a franchise agreement with SRL for a franchised outlet in Zambia, but cancelled that
agreement after SRL breached the terms of the agreement.
SRL is claiming for special damages in the amount of US$648 152, pecuniary damages in the amount
of US$4 236 041 and an unquantified amount of general damages arising out of the alleged repudiation,
together with interest and costs.
SRIBV is defending the action, denying the repudiation of the franchise agreement. SRIBV avers that it
validly cancelled the agreement as SRL breached the terms thereof. The board of SRIBV is confident that
it will be able to defend the claim successfully. A court date has yet to be determined.
20
SPUR CORPORATION LTD NOTICE AND PROXY 2014
12.
Subsequent events
Subsequent to the reporting date, but prior to the date of issue of this report, the following significant
transactions occurred:
12.1
Cash dividend
The board of directors of the company, on 9 September 2014, declared a final gross cash dividend
for the year ended 30 June 2014 of R62.5 million, which equates to 64.0 cents per share for each of
the 97 632 833 shares in issue, subject to the applicable tax levied in terms of the Income Tax Act
(Act No. 58 of 1962, as amended) (“dividend withholding tax”) of 15%.
The dividend has been declared from income reserves. The net dividend is 54.4 cents per share for
shareholders liable to pay dividend withholding tax.
The dividend was paid on 6 October 2014.
12.2
Acquisition of non-controlling interest – Panpen Pty Ltd
Subsequent to the reporting date and with effect from 1 August 2014, the group acquired the remaining
50% interest in Panpen Pty Ltd (“Panpen”), a company in which the group had an existing 50% interest
and which operates the Panarottis outlet in Penrith (Australia). Despite not owning a majority interest in
Panpen prior to this transaction, the group effectively controlled Panpen and the entity was consequently
consolidated.
The purchase consideration is an amount of AU$200 000 which was settled in cash on the effective
date. As part of the transaction, Panpen was required to settle the outstanding shareholder’s loan with
the non-controlling shareholder in the amount of AU$158 342 (or R1.584 million as at 30 June 2014)
which amount was settled in cash on the effective date. The net liabilities of Panpen at 30 June 2014
included in the consolidated financial statements of the group amount to R0.408 million and the group
has already recognised goodwill attributable to its existing investment in Panpen in the amount of
R3.215 million at 30 June 2014.
SPUR CORPORATION LTD NOTICE AND PROXY 2014
21
12.3
Issue of shares pursuant to Broad-based Black Economic Empowerment
equity transaction
Subsequent to the reporting date, on 31 July 2014, shareholders were advised by way of an
announcement published on SENS that the company had entered into various agreements to issue
10 848 093 new ordinary shares indirectly to Grand Parade Investments Limited (“GPI”, registration
number 1997/003548/06), a strategic black empowerment partner. The company is separately
intending to donate 500 000 of the company’s shares (100 000 shares per annum over five years),
currently held as treasury shares, to the Spur Foundation, a benevolent foundation that is consolidated
in accordance with IFRS.
Both transactions were approved by shareholders on 3 October 2014. Subject to regulatory approval,
the intended transaction date will be no later than 31 October 2014. The issue of shares to GPI will
result in that company indirectly holding 10% of the company’s total shares in issue after the transaction.
The shares will be issued at a price of R27.16 per share, representing a 10% discount to the volume
weighted average trading price of the company’s shares on the JSE for the 90 trading days prior to
30 July 2014. GPI will be restricted from trading the shares in question without the express permission
of the company for a period of five years from the effective date of the transaction and is furthermore
required to maintain its Broad-based Black Economic Empowerment credentials for the same period.
The group will partially fund the transaction through a subscription of cumulative compulsorily
redeemable five year preference shares in a special purpose entity with a combined subscription
value of R72.33 million (representing 24.5% of the total funding requirement for the transaction).
The preference shares will accrue dividends at a rate of 90% of the prevailing prime overdraft rate of
interest and will be subordinated in favour of the external funding provider. GPI will fund 24.5% of the
total funding requirement and an external funding provider will fund the balance of 51% of the total
funding requirement. The preference shares will be secured by a cession of the reversionary interest
in the company’s shares held indirectly by GPI which also serve as security for the external funding.
The transaction will result in a net cash inflow of R222.33 million to the group. If the transaction is
approved by regulators and the remaining conditions precedent are fulfilled, it is estimated that a sharebased payment expense of R48.686 million will be recognised in profit or loss before income tax in the
2015 financial year. Of the total estimated transaction costs of R1.604 million, it is estimated that:
R0.285 million relate directly to the subscription of the preference shares referred to above and will be
included in the carrying value of the preference shares; R1.034 million relate directly to the issue of
the company’s ordinary shares and will be charged directly against equity (retained earnings); and the
balance of R0.285 million will be charged to profit or loss before income tax. The pro forma financial
impact of the transactions was disclosed to shareholders in an announcement published on SENS
on 4 September 2014 and the circular incorporating full details of the transactions was mailed to all
shareholders on the same date.
12.4
13.
Acquisition of land and commitment to develop building
On 31 July 2014, the group concluded an agreement of sale to acquire land adjacent to the group’s
existing corporate head office in Century City, Cape Town. The cost of the land is R5.5 million and
ownership was transferred upon registration with the Deeds’ Office which took place on 5 September 2014.
In terms of the sale agreement, the group is obliged to enter into a development agreement by no
later than 31 July 2015 to erect an office building spanning at least 1 255m2. While the development
agreement has yet to be concluded, the directors estimate a further cost of R35 million to erect a
building on the land acquired and have approved the development on this basis. The building is to be
used for additional office space necessitated by the organic and acquisitive growth of the group in the
past two years.
Preparation of financial statements
These abridged consolidated financial statements have been prepared under the supervision of the Chief
Financial Officer, Ronel van Dijk CA(SA).
22
SPUR CORPORATION LTD NOTICE AND PROXY 2014
Commentary on results
for the year ended 30 June 2014
Restaurant sales
Revenue Comparable profit before income tax Dividend per share up
up
up
up
13.5%
9.1%
9.9%
9.0%
Trading performance
Spur Corporation delivered solid results as trading conditions became increasingly challenging in the second
half of the year. The fundamentals of the group’s flagship brands remain strong and continue to deliver
competitive growth.
Revenue increased by 9.1% to R732.6 million. Total restaurant sales across the group increased by 13.5% to
R5.5 billion, with sales from existing restaurants increasing by 9.8% and sales in South Africa growing by 12.8%,
driven by robust performers Spur and Panarottis.
Constrained spending is evident among lower and middle income families, with marked spikes in mid-month and
month-end pay day spending patterns becoming the norm.
Spur Steak Ranches showed a very encouraging 11.3% growth in local restaurant sales, supported by continued
investments in upgrades and refurbishments by franchisees to create and maintain an environment that appeals
to families. Existing restaurants increased sales by 9.8%. The brand currently has 1.7 million Spur Family Card
members who now account for 44% of total restaurant sales, up from 38% last year. The Spur Family Card loyalty
programme has been a profound success and a key differentiating factor for the brand.
Panarottis Pizza Pasta delivered excellent results, increasing restaurant sales by 28.2% in South Africa,
with turnover from existing restaurants increasing 15.2%. Higher visibility and marketing of the brand on
radio and television contributed to the strong growth, supported by the breakfast and Sunday lunch promotions.
Customers have responded well to the use of imported Italian ingredients and improved quality of the product
offering.
John Dory’s grew local restaurant sales by 21.0%, driven by the opening of five new restaurants. Sales from
existing outlets increased by 12.0%. The brand was promoted on national television for the first time this year,
and has the support of highly committed franchisees. The menu offering continues to take into account the
sustainability of fish stocks while improving the quality perception of the brand.
Captain DoRegos’ performance reflects the financial realities of its lower LSM target market. Local restaurant
sales declined by 13.8%, partially impacted by the closure of 15 redundant outlets.
The Hussar Grill has shown encouraging growth since being acquired in January 2014. Increasing customer
support, interest from potential franchisees and the opportunity to expand nationally create exciting growth
prospects for the brand.
Restaurant sales in the international operations were 20.2% higher in rand terms, favourably impacted by the
depreciation of the rand during the year. Based on a constant exchange rate, international sales increased by
6.6%. Africa performed well, growing at 22.3% in rand terms mainly due to the opening of seven new franchised
outlets comprising additional restaurants in Swaziland, Tanzania, Namibia, Nigeria and Zambia.
Restaurant sales revenue in the UK increased by 18.5% in rand terms, but was flat on the prior year when
applying a constant exchange rate. It is positive that the region has maintained total turnover, despite pressure
from increased competition and a decline in footfall caused by a protracted economic recovery in the region.
Australia delivered a reasonable performance in a difficult and competitive environment, with restaurant sales
increasing in rand terms by 12.1% and by 6.7% on a constant exchange rate basis. One new franchised
restaurant was opened in Perth (Australia) during the year.
SPUR CORPORATION LTD NOTICE AND PROXY 2014
23
The group opened 18 Spur, eight Panarottis, five John Dory’s and four Captain DoRegos outlets worldwide,
while 63 Spur outlets were refurbished locally with a franchisee investment of approximately R54 million.
The restaurant footprint at the end of the financial year was as follows:
South
Africa
International
Total
270
39
309
Panarottis Pizza Pasta
68
11
79
John Dory’s Fish Grill Sushi
33
–
33
Captain DoRegos
61
2
63
6
–
6
438
52
490
Franchise brand
Spur Steak Ranches
The Hussar Grill
Total
Financial performance
Local franchise revenue increased by 11.8% for the year. Spur increased franchise revenue by 10.6%, Panarottis
by 25.4% and John Dory’s by 21.8%. Franchise revenue from Captain DoRegos decreased by 10.8%. Operating
margins in the Spur and Panarottis divisions improved for the year due to the benefits of economies of scale,
while the margin in John Dory’s contracted slightly as a result of the investment in resources to ensure future
expansion of the brand.
Following the closure of the Captain DoRegos distribution centre in November 2013 and the conclusion
of a business restructure early in the new financial year aimed at rationalising the brand’s cost structure,
management is confident that the brand is well positioned for future growth.
The Hussar Grill retail division, comprising three company-owned restaurants, contributed revenue of
R15.0 million for the six months since January 2014 while the franchise division contributed R0.7 million to
group revenue for the same period.
While the manufacturing and distribution division reported a decline in revenue of 17.4% for the year, excluding
the impact of the closure of the Captain DoRegos distribution centre, comparable revenue of this business unit
increased by 9.0%. Excluding the Captain DoRegos distribution centre, the business unit reflected a decline in
operating margin from 40.8% in the prior year to 38.9% in the current year. This is as a result of relatively high
food inflation impacting on the cost of manufactured sauces, the full impact of which has not been passed on
to franchisees in an effort by management to protect franchisee profitability and maintain competitive pricing.
The group’s distribution and logistics service provider, Vector Logistics, experienced a 13.5% volume increase in
respect of the group’s business. Vector Logistics remains critical to the success of the franchising system from
a sustainability, food safety, quality and consistency point of view.
International revenue, comprising franchise revenue and company-owned restaurant turnover, increased 20.0%
to R251.9 million.
The current year loss from the UK includes impairment and related losses of R3.5 million in respect of the
Mohawk Spur in Wandsworth (England) following a recent trend of unsustainable trading losses. The region is
otherwise holding its own in a competitive environment.
The current year loss in Australia includes an impairment loss of R2.5 million relating to the Panarottis outlet in
Blacktown as well as a profit of R2.2 million realised on the sale of the group’s 80% interest in the Panarottis
outlet in Tuggerah (which had previously been impaired). Trading losses for these two outlets had a negative
impact on the division’s performance for the year.
The group’s non-controlling interest in Braviz Fine Foods, a start-up rib processing plant, is due to commence
trading in December 2014. Management remains excited at the prospects of this first new venture into vertical
integration and is optimistic of the earnings potential of the investment.
Profit before income tax increased by 2.7% to R201.9 million. This includes a net charge of R10.2 million
(2013: gain of R10.7 million) related to the group’s long-term share-linked retention scheme, R6.0 million
(2013: R2.2 million) relating to restaurant impairment and related losses, R1.3 million one-off costs associated
with the closure of the Captain DoRegos distribution centre, R1.6 million in legal and due diligence costs
associated with the acquisition of The Hussar Grill, and a net foreign exchange gain of R2.6 million (2013:
loss of R6.5 million).
24
SPUR CORPORATION LTD NOTICE AND PROXY 2014
Comparable profit before income tax, excluding exceptional and one-off items (including those listed above),
increased by 9.9%.
Headline earnings remained flat at R135.2 million, with diluted headline earnings per share growing 0.5% to
157.9 cents.
The board has declared a final cash dividend of 64 cents per share, bringing the total dividend for the year to
121 cents per share, an increase of 9.0% on last year.
Prospects
The group plans to open eight restaurants internationally while locally ten Spur, ten Panarottis, seven John
Dory’s, eight Captain DoRegos and six The Hussar Grill outlets will be opened in the 2015 financial year. The
planned international openings include additional franchised restaurants in Namibia, Tanzania, Nigeria, Zambia
and Australia.
Economic pressures are likely to continue to dampen consumer demand in the restaurant sector in the short to
medium term. Management is confident that the group will continue to deliver on its growth strategy by targeting
organic growth within existing brands and markets, and pursuing opportunities to expand vertical integration
in relation to core products. Critical to sustained organic growth will be ensuring the group’s brands remain
relevant to consumers in their respective markets, an uncompromising approach to operating standards and
quality, product innovation and value-for-money. A focus for the year ahead will also be ensuring efficient and
optimal resource utilisation to contain costs in an uncertain consumer environment.
SPUR CORPORATION LTD NOTICE AND PROXY 2014
25
Annexure 2: Curriculum vitae of directors up for re-election
Muzi Kuzwayo (Age 46) – 6 years’ service
Independent non-executive director
B.Sc. (Biochemistry and Microbiology) – Rhodes University; Executive MBA – University of Cape Town
Muzi is a visiting professor at the UCT Graduate School of Business. He is the founding chief executive officer
of Ignitive, a marketing and advertising consulting company. Muzi is an author and commentator on advertising
and marketing. He was appointed to the board in 2008 and is a member of the group’s audit, nominations and
transformation committees, and chairs the remuneration committee.
Keith Madders MBE (Age 66) – 19 years’ service
Non-executive director
B.Com (Economics) – University of Cape Town
Keith trained as an investment analyst before joining the music industry. Keith lectured and established various
businesses and charitable organisations in the UK, where he was awarded an MBE in the Queen’s 2002 Honours
List for services to the Zimbabwe Trust.
26
SPUR CORPORATION LTD NOTICE AND PROXY 2014
Annexure 3: Directors nominated for election as members of the audit committee
Dean Hyde as chairman (existing member) – 20 years’ service
Independent non-executive director
B.Com (Legal) – University of Witwatersrand; Canadian Chartered Accountants’ Board Examination
Dean joined Spur Corporation as financial manager and was the financial director for five years. He resigned in
2004 and was subsequently appointed as a non-executive director. Dean is currently the chief financial officer of
Lombard Insurance Ltd. Dean currently chairs the audit committee.
Mntungwa Morojele (existing member) – 4 years’ service
Independent non-executive director
CA (Lesotho); Higher National Diploma in Business Studies – Farnborough College of Technology, UK;
Bachelors of Business Administration – University of Charleston, USA; M.Acc – Georgetown University, USA;
MBA – University of Cape Town
Mntungwa has established and managed various companies including Briske Performance Solutions and
Motebong Tourism Investment Holdings (Pty) Ltd. He has served on the boards of Gray Security Services Ltd
and the UCS Group Ltd. He was appointed to the Spur Corporation board in 2010 and appointed as lead
independent director on 1 March 2011. He is also a member of the group’s audit, remuneration and
transformation committees and is chairman of the nominations committee.
Muzi Kuzwayo (existing member) – 6 years’ service
Independent non-executive director
B.Sc. (Biochemistry and Microbiology) – Rhodes University; Executive MBA – University of Cape Town
Muzi is a visiting professor at the UCT Graduate School of Business. He is the founding chief executive officer
of Ignitive, a marketing and advertising consulting company. Muzi is an author and commentator on advertising
and marketing. He was appointed to the board in 2008 and is a member of the group’s audit, nominations and
transformation committees, and chairs the remuneration committee.
Dineo Molefe (existing member) – 1 year’s service
Independent non-executive director
B.Compt (Hons) – Unisa; Masters’ in International Accounting – University of Johannesburg; CA(SA);
Advanced Management Program – Wharton Business School, University of Pennsylvania
Dineo held various audit and finance positions at the Industrial Development Corporation, Eskom Holdings Ltd
and SizweNtsaluba VSP. She previously served as the group financial director of Thebe Investment Corporation
(including as director of several of that company’s subsidiaries, associates and investee companies) and is
currently managing executive for financial planning and analysis at Vodacom. Dineo was appointed to the board
in September 2013 and is a member of the audit committee.
SPUR CORPORATION LTD NOTICE AND PROXY 2014
27
Annexure 4: Summary of remuneration policy
Remuneration philosophy
The group aims to remunerate all employees in such a way so as not only to attract and retain talented individuals,
but also to motivate all employees to contribute continuously to the success of the group. In order to achieve this,
the group targets remuneration at the upper quartile of benchmarked remuneration levels for each individual’s area
of expertise and responsibility and total remuneration packages are structured in such a way so as to ensure that
the interests of employees and shareholders are aligned.
In addition, the group aims to strike a balance between guaranteed remuneration, short-term incentives and longterm incentives for executive and senior management. For these individuals, multiple metrics are used to determine
performance criteria, which are aligned with the group’s strategy and shareholder interests, including short and
long-term profit growth and long-term share price appreciation.
Remuneration levels are influenced by a scarcity of skills and work performance. Given that performance-related
incentives form a material part of remuneration packages, ongoing performance feedback is vital. Employees
participate in annual performance and career development evaluations.
Remuneration structures
Remuneration consists of three elements:
1. Basic cost to company package
The basic cost to company package consists of a basic salary, medical aid contribution, provident fund
contribution and, in certain instances where employees regularly and routinely are required to travel for
business purposes, a travel allowance. These packages are linked to individual performance, expertise and
knowledge required in the position and competitive benchmarking undertaken from time to time.
2. Profit share scheme/Thirteenth cheque
Employees participate either in a discretionary thirteenth cheque scheme, or a profit share scheme, depending
on their position and seniority:
–
Thirteenth cheque scheme
Thirteenth cheques are paid to participating individuals in the event that the group achieves the requisite
financial performance parameters set by the board. This is a discretionary scheme as the board may
decide not to declare thirteenth cheque payments should the group’s performance not be satisfactory.
Depending on the extent to which financial performance parameters are met, a full or partial thirteenth
cheque may be declared. The thirteenth cheque is limited to a maximum of one month’s cost to company.
–
Profit share scheme
The profit share scheme is based on dividends received by the Spur Management Share Trust (“the Trust”)
on the 6 688 698 Spur shares held by the Trust and is allocated to participating individuals based on
growth in group profit and their division’s contribution to group profit both relative to inflation, salary level
and personal key performance indicators. The quantum of the bonus pool, being the dividend on the Spur
shares, is linked directly to group performance, as the dividend is a direct result of same.
3. Share-linked retention scheme
The executive directors and certain members of top management participate in a share-linked retention
scheme in the form of a cash-settled share appreciation rights scheme. The scheme is a three-year rolling
scheme, in terms of which a “baseline” of 1 500 000 share-linked rights become available for allocation each
year. The rights are granted each year in the period following the publishing of year-end results up to
31 December of that same year.
The number of rights to be allocated may be reduced depending on the financial performance of the group
relative to inflation, but may not be increased above 1 500 000 per tranche. The maximum number of rights
that any participant may benefit from at any point in time is 1 500 000.
A total of 4 500 000 rights are currently in issue. The first tranche of 1 500 000 share appreciation rights
(granted in December 2010) vested and was settled in cash in December 2013. The fourth tranche of
1 500 000 share appreciation rights was allocated at the same time. Upon the recommendation of the
remuneration committee, the board has approved a further allocation of 1 500 000 rights which will be
allocated upon the vesting of the second tranche (granted in December 2011) in December 2014.
28
SPUR CORPORATION LTD NOTICE AND PROXY 2014
Annexure 4: Summary of remuneration policy continued
Executive service contracts
All the executive directors have standard employment contracts in place and are restrained by agreement from
any involvement in businesses associated with brands competing with the group’s brands during the tenancy of
their employment and for a period of two years following their termination (for whatever reason) of employment.
No contracts provide for termination settlements, other than those required in terms of law.
Non-executive directors’ fees
The board as a whole considers fees to non-executive directors for membership of the board and board committees.
The board is of the opinion that such fees are market related and commensurate with the time and effort required by
the directors in question to undertake their duties. Such remuneration is not linked to the performance of the group or
its share performance.
Annexure 5: Non-executive directors’ emoluments
Proposed
2015
2014
R375 000
in total
for each
non-executive
director
R375 000
in total
for each
non-executive
director
Non-executive directors’ fees for current year and proposed for next year
Member of board
Lead independent director
Member of audit committee
Chairman of audit committee
Member of remuneration committee
Chairman of remuneration committee
Member of social and ethics committee
Chairman of social and ethics committee
Member of nominations committee
Chairman of nominations committee
Member of risk committee
Member of transformation committee
Annexure 6: Directors’ and prescribed officers’ interests in the shares of the company
Details of directors’ interests in the ordinary shares are as follows:
Allen Ambor
Ronel van Dijk
Keith Madders
Keith Getz
Total
% interest*
Direct
beneficial
2014
Indirect
beneficial
Held by
associates
Direct
beneficial
2013
Indirect
beneficial
Held by
associates
3 086 685
73 244
–
2 491
3 162 420
464 609
–
1 112 022
–
1 576 631
–
–
–
820
820
3 086 685
73 244
–
2 491
3 162 420
464 609
–
1 112 022
–
1 576 631
–
–
–
820
820
3.4
1.7
0.0
3.4
1.7
0.0
*These percentages are based on shares in issue less shares repurchased by a subsidiary company, Share Buy-back (Pty) Ltd.
There have been no changes in directors’ interests in share capital from 30 June 2014 to the date of issue of
this report.
SPUR CORPORATION LTD NOTICE AND PROXY 2014
29
Annexure 7: Shareholder analysis
Major shareholders
The following are shareholders (excluding directors) holding 3% or more of the company’s issued share capital at
30 June 2014:
Number
of shares
Allan Gray
Investec
Coronation Fund Managers
Fidelity
Spur Management Share Trust**
Sanlam
Old Mutual
13 796 644
9 924 986
8 720 679
7 017 919
6 688 698
4 743 653
3 334 193
%*
14.9
10.8
9.4
7.6
7.2
5.1
3.6
* These percentages are based on shares in issue less shares repurchased by a subsidiary company, Share Buy-back (Pty) Ltd.
** This holding relates to shares utilised in the group’s short-term profit share incentive scheme (refer Annexure 4).
Public/non-public shareholders
An analysis of public and non-public shareholders is presented below:
Number of
shareholders
Number of
shares
%
7
1
1
2
3 030
3 041
4 739 871
5 311 128
6 688 698
23 721 630
57 171 506
97 632 833
4.9
5.4
6.9
24.3
58.5
100.0
Number of
shareholders
%
Number of
shares
%
2 584
213
94
60
60
11
19
3 041
85.0
7.0
3.1
1.9
2.0
0.4
0.6
100.0
5 183 512
3 461 047
3 381 931
4 340 330
12 933 523
8 038 304
60 294 186
97 632 833
5.3
3.6
3.5
4.4
13.2
8.2
61.8
100.0
Non-public shareholders
Directors and associates
Subsidiary holding treasury shares
Spur Management Share Trust
Major shareholders
Public shareholders
Total
Analysis of shareholding
An analysis of the spread of shareholding is presented below:
Shareholder spread
1 – 10 000 shares
10 001 – 25 000 shares
25 001 – 50 000 shares
50 001 – 100 000 shares
100 001 – 500 000 shares
500 001 – 1 000 000 shares
1 000 001 shares and over
30
SPUR CORPORATION LTD NOTICE AND PROXY 2014
Annexure 7: Shareholder analysis continued
Distribution of shareholders
Banks and nominees
Endowment funds
Individuals
Insurance companies
Investment companies
Medical funds
Mutual funds
Own holdings
Pension and retirement funds
Spur Management Share Trust
Other corporate bodies
Number of
shareholders
%
Number of
shares
%
389
17
2 327
16
4
9
70
1
73
1
134
3 041
12.8
0.6
76.5
0.5
0.1
0.3
2.3
0.0
2.4
0.0
4.5
100.0
15 439 686
767 238
12 541 617
3 371 870
57 214
643 331
42 997 908
5 311 128
7 669 265
6 688 698
2 144 878
97 632 833
15.8
0.8
12.8
3.5
0.1
0.7
43.9
5.4
7.9
6.9
2.2
100.0
Number of shares
2014
2013
’000
’000
2014
R’000
2013
R’000
201 000
2
2
97 633
(5 311)
97 633
(5 311)
1
–
1
–
(6 689)
85 633
(6 689)
85 633
–
1
–
1
Annexure 8: Share capital
Ordinary share capital
Authorised
Ordinary shares of 0.001 cents each
Issued and fully paid
Ordinary shares of 0.001 cents each
Shares repurchased by subsidiary
Shares held by share incentive consolidated
structured entity
201 000
The ordinary shares have equal rights to dividends declared by the company.
In terms of the company’s Memorandum of Incorporation, the unissued shares of the company may be issued
by the directors of the company only with the approval of the shareholders by way of an ordinary resolution passed
at a general meeting. Subsequent to the reporting date, on 3 October 2014, shareholders approved the issue of
10 848 093 new ordinary shares pursuant to a Broad-based Black Economic Empowerment deal (refer note 12.3
of Annexure 1).
The company does not have any unlisted shares.
Shares repurchased by subsidiaries
During the prior year, a wholly owned subsidiary of the company, Share Buy-back (Pty) Ltd, acquired 622 500
Spur Corporation Ltd shares at an average cost of R26.87 per share, totalling R16.725 million. The group owns
5 311 128 (2013: 5 311 128) Spur Corporation Ltd treasury shares, held by Share Buy-back (Pty) Ltd, at a total
cost of R70.057 million (2013: R70.057 million).
The balance per the statement of financial position comprises the cost of the Spur Corporation Ltd shares that have
been repurchased by Share Buy-back (Pty) Ltd and those held by the Spur Management Share Trust, a consolidated
structured entity, for the purposes of the group’s short-term profit share incentive scheme (refer Annexure 4). At the
reporting date, the entities in question held 11 999 826 (2013: 11 999 826) of the company’s shares in aggregate.
SPUR CORPORATION LTD NOTICE AND PROXY 2014
31
Annexure 9: Material change statement
The directors report that there have been no material changes to the affairs, financial or trading position of the
company and group since 30 June 2014 to the date of posting of this report, other than disclosed in this report.
Annexure 10: Going concern
The board has performed a review of the group and company’s ability to continue trading as a going concern in the
foreseeable future and, based on this review, consider that the presentation of the financial statements on this
basis is appropriate.
Annexure 11: Company information
Non-executive directors
Dean Hyde*, Dineo Molefe*, Keith Getz, Keith Madders MBE (British), Mntungwa Morojele*, Muzi Kuzwayo*
(* independent non-executive director)
Executive directors
Allen Ambor (Executive Chairman), Pierre van Tonder (Group Chief Executive Officer),
Mark Farrelly (Group Chief Operating Officer), Ronel van Dijk (Group Chief Financial Officer)
Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
Transfer secretaries
Computershare Investor Services (Pty) Ltd,
70 Marshall Street, Johannesburg 2001
PO Box 61051, Marshalltown 2107
Tel: 011 370 5000 Fax: 011 688 7721
www.computershare.com
Company secretary
Ronel van Dijk
Spur Corporation head office and registered address
14 Edison Way, Century Gate Business Park, Century City, Cape Town 7441
Registration number
1998/000828/06
32
SPUR CORPORATION LTD NOTICE AND PROXY 2014
GREYMATTER & FINCH # 8113
www.spurcorporation.com
SPUR CORPORATION ltd PROXY FORM
Spur Corporation Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/000828/06)
Share code: SUR ISIN: ZAE 000022653 (“the company”)
PROXY FORM
To be completed by certificated shareholders and dematerialised shareholders with own name registration only. For use in respect
of the annual general meeting to be held at 11:00 on 5 December 2014 at 14 Edison Way, Century Gate Business Park, Century City,
Cape Town.
Shareholders who have dematerialised their shares with a CSDP or broker, other than with own name registration, must arrange
with the CSDP or broker concerned to provide them with the necessary authorisation to attend the annual general meeting or the
shareholders concerned must instruct them as to how they wish to vote in this regard. This must be done in terms of the agreement
entered into between the shareholder and the CSDP or broker concerned.
Forms of proxy must be completed and delivered/posted to the Company’s transfer secretaries, Computershare Investor Services
(Pty) Ltd, 70 Marshall Street, Johannesburg, 2001 (Postal Address: PO Box 61051, Marshalltown, 2107) to be received by no later
than 11:00 on Thursday, 4 December 2014.
I/We __________________________________________________________________________________________________________________
of (address) ___________________________________________________________________________________________________________
being a member of the company and holding _________________________________________________________ ordinary shares, appoint
1. ________________________________________________________________________________________________________ or failing him
2. ________________________________________________________________________________________________________ or failing him
the chairman of the annual general meeting as my/our proxy to attend and speak and, on a poll, vote for me/us on my/our behalf at
the annual general meeting of the Company held for the purpose of considering, and if deemed fit, passing with or without modification,
the resolutions to be proposed thereat and at each adjournment or postponement thereof, and to vote for and/or against such
resolutions and/or abstain from voting in respect of the shares in the issued share capital of the Company registered in my/our
name/s in accordance with the following instructions (see note 3):
For
Against
Abstain
Ordinary resolutions
Ordinary resolution number 1 – The adoption of the annual financial statements
Ordinary resolution number 2 – The re-appointment of directors
2.1 Muzi Kuzwayo (independent non-executive director)
2.2 Keith Madders (non-executive director)
Ordinary resolution number 3 – The re-appointment of the independent auditor and appointment
of the designated auditor
Ordinary resolution number 4 – The appointment of the audit committee for the ensuing year
4.1 Dean Hyde (chairman)
4.2 Dineo Molefe
4.3 Muzi Kuzwayo
4.4 Mntungwa Morojele
Ordinary resolution number 5 – Endorsement of remuneration policy
Special resolutions
Special resolution number 1 – The authority to repurchase shares
Special resolution number 2 – The authority to pay directors’ remuneration
Special resolution number 3 – The authority to provide financial assistance
(Please indicate instructions to proxy in the space provided above by the insertion therein of the relevant number of votes exercisable).
A member entitled to attend and vote at the annual general meeting may appoint one or more proxies to attend, speak and vote in his
stead. A proxy so appointed need not be a member of the Company.
SIGNED AT ________________________________________ ON THE _______ DAY OF _______________________________________ 2014.
SIGNATURE ____________________________________________________________________________________________________________
CAPACITY AND AUTHORISATION (see note 6)
Please read the notes on the reverse side of this form of proxy.
Notes
1. Shareholders who have dematerialised their shares with a CSDP or broker, other than with own name registration, must arrange
with the CSDP or broker concerned to provide them with the necessary authorisation to attend the annual general meeting or
the shareholders concerned must instruct them as to how they wish to vote in this regard. This must be done in terms of the
agreement entered into between the shareholder and the CSDP or broker concerned.
2. A deletion of any printed matter and the completion of any blank spaces need not be signed or initialled. Any alteration must be
signed, not initialled.
3. A shareholder may insert the name of a proxy or the names of two alternate proxies of the shareholder’s choice in the space
provided, with or without deleting “the chairman of the annual general meeting”. The person whose name stands first on the form
of proxy and who is present at the annual general meeting will be entitled to act as proxy to the exclusion of those whose names
follow.
4. A shareholder’s instructions to the proxy must be indicated by the insertion of the relevant number of votes exercisable by that
shareholder in the appropriate space provided. Failure to comply with the above will be deemed to authorise the proxy to vote or
to abstain from voting at the annual general meeting as he deems fit in respect of all the shareholder’s votes exercisable thereat.
A shareholder or his proxy is not obliged to use all the votes exercisable by the shareholder or by his proxy, but the total of the
votes cast and in respect of which abstention is recorded may not exceed the total of the votes exercisable by the shareholder or
his proxy.
5. Where there are joint holders of shares and if more than one of such joint holders is present or represented, then the person
whose name appears first in the register in respect of such shares or his proxy, as the case may be, shall alone be entitled to
vote in respect thereof.
6. Documentary evidence establishing the authority of a person signing this form of proxy in a representative capacity must be
attached to this form, unless previously recorded by the transfer secretaries of the Company or waived by the chairman of the
annual general meeting.
7. The completion and lodging of this form of proxy will not preclude the signatory from attending the annual general meeting and
speaking and voting in person thereat to the exclusion of any proxy appointed in terms hereof should such signatory wish to
so do.
8. The chairman of the annual general meeting may reject or, provided that he is satisfied as to the manner in which a member
wishes to vote, accept any form of proxy which is completed other than in accordance with these instructions.
9.Proxies will only be valid for the purpose of the annual general meeting if received by the Company’s transfer secretaries,
Computershare Investor Services (Pty) Ltd, 70 Marshall Street, Johannesburg, 2001 (Postal Address: PO Box 61051,
Marshalltown, 2107) by no later than 11:00 on Thursday, 4 December 2014.
Please note that in terms of section 58 of the Act:
•
•
•
the appointment of a proxy is revocable unless the proxy appointment expressly states otherwise. If the appointment of a proxy is
revocable, a shareholder may revoke the proxy appointment by cancelling it in writing, or making a later inconsistent appointment
of a proxy; and delivering a copy of the revocation instrument to the proxy, and to the Company. The revocation will take effect on
the later of (i) the date stated in the revocation instrument; or (ii) the date on which the revocation instrument was delivered to
the proxy and the Company.
a proxy may delegate his/her authority to act on a member’s behalf to another person, subject to any restriction set out in this
proxy form; and
a proxy form must be delivered to the Company, or to the transfer secretary of the Company, namely Computershare Investor
Services (Pty) Ltd, before a proxy exercises any of a member’s rights as a shareholder at the general meeting.