Annual Report 2016 Iii

integrated ANNUAL REPORT Integrated Annual Report 2016 iii YEARS AND STILL GOING STRONG Table of Content About this Report .................................................................................................. 2 Performance Highlights/Group Value Added Statement ......................................... 3 Our Group ............................................................................................................. 4 Chairman and CEO’s Report ............................................................................... 11 Our Strategic Intent and Our Stakeholders........................................................... 15 Our Operations and Customers .......................................................................... 19 Interaction with Government, Regulatory and Industry Bodies ............................. 27 Interaction with Investors, Suppliers and Media .................................................. 30 Company Employees and Broad-Based Black Economic Empowerment ........... 31 Investing in the Community ................................................................................. 43 Environmental Report ......................................................................................... 44 Corporate Governance Report ........................................................................... 53 Audit Committee Report ..................................................................................... 61 Remuneration Report .......................................................................................... 64 Social and Ethics Report ..................................................................................... 67 Internal Control and Risk Management ................................................................ 69 Report of the Directors ........................................................................................ 76 Statement of Responsibility by the Board of Directors .......................................... 82 Certificate of Company Secretary ........................................................................ 82 Independent Auditor’s Report .............................................................................. 83 Statements of Financial Position .......................................................................... 84 Statements of Profit or Loss ................................................................................ 85 Statements of Comprehensive Income ................................................................ 85 Statements of Changes in Equity ......................................................................... 86 Statements of Cash Flows ................................................................................... 87 Accounting Policies ............................................................................................. 88 Notes to the Financial Statements ....................................................................... 96 Notice of Annual General Meeting ...................................................................... 133 Directors Standing for Election or Re-election .................................................... 142 Share Price Performance ................................................................................... 145 Shareholder Analysis ......................................................................................... 146 Integrated Annual Report 2016 1 About this Report Scope, Boundary and Reporting Cycle the structure for this discussion. We continually strive to enhance the level of our reporting, and this year we have attempted to increase This Integrated Annual Report (“this Report”) of the Comair Group the level of connectivity across the various sections of this Report. (“the Group”) presents the economic, social, governance and environmental performance of the Group’s airline and non-airline This Report was prepared in accordance with International Financial businesses in respect of its operations in South Africa only, as Reporting Standards; the Financial Reporting Guides issued by the well as the financial results of the Group for the financial year Accounting Practices Committee; the Listings Requirements of the 1 July 2015 to 30 June 2016. While the performance of the Group’s JSE; and the requirements of the Companies Act (Act No. 71 of associates is discussed in this Report, the Report focuses more on 2008) as amended. It is also guided by the International Integrated the performance of the Group’s subsidiaries since their contribution Reporting Council’s Integrated Reporting Framework. The Group’s to the Group’s performance is more significant. This Report does reporting on sustainable development is guided by the Sustainability not extend to, nor cover the performance of the Group’s suppliers Reporting Guidelines of the Global Reporting Initiative (GRI G4). in its supply chain, outsourced operations, such as, but not limited to, its fleet maintenance or its leased facilities. These limitations are not considered material enough to impair the completeness External Audit and Assurance of this Report. The Group’s financial statements on pages 84 to 132 were audited by the Group’s independent external auditors, Grant Thornton The Report will be sent to Shareholders, who are recorded as Johannesburg Partnership (“Grant Thornton”) in accordance with such in the Group’s Securities Register on 23 September 2016, International Standards of Auditing. The report of Grant Thornton and is available on the Group’s website at www.comair.co.za. is included on page 83. Printed copies are available on request from the Group Company Secretary. This is the Group’s sixth Integrated Annual Report. The Grant Thornton has provided limited assurance over selected key prior period’s Integrated Annual Report, which covered the period performance indicators and specific disclosures as set out in this 1 July 2014 to 30 June 2015, was published on 30 October 2015 Report. Based on the work Grant Thornton performed, nothing has and is also available on the Group’s website. come to our attention that causes us to believe that the selected key performance indicators or specific disclosures in the 2016 Reporting Principles Integrated Annual Report for the year ended 30 June 2016 has not been fairly stated. The content of this Report is driven by those issues that have the greatest potential to impact the Group’s ability to operate. We For a better understanding of the scope of Grant Thornton’s consider a broad range of external and internal factors including assurance process, reference should be made to Grant Thornton’s the outcome of various stakeholder engagement processes driving Assurance Statement, which can be obtained from the Group the Group’s integrated reporting process when deciding which Company Secretary, or accessed via the Group’s website www. issues are of the utmost importance to address. While this Report comair.co.za. attempts to highlight the significant issues raised and the outcomes of these various engagement processes, as well as the risks identified during our risk assessment process, the content of this Report Board Approval predominantly focuses on the information deemed relevant to the The Board is ultimately responsible for the authenticity of this Report. Group’s Shareholders and potential investors. Together with the appropriate management and committee support, the Board reviewed and analysed the information disclosed, and is The information included in this Report aims to provide Shareholders satisfied with the content of this Report. and investors with a good understanding of the significant economic, social, governance and environmental risks and opportunities the Group faces in the short and medium term, as well as the Group’s Contact Us response in order to ensure its ability to create and sustain value We welcome opinions, suggestions and questions from all our for its Shareholders and investors in the long term. In addition, the stakeholders. Please direct these to the Group Secretary, Derek Group attempts to explain its efforts to reduce its impact on the Borer. Our contact details are included on the inside back cover environment and the societies in which it operates. Our updated of this Report. materiality determination process, divided into core themes, provides 2 Integrated Annual Report 2016 YEARS AND STILL GOING STRONG Performance Highlights/Group Value Added Statement Actual Actual Actual Strategic/Group Objective Indicator 2013/14 2014/15 2015/16 Creating shareholder value Net profit (after tax) 264 851 000 218 776 000 192 702 000 Total turnover/Group revenue 5 903 219 000 5 890 746 000 5 959 573 000 Operating expenses 5 198 457 000 5 106 894 000 5 129 781 000 Dividends paid to shareholders 70 295 000 81 464 000 69 764 000 Interest on loans 77 340 000 72 930 000 170 496 000 Current taxation 77 066 000 40 675 000 5 250 000 Commitment to quality On time performance BA: 86% BA: 87% BA: 85% kulula: 85% kulula: 86% kulula: 85% Investment in assets (property, plant and equipment) 511 049 000 274 982 000 2 012 053 000 Managing risk Number of significant safety incidents 0 0 11 Number of consecutive unqualified audits by IOSA 5 5 6 Leading as a responsible Carbon inventory- all scopes footprint per corporate citizen employee (tonnes of CO2 emissions) 328.05 317.10 316.84 % of carbon emissions relating to scope 1 82% 82% 82% % of carbon emissions relating to scope 2 1.1% 1.0% 1.0% % of carbon emissions relating to scope 3

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