integrated - Comair Airways Limited

1 integrated annual report 2016iiiAnnuAl RepoRtintegrated1 YEARS AND STILL GOING STRONGI ntegrated annual report 2016 Table of ContentAbout this report ..2 Performance Highlights/Group Value Added Statement ..3 Our Group ..4 Chairman and CEO s report ..11 Our Strategic Intent and 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 .

2 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 ..1462 integrated annual report 2016 Scope, Boundary and Reporting CycleThis integrated annual report ( this report ) of the Comair Group ( the Group ) presents the economic, social, governance and environmental performance of the Group s airline and non-airline businesses in respect of its operations in South Africa only, as well as the financial results of the Group for the financial year 1 July 2015 to 30 June 2016 .

3 While the performance of the Group s associates is discussed in this report , the report focuses more on the performance of the Group s subsidiaries since their contribution to the Group s performance is more significant. This report does not extend to, nor cover the performance of the Group s suppliers 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 of this report will be sent to Shareholders, who are recorded as such in the Group s Securities Register on 23 September 2016 , and is available on the Group s website at Printed copies are available on request from the Group Company Secretary.

4 This is the Group s sixth integrated annual report . The prior period s integrated annual report , which covered the period 1 July 2014 to 30 June 2015, was published on 30 October 2015 and is also available on the Group s Principles The content of this report is driven by those issues that have the greatest potential to impact the Group s ability to operate. We consider a broad range of external and internal factors including the outcome of various stakeholder engagement processes driving the Group s integrated reporting process when deciding which issues are of the utmost importance to address. While this report 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 predominantly focuses on the information deemed relevant to the Group s Shareholders and potential information included in this report aims to provide Shareholders 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.

5 As well as the Group s response in order to ensure its ability to create and sustain value for its Shareholders and investors in the long term. In addition, the Group attempts to explain its efforts to reduce its impact on the environment and the societies in which it operates. Our updated materiality determination process, divided into core themes, provides the structure for this discussion. We continually strive to enhance the level of our reporting, and this year we have attempted to increase the level of connectivity across the various sections of this report was prepared in accordance with International Financial Reporting Standards; the Financial Reporting Guides issued by the Accounting Practices Committee; the Listings Requirements of the JSE; and the requirements of the Companies Act (Act No.)

6 71 of 2008) as amended. It is also guided by the International integrated Reporting Council s integrated Reporting Framework. The Group s reporting on sustainable development is guided by the Sustainability Reporting Guidelines of the Global Reporting Initiative (GRI G4).External Audit and AssuranceThe Group s financial statements on pages 84 to 132 were audited by the Group s independent external auditors, Grant Thornton Johannesburg Partnership ( Grant Thornton ) in accordance with International Standards of Auditing. The report of Grant Thornton is included on page Thornton has provided Limited assurance over selected key performance indicators and specific disclosures as set out in this report .

7 Based on the work Grant Thornton performed, nothing has come to our attention that causes us to believe that the selected key performance indicators or specific disclosures in the 2016 integrated annual report for the year ended 30 June 2016 has not been fairly a better understanding of the scope of Grant Thornton s assurance process, reference should be made to Grant Thornton s Assurance Statement, which can be obtained from the Group Company Secretary, or accessed via the Group s website Board ApprovalThe Board is ultimately responsible for the authenticity of this report . Together with the appropriate management and committee support, the Board reviewed and analysed the information disclosed, and is satisfied with the content of this report .

8 Contact Us We welcome opinions, suggestions and questions from all our stakeholders. Please direct these to the Group Secretary, Derek Borer. Our contact details are included on the inside back cover of this this Report3 YEARS AND STILL GOING STRONGI ntegrated annual report 2016 Strategic/Group ObjectiveIndicatorActual 2013/14 Actual2014/15 Actual2015/16 Creating shareholder valueNet profit (after tax)264 851 000218 776 000192 702 000 Total turnover/Group revenue5 903 219 0005 890 746 0005 959 573 000 Operating expenses5 198 457 0005 106 894 0005 129 781 000 Dividends paid to shareholders70 295 000 81 464 00069 764 000 Interest on loans77 340 00072 930 000170 496 000 Current taxation77 066 00040 675 0005 250 000 Commitment to qualityOn time performanceBA: 86%BA.

9 87%BA: 85%kulula: 85%kulula: 86%kulula: 85%Investment in assets (property, plant and equipment)511 049 000274 982 0002 012 053 000 Managing riskNumber of significant safety incidents0011 Number of consecutive unqualified audits by IOSA556 Leading as a responsible corporate citizenCarbon inventory- all scopes footprint per employee (tonnes of CO2 emissions) of carbon emissions relating to scope 182%82%82%% of carbon emissions relating to scope of carbon emissions relating to scope 317%17%17%No of legislative/regulatory breaches000 Total staff cost738 003 000832 050 000897 467 000 Number of South African employees2 0112 0732 085 Overall EE representation1 2691 3591 375% of staff members belonging to a union43%35%42%Provide growth and development opportunities for employees% spend of training or training investment (% of salary spend) turnover Female effectivenessQuantity of fuel consumed per passenger/fuel burn per passenger (kg per passenger)

10 Of passengers carried5 196 5075 140 5995 428 678 Aircraft and flight simulator spend290 359 000244 991 0001 945 164 000 Number of owned aircraft171919 Number of leased aircraft966 Electricity consumed (kWh)6 938 3817 612 6355 996 310 Performance Highlights/Group Value Added Statement1 A Boeing 737-400 aircraft, registration ZS-OAA, flight number BA6234 with 100 passengers and crew on board, on a scheduled domestic flight between Port Elizabeth and Johannesburg suffered damage after the left hand main landing gear detached from the aircraft after landing. Whilst the aircraft was subsequently declared to be beyond economical repair, all the passengers and crew safely exited the aircraft without annual report 2016 Our purposeThe Group s purpose, We Lift You Up , drives our aspiration to lift people up in an inspiring, empowering, passionate and innovative way, to render a positive impact in the world.