About this report
This integrated annual report for The SPAR Group Limited (SPAR) has been developed with our stakeholders in mind, but is specifically relevant to our shareholders and investors. It has been compiled to present an account of how SPAR creates value over time. Through transparent and relevant disclosure we aim to enable investors and other stakeholders to make an informed appraisal of the group’s financial, environmental, social and governance performance during the 2014 financial year. View our key performance indicators in the Strategy and materiality section.
We have determined the content of this report by considering our previous reports and the following:
|•||JSE Limited Listings Requirements|
|•||Companies Act, No 71 of 2008, as amended|
|•||Revised King Code of Governance Principles and the King Report on Governance (King III)|
|•||The International Integrated Reporting Council’s <IR> Framework|
|•||Global Reporting Initiative (GRI) G4 sustainability reporting guidelines|
The most significant business event of 2014 to be considered when reading this report is the purchase of an 80% stake in the BWG Group (BWG), which owns the SPAR brand in Ireland and the South West of England. The effective date of the transaction was 1 August 2014 and full details can be found in the CEO’s report section.
SCOPE AND BOUNDARY
This report covers the financial year from 1 October 2013 to 30 September 2014. The financial information includes the SPAR operations in South Africa for 12 months and the operations in Ireland and South West England for two months. Non-financial information only relates to the SPAR Group operations in South Africa, unless otherwise specified.
It is important for the reader to distinguish between the listed company and its retail members’ operations, which are governed by the SPAR and the Build it Guilds. Refer to The SPAR Group at a glance and the Business Model for more detail.
MATERIAL MATTERS AND MATERIALITY DETERMINATION
SPAR considers relevant matters to be those that have an effect on the group’s ability to create value. These are determined by considering their effect on the organisation’s strategy, governance, performance or prospects. Materiality was determined by considering the International Integrated Reporting Council’s <IR> Framework and the Global Reporting Initiative’s G4 guidelines.
SPAR’s material issues were determined following the process described in the Strategy and materiality section. These, as well as compliance requirements, previous reports and reporting best practice were considered in determining what matters and data to include in the integrated report.
We are committed to providing our stakeholders with the information they need to understand how we create value and would value feedback in this regard. Any comments or requests for additional information can be emailed to our Company Secretary, Kevin O’Brien.
ASSURANCE FOR THIS REPORT
The financial information contained in this report has been independently audited by Deloitte & Touche. Non-financial data has been self-assured, with the exception of the group’s BBBEE verification, which was evaluated independently by AQRate for the 2014 year.
BOARD RESPONSIBILITY STATEMENT
The SPAR board acknowledges its responsibility to ensure the integrity of the integrated annual report and, in the opinion of the board, it addresses all material issues and fairly presents the integrated performance of the organisation. Therefore, the board has authorised the integrated annual report for release.
11 November 2014
The following icons indicate where more information can be found:
|This icon refers to additional information that can be found in other sections within this report.|
|This icon refers to additional information available on our website www.spar.co.za|
|This icon refers to case studies which highlight operational examples of how we create value|
COMMONLY USED TERMS
SPAR: Refers to the retail brand under which independent retailers choose to trade. In the context of this report it is used synonymously with our other retail brands, TOPS at SPAR, Build it, SaveMor unless otherwise stated.
Distribution centre: SPAR operates seven warehousing facilities called distribution centres that supply goods and services to our retailers. See Organisational structure section for more information.
Guilds: The SPAR and the Build it Guilds of Southern Africa are non-profit companies that are the custodians of the SPAR and Build it brands. See The SPAR Group at a glance section for more information.
Independent retailers: SPAR is essentially a wholesaler and distributor of goods that services independent storeowners who choose to operate under the SPAR brand. Each storeowner is free to choose how and from where they wish to stock their stores, but operate under specific guidelines and take advantage of the support of SPAR. See Store format overview section for more information.
LSM: The SAARF LSM (South African Audience Research Foundation Living Standards Measure) is the most widely used marketing research tool in Southern Africa. It divides the population into 10 LSM groups, 10 being the highest and 1 the lowest. This measure is useful in identifying the target market of particular retail stores. SPAR, due to its various store formats and diverse independent retailer group, is unique in that we operate across the entire LSM market.
Voluntary trading: The relationship between The SPAR Group Limited and its independent retailers is one of a “voluntary trading” partnership. See The SPAR Group at a glance section for more information.
The six capitals: The six capitals constitute financial, manufacturing, intellectual, human, social and relationships as well as natural capital. In the integrated reporting context they represent the stores of value that are the basis of an organisation’s ability to create value. See Business Model section for more information.