Barloworld Limited: Leading Brands

Economic Performance: 201-1 to 201-4

• Management Approach

  Financial performance and growth are covered by our strategic objectives, they are addressed by our three strategic levers in the short to medium term, and financial is one of the capitals.
  Relevant targets for economic performance are set and progress reported externally.

  Direct economic value created for stakeholders is reflected in the Value added statement, and should be considered with our corporate social investment and enterprise development initiatives.

  Externally direct economic impacts are reported twice during a financial year, at interim results (March) and the final results (September). This aspect is covered extensively in the group’s annual integrated reporting which includes detailed financial reporting together with external assurance. The group has developed an Intrinsic Value Model that highlights the operational and financial value drivers that are key to leveraging returns and optimising financial performance within our business.

  The Value Added Statement is designed to give the reader a full but concise understanding of how the group enhances its economic impacts in the regions where it operates.

  See also 2018 Integrated report: Value added statement
  See also Barloworld Consolidated Financial Statements 2018

• 201-1: Direct economic value generated and distributed

  The reporting organization shall report the following information:
  a. Direct economic value generated and distributed (EVG&D) on an accruals basis, including the basic components for the organization's global operations as listed below. If data are presented on a cash basis, report the justification for this decision in addition to reporting the following basic components:
  i. Direct economic value generated: revenues;
  ii. Economic value distributed: operating costs, employee wages and benefits, payments to providers of capital, payments to government by country, and community investments;
  iii. Economic value retained: 'direct economic value generated' less 'economic value distributed'.
  b. Where significant, report EVG&D separately at country, regional, or market levels, and the criteria used for defining significance.

  Integrated Report:

  Structured for value creation - Our geographic footprint - Performance per region Structured for value creation - Business Model - Impact on capitals Managing for value - Equipment - Divisional key performance indicators Managing for value - Automotive - Divisional key performance indicators Managing for value - Logistics - Divisional key performance indicators Managing for value - Corporate centre - Divisional key performance indicators Managing for value - Value added highlights Managing for value - Value added statement Licence to operate - Communities Summarised consolidated income statement

  Consolidated Annual Financial Statements:

  Notes to the consolidated annual financial statements - 1. Operating and geographical segments Notes to the consolidated annual financial statements - 2. Revenue Notes to the consolidated annual financial statements - 3. Operating profit Notes to the consolidated annual financial statements - 8. Taxation Notes to the consolidated annual financial statements - 27. Dividends Consolidated seven-year summary

  These aspects are addressed Value Added Statement contained in the Barloworld 2018 Integrated Report.

• 201-2: Financial implications and other risks and opportunities due to climate change

  The reporting organization shall report the following information:
  a. Risks and opportunities posed by climate change that have the potential to generate substantive changes in operations, revenue, or expenditure, including:
  i. a description of the risk or opportunity and its classification as either physical, regulatory, or other;
  ii. a description of the impact associated with the risk or opportunity;
  iii. the financial implications of the risk or opportunity before action is taken;
  iv. the methods used to manage the risk or opportunity;
  v. the costs of actions taken to manage the risk or opportunity.

  Integrated Report:

  Strategy and value creation - Understanding our operating context - Environmental Strategy and value creation - Risk management Strategy and value creation - Risk management - Climate and environmental Managing for value - Equipment Russia - Looking forward Licence to operate - Environmental stewardship

  Barloworld has identified risks and opportunities associated with climate change and financial implications thereof. These, together with the group's responses to the identified risks and opportunities, are disclosed in its responses to the CDP Climate Change 2018 and the CDP Water 2018 disclosures which can be viewed at https://www.barloworld.com/. Through its responsible citizenship programme and strategic objectives, including Drive profitable growth, the group considers the significance of such risks and opportunities in its strategic planning process and operational plans.

  Given Barloworld's reliance on motor vehicles, plant and equipment (currently predominantly fossil-fuel based technologies) as a core part of our business, these risks could be significant, potentially contributing to an increased cost base and decreased revenue. There are also opportunities for competitive products and solutions with reduced carbon footprints.

• 201-3: Defined benefit plan obligations and other retirement plans

  The reporting organization shall report the following information:
  a. If the plan's liabilities are met by the organization's general resources, the estimated value of those liabilities.
  b. If a separate fund exists to pay the plan's pension liabilities:
  i. the extent to which the scheme's liabilities are estimated to be covered by the assets that have been set aside to meet them;
  ii. the basis on which that estimate has been arrived at;
  iii. when that estimate was made.
  c. If a fund set up to pay the plan's pension liabilities is not fully covered, explain the strategy, if any, adopted by the employer to work towards full coverage, and the timescale, if any, by which the employer hopes to achieve full coverage.
  d. Percentage of salary contributed by employee or employer.
  e. Level of participation in retirement plans, such as participation in mandatory or voluntary schemes, regional, or country-based schemes, or those with financial impact.

  Integrated Report:

  Structured for value creation - Risk management - Defined benefit scheme exposure Structured for value creation - Risk management - Defined benefit scheme exposure

  Consolidated Annual Financial Statements:

  Accounting policies - 20. Post-employment benefit obligations Notes to the consolidated annual financial statements - 24. Other non-current liabilities

  These aspects are addressed in the Barloworld 2018 Consolidated financial statements 2018 note 3, note 24

• 201-4: Financial assistance received from government

  The reporting organization shall report the following information:
  a. Total monetary value of financial assistance received by the organization from any government during the reporting period, including:
  i. tax relief and tax credits;
  ii. subsidies;
  iii. investment grants, research and development grants, and other relevant types of grant;
  iv. awards;
  v. royalty holidays;
  vi. financial assistance from Export Credit Agencies (ECAs);
  vii. financial incentives;
  viii. other financial benefits received or receivable from any government for any operation.
  b. The information in 201-4-a by country.
  c. Whether, and the extent to which, any government is present in the shareholding structure.
  

  No significant financial assistance was received from government. If any, assistance is generally applicable in terms of legislation and across the relevant industries. It is principally in the context of training allowances and reimbursements from government such as Sector Educational Training Authorities (SETAs) in South Africa, or various allowances under taxation legislation.