ABRIDGED AUDITED GROUP RESULTS FOR THE YEAR ENDED 31 MARCH 2015, NOTICE OF AGM AND FINAL DIVIDEND DECLARATION

Transcription

1 TRUSTCO GROUP HOLDINGS LIMITED Incorporated in the Republic of Namibia (Registration number 2003/058) NSX Share code: TUC JSE share code: TTO ISIN Number: NA 000A0RF067 ("the Group") ABRIDGED AUDITED GROUP RESULTS FOR THE YEAR ENDED 31 MARCH 2015, NOTICE OF AGM AND FINAL DIVIDEND DECLARATION CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 March Months 12 Months 12 Months 31 Mar 31 Mar 31 Mar Audited Audited % Audited Reclassified Reclassified Notes change NAD'000 NAD'000 NAD'000 ASSETS Cash and cash equivalents (10%) Advances 4 15% Trade and other receivables 5 149% Current income tax assets 175% Amounts due by related parties Inventories 6 (6%) Property, plant and equipment 7 33% Investment property 8 32% Intangible assets 9 (7%) Deferred income tax assets 32% Total assets 28% EQUITY AND LIABILITIES Capital and reserves Share capital Share premium Put options (52 832) Deemed treasury shares 10 17% (57 043) (69 026) - Shares for vendors Contingency reserve (25%) Revaluation reserves 70% Foreign currency translation reserve (186%) (5 936) (2 075) Distributable reserves 29% Attributable to equity holders of the parent 27% Liabilities Overdraft 100% Borrowings 43% Trade and other payables 146% Current income tax liabilities 43% Amounts due to related parties 99%

2 Other liabilities (56%) Deferred income tax liabilities 44% Technical provisions (6%) Policyholders' liability under insurance contracts 16% Total liabilities 29% Total equity and liabilities 28% CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the period ended 31 March Months 12 Months 31 Mar 31 Mar % Audited Audited Notes change NAD'000 NAD'000 Total Revenue 21% Interest expense (141%) ( ) (57 075) Investment income (2%) Net Insurance benefits and claims 23% (42 616) (54 996) Income from operations (12%) Operating expenses (2%) ( ) ( ) Profit before taxation % Taxation (96%) (93 157) (47 566) Profit for the period 101% Other comprehensive income, net of tax 243% Items that will not be subsequently reclassified to profit or loss - Revaluation of property, plant and equipment 140% Items that may be subsequently reclassified to profit or loss - Foreign currency translation adjustment 2% (3 861) (3 944) Total comprehensive income for the period 106% CONSOLIDATED STATEMENT OF CASH FLOWS for the period ended 31 March Months 12 Months 31 Mar 31 Mar Audited % Audited NAD'000 change NAD'000 Restated Cash flow from operating activities Cash generated by operations (7%) Interest received 107% Finance costs (85%) ( ) (57 095) Net loans advanced 65% (98 215) ( ) Proceeds from funding liabilities for student advances (8%) Taxation paid (55%) (25 014) (16 146) Net cash flow from operating activities 125% Net cash flow from Investing activities 63% (7 988) (21 348) Net cash flow from financing activities (288%) ( ) Net change in cash and cash equivalents (133%) (27 926) Cash and cash equivalents at beginning of period 184%

3 Cash and cash equivalents at end of period (21%) CONSOLIDATED STATEMENT OF MOVEMENTS IN EQUITY for the period ended 31 March Months 12 Months 31 Mar 31 Mar % Audited Audited change NAD'000 NAD'000 Balance at the beginning of the period 26% Issue of shares (100%) Sale of deemed treasury shares (16 194) Deemed treasury shares purchased (85%) (1 861) - Dividends for the period - (40 817) (15 412) Total comprehensive income for the period 371% Balance at the end of the period 46% CONDENSED SEGMENT ANALYSIS as at 31 March 2015 Insurance Banking & Insurance Insurance (Emerging Total Finance (Namibia) (Investments) Markets) NAD'000 NAD'000 NAD'000 NAD'000 NAD' March 2015 Revenue Income from operations - external Income from operations - internal ( ) (12 008) (1 144) ( ) (19 884) Net profit after tax ( ) Total assets Total liabilities March 2014 Revenue Income from operations - external Income from operations - internal Net profit after tax ( ) Total assets Total liabilities NOTES TO THE AUDITED ABRIDGED ANNUAL FINANCIAL STATEMENTS as at 31 March Basis of preparation The abridged annual group financial statements, which comprise the abridged group statement of financial position as at 31 March 2015, and the abridged group statement of comprehensive income, changes in equity, cashflow statement for the year ended 31 March 2015, and related notes are derived from the audited financial statements of Trustco Group Holdings Ltd for the year ended 31 March 2015 which have been audited by the group's independent auditors, BDO Namibia. This abridged report is therefore extracted from the audited information, but is itself not audited. The directors take full responsibility for this abridged report and the financial information has been correctly extracted from the underlying annual financial statements.

4 The auditor's unmodified report is available for inspection at Trustco's registered offices. The group's audited financial statements are available for inspection at the company's registered office. Electronic copies of the integrated report and the financial statements will be available on the company's website ( on 29 June The abridged group financial statements have been prepared in accordance with the framework concepts and measurement and recognition criteria of International Financial Reporting Standards (IFRS) and comply with IAS 34 Interim Financial Reporting and are in accordance with the SAICA Financial Reporting Guides as issued by the Accounting Practice and Financial Pronouncements as issued by Financial Reporting Standards Council, and the Namibian Companies' Act. no.28 of 2004 (as amended) and JSE Listings Requirements.The accounting policies are consistent with the group's accounting policies and are consistent with the previous annual financial statements. The abridged consolidated financial information was compiled under the supervision of the Group Financial Director, Ryan McDougall, CA(SA), CA(Namibia). 12 Months 12 Months 31 Mar 31 Mar Audited Audited 2. Headline earnings per share Profit attributable to ordinary shareholders 20% Adjustments: 75% (27 494) ( ) Loss on disposal of property, plant & equipment 248% Loss on disposal of intangible assets (100%) Fair value adjustments on investment properties 100% 400 ( ) Gain on bargain purchase (878%) (29 244) (3 000) Impairment of intangible assets (100%) Tax effect 85% (748) (4 907) Headline earnings 95% Earnings per share Basic earnings per share (cents) 30% Diluted earnings per share (cents) 30% Headline earnings per share (cents) 111% Diluted headline earnings per share (cents) 111% Dividends per share (cents) 39% Shares Total number of ordinary shares in issue Weighted number of ordinary shares in issue (8%) Contingently issuable shares as a result of business acquisition Weighted number of ordinary shares for diluted earnings per share (8%) Advances Total advances 15% Total loans advanced 11% Provision for bad debts 561% (25 551) (52 921)

5 15% Less: Short-term portion (9%) ( ) ( ) 17% Trade and other receivables Trade receivables 66% Property sales receivables 232% Other receivables (1%) % Inventories During the year the group's aquired inventories relating to real estate were carried at a cost of NAD m (2014: m) and inventories relating to finished goods at a cost of NAD 7.8 m (2014: 7.7 m) No inventories are required to be written down to net realisable value. 7. Property, plant and equipment During the year the group aquired property, plant & equipment at a cost of NAD 8.6 m (2014: 10.4 m) and recognised a revaluation gain of NAD 23.5 m (2014: 13.5 m). The carrying value of property, plant & equipment as at 31 March 2015 was NAD m (2014: m). Disposals at carrying value of NAD 12.2 m (2014: 1.5 m) were made. 8. Investment property During the year the group acquired investment property at a cost of NAD 13.3 m (2014: 0.0 m) and recognised a revaluation gain of NAD m (2014: m). The fair value of investment property as at 31 March 2015 was NAD m (2014:537.3 m). Disposals at carrying value of NAD 2.2 m (2014: 0.0 m) were made. 9. Intangible assets During the year the group acquired intangible assets at a cost of NAD 11.7 m (2014: 8.2 m). The carrying value of intangible assets as at 31 March 2015 was NAD m (2014: m). Disposals at carrying value of NAD 0.02 (2014: 3.0 m) were made. 10. Deemed treasury shares The carrying value of treasury shares as at 31 March 2015 is NAD 57.0 m (2014: 69.0 m). The group purchased 1.1 m (2014: 1.6m) shares during the year. Disposals of NAD 15.2 m (2014: 0.0 m) were made. 11. Reclassifications and restatements of 2014 and 2013 comparatives Reclassification of 2014 cash flow statement On 6 November 2014 the JSE notified Trustco that as a result of the JSE's pro-active monitoring of annual financial statements it had identified two misclassifications in the statement of cash flows as reported in the group's 2014 annual financial statements. These misclassifications, although considered immaterial by Trustco due to the detailed nature of the disclosure in the 2014 annual financial statements, were deemed by the JSE to be individually and collectively misleading to users of the financial statements, hence the JSE requested that Trustco reclassify the items in this set of results. Where appropriate, financial institutions can present net cash flows from advances and loans made to customers and the repayment of those advances and loans. This has been adopted in the 2015 financial year due to the acquisition of the banking subsidiary. Extract of the condensed consolidated statement of cash flows: 12 Months 12 Months 31 Mar 31 Mar Audited Audited Reclassified Cash from operating activities

6 Cash generated by operations Included in the restatement of cash generated by operations is the effect of the increase in policyholders' liabilities under insurance contracts Cash flow from investing activities (21 348) (90 374) Purchase of deemed treasury shares - (69 026) Cash flow from financing activities Purchase of deemed treasury shares (69 026) - Increase in policyholders' under insurance contracts Net change in cash and cash equivalents The change had no impact on the cash and cash equivalents, Statement of Financial Position, Statement of Comprehensive Income, Statement of Changes in Equity, Earnings per share, Headline earnings per share or diluted earnings per share. Reclassification of the statement of financial position and statement of comprehensive income The group has elected to present its statement of financial position on the 'order of liquidity' basis as opposed to the current versus no-current classification previously used. Furthermore certain items presented on the face of the statement of comprehensive income are now aggregated. These changes were made due to the group's operations which closely mirror other financial institutions and hence allow better comparability in the industry. NAD 62.8 million was reclassified in the 2014 results to trade and other receivables from trade and other payables in order to adopt group accounting policies previously not corrected in the consolidation of acquired entities. 12. Fair Value hierarchy Level 1 Financial assets Level 2 Investment property 32% Property, Plant and Equipment 33% Level 3 Advances 15% Trade and other receivables 161% Cash and cash equivalents (10%) Bank overdrafts 100% (15 020) - Trade and other payables 235% ( ) (32 131) Other liabilities (56%) (92 750) ( ) Borrowings 43% ( ) ( ) Technical provisions (6%) (18 880) (20 113) Policyholders' liability under insurance contracts (16%) (44 838) (38 520) 13. Transactions with related parties Next Investments (Pty) Ltd Management fees (491%) (38 141) (26 110) Interest paid - - (2 854) Charter income 742% Other transactions (481%) (11 130) (238) Northern Namibia Development Company (Pty) Ltd Charter income 477%

7 14. Profit before taxation This is arrived at after taking into account the following: Profit on foreign exchange differences Gain on bargain purchase Fair value gains on investment property Audit fees (2 283) (2 930) Impairment of loans and receivables and bad debts written off (25 828) (52 972) Increase in provision for doubtful debts relating to advances (9 274) (4 743) 15.1 Business Combination On 30 June 2014, the group acquired control by way of the purchase of all the ordinary shares of Farm Herboths (Proprietary) Limited. The current operations of the acquiree include renting of farmland, sale of zoned residential estates, operation and management of water supply to third parties and the management of neighbouring residential estates. The assets and resources acquired include staff and office buildings related to the operations. The group has taken over the management of the operations of the entity, but also intends to expand the existing residential estate to more significant levels. This expansion will augment the existing investment and property development operations of the group and extend the foreseeable development timetable. Gain on bargain purchase of NAD 18 million was raised on purchase and included in the profit for the period. This gain arose as a result of the revalued identifiable fair value of assets acquired exceeding the purchase price. The large tracts of undeveloped land on the estate were not previously valued independently by the sellers. The following table summarises the consideration paid at fair value of assets acquired and liabilities assumed at the acquisition date: Fair value Book value adjustment Fair value NAD '000 NAD '000 NAD '000 Investment property Bank and cash 7-7 Other liabilities (106) - (106) Net assets Purchase consideration (41 860) Gain on bargain purchase Cash flow on acquisition Cash and cash equivalents 7 Bank overdraft - Net cash acquired 7 Consideration paid* (5 000) Cash outflow on acquisition, net of cash acquired (4 993) A portion of the consideration for the purchase of Farm Herboths (Pty) Ltd was deferred. The purchase consideration is payable by the group in 18 monthly instalments of NAD beginning July 2014 and an initial lumpsum payment. The deferred purchase consideration bears no interest. Acquisition-related costs of NAD have been charged to administrative expenses in the consolidated income statement for the period ended 31 September The revenue from this acquisition included in the consolidated statement of comprehensive income since acquisition is NAD 0.52 million and a net loss of NAD 2.42 million was incurred during the same period.

8 Had the business been consolidated from 1 April 2014, the consolidated statement of income would show pro forma revenue of NAD6.83 million and pro forma loss of NAD6.19 million Business Combination On 1 September the group acquired control of Fides Bank Namibia Limited by way of the purchase of all the ordinary shares in the entity. Fides Bank Namibia Ltd is one of only seven commercial licensed banks in Namibia. The acquisition of the bank, now re-named to Trustco Bank Namibia Limited, represents a natural progression of the group's Bank & Finance segment strategy. The acquisition offers a best fit strategic opportunity to complement the current student lending, mortgage lending, property development and insurance businesses of the group. Gain on bargain purchase of NAD 21,5 million was raised on purchase and included in the profit for the period. The total fair value of the entity exceeded the purchase price, predominantly due to the group's identification that the assessed loss residing in the bank could now be recognised as a result of the purchase. This resulted in a gain on bargain purchase as fairly valued and recognised assets exceeded the purchase consideration. The following table summarises the consideration paid at fair value of assets acquired and liabilities assumed at the acquisition Fair value Book value adjustment Fair value NAD '000 NAD '000 NAD '000 Bank and cash Other assets Loan portfolio Property plant and equipment Funding Liabilities (34 436) - (34 436) Deferred tax asset Other liabilities (4 040) - (4 040) Net assets Purchase consideration (7 000) Gain on bargain purchase Cash flow on acquisition Cash and cash equivalents Bank overdraft - Net cash acquired Consideration paid (7 000) Cash outflow on acquisition, net of cash acquired On 1 September 2013, the gross loan portfolio was N$ million with a provision for doubtful debts of NAD million raised for both specific customer advances which were fully impaired and a portfolio impairments against loans which are doubtful but recovery is still not considered remote. Acquisition-related costs of NAD have been charged to administrative expenses in the consolidated income statement for the period ended 31 March The revenue from these acquisitions included in the consolidated statement of comprehensive income since acquisition was NAD 7 million and a net loss of NAD million was incurred during the same period. Had the business been consolidated from 1 April 2014, the consolidated statement of income would show pro forma revenue of NAD 6.83 million and pro forma loss of NAD 6.19 million.

9 16. Subsequent events Option agreement On 22 June 2015, the group announced that it had entered into an option agreement with Huso Investments (Pty) Ltd ('Huso') to secure the rights to acquire Huso and its two subsidiaries, namely Northern Namibia Development Corporation (Pty) Ltd and Morse Investments (Pty) Ltd. The operations of Huso include a diamond mining operation and a diamond polishing factory - both located in Namibia. The option will be exercisable by the group should the shareholders of Huso be able to demonstrate various contingent actions as detailed in the SENS announcement issued to the market on 22 June At the time of publication of the Annual financial statements, the group was unable to determine whether the transaction would have any financial effects. 17. Directorate Mrs Veronica de Klerk resigned as a director on 1 September DIVIDEND DECLARATION During the year under review dividends of 5.75 cents per share (2014: 2 cents) amounting to a total of NAD million (2014: NAD 15.4 million) were declared and paid by the group. The directors of Trustco (the Board) are pleased to announce that the Board passed a resolution on 26 June 2015 to pay a dividend of 4 cents per share for the financial year ended 31 March The following information is provided to shareholders in respect of dividend tax: - The dividend has been declared from income reserves; - Shareholders are advised that Namibian non-resident shareholders' tax ('NRST') of 20% on the declared dividend will be applicable to all shareholders with addresses outside Namibia (unless any specific rules relating ot double tax treaties apply); - The Namibian NRST rate for South African residents is 15% resulting in a net dividend of 3,4 cents per share (South African dividend witholding tax is not applicable to Namibian dividends); and - Trustco Group Holdings Limited's Namibian Income Tax Reference Number is The number of shares in issue at the date of declaration is The salient dates for the payment of this dividend are set out below: Last day to trade cum-dividend Friday, 24 July 2015 Trading ex dividend commences Monday, 27 July 2015 Record Date Friday, 31 July 2015 Payment Date Friday, 21 August 2015 Share certificates may not be dematerialised or rematerialised between Monday, 27 July 2015 and Friday, 31 July 2015 both days included. The dividend is declared in Namibia Dollars and payable in currencies of the Republics of South Africa and Namibia which are pegged 1:1. NOTICE of AGM The full integrated report including a notice of annual general meeting will be uploaded on the company's website and posted to shareholders of the company who were recorded as such in the company's securities register on Friday, 19 June Notice is hereby given to shareholders that the annual general meeting of the shareholders of the company will be held in the boardroom, 3rd floor, Trustco House, 2 Keller street, Windhoek on Thursday 24 September 2015 at 10:00 to deal with such business as may lawfully be dealt with at the meeting in the manner required by the Companies Act, 28 of 2004 (as amended), as read with the Listings Requirements of JSE Limited ('JSE Listings Requirements'), which meeting is to be participated in and voted at by shareholders recorded in the company's securities register on the record date of Friday, 11 September Shareholders are advised of the following applicable dates: last date for lodging forms of proxy for South African shareholders is Friday, 18 September 2015 at 17H00 and Monday, 21 September 2015 at 12H00 for all other shareholders. The last date to trade to be eligible to vote is Friday, 4 September 2015.

10 By order of the board S Miller Company Secretary 29 June 2015 JSE Sponsor Sasfin Capital (a division of Sasfin Bank Limited) NSX Sponsor IJG (Pty) Limited