CONDENSED INTERIM RESULTS

Transcription

1 CONDENSED INTERIM RESULTS FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2018

2 LIMITED Incorporated in the Republic of South Africa Registration number 1998/015580/06 Share code: SCP ISIN: ZAE

3 INTRODUCTION INTRODUCTION Stellar Capital Partners Limited ( Stellar Capital or the Company or the Group ) presents its unaudited interim results for the six month period ended 31 December As at 31 December 2018, the net asset value per share (NAVPS) of Stellar Capital is R1.20, representing an increase of 15 cents per share from 30 June This increase is primarily driven by the listed share price of Torre, which increased from R0.71 on 30 June 2018 to R1.04 on 31 December 2018, offset by a further reduction in the valuation of Tellumat. OPERATIONAL UPDATE Prescient The process to empower Prescient has commenced and the first transaction has been concluded whereby Prescient repurchased 15% of its own shares in issue from Stellar Capital for R228.8 million. Further repurchases are expected to be concluded by 31 March 2019 for an estimated R146.7 million, which will occur simultaneously with the issuing of new shares by Prescient to both management and the B-BBEE partner. After closing all transactions, Stellar Capital will hold an effective 19.4% economic interest in Prescient. Client assets under management/administration of Prescient remain stable and in line with expectations. Prescient continues to invest in line with a 5-year growth plan, the results of which is expected to come to fruition in years 3, 4 and 5. Friedshelf (including Cadiz) The implementation of certain aspects of the transaction with Warwick and the substantial downscaling of the traditional operations continues. Management have continued to extract excess capital and remain focused on leveraging the licenses retained in order to grow the revenue streams and are in discussions with various parties in this regard. Praxis Since the capital restructuring in March 2018, the business has improved its profitability, concluded its development of a technology platform to enable scalability and engaged with various funders to provide capital for further growth. A key constraint remains the balance between meeting the demand for parts funding and managing the company s debt levels. The working capital cycle of the business and the cost of debt funding remains a key focus for management. Improvements in these areas have been slower than targeted and remains an area of focus in the upcoming period. Greenpoint Greenpoint Capital, the manager of the various Greenpoint Funds, is tracking budget for its financial year ending June Greenpoint continues to build its platform of alternative credit solutions via expansion of its offering and the growth of the underlying credit portfolios. Stellar Capital remains an investor of the Greenpoint Specialised Lending (GSL) Fund with R106.6 million indirectly held at 31 December The mezzanine credit fund continues to perform well with no defaults occurring during the period under review. During the period under review, Greenpoint Special Opportunities (GSO) Fund was established, with Stellar Capital as one of the initial investors with an initial R10 million investment, funded via a redemption from the GSL Fund. The GSO Fund is a credit led investment vehicle in the convertible debt space. In addition to the GSO Fund, the Greenpoint Senior Debt (GSD) Fund was established and purchased 300 Stellar Capital preference shares in July 2018 (subordinated in favour of other preference shareholders) and a further 66 Stellar Capital preference shares in December 2018 (unsubordinated), bringing the total assets under management to R366 million, which mirrors Stellar Capital s investment in the GSD Fund as at 31 December

4 INTRODUCTION (CONTINUED) Inyosi Solutions The manager of the Inyosi Supplier and Enterprise Development Funds is tracking budget for its financial year ending June 2019 and paid a maiden dividend of R1.0 million following its 2018 financial year. The assets under management increased from R292.1 million at 30 June 2018 to R335 million at 31 December The business continues to look at additional service offerings for its clients and has scaled up its team to enable a more expansive service offering in the future. Torre On 24 January 2019 Torre shareholders approved the scheme in terms of which the Torre shareholders shall dispose of their shares for a maximum consideration of R1.15 per share, comprising R1.05 per share for cash and a maximum top-up payment of R0.10 per share. The investment in Torre is held at the closing price of R1.04 per share (consistent with valuation methodologies in previous periods) as at 31 December 2018 as shareholder approval was only obtained subsequent to this reporting date. Stellar Capital received a special cash dividend of R102.7 million from Torre in December 2018 as part of this disposal process. Amecor Amecor remained a good investment with consistent operational performance. The valuation at 31 December 2018 is unchanged from R398.2 million at 30 June Stellar concluded a deal on or about 14 December 2018 (subject to a number of conditions precedent) which would result in cash proceeds payable to Stellar Capital of R413 million as well as an escalation at 10% per annum in the event that the Closing Date is delayed beyond 31 March In addition, Stellar Capital will be entitled to pre-closing Date dividends, amounting to R31 million in respect of the financial period 1 July 2018 to the Closing Date (R21 million already received during the period under review). The anticipated profit on disposal combined with total dividends received are expected to result in a return on investment of approximately 82% since acquisition in October Tellumat The performance of the Tellumat group continues to disappoint and during the previous year the Board of Directors of Stellar Capital took the decision to consider a disposal strategy with respect to the investment and engaged a corporate finance service provider to drive the disposal process. Following this and engagements with prospective buyers, Stellar Capital is considering a break-up strategy. In ensuring a conservative approach to our valuations, divisions which do not have positive engagement in respect of active disposal processes have been valued on the basis of estimated recoverability of the net asset value. The remaining divisions have been valued using a consistent 5.3 times EBITDA multiple. OUTLOOK Stellar Capital has embarked on a number of disposals of its industrial assets in the period. These have predominantly been driven by the committed intention to reduce group debt and the implementation of all of these transactions in the next period will see the group debt completely settled and Stellar having a strong cash position. Stellar will settle debt as a priority and should the conclusion of any transaction result in surplus cash, Stellar will communicate how it expects to deploy such cash. Stellar will continue to reduce its exposure to the industrial space in an organised fashion but with cognisance of protecting shareholder value. Stellar expects to build stronger relationships with its partners and co-shareholders in Prescient in exploring its exposure to the financials services market. Stellar will focus its efforts on supporting the growth strategies underway at Prescient as all shareholders seek to expand the platform business into new services and across greater geographies. Stellar is excited about the prospects it sees in its alternative financial service businesses. The economic and political environment in South Africa remains challenging in a year of elections. International markets are also uncertain with Brexit in Europe as well as turmoil in the United States. This all means we need to remain flexible to change in the global economy and the potential impact on markets that impact our various businesses. CHANGES TO THE BOARD OF DIRECTORS There have been no changes to the Board of Directors for the six month period under review. 02

5 SUM-OF-THE-PARTS (SOTP) VALUATION AS AT 31 DECEMBER 2018 % of As at As at As at R 000 portfolio 31 December June December 2017 Financial Services Prescient 25% Friedshelf 2% Praxis 1% Greenpoint Capital 0% Inyosi Solutions 0% Industrials and Technology Torre 16% Amecor 21% Tellumat 1 5% Corporate Assets Financial assets 0% Loan portfolio 6% Venture capital portfolio 2 2% Greenpoint Senior Debt 19% Cash and cash equivalents 2% Other assets 1% Total Assets Preference share liability ( ) ( ) ( ) Other financial liabilities (12 669) (26 576) ( ) Trade and other payables (2 453) (44 509) (20 883) SOTP value Net shares in issue ( 000) SOTP value per share (Rand) Notes: 1. The value comprises the sum of the investments in Tellumat and Amalinde Technologies (previously Masimong Technologies) 2. Held in Stellar International 03

6 CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION Unaudited as at Audited as at Unaudited as at R 000 Notes 31 December June December 2017 Non-current assets Listed investments at fair value Unlisted investments at fair value Other financial assets Loans to portfolio companies Property, plant and equipment Deferred taxation Current assets Listed investments at fair value Unlisted investments at fair value Other financial assets Loans to portfolio companies Current tax receivable Trade and other receivables Cash and cash equivalents Total assets Equity Ordinary share capital Preference share capital Accumulated loss ( ) ( ) ( ) Non-current liabilities Preference share liability Current liabilities Preference share liability Other financial liabilities Current tax payable Trade and other payables Total equity and liabilities

7 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Unaudited 6 month Audited 12 month Unaudited 6 month period ended period ended period ended R 000 Notes 31 December June December 2017 Fair value adjustments ( ) ( ) Fair value movements on listed investments ( ) ( ) Fair value movements on unlisted investments (23 589) (54 654) (52 779) and other financial assets Fair value adjustments resulting from capital ( ) (83 835) (56 833) distributions from portfolio companies Dividend revenue Capital distributions Earnings distributions Interest revenue Gross profit/(loss) from investments ( ) ( ) Other income Finance costs (50 350) (86 627) (41 802) Net profit/(loss) before operating expenses ( ) ( ) Management fee (8 798) (19 921) (10 454) Operating expenses (5 456) (9 012) (4 327) Transaction costs (954) (3 311) (1 181) Profit/(Loss) before tax ( ) ( ) Taxation (369) (1 426) (292) Profit/(Loss) for the period ( ) ( ) Weighted number of shares in issue ( 000) Profit/(Loss) per share (cents) (24.29) (17.44) Headline profit/(loss) per share (cents) (24.23) (17.44) 05

8 RECONCILIATION BETWEEN PROFIT/(LOSS) AND HEADLINE PROFIT/(LOSS) Unaudited 6 month Audited 12 month Unaudited 6 month period ended period ended period ended R December June December 2017 Profit/(Loss) for the period ( ) ( ) Impairment of receivable Write-off of fixed assets Headline profit/(loss) for the period ( ) ( ) There are no items which give rise to a dilutive effect on profit/(loss) and headline profit/(loss) per share. The issue of 600 convertible redeemable preference shares has not been treated as dilutive as the conversion thereof will result in an increase in earnings per share from continuing operations (i.e. the conversion is anti-dilutive). 06

9 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Unaudited 6 month Audited 12 month Unaudited 6 month period ended period ended period ended R December June December 2017 Balance at the beginning of the period Profit/(Loss) for the period ( ) ( ) Balance at the end of the period

10 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Unaudited 6 month Audited 12 month Unaudited 6 month period ended period ended period ended R December June December 2017 Operating activities Cash generated from operations and capital distributions received Interest revenue Tax paid (341) (1 231) (314) Investing activities (94 104) (54 115) (7 508) Acquisitions of investments ( ) (28 076) (7 452) Disposals of investments Net disposals / (acquisitions) of other financial assets Net loans (advanced to) / repaid by portfolio companies (29 983) (715) Disposal / (purchase) of property, plant and equipment Financing activities (55 795) ( ) (34 728) Net (repayments)/proceeds from other financial liabilities (12 542) (75 000) - Preference share financing costs (36 105) (62 972) (29 855) Other financing costs (7 148) (6 799) (4 873) Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period Net increase / (decrease) in cash and cash equivalents (11 569)

11 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS 1. REPORTING ENTITY Stellar Capital is a South African domiciled investment holding company listed on the main board of the JSE Limited (JSE). The condensed consolidated interim financial statements of the Group as at and for the six month period ended 31 December 2018 comprise the Company and its Consolidated Subsidiary, Stellar Management Services Proprietary Limited. The Company has significant interests in both listed and unlisted investments, which are more fully set out in note 7. As an investment holding company, Stellar Capital has applied the investment entity exception and accounts for its investments on a fair value basis, in accordance with IFRS 10 Consolidated Financial Statements. 2. FINANCIAL PREPARATION AND REVIEW These condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), including the disclosure requirements of IAS 34 Interim Financial Reporting (IAS 34) and comply with the Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council, as well as the JSE Listings Requirements and the Companies Act, No 71 of The results include, as a minimum, the information required by IAS 34 and do not include all the information required for a complete set of IFRS financial statements and it is advised that these results be read in conjunction with the consolidated annual financial statements of the Group for the period ended 30 June 2018, which are available at These condensed consolidated interim financial statements have been prepared by W Dreyer under the supervision of S Graham CA(SA), the Chief Financial Officer and have not been audited or reviewed by the Group s auditors. These condensed consolidated interim financial statements were approved by the Board of Directors on 19 February The Directors take full responsibility for the preparation of these results. 3. ACCOUNTING POLICIES The accounting policies applied by the Group in these condensed consolidated interim financial statements are consistent with those applied in the consolidated annual financial statements for the year ended 30 June All subsidiaries classified as portfolio investments are accounted for at fair value through profit or loss (FVTPL) in terms of IFRS 9: Financial Instruments (and previously IAS 39 Financial Instruments: Recognition and Measurement) and all associates classified as portfolio investments are accounted for at FVTPL in terms of the exemption from applying the equity method of accounting provided in IAS 28 Investments in Associates and Joint Ventures. 4. JUDGEMENTS AND ESTIMATES Management is required to make estimates and assumptions that affect the amounts presented in the financial statements and related disclosures. Use of available information and the application of judgement is inherent in the formation of estimates. Actual results in the future could differ from these estimates. In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Group s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated annual financial statements for the year ended 30 June

12 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED) 5. SEGMENT INFORMATION As the Group has only one business segment which is managed as a single pool of capital irrespective of the sector in which the Group s investees trade, segmental reporting is not applicable. 6. DIVIDENDS No ordinary dividends were declared during the six month period ended 31 December Preference share dividends are based on 120% of prime on preference share capital of R600 million for the six month period ended 31 December 2018 and preference share dividends of R36.1 million were paid, which included a payment of R0.9 million to Mr. CJ Roodt, an independent non-executive director of Stellar Capital. 7. INVESTMENTS HELD AT FAIR VALUE All subsidiaries and associates have a principle place of business in South Africa with the exception of Stellar International, which has a principle place of business in Mauritius. 10

13 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED) Listed investments ENTITY NATURE OF OPERATIONS % HELD 31 DECEMBER 2018 % HELD 30 JUNE 2018 % HELD 31 DECEMBER 2017 Torre MRI Industrial group that distributes and rents capital equipment and supplies aftermarket parts to the mining, manufacturing, construction and industrial markets across Africa Processing and screening of coal fines, a byproduct of coal mining (under care and maintenance) 57% 57% 57% - 14% 14% Unlisted investments Prescient ENTITY NATURE OF OPERATIONS Diversified financial services group offering investment management, fund services, administration, stockbroking, wealth investment, retail and institutional and insurance products % HELD 31 DECEMBER 2018 % HELD 30 JUNE 2018 % HELD 31 DECEMBER % 49% 49% Friedshelf Financial services group specialising in alternative investments 100% 100% 100% Praxis Provider of short term finance to the panel beating industry to address motor body repairers working capital needs 37% 37% 60% Greenpoint Capital Provision of management services 51% 51% 100% Inyosi Solutions Provision of management services 75% 75% 75% Amecor Tellumat Amalinde Technologies 1 (previously Masimong Technologies) Greenpoint Specialised Lending Technology solutions and services in security Technology solutions and services in manufacturing, air traffic control systems, defence and security and turnkey infrastructure solutions for the telecommunications industry A subsidiary of a diversified B-BBEE investment holding company and B-BBEE partner of Stellar Capital for Tellumat Credit fund specialising in mezzanine financing 100% 100% 100% 49% 49% 49% 100% preference shares 100% preference shares 100% preference shares - 100% 100% Stellar International Holding company for international venture capital investments in disruptive markets 100% 100% 100% Preference share (investment in GSL and GSO Funds) Preference share investment in a 100% held subsidiary of Friedshelf sole preference share sole preference share sole preference share Greenpoint Senior Debt Credit fund specialising in senior debt financing B shares The preference shares held in Amalinde Technologies are non-cumulative and redeemable at the instance of the issuer. 2 The B shares held in Greenpoint Senior Debt do not carry voting rights. 11

14 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED) As at As at As at R December June December 2017 Torre MRI Prescient Friedshelf Praxis Greenpoint Capital Inyosi Solutions Amecor Tellumat Amalinde Technologies Stellar International Greenpoint Funds Total Torre (current) The investment has been valued at the closing quoted market price of R1.04 per share on 31 December 2018 (R0.71 per share on 30 June 2018 and R1.00 per share on 31 December 2017). Mine Restoration Investments Limited (MRI) The investment was exited during the period under review and a fair value gain of R0.1 million was recognised on disposal. Prescient (current and non-current) Prescient repurchased of the shares held by Stellar Capital for R228.8 million during the period under review, being the first in a series of transactions, which will ultimately result in Stellar Capital retaining an effective 19.4% economic interest in Prescient (refer to SENS dated 26 July 2018). As at 31 December 2018, the fair value of the investment in Prescient has been estimated by management using the sustainable earnings model, which is consistent with the valuation method used at 30 June Management considers the P/E multiple to be the most appropriate valuation method and has valued the investment based on the estimated sustainable earnings of the group. The valuation is based on an estimated sustainable NPAT of R101.6 million (R101.4 million in June 2018) and a P/E multiple of 14.1 times (14.3 times in June 2018), less any debt plus any excess cash held in Prescient. Included in the current year operational performance are certain expenditures that are incurred in line with a 5 year growth plan, but are not excluded for purposes of valuation. A reasonable possible change of 5% in either the estimated sustainable NPAT or the P/E multiple would result in an adjustment to the estimated fair value of R28.4 million. R December June December 2017 Non-current Current Total

15 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED) The current portion of the investment has been determined using the best estimate of the proceeds on the part-disposal, based on the information available at 31 December Friedshelf (non-current) During the period under review, the investment was reduced by R34.2 million as a result of a corresponding capital distribution to Stellar Capital of the same amount. As at 31 December 2018, the estimated fair value of the investment is supported by the remaining net asset value of the group entities as the basis for the estimated fair value. A reasonable possible increase/decrease by 10% in the net asset value by would result in an increase/decrease in the estimated fair value of R3.5 million. Praxis (non-current) As at 31 December 2018, the fair value of the investment is based on an estimated sustainable NPAT of R7.3 million and a P/E multiple of 7.4 times, both of which are unchanged from June A reasonable possible change of 10% in either the estimated sustainable NPAT or the multiple used would result in an adjustment to the estimated fair value of R2.1 million. The Company has pledged and ceded in securitatem debiti to the GSL Fund the shares held in Praxis as a continuing general covering collateral security in respect of amounts owed by Praxis. Greenpoint Capital (non-current) As at 31 December 2018, the fair value of the investment is based on an estimated sustainable NPAT of R0.6 million and a P/E multiple of 8.6 times, both of which are unchanged from June A reasonable possible change of 10% in either the estimated sustainable NPAT or the multiple used would result in an adjustment to the estimated fair value of R0.3 million Inyosi Solutions (non-current) As at 31 December 2018, the fair value of the investment is based on an estimated sustainable NPAT of R1.0 million and a P/E multiple of 6.6 times, both of which are unchanged from June A reasonable possible change of 10% in either the estimated sustainable NPAT or the multiple used would result in an adjustment to the estimated fair value of R0.5 million. Amecor (current) As at 31 December 2018, the fair value of the investment is based on an estimated sustainable EBITDA of R64.2 million and an EV/EBITDA multiple of 6.2 times, both of which are unchanged from June A reasonable possible change of 5% in either the estimated sustainable EBITDA or the multiple used would result in an adjustment to the estimated fair value of R19.9 million. Tellumat and Amalinde Technologies (current) Following the decision to exit both investments taken in the previous financial year, Stellar Capital is currently considering a piecemeal exit approach. As at 31 December 2018, the fair value of the investments in Tellumat and Amalinde Technologies (previously Masimong Technologies), which owns 51% of Tellumat, are based on this approach. This represents a change in estimate since June 2018 when the fair value was based on an estimated sustainable group EBITDA of R20.9 million and an EV/EBITDA multiple of 5.3 times. In accordance with the Group s accounting policy, the primary valuation method used is the sustainable earnings multiple, unless this is not considered to be appropriate. The estimated fair value of the divisions of Tellumat which are engaged in active exit strategies via a sale process are based on a total estimated sustainable EBITDA of R13.7 million and an EV/EBITDA multiple of 5.3 times (consistent with previous periods). The remaining divisions have on a conservative basis been based on the estimated recoverability of these divisions through a net asset value realisation rather than a sale process. 13

16 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED) A reasonable possible change of 10% in either the estimated sustainable EBITDA or the multiple would result in an adjustment to the estimated fair value of R3.5 million for Tellumat and R3.7 million for Amalinde Technologies. A reasonable possible change of 10% in the estimated net asset value realisation would result in an adjustment to the estimated fair value of R1.7 million for both Tellumat and Amalinde Technologies. Greenpoint Funds (non-current and current) As at 31 December 2018, Stellar Capital indirectly holds R106.6 million worth of B Units in the Greenpoint Specialised Lending (GSL) Fund and R10 million worth of B Shares in the newly established Greenpoint Special Opportunities (GSO) Fund and directly holds R366 million worth of B Shares in the Greenpoint Senior Debt (GSD) Fund. The fair values of the investments in the Greenpoint Funds are determined with reference to the B Unit or B Share values as determined by the fund manager (Greenpoint Capital). The investment in the GSL Fund has decreased from R125.1 million in June 2018 as a result of redemptions of R18.5 million during the period. The non-current investments in the GSL and GSO Funds are held via a preference share in a 100% held subsidiary of Friedshelf. As at 31 December 2018, the GSD Fund holds 366 Stellar Capital preference shares (with a face value of R366 million), of which 300 have been subordinated in favour of other preference shareholders. As the Stellar Capital preference shares are to be redeemed by no later than 31 May 2019, the investment has been classified as current. Stellar International (current) The functional currency of Stellar International is the US Dollar. As at 31 December 2018, the fair value of the investment has been estimated by using the price of recent investment valuation method and the respective acquisition prices, along with the balance of cash, have been converted to Rands using the foreign exchange spot rates on 31 December Level 3 investments With the exception of Torre, a listed entity, all portfolio companies are classified as Level 3. The Board of Directors has approved the valuation methodologies used by management for Level 3 investments. The Company receives the latest available reports from portfolio companies at each reporting date, either in the form of audited financial statements or unaudited management accounts, which are then used in the valuation techniques. The table below shows the reconciliation of Level 3 movements: R December June December 2017 Opening balance Additions Disposals ( ) (1 000) - Fair value movements (23 438) (58 558) (55 387) Fair value adjustments resulting from capital distributions (42 688) (83 835) (56 833) Closing balance Transfers to Level 3 occur in instances where management assesses that the quoted market price of a listed investment is not representative fair value at the measurement date. Similarly, transfers from Level 3 occur where previously management assessed that the quoted market price of a listed investment was not representative of fair value, but where a change in factors results in management concluding that the quoted market price is considered to be an appropriate basis for estimating fair value. There were no transfers between levels during the period under review. 14

17 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED) 8. FAIR VALUE ADJUSTMENTS Unaudited 6 month Audited 12 month Unaudited 6 month period ended period ended period ended R December June December 2017 Fair value movements on listed investments ( ) ( ) Torre ( ) ( ) MRI Fair value movements on unlisted investments (23 589) (54 654) (52 779) Prescient Friedshelf - (12 816) - Praxis - (29 671) (29 671) Greenpoint Capital - (1 207) - Inyosi Solutions Amecor Tellumat (12 053) (32 828) (27 896) Amalinde Technologies (12 368) (34 532) (29 151) Stellar International (769) Other financial assets (27) Fair value adjustments resulting from capital distributions ( ) (83 835) (56 833) Total ( ) ( ) 9. DIVIDEND REVENUE Unaudited 6 month Audited 12 month Unaudited 6 month period ended period ended period ended R December June December 2017 Capital distributions Torre Friedshelf Greenpoint Capital Friedshelf (GSL Fund redemptions) Earnings distributions Torre Prescient Greenpoint Capital Inyosi Solutions Amecor Greenpoint Senior Debt Friedshelf (GSL Fund returns) Total

18 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (CONTINUED) 10. RELATED PARTY TRANSACTIONS Related party transactions are entered into in the ordinary course of business and comprise (i) transactions with portfolio companies, including loans advanced/repaid, interest income, dividends received and amounts received or paid in respect of services provided; and (ii) management fees paid to Thunder Securitisations Proprietary Limited (the appointed investment manager to Stellar Capital). 11. CONTINGENT LIABILITIES At the reporting date, the Company has issued limited corporate guarantees in favour of the creditors of Praxis for R32.5 million (R32.5 million as at 30 June 2018). The guarantees provided are subject to 3 months notice of termination. 12. EVENTS AFTER THE REPORTING PERIOD The Board of Directors are not aware of any other events after the reporting date and until the date of approval, which have a material impact on the condensed consolidated interim financial statements as presented. By order of the Board DD Tabata Chairman of the Board 19 February

19 FORWARD LOOKING STATEMENTS Any forward-looking statements included in this results announcement involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Group to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Any reference to forecast information included in this results announcement does not constitute an earnings forecast and has not been reviewed or reported on by the Group s external auditors. 17

20 DIRECTORS DD Tabata (Chairman)*, PJ Van Zyl (Chief Executive Officer), S Graham (Chief Financial Officer), CJ Roodt#, MM Ngoasheng*, MVZ Wentzel*, L Potgieter*, HC Steyn^, PJ Bishop^ #Lead Independent non-executive *Independent non-executive ^Non-executive COMPANY SECRETARY Wilma Dreyer REGISTERED OFFICE AND BUSINESS ADDRESS Fourth Floor The Terraces 25 Protea Road Claremont Cape Town 7708 POSTAL ADDRESS Suite 229 Private Bag X1005 Claremont Cape Town 7735 TRANSFER SECRETARIES Computershare Investor Services Proprietary Limited SPONSOR Rand Merchant Bank (a division of FirstRand Bank Limited) /// DESIGN AND LAYOUT BY ONE HUNDRED PERCENT / DESIGN & BRAND CONSULTANCY /