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Abridged Audited Group Results for the year ended 31 March 2013 and Notice of AGM
TRUSTCO
Incorporated in the Republic of Namibia
(Registration number 2003/058)
NSX share code: TUC
JSE share code: TTO
ISIN: NA000A0RF067
("the Company" or "the Group" or "Trustco")
Abridged Audited Group Results for the year ended 31 March 2013
Abridged Consolidated Statement of Financial Position
as at 31 March 2013
31 March 2013 31 March 2012 Change
Notes NAD000 NAD000 %
ASSETS
Non-current assets
Property, plant and equipment 4 179 266 160 502 11.7
Investment property 5 344 247 317 990 8.3
Intangible assets 6 232 650 261 478 (11.0)
Deferred income tax assets 78 183 73 136 6.9
Mortgage loans 7 20 070 – 100
Educational micro loans advanced 8 204 426 150 115 36.2
Other loans 5 692 24 566 (76.8)
Total non-current assets 1 064 534 987 787 7.8
Current assets
Short term portion of educational micro loans advanced 8 127 988 99 804 28.2
Short term portion of other loans advanced 1 160 804 44.3
Finance lease receivable – 457 (100)
Amounts due from related parties 15 8 482 – 100
Short term portion of mortgage loan book 7 1 377 – 100
Inventories 10 420 12 623 (17.5)
Trade and other receivables 9 271 182 317 425 (14.6)
Current income tax assets 860 189 355.0
Cash and cash equivalents 46 924 101 000 (53.5)
Total current assets 468 393 532 302 (12.0)
Total assets 1 532 927 1 520 089 0.8
EQUITY AND LIABILITIES
Capital and reserves
Share capital 10 169 545 162 645 4.2
Share premium 10 24 600 – 100
Deemed treasury shares 11 – (3 840) (100)
Vendor shares 12 14 976 14 976 –
Contingency reserve 4 610 2 970 55.2
Put options (52 832) (52 832) –
Revaluation reserves 21 797 16 806 29.7
Foreign currency translation reserve 1 869 – 100
Distributable reserves 783 565 772 580 1.4
Total capital and reserves 968 130 913 305 6.0
Non-current liabilities
Long term liabilities 13 288 717 211 931 36.2
Other liabilities 1 590 257 518.7
Deferred income tax liabilities 33 231 31 148 6.7
Policyholders' liability under insurance contracts 16 587 10 684 55.3
Total non-current liabilities 340 125 254 020 33.9
Current liabilities
Current portion of long–term liabilities 13 40 764 34 117 19.5
Current portion of other liabilities 4 516 2 622 72.2
Amounts due to related parties 15 – 1 413 (100)
Trade and other payables 14 129 154 256 323 (49.6)
Technical provisions 20 558 17 917 14.7
Current income tax liabilities 29 116 28 603 1.8
Bank overdraft 564 11 769 (95.2)
Total current liabilities 224 672 352 764 (36.3)
Total equity and liabilities 1 532 927 1 520 089 0.8
Abridged Consolidated
Statement of Comprehensive Income
for the year ended 31 March 2013
For the year For the year
ended ended
31 Mar 2013 31 Mar 2012 Change
Notes NAD000 NAD000 %
Insurance premium revenue 150 710 126 302 19.3
Revenue 444 529 587 002 (24.3)
Total revenue 595 239 713 304 (16.6)
Cost of sales (240 194) (320 368) (25.0)
Gross profit 355 045 392 936 (9.6)
Investment income 3 849 24 509 (84.3)
Fair value gains and losses 5 26 304 97 101 (72.9)
Other income 17 14 080 4 823 191.9
Insurance benefits and claims (26 717) (18 872) 41.6
Transfer to policyholder liabilities (5 903) (2 377) 148.3
Change in unearned premium provision (981) (492) 99.4
Administrative expenses 17 (294 167) (202 743) 45.1
Finance costs (27 814) (30 092) (7.6)
Profit before taxation 43 696 264 793 (83.5)
Taxation (4 312) (24 969) (82.7)
Profit for the period 39 384 239 824 (83.6)
Other comprehensive income, net of tax 8 138 1 392 484 .6
Item that will not be subsequently reclassified to profit or loss
Revaluation of property, plant and equipment 6 269 1 392 350.4
Items that may be subsequently reclassified to profit or loss
Foreign currency translation adjustment 1 869 – 100
Total comprehensive income for the period 47 522 241 216 (80.3)
Earnings per shares:
Basic earnings per share (cents) 3 5.41 35.08 (84.6)
Diluted earnings per share (cents) 3 5.38 34.84 (84.6)
Abridged Consolidated Statement of Changes in Equity
for the year ended 31 March 2013
Foreign
currency Deemed
Share Share translation treasury Put Vendor Contingency Revaluation Retained
capital premium reserve shares options shares reserve reserve earnings Total
NAD000 NAD000 NAD000 NAD000 NAD000 NAD000 NAD000 NAD000 NAD000 NAD000
Balance at 1 April 2011 162 645 – – (18 731) – 14 976 2 361 15 414 556 116 732 781
Transfer to contingency
reserve – – – – – – 609 – (609) –
Sale of deemed treasury
shares – – – 14 891 – – – – 3 076 17 967
Put option issued – – – – (52 832) – – – – (52 832)
Dividends for the period – – – – – – – – (25 827) (25 827)
Total comprehensive
income for the period – – – – – – – 1 392 239 824 241 216
Balance at 31 March 2012 162 645 – – (3 840) (52 832) 14 976 2 970 16 806 772 580 913 305
Balance at 1 April 2012 162 645 – – (3 840) (52 832) 14 976 2 970 16 806 772 580 913 305
Share issue 6 900 24 600 – – – – – – 31 500
Transfer to contingency
reserve – – – – – – 1 640 – (1 640) –
Sale of deemed treasury
shares – – – 3 840 – – – – 1 879 5 719
Transfer between reserves – – – – – – – (1 278) 1 278 –
Dividends for the period – – – – – – – – (29 916) (29 916)
Total comprehensive
income for the period – – 1 869 – – – – 6 269 39 384 47 522
Balance at 31 March 2013 169 545 24 600 1 869 – (52 832) 14 976 4 610 21 797 783 565 968 130
Abridged Consolidated Statement of Cash Flows
for the year ended 31 March 2013
Year ended Year ended
31 March 2013 31 Mar 2012 Change
NAD000 NAD000 %
Cash flow from operating activities
Cash generated by operations before working capital changes 96917 178 114 (45.6)
Changes in working capital (76332) (80 703) (5.4)
Interest received 3849 24 509 (84.3)
Finance costs (27814) (30 092) (7.6)
Finance lease assets 457 - 100.0
Other loans advanced (346) - (100.0)
Educational loans advanced (212 861) (154 279) 38.0
Educational loans repaid 129 222 113 825 13.5
Mortgage loans advanced (6 008) – (100.0)
Mortgage loans repaid 2 097 – 100.0
Taxation paid (13 600) (12 848) 5.9
Net cash flow from operating activities (104 419) 38 526 (371.0)
Cash flow from investing activities
Additions to property, plant and equipment (23 250) (12 095) 92.2
Additions to investment properties (3 364) (1 604) 109.7
Additions to intangible assets (10 326) (24 081) (57.1)
Proceeds on sale of assets at fair value through profit and loss – 32 300 (100.0)
Additions to assets at fair value through profit and loss – (4 223) (100.0)
Proceeds on sale of investment property 1 600 17 400 (90.8)
Proceeds on sale of property, plant and equipment 6 917 1 160 496.3
Net cash flow from investing activities (28 423) 8 857 (420.9)
Cash flow from financing activities
Public issue of ordinary shares 31 500 – 100
Sale of deemed treasury shares 5 719 17 967 (68.2)
Proceeds from long-term liabilities 83 433 13 830 503.3
Payments to related parties (9 895) (7 413) 33.5
Increase in policyholder under insurance contracts 5 903 2 377 148.3
Dividends paid (29 916) (25 827) 15.8
Proceeds/(repayment) of other liabilities 3 227 (582) (654.5)
Net cash flow from financing activities 89 971 352 25459.9
Net change in cash and cash equivalents (42 871) 47 735 (189.8)
Cash and cash equivalents at the beginning of the period 89 231 41 496 115.0
Cash and cash equivalents at the end of the period 46 360 89 231 (48)
Notes to the Abridged Audited Annual Financial Statements
for the year ended 31 March 2013
1 Basis of preparation
The abridged annual consolidated financial statements, which comprise the abridged consolidated statement of financial position as at 31 March 2013, and the
abridged consolidated statement of comprehensive income, changes in equity, cash flow statement for the year ended 31 March 2013, and related notes are
derived from the audited consolidated financial statements of Trustco Group Holdings Ltd for the year ended 31 March 2013 which have been audited by
the group's independent auditors BDO. The auditor's unmodified report is available for inspection at Trustco's registered offices.
The abridged consolidated financial information was compiled under the supervision of the group financial director, Ryan McDougall, CA (SA),
CA (Namibia).
The group's audited financial statements and annual integrated report are available for inspection at the company's registered office. Electronic copies are
available on the
company's website (www.tgi.na).
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.
These abridged financial statements do not contain all the information and disclosures required by IFRS in the annual financial statements.
Accounting policies used in the abridged group financial statements are the same as those used to prepare the group annual financial statements,
and consistent with the prior year.
31 Mar 2013 31 Mar 2012 Change
NAD000 NAD000 %
2 Headline earnings
Profit attributable to ordinary shareholders 39 384 239 824 (83.6)
Adjustments net of taxation: (5 521) (101 284) (94.5)
Loss/ (profit) on disposal of property, plant and equipment 774 (156) (596.2)
Fair value adjustments on investment properties (26 304) (97 196) (72.9)
Impairment of intangible assets 28 406 – 100.0
Impairment of property, plant and equipment – 700 (100.0)
Profit on disposal of investment property (180) (4 447) (96.0)
Tax effect (8 217) (185) 4 341.6
Headline earnings 33 863 138 540 (75.6)
31 Mar 2013 31 Mar 2012 Change
(cents) (cents) %
3 Earnings, headline earnings and dividends per share
Earnings per share 5.41 35.08 (84.6)
Diluted earnings per share 5.38 34.84 (84.6)
Headline earnings per share 4.65 20.27 (77.0)
Diluted headline earnings per share 4.62 20.12 (77.0)
Dividends declared per share (cents) 4.15 3.75 (10.7)
Dividends paid per share (cents) 4.15 3.75 (10.7)
4 Property, plant and equipment
During the year the group acquired property, plant and equipment (PPE) at a cost of NAD23.3m (2012: NAD12.1m). The closing net book value of
PPE as at 31 March 2013 was NAD179.3m (31 March 2012: NAD160.5m). Disposals at carrying value of NAD7.7m were made (2012: NAD1.3m).
5 Investment properties
During the year the group acquired investment property at a cost of NAD3.4m (2012: NAD1.6m) and recognised a revaluation gain of NAD26.3m
(2012: NAD97.1m).The fair value of Investment properties as at 31 March 2013 was NAD344.2m (31 March 2012: NAD318.0m). Disposals at carrying
values of NAD1.4m were made (2012: NAD13.0m).
6 Intangible assets
A loss on the impairment of intangible assets was recognised in the current financial period amounting to NAD28.4m (2012: NAD2.4m).
31 Mar 2013 31 Mar 2012 Change
NAD'000 NAD'000 %
7 Mortgage loans advanced
Loans advanced (including transaction costs) 6 008 – 100.0
Reclassification from other loans 17 536 – 100.0
Payments received (2 097) – (100.0)
Closing balance 21 447 – 100.0
The group has chosen to enter into mortgage loan agreements with certain purchasers of the Lafrenz development. These loans are issued to the
borrowers on commercial market-related terms and are subject to credit approval processes by the group.
31 Mar 2013 31 Mar 2012 Change
NAD'000 NAD'000 %
8 Educational loans advanced
Educational loans advanced at the end of the year 348 853 266 055 31.1
Impairment of loans at the end of the period (16 439) (16 136) 1.9
Closing balance 332 414 249 919 33.0
9 Trade and other receivables
Property sales receivables 155 616 218 001 (28.6)
Other receivables 30 800 33 620 (8.4)
Prepayments 4 303 3 350 28.4
State: other taxes receivable 4 994 8 337 (40.1)
Trade receivables 75 469 54 117 39.5
Total 271 182 317 425 (14.6)
Included in other receivables is an amount of NAD42.1m that relates to royalties due by Econet in Zimbabwe. Trustco has instituted legal action to
recover the royalties. Litigation is ongoing, but the directors are confident that the amount is fully recoverable.
Number of Share
shares Share capital premium Total
10 Share capital 000 NAD'000 NAD'000 NAD'000
Authorised
As at 31 March 2013: 2 500 000 000 ordinary par value shares of NAD0.23 2 500 000 575 000 – 575 000
As at 31 March 2012: 2 500 000 000 ordinary par value shares of NAD0.23 2 500 000 575 000 – 575 000
Issued and fully paid up
As at 31 March 2013: 737 142 ordinary par value shares of NAD0.23 737 142 169 545 24 600 194 145
As at 31 March 2012: 707 142 ordinary par value shares of NAD0.23 707 142 162 645 – 162 645
During the year 30 000 000 new shares were issued at a premium of NAD0.82 (par value NAD0.23) (2012: nil).
11 Treasury shares
There were no treasury shares held by the company.
12 Vendor shares
The carrying value of vendor shares as at 31 March 2013 is NAD14.98m (31 Mar 2012: NAD14.98m). This amount is held as a contingent payment
on settlement of purchase price to DEX. Total amount of shares to be issued upon settlement of the overdraft facility of NAD 19.4 million,
is 4.789 million shares.
13 Borrowings & facilities
A new Domestic Medium Term Note Programme was listed on the JSE to the value of R1bn. The first tranche of bond has, as at 31 March 2013,
not yet been issued. The first tranche of the bond will carry a floating rate linked to JIBAR. The value of other borrowings as at 31 March 2013 is
NAD329.5m (2012: NAD246m).
31 Mar 2013 31 Mar 2012 Change
NAD000 NAD000 %
14 Trade and other payables
Trade creditors 13 088 29 823 (56.1)
State: Other taxes due 23 049 30 325 (24.0)
Other payables 11 857 16 206 (26.8)
Put option liability 52 032 52 832 (1.5)
Insurance premiums, brokerage and administered claims payable 29 128 127 137 (77.1)
Total 129 154 256 323 (49.6)
Insurance premiums, brokerage and administered claims payable relate to amounts owing in terms of service contracts under Trustco Financial
Services arrangements.
31 Mar 2013 31 Mar 2012 Change
NAD'000 NAD'000 %
15 Amounts due by / (due to) related parties
Loan due by/ (due to) Next Investments (Pty) Ltd 8 482 (1 413) (700.3)
The sole shareholder of Next Investments (Pty) Ltd ("Next") is Quinton Van Rooyen, the Group CEO and majority shareholder (53.25%) of Trustco Group
Holdings Ltd. The loan to Next is unsecured, bears interest at 9.25% and is repayable in 12 months.
16 Transactions with related parties
Next Investments (Pty) Ltd (17 075) (3 318) 414.6
Charter income received 369 69 434.8
Rent received 247 640 (61.4)
Advertising income received 4 – 100.0
Facility fee paid (4 598) (3 108) 47.9
Interest paid – (919) (100.0)
Management fees paid (13 097) – 100.0
Northern Namibia Development Company (Pty) Ltd ("NNDC") 408 292 39.7
Charter income received 406 282 44.0
Advertising income received 2 10 (80.0)
The sole shareholder of NNDC is Quinton van Rooyen, the Group MD and majority shareholder of Trustco Group Holdings Ltd. Quinton van Rooyen
is not directly remunerated by the Group. Dividends received by virtue of his shareholding as well as his interest in Next and NNDC have been fully
disclosed to the remuneration committee. Quinton Z van Rooyen (Jnr) is an employee of Next.
In terms of a management agreement with Next Investments, the following is payable annually to Next by Trustco after completion of the financial
statement audit:
- 0.5% of Turnover;
- 1% of the headline earnings; and
- 1% of the basic earnings of the company.
If the annual growth of any of the above categories excess inflation by more than 5% then the payment is doubled. The above calculation is halved if
this target is not met. Next may elect to waive any or all of its management fees due at the discretion of its management.
17 Profit before tax
This is arrived at after taking into account the following:
Profit on foreign exchange differences 4 078 – 100.0
Audit fees (3 300) (1 488) (121.8)
(Loss)/profit on disposal of property, plant and equipment (774) 156 (596.2)
Depreciation, amortization and impairment
- Property, plant and equipment (8 142) (6 295) (29.3)
- Intangible assets (39 154) (4 761) (722.4)
Bad debts written off and provision for doubtful debts (2 402) 1 726 (239.2)
18 Directorate
Details of appointment and resignations of directors and other officers in the year under review were as follows:
Name Position Appointment Resignation
J Mahlangu Director 04 Feb 2013
R Taljaard Director 05 Jul 2012
R McDougall Director 31 Mar 2013
A L Bock Director 31 Mar 2013
M A Gebhardt Company secretary 30 Nov 2012
D J Steyn Company secretary 03 Dec 2012
19 Dividends
The Board of Directors recommended on 2 November 2012 that an interim dividend of 1.90 cents per share be declared for the six months ended 30 September 2012.
The dividend was paid on 14 December 2012.
The board of directors recommended that no final dividend for the year ended 31 March 2013 would be declared.
20 Litigation settlements & contingent liabilities
The contract with Econet in Zimbabwe expired during February 2012. The Group has recognised revenue as per the limited data provided by Econet
while the legal process to recover damages and outstanding royalties continues. No liability was raised in respect of the insurance premiums for the
period 1 June 2011 to 17 February 2012 as the group believes that they do not have a constructive obligation. In addition, no asset was raised as a
result of the loss of income for the remainder of the contract period, subsequent to 30 September 2011.
Litigation continues on the above matter and during the 2013 financial year various legal opinions were sought on the recoverability of the claims as
well as the merits of a possible obligation arising to Econet. Based on these opinions, the group has not chosen to impair the related financial asset or
quantify any possible obligation.
21 Business combinations
On the 3rd June 2013, the group acquired the rights to various leased premises, accompanying staff and PPE from Real People (Pty) Ltd. In terms of
IFRS 3: Business Combinations, the acquisition meets the definition of a business combination. The business which forms a set of integrated branch
outlets and skilled workforce across South Africa was acquired to increase the presence of the group in South Africa and facilitate sales of Trustco
products through direct outlets.
The Group will settle the transaction with 2 equal payments for R4.1m and a third and final payment to be determined based on the actual transfer
date value of all the agreed assets and obligations less the difference between R9m and the actual monthly operating expenses of the entity for the
months of June and July 2013, the value of such final payment is expected to be similar to the first two payments. All consideration is by way of a
cash settlement.
Condensed Segmental Analysis
for the year ended 31 March 2013
Micro
insurance Micro
(Namibia) Finance Property Zimbabwe South Africa Group
NAD '000 NAD '000 NAD '000 NAD '000 NAD '000 NAD '000
2013
Segment revenue – 141 642 236 010 499 175 717 553 868
Inter segment revenue – – (109 339) (109 339)
– 141 642 126 671 499 175 717 444 529
Insurance income 150 013 – – - 697 150 710
External revenue 150 013 141 642 126 671 499 176 414 595 239
Segment result 49 374 18 401 62 008 (1 169) (55 614) 73 000
Inter segment 17 624 9 377 (43 317) – (17 299) (33 615)
Profit for the year 66 998 27 778 18 691 (1 169) (72 913) 39 385
Segment assets 170 559 455 649 675 102 49 889 181 728 1 532 927
Segment liabilities 106 809 307 898 137 178 – 12 912 564 797
Capital expenditure 4 969 5 797 21 202 – 4 761 36 729
Depreciation 1 923 2 244 2 299 – 1 676 8 142
Impairment losses - - - - 28 406 28 406
Amortisation of intangible assets 1 238 1 892 1 444 3 199 2 975 10 748
2012
Segment revenue – 114 566 211 514 29 076 309 654 664 810
Inter segment revenue – – (77 808) – – (77 808)
– 114 566 133 706 29 076 309 654 587 002
Insurance income 126 302 – – – – 126 302
External revenue 126 302 114 566 133 706 29 076 309 654 713 304
Segment result 77 814 39 870 161 693 22 819 7 033 309 229
Inter segment (17 932) (14 428) (38 441) – 1 396 (69 405)
Profit for the year 59 882 25 442 123 252 22 819 8 429 239 824
Segment assets 153 547 346 943 723 444 32 449 263 706 1 520 089
Segment liabilities 110 238 217 334 154 442 – 124 770 606 784
Capital expenditure 11 550 15 475 46 475 – – 73 500
Depreciation 1 517 1 811 1 875 – 1 092 6 295
Amortisation of intangible assets 2 203 1 274 984 – 300 4 761
22. Notice of AGM
The full integrated report including a notice of annual general meeting will be uploaded on the Company’s website tomorrow, 27 June 2013 and posted to shareholders of
the Company who were recorded as such in the Company's securities register on Friday, 21 June 2013.
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 Wednesday, 25 September 2013 at 12:00 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, 13 September 2013. S hareholders are advised of the following
applicable dates, last date for lodging forms of proxy for South African shareholders is Friday 20 September 2013 at 17H00 and Monday 23 Septembe r 2013 at 12H00 for
all other shareholders. The last date to trade to be eligible to vote is Friday 6 September 2013.
By order of the board
DJ Steyn
Company Secretary
26 June 2013
JSE Sponsor
Sasfin Capital
(a division of Sasfin Bank Limited)
NSX Sponsor
IJG (Pty) Limited
Date: 26/06/2013 05:22:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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