Wrap Text
Audited consolidated results for the twelve months ended 28 February 2014
FINBOND GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2001/015761/06)
Share code: “FGL” ISIN: ZAE00013895
(“Finbond” or “the Company” or “the Group")
AUDITED CONSOLIDATED RESULTS FOR THE TWELVE MONTHS ENDED 28 FEBRUARY
2014
Executive Overview
The directors are pleased to present the financial results of the
Finbond Group for the twelve months ended 28 February 2014.
During the twelve months under review, Finbond delivered a set of
solid results increasing Net Profit After Tax by 78%, Headline
Earnings by 90%, Total Assets by 95% and Deposits by 324%. These
results were achieved in extremely difficult and challenging market
conditions.
We made further good progress with regards to the realization of its
vision “to be the leading Mutual Bank in South Africa improving the
quality of life of our clients, through their participation in saving
together, growing together and ownership of their own community
bank”. This included a number of achievements and significant
developments for Finbond:
* Operating profit from continuing operations increased by 121.3% to
R46.8 million (Feb 2013: R21.2 million).
* Profit for the period attributable to owners of the company
increased 78.1% to R36.9 million (Feb 2013: R20.7 million).
* Earnings before interest, taxation, depreciation and amortization
(EBITDA) increased 93.5% to R104.3 million (Feb 2013: R53.9
million).
* Revenue from continuing operations increased 42.6% to R283.9
million (Feb 2013: R199.0 million).
* Basic earnings per share increased 70% to 6.1c (Feb 2013: 3.6c).
* Headline earnings per share increased 81% to 5.6c (Feb 2013:
3.1c).
* Total assets increased 94.8% to R 1,085.8 billion (Feb 2013: R557
million).
* Value of loans advanced increased by 32.2% to R539.3 million (Feb
2013: R407.9 million).
* Cash, cash equivalents and liquid investments increased by 470.0%
to R500.5 million (Feb 2013: R87.8 million).
* Gross loans and advances increased by 79.5% to R298.7 million (Feb
2013: R166.5 million).
* Cash received from customers increased by 26% to R709.5 million
(Feb 2013: R563.2 million)
* Increased fixed term retail deposits by 324.2% to R 695.9m (Feb
2013 R164 million).
* Became a participant in the South African Multiple Settlement
Option System environment (SAMOS).
* Was granted full membership of the Payments Association of South
Africa (PASA) and its various Payment Clearing Houses.
* Was granted a principle Mastercard License by Mastercard
International.
* Was granted permission to join the Society for Worldwide Interbank
Financial Telecommunication (SWIFT).
* Transferred its listing to the main Board of the Johannesburg Stock
Exchange following a sector reclassification from “consumer
finance” to “banks”.
During the period under review we further expanded our Compliance,
Internal Audit, Information Technology, Human Capital Development and
Risk and Analysis Departments in order to effectively manage Finbond
Mutual Bank's Risk Management Framework. The bulk of the increased
expenses during the period under review relates to increasing
capacity and improving risk management functions and processes within
Finbond Mutual Bank.
We remain focused on executing the Group’s strategy and top business
priorities namely optimal capital utilization, earnings growth,
strict upfront credit scoring, good quality sales, effective
collections, cost containment and training and development of staff
members. This enabled us to achieve overall strong operational
results despite the current difficult and challenging business
environment.
Finbond continues to manage for the long term and to invest in
people, training, information technology, banking systems, compliance
systems as well as in enhanced collection strategies and systems, in
order to build a sustainable, professional business.
Finbond Mutual Bank
A “Mutual Bank”, also known as a “Mutual Savings Bank”, is a bank
which is operated on a mutual bank model, with the specific goal of
encouraging savings and providing benefits to its depositors.
Finbond Mutual Bank, with its 617 staff members and 200 branches,
specializes in the design and delivery of unique value and solution
based savings and credit solutions tailored around depositor and
borrower requirements rather than institutionalized policies and
practices. We exist to improve and transform the lives and
livelihoods of our clients by availing them of modern inclusive
banking products and services that benefit and empower them.
Finbond Mutual Bank conducts its business through two divisions
focused on:
1. Short and Medium Term Micro Credit Products; and
2. Investment and Savings Products.
Micro Credit Portfolio
The overall gross loan book reflected strong positive growth of 79.5%
ending the twelve month period at R298.7 million (Feb 2013: R166.5
million).
Total segment revenue from Finbond’s Micro Finance activities, made
up of interest, fee and insurance income (portfolio yield) increased
35.1% to R262.1 million (Feb 2013: R194 million).
During the period under review Finbond offered 1 month – 24 month
micro loans from R100 - R20,000 with an average loan size of R1,732
and an average tenure of 3.34 months (102 days). Given the short
term nature of Finbond’s products, Finbond’s loan portfolio is cash
flow generative and a good source of internally generated liquidity.
The whole loan portfolio turns nearly 4 times a year. This is a key
differentiator from longer term lenders. By way of example: If a
longer term lender’s average tenure is 36 months with a book size of
R600 million, that lender will collect R200 million cash per year and
R600 million over three years. If Finbond’s book is R600 million,
Finbond will collect approximately R2.4 billion in cash per year and
more than R7.2 billion in cash over three years.
For the twelve months ended February 2014 Finbond granted R539.3
million worth of loans and received cash payments of R709.5 million
from customers.
Finbond’s average loan period is significantly shorter than our
larger competitors and our average loan size significantly smaller.
Given this conservative approach, Finbond does not have any exposure
to the 36 – 84 month, R30,000 – R180,000 long term unsecured lending
market that saw disproportionate growth over the past 18 - 36 months
and that caused significantly increased write offs and bad debts.
Shorter term loans offer lower risk as consumers are more likely to
pay them back as opposed to longer term loans.
Finbond’s micro credit portfolio is further also not exposed to any
concentration risk and does not have any significant exposure any
specific employer or industry.
Strict Upfront Credit Scoring
Over the past twelve months Finbond continued to improve on and apply
strict upfront credit scoring and affordability criteria. The credit
scores on the various products are monitored on a monthly basis.
Detailed affordability calculations are also performed prior to
extending any loans in order to determine whether the client can in
fact afford the loan repayments.
Finbond’s lending practices have been consistently conservative over
the past number of years. While other micro-lenders in the market may
have doubled or tripled debtors books two and three years ago,
Finbond did not. In fact two and three years ago Finbond saw very
conservative growth in the loan portfolio. Finbond did not have
liberal lending polices two and three years ago that now require
adjustment.
Finbond has been consistently conservative and rejection rates remain
higher than that of our major competitors even after their recent
tightening of lending criteria. Rejection rates stood at between 39%
and 57% for our 3 – 6 month product range and 82% - 94% for our 12 –
24 month product range at the end of February 2014.
Bad Debts
Conservative lending practices, strict upfront credit scoring
supported by robust collection strategies and processes ensured
better that industry bad debts.
Finbond’s Net Impairment Loss Ratio improved to 12.1% (Feb 2013: 15%)
this financial year. Finbond’s Net Impairment as a percentage of
expected instalments amounted to 6.3% (Feb 2013: 5.2%) and Net
Impairment as a percentage of cash received (which is more
conservative than instalments due) stood at 7.3% at the end of
February 2014 (Feb 2013: 5.8%). The best measurement of arrears and
impairments on the short term products is against instalments due and
not outstanding balances, because a large part of a short term loan
is repaid before month-end/year-end and is therefore not reflected on
the balance sheet. Computations based on the outstanding balance
therefore distort this ratio on short term products.
Loan loss reserve, also referred to as the risk coverage ratio
(impairment provision/Portfolio at Risk: 90 days in arrears and
longer) is more conservative at 102.5% (Feb 2013: 95.6%), which is an
indication of a microfinance institution’s ability to cope with
estimated loan losses.
Liquidity
Finbond’s liquidity position at the end of February 2014 reflects
R86.8 million cash in bank (Feb 2013: R63.0 million). Cash, cash
equivalents and liquid investments increased by 470.0% to R500.5
million (Feb 2013: R87.8 million).
Cash Received as a percentage of Cash Granted for the period of March
2013 to February 2014 averaged 132%.
By the end of February 2014 the deposit book had grown to R 695.9
million. The average deposit size is R328,017, the average term 28,8
months and the average interest rate is 9.13%.
Finbond is not exposed to the uncertainty that accompanies the use of
corporate call deposits as a funding mechanism since Finbond only
accepts 6 – 72 month fixed and indefinite term deposits. Given the
long term nature of Finbond’s liabilities (fixed term deposits with
average term of 28,8 months) and short term nature of its assets
(short term micro loans with an average term just more than 3
months), Finbond possesses a low risk liquidity structure as a result
of a positive liquidity mismatch.
Capital Position
Finbond follows a conservative approach to capital management and
holds a level of capital which supports its business while also
growing its capital base ahead of business requirements.
Our Capital position remains very strong. Finbond Mutual Bank is well
above its minimum regulatory capital requirements with an excess of R
129 million over and above the R 250 000 000 required by the
Registrar of Banks and an excess of R 274 million over and above the
normal DI 400 required minimum for Mutual Banks.
Although Finbond as a Mutual Bank are not subject to the Basel III
requirements, Finbond already complies with and significantly exceeds
all Basel III requirements set for 2018 and 2019. As at 28 February
2014 Finbond’s:
• liquidity coverage ratio % was 191% [91% more than required from 2019]
• net stable funding ratio % was 511% [411% more than required from
2018]
• capital adequacy ratio % was 36% [25.5% more than required from 2018].
Increasing Footprint
Finbond currently operates through 200 branches in South-Africa of
which 62 are located in Gauteng, 49 in Kwazulu Natal, 34 in the
Western Cape, 23 in the Eastern Cape and 32 in the Free State and
North West.
We intend to open 60-80 branches in the next financial year and
thereafter approximately 40 branches per year for the next five
years.
Providing Inclusive Financial Services
Achieving sustainable and inclusive development in the banking sector
goes hand-in-hand with improving access to financial services,
particularly for the poor and vulnerable.
A significant portion of the adult population in South Africa are
actively seeking banking, saving and credit solutions but remain
largely unattended and underserviced.
There is a need among Finbond’s current customer base and target
market for a Mutual and Savings Bank that specifically caters for
their needs with regards to inter alia the following banking products
and needs:
• Savings accounts that earn interest on small amounts;
• Higher interest on savings deposits than traditional banks, that
actively encourage saving (due to Finbond’s higher margins on
the micro lending it can afford to pay depositors more than the
traditional banks that have low margins can);
• No minimum operating balance;
• Branch Network in rural areas;
• Low monthly bank charges and no cash deposit or cash handling
fees;
• Innovative and modern cash deposits, transfers and drawings;
• Unsecured Loans with credit guarantee insurance;
• Basic Financial Education.
Finbond is well positioned and able to provide much needed, inclusive
Banking services and products to the vulnerable, unbanked, under
banked and previously disadvantaged in line with the principles set
out in Treasuries National Policy Document, “A safer financial sector
to serve South Africa better”, with regards to financial inclusion
and promoting access to financial services.
Growing Market Share
Our share of the short term unsecured market (loans below R 8,000
with a tenure of between 30 days and 180 days) grew to approximately
12.5% and we have an insignificant share of the total R167 billion
unsecured lending market in South Africa.
Given that we are growing from a small base we can keep on growing
for a long time despite the current difficult environment in the
unsecured lending market.
Finbond is well positioned for the implementation of its strategic
growth plans in the micro credit market in South Africa and has
significant growth opportunities over the next five to ten years.
Credit rating
Global Credit Ratings (“GCR”) confirmed Finbond’s BB+ (RSA) Long Term
National Scale Corporate Credit Rating on 11 October 2013 with a
Stable Outlook. GCR increased Finbond’s Short Term Credit Rating to
A3 with a Stable Outlook. According to GCR, the ratings are based on
the following key factors:
- “The ratings are supported by Finbond Group Limited’s (“Finbond” or
“the group”) new operational status as a mutual bank, its growing
franchise value, as well as its sound corporate governance structures
and experienced management team.
- From a structural perspect ive, the group has naturally transitioned
into a more stable growth phase, leveraging off its strengths,
namely: leadership - the management team is recruited from the micro-
loan and banking fraternity, hence has all the hard skills and
expertise to take the business forward and/or respond to challenges;
infrastructure - opting to build scale upfront has made the group
accessible on a country wide basis, whilst also creating a fair
amount of spare capacity; and finally, market prospects – operating
in a growth segment, the group benefits from a steady client demand
flow.
- Operationally, the group’s recent activities have been varied, with
observations thereon categorised as follows: capital adequacy - given
the current level of shareholder participation, the group is
considered suitably capitalised and boasts strong protection ratios
(stress tests also confirm a sufficient buffer over risk minima);
asset quality - notwithstanding the group’s success in transforming
portfolio efficiency, some underlying quality issues remain,
particularly the rate at which loan arrears transition through the
ageing buckets after a failed payment/s. Here too, stress tests
indicate that the group has sufficient resources to withstand and/or
absorb a sudden blowout in bad debts; liquidity – note was taken of
the group’s improved liquidity profile, as reflected in the upgrade
of its short term rating; and profitability - across the board
developments were noted, with the group’s profitability recording a
net improvement, resulting in positive back-to-back income growth.”
Finbond’s national scale corporate credit rating from Moody’s
Investor Services (“Moody’s”) of Ba3.za/NP.za, with a stable outlook
was affirmed in September 2013. In light of the fact that Finbond do
not need two ratings, and do not intend to approach the debt capital
markets in the short to medium term given the current surplus cash
position, we terminated Moody’s Rating Services.
Property Investments
Two Independent valuations by professional valuers registered with
the South African Institute of Valuers were again obtained as at 28
February 2014, as required by IAS 40.
The Independent Valuations revalued Finbond’s property portfolio at
R242.6 million (Feb 2013: R233 million).
The R242.6 million in development properties on Finbond’s Balance
sheet are held as passive long term investments. The intention is to
realize a profit over the medium to long term and to invest the cash
realized into the Micro Finance Business.
Strategic initiatives under way include:
• Developing and rolling out Finbond Mutual Bank, transactional
bank accounts and savings accounts to all its micro credit
clients;
• Developing and rolling out a Cellular Phone Banking Product and
Application;
• Developing and rolling out an Internet Banking Product and
Application;
• Developing and rolling out a Mastercard Debit Card product;
• Growing market share through the increased sale of short and
medium term products, specifically the 30 days, 90 days, 6
months and 12 – 24 month products;
• Further refining, developing and improving all information
technology systems and process in all divisions;
• Expansion of the branch network by 60 – 80 branches in high
growth areas;
• Selective strategic acquisitions.
Prospects
The challenging and difficult macro-economic environment as well as
the adverse market conditions in the markets within which Finbond
operates, are not expected to abate in the short and medium term.
However, we remain confident that we have the required resources and
depth in management to successfully confront and overcome these
various challenges.
We remain positive about our prospects for the future due to
Finbond’s:
• Improvement achieved in earnings and profitability despite
difficult market conditions;
• Improvement achieved in cash generated from operating
activities;
• Management expertise;
• Strong Cash Flow;
• Strong Liquidity and surplus cash position;
• Uniquely positioned 200 Branch Network;
• Superior Asset Quality;
• Access to funding;
• Conservative Risk Management; and
• Growth potential in the Micro Finance and Mutual Banking markets
in the lower end of the market.
Finbond’s strong capital position, significant surplus cash, robust
liquidity and funding profile together with its conservative approach
to risk management, position the business well both in adverse market
conditions and as markets improve.
References to future financial performance included anywhere in this
announcement have not been reviewed or reported on by the group’s
external auditors.
Dividend
Notice is hereby given that a gross ordinary dividend of 2.1 cents
per share (2013: nil) has been declared out of income reserves on 28
March 2014 in respect of the financial year ended 28 February 2014
and is payable to ordinary shareholders in accordance with the
timetable below.
In terms of dividend tax effective since 1 April 2012, the following
additional information is disclosed:
• The local dividend tax rate is 15%;
• STC credits of R12 705 530 equivalent to 2.1 cents per share will be utilised for the full ordinary dividend;
• 605 025 250 shares are in issue;
• The net ordinary dividend is 2.1 cents per share for ordinary
shareholders who are not exempt from dividends tax; and
• Finbond Group Limited’s tax reference number is 9194313145.
Timetable:
Declaration date Friday, 28 March 2014
Last day to trade cum dividend Wednesday, 16 April 2014
Shares commence trading ex dividend Thursday, 17 April 2014
Record date Friday, 25 April 2014
Dividend payment date Tuesday, 29 April 2014
No dematerialisation or rematerialisation of shares will be allowed
for the period from Thursday 17 April 2014 to Friday 25 April 2014,
both dates inclusive.
Dividends are declared in the currency of the Republic of South
Africa. The directors have confirmed that the company will satisfy
the liquidity and solvency requirements immediately after the
payment of the dividend.
AUDITED CONSOLIDATED RESULTS FOR THE TWELVE MONTHS ENDED 28 FEBRUARY-
2014
STATEMENT OF COMPREHENSIVE INCOME
Figures in Rand 2014 2013
Interest income 93 018 672 51 206 846
Interest expense (44 286 052) (20 719 116)
Net interest income 48 732 620 30 487 730
Fee income 112 731 141 94 019 282
Management fee income 20 736 996 7 178 143
Other microfinance income 28 499 859 20 489 146
Operating profit from Cell captive
arrangement
22 804 330 21 840 016
Fair value adjustments 4 957 526 3 100 000
Net commission expense (2 374 768) (1 370 912)
Net impairment charge on loans and
advances
(24 940 770) (19 825 956)
Operating expenses (164 294 444) (134 743 073)
Profit/(loss) before taxation 46 852 490 21 174 376
Taxation 9 934 869 695 597
Total profit and comprehensive income for
the year
36 917 621 20 478 779
Profit attributable to:
Owners of the parent 36 917 621 20 732 776
Non-controlling interest - Continuing
operations - (253 997)
Basic earnings/(loss) per share (cents) 6.1 3.6
RECONCILIATION OF HEADLINE EARNINGS/(LOSS) PER SHARE
Net (loss)/ profit attributable to
ordinary equity holders of the parent 36 917 621 20 732 776
Adjusted for:
Loss/ (profit) on disposal of property,
plant and equipment 92 920 (438 686)
Revaluation of investment properties
(3 288 184) (2 521 333)
Fair value adjustment of investment
properties included in basic earnings (4 042 854) (3 100 000)
Tax effect on re-measurement of items
of a capital nature included in 754 670 578 667
earnings in the current period
Headline profit 33 722 357 17 772 757
Headline earnings/(loss) per share
(cents) 5.6 3.1
Diluted headline earnings/(loss) per
share (cents) 5.6 3.1
STATEMENT OF FINANCIAL POSITION
Figures in Rand 2014 2013
Assets
Cash and cash equivalents 86 759 771 62 970 116
Other financial assets 413 720 500 24 838 584
Loans and other advances to customers 210 988 685 122 434 015
Other receivables 18 132 659 6 317 293
Current tax receivable 3 759 606 -
Property, plant and equipment 22 567 979 16 201 091
Investment property 242 620 028 233 005 882
Goodwill 62 596 218 61 262 303
Deferred tax 24 701 780 30 437 602
Total Assets 1 085 847 226 557 466 886
Equity and liabilities
Equity
Share capital & premium 225 952 568 239 162 377
Reserves 4 875 698 3 913 339
Accumulated profit/ (loss) 99 598 394 62 680 773
Equity attributible to owners of the
Company
330 426 660 305 756 489
Non-controlling interest (824 052) (824 052)
Total equity 329 602 608 304 932 437
Liabilities
Trade and other payables 20 100 205 22 275 584
Deposits received from customers 695 902 092 164 037 998
Current tax payable 8 726 6 836 275
Finance lease obligation 1 327 599 240 192
Other financial liabilities - 23 488 649
Deferred tax 38 905 996 35 655 751
Total liabilities 756 244 618 252 534 449
Total equity and liabilities 1 085 847 226 557 466 886
STATEMENT OF CHANGES
IN EQUITY
Figures in Rand Share Share Treasury Total Share Reserves
Capital premium shares Capital
Balance at 1 March
2012 382 211 256 957 (9 481 395) 201 775 944 3 913 339
Profit for the
period - - - - -
Other comprehensive
income
- - - - -
Total comprehensive
income for the
period - - - - -
Issue of shares 23 9 199 972 9 199 995 -
Rights issue 200 19 999 800 - 20 000 000 -
Costs associated
with Rights Issue
- (765 102) - (765 102) -
Treasury shares sold - - 8 951 540 8 951 540
Total contributions
by and distributions
to owners of company
recognised directly
in equity
223 28 434 670 8 951 540 37 386 433 -
Balance at 1 March
2013
605 239 691 627 (529 855) 239 162 377 3 913 339
Profit for the
period - - - - -
Other comprehensive
income - - - - -
Total comprehensive
profit for the
period - - - - -
Transfer to reserv -
Employees shares
option scheme
- - - 962 359
Treasury shares
purchased
- (13 209 809) (13 209 809) -
Total contributions
by and distributions
to owners of company
recognised directly
in equity
- - (13 209 809) (13 209 809) 962 359
Balance at 28
February 2014
605 239 691 627 (13 739 664) 225 952 568 4 875 698
STATEMENT OF CHANGES IN EQUITY (continued)
Figures in Rand Retained Total Non- Total
Income Attributable controlling equity
to equity interest
holders of
the company
Balance at 1 March 2012 41 947 997 247 637 280 (570 054) 247 067 226
Profit for the period 20 732 776 20 732 776 (253 997) 20 478 779
Other comprehensive income - - - -
Total comprehensive income 20 732 776 20 732 776 (253 997) 20 478 779
for the period
Issue of shares - 9 199 995 - 9 199 995
Rights issue - 20 000 000 - 20 000 000
Costs associated with - (765 102) - (765 102)
Rights Issue
Treasury shares sold - 8 951 540 - 8 951 540
Total contributions by and - 37 386 433 - 37 386 433
distributions to owners of
company recognised directly
in equity
Balance at 1 March 2013 62 680 773 305 756 489 (824 052) 304 932 437
Profit for the period 36 917 621 36 917 621 - 36 917 621
Other comprehensive income - - - -
Total comprehensive profit 36 917 621 36 917 621 - 36 917 621
for the period
Transfer to reserv - 962 359 - 962 359
Employees shares option
scheme
Treasury shares purchased - (13 209 809) - (13 209 809)
Total contributions by and - (12 247 450) - (12 247 450)
distributions to owners of
company recognised directly
in equity
Balance at 28 February 2014 99 598 394 330 426 660 (824 052) 329 602 608
STATEMENT OF CASH FLOW
Figures in Rand 2014 2013
Cash flows from operating activities
Cash receipts from customers 1 315 824 084 305 148 732
Cash paid to suppliers and employees (676 815 229) (51 683 835)
Cash generated from operations 639 008 855 253 464 897
Interest income 15 264 706 2 206 483
Interest expense (40 666 664) (20 325 191)
Taxation (paid)/received (13 292 248) (3 106 390)
Increase in net loans and advances (136 393 704) (69 455 541)
Net cash from operating activities 463 920 945 162 784 258
Purchase of property, plant and equipment (9 117 732) (3 068 663)
Sale of property, plant and equipment 691 084 3 136 871
Purchase of investment property (5 571 292) -
Purchase of other intangible assets (1 333 915) -
Purchase of financial assets (387 967 244) (17 086 384)
Net cash from investing activities (403 299 099) (17 018 176)
Cash flows from financing activities
Proceeds on share issue - 18 151 535
Reduction of shares capital of buy back of
shares (13 209 809) -
Proceeds from other financial liabilities - 13 185 000
Repayment of other financial liabilities (23 488 649) (164 138 171)
Finance lease payments (133 733) (2 461 887)
Share premium expenses - (765 102)
Net cash from financing activities (36 832 191) (136 028 625)
Total cash movement for the year 23 789 655 (9 737 457)
Cash at the beginning of the year 62 970 116 53 232 659
Total cash at the end of year 86 759 771 62 970 116
SEGMENTAL REPORT
Figures in rand Deposits Micro Finance Property
Received Investment
12 Months ended 28 February 2014
Interest income 13 264 721 78 012 417 27 177
Interest expense (31 005 074) (13 140 106) (11)
Net interest income (17 740 353) 64 872 312 27 166
Fee income - 112 731 141 -
Management fee income - 20 736 996 -
Other microfinance income - 27 840 164 658 248
Operating profit from Cell Captive - 22 804 330 -
arrangement
Fair Value adjustment 914 672 (7 027 646) -
Net commission income 258 128 (19 827 082) 115 836
Net impairment charge on loans and - (24 899 428) -
advances
Operating expenses (1 902 024) (143 162 077) (530 045)
Operating (loss)/ profit (18 469 577) 54 068 709 271 205
Excess of acquirers' interest in net - - -
assets
(Loss)/ profit before taxation (18 469 577) 54 068 709 271 205
Taxation - (13 865) (203 382)
(Loss)/ profit for the period (18 469 577) 54 054 844 67 823
(50.0%) 146.4% 0.2%
(Loss)/ profit for the period attributable
to:
Owners of the company (18 469 577) 54 054 844 67 823
Non-controlling interest - - -
Segment assets 401 343 968 272 002 607 243 527 577
Investment property - - 242 620 028
Loans and advances - 210 998 685 -
Cash and cash equivalents 18 679 486 29 947 904 907 549
Other Financial Assets 382 664 482 31 056 018 -
- - -
Segment liabilities 695 902 092 7 530 018 -
Deposits received from customers 695 902 092 - -
SEGMENTAL REPORT
Figures in rand Deposits Micro Finance Property
Received Investment
12 Months ended 28 February 2013
Interest income 41 404 50 480 602 28 717
Interest expense (2 335 687) (11 589 806) (336 323)
Net interest income (2 294 283) 38 890 796 (307 606)
Fee income - 94 019 282 -
Management fee income - 7 178 143 -
Other microfinance income - 20 489 146 -
Operating profit from Cell Captive - 21 840 016 -
arrangement
Fair Value adjustment - - 3 100 000
Net commission income - (2 012 165) 639 974
Net impairment charge on loans and - (19 825 956) -
advances
Operating expenses 3 850 916 (137 597 015) (1 413 883)
Operating (loss)/ profit 1 556 633 22 982 247 2 018 485
Excess of acquirers' interest in net - - -
assets
(Loss)/ profit before taxation 1 556 633 22 982 247 2 018 485
Taxation - (513 184) (182 413)
(Loss)/ profit for the period 1 556 633 22 469 063 1 836 072
7.6% 109.7% 9.0%
(Loss)/ profit for the period attributable
to:
Owners of the company 1 556 633 22 469 063 1,836,072
Non-controlling interest - 253 997 -
Segment assets 20 812 729 288 126 618 236 747 488
Investment property - - 233 005 882
Loans and advances - 122 434 015 -
Cash and cash equivalents 19 612 729 31 800 942 919 380
Other Financial Assets - 24 838 584 -
Segment liabilities 168 353 141 10 130 991 1 049 273
Deposits received from customers 164 037 998 - -
SEGMENTAL REPORT
Figures in rand Reconciling Consolidated
12 Months ended 28 February 2014
Interest income 1 714 357 93 018 672
Interest expense (140 861) (44 286 052)
Net interest income 1 573 496 48 732 620
Fee income - 112 731 141
Management fee income - 20 736 996
Other microfinance income 1 447 28 499 859
Operating profit from Cell Captive - 22 804 330
arangement
Fair Value adjustment 11 070 500 4 957 526
Net commission income 17 078 350 (2 374 768)
Net impairment charge on loans and (41 342) (24 940 770)
advances
Operating expenses (18 700 298) (164 294 444)
Operating (loss)/ profit 10 982 153 46 852 490
Excess of acquirers' interest in net - -
assets
(Loss)/ profit before taxation 10 982 153 46 852 490
Taxation (9 717 622) (9 934 869)
(Loss)/ profit for the period 1 264 531 36 917 621
3.4% 100%
(Loss)/ profit for the period attributable
to:
Owners of the company 1 264 531 36 917 621
Non controlling interest - -
Segment assets 168 973 074 1 085 847 226
Investment property - 242 620 028
Loans and advances - 210 998 685
Cash and cash equivalents 37 224 832 86 759 771
Other Financial Assets - 413 720 500
Segment liabilities 52 812 508 756 244 618
Deposits received from customers - 695 902 092
SEGMENTAL REPORT
Figures in rand Reconciling Consolidated
12 Months ended 28 February 2013
Interest income 656 123 51 206 846
Interest expense (6 457 300) (20 719 116)
Net interest income (5 801 177) 30 487 730
Fee income - 94 019 282
Management fee income - 7 178 143
Other microfinance income - 20 489 146
Operating profit from Cell Captive - 21 840 016
arangement
Fair Value adjustment - 3 100 000
Net commission income 1 279 (1 370 912)
Net impairment charge on loans and - (19 825 956)
advances
Operating expenses 416 909 (134 743 073)
Operating (loss)/ profit (5 382 989) 21 174 376
Excess of acquirers' interest in net - -
assets
(Loss)/ profit before taxation (5 382 989) 21 174 376
Taxation - (695 597)
(Loss)/ profit for the period (5 382 989) 20 478 779
(26.3%) 100%
(Loss)/ profit for the period attributable
to:
Owners of the company (5 382 989) 20 478 779
Non controlling interest - (253 997)
Segment assets 11 780 051 557 466 886
Investment property - 233 005 882
Loans and advances - 122 434 015
Cash and cash equivalents 10 637 065 62 970 116
Other Financial Assets - 24 838 584
Segment liabilities 73 001 044 252 534 449
Deposits received from customers - 164 037 998
BASIS OF PREPARATION
These Finbond Group Limited (“the Group”) financial results for the
year ended 28 February 2014 constitute a summary (prepared in
accordance with the JSE Listing Requirements, the South African
Companies Act (Act 71 of 2008) as amended, and the recognition and
measurement requirements of International Financial Reporting
Standards and the presentation and disclosure requirements of
International Accounting Standard 34 and the Financial Reporting
Guides as issued by the Accounting Practices Committee and Financial
Pronouncements as issued by the Financial Reporting Standards
Council.
These summarized consolidated financial statements do not include all
of the information required for full annual financial statements and
should be read in conjunction with the consolidated financial
statements of the Group as at and for the year ended 28 February
2014.
The accounting policies applied by the Group in these summarized
consolidated financial statements are consistent with those applied
in the previous year, except 2013 figures have been restated due to a
change in accounting policy, whereby the Cell Captive Arrangement is
now accounted for by applying IFRS 10 instead of SIC 12 (AC 412).
Audit opinion
The Group’s financial statements have been audited by the Company’s
auditors, KPMG Inc., who have expressed an unmodified opinion which
is available for inspection at the Company’s registered office.
Annual report
The Company`s annual report, together with a notice convening the
annual general meeting, will be mailed to Finbond shareholders before
the end of May 2013, at which time an announcement incorporating
details of the annual general meeting will be published on SENS.
For and on behalf of the Board
Dr. Malesela Motlatla Dr. Willie van Aardt
28 March 2014
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Directors
Chairman: Dr MDC Motlatla* (BA, DCom (Unisa)); Chief Executive
Officer: Dr W van Aardt (BProc (Cum Laude), LLM (UP), LLD (PU CHE)
Admitted Attorney of The High Court of South Africa, QLTT (England
and Wales), Solicitor of the Supreme Court of England and Wales); HJ
Wilken-Jonker* (BComHons (Unisa); Chief Financial Officer: GT Sayers
(CA (SA), BCom (Hons) (UNP), BCompt (Hons) (Unisa)); Adv J Noeth* (B
Iuris LLB); Adv. N Melville* (B Law, LLB(Natal) LLM(cum
laude)(Natal)SEP(Harvard) RN Xaba* (CA (SA) BCompt, BCompt (Hons)
(Unisa))R Emslie* (B Comm Law, Hons Acc, CA (SA)) D Brits* (B Com,
MBA) (NW) *Non-Executive. Secretary: CD du Plessis – Sekretari
Transfer secretaries
Link Market Services South Africa (Proprietary) Limited
(Registration number 2000/007239/07)
11 Diagonal Street, Johannesburg, 2001
(PO Box 4844, Johannesburg, 2000)
Sponsor: Grindrod Bank Limited
Date: 28/03/2014 04:19:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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