Wrap Text
Audited Consolidated Results and Dividend for the Twelve Months Ended 28 February 2015
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 AND DIVIDEND FOR THE TWELVE MONTHS ENDED
28 FEBRUARY 2015
Executive Overview
The directors are pleased to present the financial results of the
Finbond Group for the twelve months ended 28 February 2015.
During the twelve months under review, Finbond delivered another set
of solid results increasing Headline Earnings by 52%, Operating
profit by 57%, Revenue from continuing operations by 60%, EBITDA by
51% and Dividend per share by 62%. These results were achieved in
difficult and challenging market conditions.
The Group took positive strides towards achieving its vision “to be
the leading emerging market community Bank in South Africa improving
the quality of life of our clients by offering them access to unique
value and solution based savings, credit, transactional and insurance
solutions tailored around depositor and borrower requirements that
empower, develop and uplift our clients.” This included a number of
achievements and significant developments for Finbond:
* Headline earnings per share increased 53.64% to 8.6 cents (Feb
2014: 5.6 cents).
* Dividend per share increased 61.9% to 3.4 cents (Feb 2014: 2.1
cents).
* Operating profit from continuing operations increased by 56.8% to
R 73.4 million (Feb 2014: R 46.8 million).
* Profit for the period attributable to owners of the company
increased 37.9% to R 50.9 million (Feb 2014: R 36.9 million).
* Earnings before interest, taxation, depreciation and amortization
(EBITDA) increased 50.2% to R 156.7 million (Feb 2014: R 104.3
million).
* Revenue from continuing operations increased 60.4% to R 455.4
million (Feb 2014: R 283.9 million).
* Operating cost to Income ratio improved, reducing by 5.1% to 64.5%
(Feb 2014: 69.6%).
* Value of loans advanced increased by 42.0% to R 765.7 million (Feb
2014: R 539.3 million).
* Cash received from customers increased by 50.8% to R 1.07 billion
(Feb 2014: R 709.5 million).
* Fixed and indefinite term retail deposits increased by 32.5% to
R 921.9 million (Feb 2014 R 695.9 million).
* Received an investment grade credit rating from Global Credit
Ratings.
* Was granted full membership of the Authenticated Early Debit Order
and Non-Authenticated Early Debit Order Payment Clearing Houses of
the Payments Association of South Africa (PASA).
* Launched a fully functional debit card transactional banking
product to a portion of the existing base of loan customer
clientele.
* Expanded the branch network by 43% to 286 branches nationwide
(February 2014: 200).
Managing an efficient business requires stringent risk, compliance
and corporate governance systems. 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’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 Finond.
Management remains 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, risk management, information technology, banking systems,
compliance systems as well as in enhanced collection strategies and
systems, in order to build a sustainable, professional business that
creates long term economic value and produces significant benefits
for the wider community.
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Finbond Group Limited
Finbond Group Limited, with its 880 staff members and 286 branches,
specializes in the design and delivery of unique value and solution
based savings, credit, transactional and insurance 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 Group Limited conducts its business through four divisions
focused on:
1. Short and Medium Term Micro Credit Products;
2. Investment and Savings Products;
3. Transactional Banking Products; and
4. Insurance Products.
Micro Credit, Transactional and Insurance solutions are offered
nationally to the under banked and underserved emerging banking
market actively seeking credit and banking solutions, but remaining
largely unattended and underserviced due to the traditional banks
concentration on the higher income brackets of the population.
Our Investment and Savings Products, which offer a superior above
average rate of return, are offered nationally to investors and
pensioners looking for guaranteed higher fixed income in the current
environment of depressed low yields.
Micro Credit Portfolio
The overall gross loan book (excluding unearned finance revenue)
reflected another year of strong positive growth totalling 38.0%
ending the twelve month period at R 317.6 million (Feb 2014: R 230.1
million).
Total segment revenue from Finbond’s Micro Finance activities, made
up of interest, fee and insurance income (portfolio yield) increased
41.3% to R 370.3 million (Feb 2014: R 262.1 million).
During the period under review Finbond’s loan product offering
remained unchanged consisting of 1 month – 24 month micro loans from
R 100 – R 20,000 with an average loan size of R 1,615 (Feb 2014:
R1,732 and an average tenure of 3.6 months (Feb 2014: 3.3 months).
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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 four 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 R 600 million, that lender will collect R 200
million cash per year and R 600 million over three years. If
Finbond’s book is R 600 million, Finbond will collect approximately
R 2.4 billion in cash per year and more than R 7.2 billion in cash
over three years.
For the twelve months ended February 2015 Finbond granted R 765.7
million worth of loans (Feb 2014: R 539.3 million) and received cash
payments of R 1.07 billion from customers (Feb 2014: R 709.5
million).
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, R 30,000 – R 180,000 long term unsecured
lending market that saw disproportionate growth over the past 24 - 36
months and that caused significantly increased write offs and bad
debts. Shorter term loans offer lower risk since consumers are more
likely to pay them back as opposed to longer term loans.
Furthermore, Finbond’s micro credit portfolio is not exposed to any
significant concentration risk and does not have any significant
exposure to 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 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 have not. In fact two and three years ago Finbond saw very
conservative growth in the loan portfolio. Finbond did not have
liberal lending polices that now require significant adjustment.
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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 2015.
Impairments
Conservative lending practices, strict upfront credit scoring
supported by robust collection strategies and processes continue to
ensure better than industry bad debts.
Notwithstanding an increase in impairments, the loan loss reserve,
also referred to as the risk coverage ratio (impairment
provision/Portfolio at Risk: 90 days in arrears and longer), which is
an indication of a microfinance institution’s ability to cope with
estimated loan losses, actually improved marginally at the end of the
financial year to 102.7% (Feb 2014: 102.5%). This improvement
occurred as a direct result of continued, consistent conservative
provisioning against future loan losses undertaken by management.
The 30-day arrears coverage ratio (impairment provision/Portfolio at
Risk: 30 days in arrears and longer), reflects even greater
improvement, being recorded at 56.5% at the financial year end, which
is up from a ratio of 51.5% at the end of the preceding financial
year.
Finbond recorded a moderate but manageable increase in impairments in
2015. The overall, unadjusted Net Impairment Loss Ratio reverted to
levels similar to those recorded 24 months ago, ending this financial
year at 15.2% (Feb 2014: 12.0%). Finbond’s significantly lower, and
much more accurate, adjusted loan loss ratios trended similarly
during the year with Net Impairment as a percentage of expected
instalments amounting to 6.9% (Feb 2014: 6.3%) and Net Impairment as
a percentage of cash received (which is more conservative than
instalments due) stood at 8.2% at the end of February 2015 (Feb 2014:
7.3%). These adjusted measures are a more appropriate reflection of
the impairment cost related to a short-term loan portfolio than
traditional balance sheet ratios. 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.
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Insurance
Finbond has strategically repositioned the product offering and
underwriting components of our insurance offering. Finbond’s
insurance business is now managed on an arm’s length basis by the PSG
subsidiary, African Unity Insurance under a long term insurance
license which releases Finbond from the capital adequacy requirements
imposed by the previous cell captive arrangement and improves capital
utilization.
Under this new arrangement, Finbond expanded and enhanced the
insurance benefits to our customers which, inter alia includes:
- More comprehensive insurance cover with added benefits at the
same cost to the customer;
- Cover that includes a broader definition for loss of income;
- Cover for a reduction in monthly income such as cutbacks in
working hours;
- Proportional cover when a partial premium is received;
- No waiving period subject to terms and conditions;
- Faster more efficient claims process;
Total Insurance Revenue for the period under review amounted to R 75
million (Feb 2014: R 56.3 million). The income statement includes a
net increase in after tax earnings of R 8.6 million relating to core
insurance trading activities, resulting from efficiencies under the
new structure and a release of previously earned profits no longer
required to be held as solvency reserves under the cell captive
arrangements. It is expected that the new insurance arrangement will
yield better Total Insurance Revenue and returns to Finbond in
ensuing financial years and that it will be less affected, if at all,
by expected changes to credit life insurance and cell captive
regulations.
Liquidity
Finbond’s liquidity position at the end of February 2015 reflects
R 197.5 million cash in bank (Feb 2014: R 86.8 million). Cash, cash
equivalents and liquid investments increased by 13.9% to R 570.2
million (Feb 2014: R 500.5 million), as Finbond has continued to
practice conservatism in its approach to liquidity risk management.
Cash Received as a percentage of Cash Granted for the period of March
2014 to February 2015 averaged 141% showing an improvement in overall
collections since the 138% achieved in the previous financial year.
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By the end of February 2015 the deposit book had grown by 32.5% to
R 921.9 million from R 695.9 million at the of February 2014, with an
average interest rate of 9.38%, an average term of 26.6 months and an
average deposit size of R 338,184.
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 26.6 months) and short term nature of its assets
(short term micro loans with an average term just more than 3.5
months), Finbond possesses a low risk liquidity structure as a result
of this positive liquidity mismatch.
Capital Position
Finbond Mutual Bank follows a conservative approach to capital
management holding a level of capital which supports the business
while also growing its capital base ahead of business requirements.
Our Capital position remains very strong. Finbond Mutual Bank
continued to trade well above the minimum regulatory capital
requirement throughout the financial year, reflecting an excess of
qualifying capital amounting to R 120.7 million over and above
Finbond’s specific prudential minimum requirement at financial year
end, and an excess of R 298.1 million over and above the standard
DI 400 required minimum for Mutual Banks.
Although Finbond as a Mutual Bank is not subject to the Basel III
requirements, Finbond Mutual Bank already not only complies with, but
significantly exceeds the key Basel III requirements set for 2018 and
2019. As at 28 February 2015 Finbond’s:
- liquidity coverage ratio % was 204% (104% more than required from
2019);
- net stable funding ratio % was 579% (479% more than required from
2018); and
- capital adequacy ratio % was 35.1% (25.1% more than required from
2018).
Increasing Footprint
Face to face communication and excellent customer service are an
integral part of our business model.
During the past financial year Finbond increased its branch network
by 86 branches to 286 branches in South-Africa of which 86 are
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located in Gauteng, Limpopo and Mpumalanga, 57 in Kwazulu Natal, 59
in the Western Cape, 45 in the Eastern Cape and 39 in the Free State
and North West. As part of our client centric focus we ensured that
our distribution channels reflect the demographics of our clients.
During the past year we also increased our capacity at existing
branches by increasing the number of consultant work stations. Across
the bank we created an additional 286 jobs.
We intend to open 40 - 60 branches in the current financial year and
thereafter approximately 40 branches per year for the next five
years.
Credit rating
During the 2015 financial year, Finbond was awarded an investment
grade rating by ratings agency Global Credit Ratings (“GCR”). GCR
upgraded Finbond’s BB+(ZA) National Scale Long Term Corporate Credit
Rating with a Stable Outlook to BBB-(ZA), with the outlook accorded
as Stable on 30 October 2014. GCR also affirmed Finbond’s Short Term
Credit Rating of A3 with a Stable Outlook and Finbond’s Long Term
International Scale Corporate Credit Rating of BB with a Stable
Outlook on the same date.
According to GCR, the ratings are based on the following key factors:
- “Finbond Group Limited’s (“Finbond”, “the group”) growing
franchise as a leading player in short-term microfinance, providing
short- and medium-term credit, insurance and savings products through
281 branches, and its transactional banking ambitions.
- Adequate capital, conservative credit/risk management, and
improving profitability/earnings diversification (despite regulatory
risk) support the rating, which excludes the prospect of systemic
support, given its low likelihood. The rating outlook considers
Finbond’s prospects/strategic direction, within the context of the
negative consumer health, debt affordability, and credit trends.
- High liquidity levels (46% of assets) and adequate
capitalisation (Finbond Mutual Bank’s capital adequacy ratio (“CAR”)
was 34% at 1H F15) support the moderate credit appetite. The
loan/deposit ratio fell from 65.2% (FYE14) to 30.3% (1H F15).
- Asset quality appeared stable despite gross advances growth of
69.7% in F14 (1H F15: 23.5%). As c.80% of Finbond’s loans issued are
short-term, traditional asset quality measures may overstate the bad
debt experience. Gross and net impairment ratios (impairments being
instalments in arrears) have declined since FYE13 to 20.1% and 12.1%,
and net impairments vs. instalments due (management’s key impairment
measure) fell from 6.3% (FYE14) to 5.8% (1H F15). Over the same
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period, collection rates remained strong, loan rejection rates rose,
and stability was noted in arrears as a proportion of loans, and
arrears roll-rates. Provisioning appeared adequate. However, close
monitoring is required given the challenging market conditions.
- In F14, operating income rose by 34.3% to R236.1m (net income –
80.3% to R36.9m). Despite 21.9% cost growth in F14 driven by loan
volumes and risk systems/infrastructure enhancement, the cost/ income
ratio declined to 69.6% (F13: 76.7%). Impairment costs grew 25.8% in
F14 and 90.0% in 1H F15, highlighting a lagged effect of loan book
size and term extension.
- Finbond appears well placed to develop its business profitably
and conservatively, despite the challenging operating environment.”
Property Investments
Two independent valuations by professional valuers registered with
the South African Institute of Valuers were again obtained as at 28
February 2015, as required by IAS 40 and the Group’s accounting
policy. The independent valuations revalued Finbond’s property
portfolio at R248.8 million (February 2014: R242.6 million).
The R248.8 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.
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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.
Finbond remains positive about the prospects for the future due to
the following key aspects of the business:
- 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 286 Branch Network;
- Superior Asset Quality;
- Access to funding;
- Strong Capital Adequacy;
- Ability to leverage the existing cost platform while
diversifying income streams;
- Conservative Risk Management; and
- Growth potential in the Micro Finance and Mutual Banking markets
arising from the exit of certain competitors in recent times.
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 3.4 cents
per share (2014: 2.1 cents) has been declared out of income reserves
on 16 April 2015 in respect of the financial year ended 28 February
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2015 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%;
- 605,025,250 shares are in issue of which the Group holds
15,411,082;
- The net ordinary dividend is 2.89 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 Thursday, 16 April 2015
Last day to trade cum dividend Friday, 8 May 2015
Shares commence trading ex-dividend Monday, 11 May 2015
Record date Friday, 15 May 2015
Dividend payment date Monday, 18 May 2015
No dematerialization or rematerialization of shares will be allowed
for the period from Monday 11 May 2015 to Friday 15 May 2015, 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-
2015
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 28 February 2015
Figures in Rand 2015 2014 movement
Interest income 145 456 503 93 018 672 56%
Interest expense -76 136 528 -44 286 052 -72%
Net interest income 69 319 975 48 732 620 42%
Fee income 170 127 896 112 731 141 51%
Management fee income 27 765 974 20 736 996 34%
Other microfinance income 79 685 790 28 499 859 180%
Operating profit from Cell captive
arrangement 30 611 709 22 804 330 34%
Fair value adjustments 1 790 507 4 957 526 -64%
Net commission expense -3 384 258 -2 374 768 -43%
Net impairment charge on loans and -60 136 892 -24 940 770 -141%
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advances
Operating expenses -242 417 723 -164 294 444 -48%
Profit/(loss) before taxation 73 362 978 46 852 490 57%
Taxation -22 495 603 -9 934 869 -126%
Total profit and comprehensive income
for the year 50 867 375 36 917 621 38%
Profit attributable to:
Owners of the parent 50 867 375 36 917 621 38%
Non-controlling interest - Continuing
operations - - 0%
Basic earnings/(loss) per share
(cents) 8.6 6.1 41%
RECONCILIATION OF HEADLINE EARNINGS/(LOSS) PER SHARE
Figures in rand 2015 2014 Movement
Net profit/ (loss) attributable to
50 867 375 36 917 621 38%
ordinary equity holders of the parent
Adjusted for:
Loss/ (profit) on disposal of
88 814 92 920 -4%
property, plant and equipment
Loss/ (profit) on disposal of
property, plant and equipment included 123 352 129 056 -4%
in basic earnings
Tax effect of Loss on disposal of
-34 538 -36 136 -4%
property, plant and equipment
Revaluation of investment properties -3 255 988 -3 288 184 -1%
Fair value adjustment of investment
properties included in basic earnings -4 002 345 -4 042 854 -1%
Tax effect of Fair value adjustment of
746 357 754 670 -1%
investment properties
Gains/losses on the loss of control of
3 480 948 - 100%
a subsidiary
Gains on the loss of control of a
subsidiary included in basic earnings -4 683 216 - 100%
Tax effect on gains on the loss of
8 164 164 - 100%
control of a subsidiary
Headline profit 51 181 149 33 722 357 52%
Headline earnings/(loss) per share
(cents) 8.6 5.6 54%
Diluted headline earnings/(loss) per
share (cents) 8.6 5.6 54% 54%
STATEMENT OF FINANCIAL POSITION
Figures in Rand 2015 2014 Movement
Assets
Cash and cash equivalents 197 499 520 86 759 771 128%
Other financial assets 372 772 262 413 720 500 -10%
Loans and other advances to customers 290 715 142 210 988 685 38%
Other receivables 57 553 494 18 132 659 217%
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Inventories 2 566 657 - 100%
Current tax receivable 2 531 705 3 759 606 -33%
Property, plant and equipment 46 044 154 22 567 979 104%
Investment property 248 820 000 242 620 028 3%
Goodwill 120 033 629 62 596 218 92%
Intangible Assets 171 000 - 100%
Deferred tax 10 544 541 24 701 780 -57%
Total Assets 1 349 252 104 1 085 847 226 24%
Liabilities
Trade and other payables 26 297 683 20 100 205 31%
Fixed and Notice deposits 921 933 480 695 902 092 32%
Transactional deposits 69 220 - 100%
Current tax payable 1 947 8 726 -78%
Finance lease obligation 1 532 266 1 327 599 15%
Loans from shareholders 15 000 000 - 100%
Deferred tax 38 513 237 38 905 996 -1%
Total liabilities 1 003 347 833 756 244 618 32%
Equity
Equity Attributable to Equity Holders
of Parent
Share capital & premium 201 522 768 225 952 568 -11%
Reserves 3 428 404 4 875 698 -30%
Accumulated profit/ (loss) 141 777 151 99 598 394 42%
Equity attributable to owners of the
Company 346 728 323 330 426 660 5%
Non-controlling interest -824 052 -824 052 0%
Total equity 345 904 271 329 602 608 5%
Total equity and liabilities 1 349 252 104 1 085 847 226 24%
STATEMENT OF CHANGES IN
EQUITY
Figures in Rand Share Reserves Retained Total
capital and income attributable
premium to equity
holders of
the group /
company
Balance at 1 March 2013 239 162 377 3 913 339 62 680 773 305 756 489
Total comprehensive
income for the year - - 36 917 621 36 917 621
Equity settled share
based payment charge - 962 359 962 359
Treasury shares
purchased -13 209 809 - - -13 209 809
Balance at 1 March 2014 225 952 568 4 875 698 99 598 394 330 426 660
Total comprehensive
income for the year - - 50 867 375 50 867 375
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Equity settled share
based payment charge - 2 408 916 - 2 408 916
Transfers between
reserves - -3 856 210 3 856 210 -
Treasury shares
purchased -24 429 800 - - -24 429 800
Dividends - - -12 544 828 -12 544 828
Balance at 28 February
2015 201 522 768 3 428 404 141 777 151 346 728 323
STATEMENT OF CHANGES IN
EQUITY
Figures in Rand Non- Total equity
controlling
interest
Balance at 1 March 2013 -824 052 304 932 437
Total comprehensive
income for the year - 36 917 621
Equity settled share
based payment charge - 962 359
Treasury shares
purchased - -13 209 809
Balance at 1 March 2014 -824 052 329 602 608
Total comprehensive
income for the year - 50 867 375
Equity settled share
based payment charge - 2 408 916
Transfers between
reserves - -
Treasury shares
purchased - -24 429 800
Dividends - -12 544 828
Balance at 28 February
2015 -824 052 345 904 271
STATEMENT OF CASH FLOWS
For the year ended 28 February 2015
Figures in Rand 2015 2014 Movement
Cash flows from operating activities
Cash generated from operations 161 165 587 477 213 193 -66%
Tax paid -8 542 750 -13 292 248 -36%
Net cash from operating activities 152 622 837 463 920 945 -67%
Cash flows from investing activities
Purchase of property, plant and
equipment -31 946 505 -9 117 732 250%
Sale of property, plant and equipment 1 740 518 691 084 152%
Purchase of investment property -2 197 627 -5 571 292 -61%
Purchase of other intangible assets -57 608 411 -1 333 915 4219%
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Purchase of financial assets -589 187 327 -387 967 244 -52%
Sale of financial assets 660 977 239 - 100%
Net cash from investing activities -18 222 112 -403 299 099 -95%
Cash flows from financing activities
Reduction of shares capital or buy
back of shares -24 819 437 -13 209 809 88%
Repayment of other financial
liabilities - -23 488 649 -100%
Proceeds from shareholders loan 15 000 000 - 100%
Finance lease payments -1 136 009 -133 733 749%
Dividends paid -12 705 530 - 100%
Net cash from financing activities -23 660 976 -36 832 191 -36%
Total cash movement for the year 110 739 749 23 789 655 365%
Cash at the beginning of the year 86 759 771 62 970 116 38%
Total cash at the end of year 197 499 520 86 759 771 128%
SEGMENTAL REPORT
Investment Micro Property
Figures in rand Products Finance Investment
12 Months ended 28 February 2015
Interest income 23 576 972 119 768 448 27 798
Interest expense -37 700 477 -16 049 451 112
Net interest income -14 123 505 103 718 997 27 910
Fee income -2 000 169 835 221 289 965
Management fee income - - -
Other microfinance income 515 185 50 104 791 -
Operating profit from Cell Captive
arrangement - 30 611 709 -
Fair Value adjustment -2 211 838 - 4 002 345
Net commission income - -3 384 258 -
Net impairment charge on loans and
advances - -57 959 210 -923 334
Operating expenses -1 654 244 -225 112 409 -926 739
Profit/(loss) before taxation -17 476 402 67 814 841 2 470 147
Taxation - 71 234 171 012
(Loss)/ profit for the period -17 476 402 67 886 075 2 641 159
(Loss)/ profit for the period
attributable to:
Owners of the company -17 476 402 67 886 075 2 641 159
Non-controlling interest - - -
Significant segment assets 524 654 701 494 604 198 248 857 930
Cash and cash equivalents 154 925 488 42 536 102 37 930
Other Financial Assets 369 719 612 3 052 650 -
Loans and advances - 290 715 142 -
Inventories - - -
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Property, Plant and Equipment 9 601 38 266 675 -
Investment property - - 248 820 000
Goodwill - 120 033 629 -
Significant segment liabilities 921 933 480 - -
Deposits received from customers 921 933 480 - -
Transactional deposits - - -
Loans from shareholders - - -
*The Reconciling column represents
Group Shared Services
SEGMENTAL REPORT
Investment Micro Property
Figures in rand Products Finance 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
arrangement - 22 804 330 -
Fair Value adjustment 914 672 - -
Net commission income 258 128 -19 827 082 115 836
Net impairment charge on loans and
advances - -24 899 428 -
Operating expenses -1 902 024 -143 162 077 -530 045
(Loss)/ profit before taxation -18 469 577 61 096 352 271 205
Taxation - -13 865 -203 382
(Loss)/ profit for the period -18 469 577 61 082 487 67 823
(Loss)/ profit for the period
attributable to:
Owners of the company -18 469 577 61 082 487 67 823
Non-controlling interest - - -
Significant segment assets 438 568 800 272 002 607 243 527 577
Investment property - - 242 620 028
Loans and advances - 210 998 685 -
Cash and cash equivalents 55 904 318 29 947 904 907 549
Other Financial Assets 382 664 482 31 056 018 -
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Significant segment liabilities 695 902 092
Deposits received from customers 695 902 092 - -
*The Reconciling column represents
Group Shared Services
SEGMENTAL REPORT
Transactional
Figures in rand Banking Reconciling* Consolidated
12 Months ended 28 February 2015
Interest income - 2 083 285 145 456 503
Interest expense -127 513 -22 259 199 -76 136 528
Net interest income -127 513 -20 175 914 69 319 975
Fee income 8 562 -3 852 170 127 896
Management fee income - 27 765 974 27 765 974
Other microfinance income 11 29 065 803 79 685 790
Operating profit from Cell Captive
arrangement - - 30 611 709
Fair Value adjustment - - 1 790 507
Net commission income - - -3 384 258
Net impairment charge on loans and
advances - -1 254 348 -60 136 892
Operating expenses -2 075 799 -12 648 532 -242 417 723
Profit/(loss) before taxation -2 194 739 22 749 131 73 362 978
Taxation - -22 737 849 -22 495 603
(Loss)/ profit for the period -2 194 739 11 282 50 867 375
(Loss)/ profit for the period
attributable to:
Owners of the company -2 194 739 11 282 50 867 375
Non-controlling interest - - -
Significant segment assets 4 163 431 6 171 104 1 278 451 364
Cash and cash equivalents - - 197 499 520
Other Financial Assets - - 372 772 262
Loans and advances - - 290 715 142
Inventories 2 566 657 - 2 566 657
Property, Plant and Equipment 1 596 774 6 171 104 46 044 154
Investment property - - 248 820 000
Goodwill - - 120 033 629
Significant segment liabilities 69 220 15 000 000 937 002 700
Deposits received from customers - - 921 933 480
Transactional deposits 69 220 - 69 220
Loans from shareholders - 15 000 000 15 000 000
*The Reconciling column represents
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Group Shared Services
SEGMENTAL REPORT
Transactional
Figures in rand Banking 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
arrangement - - 22 804 330
Fair Value adjustment - 4 042 854 4 957 526
Net commission income - 17 078 350 -2 374 768
Net impairment charge on loans and
advances - -41 342 -24 940 770
Operating expenses - -18 700 298 -164 294 444
(Loss)/ profit before taxation - 3 954 507 46 852 490
Taxation - -9 717 622 -9 934 869
(Loss)/ profit for the period - -5 763 115 36 917 621
(Loss)/ profit for the period
attributable to:
Owners of the company - -5 763 115 36 917 621
Non-controlling interest - - -
Significant segment assets - - 954 098 984
Investment property - - 242 620 028
Loans and advances - - 210 998 685
Cash and cash equivalents - - 86 759 771
Other Financial Assets - - 413 720 500
Significant segment liabilities 695 902 092
Deposits received from customers - - 695 902 092
*The Reconciling column represents
Group Shared Services
BASIS OF PREPARATION
These Finbond Group Limited (“the Group”) financial results for the
year ended 28 February 2015 constitute a summary (prepared in
accordance with the JSE Listing Requirements, the South African
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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
2015.
These summarized consolidated financial statements are extracted from
the Group’s audited financial statements and are not itself audited.
The directors take full responsibility for the preparation of these
summarized consolidated financial statements and the financial
information has been correctly extracted from the Group’s audited
financial statements.
The accounting policies applied by the Group in these summarized
consolidated financial statements are consistent with those applied
in the previous year.
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 2015, 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
16 April 2015
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Directors
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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
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Date: 16/04/2015 01:47:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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