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EFFICIENT GROUP LIMITED - Summarised audited financial results for the year ended 31 August 2015

Release Date: 13/11/2015 17:45
Code(s): EFG     PDF:  
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Summarised audited financial results for the year ended 31 August 2015

EFFICIENT GROUP LIMITED
(Incorporated in the Republic of South Africa)
(Registration No 2006/036947/06)
JSE share code: EFG
ISIN: ZAE000151841
(“Efficient Group” or “the Company”)

SUMMARISED AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31 AUGUST 2015

HIGHLIGHTS


+      Revenue increased by 207%

+      Profit after tax for the year
        increased from R5 million to
        R29 million

+      Headline earnings per share
        increased from 9.37 cents
        to 32.32 cents
+      Cash generated from
         operations increased from
         R13.6 million to R102.4 million

+      Dividend of 12 cents per
         share declared

COMMENTARY


1. Commentary
   The business strategy of the Efficient Group is to be a diversified financial services provider offering
   customised products, professional services and added value throughout the financial services value chain.

   In order to be well positioned to do this, the Group restructured during the 2015 financial year, paring down
   from four product-focused divisions with centralised support services to three market-focused clusters of
   business units that are supported by standardised and centralised processes for finance and compliance.

   This structure is in line with international trends towards intrapreneurship, which aims to empower business
   units to function independently and so be more responsive to market needs.

   The three clusters of business units are focused on:

    
    Financial Services;
    Services and Solutions; and
    Investments.

   With these structural changes, the focus is on growing and acquiring entrepreneurial, like-minded entities
   to expand the Group’s value chain. From a strategic perspective, the Group prefers to acquire a majority
   shareholding in businesses, but it will consider and pursue minority interests throughout the value
   chain where synergistic-, cross-sell- or future consolidation opportunities exist or where the acquisition
   opportunities are accretive.

   In support of this new structure, the Group has substantially extended its reach over the past year,
   specifically with reference to independent boutique asset managers. It is the intention that these boutique
   managers will provide access for both individual and institutional clients to quality investment solutions
   administered by the Group, and that the Group will be able to develop long-term relationships with like-
   minded boutique partners, some of whom may present future consolidation opportunities.

   The Group is also extending its footprint into new areas, and has already launched a Fiduciary Services
   business unit. As part of its diversification strategy, it will in future also consider quality value propositions
   in the healthcare, short-term insurance, life and employee benefits areas.

   Highlights of the year include:
   +Financial Services
   -The number of financial advisors increased from 84 to 96;
   -The number of financial services branches increased from 7 to 10;
   -Revenue grew by 72% to R118 million;
   -Assets under advice grew by 43% to R12.7 billion;
   -The successful rebranding of Efficient Wealth; and
   -The acquisition of Stead Wealth, Exceed Asset Management and Exceed Private Client Services.

   +Services and Solutions
   -Successful rebranding of Naviga Solutions;
   - An enhanced focus on the development of proprietary software; and
   -The packaging and roll-out of proprietary investment solutions.

   +Investments
   -The acquisition of Select Manager;
   -Assets under administration grew by 54% to R63.2 billion;
   -Assets under management grew by 31% to R18.2 billion;
   -Assets under consulting grew by 22% to R24 billion; and
   -Revenue grew by 289% to R646 million.

1.1 Financial results
    In the 2014 financial year, the Group made several significant investments in order to expand its distribution
    network, grow its asset administration division and expand its product offering to include asset consulting.
    The full-year effect of these investments, which contributed 131% to the growth in revenue in the 2015
    financial year, is evident in the higher profits and cash generated during the course of the year.

    A substantial share of the Group’s revenue accrues from the value of assets under management, assets
    under administration, assets under consulting and assets under advice. Assets under management are
    represented by amounts invested in unit trust funds, unit trust funds of funds and private share portfolios
    managed by the asset management division. The Group had R18 183 million (2014: R13 888 million) assets
    under management by the end of the 2015 financial year. Assets under administration are represented by
    unit trust funds and unit trust funds of funds administered by the Group. Administration of assets includes
    liability administration and asset administration, such as monitoring of the daily pricing of unit trust funds.
    The Group administers assets to the value of R63 173 million (2014: R41 041 million). Assets under consulting
    are represented by assets on which Boutique Investment Partners supply investment consulting services.
    These consist primarily of portfolio construction, strategic and tactical asset allocation, and manager
    selection services. The Group consults on assets to the value of R23 978 million (2014: R 19 691 million).
    Assets under advice are represented by client investments made on the recommendation of, or with the
    guidance of, financial advisors employed by the Financial Services division. Total assets under advice
    amount to R12 707 million (2014: R8 945 million).

    Revenue increased by 207%, which is attributable to the full-year effect of investments made in the 2014
    financial year (131%), organic growth (69%) and the investment in Select Manager (7%), which was made
    during the reporting period.

    The investments made in growing the asset administration division and expanding the product range
    to include asset consulting during the course of the 2014 financial year were particularly successful.
    Not only did this division exceed its original target, but it also increased combined assets from R66 billion
    to R96 billion during the reporting period, contributing substantially to organic growth.

    The other investments made in the previous financial year performed satisfactorily. The acquisition of Select
    Manager contributed R11.4 million in additional revenue to asset management and R5.1 million to financial
    services. Excluding fees received from the investment in Select Manager, asset management earned slightly
    lower performance fees compared to the previous reporting period. The base fee earned (after the re-
    allocation of the multi-manager fee to financial services) is 11% higher than the previous financial year.

    Fixed expenses associated with the organic growth of the Group increased by 8%. The full-year effect of
    the previous year’s investments and the acquisition of Select Manager increased the fixed expense base
    by 22%. Staff incentives and profit-share provisions also increased as a result of the increase in operating
    profit. The increase in the non-cash flow expenses is due to higher amortisation charges related to the
    intangible assets that formed part of this year’s business combinations. Management is focused on ensuring
    that future increases in the expense base are kept at acceptable levels.

    The Group reports an operating profit of R33 million (2014: R7 million) for the 2015 financial year.
    The following non-operational items impacted on the operating profit:

    –AS Sure contributed R908 000 to profits, below agreed expectations. The result of this
     underperformance resulted in a reversal of part of the outstanding vendor loans on this transaction and
     an impairment of a portion of the Group’s non-controlling interest in this entity.
    –During the reporting period the Group disposed of its investment in Marion Technology and recouped
     an amount of R2.6 million on this transaction.
    –The non-controlling interest in Rudiarius Fund Management contributed R824 000 to profit.


    –Fair value adjustments of R2.8 million were made to the outstanding purchase price related to the
     Select Manager acquisition.
    –Net interest received amounted to R4.4 million.

    The profit after tax for the year ended 31 August 2015 is R29 million (2014: R5 million). Net tangible
    liabilities per share is reported at 71.30 cents (2014: Net tangible assets per share of 30.84 cents).
    The net tangible liabilities per share is as a result of cash utilised and liabilities raised to acquire
    intangible assets.

    On 31 August 2015 the Group had R211 million (2014: R126 million) of tangible assets, including cash and
    cash equivalents (including unit trust investments) of R97 million (2014: R34 million). It had R316 million
    (2014: R127 million) in liabilities. The increase in liabilities is directly related to the acquisition of Select
    Manager and consists mainly of vendor finance.

    At the end of the reporting period the Group’s current liabilities exceed its current assets. Management
    assessed the Group’s cash flow forecast and its access to credit and it is of the opinion that the Group will
    be able to settle its short-term commitments as and when due.

    Cash of R44.5 million (2014: R18.3 million) was generated from operations during the reporting period.
    The decrease in working capital further increased cash and cash equivalents by R58 million. Net finance
    income earned contributed R4.4 million to cash flow. Tax paid reduced cash by R35 million.

    The cash utilised for investment activities relates mainly to the Select Manager acquisition, the acquisition
    of financial advisory client bases and unit trust investments. This reduced cash by R48.7 million. The
    investments and working capital requirements were financed through retained income and borrowings
    from Standard Bank.

1.2 Operating overview

    From a Group perspective, the main focus during the year was on the integration of newly acquired and
    newly established businesses. This did not only include the integration of Select Manager, Stead Wealth,
    Exceed Asset Management and Exceed Private Client Services, all of which were acquired during the course
    of the year, but also the continued integration of Efficient Wealth (formerly Verso Investment Services) and
    Naviga Solutions (formerly Verso Multi Manager). Boutique Collective Investments and Boutique Investment
    Partners also enjoyed their first full year of operations within the Efficient Group.

    During the financial year a decision was made to disinvest from the Group’s previous IT partner and to
    outsource IT services to entities specialising in specific service categories in order to optimise the return on
    investment related to these services. Outsourcing provides the Group with enhanced flexibility and control,
    and allows for greater accountability from suppliers.

    The Group has also undergone an extensive cost and functional comparison in relation to third-party
    software providers as this relates to key systems requirements. As a result, a decision was made to further
    invest in the development of proprietary software, which will be deployed across a number of entities within
    the Group. The software will provide the Group with a consolidated platform to view key performance
    indicators across a number of subsidiaries, as well as the tools to improve efficiency and accountability
    across the board. Development of the solution has commenced and the Group intends to start deployment
    during the course of the 2016 financial year.

    Another major focus was the restructuring of the Group’s operations in order to align these with
    our strategic objectives and the financial services value chain. This process included the continued
    decentralisation of various support functions and the strengthening of the Group’s primary control
    functions, namely finance and compliance.

1.3 Conclusion

    In line with the Group’s new business strategy, the Group will continue to concentrate on growing the
    business organically and by acquiring entrepreneurial, like-minded entities to expand the Group’s value
    chain.

    Key performance targets        2016 target     2015            
    Number of financial planners   108             96              
    Assets under advice            R14.9 billion   R12.7 billion   
    Assets under management        R20.2 billion   R18.2 billion   
    Assets under administration    R74.4 billion   R63.2 billion   
    Assets under consulting        R25.9 billion   R24 billion     


1.4 Cash dividend
    Dividends are declared at the discretion of the board of directors, after taking the financial position of the
    group into consideration. As a guideline 80% of the free cash flow is paid as a dividend. Based on this policy
    the directors determined that a final dividend of 6.15000 cents per share will be paid.

    The salient dates for this dividend payment are as follows:                              
    Last date to trade “cum” dividend                             Friday, 27 November 2015   
    Securities trade “ex” dividend                                Monday, 30 November 2015   
    Record date                                                    Friday, 4 December 2015   
    Payment date                                                   Monday, 7 December 2015   


    Share certificates may not be dematerialised or rematerialised between Monday, 30 November 2015 and
    Friday, 4 December 2015, both days inclusive.

    Shareholders are advised of the following additional information:

    +the dividend has been declared out of the 2015 profits;
    +the local dividend tax rate is 15%;
    +the gross local dividend amount is 6.15000 cents per share;
    +the net local dividend amount for shareholders:
    +exempt from payments of dividend tax is 6.15000 cents per share;
    +liable to pay the dividends tax is 5.22750 cents per share;
    +the issued share capital of the company is 90 592 973 shares of R0.00000277 each; and
    +the company’s tax reference number is 9071679170.

1.5 Basis of preparation

    These summarised Group financial results for the year ended 31 August 2015 constitute a summary of
    the Group’s audited financial statements, prepared in accordance with the framework concepts and the
    measurement and recognition requirements of IFRS and the SAICA Financial Reporting Guides as issued
    by the Accounting Practices Committee and Financial Pronouncements as issued by Financial Reporting
    Standards Council, and the presentation and disclosure requirements of International Accounting
    Standard 34.

   The accounting policies are in terms of International Financial Reporting Standards and consistent, except
   where new standards have been adopted, with those of the previous financial statements. The Group has
   adopted the following new standards:

   + IFRS 10, IFRS 12 and IAS 27 amendment – Investment Entities (effective 1 January 2014)
   + IAS 32 – Offsetting Financial Assets and Financial Liabilities (effective 1 January 2014)
   + IAS 36 – Recoverable amount disclosures for Non-financial Assets (effective 1 January 2014)
   + IAS 39 – Novation of Derivatives and Continuation of Hedge Accounting (effective 1 January 2014)
   + IFRIC 21 – Levies (effective 1 January 2014)
   + IAS 19 – Defined Benefit Plans: Employee Contributions (effective 1 July 2014)
   + Amendments to 6 standards: Improvements to IFRSs 2010 – 2012 Cycle (effective 1 July 2014)
   + Amendments to 4 standards: Improvements to IFRSs 2011 – 2013 Cycle (effective 1 July 2014)

   The adoption of these standards had no significant impact on the measurement of the Group’s assets and
   liabilities.

   These summarised Group financial results do not include all of the information required for full financial
   statements, and should be read in conjunction with the audited consolidated financial statements of the
   Group as at and for the year ended 31 August 2015.

   This summarised report is extracted from audited information, but is not itself audited. The audited
   consolidated financial statements and unmodified audit report, as issued by KPMG Inc., are available for
   inspection at the company’s registered office. The directors take full responsibility for the presentation of
   the summarised report and for ensuring that the financial information has been correctly extracted from
   the underlying audited consolidated financial statements.

   The summarised financial results were prepared by Ernes Smit CA(SA), the Group Financial Manager of
   Efficient Group.

   Summarised Audited
   Statements of Financial Position
   As at 31 August 2015

                                                         2015      2014   
                                                        R’000     R’000   
ASSETS                                                                    
Non-current assets                                                        
Property and equipment                                  4 103     2 668   
Goodwill                                              153 274    66 255   
Intangible assets                                     140 965   102 637   
Investments                                             1 657     6 761   
Equity accounted investments                           10 913    16 973   
Long-term receivables                                   1 898     3 889   
Deferred tax                                           20 081     3 736   
                                                      332 891   202 919   
Current assets                                                            
Related party loans                                        39         –   
Investments                                            41 931         –   
Trade and other receivables                            74 255    56 507   
Cash and cash equivalents                              53 833    33 552   
Short-term portion of long-term receivables             1 377       727   
Tax receivable                                            976     1 231   
                                                      172 411    92 017   
Total assets                                          505 302   294 936   
Equity and liabilitieS                                                    
Equity                                                                    
Share capital and share premium                       150 325   150 325   
Treasury shares                                         (389)     (149)   
Accumulated income                                     41 982    18 441   
Fair value adjustment reserve                             (3)        98   
Equity attributable to equity holders of the parent   191 915   168 715   
Non-controlling interest                              (2 420)   (1 041)   
Total equity                                          189 495   167 674   
Non-current liabilities                                                   
Long-term liabilities                                  95 226    25 244   
Deferred tax                                           33 824    26 407   
                                                      129 050    51 651   
Current liabilities
Trade and other payables                              136 687    64 485   
Short-term portion of long-term liabilities            47 940     8 754   
Tax payable                                             2 130     2 372   
                                                      186 757    75 611   
Total liabilities                                     315 807   127 262   
Total equity and liabilities                          505 302   294 936   
Net asset value per share (cents)                      212.38    186.23   
Net tangible asset value per share (cents)            (71.30)     30.84   


Summarised Audited
Statements of Comprehensive Income
For the year ended 31 August 2015

                                                                                                           2015        2014   
                                                                                                          R’000       R’000   
Revenue                                                                                                 716 179     233 360   
Operating expenses                                                                                     (683 599)   (226 673)   
Operating profit                                                                                         32 580       6 687   
Dividends received                                                                                          258           –   
Finance income                                                                                            7 126       2 797   
Finance cost                                                                                             (2 711)     (1 210)   
Profit on sale of equipment                                                                                  82          24   
Profit on sale of shares in associate                                                                     2 607         527   
Profit on sale of financial advisory client base                                                             73          35   
Other income                                                                                                765         619   
Fair value adjustment of investments designated at fair value through profit or loss                       (57)         926   
Re-measurement of liabilities at fair value through profit or loss                                        3 097           –   
Fair value adjustments of liabilities                                                                   (2 830)           –   
Impairment of intangible assets                                                                           (420)      (1 070)   
Impairment of investment in associate and loan to associate                                               (869)        (194)   
Share of profits/(losses) from associates, net of taxation                                                1 808        (839)   
Profit before taxation                                                                                  41 509        8 302   
Taxation                                                                                               (12 207)      (3 342)   
Profit for the year                                                                                     29 302        4 960   
Other comprehensive income:                                                                                                                                                          
Items that may be reclassified subsequently to profit or loss                                            (101)           33
Unrealised fair value adjustment of available-for-sale financial assets, net of taxation                 (101)           33       
Total comprehensive income for the year                                                                 29 201        4 993   
Profit/(loss) for the year attributable to:                                                                                                                                         
Equity holders of the parent                                                                            30 681        5 988   
Non-controlling interest                                                                                (1 379)      (1 028)   
                                                                                                        29 302        4 960   
Total comprehensive income for the year attributable to:                                                                                                                            
Equity holders of the parent                                                                            30 580        6 021   
Non-controlling interest                                                                                (1 379)      (1 028)   
                                                                                                        29 201        4 993   
Basic and diluted earnings per share (cents)                                                             33.91         8.53   


Summarised Audited
Statements of Changes in Equity
For the year ended 31 August 2015

                              Ordinary 
                                shares                              Fair value                   Non-
                             and share    Treasury Accumulated      adjustment            controlling      Total
                               premium      shares      income         reserve     Total     interest      equity
                                 R’000      R’000        R’000           R’000     R’000        R’000       R’000
Balance at
31 August 2013                  58 657       (149)      12 453              65    71 026         (13)      71 013
Issue of shares                 91 668          –            –               –    91 668            –      91 668
Total comprehensive
income for the year                                                                                            
– Profit/(loss)                     –           –        5 988               –     5 988      (1 028)       4 960
– Other comprehensive
  income                            –           –            –              33        33            –          33
Balance at    
31 August 2014                150 325        (149)      18 441              98   168 715      (1 041)     167 674
Repurchase of company’s    
own equity instruments              –        (240)           –               –      (240)           –        (240)
Total comprehensive    
income for the year                                                                                             
– Profit/(loss)                     –           –       30 681               –    30 681      (1 379)      29 302
– Other comprehensive    
income                              –           –            –            (101)     (101)          –         (101)
Dividends declared                  –           –       (7 140)              –    (7 140)          –       (7 140)
Balance at 
31 August 2015                150 325        (389)      41 982              (3)  191 915      (2 420)     189 495
                                                                                                                  

Summarised Audited
Statements of Cash Flows
For the year ended 31 August 2015

                                                                                      2015        2014   
                                                                                     R’000       R’000   
Cash flows from operating activities                                                                     
Cash receipts from customers                                                       698 431     185 418   
Cash paid to suppliers and employees                                             (596 017)   (171 828)   
Cash generated by operations                                                       102 414      13 590   
Interest received                                                                    7 126       2 671   
Interest paid                                                                      (2 711)     (1 210)   
Dividend received                                                                      258           –   
Dividend received from associate                                                       863         216   
Taxation paid                                                                     (35 070)     (7 922)   
Net cash inflow from operating activities                                           72 880       7 345   
Cash flows from investing activities                                                                     
Acquisition and disposal of businesses                                            (12 239)    (34 044)   
Investment in associate                                                                  –     (7 751)   
Long-term loan to associate                                                              –     (1 062)   
Repayment of long-term receivables                                                   1 727         511   
Acquisition of investments                                                        (37 225)     (1 065)   
Acquisition of intangible assets                                                   (7 048)        (14)   
Decrease in long-term liabilities                                                        –       (606)   
Proceeds on the disposal of investments                                                  –       4 514   
Proceeds on the sale of investments in associates                                    8 743         527   
Proceeds on the disposal of equipment                                                  160          34   
Acquisition of equipment                                                           (2 826)     (2 693)   
Net cash outflow from investing activities                                        (48 708)    (41 649)   
Cash flows from financing activities                                                                     
Decrease in related party loans                                                       (39)           –   
Increase/(decrease) in long-term liabilities                                         3 483     (1 652)   
(Decrease)/increase in loans from non-controlling shareholders of subsidiaries       (195)       1 324   
Issue of share capital                                                                   –      48 924   
Dividends paid                                                                     (7 140)           –   
Net cash (outflow)/inflow from financing activities                                (3 891)      48 596   
Total cash and cash equivalents movement for the year                               20 281      14 292   
Total cash and cash equivalents at the beginning of the year                        33 552      19 260   
Total cash and cash equivalents at the end of the year                              53 833      33 552   


Notes to the Summarised
Audited Financial Statements
For the year ended 31 August 2015

                                                                 Accumulated            Carrying
                                             Cost               depreciation               value
                                                                                                                                                         
                                            R’000                      R’000               R’000   
1 Property and equipment                                                                         
Furniture, fixtures and office equipment    4 899                    (3 463)               1 436   
Computer equipment                          6 935                    (5 570)               1 365   
Leasehold improvements                      1 945                      (643)               1 302   
Other fixed assets                            247                      (247)                   –   
Total                                      14 026                    (9 923)               4 103  
 
                                                                    Aug 2014                       
                            
                                            R’000                      R’000               R’000   
Furniture, fixtures and office equipment    3 622                    (2 689)                 933   
Computer equipment                          5 794                    (4 321)               1 473   
Leasehold improvements                        796                      (546)                 250   
Other fixed assets                            232                      (220)                  12   
Total                                      10 444                    (7 776)               2 668   


                                                                              Aug 2015                            
                                                                             Acquired                                        
                                               Opening                        through
                                                                             business                              Closing   
                                               balance   Disposals        combination   Additions   Depreciation   balance   
                                                 R’000       R’000              R’000       R’000          R’000     R’000   
Reconciliation of property and
equipment                                                                                 
Furniture, fixtures and office                                                                                               
equipment                                          933        (39)                124         841          (423)     1 436   
Computer equipment                               1 473        (39)                 44         821          (934)     1 365   
Leasehold improvements                             250           –                  –       1 149           (97)     1 302   
Other fixed assets                                  12           –                  –          15           (27)         –   
Total                                            2 668        (78)                168       2 826        (1 481)     4 103   
   
                                                                              Aug 2014                                            
Furniture, fixtures and office                                                                                     
equipment                                          252           –                103       1 086          (508)       933   
Computer equipment                                 395        (10)                557       1 288          (757)     1 473   
Leasehold improvements                               5           –                  –         299           (54)       250   
Other fixed assets                                   6           –                  –          20           (14)        12   
Total                                              658        (10)                660       2 693        (1 333)     2 668   


A register containing the information required by paragraph 25(3) of Part C of Chapter 2 of the Companies
Regulations 2011 is available for inspection at the registered office of the company and its subsidiaries.

                                                                                           2015      2014
                                                                                          R’000     R’000
2Goodwill                                                                                                
 Recognised on acquisition of business combinations                                     153 274    66 255
 Impairment testing for cash-generating units containing goodwill:                                       
 For the purpose of impairment testing, goodwill is allocated to the group's operating
 divisions which represents the lowest level within the group at which the goodwill is
 monitored for internal management purposes.                                                             
 The aggregate carrying amounts of goodwill allocated to each cash-generating unit
 are as follows:                                                                                          
 Efficient Financial Services (Pty) Ltd                                                  11 275    10 622
 Efficient Select (Pty) Ltd                                                               8 369    13 275
 Efficient Wealth (Pty) Ltd (group of companies)                                         47 264    42 358
 Select Manager (Pty) Ltd (group of companies)                                           86 366         –
                                                                                        153 274    66 255
 Reconciliation of goodwill:                                                                             
 Opening balance                                                                         66 255    23 703
 Acquisitions                                                                                              
 – Independent financial advisory client bases                                              653       194
 – Efficient Wealth (Pty) Ltd (group of companies)                                            –    42 358
 – Select Manager (Pty) Ltd (group of companies)                                         86 366         –
 Closing balance                                                                        153 274    66 255

During the financial year the Efficient Funds of Funds were transferred from Efficient Select to Naviga. As a result
of this transaction, intangible assets and goodwill related to the Efficient Funds of Funds, with carrying amounts of
R2.8 million and R4.9 million respectively, were transferred from Efficient Select to the Efficient Wealth group.

                                                                          Aug 2015              
                                                                       Accumulated              
                                                                      amortisation
                                                                               and   Carrying   
                                                   Cost                impairments      value   
                                                  R’000                      R’000      R’000   
3   Intangible assets                                                                           
Trade names                                       5 902                    (2 674)      3 228   
Customer contracts and customer relationships   169 631                   (38 710)    130 921   
Computer software                                 7 455                      (639)      6 816   
Total                                           182 988                   (42 023)    140 965 
  
                                                                          Aug 2014              
                                                                       accumulated              
                                                                      amortisation
                                                                               and   Carrying   
                                                   Cost                impairments      value   
                                                  R’000                      R’000      R’000   


Trade names                                       5 112                    (1 476)     3 636   
Customer contracts and customer relationships   126 928                   (27 927)    99 001   
Computer software                                     –                         –         –   
Total                                           132 040                   (29 403)   102 637   


                                                           Aug 2015
                                                                   Acquired
                                                                    through
                     Opening                                       business                  Closing
                     balance Impairments Disposal Acquisitions  combination Amortisation     balance
                       R’000       R’000    R’000        R’000        R’000        R’000       R’000
Reconciliation of
intangible assets                                                                                   
Trade names            3 636           –        –            –          790       (1 198)      3 228
Customer contracts
and customer
relationships         99 001        (420)    (275)           –       43 404      (10 789)    130 921
Computer software          –           –        –         7 048         319         (551)      6 816
Total                102 637        (420)    (275)        7 048      44 513      (12 538)    140 965

                                                       Aug 2014
                                                                   Acquired
                                                                    through
                    Opening                                        business                 Closing
                    balance  Impairments Disposals Acquisitions combination Amortisation    balance
                      R’000        R’000     R’000        R’000       R’000        R’000      R’000
                                                                                      
Trade names             907             –        –            –       3 354         (625)    3 636
Customer contracts
and customer
relationships        16 914        (1 070)    (264)          14     90 088        (6 681)   99 001
Total                17 821        (1 070)    (264)          14     93 442        (7 306)  102 637

The remaining useful life of the trade names are between 2 and 20 years (2014: 3 and 13 years), customer
contracts and customer relationships, between 2 and 20 years (2014: 3 and 15 years) and computer software
between 4 and 7 years.

                                                                                   2015    2014   
                                                                                  R’000   R’000   
4   Investments                                                                                   
    Available-for-sale financial assets                                                           
    Available-for-sale financial assets consists of:                                              
    Linked unit investments (Fair value hierarchy: Level 1)                       1 298     842   
    Listed share portfolios (Fair value hierarchy: Level 1)                         359     464   
                                                                                  1 657   1 306   
    Investments designated at fair value through profit or loss                                   
    Investments designated at fair value through profit or loss consists of:                      
    Linked unit investments (Fair value hierarchy: Level 1)                      41 931   5 455   
                                                                                 41 931   5 455   
    Less current portion of investments                                        (41 931)       –   
    Non-current investments                                                       1 657   6 761   


5   Equity accounted investments                                                                             
                                                                           Proportion
                                                           Country of    of ownership            Principal
Name                                                    incorporation        interest           activities
C & A F Financial Services (Pty) Ltd                              RSA           49.0%   Financial Services
Rudiarius Capital Management (Pty) Ltd                            RSA           30.0%   Financial Services
AS Sure Investment Services (Pty) Ltd                             RSA           25.1%   Financial Services
Efficient Financial Services (Namibia) (Pty) Ltd                  NAM           50.0%   Financial Services
Efficient Financial Services (Namibia) (Pty) Ltd is an equity accounted investment because the Group does not hold
the majority of the voting rights, nor does it have the ability to appoint the majority of the board.

The equity accounted investments in Rebalance Fund Managers (Pty) Ltd and Marion Technology (Pty) Ltd were
disposed of by the Group on 1 June 2015 and 1 March 2015 respectively.

                                                                                    2015     2014   
                                                                                   R’000    R’000   
Equity accounted investments consist of:                                                            
C & A F Financial Services (Pty) Ltd                                                   –        –   
Rudiarius Capital Management (Pty) Ltd                                               263      329   
Rebalance Fund Managers (Pty) Ltd                                                      –       40   
AS Sure Investment Services (Pty) Ltd                                             10 650   11 012   
Marion Technology (Pty) Ltd                                                            –    5 592   
Efficient Financial Services (Namibia) (Pty) Ltd                                       –        –   
                                                                                  10 913   16 973   
Reconciliation of equity accounted investments:                                                     
Opening balance                                                                   16 973    6 313   
Profit/(loss) for the year per statement of comprehensive income                   1 808    (839)   
Profit/(loss) for the year                                                         1 808    (879)   
Realisation of inter-company profit on sale of equipment to associate                  –       56   
Deferred tax on realisation of inter-company profit on sale of equipment to                         
associate                                                                              –     (16)   
Impairment of investment in associate                                              (869)        –   
Repayment of loan to associate                                                     (412)        –   
Long-term loan granted and transferred from long-term receivables to associate                      
during the year                                                                        –    1 062   
Impairment of loans                                                                    –    (194)   
Dividend received                                                                  (863)    (216)   
Acquisition of investment in associate                                                 –   10 847   
Disposal of investment in associate                                              (5 724)        –   
Investment in associates                                                          10 913   16 973   


                                                      2015       2014   
                                                     R’000      R’000   
    Aggregate amounts relating to associates:                           
    Assets                                           8 350     14 573   
    Liabilities                                    (4 571)   (19 994)   
                                                     3 779    (5 421)   
    Group’s share of net assets                      1 001    (2 686)   
    Revenues                                        39 908     23 486   
    Profit/(loss) after tax                          6 453    (1 591)   
    Group’s share of net profit/(loss) after tax     1 808      (879)   


The respective year-ends for some of the associates differ from the year end of the Group. C & A F Financial
Services (Pty) Ltd and AS Sure Investment Services (Pty) Ltd have a February year-end. The results of these
associates are equity accounted using management-prepared information on a basis co-terminus to the Group's
year-end.

Due to a decrease in the expected financial performance of the entity, the recoverable amount of the investment
in AS Sure Investment Services (Pty) Ltd decreased to below its carrying amount. The recoverable amount has
been based on a value in use calculation. The calculation uses pre-tax cash flow projections based on financial
budgets approved by management covering a five-year period, a pre-tax discount rate of 29.5% and a terminal
value discount rate of 4% (2014: 3%). The recoverable amount decreased to below the asset's carrying value and
an impairment loss amounting to R869 000 was recognised in profit or loss.

                                                                                          2015      2014
                                                                                          R’000    R’000
6   Long-term receivables                                                                               
6.1 L Benade                                                                              1 470    1 922
    The loan to L Benade forms part of the acquisition of a customer base. This loan
    is unsecured and repayable in 60 monthly instalments of R60 477 each. The loan
    bears interest at the prime interest rate.                                                          
    Less: Short-term portion of long-term receivables                                    (1 109)    (616)
                                                                                            361    1 306
6.2 T Maree                                                                                 198      280
    The loan to T Maree forms part of the acquisition of a customer base. This loan
    is unsecured and repayable in 36 monthly instalments of R9 215 each. The loan
    bears interest at the prime interest rate.                                                          
    Less: Short-term portion of long-term receivable                                       (102)    (111)
                                                                                             96      169
6.3 H Raath                                                                                 177        –
    The loan to H Raath forms part of the acquisition of a customer base. This loan is
    unsecured and repayable in 30 monthly instalments of R9 137 each. The loan bears
    interest at the prime interest rate.                                                                
    Less: Short-term portion of long-term receivable                                        (98)       –
                                                                                             79        –
                                                                      
6.4 CJ van Zyl                                                                              139        –
    The loan to CJ van Zyl forms part of the acquisition of a customer base. This loan
    is unsecured and repayable in 24 monthly instalments of R6 451 each. The loan
    bears interest at the prime interest rate.                                                              
    Less: Short-term portion of long-term receivable                                        (68)       –
                                                                                             71        –
6.5 Share purchase scheme                                                                 1 291    2 414
    In terms of the Share Incentive Scheme loans were granted to fund 75% of the
    acquisition of Efficient Group shares by employees. The loans are repayable on
    31 August 2018. The loans bear interest at the Official Rate of Interest as defined
    by the Income Tax Act. Employees cannot trade the shares until the debt is repaid
    in full.

    The fair value of the long-term receivable is R1 192 458 (2014: R2 139 000) and
    the instrument is classified as level 3 on the fair value hierarchy. The valuation
    considers the present value of the payments set out in the agreement, discounted
    using a discount rate of 9.50%                                                                        
                                                                                          1 898     3 889

                                                                                           2015      2014
                                                                                          R’000     R’000
7   Share capital and share premium                                                                         
    Authorised                                                                                              
    361 350 000 ordinary shares of R0.00000277 each                                           1         1
    Issued                                                                                                  
    90 592 973 ordinary shares of R0.00000277 each                                            –          – 
    Share premium                                                                       150 325    150 325
                                                                                        150 325    150 325

    The Efficient Share Incentive Trust holds 227 502 (2014: 61 695) shares in Efficient Group Ltd. These shares are
    disclosed as treasury shares.

    The unissued ordinary shares are under the control of the directors in terms of a resolution of shareholders
    passed at the last annual general meeting. This authority remains in force until the next annual general meeting.

                                                                                              2015     2014
                                                                                             R’000     R’000
8   Long-term liabilities                                                                                  
8.1 Vendor finance                                                                           1 744       652
    These liabilities form part of the acquisition of customer bases. The loans are
    unsecured, interest free and repayable at various instalment dates and amounts.
    The last instalment is payable in 2018.                                                                 
    Less: Short-term portion                                                                  (524)     (285)
                                                                                             1 220       367
    The fair value of the outstanding liabilities is R1 583 941 (2014: R557 000). The
    fair value hierarchy is level 3. The valuation considers the present value of the
    payments set out in the agreements, discounted using a discount rate of 9.50%
    (2014: 9.25%). 
                                                                                         
8.2 Select Manager forward purchase liability                                                               
    This liability forms part of the acquisition of the Select Manager group through
    a forward purchase contract entered into with effective date 1 March 2015, and is
    payable in two phases over a period of three years.                                                     
    Phase 1 liability                                                                       42 243          –
    This liability is presented at fair value and is payable in equal instalments of
    R15 million over two years. The fair value hierarchy is level 3. The valuation
    considers the present value of the expected payments set out in the contract,
    discounted using a discount rate of 9.80%.                                                              
    Phase 2 liability                                                                       52 763          –
    This liability is presented at fair value and payable on 1 March 2018. The fair value
    hierarchy is level 3. The valuation considers the present value of the expected
    payments set out in the contract, discounted using a discount rate of 6.60%.                            
    Less: Short-term portion                                                               (27 957)         –
    The unobservable inputs for calculating the forward purchase liability include
    budgets and forecasts, the conversion ratio of independent financial advisor book
    buys, profit targets and free cash flows.                                                               
                                                                                            67 049          –
8.3 Select Manager dividend liability                                                       15 336          –
    This liability is presented at fair value and payable over a period of three years.
    The fair value hierarchy is level 3. The valuation considers the present value of the
    expected payments set out in the contract, discounted using a discount rate of
    6.60%.                                                                                                  
    Less: Short-term portion                                                                (7 267)         –
    The unobservable inputs for calculating the dividend liability include budgets and
    forecasts, the conversion ratio of independent financial advisor book buys, profit
    targets and free cash flows.                                                                            
                                                                                             8 069         –                                                               
8.4 Incentive liability                                                                      662          928
    This liability relates to a percentage of an incentive scheme payment that is due
    to the asset managers, that is retained and payable after an agreed employment
    period.                                                                                                 
    Less: Short-term portion                                                                (662)        (607)
                                                                                               –          321
8.5 Working capital loan                                                                                     
    The liability relates to an amortising term loan from Standard Bank of South Africa
    to assist the subsidiaries with their respective working capital requirements, and
    consists of two facilities.                                                                             
    Facility 1                                                                            21 038       28 687
    The loan bears interest at JIBAR plus 3.75% per annum and is repayable in 16
    equal and quarterly payments of R1 912 500 plus interest accrued for the period.
    The loan is guaranteed by Efficient Wealth (Pty) Ltd, Naviga Solutions (Pty) Ltd,
    Boutique Investment Partners (Pty) Ltd and Efficient Financial Services (Pty) Ltd.
    All loan covenants have been met.                                                                        
    Facility 2                                                                             9 167            –
    The loan bears interest at JIBAR plus 3.5% per annum and is repayable in 12
    variable quarterly capital payments plus interest accrued for the period. The loan
    is guaranteed by Efficient Wealth (Pty) Ltd, Naviga Solutions (Pty) Ltd, Boutique
    Investment Partners (Pty) Ltd and Efficient Financial Services (Pty) Ltd. All loan
    covenants have been met.                                                                                 
    Less: Short-term portion                                                             (11 317)      (7 650)
                                                                                          18 888       21 037
8.6 P S J Dynes and Associates                                                               212          635
    This loan is unsecured and bears no interest. The capital is repayable in 10
    instalments, with a payment every six months, with the first instalment paid on
    1 December 2011 and the last instalment payable on 1 June 2016.                                          
    Less: Short-term portion                                                                 (212)       (212)
                                                                                                –         423
8.7 A Knowles                                                                                                
    On 1 August 2014 the company acquired 25.1% of the shares and voting interest
    in AS Sure Investment Services (Pty) Ltd. R7 750 000 of the purchase price
    was settled in cash. The balance is payable on 1 August 2017 subject to the
    achievement of a profit target. No interest is charged on this liability.                   –       3 096
    The fair value hierarchy is level 3. The valuation considers the present value of
    the expected payment. The expected payment is determined by considering the
    possible scenarios of forecast profit after tax, the amount to be paid under each
    scenario and the probability of each scenario. After assessing the performance of
    AS Sure Investment Services (Pty) Ltd during the 2015 financial year, as well as
    the forecast performance presented in the budgets, the liability was remeasured
    at Rnil.                                                                                                 
                                                                                          95 226       25 244

9   Contingent liabilities and capital commitments
    Efficient Group issued a guarantee to the amount of R300 000 in terms of a lease agreement for Efficient Select’s
    offices in Cape Town.
    Efficient Wealth issued a guarantee to the amount of R317 550 in terms of a lease agreement for their offices in
    Cape Town.

                                                                                          2015    2014
                                                                                         R’000   R’000
10 Impairments                                                                                        
    Impairment of intangible asset                                                           –   1 052
    In 2012 Efficient Asset Finance (Pty) Ltd acquired an asset-based finance business
    to expand the product offering of the Group. Due to industry changes the asset
    based finance product was scaled down to the extent that the acquired business
    was no longer profitable, and was subsequently impaired during 2014.                              
    Impairment of other intangible assets                                                  420      18
    Impairment of loans to associates                                                        –     194
    The loans to Efficient Financial Services Namibia (Pty) Ltd and C & A F Financial
    Services (Pty) Ltd are not recoverable and were impaired.
    Impairment of investment in associate                                                  869       –
    Due to a decrease in the expected financial performance of the entity, the
    recoverable amount of the investment in AS Sure Investment Services (Pty) Ltd
    decreased to below its carrying amount. The recoverable amount has been based
    on a value in use calculation. The calculation uses pre-tax cash flow projections
    based on financial budgets approved by management covering a five-year
    period, a pre-tax discount rate of 29.5% and a terminal value discount rate of 4%
    (2014: 3%). The recoverable amount decreased to below the asset's carrying value
    and an impairment loss amounting to R869 790 was recognised in profit or loss.                    
    Total impairments included in the statement of comprehensive income                  1 289   1 264

                                                                                                   2015            2014
                                                                                                    ’000           ’000
11   Basic and diluted earnings per share                                                                               
     Basic and diluted earnings per share is calculated by dividing the profit attributable
     to equity holders of the company by the weighted average number of ordinary
     shares in issue during the year.                                                                                   
     Weighted average number of ordinary shares in issue                                                                
     Number of shares in issue at the end of the year                                             90 593          90 593
     Less: Issue of ordinary shares during the year                                                    –         (49 833)
                                                                                                  90 593          40 760
     Add: Rights issue bonus element                                                                   –           4 476
     Add: Weighted average number of ordinary shares issued/(repurchased) during
     the year                                                                                        (121)        24 975
     Weighted average number of ordinary shares in issue                                           90 472         70 211
     Basic and diluted earnings per share (cents)                                                   33.91           8.53
      Attributable earnings (R'000)                                                                30 681          5 988
      Weighted average number of ordinary shares in issue                                          90 472         70 211
     Headline and diluted headline earnings per share (cents)                                       32.32           9.37
      Headline earnings (R'000)                                                                    29 245          6 577
      Weighted average number of ordinary shares in issue                                          90 472         70 211
                                                                                                              




      




                                                                                                  R’000           R’000
     Headline and diluted headline earnings are calculated as follows                             29 245          6 577
       Attributable earnings                                                                      30 681          5 988
       Profit on sale of equipment                                                                   (82)           (24)
       Taxation on profit on sale of equipment                                                        23              7
       Profit on sale of shares in associate                                                      (2 607)          (527)
       Taxation on profit on sale of share in associate                                                –             98
       Impairment of intangible asset                                                                420          1 070
       Impairment of investment in associate                                                         869              –
       Profit on sale of financial advisor client base                                               (73)           (35)
       Taxation on profit on sale of financial advisor client base                                    14              –

12 Acquisition and disposal of businesses
     

    The Group made the following acquisitions during the year under review as part of its strategy to increase assets
    under management and assets under advice:

    On 1 March 2015 the Group entered into a forward purchase agreement to acquire 100% of the shares and
    voting interest in Select Manager (Pty) Ltd and its subsidiaries (70% on the acquisition date and 30% on
    1 March 2018), a group providing asset management and financial advisory services, obtaining control of Select
    Manager (Pty) Ltd. All the suspensive conditions were met on 27 April 2015 (the acquisition date). The purchase
    consideration of R122.5 million will be settled by cash payments and the issue of the company’s own equity
    over a period of three years from the date of acquisition. During the four months leading up to 31 August 2015,
    Select Manager contributed revenue of R16.5 million and profit after tax of R4.0 million to the Group's results. If
    the acquisition had occurred on 1 September 2014, management estimates that the consolidated revenue would
    have been R49.4 million and consolidated profit after tax for the year R13.2 million. In determining these amounts
    management has assumed that the fair value adjustments that arose on the date of acquisition would have been
    the same if the acquisition had occurred on 1 September 2014.

    In addition to the above acquisition, the Group also acquired 11 financial advisory client bases from various
    independent financial advisors for a total purchase price of R2.6 million which will be settled on different dates,
    in cash, based on the respective agreements. These acquisitions were accounted for as business combinations.


    Consideration transferred
    The table below summarises the acquisition date fair value of each major class of consideration transferred:

                                                                                             
                                                           Select               Financial
                                                          Manager                advisory
                                                                             client bases     Total   
                                                            R’000                   R’000     R’000   
Cash                                                       15 000                   1 305    16 305   
Liability raised as part of business combination          107 512                   1 270   108 782   
                                                          122 512                   2 575   125 087 

Financial advisory client bases
    The consideration for the financial advisory client bases is structured as a lump sum cash payment with the
    remaining balance paid in future instalments over a period of 12 to 36 months.
     
    Select Manager
    The agreement for the acquisition of Select Manager constitutes a forward purchase contract whereby the Group
    acquires 100% of Select Manager over a three-year period. The Group accounts for forward purchase acquisitions
    using the anticipated-acquisition method, resulting in the recognition of a forward purchase and dividend liability
    measured at fair value. Refer to note 8.
     
    Acquisition-related costs
    The Group incurred acquisition-related costs on legal fees, due diligence costs and other expenses. The table
    below summarises the costs:

                                                                          Financial
                                                            Select         advisory
                                                           Manager     client bases      Total
                                                             R’000            R’000      R’000
    Costs included in operating expenses                       742                –        742
                                                               742                –        742
    Identifiable assets acquired and liabilities assumed                                     
    Identifiable assets acquired and liabilities assumed    47 799            2 575     50 374
    Less: Deferred tax raised on intangible assets         (11 653)            (653)   (12 306)
                                                            36 146            1 922     38 068

    The valuation techniques used for measuring the fair value of intangible assets acquired were as follows:

    Trade names
    Relief-from-royalty method was used to calculate the intangible assets for trade names. This method considers the
    discounted estimated royalty payments that are expected to be avoided as a result of trade names being owned.
     
    Customer related intangible assets
    Multi-period excess earnings method was used to calculate the customer related intangible assets. This method
    considers the present value of net cash flows expected to be generated by the customer relationships, by
    excluding any cash flows related to contributory assets.

       Goodwill
       Goodwill arising from the acquisitions has been recognised as follows:
           
                                                                         Financial
                                                            Select        advisory
                                                           Manager    client bases      Total
                                                             R’000           R’000      R’000
                                                                                             
       Consideration transferred                           122 512           2 575    125 087
       Fair value of identifiable net assets              (36 146)         (1 922)   (38 068)
       Goodwill                                             86 366             653     87 019
       
       The goodwill is attributable mainly to the skills and technical talent of Select Manager and the synergies expected
       to be achieved from integrating the company into Efficient Group's existing Financial Services and Investments
       businesses. None of the goodwill recognised is expected to be deductible for tax purposes.
       
                                                                              2015       2014   
                                                                             R’000      R’000   
       Net cash paid on acquisition and disposal of businesses:                                 
       Gross trade receivables                                               5 247      2 510   
       Equipment                                                               168        660   
       Intangible assets                                                    44 513     93 443   
       Deferred tax asset                                                     (34)        161   
       Trade payables                                                      (2 017)    (8 828)   
       Taxation payable                                                    (1 607)      (480)   
       Cash and cash equivalents                                             4 104     11 927   
       Long-term liabilities                                                     –   (31 474)   
       Identifiable assets acquired and liabilities assumed                 50 374     67 919   
       Goodwill                                                             87 019     42 551   
       Add: Long-term receivable raised as part of the purchase price          386        280   
       Less: Long-term liability raised as part of the purchase price    (108 782)      (488)   
       Less: Deferred tax raised on intangible asset acquired             (12 306)   (25 721)   
       Less: Cash acquired                                                 (4 104)   (11 927)   
       Less: Fair value of shares issued as part of the purchase price           –   (38 272)   
       Net cash paid on acquisition of businesses                           12 587     34 342   
       disposal:                                                                                
       Intangible assets                                                     (348)      (298)   
       Net cash received on disposal of businesses                           (348)      (298)   
       Net cash paid on acquisition and disposal of businesses              12 239     34 044   
       
                                                                              2015       2014   
                                                                             R’000      R’000   
13     Related PartieS                                                                          
13.1   Related party loans                                                                      
       Loans to related parties                                                                 
       Rudiarius Capital Management (Pty) Ltd                                   39          –   
                                                                                39          –   
       Accounts receivable from related parties                                                 
       Rudiarius Capital Management (Pty) Ltd                                   15          –   
                                                                                15          –   
       Accounts payable to related party                                                        
       Midnight Storm Investments 299 (Pty) Ltd                               (97)          –   
       Rudiarius Capital Management (Pty) Ltd                              (1 256)          –   
                                                                           (1 353)          –   
   
       The current loans are unsecured, bear no interest and have no fixed repayment terms.
   
       During the year, Efficient Group Ltd provided financial support to the Efficient Share Incentive Scheme Trust
       to enable the structured entity to purchase some of Efficient Group's own equity instruments. Efficient Group
       provided assistance of R254 000 (2014: Rnil) during the 2015 financial year for this purpose.

                                                                                        2015     2014   
                                                                                       R’000    R’000   
13.2   Related party transactions                                                                       
       Rent paid to Midnight Storm Investments 299 (Pty) Ltd                             976      830   
       Administration fees received:                                                                    
       Rudiarius Capital Management (Pty) Ltd                                             55        –   
       Rebalance Fund Managers (Pty) Ltd                                                  78        –   
       Dividends received:                                                                              
       C & A F Financial Services (Pty) Ltd                                                –      216   
       Rudiarius Capital Management (Pty) Ltd                                            450        –   
       Rebalance Fund Managers (Pty) Ltd                                                  11        –   
       AS Sure Investment Services (Pty) Ltd                                             402        –   
       Marion technology (Pty) ltd:                                                                     
       Information Technology Services paid and software development                   2 155    1 416   
       Interest received                                                                  26       59   
       Service fees paid to Rudiarius Capital Management (Pty) Ltd by
       Boutique Collective Investments (RF) (Pty) Ltd                                 10 106    2 021   
13.3   Transactions with directors and prescribed officers (including their families)                   
       Remuneration paid and accrued to directors and prescribed officers                               
       – Remuneration                                                                 63 287   13 251   
       – Share-based payments                                                            504      304   
                                                                                      63 791   13 555   

14   Segmental analysis                                                                                                                                                                                                           
     The Group changed the reporting segments from the previous financial year to better reflect the core business                                                                                                                
     activities in the Group. The Asset Management, Consulting and Administration businesses were combined in one
     segment. The Services and Solutions segment, a new segment, now contains Naviga Solutions (Pty) Ltd.      

     The group is organised into three main business segments:                 

     Financial Services   

     The following entities are included in this segment: Efficient Financial Services, Efficient Asset Finance,
     Efficient Wealth, Twist Street Securities, Efficient Fiduciary Services, Stead Wealth Management, Exceed Asset   
     Management, Exceed Private Clients and AS Sure Investment Services.     

     Services and Solutions                 

     The following entity is included in this segment: Naviga Solutions.    

     Investments          

     The following entities are included in this segment: Efficient Select, Efficient International Investments,
     Boutique Collective Investments, Boutique Investment Partners, Select Manager, Rudiarius and Rebalance.          

                                                                                     2015                           
                                                                   Services
                                              Financial                 and                                         
                                               Services           Solutions   Investments       Other       Total   
                                                  R’000               R’000         R’000       R’000       R’000   
     Revenue                                    118 363              35 974       645 918    (84 076)     716 179   
     – External                                 111 537               1 398       602 790         454     716 179   
     – Inter-segment                              6 826              34 576        43 128    (84 530)           –   
     Operating expenses                       (117 930)            (10 475)     (625 258)      70 064   (683 599)   
     Finance cost                               (1 255)                   –         (318)     (1 138)     (2 711)   
     Finance income                               1 183                 368         5 213         362       7 126   
     Impairment of investment in associates       (869)                   –             –           –       (869)   
     Impairment of intangible assets              (420)                   –             –           –       (420)   
     Profit/(loss) for the year                     383              18 623        19 348     (9 052)      29 302   
     Taxation                                     (718)             (7 245)       (7 692)       3 448    (12 207)   
     Net asset value                            (8 574)              15 754        66 486     115 829     189 495   
     Assets                                      45 410              20 802       189 236     249 854     505 302   
     Liabilities                               (53 983)             (5 048)     (122 750)   (134 026)   (315 807)   
     Depreciation and amortisation              (1 228)             (1 378)       (1 914)     (9 499)    (14 019)   
     Share of profit from associates                908                   –           890          10       1 808   
 
                                                                         2014 (Restated)                          
                                                                   Services
                                              Financial                 and                                           
                                               Services           Solutions   Investments       Other       Total   
                                                  R’000               R’000         R’000       R’000       R’000   
     Revenue                                     68 628              22 170       165 705    (23 143)     233 360   
     – External                                  65 468              15 529       151 938         425     233 360   
     – Inter-segment                              3 160               6 641        13 767    (23 568)           –   
     Operating expenses                        (68 828)             (7 484)     (165 425)      15 064   (226 673)   
     Finance cost                                 (913)                   –           (4)       (293)     (1 210)   
     Finance income                                 633                 166         1 258         740       2 797   
     Impairment of investment in associates       (101)                   –             –        (93)       (194)   
     Impairment of intangible assets            (1 070)                   –             –           –     (1 070)   
     Net (loss)/profit for the year             (1 173)              10 523           959     (5 349)       4 960   
     Taxation                                       251               4 159           492     (1 560)       3 342   
     Net asset value                           (12 973)             (2 869)        29 915     153 601     167 674   
     Assets                                      27 823               8 502       107 710     150 901     294 936   
     Liabilities                               (40 807)            (11 371)      (77 790)       2 706   (127 262)   
     Depreciation and amortisation                (939)                 (3)       (2 824)     (4 875)     (8 641)   
     Share of loss from associates                  (2)                   –             –       (837)       (839)   
 
     Other consists of consolidation entries, amortisation of intangible assets, C & A F Financial Services,
     Efficient Capital, Efficient Select Swaziland, Efficient Share Incentive Scheme Trust and Efficient Group.
     All operations take place in southern Africa.
     
15   Liquidity
     At the end of the reporting period the Group's current liabilities exceed its current assets. Management assessed
     the Group's cash flow forecasts and its access to secured credit, which includes the realisation of net deferred tax
     assets of R21 million in the next 12 months. Based on the cash flow forecast and the timing of cash inflows and
     outflows, management is of the opinion that the Group will be able to settle its short-term commitments as and
     when they become due.
     
16   Events after reporting date
     No significant events occurred subsequent to the financial year that requires any additional disclosure or
     adjustments to the financial statements.
     
17   Dividend paid
     A dividend of 2 cents per share and a dividend of 5.88235 cents per share were paid in December 2014 and
     May 2015 respectively (2014: nil).

Corporate Information

Non-Executive Directors
Dr SF Booysen (Chairman)*, LC Cele*, L Taylor*, J Rosen*, JA Mabena , AP du Preez and MM du Preez#
(*) Independent; (#) Alternate

Executive Directors
DD Roodt, H Weidhase, AT De Klerk, RH Walton and CP Burger.

Registered and Business address
81 Dely Road, Hazelwood, 0081

Company Secretary
Adv Rudi Barnard

Sponsor
Java Capital

Reporting Accountants and Auditors
KPMG Inc.

Transfer Secretaries
Link Market Services South Africa (Pty) Ltd

13 November 2014

(Incorporated in the Republic of South Africa)
(Registration No 2006/036947/06)
JSE share code: EFG
ISIN: ZAE000151841
(“Efficient Group” or “the Company”)

Pretoria
81 Dely Road, Hazelwood
Pretoria, 0081
South Africa
Tel: +27 (0)12 460 9580
Fax: +27(0)12 346 6135
info@efgroup.co.za

www.efgroup.co.za  



  




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