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Condensed Reviewed Financial Results for the Six Month Period Ended 31 March 2015
AFRICAN BANK INVESTMENTS LIMITED (in business rescue)
(Incorporated in the Republic of South Africa)
(Registration number 1946/021193/06)
(Ordinary share code: ABL) (ISIN: ZAE000030060)
(Hybrid instrument code: ABLP) (ISIN: ZAE000065215)
("ABIL" or "the company")
CONDENSED REVIEWED FINANCIAL RESULTS FOR THE SIX MONTH PERIOD ENDED 31 MARCH 2015
OVERVIEW
Subsequent to reporting date, the company began voluntary business rescue proceedings
on 5 June 2015.
Since the previous year end, there were no changes in status of the company's
investments with African Bank Limited ("African Bank") still in curatorship and
Ellerine Holdings Limited still under business rescue.
The board of directors of ABIL ("the Board") set out the reasons for not preparing consolidated
annual financial statements for the year ended 30 September 2014 in those
financial statements.
As a consequence of the above, no consolidated results could be prepared as no
consolidated opening balances are available for the current period.
FINANCIAL PERFORMANCE
The company broke even in the current period (March 2014: R481 million loss). This was
due to the lower impairments incurred, in respect of investments, in the current period
compared to the prior comparative period.
GOING CONCERN
ABIL is currently in business rescue due to the demand for repayment of loans and
fulfilment of guarantees issued to various financial institutions. Information regarding
the business rescue proceedings is available at
http://abil.investoreports.com/investor-media/abil-business-rescue/
The company is an investment holding company and hence is reliant on the dividends
it receives from its subsidiaries for income in order to meet its commitments.
However, the Board believe that the claims by the creditors will be paid in full for
the following reasons:
- The company's subsidiary, The Standard General Insurance Company Limited("Stangen"),
is in a strong financial position and has equity of approximately R1.1 billion at
30 September 2015.
- Stangen is profitable and in the 2015 financial year made profits of approximately
R1.4 billion.
- Value will be realised from Stangen's run-off credit life book with African Bank
despite the lapsing of the purchase and sale agreement for the entire issued shares
of Stangen. Stangen is exploring various ways to retain value in its book as well as
developing new routes to market independent of African Bank Limited.
- Stangen has sufficient cash and equity to declare dividends to ABIL that will fund
operations, facilitate repayment of ABIL's creditors and provide ABIL with funds to
either invest in new opportunities or to make distributions to ABIL's shareholders.
The Board believes that if Stangen is either sold or continues operating as a
subsidiary of ABIL, there will be sufficient cash to pay ABIL's creditors, fund
operations and potentially make new investments or distributions to ABIL's shareholders.
Thus the Board concluded that the preparation of the financial information as a going
concern is appropriate.
DIVIDENDS
No ordinary or preference dividends were declared in the current period.
DIRECTORATE
Nithia Nalliah resigned on 31 March 2015 and Jack Koolen sadly passed away subsequent
to period end on 3 May 2015.
LOOKING AHEAD
The company is currently under business rescue and its future will depend on the
outcome of the business rescue process, which is forecast to conclude in 2016.
On behalf of the board
Mutle Mogase
Chairman
COMPANY INCOME STATEMENT
for the six month period ended 31 March 2015
31 March 31 March 30 September
R million 2015 2015 2015
Dividend received 45 1 021 1 271
Interest received - 12 16
Total income 45 1 033 1 287
Operating costs (10) (5) (372)
Impairment of financial instruments - - (167)
Impairment of subsidiaries (14) (1 506) (16 925)
Finance costs (21) - (6)
Indirect taxation: VAT - (1) (4)
Loss before taxation - (479) (16 187)
Direct taxation: Normal - (2) (4)
Loss for the period - (481) (16 191)
Reconciliation between basic loss and headline earnings
Loss for the period - (481) (16 191)
Preference dividend - (42) (89)
Basic loss attributable to ordinary shareholders - (523) (16 280)
Adjusted for: Impairment of subsidiaries 14 1 506 16 925
Headline earnings 14 983 645
Earnings per share (cents)
Basic and diluted loss per share 0.0 (40.3) (1 160.9)
Headline earnings per share 0.9 75.7 46.0
Weighted number of shares in issue (million) 1 501.0 1 297.8 1 402.4
COMPANY STATEMENT OF OTHER COMPREHENSIVE INCOME
for the six month period ended 31 March 2015
31 March 31 March 30 September
R million 2015 2014 2014
Loss for the period - (481 (16 191)
Other comprehensive loss - - -
Total comprehensive loss for the period - (481 (16 191)
COMPANY STATEMENT OF FINANCIAL POSITION
as at 31 March 2015
31 March 31 March 30 September
R million 2015 2014 2014
Assets
Short-term deposits and cash 14 64 4
Other assets 5 4 4
Deferred tax asset - 1 -
Investments - 177 -
Investment in subsidiaries 565 15 783 564
Total assets 584 16 029 572
Liabilities and equity
Borrowings 447 497 447
Other liabilities 390 28 378
Total liabilities 837 525 825
Ordinary shareholders' equity (1 383) 14 374 (1 383)
Preference shareholders' equity 1 130 1 130 1 130
Total equity (capital and reserves) (253) 15 504 (253)
Total liabilities and equity 584 16 029 572
Tangible net asset value per ordinary share (cents) (92.1) 957.7 (92.1)
Net asset value per ordinary share (cents) (92.1) 957.7 (92.1)
Number of shares in issue (million) 1 501.0 1 501.0 1 501.0
COMPANY STATEMENT OF CHANGES IN EQUITY
for the six month period ended 31 March 2015
Ordinary shares
Share Ordinary
capital Distributable shareholders'
R million and premium reserves equity
Balance at 30 September 2013 9 440 288 9 728
Dividends paid - (41) (41)
Shares issued in terms of the rights offer 5 210 - 5 210
Total comprehensive loss for the period - (523) (523)
Balance at 31 March 2014 14 650 (276) 14 374
Dividends paid - - -
Total comprehensive loss for the period - (15 757) (15 757)
Balance at 30 September 2014 14 650 (16 033) (1 383)
Total comprehensive loss for the period - - -
Balance at 31 March 2015 14 650 (16 033) (1 383)
Preference
share capital
R million and premium Total
Balance at 30 September 2013 1 130 10 858
Dividends paid (42) (83)
Shares issued in terms of the rights offer - 5 210
Total comprehensive loss for the period 42 (481)
Balance at 31 March 2014 1 130 15 504
Dividends paid (47) (47)
Total comprehensive loss for the period 47 (15 710)
Balance at 30 September 2014 1 130 (253)
Total comprehensive loss for the period - -
Balance at 31 March 2015 1 130 (253)
COMPANY STATEMENT OF CASH FLOWS
for the six month period ended 31 March 2015
31 March 31 March 30 September
R million 2015 2014 2014
Cash generated from operations 10 1 027 1 258
Cash receipts 30 1 030 1 287
Cash paid (20) (3) (29)
Indirect and direct taxation paid - (5) (7)
Cash inflow from operating activities 10 1 022 1 251
Cash outflow from investing activities - (5 307) (5 494)
Investments acquired during the period - (177) (177)
Investments disposed of during the period - 120 132
Investments in subsidiaries - (5 250) (5 449)
Cash inflow from financing activities - 4 314 4 216
Cash outflow from funding activities - (817) (867)
Issue of ordinary shares - 5 213 5 213
Preference shareholders' payments and transactions - (42) (89)
Ordinary shareholders' payments and transactions - (40) (41)
Increase/(decrease) in cash and cash equivalents 10 29 (27)
Cash and cash equivalents at the beginning of the period 4 35 35
Reclassification of cash held by African Bank Limited - - (4)
Cash and cash equivalents at the end of the period 14 64 4
NOTES TO THE FINANCIAL STATEMENTS
AUDITORS' REPORT
The accompanying financial information has been reviewed by the independent auditors,
Grant Thornton Johannesburg Partnership.
The extract of the adverse review conclusion on the group financial results and an
unqualified conclusion on the separate company financial results are as follows:
"Basis for adverse conclusion on consolidated interim financial statements and unqualified
conclusion on the separate interim financial statements
The company has subsidiaries and is required by International Financial Reporting Standards
to prepare consolidated interim financial statements. As described in the interim financial
statements, the directors have prepared unconsolidated interim financial statements.
These interim financial statements have been prepared on the same basis as separate financial
statements, which are financial statements permitted in terms of International Financial
Reporting Standards when an entity also prepares consolidated financial statements.
Unconsolidated interim financial statements are prepared on the basis that investments in
subsidiaries are reported at cost and income is recognised when dividends from subsidiaries
are receivable.
Adverse conclusion on consolidated interim financial statements
Based on our review, because of the significance of the matter discussed in the preceding
paragraph, the interim financial statements do not present fairly the financial position of the
group as at 31 March 2015, and of its financial performance and cash flows for the period then
ended, in accordance with International Financial Reporting Standards, and the requirements
of the Companies Act of South Africa.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the
accompanying condensed separate financial statements of African Bank Investments Limited for
the period ended 31 March 2015 are not prepared, in all material respects, in accordance with
the International Financial Reporting Standard, (IAS) 34 Interim Financial Reporting 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 requirements of the
Companies Act of South Africa.
Emphasis of Matter
Without qualifying our conclusion, we draw attention to the going concern statement to the
separate interim financial statements which indicate the existence of a material uncertainty
which may cast significant doubt on the company's ability to continue as a going concern.
Report on other legal and regulatory requirements
In accordance with our responsibilities in terms of Sections 44(2) and 44(3) of the Auditing
Profession Act, we report that we have identified certain unlawful acts or omissions committed
by persons responsible for the management of African Bank Investments Limited which constitute
reportable irregularities in terms of the Auditing Profession Act, and have reported such matters
to the Independent Regulatory Board for Auditors.
The reported irregularities reported are that the annual financial statements for the years
ended 30 September 2014 and 30 September 2015 have not been published within six months after the
year-end as required in terms of Section 30(1) of the Companies Act and the Annual General Meeting
has not been held within 15 months from the previous Annual General Meeting as required by
Section 61(7) if the Companies Act."
The full review conclusion is available for inspection at the company's registered office.
Any reference to future financial performance included in this announcement, has not been reviewed
or reported on by the auditors.
BASIS OF PREPARATION
The preparation of this financial information was supervised by Reynold Ngobese CA(SA).
Except for the non-preparation of consolidated results, this financial information has been prepared
in accordance with the framework concepts and the measurement and recognition requirements of the
International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards
Board, Interpretations issued by the International Financial Reporting Interpretations Committee
(IFRIC) of the IASB, IAS 34 "Interim Financial Reporting", the SAICA Financial Reporting Guides as
issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by
Financial Reporting Standards Council, the requirements of the Companies Act of South Africa
(Act 71 of 2008) as well as the Listings Requirements of the JSE Limited.
The company has adopted the following standards and interpretations during the financial year,
which did not have material impact on the reported results:
- IFRS 10 - Consolidated Financial Statements;
- IFRS 12 - Disclosure of Interests in Other Entities;
- IAS 19 - Employee Benefits;
- IAS 27 - Consolidated and Separate Financial Statements;
- IAS 32 - Financial Instruments: Classification and Measurement;
- IAS 36 - Impairment of Assets;
- IAS 39 - Financial Instruments: Recognition and measurement; and
- IFRIC 21 - Levies.
All the other accounting policies and their application are consistent with those used for the
company's 2014 annual financial statements.
Midrand
22 April 2016
Sponsor
Merchantec Capital
Board of directors
Independent non-executive: MC Mogase (Chairman), N Adams, Advocate MF Gumbi, NB Langa-Royds,
M Mthombeni, RJ Symmonds
African Bank Investments Limited
(Incorporated in the Republic of South Africa)
(Registration number 1946/021193/06)
(Ordinary share code: ABL) (ISIN: ZAE000030060)
(Hybrid instrument code: ABLP) (ISIN: ZAE000065215)
Registered office
59 16th Road, Midrand, South Africa, 1685
Private Bag X170, Midrand, South Africa, 1685
Share transfer secretaries
Link Market Services South Africa Proprietary Ltd
13th Floor, Rennie House, 19 Ameshoff Street, Braamfontein
PO Box 4844, Johannesburg, 2000.
Telephone: +27 11 713 0800
Telefax: +27 86 674 4381
Website
www.abil.co.za
Date: 22/04/2016 05:35:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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