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Condensed Audited Financial Results for the Year Ended 30 September 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 AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2015
OVERVIEW
During the year, 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 year.
FINANCIAL PERFORMANCE
The company had a profit after tax of R811 million (2014: R16.2 billion loss) mainly due to
significantly lower impairments on investments.
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.
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 in 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 financial year.
DIRECTORATE
The following changes in directors occurred in the current year:
Nithia Nalliah resigned on 31 March 2015 and Jack Koolen sadly passed away 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 year ended 30 September 2015
R million 2015 2014
Dividends received 897 1 271
Sundry income - 7
Interest received 4 9
Total income 901 1 287
Operating costs (27) (372)
Impairment of financial instruments - (167)
Impairment of investments (14) (16 925)
Finance costs (47) (6)
Indirect tax (1) (4)
Income/(loss) before taxation 812 (16 187)
Direct taxation: SA normal tax (1) (4)
Income/(loss) for the year 811 (16 191)
Reconciliation between basic earning/(loss) and headline earnings
Income/(loss) for the year 811 (16 191)
Preference dividends - (89)
Basic loss attributable to ordinary shareholders 811 (16 280)
Adjusted for: Impairment of subsidiaries 14 16 925
Headline earnings 825 645
Earnings per share (cents)
Basic and diluted earnings/(loss) per share 54,0 (1 160,9)
Headline earnings per share 55,0 46,0
Weighted number of shares in issue (million) 1 501,0 1 402,4
Company statement of other comprehensive income for the year ended 30 September 2015
2015 2014
Profit/(loss) for the year 811 (16,191)
Other comprehensive loss - -
Total comprehensive income/(loss) 811 (16,191)
Company statement of financial position as at 30 September 2015
R million 2015 2014
Assets
Short-term deposits and cash 454 4
Other financial assets 407 4
Investments - -
Investment in subsidiaries 565 564
Total assets 1 426 572
Liabilities and equity
Taxation 1 -
Borrowings 447 447
Other liabilities 420 378
Total liabilities 868 825
Ordinary share capital 192 192
Ordinary share premium 14 458 14 458
Reserves (15 222) (16 033)
Ordinary shareholders' equity (572) (1 383)
Preference shareholders' equity 1 130 1 130
Total equity (capital and reserves) 558 (253)
Total liabilities and equity 1 426 572
Tangible net asset value per ordinary share (cents) (38,1) (92,1)
Net asset value per ordinary share (cents) (38,1) (92,1)
Number of shares in issue (million) 1 501,0 1 501,0
Company statement of changes in equity for the year ended 30 September 2015
Ordinary shares
Ordinary
share capital Retained
R million and premium earnings
Balance at 30 September 2013 9 440 288
Shares issued in rights issue 5 210 -
Dividends paid - (41)
Total comprehensive loss for the year - (16 280)
Balance at 30 September 2014 14 650 (16 033)
Total comprehensive income for the year - 811
Balance at 30 September 2015 14 650 (15 222)
Ordinary Preference
shareholders' share capital
R million equity and premium Total
Balance at 30 September 2013 9,728 1,130 10,858
Shares issued in rights issue 5,210 - 5,210
Dividends paid (41) (89) (130)
Total comprehensive loss for the year (16,280) 89 (16,191)
Balance at 30 September 2014 (1,383) 1,130 (253)
Total comprehensive income for the year 811 - 811
Balance at 30 September 2015 (572) 1,130 558
Company statement of cash flows for the year ended 30 September 2015
R million 2015 2014
Cash generated from operations 452 1 258
Cash receipts 484 1 287
Cash payments (32) (29)
Indirect and direct taxation paid (2) (7)
Cash inflow from operating activities 450 1 251
Cash outflow from investing activities - (5 494)
Investments acquired during the year - (177)
Investments disposed of during the year - 132
Investments in subsidiaries - (5 449)
Cash inflow from financing activities - 4 216
Cash outflow from funding activities - (867)
Issue of ordinary shares - 5 213
Preference shareholders' payments and transactions - (89)
Ordinary shareholders' payments and transactions - (41)
Increase/(decrease) in cash and cash equivalents 450 (27)
Cash and cash equivalents at the beginning of the year 4 35
Reclassification of cash held by African Bank Limited - (4)
Cash and cash equivalents at the end of the year 454 4
NOTES TO THE FINANCIAL STATEMENTS
AUDITORS' REPORT
The accompanying financial information is extracted from the audited financial statements but is
itself not audited. The auditors have expressed an adverse opinion on the financial statements of
the group and an unqualified opinion on the separate financial statements of the company. An
extract of the audit report is as follows:
'Basis for adverse opinion on consolidated financial statements and an unqualified opinion on the
separate financial statements
The company has subsidiaries and is required by International Financial Reporting Standards to
prepare consolidated financial statements. As described in the directors' report, the directors have
prepared unconsolidated financial statements. These 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 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. The effect of not preparing consolidated financial statements in accordance with
International Financial Reporting Standards is not given as required.
Adverse opinion on consolidated financial statements
In our opinion, because of the significance of the matter discussed in the preceding paragraph,
the financial statements do not present fairly the financial position of the group as at
30 September 2015, and of its financial performance and cash flows for the year then ended, in
accordance with International Financial Reporting Standards, and the requirements of the
Companies Act of South Africa.
Unqualified opinion on the separate financial statements
In our opinion, the separate financial statements present fairly, in all material respects, the financial
position of the company as at 30 September 2015, and its financial performance and its cash flows
for the year then ended in accordance with International Financial Reporting Standards, and the
requirements of the Companies Act of South Africa.
Emphasis of Matter
Without qualifying our opinion, we draw attention to Note 3.1 to the financial statements which
indicate that the company 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 reportable 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 audit report is available for inspection at the company's registered office. The auditors'
report does not necessarily report on all of the information contained in these financial results.
Shareholders are therefore advised that in order to obtain a full understanding of the nature of the
auditors' engagement they should obtain a copy of the auditors' report together with the
accompanying financial information from the issuer's registered office.
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
- IFRIC 21 - Levies
All the other accounting policies and their application are consistent with those used for the
company's 2014 annual financial statements.
The directors take full responsibility for the preparation of these financial results and confirm that
the financial information has been correctly extracted from the underlying 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 (Pty) 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 05:39:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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