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Preliminary audited results
for the year ended 29 February 2016
SANTOVA
Registration number 1998/018118/06
Share code SNV
ISIN ZAE000159711
PRELIMINARY AUDITED RESULTS
FOR THE YEAR ENDED 29 FEBRUARY 2016
Innovative Solutions. Endless Possibilities.
HIGHLIGHTS
INCREASE IN PROFIT BEFORE TAX 29,9%
R'000
13 33 470
14 40 014
15 51 386
16 66 736
INCREASE IN NORMALISED HEADLINE EARNINGS PER SHARE 33,2%
cents
13 17,66
14 21,65
15 25,73
16 34,28
INCREASE IN CAPITAL AND RESERVES 67,8%
R'000
13 147 963
14 198 510
15 230 289
16 386 415
INCREASE IN CASH AND CASH EQUIVALENTS 175,5%
R'000
13 28 084
14 36 843
15 44 889
16 123 657
INCREASE IN NET ASSET VALUE PER SHARE 45,3%
cents
13 108,43
14 145,47
15 168,76
16 245,19
COMMENTARY
2016 PRELIMINARY RESULTS COMMENTARY
2016 was, in many ways, an exciting year for the Group. While the industry in general was faced with flat
growth, predominantly as a result of reduced trade volumes and ongoing over-capacity in ocean freight, the
Group was able to mitigate these factors through a clear growth strategy and strong execution infrastructure.
Revenue earned of R278,7 million for the year is 24,3% up on the previous year's revenue of R224,2 million
and the net profit before tax for the year has increased by 29,9% to R66,7 million from R51,4 million. Most
notable, however, is the increase in normalised head line earnings per share to 34,28 cents, which is 33,2%
up on the previous year's figure of 25,73 cents. Of significance is that this financial performance was achieved
largely as a result of organic growth and what is encouraging is the growth in the contribution from the
Group's offshore earnings.
FINANCIAL HIGHLIGHTS
The 2016 financial year continued a seven year trend of consistent growth in profit and net assets and was
marked by a number of significant financial events and results which have strengthened the Group balance
sheet and positioned it well for future growth. The key financial highlights during the period were:
- the acquisition of 100% of Tradeway (Shipping) in the United Kingdom for a total purchase consideration
of R121,5 million, the Group's largest acquisition to date;
- the Group's offshore operations contributing 55% to profit for the year which, with the acquisition and
integration of Tradeway (Shipping) in the last three months of the financial year under review, is expected
to be significantly higher in future;
- a successful capital raising of R51,3 million via a general issue of new shares for cash. This was the Group's
first new issue of shares since a vendor placement in June 2010 and the first public issue of new shares in
the past decade;
- a 67,8% increase in Capital and Reserves primarily as a result of increased profitability, foreign currency
revaluation gains and the capital raising;
- the significant reduction in the Group's gearing ratio to 55,6% as at 29 February 2016, versus 114,1% as at
the end of the prior financial year, falling below 100% for the first time.
- the successful conclusion of a new five year medium term loan facility of R60 million from the Group's
primary bankers, utilised to fund the acquisition of Tradeway (Shipping);
- the strong growth in the financial performance of the Netherlands and Australian regions with profit for
the year up 70,1% in the Netherlands and 69,6% in Australia;
- a strong performance from the Group's logistics operations in South Africa which achieved a 25,3%
increase in profit for the year, despite the year-on-year reduction in trade volumes as a result of the poor
economic climate within the country. This growth was achieved through a strengthening in margins and
containing growth in administrative expenses to below current inflation levels, as the Group continually
seeks efficiencies in its operations, systems and cost structures;
- a continuing trend of strong cash generation particularly in the Group's offshore operations which resulted
in cash on hand at year end increasing 175,5% from R44,9 million to R123,7 million in the current year; and
- total assets exceeding R1 billion for first time in Group's history.
STRATEGIC HIGHLIGHTS
Balanced growth strategy
The Group focuses on three growth models which include organic growth, growth through "bolt-on"
acquisitions and growth through strategic acquisitions. The prime objective of our strategy is to balance
organic growth with this acquisition growth.
In this regard, the Group acquired the Tradeway (Shipping) Group in the United Kingdom with offices in
Leeds and Manchester, an exceptionally strong brand within the United Kingdom specialising in the West
and East African trade routes from the United Kingdom. Coupled with the expected synergies with the
Group's recently established office in Ghana, the current trade lane volumes under the management of this
business offer Santova the opportunity to expand its geographical presence into East Africa in the near future.
Grassroots operations in Ghana and Hamburg were set up during the year under review, together with a
small acquisition in Mauritius, which collectively constituted a cost to the income statement as opposed to a
positive contribution to Group profits. These investments were made on the premise that they were strategic
in nature and that the Group's future earnings would be enhanced through new revenue streams generated
by and through these grassroots operations.
Innovative Group information communication technologies
During the current period the Group initiated the re-design of existing information systems and technologies
(OSCAR) which has paved the way for Santova to further differentiate itself from its competitors. Santova' s
next generation technological capability constitutes a single-platform worldwide, is cloud based and allows
all information pertaining to the activities or participants in the supply chain to be housed in a single central
database. Completion date for the roll-out of this system throughout Santova offices worldwide is expected
to be during the third quarter of the 2016 calendar year.
Operational efficiency and effectiveness
To facilitate greater efficiency and effectiveness the Group has focused on three areas, including
centralisation vs decentralisation, workflow processes design, and information communication
technologies.
In this regard, the Group has embarked on a strategy of centralisation and decentralisation. Where possible,
the functions of finance, information technology, human resources, customs clearance and supply chain
services have been centralised while marketing, key account management and new business development
have been decentralised. In making these decisions cognisance was taken of local knowledge, consistent
policies, greater control, standardised procedures, quicker decision making, customer service and the
elimination of duplication.
With the centralisation and decentralisation of certain functions, the Group is continuously re-engineering
workflows to ensure improved efficiency, compliance agility, and visibility by ensuring that every process
step is explicitly defined, monitored over time, and optimised for maximum productivity. This is an ongoing
process which continuously strives for best practice.
The Group has embraced next generation technology which has facilitated the faster processing of data,
easier retrieval of information, reduction or elimination of errors, and ultimately shorter lead times to
complete a shipment. Most importantly, the timely reporting – access to data – and visibility of all facets of
the supply chain has allowed the Group to re-strategise low-margin clients or services and invest the saved
time and money into greater earnings enhancing related activities.
Against this backdrop, the Group has maintained sound operating profit margins and above-average capital
efficiency ratios. Productivity has increased significantly, expenses have been contained and profitability has
increased, all of which is in contrast to many of the companies in the industry whose top-line growth and
operating margins have suffered during the global economic downturn.
This clearly supports the view that the Group has been successful in its vision of becoming a recognised
brand in global trade solutions through its strategically placed international offices and leading intellectual
capital. Our strategy of diversification in terms of geographic regions, currencies, industries, products and
services has served the Group well, particularly during the current period of significant South African Rand
weakness and depreciation.
LOOKING FORWARD
Smart, client-centric, flexible and rapid response supply chain services and solutions are in demand. With
the growing economic inter-dependence of countries worldwide, through increasing cross-border trade and
widespread diffusion of technology, the Group will continue to leverage off the opportunities that present
themselves.
In times of increased competition, client retention is a priority. We will continue to ensure that our capabilities
are valued by the market and that a management-performance system and scorecard, focusing on the
leading indicators that drive the three key strategic objectives, is the responsibility of strong leadership
practices at every level of the Group. We will also seek and leverage off the business opportunities that
always accompany economic downturns – after all the Santova Group was born and developed during flat
economic times.
Finally, we will be unrelenting in our pursuit of continued diversification in terms of geographic regions,
currencies, industries, products and services whilst at all times striving for greater growth, innovation,
efficiency and effectiveness.
SUMMARISED CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
as at 29 February 2016
2016 2015
Notes R'000 R'000
ASSETS
Non-current assets 262 221 140 652
Property, plant and equipment 25 086 7 933
Intangible assets 5 222 881 122 264
Financial assets 7 4 536 3 235
Deferred taxation 9 718 7 220
Current assets 760 944 592 834
Trade receivables 590 133 495 162
Other receivables 46 743 52 738
Current tax receivable 385 45
Financial assets 7 26 –
Cash and cash equivalents 123 657 44 889
Total assets 1 023 165 733 486
EQUITY AND LIABILITIES
Capital and reserves 386 415 230 289
Stated capital 8 214 076 145 192
Treasury shares (998) –
Equity compensation reserve 3 028 1 703
Foreign currency translation reserve 62 044 20 445
Accumulated profit 102 027 59 090
Attributable to equity holders of the parent 380 177 226 430
Non-controlling interests 6 238 3 859
Non-current liabilities 76 329 20 500
Interest-bearing borrowings 9 57 043 18 800
Long-term provision 1 500 1 700
Financial liabilities 7 17 786 –
Current liabilities 560 421 482 697
Trade and other payables 216 154 173 826
Current tax payable 8 000 2 710
Current portion of interest-bearing borrowings 9 18 620 8 088
Amounts owing to related parties 302 216
Financial liabilities 7 31 348 1 447
Short-term borrowings 262 918 280 838
Short-term provisions 23 079 15 572
Total equity and liabilities 1 023 165 733 486
SUMMARISED CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME
for the year ended 29 February 2016
2016 2015*
Notes R'000 R'000
Gross billings 3 797 890 3 462 792
Revenue 2 278 655 224 235
Other income 11 196 15 952
Depreciation and amortisation (4 043) (3 311)
Administrative expenses (215 022) (182 742)
Operating profit 70 786 54 134
Interest received 205 231
Finance costs (4 255) (2 979)
Profit before taxation 66 736 51 386
Income tax (16 841) (12 166)
Profit for the year 49 895 39 220
Attributable to:
Equity holders of the parent 48 713 38 525
Non-controlling interests 1 182 695
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
– Exchange differences arising from translation
of foreign operations 42 796 (4 144)
– Net actuarial gain on remeasurement of post-retirement
medical aid benefit liability 18 –
Total comprehensive income 92 709 35 076
Attributable to:
Equity holders of the parent 90 330 34 650
Non-controlling interests 2 379 426
Basic earnings per share (cents) 4 34,50 28,23
Diluted basic earnings per share (cents) 33,68 27,73
Dividends per share (cents) 5,50 4,25
* Restated due to voluntary change in presentation and classification as detailed in note 3
SUMMARISED CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
for the year ended 29 February 2016
Attributable to equity holders of the parent
Equity Foreign Non-
compen- currency Accu- cont-
Stated Treasury sation translation mulated rolling Total
capital shares reserve reserve profit Total interests equity
R'000 R'000 R'000 R'000 R'000 R'000 R'000 R'000
Balances at
28 February 2014 145 192 – 565 24 320 25 000 195 077 3 433 198 510
Total comprehensive
income – – – (3 875) 38 525 34 650 426 35 076
Share-based equity
reserve charged to
profit and loss – – 1 142 – – 1 142 – 1 142
Foreign currency
differences on translation
of share-based equity
reserve – – (4) – – (4) – (4)
Dividends paid
to shareholders – – – – (4 435) (4 435) – (4 435)
Balances at
28 February 2015 145 192 – 1 703 20 445 59 090 226 430 3 859 230 289
Total comprehensive
income – – – 41 599 48 731 90 330 2 379 92 709
Share-based equity
reserve charged to
profit and loss – – 1 335 – – 1 335 – 1 335
Foreign currency
differences on translation
of share-based
equity reserve – – (10) – – (10) – (10)
Treasury shares acquired – (998) – – – (998) – (998)
General issue of shares 51 282 – – – – 51 282 – 51 282
Vendor issue of shares
to sellers of Tradeway
(Shipping) Limited 17 714 – – – – 17 714 – 17 714
Costs to issue securities (112) – – – – (112) – (112)
Dividends paid
to shareholders – – – – (5 794) (5 794) – (5 794)
Balances at
29 February 2016 214 076 (998) 3 028 62 044 102 027 380 177 6 238 386 415
SUMMARISED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 29 February 2016
2016 2015*
R'000 R'000
OPERATING ACTIVITIES
Cash generated from operations 48 226 46 138
Interest received 205 91
Finance costs (3 628) (2 976)
Taxation paid (14 389) (14 609)
Net cash generated by operating activities 30 414 28 644
INVESTING ACTIVITIES
Plant and equipment acquired (3 041) (1 939)
Intangible assets acquired and developed (3 220) (1 076)
Proceeds on disposals of plant and equipment and intangible assets 310 496
Dividends received – 1 200
Net cash flows on acquisition of subsidiaries (59 275) (3 438)
Net cash used by investing activities (65 226) (4 757)
FINANCING ACTIVITIES
Borrowings raised/(repaid) 48 775 (9 439)
Issue of shares for cash 51 170 –
Treasury shares acquired (998) –
Increase in amounts owing to related parties 86 12
Dividends paid (5 794) (4 435)
Net cash generated/(used) by financing activities 93 239 (13 862)
Net increase in cash and cash equivalents 58 427 10 025
Difference arising on translation 19 576 (1 979)
Cash and cash equivalents at beginning of year 44 889 36 843
Cash and cash equivalents at end of year 122 892 44 889
Cash and cash equivalents are made up as follows:
Cash and cash equivalents 123 657 44 889
Less: Bank overdrafts (765) –
Cash and cash equivalents at end of year 122 892 44 889
* Restated due to voluntary change in presentation and classification as detailed in note 3.
CONSOLIDATED SEGMENTAL ANALYSIS
for the year ended 29 February 2016
Logistics Financial Head
Services Services Office Consolidated
BUSINESS SEGMENTS R'000 R'000 R'000 R'000
29 February 2016
Gross billings 3 902 726 9 978 38 472 3 951 176
External 3 788 217 8 973 700 3 797 890
Internal 114 509 1 005 37 772 153 286
Revenue 269 177 9 978 (500) 278 655
Depreciation and amortisation (2 580) (48) (1 415) (4 043)
Operating profit 64 916 4 493 1 377 70 786
Interest received 1 361 683 (1 839) 205
Finance costs (2 850) – (1 405) (4 255)
Income tax (15 351) (1 085) (405) (16 841)
Profit/(loss) for the year 48 076 4 091 (2 272) 49 895
Total assets 859 903 10 077 153 185 1 023 165
Total liabilities 563 073 840 72 837 636 750
28 February 2015*
Gross billings 3 533 024 9 795 33 200 3 576 019
External 3 453 598 8 633 561 3 462 792
Internal 79 426 1 162 32 639 113 227
Equity holders of the parent 215 249 9 795 (809) 224 235
Depreciation and amortisation (2 144) (38) (1 129) (3 311)
Operating profit 47 559 3 769 2 806 54 134
Interest received 1 187 472 (1 428) 231
Finance costs (3 048) – 69 (2 979)
Income tax (11 426) (778) 38 (12 166)
Profit for the year 34 272 3 463 1 485 39 220
Total assets 661 452 733 486 62 176 733 486
Total liabilities 517 846 1 461 (16 110) 503 197
LOGISTICS SERVICES
United
GEOGRAPHICAL Africa Asia Pacific Kingdom Europe Total
SEGMENTS R'000 R'000 R'000 R'000 R'000
29 February 2016
Gross billings 2 709 556 193 080 402 910 482 671 3 788 217
Revenue 131 234 24 977 54 446 58 520 269 177
Net profit 18 271 5 092 11 426 13 287 48 076
Total assets 519 764 59 744 194 263 86 132 859 903
Total liabilities 413 121 21 001 75 720 53 231 563 073
28 February 2015*
Gross billings 2 842 967 195 233 214 871 279 953 3 533 024
Revenue 123 453 21 971 32 590 37 235 215 249
Net profit 15 780 4 783 5 765 7 944 34 272
Total assets 534 357 36 368 46 392 44 335 661 452
Total liabilities 445 820 11 513 28 885 31 628 517 846
* Restated due to voluntary change in presentation and classification as detailed in note 3
SUPPLEMENTARY INFORMATION
for the year ended 29 February 2016
1. BASIS OF PREPARATION
The summarised consolidated financial statements for the year ended 29 February 2016 have been prepared
and presented in accordance with the framework concepts and the measurement and recognition requirements
of International Financial Reporting Standards ("IFRS"), the SAICA Financial Reporting Guidelines as issued
by the Accounting Practices Committee, and Financial Reporting Pronouncements as issued by the Financial
Reporting Standards Council, the Listings Requirements of the JSE Limited for preliminary reports, the minimum
information required by IAS 34: Interim Financial Reporting, and the requirements of the South African
Companies Act, No 71 of 2008 as applicable to summarised financial statements.
The Group's accounting policies are consistent with those applied in the consolidated annual financial
statements for the year ended 28 February 2015, except for the voluntary reclassification as detailed below.
The financial information in these preliminary results were prepared under the supervision of the Group Financial
Director, DC Edley, CA(SA).
2016 2015
R'000 R'000
2. REVENUE
Gross billings 3 797 890 3 462 792
Less: Recoverable disbursements (3 519 235) (3 238 557)
Revenue 278 655 224 235
Comprising revenue from:
Logistics services 256 690 203 811
Net interest and fee Income from client financing activities 12 488 11 438
Insurance commission and management fees 8 973 8 633
Other revenue 504 353
3. VOLUNTARY CHANGE IN PRESENTATION AND CLASSIFICATION
The following voluntary change in accounting presentation and classification, in terms of IAS 1 Presentation of
Financial Statements (IAS 1), has been applied during the period under review resulting in the restatement and
reclassification of certain comparatives for the year ended 29 February 2016.
IAS 1 Presentation of Financial Statements – Reclassification of the net interest and fee income from client
financing activities to revenue
Interest expense, interest income, fee income and fee expense relating to client financing activities have
previously been disclosed in the Group statement of profit or loss and other comprehensive income as
finance costs, interest received, other income and administration expenses respectively. During the period
under review, the Group's management resolved to account for this net interest and fee income as revenue.
The Group generates net interest and fee revenue through the provision of short term finance facilities to
clients for logistics-related recoverable disbursements, effectively acting as a financial institution. The Group's
management regards this as a principal revenue producing activity. The Group funds these short-term
receivables through the ongoing sale of such receivables to its principal banker via an invoice discounting
facility, on which it incurs an interest expense. To enable the Group to access this invoice discounting facility it
is a requirement of the Group's bankers that the receivables being financed are insured by a third-party credit
underwriter and management views this cost as part of the effective cost of finance.
The Group believes that this change in presentation and classification will result in more relevant and reliable
information being presented in respect of it's client financing activities by matching all the direct related interest
income, fee income and expenses associated with this principal revenue-producing activity and disclosing it as
part of revenue.
In addition this change in classification and presentation further reinforces the voluntary change in accounting
policy applied by the Group in the previous reporting period, whereby the cash inflows and outflows relating
to this principal revenue-generating activity were reclassified as operating cash flows.
As required by IAS 1, this change in presentation and classification has been retrospectively applied, resulting in
the restatement of the Group's Statement of Comprehensive Income and Statement of Cash Flows as disclosed
below. This change in presentation and classification has not resulted in any changes or restatement to the
Group's Statement of Financial Position.
2015 2014
R'000 R'000
Impact of the change on:
Statement of profit or loss and other comprehensive income
Revenue (12 798) (12 478)
Other income (806) –
Administrative expenses 6 057 4 705
Operating profit (7 547) (7 773)
Interest received (8 455) (4 257)
Finance costs 16 002 12 030
Profit before taxation – –
Statement of cash flows
Cash generated from operations (7 547) (7 773)
Interest received (8 455) (4 257)
Finance costs 16 002 12 030
Net cash flows from operating activities – –
2016 2015
R'000 R'000
4. EARNINGS PER SHARE
Reconciliation between basic, headline
and normalised headline earnings
Profit attributable to equity holders of the parent 48 713 38 525
Adjusted for:
Net loss/(profit) on disposals of plant and equipment 255 (130)
Impairment of goodwill – 3 892
Taxation effects (84) 19
Minority interest (51) –
Headline earnings 48 833 42 306
Adjusted for:
Effect of fair value gain on remeasurement of financial liability (1 024) (5 896)
Effect of lease termination agreement (467) (2 359)
Non-recurring transaction costs 929 394
Taxation effects 131 661
Normalised headline earnings (unaudited) 48 402 35 106
Basic earnings per share (cents) 34,50 28,23
Headline earnings per share (cents) 34,58 31,00
Normalised headline earnings per share (unaudited) (cents) 34,28 25,73
Weighted average number of shares (000s) 141 211 136 459
Diluted weighted average number of shares (000s) 144 648 138 939
The difference between earnings per share and diluted earnings per share is due to the impact of share options
that are yet to vest under the Group's share option scheme.
2016 2015
R'000 R'000
5. INTANGIBLE ASSETS
Goodwill movement:
Carrying value at beginning of year 118 944 120 821
Acquisition of Masterfreight Internationale Spedition GmbH – 4 050
Acquisition of Tradeway (Shipping) Limited 75 854 –
Acquisition of AEMC Trading Agency (Pty) Ltd 1 498 –
Impairment of investment in W.M. Shipping Limited – (3 892)
Foreign exchange gain/(loss) on tranlsation 21 176 (2 035)
Carrying value at end of year 217 472 118 944
Carrying value of computer software
and indefinite useful life intangible assets 5 409 3 320
Total intangible assets 222 881 122 264
6. MATERIAL ACQUISITION OF TRADEWAY (SHIPPING) LIMITED ("TRADEWAY")
Effective 1 December 2015, the Group acquired the entire issued share capital of Tradeway, which operates as an
international freight forwarding, logistics, cargo, imports and exports company based in Leeds and Manchester,
United Kingdom. This resulted in control of the entity on the effective date as required by IFRS 3: Business
Combinations.
The acquisition is in line with Santova's strategy to continuously expand its international presence and will further
enhance the Group's current capabilities in the United Kingdom and internationally. This, coupled with the
expected synergies from this acquisition with the Group's recently established office in Ghana, West Africa, will
result in immediate growth in the earnings and capability of the Santova Group as a whole.
The acquisition was concluded for a purchase price of R121,5 million, to be settled as follows:
– R67,2 million paid upfront by Santova Administration Services, the Group's designated domestic treasury
company, using a loan from the holding company for the full amount;
– R17,7 million in the form of a vendor issue of ordinary shares of the ultimate holding company; and
– two separate contingent payments payable after 12 and 24-month periods based on warranted annual profits
being achieved, amounting to a net present value on acquisition date of R36,6 million.
Differences in amounts actually paid are recognised as foreign exchange gains or losses immediately.
The fair value, on acquisition date, of the assets acquired was R61,2 million and the R60,3 million by which
the purchase price exceeds the fair value of the assets acquired, attributable to anticipated profitability and
expected cash generation, has been recognised as goodwill.
2016 2015
R'000 R'000
7. FAIR VALUE DISCLOSURE FOR FINANCIAL INSTRUMENTS
Financial assets in the statement of financial position measured at fair value:
Future profit share on rental agreement(1) 1 228 1 228
Guardrisk cell captive(2) 3 308 2 007
Forward exchange contracts 26 –
4 562 3 235
Financial liabilities in the statement of financial position measured at fair value:
Lease termination liability – 457
Contingent purchase considerations on acquisitions(3) 49 134 990
49 134 1 447
1. This amount represents the fair value of the profit share accruing to Santova Logistics (SA) in terms of a
profit-sharing agreement with the landlord of the Durban premises. The agreement gives Santova Logistics
(SA) a specified portion of the actual or deemed profit made should the building be sold or vacated. The
primary inputs used to determine the fair value of the profit share are a current market-related rental of
R93 per m2 for an equivalent such property applied to a market related capitalisation rate of 12%. This asset
has been assessed as level 2 on the fair value hierarchy.
2. This amounts represents the fair value of the investment by Santova Logistics (SA) in the Guardrisk cell
captive, recognised as a financial asset with changes in fair value being recognised in profit or loss for the
year. The fair value of the cell captive is determined by the net asset value of the cell as at the reporting date.
This asset has been assessed as level 2 on the fair value hierarchy.
3. This represents the present value of the remaining contingent purchase obligations arising from acquisitions
during the current financial period. The fair value of the liabilities has been calculated as the net present
value of the warranty payments, which management reasonably expect to be achieved, as set out in the
agreements of sale, discounted at the weighted average cost of capital for the acquired entities. These
liabilities are assessed as level 3 on the fair value hierarchy. The financial liability can be reconciled as follows:
R'000
Financial liability at beginning of year 990
Financial liabilities raised during the year 47 752
Interest on present value calculation 627
Foreign exchange gain on translation 789
Fair value gain on remeasurement (1 024)
Financial liability at end of year 49 134
The contingent purchase obligations relate to the following acquisitions that were successfully completed
during the current year:
Acquiring company Target company Discount rate used
Santova Administration Services (Pty) Ltd Tradeway (Shipping) Limited 6,6%
Santova Logistics (Pty) Ltd (SA) AEMC Trading Agency 8,8%
Management has assessed the sensitivity of the level 3 fair value measurement to changes in unobservable
inputs and do not believe that such reasonably expected changes would materially affect the fair value.
Management has assessed the degree of classification of the liabilities within level 3 and are satisfied that
the classification above is appropriate due to the fact that these liabilities are measured using the same
methods and thus do not have varying degrees of uncertainty or subjectivity.
There were no other material adjustments to fair values of financial instruments nor transfers between the
fair value hierarchy levels during the year.
Shares 2016 2015
000s R'000 R'000
8. STATED CAPITAL
Reconciliation of the ordinary shares in issue
Balance at beginning of year 136 459 145 192 145 192
General issue of shares for cash 16 245 51 282 –
Vendor issue of shares to sellers of
Tradeway (Shipping) Limited 4 893 17 714 –
Costs to issue securities – (112) –
Treasury shares purchased by subsidiaries (310) – –
Balance at end of year 157 287 214 076 145 192
There were no movements in the number of ordinary shares during
the previous financial year.
9. INTEREST-BEARING BORROWINGS
Instalment sale and other agreements 996 1 347
Medium-term loan (R39 million) 17 784 25 541
Medium-term loan (R60 million) 56 883 –
75 663 26 888
During the year, a R60 million medium-term loan was taken by the holding company, Santova Limited, and bears
interest at a variable rate of the South African prime rate less 0,25%. It is repayable on an amortising basis over
five years at quarterly instalments of R3 852 101. This loan is secured by cross company sureties supplied by
certain subsidiaries.
As a condition of granting the medium-term loan facilities, the Group banking facilities contain certain
covenants with respect to minimum levels of actual shareholders' funds and to minimum ratios of annual plus
cumulative free cash flow generation to net interest and capital serviced on the Santova Limited medium-term
loan. These covenants are monitored on an ongoing basis by management and reviewed and confirmed with
the Group's bankers. As at the end of the current financial period, none of the covenants have been breached.
10.EVENTS AFTER THE REPORTING PERIOD
There are no events that have taken place after the reporting period for which non-disclosure would affect the
ability of the users to make proper evaluations and decisions.
11.APPROVAL OF ANNUAL FINANCIAL STATEMENTS
The annual financial statements were approved by the Board of directors on 18 May 2016, and are available for
inspection at the Company's registered office.
The Annual Integrated Report, and the Notice of Annual General Meeting therein, will be available on the
Company's website at www.santova.com and posted to shareholders on or about 31 May 2016.
12.AUDIT OPINION
These summarised consolidated financial statements have been extracted from the consolidated
audited annual financial statements upon which Deloitte & Touche have issued an unmodified report, dated 18 May 2016.
The auditor's report does not necessarily cover all of the information contained in this announcement/financial
report. Shareholders are therefore advised that in order to obtain a full understanding of the nature of the
auditor's work they should obtain a copy of that report together with the accompanying financial information
from the registered office of the Company or the Company's website.
A copy of the unmodified auditor's report on these summarised consolidated financial statements and of the unmodified auditor's
report on the annual financial statements for the year ended 29 February 2016 are 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 Company's auditors.
DIVIDEND DECLARATION
Notice is hereby given that the directors have declared a final gross dividend of 5,50 cents
(2015: 4,25 cents) per ordinary share, payable out of income reserves for the year ended 29 February 2016
to ordinary shareholders in accordance with the timetable below.
Timetable
Declaration date Wednesday, 18 May 2016
Last day to trade cum-dividend Friday, 17 June 2016
Shares commence trading ex-dividend Monday, 20 June 2016
Record date Friday, 24 June 2016
Dividend payment date Monday, 27 June 2016
In terms of South African Dividends tax, the following additional information is disclosed:
Local dividend withholding tax rate – 15%
Net local dividend payable to shareholders who are not exempt from dividends tax – 4,675 cents per ordinary share
Total number of ordinary shares in issue – 157 597 496
Company income tax reference number – 9077/274/84/4P
Share certificates may not be dematerialised or rematerialised between Monday, 20 June 2016
and Friday, 24 June 2016, both dates inclusive.
By order of the Board
J Lupton
Company Secretary
18 May 2016
CORPORATE INFORMATION
Independent non-executive directors ESC Garner (Chairman)
AD Dixon
WA Lombard
EM Ngubo
Executive directors GH Gerber (Chief Executive Officer)
DC Edley (Group Financial Director)
AL van Zyl
Company Secretary JA Lupton, FCIS
JSE sponsor River Group
Auditors Deloitte & Touche
Transfer secretaries Computershare Investor Services (Pty) Ltd
Investor relations Contact persons GH Gerber (Chief Executive Officer)
DC Edley (Group Financial Director)
E mail address investor@santova.com
Contact number +27 31 374 7000
Physical address Santova House, 88 Mahatma Gandhi Road, Durban, 4001
Postal address PO Box 6148, Durban, 4000
Contact number +27 31 374 7000
www.santova.com
Date: 18/05/2016 02:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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