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TRUSTCO GROUP HOLDINGS LIMITED - Abridged audited year end results, notice of AGM and dividend declaration

Release Date: 27/06/2016 16:13
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Abridged audited year end results, notice of AGM and dividend declaration

TRUSTCO GROUP HOLDINGS LIMITED
Incorporated in the Republic of Namibia
(Registration number 2003/058)
NSX Share code: TUC
JSE share code: TTO
ISIN Number: NA 000A0RF067
("the Group")


ABRIDGED AUDITED GROUP RESULTS FOR THE YEAR ENDED 31 MARCH 2016, NOTICE OF AGM AND FINAL DIVIDEND
DECLARATION


CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 MARCH 2016




                                          Notes   31 March 2016   31 March 2015
                                                      NAD'000         NAD'000
ASSETS


Cash and cash equivalents                                99 835         118 700
Advances                                     4        1 184 063         806 965
Trade and other receivables                             765 949         574 390
Current income tax assets                                 7 496          12 982
Inventories                                  5          327 619         323 917
Property, plant and equipment                6          459 335         269 329
Investment property                          7          816 180         708 835
Intangible assets                            8          209 849         197 623
Deferred income tax assets                              143 675         146 359
Total assets                                          4 014 001       3 159 100
EQUITY AND LIABILITIES


Liabilities Bank overdraft                                17 249         15 020
Borrowings                                             1 104 695       1 045 641
Trade and other payables                                 215 806          78 891
Current income tax liabilities                            10 257           7 945
Other liabilities                                         72 406          93 277
Deferred income tax liabilities                          329 159         304 441
Insurance provisions                                      75 365          63 719
Total liabilities                                      1 824 937       1 608 934


Capital and reserves
Share capital                                             177 595         177 595
Share premium                                              46 300          46 300
Deemed treasury shares                                          -         (57 043)
Other reserves                                              87 282         63 373
Retained earnings                                        1 877 887      1 319 941
Total capital and reserves                               2 189 064      1 550 166
Total equity and liabilities                             4 014 001      3 159 100


SUMMARISED CONSOLIDATED INCOME STATEMENT

                                       For the year ended   For the year ended

                                            31 Mar 2016          31 Mar 2015
                                               NAD'000              NAD'000



Revenue                                        1 150 286            1 017 073
Investment income                                153 167              136 127
Income from operations                         1 303 453             1 153 200
Insurance benefits and claims                     (45 895)             (42 616)
Operating expenses                               (673 405)            (608 693)
Finance costs                                    (134 279)            (105 496)
Profit before taxation                            449 874              396 395
Taxation                                          (30 076)             (93 157)
Profit for the year                               419 798              303 238


Other comprehensive income, net of tax             24 115               18 540
Items that will not be reclassified to
profit or loss
Revaluation of PPE                                 25 814               22 401
Items that will be reclassified to profit
or loss
Exchange difference on translation of              (1 699)              (3 861)
foreign operations
Total comprehensive income                         443 913              321 778

STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2016

                                                                       Deemed
                                               Share        Share      treasury       Other   Distributable
                                              capital    premium         shares    reserves        reserves      Total
                                            NAD'0000     NAD'000      NAD'000     NAD'000        NAD'000      NAD'000

Balance at 1 April 2014                       177 595        46 300    (69 026)     46 525       1 022 961    1 224 355
Transfer between reserves                           -             -           -     (1692)           1692              -
Deemed treasury shares purchased                    -             -     (1 861)          -               -       (1 861)
Deemed treasury shares sold                         -             -      13 844          -          32 867        46 711
Total comprehensive income for the period           -             -           -     18 540         303 238      321 778
Dividends for the period                            -             -           -          -        (40 817)     (40 817)
Balance at 31 March 2015                      177 595        46 300    (57 043)     63 373       1 319 941    1 550 166

Balance at 1 April 2015                       177 595        46 300    (57 043)     63 373       1 319 941    1 550 166
Transfer between reserves                           -             -           -      (206)             206            -
Deemed treasury shares sold                         -             -      57 043          -         187 342      244 385
Total comprehensive income for the period           -             -           -     24 115         419 798      443 913
Dividends for the period                            -             -           -          -        (49 400)     (49 400)
Balance at 31 March 2016                      177 595        46 300           -     87 282       1 877 887    2 189 064
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS


                                                 For the year ended   For the year ended
                                                      31 Mar 2016          31 Mar 2015
                                                         NAD'000              NAD'000

Cash flow from operating activities
Cash generated by operations                               446 182              177 555
Finance costs                                            (134 279)            (105 496)
Net loans advanced                                       (375 622)             (98 215)
Proceeds from funding liabilities for student               76 252              220 000
advances
Taxation paid                                              (7 810)             (25 014)
Net cash flow from operating activities                      4 723              168 830

Cash flow from investing activities
Net cash flow from investing activities                  (140 733)              (7 988)

Cash flow from financing activities

Sale of deemed treasury shares                             244 384               47 611
Net proceeds from /(repayments to) lenders and               1 547             (75 863)
related parties
Dividends paid                                            (49 400)             (40 817)
Repayment of other liabilities                            (81 615)            (119 699)
Net cash flow from financing activities                    144 916            (188 768)

Net change in cash and cash equivalents                   (21 094)             (27 926)
Cash and cash equivalents at beginning of year             103 680              131 606
Cash and cash equivalents at end of year                    82 586              103 680
 CONDENSED SEGMENTAL ANALYSIS




                                   Total    Banking and finance         Investments            Insurance
                                NAD'000               NAD'000             NAD'000              NAD'000
2016
Revenue                         1 150 286               221 493            727 507               201 286
Profit for the year               419 798                57 326            317 439                45 033


Segment total assets            4 014 001             1 507 636           2 180 726              325 639


2015
Revenue                         1 017 073               173 114            660 434              183 525
Profit for the year               303 238                52 528            266 161              (15 451)


Segment total assets            3 159 100             1 521 863           1 214 626              422 611


NOTES TO THE AUDITED ABRIDGED ANNUAL FINANCIAL STATEMENTS AS AT 31 MARCH 2016

1. Basis of preparation
The abridged annual group financial statements, which comprise the abridged group statement of financial position as at 31 March 2016, and the abridged group statement of
comprehensive income, changes in equity, cash flow statement for the year ended 31 March 2016, and related notes are derived from the audited financial statements of Trustco
Group Holdings Ltd for the year ended 31 March 2016 which have been audited by the group’s independent auditors, BDO. This abridged report is therefore extracted from the
audited information, but is itself not audited. The directors take full responsibility for this abridged report and that the financial information has been correctly extracted from
the underlying annual financial statements.

The auditor’s unmodified report is available for inspection at Trustco’s registered offices. The group’s audited financial statements are available for inspection at the company’s
registered office. Electronic copies of the integrated report and the financial statements will be available on the company’s website(www.tgh.na), on 24 June 2016. The abridged
group financial statements have been prepared in accordance with the framework concepts and measurement and recognition criteria of International Financial Reporting
Standards (IFRS) and comply with IAS 34 Interim Financial Reporting and are in accordance with the SAICA Financial Reporting Guides, and the Namibian Companies’ Act.
no.28 of 2004 (as amended) and JSE Listings Requirements.The accounting policies are consistent with the previous annual financial statements. The abridged consolidated
financial information was compiled under the supervision of the Group Financial Director, Ryan McDougall, CA(SA), CA(Namibia).
 2. Headline Earnings Reconciliation
                                           For the year ended   For the year ended
                                              31 March 2016        31 March 2015
                                                   NAD ‘000             NAD ‘000
 Profit attributable to ordinary                     419 798              303 238
 shareholders

 Adjustments:                                          (366)             (27 494)
 Profit/Loss on disposals of property,                 (221)                2 098
 plant and equipment
 Fair value adjustments on investment                  (300)                  400
 properties
 Gain on bargain purchase                                   -            (29 244)
 Loss on disposal of intangible assets
 Tax effect                                              155                (748)

 Headline earnings                                   419 432              275 744



 3. Per Share Information
                                           For the year ended   For the year ended
                                              31 March 2016        31 March 2015
 Earnings per share (cents)                            55.37                43.59
 Diluted earnings per share (cents)                    55.02                43.29
 Headline earnings per share (cents)                   55.32                39.64
 Diluted headline earnings per share                   54.97                39.36
 (cents)
 Dividends declared per share (cents)                   8.40                 7.00
 Dividends paid per share (cents)                       7.40                 5.75


WANOS 758million (2015: 696 million)
Diluted WANOS 763 million (2015: 701 million)
Shares in issue 772 million (2015: 772 million)
4. Advances
                                                 31 March 2016     31 March 2015
                                                     NAD ‘000          NAD ‘000
Property advances                                      420 963           125 287
Student advances                                       721 810           630 805
Other loans advanced                                    41 290            50 873

Net Advances                                          1 184 063            806 965


Current assets                                          199 102            199 062
Non-current assets                                      984 961            607 903

Consisting of:
Advances at end of the year                           1 220 056           851 879
Impairment of loans at end of the year                 (35 993)           (44 914)




5. Inventories
   During the year the group’s acquired inventories relating to real estate were carried at a cost of NAD 320 m (2015: NAD 316.1 m) and inventories relating to finished goods at a cost of
   NAD 7.4 m (2015: NAD 7.8 m) No inventories are required to be written down to net realisable value.

6. Property, plant and equipment
   During the year the group acquired property, plant & equipment at a cost of NAD 157.7 m (2015: NAD 68.2 m) and recognised a revaluation gain of NAD 35 m (2015: NAD 23.5 m). The
   carrying value of property, plant & equipment as at 31 March 2016 was NAD 459 m (2015: NAD 269.3 m). Disposals at carrying value of NAD 7.9 m (2015: NAD 12.2 m) were made.

7. Investment property
   During the year the group acquired investment property at a cost of NAD 0.5 m (2015: NAD 13.3 m) and recognised a revaluation gain of NAD 132 m (2015: NAD 103.2 m). The fair value
   of investment property as at 31 March 2016 was NAD 816 m (2015: NAD 708.8 m). Disposals at carrying value of NAD 3.5 m (2014: NAD 2.2 m) were made.

8. Intangible assets
   During the year the group acquired intangible assets at a cost of NAD 15.7 m (2015: NAD 11.7 m). The carrying value of intangible assets as at 31 March 2016 was NAD 209.8 m
   (2015: NAD 197.6 m). Disposals at carrying value of NAD 2.9 (2015: NAD 0.02 m) were made.
9. Profit Before Taxation
Operating profit (loss) for the year is stated after accounting for the following:
                                                                               For the year ended    For the year ended
                                                                                  31 March 2016         31 March 2015
                                                                                       NAD ‘000              NAD ‘000
Employee costs                                                                            145 672               136 480
Profit on foreign exchange differences                                                      6 978                 8 640
Fair value gains on investment property                                                   131 305               103 200
Depreciation - Property, plant and equipment -                                             22 541                22 241
Amortisation - Intangible assets -                                                         23 840                26 939
Auditors’ remuneration                                                                       5 652                 2 283
(Profit)/Loss on disposal of property, plant and equipment                                   (221)                 2 098
Impairment of loans and receivables and
bad debts written off                                                                       7 445                 25 828
(Decrease)/Increase in provision for doubtful debts relating                               (8 921)                 9 274
to student advances
Gain on bargain purchase - Fides Bank Namibia Ltd                                                -               11 203
Gain on bargain purchase - Farm Herboths (Pty) Ltd                                               -               18 041




10. Related party transactions

Charter income received from/(fees paid to) related parties
Next Investments (Pty) Ltd                                                                    498                   202
Northern Namibia Development Company (Pty) Ltd                                                842                 1 278

Management fees paid to related parties
Next Investments (Pty) Ltd                                                                 (28 287)             (22 036)

Facility fees paid to related parties
Next Investments (Pty) Ltd                                                                 (18 641)             (11 130)

Q van Rooyen is a common director of the group, Next Investments and Northern Namibia Development Company.
11. Fair Value Hierarchy

                                                                                     Level 1          Level 2        Level 3             Total
                                                                                   NAD ‘000         NAD ‘000       NAD ‘000           NAD ‘000

2016
Group: Assets
- Land and buildings                                                                         -        117 617              -             117 617
- Aircraft                                                                                   -        109 268              -             109 268
- Investment property                                                                        -        816 180              -             816 180
- Advances                                                                                   -              -      1 184 063           1 184 063
- Trade and other receivables-                                                               -              -        765 949             765 949
- Cash and cash equivalents                                                                  -              -         99 835              99 835

                                                                                             -      1 043 065      2 049 874           3 092 912

2016
Group: Liabilities
- Insurance contract liabilities                                                             -               -        75 365              75 365
- Bank overdraft                                                                             -               -        17 249              17 249
- Trade and other payables                                                                   -               -       215 806             215 806
- Other liabilities                                                                          -               -        42 038              42 038
- Borrowings                                                                                 -               -     1 104 695           1 104 695

                                                                                             -               -     1 455 153           1 455 153


12. Business combinations

On 30 June 2015 the group acquired 100% of the voting equity interest of Watermeyer Mining and Construction (Pty) Ltd (“WMC”) which resulted in the Group obtaining control thereof.
WMC is a construction company specializing in construction projects. The assets and resources acquired include staff and office buildings related to the operations. The Group has taken over
the management of the operations of the entity. This expansion will augment the existing investment and property development operations of the Group and reduce the foreseeable
development timetable.

Goodwill of NAD9.5 million arising from the acquisition is attributable to the expected savings to be made by the Group relating to the reduced cost of bulk servicing via WMC rather than
external vendors. Goodwill is not deductible for income tax purposes.

WMC’s acqusition is to be settled in cash in 2 instalments. The first instalment of NAD15.0 million was paid in July 2015, with the second instalment of NAD15.0 due in July 2016.
Fair value of assets acquired and liabilities assumed                               NAD ‘000
Property, plant and equipment                                                          24 000
Current tax assets                                                                         38
Trade and other receivables                                                            17 499
Cash and cash equivalents                                                               2 769
Borrowings                                                                           (11 097)
Deferred tax liabilities                                                              (4 004)
Current tax liabilities                                                                  (44)
Trade and other payables                                                             (10 345)

Total identifiable net assets                                                           18 816
Goodwill                                                                                 9 497

Total                                                                                   28 313

Acquisition date fair value of consideration paid
Cash                                                                                  (15 000)
Deferred consideration                                                                (13 313)

                                                                                      (28 313)

Revenue of NAD16.7 million and a loss of NAD11.0 million of WMC have been included in the Group’s results since the date of acquisition.

DIRECTORATE
Jan Jones, deputy CEO and alternate director to Quinton van Rooyen resigned on 16 March 2016. On 16 March 2016, QZ van Rooyen and SW Pienaar were appointed as alternate directors to
Quinton van Rooyen and Ryan McDougall respectively. On 15 June 2016, SW Pienaar resigned.

DIVIDEND DECLARATION
During the year under review dividends of 7.40 cents per share (2015: 5.75 cents) amounting to a total of NAD49.40 million (2015: NAD45.18 million) were declared and paid by the
Group. The directors of Trustco (the board) are pleased to announce that the board passed a resolution on 22 June 2016 to pay a dividend of 5 cents per share for the financial year ended
31 March 2016.

The following information is provided to shareholders in respect of dividend tax:
• The dividend has been declared from income reserves;
• Shareholders are advised that Namibian non-resident shareholders’ tax (NRST) of 20% on the declared dividend will be applicable to all shareholders with addresses outside Namibia
  (unless any specific rules relating to double tax treaties apply), which will result in a net dividend of 4 cents per share;
• The NRST rate for South African residents is 15% resulting in a net dividend of 4.25 cents per share (South African dividend withholding tax is not applicable to
  Namibian dividends);
• Trustco Group Holdings Ltd’s Namibian income tax reference number is 3356338-01-1;
• The number of shares in issue at the date of declaration is 772 142 090.

The salient dates for the payment of this dividend are set out below:
- Last day to trade cum dividend (Namibian register) Friday, 22 July 2016
- Last day to trade cum dividend (South African register) Tuesday, 26 July 2016
- Trading ex dividend (Namibian register) Monday, 25 July 2016
- Trading ex dividend (South African register) Wednesday, 27 July 2016
- Record Date (Namibian and South African register) Friday, 29 July 2016
- Payment Date (Namibian and South African register) Monday, 22 August 2016
Share certificates may not be dematerialised or rematerialised between Wednesday, 17 July 2016 and Friday, 19 August 2016 both days included. The dividend is declared in Namibia Dollars
and payable in currencies of the Republics of South Africa and Namibia which are pegged 1:1.

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the annual general meeting of shareholders of the company in respect of the year ended 31 March 2016 will be held at Trustco House, 2 Keller Street,
Windhoek, on Thursday, 22 September 2016 at 10H00 (“AGM”), to deal with such business as may lawfully be dealt with at the AGM in the manner required by the Namibian Companies
Act as amended, as read with the Listings Requirements of the JSE Limited and the provisions of the company’s articles of association. The AGM is to be participated in and voted at by
the shareholders recorded in the company’s security register on the record date of Friday, 16 September 2016.

Shareholders are advised of the following applicable dates:

Last date to trade to be eligible to vote:                                  Tuesday, 13 September 2016

Last date for lodging forms of proxy for South
African shareholders:                                                       Tuesday, 20 September 2016

Last date for lodging forms of proxy for all other shareholders:            Monday, 19 September 2016

The full integrated report including the notice of AGM will be uploaded to the company’s website and posted to the shareholders of the company who were recorded as such in the
company’s securities register on Friday, 24 June 2016.

By order of the board
A Bruyns
Company Secretary
27 June 2016
JSE Sponsor
Sasfin Capital
(a division of Sasfin Bank Limited)
NSX Sponsor
IJG (Pty) Limited

Date: 27/06/2016 04:13:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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