Wrap Text
Condensed Consolidated Reviewed Second Interim Results for the 12 months ended 31 December 2016
ECSPONENT LIMITED
Incorporated in the Republic of South Africa
Registration number: 1998/013215/06
JSE Code: ECS - ISIN: ZAE000179594
(“the Company” or “Ecsponent”)
Condensed Consolidated Reviewed Second Interim Results for the 12 months ended
31 December 2016
The Board of Directors (“the Board”) is pleased to advise shareholders of the continued
growth of Ecsponent and its subsidiaries (“the Group”) as reflected in further improved,
consolidated results for the 12 months ended 31 December 2016.
On 12 December 2016, the Board advised shareholders that the Group’s financial year end had
moved to 31 March. This has necessitated this second interim results report detailing the Group’s
performance for the 12-month period ended 31 December 2016 in terms of the JSE Listings
Requirements.
The Board further advised shareholders on 20 December 2016 that the Group had undertaken a
process of rationalising its operations and investments including a series of financial transactions
designed to streamline operations and re-align the Group for increased strategic growth. These
transactions provide uncompromising focus on the core business of capital raising, SME funding,
enterprise development and private equity investment.
RESULTS HIGHLIGHTS
The Group’s access to capital through the issue of preference shares facilitated the continued
improvement in the Group’s performance and generated increased returns for the 12 months ended
31 December 2016.
As a result of the rationalisation the statement of profit and loss is presented in two categories being
Continued and Discontinued Operations. The comparative period has also been ‘re-presented’ to
reflect the two categories and does not represent a restatement. Furthermore, the current period
assets and liabilities related to the operations subject to the rationalisation (disposal groups) have
been classified as ‘Held for sale’ in these financial statements, as required by IFRS 5.
Highlights of the Group’s December 2016 reviewed interim results compared to the December 2015
audited results are set out below:
• revenue from continuing operations increased by 81.5% to R245 million compared to R135
million;
• gross profits from continuing operations increased by 70% to R203.6 million compared to
R119.8 million;
• operating profits from continuing operations increased by 198.3% to R129.3 million compared
to R43.3 million;
• profits before tax from continuing operations increased by 121.4% to R55.4 million compared
to R25 million;
• total assets increased by 128.1% to R1 063.3 million compared to R466.2 million;
• basic earnings increased by 24.2% to R29 million compared to R23.4 million; and
• resultant earnings per share (“EPS”) increased by 22.1% to 3.16 cents per share compared to
2.59 cents per share.
The EPS increase did not flow through to headline earnings per share (“HEPS”) as a result of
categorisation requirements in accordance with circular 2/2015 issued by the South African Institute
of Chartered Accountants. In the comparative period for 2015 the benefit of the disposal of certain
financial assets were included in the calculation of HEPS while the disposal of the Swaziland retail
credit business during the period under review was categorised under IFRS 10 and therefore
excluded from the HEPS calculation.
OPERATIONAL REVIEW
Group overview
Below is an overview of the Group’s operations during the first 12 months of the 2016/2017 financial
year.
Financial Services SA
The period under review highlighted the Group’s successful shift in focus area to provide secured
credit to small medium enterprises (“SME”). The comparative period to December 2015 reflects a
predominantly retail, unsecured employee benefits credit business. The strategy to focus
predominantly on enterprise finance and the provision of credit to specific niche market SME’s has
realised immediate improvement in the Group’s results.
The Group’s financial services operations continued their exponential growth during the period. Total
assets increased by 87.3% to R1 330.8 million while revenue increased by 186% to R379.9 million
compared to R132.8 million, comprising 72.6% of total revenue in the 2016 second interim results.
As a result, operating profit increased by 252.1% to R229.5 million.
The demand for credit remains buoyant particularly in the enterprise development sector. The South
African financial services operation has begun to make inroads in this high demand sector. In
addition, the Group’s policy to secure credit risk provides a competitive edge in unlocking value for
all stakeholders in the chain. The directors are confident that the growth will continue specifically in
respect of the continuing operations post the shareholder vote on the proposed disposals.
Financial Services Africa
The roll out of the Group’s financial services offering into Africa replicates the South African model
and leverages the infrastructure, systems, products and management expertise of the local business.
The African operations provide continuing opportunities for growth in deposit taking and retail credit
operations. In each country, the local regulatory framework is fully complied with and the directors
of the different companies are operationally autonomous. The South African backbone provides the
required governance and control.
Botswana
The Botswana operations mirror the South African processes and the Group provides management
oversight and liquidity to the country’s credit operations. In addition to employee benefits,
Ecsponent Botswana provides both enterprise and SME credit on a secured basis to qualifying clients.
Ecsponent Asset Management (Pty) Ltd Botswana (“EAM”) was awarded a licence to operate as an
Investment Company with Variable Capital (ICVC). Ecsponent through its local holding structures
has a 70% interest in this operation.
The performance of the Botswana operations reflects a continued steady improvement compared to
the year ended December 2015. Botswana grew revenue by 81.5% to R74.3 million, total assets
increased by 105.9% to R378.5 million, and operating profits increased by 51.4% to R31.7 million.
The growth in the Botswana economy, stability of the currency and demand for credit continues to
drive growth of the Ecsponent operation in the territory. The directors are confident that the growth
will continue specifically in respect of the continuing operations post the shareholder vote on the
proposed disposals.
Swaziland
The Swaziland operation includes capital raising opportunities which mirror the South African process
and provides ongoing liquidity to the country’s credit operations which includes consumer credit,
enterprise and SME finance.
The country has ambitious goals, targeted to be realised by 2022 and which require significant
development in the country’s SME sector. The directors believe that the Group is perfectly positioned
to provide funding and services in support of the country’s objectives.
Consequent to the strategy deployed in South Africa the Group has disposed of its interests in the
strategic alliance with GetBucks, Ligagu Investments (Pty) Ltd. The Group continues to provide
secured SME credit to GetBucks.
The performance of the Swaziland operations reflects a steady improvement compared to the
December 2015 results. Swaziland grew revenue by 117.9% to R29.3 million whilst operating profits
increased by 99% to R12.7 million. Total assets increased by 62.9% to R132.5 million.
The directors have confidence that the continuing business will continue to grow.
Zambia
The Zambian operation provides similar products and services as the rest of the Group. In addition,
the Group has a Tier 2 Deposit Taking Licence regulated by the Bank of Zambia and the operations
are directed from the head office situated in Lusaka.
The country’s demand for both retail and business credit ensures that the Group’s products are likely
to be profitable and successful. The country is recovering from the dramatic reduction in international
commodity prices/demand and has also suffered significant currency fluctuation depressing both
investments and business confidence. Off the back of the recovery and post the period under review,
the Group started rolling out products that are anticipated to deliver returns in the 2017/2018
financial period.
As part of the group re-organisation the Group’s 100% interest in Ecsponent Financial Services
Limited (Zambia) will reduce to 24.99%, subject to shareholder approval. The directors are however
confident that the Zambian operations will provide profitable future returns to the Group.
Private Equity
Biotechnology
The biotechnology sector is directly linked to the fluctuations in the international economy and
margins remained under pressure during the period under review. The Group has continued to
protect its market share and is bullish about prospects for the future.
The Group’s biotechnology operations have had a significant growth year which realised the
development of a new and extensive range of products to complement the existing cord blood and
tissue stem cell products. Development is complete and commercialisation is now advanced. To
reduce overheads and align the operations with the new strategy the underlying company
infrastructures have been rationalised and the benefits from these developments will be realised
during the 2017/2018 financial period.
The contracts with pharmaceutical and medical aid companies concluded by both Cryo-Save and
Salveo have begun to translate into sales and this is anticipated to ramp up during the remainder of
the financial period. Further channels to market are being negotiated by management and these are
anticipated to be realised in the near future.
As per the Group’s policy, the development costs of all the new ventures have been expensed and
are included in the operating results.
PROSPECTS
Key elements of the on-going expansion strategy are:
• continued investment in the credit operations of the Group;
• continued growth of underlying assets through product and market extension;
• focus on core businesses;
• aggressive trading and cost rationalisation/reduction; and
• increased emphasis on high yield private equity opportunities.
The abovementioned approach is aimed at the continued development of a robust and
complementary financial services Group which provides sustainable returns.
FINANCIAL RESULTS
Presented below are the reviewed condensed consolidated financial statements for the 12 months
ended 31 December 2016.
Condensed Consolidated Interim Statement of Financial Position as at 31 December 2016
Reviewed Audited
31 December 31 December
2016 2015
Group Group
R’000 R’000
ASSETS
Non-current assets
Property, plant and equipment 7 117 8 475
Intangible assets and Goodwill 6 182 8 557
Other financial assets 5 604 059 98 066
Deferred tax 13 506 12 191
Other non-current receivables 4 569 3 127
Current assets
Inventories 1 593 1 819
Other financial assets 5 99 167 278 450
Trade and other receivables 54 662 40 379
Current tax receivable 309 -
Cash and cash equivalents 20 605 15 115
Non-current assets held for sale 8 251 577 -
TOTAL ASSETS 1 063 346 466 179
EQUITY AND LIABILITIES
Equity 36 817 78 191
Non-controlling interest 9 (11 962) (4 653)
Non-current liabilities
Other financial liabilities 7 759 526 324 840
Deferred revenue 2 248 9 552
Deferred tax 4 603 5 939
Current liabilities
Other financial liabilities 7 23 771 17 259
Deferred revenue 132 4 144
Current tax payable 32 536 3 142
Trade and other payables 21 454 22 391
Bank overdraft 227 5 374
Liabilities held for sale 8 193 994 -
TOTAL EQUITY AND LIABILITIES 1 063 346 466 179
Condensed Consolidated Statement of Profit and Loss and Other Comprehensive Income
for the interim period ending 31 December 2016
Re-presented
Reviewed Audited
12 months 12 months
ended 31 ended 31
December 2016 December 2015
Group Group
R’000 R’000
Revenue 245 000 134 972
Cost of sales (41 378) (15 160)
GROSS PROFIT 203 622 119 812
Other income 27 637 21 862
Operating expenses (101 988) (98 331)
OPERATING PROFIT 129 271 43 343
Fair value adjustments - 5 639
Net finance costs (73 883) (25 710)
Income from equity accounted investment - 1 742
PROFIT BEFORE TAXATION 55 388 25 014
Taxation (28 982) (7 786)
PROFIT FROM CONTINUING OPERATIONS 26 406 17 228
(Loss)/Profit from discontinued operations 8 (5 077) 2 706
PROFIT FOR THE PERIOD 21 329 19 934
Other comprehensive income / (loss) 212 (301)
TOTAL COMPREHENSIVE INCOME 21 541 19 633
Loss attributable to non-controlling interest 7 484 3 298
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO 29 025 22 931
ORDINARY SHAREHOLDERS
Profit / (loss) attributable to owners of the parent
from:
Continuing operations 30 422 21 533
Discontinued operations (1 416) 1 826
29 006 23 359
Total comprehensive income/(loss) attributable to:
Owners of the parent 29 025 22 931
Non-controlling interest (7 484) (3 298)
21 541 19 633
Basic and fully diluted earnings per share (cents) from 3.318 2.388
continuing operations attributable to equity holders of
the parent
Basic and fully diluted earnings / (loss) per share (0.154) 0.203
(cents) from discontinued operations attributable to
equity holders of the parent
Basic and fully diluted earnings per share (cents) 3 3.163 2.591
attributable to equity holders of the parent
Condensed Consolidated Interim Statement of Changes in Equity for the 12 months ended 31 December 2016
Share Non- Foreign Common Accumulated Non- Total
capital distributable currency control profit/(loss) controlling equity
reserve translation reserve interest
reserve
R’000 R’000 R’000 R’000 R’000 R’000 R’000
Balance at 1 January 118 071 3 842 (55) (36 687) (28 505) (3 795) 52 871
2015
Total comprehensive - - (428) - 23 359 (3 298) 19 633
profit for the year
Purchase of non- - (3 842) - - 2 435 2 440 1 033
controlling interest
Balance at 1 January 118 071 - (483) (36 687) (2 711) (4 653) 73 537
2016
Issue of shares 6 001 - - - - - 6 001
Business - - - (56 824) (19 400) (76 224)
combinations
Total comprehensive - - 19 - 29 006 (7 484) 21 541
profit for the 12
months
Profit for the 12 - - - - 29 006 (7 677) 21 329
months
Other - - 19 - - 193 212
comprehensive
income
Purchase of non- - - - - (19 575) 19 575 -
controlling interest
Realisation of - - - 93 511 (93 511) - -
Common control
reserve #
Balance at 31 124 072 - (464) - (86 791) (11 962) 24 855
December 2016
# In terms of the Group’s accounting policies, Business combinations involving entities under common control comprise business combinations
where both entities remain under the ultimate control of the holding company before and after the combination, and that control is not
transitory. The group applies merger accounting for all its common control transactions which requires that the assets and liabilities of the
purchased business be incorporated at the consolidated book value (by the ultimate parent) and the difference between the purchase
consideration and the book value of the assets and liabilities be recorded in equity as a common control reserve.
During the financial period, the previous majority shareholder (ultimate parent – Ecsponent Capital (RF) Limited {“Capital”}) disposed of 34.9%
of its interest in Ecsponent Ltd, resulting in the loss of control. On the effective date, the common control reserve was therefore realised to
retained earnings, as per the accounting policies applied.
Condensed Consolidated Interim Cash Flow Statement for the 12 months ended 31
December 2016
Reviewed Audited
12 months 12 months
ended ended
31 December 31 December
2016 2015
Group Group
R’000 R’000
Cash generated by operations 95 792 20 340
Interest revenue 2 671 388
Finance cost (60 488) (18 504)
Taxation paid (3 004) (1 222)
NET CASH INFLOW FROM OPERATING ACTIVITIES 34 971 1 002
Proceeds on sale of investment in subsidiary / associate (2 616) 7 740
Investment in financial assets (803 425) (443 638)
Proceeds from financial assets 318 853 191 110
Business combinations 4 11 733 600
Other (4 523) (7 657)
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (479 978) (251 845)
Proceeds from other financial liabilities 502 037 273 144
Repayment of other financial liabilities (24 004) (4 496)
Other - (404)
NET CASH INFLOW FROM FINANCING ACTIVITIES 478 033 268 244
Movement in cash and cash equivalents for the period 33 026 17 401
Cash and cash equivalents at the beginning of the period 9 741 (6 950)
Effect of exchange rate movement on cash balances (663) (710)
Cash and cash equivalents at the end of the period 42 104 9 741
Notes to the Condensed Consolidated Interim Financial statements for the 12 months
ended 31 December 2016
1. ACCOUNTING POLICIES, BASIS OF PREPARATION OF RESULTS AND REVIEW
OPINION
The condensed consolidated interim financial statements have been prepared in accordance with
International Financial Reporting Standard, (IAS) 34 Interim Financial Reporting, the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements
as issued by the Financial Reporting Standards Council and in the manner required by the Companies
Act of South Africa and the JSE Listings Requirements. The principle accounting policies applied in
the preparation of the condensed consolidated interim financial statements are in terms of the
International Financial Reporting Standards and are consistent with those applied in the comparative
consolidated annual financial statements.
The results of the Group, were prepared under supervision of the Group’s financial director, Mr B
Shanahan CA (SA).
These interim condensed consolidated financial statements for the period ended 31 December
2016 have been reviewed by Nexia SAB&T, who expressed an unmodified review conclusion. A
copy of the auditor’s review report is available for inspection at the company’s registered office
together with the interim condensed consolidated financial statements identified in the auditor’s
report.
2. REVIEW OF RESULTS AND FINANCIAL POSITION
The condensed consolidated second interim financial results represent the trading results of the
Company and its subsidiaries which are active in the financial services and private equity markets.
The Group showed sustained improvement in its performance for the period under review. The
expansion strategy, substantially increased the portfolio of financial services assets. Funding for the
expansion strategy was secured through the registration of Ecsponent’s listed preference share
programme enabling the company to raise capital to fund its investments on an ongoing basis. The
market subscription of the preference shares has continued to grow.
3. EARNINGS AND FULLY DILUTED EARNINGS PER SHARE
Reviewed Audited
31 December 31 December
2016 2015
BASIC AND HEADLINE EARNINGS R’ 000 R’ 000
Basic earnings 29 006 23 359
Headline earnings 17 794 22 453
Basic and fully diluted earnings per share (cents) 3.163 2.591
attributable to equity holders of the parent
Headline and fully diluted headline earnings per share 1.941 2.490
(cents) attributable to equity holders of the parent
Number of shares in issue 931 769 996 901 588 049
Weighted average number of shares 916 937 611 901 588 049
RECONCILIATION BETWEEN BASIC EARNINGS AND
HEADLINE EARNINGS
IAS 33 Basic earnings 29 006 23 359
IAS 16 (Profit) / Loss on disposal of property plant and (48) 10
equipment
IAS 38 Impairment of intangible assets - 494
IFRS 10 Gain on disposal of subsidiary (11 164) (1 410)
Headline earnings 17 794 22 453
The calculation of earnings per share (“EPS”) is based on the profit for the period attributable to ordinary
shareholders and the weighted average number of ordinary shares in issue during the period. Headline
earnings per share (“HEPS”) are calculated in accordance with circular 2/2015 issued by the South African
Institute of Chartered Accountants.
4. ACQUISITIONS AND DISPOSALS
The board actively investigates acquisition opportunities aimed at improving earnings and cash
generation for the Group.
Aggregated business combinations for the period:
2016
R
Property, plant and equipment 1 027 791
Intangible assets 2 570 990
Deferred taxation 5 281 657
Trade and other receivables 47 800 334
Cash and cash equivalents 11 735 694
Other financial liabilities (17 511 894)
Trade and other payables (3 679 793)
Bank overdraft (2 360)
Total identifiable net liabilities 47 222 419
Non-controlling interest 18 155 215
Common control reserve 56 824 377
Goodwill 9 255 232
Purchase consideration 131 457 243
Net cash flow on acquisition
Purchase consideration $ -
Net cash balances assumed 11 733 334
11 733 334
$ The purchase considerations are payable on deferred payment terms and no balance was
payable at the effective date. All cash flow movements are therefore recognised through
the Other Financial Asset and/or Liabilities movements.
Return on Innovation (Pty) Ltd (“ROi”)
ROi provides strategic management inputs across all media platforms from the rumblings on social
media, through the wide variety of print media to radio and TV – all managed through one
intelligence platform. The business provides a strategic high ground for its corporate clients. For
Ecsponent, this acquisition is in line with its growth strategy in that ROi is an opportunity that is
high tech, offers high margins, high barriers to entry and can effectively be applied in both a South
African as well as in an international context. The Group concluded an agreement to acquire 51%
of the company from Capital, effective 1 March 2016.
Fair value of the assets acquired and liabilities assumed are as follows:
2016
R
Property, plant and equipment 3 221 303
Deferred taxation 1 434 674
Trade and other receivables 1 570 226
Cash and cash equivalents 282 528
Other financial liabilities (6 059 728)
Trade and other payables (1 714 290)
Total identifiable net liabilities (1 265 287)
Non-controlling interest 619 991
Common control reserve 2 145 296
Purchase consideration 1 500 000
Net cash flow on acquisition
Purchase consideration $ -
Net cash balances assumed 282 528
282 528
The goodwill was recognised directly to the Common control reserve in terms of the Group’s
accounting policies, which is anticipated to be recovered through the future operating profits of the
business. Included in the Trade and other receivables at the effective date was gross contractual
trade receivables of R1 325 373 with a provision for doubtful debt of R2 280.
ROi reported sales amounting to R8.6 million, and a loss after tax and contributions toward group
overheads of R2.4 million for the interim period ended 31 December 2016.
Ecsponent Development Fund (Pty) Ltd (“EDF”)
EDF, a 74% owned subsidiary of the Company, agreed to acquire the business conducted by
Ecsponent Investment Holdings (Pty) Ltd as a going concern. The business provides high yielding
financing opportunities which offer an attractive proposition for the Company. The Group
concluded an agreement to acquire the business of the company, effective 30 June 2016.
Fair value of the assets acquired and liabilities assumed are as follows:
2016
R
Property, plant and equipment 368 871
Deferred taxation 446 087
Trade and other receivables 44 608 966
Trade and other payables (357 332)
Total identifiable net assets 45 066 592
Non-controlling interest 19 211 569
Common control reserve 54 679 081
Purchase consideration 118 957 242
Net cash flow on acquisition
Purchase consideration $ -
Net cash balances assumed -
-
The goodwill was recognised directly to the Common control reserve in terms of the Group’s
accounting policies, which is anticipated to be recovered through the future operating profits of the
business. Included in the Trade and other receivables at the effective date was gross contractual
trade receivables of R46 675 943 with a provision for doubtful debt of R2 066 977.
EDF reported revenue amounting to R22.7 million, and a profit after tax of R3.3 million for the
second interim period ended 31 December 2016.
The Company acquired the 26% non-controlling interest in EDF effective on 30 September 2016.
Profit after tax amounting to R156 538 was recognised as non-controlling interest profits up to the
effective date. Refer below to note 9 for more detail in this regard.
The Company also entered a proposed sale agreement to dispose of a portion of the business. Please
refer to note 8 for more detail in this regard.
Clade Investment Management (Pty) Ltd (“Clade”) and its subsidiary
Ecsponent acquired 51% of the ordinary share capital of Clade, which wholly own the shares of
Exchange Trade Fund Ltd, effective 30 June 2016. It has category 2 and 2A investment licences
with the Financial Services Board, allowing the entity to offer a comprehensive range of hybrid
investment solutions for investors.
Fair value of the assets acquired and liabilities assumed are as follows:
2016
R
Property, plant and equipment 8 606
Deferred taxation 3 400 896
Trade and other receivables 1 621 142
Cash and cash equivalents 11 453 166
Other financial liabilities (11 452 166)
Trade and other payables (1 608 171)
Bank overdraft (2 360)
Total identifiable net assets 3 421 113
Non-controlling interest (1 676 345)
Intangible assets and goodwill 9 255 232
Purchase consideration 11 000 000
Net cash flow on acquisition
Purchase consideration $^ -
Net cash balances assumed 11 450 806
11 450 806
^ As part of the purchase consideration, 19 095 617 ordinary shares of the Company were
issued at the 30 day VWAP (volume weighted average price) at the date of the Letter of
Intent, equal to R4 million. The balance of the purchase consideration was payable in cash
in seven equal monthly instalments.
The intangible assets and goodwill was recognised in terms of the Group’s accounting policies,
which represented the premium paid for the Category 2 and 2A, asset management license and
therefore a new channel for capital raising. Included in the Trade and other receivables at the
effective date was gross contractual trade receivables of R1 608 581 with no provision for doubtful
debt. Clade reported revenue amounting to R50 921, and a loss after tax of R1.6 million for the
interim period ended 31 December 2016.
The Company also entered a proposed sale agreement to dispose of its interest in Clade. Please
refer to note 8 for more detail in this regard.
Disposals
Disposal of 51% of Ligagu Investments (Pty) Ltd Swaziland (“Ligagu Investments”)
Ecsponent entered into an agreement to dispose of its 51% shareholding in Ligagu Investments, its
subsidiary in Swaziland providing retail credit loans to individuals. The investment was effectively
sold on 30 June 2016 for a total consideration of R16 million, payable in twelve equal instalments
from 31 July 2016.
Fair value of the assets and liabilities disposed of are as follows:
2016
R
Property, plant and equipment 199 222
Intangible assets 275 321
Deferred taxation 759 219
Other financial assets 29 629 448
Trade and other receivables 751 854
Cash and cash equivalents 2 615 690
Other financial liabilities (19 897 090)
Trade and other payables (9 746 114)
Current tax payable (1 729 620)
Total identifiable net assets 2 857 930
Non-controlling interest (1 245 645)
Net assets derecognised 1 612 285
Profit on disposal 14 387 715
Consideration receivable 16 000 000
Net cash flow on disposal
Purchase consideration $ -
Net cash balances disposed off (2 615 690)
(2 615 690)
$ The disposal proceeds are receivable on deferred payment terms and no balance was
received at the effective date. All cash flow movements are therefore recognised through
the Other Financial Asset movements.
Disposal of acquired debt collection books
Ecsponent decided, as part of its new focus on financial services, to dispose of its acquired debt
books to Ecsponent Business Finance (Pty) Ltd (“EBF”), effective on 28 February 2016. The disposal
consideration of R9 million was paid in cash to Ecsponent Credit Services (Pty) Ltd in 12 equal
instalments. The acquired debt books had a carrying value of R8.9 million on the effective date.
5. OTHER FINANCIAL ASSETS
The other financial asset category incorporates the benefits provided to employees against payroll
facilities contracts, business funding and purchase price repayment facilities. Total other financial
assets increased by 86.8% compared to the comparative period. Provided below is the detail
regarding the Group’s other financial assets:
Reviewed Audited
Group Group
31 December 31 December
2016 2015
R ‘000 R ‘000
At fair value through profit and loss – designated
Acquired debt - 8 874
Loans and receivables
Employee benefit loans * - 77 645
Secured SME loans 230 620 54 942
Ecsponent Capital RF Limited 337 439 134 917
Ecsponent Investment Holdings (Pty) Ltd - 81 940
Getbucks (Pty) Ltd – purchase price facility - 18 198
Virtual Shared Services (Pty) Ltd – purchase price 9 633 -
facility
Ecsponent Projects (Pty) Ltd 29 780 -
Clade Investment Management (Pty) Ltd (“Clade”)* 2 026 -
Ecsponent Financial Services Ltd - Zambia (“EFS 13 782 -
Zambia”)*
Surechoice (Pty) Ltd (“Surechoice”)* 76 438 -
Ecsponent Holdings (Pty) Ltd – Botswana (“EHB”)* 3 508 -
TOTAL OTHER FINANCIAL ASSETS 703 226 376 516
Total included in non-current assets 604 059 98 066
Total included in current assets 99 167 278 450
* These items have been reclassified to ‘Non-current assets held for sale’ as they form part
of the identified disposal groups as described above. Please also refer to note 8 for more
detail related to the disposal groups and IFRS 5 disclosures.
6. PREFERENCE SHARE CAPITAL
Ecsponent’s business model requires funding for both existing business growth and to pursue further
acquisitions. Funding is deployed in the growth of financial services assets and the acquisition of
new assets which contribute to the growth strategy. The Group’s primary capital raising is through
the issuance of preference shares for on-going business needs. The Company has registered a R5
billion preference share programme (“the Programme”) under which Ecsponent may, from time to
time, issue multiple tranches of preference shares. The Programme was approved by the JSE on 8
September 2014 and again on 15 December 2015. By 31 December 2016 Ecsponent Limited had
received subscription investments of R661.5 million. The Group will continue to raise capital through
the further issues of preference shares.
Reconciliation of the number of preference shares in issue:
Ecsponent Limited (South Africa)
Class A Class B Class C
Reported at the beginning of the period 326 798 688 485 1 641 290
Issue of preference shares during the year 84 797 779 085 3 116 158
411 595 1 467 570 4 757 448
Weighted average issue price per share 94.85 100.00 100.00
(Rands)
Ecsponent Limited (Swaziland)
Class A Class E
Reported at the beginning of the period 18 058 000 18 174 000
Issue of preference shares during the year 27 597 000 26 278 700
45 655 000 44 452 700
Weighted average issue price per share 1.00 1.00
(converted to Rand)
Ecsponent Limited (Botswana)
Class A Class B
Reported at the beginning of the period 14 764 000 2 067 000
Redemption of preference shares during the (3 014 000) -
year
11 750 000 2 067
000
Weighted average issue price per share
(Pula) 1.00 1.00
Weighted average issue price per share 1.26 1.26
(Rand)
7. OTHER FINANCIAL LIABILITIES
In terms of IFRS the preference share capital is classified as debt and disclosed as other financial
liabilities in the Condensed Consolidated Statement of Financial Position as at 31 December 2016.
Consequently, the preference share dividends are classified as funding costs and disclosed as such
in the Condensed Consolidated Interim Statement of Profit and Loss and Other Comprehensive
Income for the 12 months ended 31 December 2016.
The other financial liabilities category incorporates external funding facilities with either banks,
individuals or corporate funding entities. Provided below is the detail regarding the Group’s other
financial liabilities:
Reviewed Audited
Group Group
31 December 31 December
2016 2015
R ‘000 R ‘000
Held at amortised cost
Preference share liability 763 036 313 837
Experite NV Group 6 218 6 498
Capital bank - Term loan facilities * - 8 977
Getbucks (Pty) Ltd - 4 054
GetBucks (Pty) Ltd - Botswana 1 153 -
Ecsponent Projects (Pty) Ltd - 4 873
Ecsponent Holdings (Pty) Ltd (Botswana) * 11 972 -
Other 918 3 860
TOTAL OTHER FINANCIAL LIABILITIES 783 297 342 099
Total included in non-current liabilities 759 526 324 840
Total included in current liabilities 23 771 17 259
* These items have been reclassified to ‘Liabilities held for sale’ as they form part of the
identified disposal groups described above. Please also refer to note 8 for more detail
related to the disposal groups and IFRS 5 disclosures.
8. ASSETS CLASSIFIED AS HELD FOR SALE / DISCONTINUED OPERATIONS
The Group has undertaken a process of rationalising the Group’s operations and investments
including a series of financial transactions designed to streamline operations and re-align the Group
for increased strategic growth. The relevant recognition and disclosure requirements of IFRS 5
therefore resulted in the ‘re-presentation’ of the financial results to disclose two categories being
Continued and Discontinued operations (disposal groups). The comparative period Statement of
Profit / Loss has therefore been ‘re-presented’ and does not represent a restatement of the results.
The results have also been presented to disclose the impact of the proposed transactions on the
Group’s financial results, resulting in the disclosure of Loan receivables and Loan payables between
the affected subsidiaries and the continuing group financial services entities, disclosed in the two
different categories. The continued revenue from loan funding have been included in the continued
financial services operations’ results for the period, as determined by the terms signed funding
and/or sale agreements.
For details related to the various transactions, please refer below to note 13 for a summary of the
‘Related Party Circular Transactions’.
The following disposal groups have been classified as held for sale for the period ended 31 December
2016:
Profit and loss - December EHB and Clade Sure EFS EDF TOTAL:
2016 EAM and ETF Choice Zambia
Bots
R’000 R’000 R’000 R’000 R’000 R’000
Revenue 248 10 35 004 1 642 19 589 56 493
Cost of sales (826) - (20 661) (52) - (21 540)
Gross profit (578) 10 14 343 1 590 19 589 34 953
Other Income 280 - - - 280
Operating expenses (7 279) (1 030) (8 104) (4 943) (4 096) (25 452)
Operating profit / (loss) (7 577) (1 020) 6 239 (3 353) 15 493 9 781
Investment revenue 11 251 20 2 112 - - 13 384
Finance Costs (11 917) (72) (4 998) (2 831) (12 017) (31 835)
Profit / (loss) before taxation (8 243) (1 072) 3 353 (6 184) 3 476 (8 670)
Taxation 2 011 468 (77) 2 164 (973) 3 593
Net profit / (loss) after tax (6 232) (604) 3 276 (4 020) 2 503 (5 077)
Gain (loss) on measurement to - - - - - -
fair value less cost to sell
Tax thereon - - - - - -
Profit / (loss) for the year from (6 232) (604) 3 276 (4 020) 2 503 (5 077)
discontinuing operations
Profit and loss - December EHB and Clade Sure EFS EDF TOTAL:
2015 EAM and ETF Choice Zambia
Bots
R’000 R’000 R’000 R’000 R’000 R’000
Revenue - - 23 597 1 143 - 24 740
Cost of sales - - (11 963) - - (11 963)
Gross profit - - 11 634 1 143 - 12 777
Other Income - - 91 - - 91
Operating expenses - - (6 928) (1 902) - (8 830)
Operating profit / (loss) - - 4 797 (759) - 4 038
Investment revenue - 241 3 244
Finance Costs - - (602) (1 127) - (1 729)
Profit / (loss) before taxation - - 4 435 (1 883) - 2 552
Taxation - - (505) 659 - 154
Net profit / (loss) after tax - - 3 930 (1 224) - 2 706
Gain (loss) on measurement to - - - - - -
fair value less cost to sell
Tax thereon - - - -
Profit / (loss) for the year from - - 3 930 (1 224) - 2 706
discontinuing operations
Assets classified as held for EHB and Clade Sure EFS EDF TOTAL:
sale - December 2016 EAM and ETF Choice Zambia
Bots
R’000 R’000 R’000 R’000 R’000 R’000
Property, plant and equipment 1 047 6 925 1 433 356 3 767
Intangible assets - 9 255 - 4 176 - 13 431
Other financial assets 31 334 - 93 527 4 058 - 128 919
Deferred tax 1 790 3 869 1 709 2 690 - 10 058
Trade Receivables 1 031 1 040 8 406 236 57 877 68 590
Cash and cash equivalents 17 097 3 538 5 901 276 - 26 812
52 299 17 708 110 468 12 869 58 233 251 577
Liabilities of disposal groups
Other Financial Liabilities (41 695) (6 119) (111 197) (14 167) - (173 178)
Deferred income - - (12 152) - - (12 152)
Trade Payables (1 733) (116) (1 074) (257) (173) (3 353)
Current tax payable - - (224) - - (224)
Bank overdraft - - (5 087) - - (5 087)
(43 428) (6 235) (129 734) (14 424) (173) (193 994)
Cash flows from discontinued EHB and Clade Sure EFS EDF TOTAL:
operations - December 2016 EAM and ETF Choice Zambia
Bots
R’000 R’000 R’000 R’000 R’000 R’000
Net cash flows from operating (7 521) (886) 978 (5 754) 3 608 (9 575)
activities
Net cash flows from investing (32 455) 11 451 (30 311) 901 (58 232) (108 646)
activities
Net cash flows from financing 41 695 (6 416) 46 163 3 063 - 84 505
activities
Net cash flow movement 1 719 4 149 16 830 (1 790) (54 624) (33 716)
Financial Financial Financial Financial Financial
Operating segment Services Services Services Services Services
Botswana South Botswana Zambia South
Geographical segment Africa Africa
9. NON-CONTROLLING INTEREST
The movement of the non-controlling interest for the period ending 31 December 2016 is as
follows:
Reviewed Audited
31 December 31 December
2016 2015
R’000 R’000
Balance at the beginning of the period (4 653) (3 795)
Non-controlling interest in current period income (7 677) (3 425)
Foreign currency translation on non-controlling interest 193 127
Acquisition of non-controlling interest 19 576 (370)
Non-controlling interest as a result of business (18 155) -
acquisitions
Disposal of non-controlling interest (1 246) 2 810
Total non-controlling interest at the end of the period (11 962) (4 653)
Ecsponent Limited acquired the following entities during the period under review:
- Clade Investment Management (Pty) Ltd and subsidiary
- Return on Innovation (Pty) Ltd
- The Business from Ecsponent Investment Holdings (Pty) Ltd
The following changes to non-controlling interests were effected during the period under review:
- Ecsponent Ltd disposed of its 51% controlling interest in Ligagu Investments (Pty) Ltd on
30 June 2016
- The EDF non-controlling interest was purchased effective on 30 September 2016 taking the
controlling interest from 74% to 100%
- Ecsponent Ltd (Botswana) purchased the 100% interest in Sanceda Collections (Pty) Ltd
(Botswana) from Ecsponent Holdings (Pty) Ltd (Botswana) effective on 1 July 2016, taking
the effective controlling interest from 70% to 100%
10. RELATED PARTY DISCLOSURES
The group entered into related party transactions with its holding company and related subsidiaries
during the financial period. Below is a summary of the relevant balances and transactions in this
regard:
Reviewed Audited
31 December 31 December
2016 2015
R’000 R’000
Related party balances
Loan accounts - Owing (to) / by related parties
Ecsponent Capital (RF) Limited (“Capital”) 337 439 134 917
Ecsponent Capital (RF) Limited (1 082) -
Ecsponent Investment Holdings (Pty) Ltd (subsidiary of - 81 940
Capital)
Ecsponent Projects (Pty) Ltd (subsidiary of Capital) 29 780 (4 873)
Amounts included in Trade receivable / (Trade
Payable) regarding related parties
Ecsponent Investment Holdings (Pty) Ltd (subsidiary of (50) -
Capital)
Ecsponent Business Finance (Pty) Ltd (subsidiary of (247) -
Capital)
Related party transactions
Interest (received from) / paid to related parties
Ecsponent Capital (RF) Limited (68 293) (14 110)
Ecsponent Investment Holdings (Pty) Ltd (subsidiary of (25 194) (18 644)
Capital)
Ecsponent Investment Holdings (Pty) Ltd (subsidiary of 2 486 -
Capital)
Ecsponent Business Finance (Pty) Ltd (subsidiary of (676) -
Capital)
Administration fees paid to (received from) related
parties
Ecsponent Capital (RF) Limited (4 471) (5 962)
Ecsponent Investment Holdings (Pty) Ltd (1 170) (3 240)
Return on Innovation (Pty) Ltd (subsidiary of Capital up to (216) -
28 Feb 2016)
Ecsponent Investment Holdings (Pty) Ltd 50 -
Commission paid to (received from) related parties
Ecsponent Business Finance (Pty) Ltd (2 069) (1 500)
Ecsponent Investment Holdings (Pty) Ltd (500) -
Recoveries paid to (received from) related parties
Ecsponent Capital (RF) Limited 564 -
Ecsponent Business Finance (Pty) Ltd (40) -
Ecsponent Investment Holdings (Pty) Ltd (37) -
Return on Innovation (Pty) Ltd 117 -
11. FINANCIAL INSTRUMENTS – FAIR VALUE AND RISK MANAGEMENT
Financial instruments measured in the statement of financial position at fair value require
disclosure. Financial instruments of the Group carried at fair value with unobservable inputs for
the asset are disclosed below.
Reviewed 31 December 2016
Financial instrument carried at fair value Carrying value - Fair value -
Designated at Level 3
fair value
R’000 R’000
Other financial assets - -
Audited 31 December 2015
Financial instrument carried at fair value Carrying value - Fair value -
Designated at Level 3
fair value R’000
R’000
Other financial assets 8 874 8 874
Financial instrument carried at fair value Reviewed Audited
31 31
December December
2016 2015
Fair value gains recognised in profit and loss - 5 639
Financial instrument carried at fair value Reviewed 31 Audited 31
December December
2016 2015
Opening balance at the start of the period 8 874 3 241
Purchases & revaluations 126 5 854
Transfer of realised gains recognised in profit and loss - (221)
Disposal of financial instrument 4 (9 000) -
Balance at the end of the period - 8 874
Financial Instruments
The carrying amount of all financial assets and liabilities approximates the fair value. Directors
consider the carrying value of financial instruments of a short term nature, that mature in 12 months
or less, to approximate the fair value of such assets or liability classes. The carrying value of longer
term assets are considered to approximate their fair value as these instruments bear interest at
interest rates appropriate to the risk profile of the asset or liability class.
Financial Risk Management
The Group's financial risk management objectives and policies are consistent with those disclosed in
the consolidated annual financial statements as at and for the year ended 31 December 2015.
12. SUMMARISED CONSOLIDATED SEGMENTAL INFORMATION
The segments identified are based on the operational and financial information reviewed by
management for performance assessment and resource allocation. There has been no change in the
basis of operational segmentation or in the basis of measurement of segment profit or loss since the
2015 annual financial statements.
The continued expansion of the Group has resulted in the need for geographic segmentation in
addition to operational segmentation.
Period ended 31 December 2016
Operating Segment Total Assets Revenue Operating profit
/ (loss)
R’ 000 R’ 000 R’000
Financial Services 1 330 826 379 866 229 536
Private equity 59 200 63 143 (5 900)
Collections 4 548 3 160 (3 708)
Corporate 908 915 77 041 85 440
Eliminations (1 239 303) (221 718) (166 316)
Group total 1 064 186 301 492 139 052
Transferred to discontinued operations (251 577) (56 492) (9 781)
Total continued operations 812 609 245 000 129 271
Geographic Segment Total Assets Revenue Operating profit
/ (loss)
R’ 000 R’ 000 R’000
South Africa 1 779 399 417 439 264 261
Botswana 378 525 74 332 31 737
Swaziland 132 453 29 285 12 658
Namibia 244 513 65
Zambia 12 869 1 642 (3 353)
Eliminations (1 239 303) (221 718) (166 316)
Group total 1 064 186 301 492 139 052
Transferred to discontinued operations (251 577) (56 492) (9 781)
Total continued operations 812 609 245 000 129 271
Year ended 31 December 2015
Operating Segment Re-presented Re-presented
Total Assets Revenue Operating profit
/ (loss)
R’ 000 R’ 000 R’000
Financial Services 710 672 132 833 65 193
Private equity – Biotechnology 36 088 39 623 (5 644)
Collections 8 802 16 209 (258)
Corporate 355 853 57 728 30 618
Eliminations (645 236) (86 679) (42 528)
Group total 466 179 159 712 47 381
Transferred to discontinued operations - (24 740) (4 038)
Total continued operations 466 179 134 972 43 343
Geographic Segment Total Assets Revenue Operating profit
/ (loss)
R’ 000 R’ 000 R’000
South Africa 834 788 190 292 63 494
Botswana 183 856 40 956 20 969
Swaziland 81 321 13 438 6 362
Namibia 187 562 (157)
Zambia 11 263 1 143 (759)
Eliminations (645 236) (86 679) (42 528)
Group total 466 179 159 712 47 381
Transferred to discontinued operations - (24 740) (4 038)
Total continued operations 466 179 134 972 43 343
13. EVENTS AFTER THE REPORTING PERIOD
The directors are not aware of any material event, other than the matters listed below, which
occurred after the reporting date and up to the date of this report, which require disclosure.
The Board has undertaken a process of rationalising the Group’s operations and investments and
has announced a series of financial transactions designed to streamline operations and re-align the
Group for increased strategic growth. These transactions ensure uncompromising focus on its core
business of SME and enterprise finance and private equity, with the Group disposing of all other
assets not aligned to these activities. The transactions are conditional upon obtaining the requisite
shareholder approvals during the general meeting of shareholders, scheduled for 30 March 2017.
Disposals
1. the disposal of the Company’s 51% interest in, and loan accounts against, Clade Investment
Management Proprietary Limited (“Clade”) to Ecsponent Capital (RF) Limited (“Capital”) for
a total consideration of R15 500 000 (“the Clade Disposal”);
2. the disposal of the Company’s 70% interest in, and loan accounts against Ecsponent
Holdings Proprietary Limited, incorporated in Botswana (“ECS Holdings”), to Ecsponent
Projects Proprietary Limited (“Projects”), for a consideration of P34 000 000 (“the ECS
Holdings Disposal”);
3. the disposal of a portion of the business of Ecsponent Development Fund Proprietary Limited
(“EDF”), as a going concern, to Ecsponent Investment Holdings Proprietary Limited (“EIH”),
for a consideration of R120 150 000 (“the EDF Disposal”);
4. the issue of 1 500 000 new shares by Ecsponent Financial Services Limited (“EFS Zambia”),
equating to 75% of the total issued share capital in EFS Zambia after the issue, to GetBucks
Limited (“GetBucks MU”), for a subscription price equal to ZMW 7 500 000, payable in cash
(“the EFS Zambia Subscription”), resulting in a dilution of Ecsponent’s interest from 100%
to 25%; and
5. the disposal of the Company’s 50% interest in Sure Choice Proprietary Limited (“Sure
Choice”) to GetBucks Limited (“GetBucks BW”), for a sale consideration of P10 000 000 (“the
Sure Choice Disposal”).
Acquisitions
1. The Board has proposed the acquisition by Ecsponent Limited, incorporated in Botswana
(“ECS Botswana”), of 10.002% of the issued share capital of MyBucks SA (“MyBucks”) from
Projects for a purchase consideration of R262 570 000 (“the MyBucks Acquisition”) as part
settlement on the Loan Account reducing the balance on the Loan Account following the
Disposals and the Loan Consolidation.
Loan consolidation
1. In addition to the above Disposals, the various parties to the Disposals, and/or their group
companies, have agreed to undertake a process to consolidate various loan accounts due to
and from the various parties and/or their group companies, resulting in one single loan
account (“the Loan Account”) between Ecsponent Treasury Services Limited (“ECS
Treasury”) and Capital (“the Loan Consolidation”).
The following events initiated during the period, were concluded post the reporting period end:
Rights offer
In terms of the Rights Offer, 135 758 403 new ordinary Ecsponent shares (“Rights Offer Shares”)
were allocated to qualifying shareholders and Mason Alexander (Pty) Ltd (‘the Underwriter”),
resulting in R20 363 760.50 being received from the Rights Offer which concluded on 24 February
2017. Following the issue of the Rights Offer Shares, Ecsponent has 1 067 528 399 ordinary shares
in issue.
14. CORPORATE ACTIONS
During the financial period ended 31 December 2016, the following corporate actions were
implemented by the Group:
Related party acquisitions
EDF, a subsidiary of the Company, acquired the business conducted by Ecsponent Investment
Holdings Proprietary Limited (“EIH”) as a going concern (“the EIH Transaction”). The EIH Transaction
was approved by the requisite number of shareholders votes at a general meeting held on 3 May
2016 and became effective on 30 June 2016.
Class G Preference Shares
At the annual general meeting held on 25 August 2015, shareholders approved the creation of an
additional Class G preference share, which contains provisions for conversion into ordinary shares
on certain default events. Specific approval for the issue of convertible Class G shares was obtained
from shareholders at a general meeting held on 3 May 2016, however none have been issued to
date.
Issue of ordinary shares to Directors
The Company’s remuneration committee approved the partial settlement of directors’ fees for the
non-executive directors and for the executive directors’ salaries through the issue of ordinary shares
to the directors in lieu of a cash settlement of the fees (“the Directors’ Issue”). The issue was
approved by the requisite number of shareholders at a general meeting held on 3 May 2016.
Odd lot offer and specific repurchase
The Company undertook an odd-lot offer and a specific repurchase of ordinary shares at 20.55 cents
per share to reduce the ongoing administration costs associated with the Company’s large minority
ordinary shareholder base, as follows:
• an odd-lot offer to repurchase holdings equal to or less than 532 ordinary shares (“the Odd-
Lot Offer”);
• a specific offer to repurchase holdings of more than 532 ordinary shares and equal to or less
than 10 000 ordinary shares (“the Specific Repurchase”).
In terms of the Odd-Lot Offer and the Specific Repurchase, a total of 542 758 ordinary shares were
repurchased and subsequently cancelled. The Odd-Lot Offer and the Specific Repurchase was
approved by shareholders in a general meeting on 3 May 2016 and became effective on 19 August
2016.
Amendment of the Memorandum of Incorporation
The Company’s MOI was amended to specifically allow the Company to expropriate shares pursuant
to the Odd-Lot Offer. The amendment was approved by the requisite number of shareholders at a
general meeting held on 3 May 2016.
Related party acquisition and disposals
The Board has undertaken a process of rationalising the Group’s operations and investments and on
20 December 2016 announced a series of financial transactions designed to streamline operations
and re-align the Group for increased strategic growth. Please refer to note 13 for details related to
the Transactions.
Rights offer
Shareholders were advised on 10 October 2016 that Ecsponent intended to raise up to R50 million
by way of a partially underwritten renounceable rights offer (“the Rights Offer”).
In terms of the Rights Offer, 333 333 292 new ordinary Ecsponent shares (“Rights Offer Shares”)
were offered to Ecsponent shareholders recorded in Ecsponent’s share register at the close of
business on Friday, 10 February 2017 (“Record Date”), at a subscription price of 15 cents per Rights
Offer Share.
15. SHARE CAPITAL
The following ordinary shares were issued during the 12 months ended 31 December 2016.
Number of Issued share Total
shares capital
‘000 R’000 R’000
Opening balance 1 January 2016 901 588 118 072 118 072
Acquisition of Clade Investment Management 19 096 4 000 4 000
Odd lot Offer - repurchase and cancellation (543) (112) (112)
Shares issued pursuant to the Directors’ Issue 11 629 2 113 2 113
Closing balance 31 December 2016 931 770 124 073 124 073
16. DIVIDENDS
No ordinary dividends have been declared or proposed for the year.
The Company has issued and listed three classes of Preference Shares with the following dividend
terms:
• Class A – 10% fixed rate monthly dividend;
• Class B – 0% monthly dividend, but redeeming at a rate equal to 170% of the Initial Issue
Price; and
• Class C – prime plus 4% floating rate monthly dividend.
Preference Share dividends and interest of R74.2 million accrued to investors for the 12 months
ended 31 December 2016. The dividends are classified as finance costs and included in the finance
cost expense in the Condensed Consolidated Statement of Profit and Loss and Comprehensive
Income.
17. CONTINGENCIES
The directors are not aware of any material contingent liability which existed at the reporting date
and up to the date of this report that requires disclosure.
18. DIRECTOR CHANGES
The following changes in the directorate took place during the period, effective 1 October 2016:
• Mr TP Gregory (previous Chief Operating Officer) was appointed as the Company and
Group’s Chief Executive Officer (“CEO”);
• Mr E Engelbrect resigned as Company and Group CEO and retained a position as non-
executive director on the Board; and
• Mr P Matute was appointed as a non-executive director on the Board.
The following changes in the directorate took place after the reporting period ending 31 December
2016, effective 20 March 2017:
• Mr G Manyere was appointed as a non-executive Vice Chairman to the Ecsponent Board;
• Mr W Oberholzer was appointed as independent non-executive director to the Ecsponent
Board as well as a member of the Audit Committee.
19. COMPANY SECRETARY
During the period, Mr. D van der Merwe was appointed as the company secretary.
20. AUDITORS
At the Annual General Meeting held on 27 May 2016, shareholders reappointed Nexia SAB&T as
the independent external auditors of the Group for the 2016/2017 financial year.
21. GOING CONCERN
The directors believe that the Group has adequate financial resources to continue in operation for
the foreseeable future and accordingly the Condensed Consolidated Reviewed Second Interim
Financial Statements for the 12 months ended 31 December 2016 have been prepared on a going
concern basis. The directors have satisfied themselves that the Group is in a sound financial position
and that it has access to sufficient equity and borrowing facilities to meet its foreseeable cash
requirements.
The directors are not aware of any new material changes that may adversely affect the Group. The
directors are also not aware of any material non-compliance with statutory or regulatory
requirements or of any pending changes to legislation which may affect the Group.
For and on behalf of the Board
TP Gregory
Pretoria
24 March 2017
Directors: RJ Connellan* (Chairman), KA Rayner*, BR Topham*, W Oberholzer*, E Engelbrecht #,
P Matute #, G Manyere (Vice Chairman) #, TP Gregory (Chief Executive Officer) and B Shanahan
(Financial Director).
(* Independent Non-Executives)
(# Non-Executive)
Company Secretary: DP van der Merwe
Registered Office: Acacia House, Green Hill Village Office Park, on Lynnwood, Cnr Botterklapper
and Nentabos Street, The Willows, Pretoria East, PO Box 39660, Garsfontein East 0060
Transfer Secretaries: Computershare Investor Services Proprietary Limited, (Registration number
2004/003647/07), 2nd Floor, Rosebank Towers, 15 Biermann Avenue, Rosebank, 2196, (PO Box
61051, Marshalltown, 2107)
Auditors: Nexia SAB&T Inc.
Sponsor: Questco (Pty) Ltd
Date: 24/03/2017 07:05:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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