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Revised Abridged Report for the 15 months ended 31 March 2017 and notice of annual general meeting
ECSPONENT LIMITED
Incorporated in the Republic of South Africa
Registration number: 1998/013215/06
JSE Code: ECS - ISIN: ZAE000179594
("the Company" or "Ecsponent" or "the Group")
Abridged Report for the 15 months ended 31 March 2017
and notice of annual general meeting
The Board of Directors ("the Board") is pleased to advise shareholders of the continued
growth and profitability of Ecsponent and its subsidiaries ("the Group") as reflected in
the consolidated results for the 15 months ended 31 March 2017.
Ecsponent further refined its strategic focus during the period by effecting additional investments in
financial services while disposing of non-core assets which did not meet the Group's profit
expectations. These transactions provide an uncompromising focus on the core business of investment services,
SME funding, enterprise development and private equity investment. The directors envisage
that the focused expansion strategy will continue indefinitely.
RESULTS HIGHLIGHTS
The Group showed sustained improvement in performance and generated greatly increased
returns for the 15 months ended 31 March 2017.
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.
Certain highlights of the Group's audited results for the 2017 financial period compared to the 2015
financial period are set out below. It should be noted that the comparison is a period of 15 months
versus the previous 12-month period:
- revenue from continuing operations increased by 122% to R321.8 million compared to R144.7 million;
- operating profits from continuing operations increased by 416% to R229.2 million compared to
R44.4 million;
- total assets increased by 161% to R1 214.8 million compared to R466.2 million;
- after tax profit, before other comprehensive income, increased by 239% to R67.6 million
compared to R19.9 million;
- basic earnings increased by 234% to R78 million compared to R23.4 million; and
- resultant earnings per share ("EPS") increased by 223% to 8.38 cents per share compared to
2.59 cents per share.
External revenue generated by the Group's financial services operations increased by 237.8% to
R217.9 million compared to R64.5 million for the comparative period, comprising 59.4% of total
revenue for the 2017 financial period. Funding for the expansion strategy was secured through the
registration and listing of Ecsponent's Preference Share programme enabling, the Company to raise
capital to fund investments on an ongoing basis. Continued market subscriptions of the Preference
Shares have been very encouraging.
OPERATIONAL REVIEW
Group overview
During the period under review the Group further refined its business structure resulting in a
functional rather than a geographic focus. The three core functions of the Group are Investment
Services (including capital raising), Business Credit and Equity Holdings. The disposal of non-core
and underperforming assets was a natural result of refinement.
The adjustments required in terms of the Headline Earnings Circular 2/2015 issued by the South
African Institute of Chartered Accountants ("SAICA") results in a notable disparity between earning
per share ("EPS") and headline earnings per share ("HEPS"). The impact is that after-tax profits of
R78 million are included in the IFRS guided EPS calculation but are excluded from the SAICA guided
HEPS calculation. The Board believes the Group's performance is best guided by EPS, as the Group
is in the process of concluding the balance of the corporate actions in respect of the Sure Choice
disposal and the dilution in Ecsponent Financial Services Limited Zambia (as detailed below), which
will be accounted for in the new financial year.
Below is an overview of the Group's operations during the period ended 31 March 2017.
Investment Services
The Group's Investment Services operations continued their exponential growth during the period.
Investments placed under the highly successful Preference share programme in South Africa and
the link loan products in Swaziland, increased by 196% from R313.8 million in 2015 to R928 million
in 2017. The investments increased by R544.8 million in South Africa and R73.5 million in Swaziland,
during the current financial period. Total returns of R127.3 million were paid and accrued to retail
investors during the period.
The Directors continue to evaluate opportunities to reduce the cost of capital of the Group as well
as exploring alternative products which could be provided through the distribution channel.
Business Credit
The period under review witnessed the final steps in the Group's disposal of its retail, unsecured
employee benefits credit business in favour of secured business credit to SME's, including enterprise
finance.
The credit operations continued the exponential growth and interest income increased by 271% to
R232.3 million for the period. The new enterprise development sector generated R31 million of this
income, a pleasing start up result. Furthermore, Ecsponent Procurement Services (EPS), which is
the procurement leg of enterprise development, contributed revenues of R30.6 million to the Group
results. EPS was however managed and reported in the Private Equity sector.
The change in emphasis to the provision of business credit has not only improved margins but has
realised the additional benefits of the provision of security for the credit and the reduction of
infrastructure costs.
The demand for credit remains buoyant particularly in the enterprise development sector and the
Group is well positioned to maximise opportunities. The roll-out of the Group's business credit
offering into Africa replicates the South African model and leverages off the infrastructure, systems,
products and management expertise of the local business.
Equity Holdings
Fintech
The Group's Equity Holding pillar was significantly bolstered during the period under review with the
acquisition of 10% of the issued share capital in MyBucks SA, a fintech company listed on the
Frankfurt Stock Exchange. MyBucks is a fast growing, innovative fintech business with credit,
banking and insurance products which are delivered through its proprietary technology and digital
channels. The MyBucks group has expanded rapidly in both Africa and Europe and not only provides
the Group with the obvious grass roots investment opportunity but also provides a significant rand
hedge.
The MyBucks investment is the most significant equity investment for the Ecsponent group to date,
with the Group's shareholding value at the period end of R233 million. In addition to the anticipated
share value appreciation the investment also provides the Group with a hard currency asset.
Biotechnology
Under difficult market conditions, the Group's Biotechnology Operations increased its sales revenue
by 28.7% to R32.2 million for the current financial period. The growth was a direct result of the
contracts concluded in the prior period which resulted in prospect generation from medical aid and
pharmacy groups.
Margins in the sector continued to appear to be under pressure and this was aggravated by foreign
exchange movements which resulted in a loss position for the biotech sector.
Management anticipates that the market in this sector will improve in the second half of 2017 and
that the Group's biotech offering will improve sales volumes and profitability accordingly.
Media monitoring and intelligence
Return on Innovation (ROI) is a high IP media intelligence business which provides strategic input
to large companies. In the first year of ROI's incorporation into the Group, the business contributed
R10.3 million to the revenue of the Group.
The nature of ROI's services are of increased importance in low margin highly competitive business
environments and the directors are confident that management will continue to grow the client base.
DISPOSALS
The rationalisation of the Group has resulted in the disposal of the following non-core assets;
- Ecsponent disposed of its acquired debt books to Ecsponent Business Finance (Pty) Ltd
("EBF"), effective on 28 February 2016, for a purchase consideration of R9 million;
- Ligagu Investment Proprietary Limited, trading as GetBucks Swaziland. Aligned with the
Group's strategy to exit the retail credit sector the Group disposed of its entire (51%)
interest in Ligagu for a total consideration of R16 million. The transaction was effective 30
June 2016;
- 51% interest and loan accounts in Clade Investment Management (Pty) Ltd for a total
consideration of R16.5-million;
- 70% interest and loan accounts in Ecsponent Holdings (Pty) Ltd, incorporated in Botswana,
for a purchase consideration of R38.6 million;
- A portion of the business of Ecsponent Development Fund (Pty) Ltd as a going concern for
a purchase consideration of R83.9 million.
The group's disposal of its 50% interest in Sure Choice (Pty) Ltd, incorporated and operating in
Botswana, to GetBucks for a purchase consideration of R12.7 million (P10 million) awaits regulatory
approval at the time of going to print.
In addition, the agreement to dilute its interest in Ecsponent Financial Services Ltd Zambia
(EFS Zambia) from 100% to 25%, through an issue of shares by EFS Zambia to GetBucks MU has also
not been finally concluded, awaiting final regulatory approval.
Both the Sure Choice as well as the EFS Zambia transaction are anticipated to be finally concluded
in the near future.
The disposals result in an improved capital investment in profit generating assets whilst at the same
time reducing the infrastructure overheads of the Group.
PROSPECTS
Key elements of the on-going expansion strategy are:
- reduction in the cost of capital for the Group;
- the ongoing investment in the credit operations of the Group;
- the continued growth of subsidiaries through product and market extension;
- aggressive trading and cost reduction;
- the acquisition of new equity investments which are profit generating and aligned with the
Group's strategy.
The approach mentioned above is aimed at developing a robust and complementary financial
services Group which provides sustainable returns.
FINANCIAL RESULTS
Presented below are the summary audited consolidated financial statements for the 15 months
ended 31 March 2017.
Summary Consolidated Statement of Financial Position as at 31 March 2017
Audited Audited
31 March 31 December
2017 2015
Group Group
R'000 R'000
ASSETS
Non-current assets
Property, plant and equipment 6 810 8 475
Intangible assets and goodwill 6 011 8 557
Other financial assets 667 089 98 066
Deferred tax 28 458 12 191
Other non-current receivables 4 656 3 127
Total current assets
Inventories 1 222 1 819
Other financial assets 314 542 278 450
Trade and other receivables 36 150 40 379
Current tax receivable 186 -
Cash and cash equivalents 25 380 15 115
Non-current assets held for sale 124 313 -
TOTAL ASSETS 1 214 817 466 179
EQUITY AND LIABILITIES
Equity attributable to equity holders of parent 106 986 78 191
Non-controlling interest (11 429) (4 653)
Non-current liabilities
Other financial liabilities 922 796 324 840
Deferred revenue 2 538 9 552
Deferred tax 13 454 5 939
Total current liabilities
Other financial liabilities 16 524 17 259
Current tax payable 11 864 3 142
Deferred revenue 148 4 144
Trade and other payables 20 777 22 391
Bank overdraft 469 5 374
Liabilities of disposal groups held for sale 130 690 -
TOTAL EQUITY AND LIABILITIES 1 214 817 466 179
Summary Consolidated Statement of Profit and Loss and Other Comprehensive Income
for the 15 months ended 31 March 2017
Audited Audited
15 months 12 months
ended 31 March ended
2017 31 December
Group 2015
Group
R'000 Re-presented
R'000
Revenue 321 795 144 705
Cost of sales (43 782) (23 818)
GROSS PROFIT 278 013 120 887
Other income 88 543 21 862
Operating expenses (137 370) (98 331)
OPERATING PROFIT 229 186 44 419
Fair value adjustments (11 017) 5 639
Net finance costs (130 351) (26 785)
Income from equity accounted investment - 1 742
PROFIT BEFORE TAXATION 87 818 25 015
Taxation (23 094) (7 786)
PROFIT FROM CONTINUING OPERATIONS 64 724 17 228
Profit from discontinued operations 2 852 2 706
PROFIT FOR THE PERIOD 67 576 19 934
Other comprehensive profit/(loss) 282 (301)
TOTAL COMPREHENSIVE INCOME 67 858 19 633
Loss attributable to non-controlling interest 10 239 3 726
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO
ORDINARY SHAREHOLDERS 78 097 23 359
Profit attributable to owners of the parent from:
- Continuing operations 75 245 20 653
- Discontinued operations 2 852 2 706
78 097 23 359
Total comprehensive income/(loss) attributable to:
Owners of the parent 78 097 23 359
Non-controlling interest (10 239) (3 726)
67 858 19 633
Basic and fully diluted earnings per share (cents) from 8.074 2.291
continuing operations attributable to equity holders of the
parent
Basic and fully diluted earnings / (loss) per share (cents) 0.306 0.300
from discontinued operations attributable to equity holders
of the parent
Basic and fully diluted earnings per share (cents) 8.380 2.591
attributable to equity holders of the parent
Summary Consolidated Statement of Changes in Equity for the 15 months ended 31 March 2017
Share Non- Foreign Common Accumulated Non- Total equity
capital distributable currency control loss controlling
reserve translation reserve interest
reserve
R'000 R'000 R'000 R'000 R'000 R'000 R'000
Balance at 1 January 2015 118 071 3 842 (55) (36 687) (28 505) (3 795) 52 871
Total comprehensive profit for - - (428) - 23 359 (3 298) 19 633
the period
Purchase of non controlling - (3 842) - - 2 435 2 440 1 033
interest
Balance at 31 December 2015 118 071 - (483) (36 687) (2 711) (4 653) 73 537
Total comprehensive profit for
the year - - 85 - 78 013 (10 239) 67 858
Profit for the year - - - - 78 013 (10 436) 67 576
Other comprehensive income - - 85 - - 197 282
Issue of shares 27 098 - - - - - 27 098
Business combinations and - - - (56 824) - (18 155) (74 979)
common control acquisitions
Realisation of reserve - - - 93 512 (93 512) - -
Disposal of investment
Purchas of non-controlling - - - - - 2 043 2 043
interest - - - - (19 575) 19 575 -
Balance as at 31 March 145 169 - (398) - (37 785) (11 429) 95 557
2017
Summary Consolidated Cash Flow Statement for the 15 months ended 31 March 2017
Audited Audited
15 months 12 months
ended ended
31 March 2017 31 December
Group 2015
Group
R'000 R'000
Cash generated by operations 177 263 20 340
Investment revenue - 388
Finance costs (106 732) (18 504)
Taxation paid (25 234) (1 222)
NET CASH INFLOW FROM OPERATING ACTIVITIES 45 297 1 002
Purchase of property, plant and equipment (5 513) (2 618)
Investment in intangible assets (187) (4 290)
Sale of property plant and equipment 1 261 285
Cash and cash equivalents disposed of (24 994) 2 490
Investment in associate - (1 034)
Investment in financial assets (797 842) (443 638)
Proceeds from financial assets 133 064 191 110
Proceeds on disposal of associate - 5 250
Business combinations and common control acquisitions 10 233 600
NET CASH OUTFLOW FROM INVESTING ACTIVITIES (683 978) (251 845)
Proceeds on preference share issues 579 442 247 511
Other financial liabilities raised 77 154 25 633
Repayment of other financial liabilities (18 899) (4 496)
Proceeds on rights offer 19 465 -
Other (112) (404)
NET CASH INFLOW FROM FINANCING ACTIVITIES 657 050 268 244
Movement in cash and cash equivalents for the period 18 370 17 401
Effect of exchange rate movement on cash balances (1 631) (711)
Cash and cash equivalents at the beginning of the period 9 741 (6 949)
Cash and cash equivalents at the end of the period 26 480 9 741
Notes to the Summary Consolidated Financial Statements for the 15 months ended 31 March 2017
1. ACCOUNTING POLICIES AND BASIS OF PREPARATION OF RESULTS
The summary consolidated financial statements are prepared in accordance with the requirements
of the JSE Limited Listings Requirements for abridged reports, and the requirements of the
Companies Act of South Africa applicable to summary financial statements. The Listings
Requirements require abridged reports to be prepared in accordance with the framework concepts
and the measurement and recognition requirements of International Financial Reporting Standards
(IFRS) and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee
and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also,
as a minimum, contain the information required by IAS 34 Interim Financial Reporting. The
accounting policies applied in the preparation of the consolidated financial statements, from which
the summary consolidated financial statements were derived, are in terms of IFRS and are
consistent with the accounting policies applied in the preparation of the previous consolidated
financial statements.
The results of the Group, were prepared under the supervision of the Group's financial director,
Mr B Shanahan CA (SA).
This summarised report is extracted from audited information, but is not itself audited. The
consolidated financial statements were audited by Nexia SAB&T, who expressed an unmodified
opinion thereon. The audited conslidated financial statements and the auditor's report thereon are
available for inspection at the company's registered office. The directors take full responsibility for
the preparation of the abridged report and the financial information has been correctly extracted
from the underlying consolidated financial statements.
2. REVIEW OF RESULTS AND FINANCIAL POSITION
The summary consolidated financial statements 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
Audited Audited
31 March 2017 31 December
2015
BASIC AND HEADLINE EARNINGS R'000 R' 000
Basic earnings 78 013 23 359
Headline earnings 132 22 453
Basic and fully diluted earnings per share (cents) 8.380 2.591
attributable to equity holders of the parent
Headline and fully diluted headline earnings per share 0.014 2.490
(cents) attributable to equity holders of the parent
Number of shares in issue 1 079 550 795 901 588 049
Weighted average number of shares 930 907 328 901 588 049
RECONCILIATION BETWEEN BASIC EARNINGS AND
HEADLINE EARNINGS
Basic earnings 78 013 23 359
Gain on disposal of subsidiary (11 495) (2 040)
Gain on disposal of subsidiary - discontinued operations (14 302) -
Loss on disposal of property, plant and equipment 254 10
Impairment of intangible assets - 493
Loss on disposal of associate - 631
Gain on disposal of disposal group held for sale (52 338) -
Headline earnings 132 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. BUSINESS COMBINATIONS AND COMMON CONTROL ACQUISITIONS
The board actively investigates acquisition opportunities aimed at improving earnings and cash
generation for the Group.
Aggregated business combinations for the period:
Audited 31 Audited 31
March December
2017 2015
R'000 R'000
Property, plant and equipment 1 028 1 600
Intangible assets and goodwill 11 826 -
Deferred taxation 5 282 -
Inventories - 527
Trade and other receivables 47 800 1 541
Cash and cash equivalents 11 736 600
Other financial liabilities (17 512) (2 418)
Trade and other payables (3 680) (742)
Total identifiable net assets 56 480 1 108
Non-controlling interest 18 155 -
Common control reserve 56 824 -
Goodwill - 3 992
Purchase consideration 131 459 5 100
Net cash flow on acquisition
Purchase consideration $ (1 500) -
Net cash balances assumed 11 733 600
10 233 600
($) 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. As part of the purchase
considerations, 19 095 617 ordinary shares of the Company were issued at the 30 day
VWAP, equal to R4 million.
Acquisition of Clade Investment Management (Pty) Ltd ("Clade") and its subsidiary
Ecsponent acquired 51% of the ordinary share capital of Clade, which wholly owns the shares of
Exchange Traded 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:
2017
R'000
Property, plant and equipment 9
Intangible assets 9 255
Deferred tax asset 3 401
Trade and other receivables 1 621
Cash and cash equivalents 11 453
Other financial liabilities (11 452)
Trade and other payables (1 608)
Bank overdraft (3)
Total identifiable net assets 12 676
Non-controlling interest (1 676)
Goodwill -
Purchase consideration 11 000
Acquisition of 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 television – 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.
Carrying value of the assets acquired and liabilities assumed:
2017
R'000
Property, plant and equipment 650
Intangible assets and goodwill 2 571
Deferred tax asset 1 435
Trade and other receivables 1 570
Cash and cash equivalents 283
Other financial liabilities (6 060)
Trade and other payables (1 714)
Total identifiable net liabilities (1 265)
Non-controlling interest 620
Common control reserve 2 145
Purchase consideration 1 500
Acquisition of the business of Ecsponent Investment Holdings (Pty) Ltd, by Ecsponent
Development Fund (Pty) Ltd
EDF, a 74% owned subsidiary of the Company at the date of acquisition, 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.
Carrying value of the assets acquired and liabilities assumed are as follows:
2017
R'000
Property, plant and equipment 369
Deferred tax asset 446
Trade and other receivables 44 609
Trade and other payables (357)
Total identifiable net assets 45 067
Non-controlling interest 19 211
Common control reserve 54 679
Purchase consideration 118 957
5. DISPOSAL OF INVESTMENT IN SUBSIDIARIES
The Group implemented 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. Details of these transactions are disclosed below:
Aggregated business disposals for the period
Group
Audited Audited 31
31 March December
2017 2015
R'000 R'000
Property, plant and equipment 1 635 125
Intangible assets 9 531 -
Deferred tax asset 7 492 2 282
Other financial assets 49 684 3 132
Trade and other receivables 54 083 384
Cash and cash equivalents 24 994 -
Loans from group companies (19 897) -
Other financial liabilities (78 350) (6 785)
Deferred income (1 759) -
Trade and other payables (10 386) (1 553)
Tax payable (1 700) -
Bank overdraft - (2 040)
Total identifiable net assets / (liabilities) 35 297 (4 454)
Non-controlling interest 2 043 2 183
Foreign currency translation reserve (128) -
Loans from group companies settled through loan
implementation 34 613 -
Other financial asset disposed of with investment - 6 225
Net assets derecognised 71 825 3 953
Profit / (loss) on disposal 83 147 (3 503)
Consideration receivable 154 972 450
Gain on disposal of discontinued operations 16 421 -
Gain / (loss) on disposal included in continuing
operations profit and loss 66 726 (3 503)
Gain / (loss) on disposal of investment in
subsidiary 14 388 (3 503)
Gain on disposal of disposal group held for sale 52 338 -
Total profit / (loss) on disposals 83 147 (3 503)
Net cash flow on disposals
Disposal proceeds $ - 450
Net cash (balance)/overdraft disposed of (24 994) 2 040
(24 994) 2 490
$ - 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.
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:
2017
R'000
Property, plant and equipment 199
Intangible assets 275
Deferred tax asset 759
Other financial assets 29 629
Trade and other receivables 752
Cash and cash equivalents 2 616
Loans from group company (19 897)
Deferred income (1 758)
Trade and other payables (7 987)
Current tax payable (1 730)
Total identifiable net assets 2 858
Non-controlling interest (1 246)
Net assets derecognised 1 612
Profit on disposal 14 388
Consideration receivable 16 000
Disposal of 51% of Clade Investment Management (Pty) Ltd ("Clade")
Ecsponent entered into an agreement to dispose of its 51% shareholding and loan accounts in Clade
Investment Management (Pty) Ltd and its subsidiary ("Clade"), as part of a process of rationalising
the Group's operations and investments designed to streamline operations and re-align the Group
for increased strategic growth. The investment was sold to Ecsponent Capital (RF) Ltd on 31 March
2017 for a total consideration of R16.5 million, payable through a loan implementation agreement
describing the terms of consolidation various loan accounts. The first part of the purchase
consideration receivable was applied to the settlement of the existing inter group funding facility and
the balance towards payment for the equity interest.
Fair value of the assets and liabilities disposed of are as follows:
2017
R'000
Property, plant and equipment 6
Intangible assets 9 255
Deferred tax asset 4 117
Trade and other receivables 1 275
Cash and cash equivalents 3 118
Other financial liabilities (6 806)
Trade and other payables (128)
Total identifiable net assets 10 837
Non-controlling interest (775)
Loans from group companies settled through loan
implementation 3 145
Net assets derecognised 13 207
Profit on disposal 3 293
Consideration receivable 16 500
Disposal of 70% of Ecsponent Holdings (Pty) Ltd (Botswana) and its subsidiary ("ECS Holdings")
Ecsponent entered into an agreement to dispose of its 70% interest in, and loan accounts against
Ecsponent Holdings (Pty) Ltd, incorporated in Botswana ("ECS Holdings"), to Ecsponent Projects
(Pty) Ltd ("Projects"), as part of a process of rationalising the Group's operations and investments
designed to streamline operations and re-align the Group for increased strategic growth. ECS
Holdings also has a 70% interest in Ecsponent Asset Management Ltd (Botswana). The investment
was effectively sold on 31 March 2017 for a total consideration of P30.3 million, payable through a
loan implementation agreement describing the terms of consolidation various loan accounts.
Fair value of the assets and liabilities disposed of are as follows:
2017
R'000
Property, plant and equipment 1 074
Deferred tax asset 2 616
Other financial assets 20 055
Trade and other receivables 20 659
Cash and cash equivalents 19 261
Other financial liability (71 545)
Trade and other payables (2 074)
Total identifiable net liabilities (9 954)
Non-controlling interest 4 063
Foreign currency translation reserve (128)
Loans from group companies settled through loan
implementation 31 469
Net assets derecognised 25 450
Profit on disposal 13 128
Consideration receivable 38 578
Disposal of a portion of the business of Ecsponent Development Fund (Pty) Ltd ("EDF")
Ecsponent entered into an agreement to dispose of a portion of the business of Ecsponent
Development Fund (Pty) Ltd ("EDF"), as a going concern, to Ecsponent Investment Holdings (Pty)
Ltd ("EIH"), for a consideration of R 83.9 million. EDF's client base includes retail clients, local
government/municipal business as well as large corporate businesses. In order to penetrate this
market effectively the Board has decided to focus on the corporate sector. As a result, EDF will
dispose of its primarily municipal and retail clients.
Fair value of the assets and liabilities disposed of are as follows:
2017
R'000
Property, plant and equipment 356
Trade and other receivables 31 397
Trade and other payables (197)
Net assets derecognised 31 556
Profit on disposal 52 338
Consideration receivable 83 894
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. All cash flow movements are therefore recognised through the Other Financial
Asset movements. The acquired debt books had a carrying value of R8.9 million on the effective
date.
6. 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 160.7% compared to the comparative period. Provided below is the detail
regarding the Group's other financial assets:
Audited Audited
Group Group
31 March 31 December
2017 2015
R'000 R'000
At fair value through profit and loss – designated
Acquired debt - 8 874
Listed shares 232 980 -
Loans and receivables
Employee benefit loans - 77 645
Business funding – advances 748 651 289 997
TOTAL OTHER FINANCIAL ASSETS 981 631 376 516
Total included in non-current assets 667 089 98 066
Total included in current assets 314 542 278 450
7. PREFERENCE SHARE CAPITAL
In terms of IFRS the preference share capital is classified as debt and disclosed as an Other financial
liability in the Summary Consolidated Statement of Financial Position as at 31 March 2017.
Consequently, the preference share dividends are classified as funding costs and disclosed as such
in the Summary Consolidated Statement of Profit and Loss and Other Comprehensive Income for
the 15 months ended 31 March 2017.
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 March 2017 Ecsponent Limited had
received subscription investments of R807.8 million. The Group will continue to raise capital through
the further issues of preference shares.
The preference share liability at the end of the year comprises of the following:
Group
Audited Audited 31
31 March December
2017 2015
R'000 R'000
Held at amortised cost
Preference shares issued by Ecsponent Limited (South
Africa):
- Preference share - class A 39 210 29 930
Initial issue price redeemable after 5 years. Monthly dividend
paid at a rate of 10% per annum.
- Preference share - class B 178 736 68 792
Preference share redeems at 170% of the initial issue after 5
years. No monthly dividends are paid.
- Preference share - class C 582 006 156 403
Initial issue price redeemable after 5 years. Monthly dividend
paid at a rate of prime plus 4% per annum.
Preference shares issued by Ecsponent Limited (Swaziland):
- Preference share - class A 50 484 16 939
5 year income provider with a variable rate redeemable,
convertible units of E1 000 comprising E1 preference share
and E999 claim. 15% rate at present paid monthly.
- Preference share - class E 59 130 19 146
5 year capital growth provider with a zero rate redeemable,
convertible units of E1 000 comprising E1 preference share
and E999 claim. Redeemed at end of 5 years at E2 000.
Preference shares issued by Ecsponent Limited (Botswana):
- Preference share - class A 14 861 19 450
5 year income provider with a variable rate redeemable,
convertible units of P1 000 comprising P1 preference share
and P999 claim. 15% rate at present paid monthly.
· Preference share - class B 3 546 3 177
5 year capital growth provider with a zero rate redeemable,
convertible units of P1 000 comprising P1 preference share
and P999 claim. Redeemed at end of 5 years at P2 000.
Total preference shares 927 973 313 837
Non-current liabilities
At amortised cost 921 925 312 074
Current liabilities
At amortised cost 6 048 1 763
8. OTHER FINANCIAL LIABILITIES
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:
Audited Audited
Group Group
31 March 31 December
2017 2015
R'000 R'000
Held at amortised cost
Experite NV Group 6 197 6 498
Capital bank - Term loan facility (*) - 8 977
Getbucks (Pty) Ltd Botswana 4 241 -
Getbucks (Pty) Ltd 4 054
Ecsponent Projects (Pty) Ltd - 4 873
Fixed term deposits (*) - 2 007
Other 909 1 853
TOTAL OTHER FINANCIAL LIABILITIES 11 347 28 262
Total included in non-current liabilities 871 12 767
Total included in current liabilities 10 476 15 495
* 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 9 for more detail related to
the disposal groups and IFRS 5 disclosures.
9. 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 15 for a summary of the
'Related Party Circular Transactions'.
Analysis of profit / (loss) for the year from discontinued operations
Audited 15 Audited 12
months month
ended 31 ended 31
March December
2017 2015
Revenue 64 634 24 740
Cost of sales (28 764) (11 963)
Gross profit 35 870 12 777
Other income 71 91
Operating expenses (26 454) (8 830)
Operating (loss) / profit 9 487 4 038
Investment revenue - 244
Finance costs (27 242) (1 730)
(Loss) / Profit before taxation (17 755) 2 552
Taxation 6 307 154
(Loss) / Profit for the year from discontinued
operations (11 448) 2 706
Gain (loss) on disposal of discontinued operation 16 421 -
Tax thereon (2 120) -
Profit / for the year from discontinued operations 2 852 2 706
Cash flows used in discontinued operation
Net cash used in operations (31 935) 2 373
Net cash used in investing activities (34 087) (4 286)
Net cash used in financing activities 76 502 11 218
10 480 9 305
All these divisions were part of the financial services reporting segment of the group.
The Surechoice and EFS Zambia operations have been classified and accounted for as disposal
groups held for sale as at 31 March 2017.:
Combined aggregate of disposal groups held for sale
31 March
2017
Assets of disposal groups
Property, plant and equipment 1 594
Intangible assets and goodwill 4 211
Other financial assets 96 880
Deferred tax 5 211
Trade and other receivables 10 251
Cash and cash equivalents 6 166
124 313
Liabilities of disposal groups
Other financial liabilities (118 939)
Deferred income (6 193)
Trade and other payables (961)
Bank overdraft (4 597)
(130
690)
10. NON-CONTROLLING INTEREST
The movement of the non-controlling interest for the 15 months ending 31 March 2017 is as
follows:
Audited Audited
31 March 31 December
2017 2015
R'000 R'000
Balance at the beginning of the period (4 653) (3 795)
Non-controlling interest in current period income (10 436) (3 425)
Foreign currency translation on non-controlling interest 197 127
Acquisition of non-controlling interest 19 576 257
Business combinations and common control acquisitions (18 156) -
Disposal of investments in subsidiaries 2 043 2 183
Total non-controlling interest at the end of the period (11 429) (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 of 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 Botswana (Pty) Ltd
from Ecsponent Holdings (Pty) Ltd (Botswana) effective on 1 July 2016, taking the
effective controlling interest from 70% to 100%
- Ecsponent Ltd disposed of its 51% controlling interest in Clade Investment Management
(Pty) Ltd on 31 March 2017
- Ecsponent Ltd disposed of its 70% controlling interest in Ecsponent Holdings (Pty) Ltd
(Botswana) (including its 70% subsidiary Ecsponent Asset Management Limited) on 31 March 2017
11. RELATED PARTY DISCLOSURES
The group entered 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:
Audited Audited
31 March 31
2017 December
R'000 2015
R'000
Related party balances
Loan accounts - Owing (to) by related parties
Ecsponent Capital (RF) Limited 278 334 134 917
Ecsponent Investment Holdings (Pty) Ltd - 81 940
Experite AG (formerly Cryo-Save AG) (5 583) (5 891)
Esperite NV (formerly Cyro-Save NV) (614) (606)
Ecsponent Projects (Pty) Ltd (Botswana) - (4 873)
Loan accounts - Owing (to) by intergroup companies
Ecsponent Financial Services Limited (Zambia) 14 736 -
Surechoice (Pty) Ltd 68 918 -
Related party transactions
Interest (received from) / paid to related parties
Ecsponent Capital (RF) Limited (76 075) (14 110)
Ecsponent Investment Holdings (Pty) Ltd (22 708) (18 644)
Ecsponent Business Finance (Pty) Ltd (676) -
Ecsponent Projects (Pty) Ltd (6 045) -
Experite AG (formerly Cryo-Save AG) - 44
Administration fees paid to (received from) related parties
Ecsponent Capital (RF) Limited (6 440) (5 962)
Ecsponent Investment Holdings (Pty) Ltd (1 120) (3 240)
Ecsponent Business Finance (Pty) Ltd - (1 500)
Recoveries paid to (received from) related parties
Ecsponent Capital (RF) Limited 564 -
Ecsponent Investment Holdings (Pty) Ltd (37) -
Ecsponent Business Finance (Pty) Ltd (40) -
Commission paid to (received from) related parties
Ecsponent Investment Holdings (Pty) Ltd (500) -
12. FINANCIAL INSTRUMENTS – FAIR VALUE AND RISK MANAGEMENT
Financial instruments measured in the statement of financial position at fair value require
disclosure.
The Group acquired a 10% interest in the issued share capital in MyBucks SA, a fintech company
listed on the Frankfurt Stock Exchange. The investment has been classified as a Level 1 fair value
instrument as observable quoted prices which trade in an active market has been utilised to
measure its current fair value.
Audited 31 March 2017
Financial instrument carried at fair value Carrying value - Fair value -
Designated at Level 1
fair value R'000
R'000
Other financial assets 232 980 232 980
Financial instruments of the Group carried at fair value with unobservable inputs for the asset are
disclosed below:
Audited 31 December 2015
Financial instrument carried at fair value Carrying value Fair value -
- Designated Level 3
at fair value
R'000 R'000
Other financial assets 8 874 8 874
Financial instrument carried at fair value Audited Audited
31 March 2017 31 December 2015
Fair value gains recognised in profit and loss (29 590) 5 639
Financial instrument carried at fair value – Level 3 Audited Audited
31 March 2017 31 December 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 (9 000) -
Balance at the end of the period - 8 874
Financial instrument carried at fair value – Level 1 Audited Audited 31
31 March December
2017 2015
Opening balance at the start of the period - -
Purchases 262 570 -
Foreign currency loss recognised in profit and loss (18 573) -
Fair value loss recognised in profit and loss (11 017) -
Balance at the end of the period 232 980 -
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 12 months ended 31 December 2015.
13. SUMMARY 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 the operational segmentation.
Year 15 months ended 31 March 2017
Operating Segment Total Assets Revenue Operating profit
/(loss)
R'000 R'000 R'000
Financial services 2 193 710 324 506 169 149
Private equity 293 007 76 649 (18 106)
Collections 2 380 7 921 2 866
Corporate 46 237 123 462 63 112
Eliminations (1 320 517) (165 900) 19 170
Transfer to discontinued operations (124 313) (44 843) (7 005)
Total continued operations 1 090 504 321 795 229 186
Geographic Segment Total Assets Revenue Operating profit
/(loss)
R'000 R'000 R'000
South Africa 1 944 539 406 740 168 382
Botswana 425 343 75 300 28 277
Swaziland 152 731 47 981 24 418
Namibia 188 626 18
Zambia 12 533 1 891 (4 074)
Eliminations (1 320 517) (165 900) 19 170
Transfer to discontinued operations (124 313) (44 843) (7 005)
Total continued operations 1 090 504 321 795 229 186
Year 12 months 31 December 2015
Operating Segment 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 57 727 30 618
Eliminations (645 236) (76 947) (41 452)
Transfer to discontinued operations - (24 740) (4 038)
Total continued operations 466 179 144 705 44 419
Geographic Segment Total Assets Revenue Operating profit
/(loss)
R'000 R'000 R'000
South Africa 834 784 190 292 63 494
Botswana 183 859 40 956 20 969
Swaziland 81 321 13 438 6 362
Namibia 188 563 (157)
Zambia 11 263 1 143 (759)
Eliminations (645 236) (76 947) (41 452)
Transfer to discontinued operations - (24 740) (4 038)
Total continued operations 466 179 144 705 44 419
14. 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 requiring disclosure. The following
events initiated during the period were concluded past the year end:
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, held on 30 March 2017, which
included the following:
- 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
- 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").
During the general meeting all proposed transactions were approved by the required number of
shareholders, however the above two transactions were not concluded due to the following
conditions:
- Regulatory approval by the Competitions Commission Authority of Botswana, approving the
Surechoice disposal.
In terms of the Regulations the submission to the Authority can only be submitted once final
approval of the transaction has been obtained. The application was therefore filed with the
Authority and formal final approval was not yet granted at the date of issuing the
consolidated financial statements. Communications with the Regulatory authority have not
indicated any concerns relating to obtaining approval and management believes it will
receive final confirmation during July 2017.
- Regulatory approval by the Bank of Zambia, approving the EFS Zambia subscription and change
in shareholder.
The application for the change in shareholders to EFS Zambia was submitted to the Bank of
Zambia, however formal approval was not yet granted as at 31 March 2017. The supporting
documentation was therefore filed with the Authority and final approval was not yet granted
at the date of issuing the consolidated financial statements. Communications with the
Regulatory authority have not indicated any concerns relating to obtaining approval and
management believes it will receive final confirmation during July 2017.
15. CORPORATE ACTIONS
During the financial period ended 31 March 2017, 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.
16. SHARE CAPITAL
The following ordinary shares were issued during the 15 months ended 31 March 2017.
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
Director share issue in lieu of services 11 629 2 113 2 113
Director share issue - incentives 12 022 1 631 1 631
Capitalisation of share issue expenses - (286) (286)
Proceeds from rights offer 135 758 20 364 20 364
Capitalisation of rights offer direct costs - (612) (612)
Purchase of shares in terms of odd lot and (542) (111) (111)
specific share buy back
Closing balance 31 March 2017 1 079 551 145 169 145 169
17. DIVIDENDS
No ordinary dividends have been declared or proposed for the year.
Ecsponent Limited 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; and
- Class C – prime plus 4% floating rate monthly dividend.
Preference Share dividends and interest of R86.8 million accrued to investors for the 15 months
ended 31 March 2017. The dividends are classified as finance costs and included in the finance cost
expense in the Summary Consolidated Statement of Profit and Loss and Comprehensive Income.
18. 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.
19. 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 Engelbrecht 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 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.
The following changes in the directorate took place after the reporting period ending 31 March 2017,
effective 31 May 2017:
- Mr E Engelbrecht resigned as a non-executive director on the Board.
20. COMPANY SECRETARY
During the period, Mr. D van der Merwe was appointed as the company secretary.
21. 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.
22. GOING CONCERN
The directors believe that the Group has adequate financial resources to continue in operation for
the foreseeable future and accordingly the Summary Audited Consolidated Financial Statements for
the 15 months ended 31 March 2017 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.
23. NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the fourteenth Annual General Meeting ("AGM") of the members of
Ecsponent Limited will be held on Friday, 4 August 2017 at the Company's registered office, Acacia
House, Green Hill Village Office Park, On Lynwood Road, Corner Botterklapper and Nentabos Street,
The Willows, Pretoria East at 09:00, to consider and, if deemed fit, to pass, with or without
modification, the ordinary and special resolutions set out in this notice.
The record date on which shareholders must be recorded as such in the company share register
maintained by the transfer secretaries in order to be entitled to attend and vote at the AGM is Friday,
28 July 2017. The last day to trade in order to be recorded on the register on the record date is
Tuesday, 25 July 2017.
For and on behalf of the Board
TP Gregory
Pretoria
29 June 2017
Directors: RJ Connellan* (Chairman), KA Rayner*, BR Topham*, W Oberholzer*, 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: 29/06/2017 12:49:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
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