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Abridged Consolidated Financial Statements for the year ended 31 March 2017
PBT Group Limited
Incorporated in the Republic of South Africa
Registration number: 1936/008278/06
JSE share code: PBG
ISIN: ZAE000227781
ABRIDGED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2017
Since the publication of the aforementioned results, the following changes have been made to the
financial statements for the year ended 31 March 2017.
Take note that during the 2018 audit of the financial statements the 2017 figures have been
restated. The restated 2017 figures have been used in these financial statements. Please refer to
the 2018 integrated report for an explanation on this restatement. (All numbers are expressed in
thousands):
Notes to be taken into account for earnings per share and headline earnings per share figures for
31 March 2017:
- Due to the Prescient Capital group being reclassified as discontinued operations, the profit
from this group of R9 492 for the 2017 financial year has been reclassified to discontinued
operations. The earnings per share ('EPS') and headline earnings per share ('HEPS') have been
reflected as a split between continuing and discontinued operations. This change is already
reflected in the 2018 integrated report.
Included in the HEPS calculation is the 'change in fair value of investments property' of
R4 179 as an adjustment. This adjustment reflects under the discontinued operations.
- An impairment loss of R2 429 on intangible assets for 2017 was not added back as an
adjustment for HEPS, understating the HEPS by R2 429. This change is reflected in the
SENS announcement released on 30 July 2018.
- Adjustments to the EPS and HEPS in the 2017 figures released on 4 August 2017 for earnings
attributable to forfeitable share plan shareholders were incorrectly added to the profit
(R5 129 for continuing operations and R13 834 for discontinued operations). This resulted
in an overstatement of the EPS and HEPS figures. This correction is already reflected in
the 2018 comparative figures as released on 30 July 2018.
Restatement for 2017 figures published on 30 June 2017 and 2018 comparative figures published on
30 July 2018:
1. An error was noted in the profit from discontinued operations in the 2018 comparative figures.
This error was due to an account being misallocated to profit instead of the equity. The profit
from discontinued operations and equity were overstated by R13 627. This adjustment reflects in
this SENS announcement as a correction.
2. An error was noted between the non-controlling interest (NCI) for discontinued operations and
profit from discontinued operations of R126. The NCI and profit from discontinued operations
were understated by 126. The adjustment to the profit from discontinued operations reflects in
this SENS announcement as a correction. The adjustment to NCI was already corrected in the 2018
comparative figures.
3. An error was noted in the HEPS calculation for the 2017 figures. The foreign exchange recycled
from the foreign currency translation reserve of R3 014 was excluded from the gain on sale of
discontinued operations for the HEPS calculation. The adjustment is reflected in this
announcement.
4. An error was noted on the comparative figures on the Statement of Cash Flows for the year ended
31 March 2017. The 'Acquisition of shares' on the comparative figures was incorrectly shown as
a cash inflow of R2 074. Consequently, the 'Cash generated from operations' were understated by
R4 148. The error was corrected by the restatement of the 'Acquisition of own shares' as a cash
outflow of R2 074 and the 'Cash generated from operations' increasing by R4 148 for the
comparative figures.
The changes made above have not been audited and will not agree to the audited financial
statements. Please refer to note 11 for the reconciliation between the released financial
information and the restated financial information.
The restatements were identified through the JSE proactive monitoring process of the Abridged Consolidated
Financial Statements for the year ended 31 March 2017.
Review of operations
During the period under review, PBT Group Limited's shareholders approved a transaction with
Stellar Capital Partners Limited and received a distribution to an amount of R1.428 billion from
Prescient Holdings (Pty) Ltd ("Prescient Holdings") resulting in the effective disposal of
Prescient Holdings. Prescient Limited was renamed to PBT Group Limited to better reflect the ongoing
operations and strategic vision of the Company. The final regulatory approval had been received for
the group on 10 February 2017.
The pro rata income and expenses associated with Prescient Holdings was disclosed as profits from
discontinued operations in the abridged consolidated statement of profit or loss and other
comprehensive income. The comparative profit from Prescient Holdings for the prior year has been
restated to reflect as profits from discontinued operations in the comparative period. The
corresponding earnings per share and headline earnings per share have also been reflected as a
split between continuing and discontinued operations.
- Total loss after tax from continuing operations after the impairment of goodwill (R31.6 million)
for the period was R33.1 million (March 2016: profit of R19.7 million)
- Loss before tax for continuing operations being R7.8 million (March 2016: profit of R40 million).
- Headline earnings per share was 3.76 cents per share (March 2016: 6.79 cents per share)
- Headline loss per share for continuing operations was 0.64 cents per share
(March 2016: 0.99 cents per share)
- Headline earnings per share for discontinued operations was 4.40 cents per share
(March 2016: 5.81 cents per share).
The weighted average number of shares in issue for the 12 months ended 31 March 2017 was
1 619 927 367 (March 2016: 1 600 156 235).
South Africa and Australia
The South African and Australian operations continue to operate well despite the general
challenging environment. The demand for our services in these two segments remain strong and
resulted in satisfactory growth and profits.
Middle-East/Africa
The headwinds in the Middle-East/Africa ("MEA") segment of our business resulted in a loss after tax
of R51.8 million for the region. The negative payment culture resulted in very high interest charges
and a bad debt write-off of R18.4 million. An implemented change in the tax law resulted in
withholding tax ("WHT") of R16.86 million expensed as additional tax paid in the current financial
year that resulted in an exceptionally high tax charge. This will be a recurring expense in future
periods. WHT is deducted from payments to the Company from certain MEA countries. South Africa has
Double Tax Agreements with most of these countries which disallows the deduction of WHT. The WHT was
allowed as a credit against the South African Tax in terms of Section 6quin of the Income Tax Act.
This Section has however been deleted and for all tax years starting on or after 1 January 2016 no
concession is allowed. As of this date a deduction cannot be claimed against the income in terms
of Section 6quat(1C) of the Income Tax Act. Although WHT of R14.9 million relating to previous periods
is available to be offset against future tax payable, we felt it prudent to impair this asset and
expense it through profit or loss.
Dividend
In accordance with the SENS announcement released on 26 May 2017, an excess pay-out was made
post year end to PBT Group by Prescient Holdings Group. The cash portion of this excess pay-out
amounted to R26.2 million and was paid out to shareholders as a capital reduction distribution on
28 August 2017. No dividend from normal commercial operations was declared for the 6 months
ended 31 March 2017. Biannually, the directors consider the payment of a dividend, taking into
account prevailing circumstances and future cash and capital requirements of the Group in order to
determine the appropriate dividend in respect of a particular financial reporting period.
Prospects
Our South African and Australian operations continue to perform well and will in all likelihood
continue to do so. We continue to experience good cash flows in these regions. A very small portion
of revenue in these regions is based on fixed price projects resulting in a clear cut operating
environment. The demand for services is very strong and exceeds the availability of skills. The
trading environment in the Middle-East/Africa region has deteriorated vastly over the last two
reporting periods. The change in legislation regarding the treatment of withholding tax, the
payment culture and the blatant disregarding of Double Tax Agreements make profitable trading in
some accounts in this region highly unlikely. Accordingly, we shall downscale our operations in
this region, taking into account the reduced requirements from our clients as well as the duration
of our current contract with clients.
Changes to Management and the Board of Directors
There were a number of changes to the Board during the period and subsequent to the end of the
period under review.
KR Moloko, R van Rooyen and ZK Meyer resigned as independent non-executive directors effective
17 March 2017. PJ De Wet was appointed as CEO and AJ Taylor and CL Dyers were appointed as independent
non-executive directors on 17 March 2017. AJ Taylor was appointed as lead independent non-executive
director. Additionally, AL Winkler was appointed as an independent non-executive director effective
17 May 2017.
The Board wishes PJ de Wet well in his new role.
Forward-looking statements
This announcement contains certain forward-looking statements with respect to the financial
condition and results of the operations of PBT Group Limited that, by their nature, involve risk and
uncertainty because they relate to events and depend on circumstances that may or may not occur
in the future. These may relate to future prospects, opportunities and strategies. If one or more of
these risks materialise, or should underlying assumptions prove incorrect, actual results may differ
from those anticipated. By consequence, none of the forward-looking statements have been
reviewed or reported on by the Group's auditor.
ABRIDGED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
for the year ended 31 March 2017
2017 Restated 2016 Restated
R'000 R'000
Continuing operations
Total income 595 877 543 136
Service fees 563 766 538 913
Interest and dividend income 13 239 907
Other investment income 18 872 3 316
Cost of information management services (447 985) (405 573)
Operating expenses (117 038) (94 868)
Impairment of goodwill and other (34 074) -
Share-based payment expense - (455)
Profit from operations (3 220) 42 240
Other income 1 311 2 494
Finance costs (5 869) (4 694)
Profit before tax (7 778) 40 040
Income tax expense 9 (25 318) (20 387)
Profit from continuing operations (33 096) 19 653
Discontinued operations
Profit for the period from discontinued operations 6 1 239 026 99 439
Profit for the year 1 205 930 119 092
Other comprehensive income
Items that are or may be reclassified to profit or loss
Foreign currency translation differences - foreign operations (8 183) 17 398
Tax on other comprehensive income - -
Other comprehensive income for the year, net of tax (8 183) 17 398
Total comprehensive income for the year 1 197 747 136 490
Profit attributable to:
Owners of the Company 1 203 570 109 004
Non-controlling interests 2 360 10 088
Profit for the year 1 205 930 119 092
Total comprehensive income attributable to:
Owners of the Company 1 195 387 123 489
Non-controlling interests 2 360 13 001
Total comprehensive income for the year 1 197 747 136 490
Earnings per shares (cents)
Continuing operations 5 (2.75) 0.88
Discontinued operations 5 75.87 5.81
Diluted earnings per share (cents)
Continuing operations 5 (2.75) 0.88
Discontinued operations 5 75.87 5.81
Headline earnings per share (cents)
Continuing operations 5 (0.64) 0.99
Discontinued operations 5 4.40 5.81
Diluted headline earnings per share (cents)
Continuing operations 5 (0.64) 0.99
Discontinued operations 5 4.40 5.81
ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
for the year ended 31 March 2017
2017 2016
Notes R'000 R'000
Assets
Non-current assets 312 968 11 667 621
Property and equipment 7 792 29 241
Investment property - 35 728
Goodwill and intangible assets 7 263 494 397 960
Deferred tax asset 7 352 14 197
Long-term loans and other receivables - 54 186
Investment in equity-accounted investees - 9 658
Financial assets at fair value through profit or loss 34 330 151 439
Linked investments backing policyholder funds - 10 975 212
Current assets 282 173 1 077 824
Inventory 19 787 35 688
Trade and other receivables 8 224 214 214 959
Amounts owing by clearing houses - 192 777
Amounts owing by clients - 429 186
Taxation receivable - 13 623
Cash and cash equivalents 38 172 191 591
Non-Current assets held for sale and assets of disposal groups 6 82 234
Total assets 677 375 12 745 445
Equity
Stated capital 144 015 667 660
Reserves 5 400 7 066
Retained income 410 765 152 451
Total equity attributable to owners of the Company 560 180 827 177
Non-controlling interests 12 434 24 064
Total equity 572 614 851 241
Liabilities
Non-current liabilities 5 920 11 018 427
Deferred tax liability 5 920 13 548
Policyholder investment contract liabilities - 10 974 330
Loans payable - 30 549
Current liabilities 89 540 875 777
Trade and other payables 29 369 106 393
Provisions 9 421 -
Amounts owing to clearing houses - 16 134
Amounts owing to clients - 604 668
Current tax payable 7 669 9 377
Loans payable 35 000 44 126
Bank overdraft 8 081 95 079
Liabilities of disposal groups 6 9 301
Total liabilities 104 761 11 894 204
Total equity and liabilities 677 375 12 745 445
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 March 2017
Share-based Non-
Stated Translation Treasury payment Retained controlling Total
R'000 capital reserve shares reserve income Total interests equity
Balance at 1 April 2015 664 702 6 414 (14 502) 801 138 578 795 993 14 139 810 132
Total comprehensive income for the year
Profit for the year - - - - 109 004 109 004 10 088 119 092
Total other comprehensive income - 14 485 - - - 14 485 2 913 17 398
Total comprehensive income for the year - 14 485 - - 109 004 123 489 13 001 136 490
Transactions with owners recognised directly in equity
Contributions by and distributions to owners of the Company
Treasury shares purchased - - (2 074) - - (2 074) - (2 074)
Equity-settled share-based payments - - - 1 942 - 1 942 - 1 942
Dividends declared during the year - - - - (95 131) (95 131) (2 548) (97 679)
Issue of ordinary shares 2 958 - - - - 2 958 - 2 958
Total contributions by and distributions to owners of the Company 2 958 - (2 074) 1 942 (95 131) (92 305) (2 548) (94 853)
Changes in ownership interests in subsidiaries
Acquisition of NCI without a change in control - - - - - - 5 950 5 950
Disposal of subsidiary - - - - - - (6 478) (6 478)
Total changes in ownership interests in subsidiaries - - - - - - (528) (528)
Total transactions with owners of the Company 2 958 - (2 074) 1 942 (95 131) (92 305) (3 076) (95 381)
Balance at 31 March 2016 667 660 20 899 (16 576) 2 743 152 451 827 177 24 064 851 241
Share-based Non-
Stated Translation Treasury payment Retained controlling Total
R'000 capital reserve shares reserve income Total interests equity
Balance at 1 April 2016 667 660 20 899 (16 576) 2 743 152 451 827 177 24 064 851 241
Total comprehensive income for the year
Profit for the year - - - - 1 217 170 1 217 170 2 360 1 219 530
Total other comprehensive income - (8 183) - - - (8 183) - (8 183)
Total comprehensive income for the year - (8 183) - - 1 217 170 1 208 987 2 360 1 211 347
Transactions with owners recognised directly in equity
Contributions by and distributions to owners of the Company
Treasury shares sold - - 9 260 - 11 166 20 426 - 20 426
Dividends declared during the year - - - - (73 832) (73 832) (3 304) (77 136)
Capital distribution (469 853) - - - (911 967) (1 381 820) - (1 381 820)
Adjustment to reflect the PBT Group Limited Share Capital after disposal of
Prescient Holdings (Pty) Ltd (53 792) - - - - (53 792) - (53 792)
Equity-settled share-based payments - - - 1 680 - 1 680 - 1 680
Termination of forfeitable share plan - - - (4 423) 3 142 (1 281) - (1 281)
Total contributions by and distributions to owners of the Company (523 645) - 9 260 (2 743) (971 491) (1 488 619) (3 304) (1 491 923)
Changes in ownership interests in subsidiaries
Acquisition of non-controlling interests - - - - 12 635 12 635 (12 470) 165
Disposal of subsidiary - - - - - - 1 784 1 784
Total changes in ownership interests in subsidiaries - - - - 12 635 12 635 (10 686) 1 949
Total transactions with owners of the Company (523 645) - 9 260 (2 743) (958 856) (1 475 984) (13 990) (1 489 974)
Balance at 31 March 2017 144 015 12 716 (7 316) - 410 765 560 180 12 434 572 614
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 March 2017
2017 2016
Notes R'000 R'000
Restated Restated
Cash flows from operating activities
Cash generated from operations 208 986 171 411
Dividends received 8 084 2 946
Dividends paid (69 275) (97 679)
Interest received 5 155 19 358
Interest paid (5 869) (10 862)
Taxation paid (19 904) (50 998)
Net cash inflow from operating activities 127 177 34 176
Cash flows from investing activities
Acquisition of equipment (2 698) (8 040)
Disposals of equipment 60 -
Acquisition of intangible assets (1 244) (8 382)
Sale of othe asset 429 186 -
Proceeds on loss in control of subsidiary, net of cash disposed of - 2 155
Disposal of equity-accounted investee - 3 064
Proceeds on disposal of discontinued operation, net of cash disposed of 1 317 935 -
Disposal/(Acquisition) of financial assets at fair value through profit or loss (53 104) 6 026
Advancement of long-tem loans receivable - (2 313)
Cash outflow from investing activities 1 690 135 (7 490)
Cash flows from financing activities
Acquisition of own shares (145) (2 074)
Movement in loans to directors, manager and employees (534 809) -
Reduction of share capital or buy-back of shares 53 830 -
Capital distribution (1 427 822) -
Increase in loans payable 32 899 4 499
Cash inflow from financing activities (1 876 047) 2 425
Net increase in cash and cash equivalents (58 735) 29 111
Effect of exchange rate fluctuations on cash held - 18 133
Cash and cash equivalents at beginning of the year 88 826 49 268
Cash and cash equivalents at end of the year 30 091 96 512
Notes to the abridged consolidated financial statements
1. Basis of preparation and accounting policies
Statement of compliance
The abridged consolidated financial statements have been prepared in accordance with IAS 34
Interim Financial Reporting, as well as the AC 500 standards as issued by the Accounting Practices
Board, the requirements of the South African Companies Act, and the Listings Requirements of the
JSE. The abridged consolidated financial statements do not include all of the information required
for full annual financial statements. The abridged consolidated financial statements have been
prepared in accordance with the historical cost basis, except for certain financial instruments
which are stated at fair value. The abridged consolidated financial statements are presented in
Rand, rounded to the nearest thousand. The accounting policies applied in the presentation of the
abridged consolidated financial statements are in accordance with International Financial Reporting
Standards and are consistent with those presented in the annual financial statements. The abridged
consolidated financial statements have been extracted from information, but have not, in
themselves, been audited. The auditor's unqualified audit report and the audited financial
statements are available for inspection at the Company's registered office in terms of 3.18 (F) of
the Listings Requirements.
These abridged consolidated financial statements were prepared under the supervision of the
Financial Director, AM Louw. The board of directors approved these financial statements on
30 June 2017 and the changes as explained above, on 12 September 2018.
2. Judgements and estimates
Preparing the financial statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets
and liabilities, income and expenses. Actual results may differ from these estimates. In preparing
these abridged consolidated financial statements, significant judgements made by management in
applying the Group's accounting policies and key sources of estimation uncertainty were the same
as those that applied to the consolidated financial statements as at and for the year ended
31 March 2016.
3. Related party transactions
PBT Group Limited and its subsidiaries ("the Group" or "the Company"), entered into various
intercompany transactions with related parties. The Company has related party relationships with
subsidiaries and with its key management personnel. There were no significant changes to these
relationships, other than the disposal of Prescient Holdings (Pty) Ltd Group which no longer forms
part of the PBT Group with effect from 21 February 2017.
4. Subsequent events
Subsequent to the 31 March 2017 year-end a capital reduction distribution of 1.57 cents per share
was paid on 28 August 2017.
A Circular has been released on 23 March 2018 for the disposal of Prescient Capital Proprietary
Limited and its subsidiaries and a Supplementary Circular was released on 28 August 2018.
5. Earnings per share
The calculation of basic earnings per share at 31 March 2017 was based on the profit
attributable to ordinary shareholders of R1 184 606 601 (2016: R107 054 988),
and a weighted average of ordinary shares outstanding of 1 619 927 367 (2016: 1 600 156 235),
calculated as follows:
31 March 2017 31 March 2016
Profit attributable to ordinary shareholders (basic) Continuing Discontinued
Continuing Discontinued Total operations operation Total
R'000 operation operation Restated Restated
(Loss)/profit for the year, attributable to owners of the Company (39 351) 1 242 921 1 203 570 14 684 94 320 109 004
Earnings attributable to forfeitable share plan (FSP) Shareholders (5 129) (13 835) (18 964) (527) (1 422) (1 949)
(Loss)/profit attributable to ordinary shareholders (44 480) 1 229 086 1 184 606 14 157 92 898 107 055
Weighted average number of ordinary shares (basic) 2017 2016
In thousands of shares
Ordinary shares at 1 April 1 669 251 1 648 655
Effect of treasury shares held (23 022) (29 672)
Effect of FSP shares (26 302) (29 666)
Effect of shares issued and share capitalisation - 10 839
Weighted average number of ordinary shares at 31 March 1 619 927 1 600 156
Headline earnings per share
Headline earnings per share has been calculated in accordance with Circular 2/2015
issued by the South African Institute of Chartered Accountants.
Diluted earnings per share is equal to basic earnings per share. Diluted headline earnings per
share is equal to headline earnings per share.
R'000
Earnings Earnings
Non- attributable to attributable to
Profit before controlling FSP ordinary Cents per
2017 tax Tax interests shareholders shareholders share
Continuing operations
Per the statement of comprehensive income (7 778) (25 318) (6 255) (5 129) (44 480) (2.75)
Adjustments
Impairment loss on goodwill and intangible asset 34 074 - - - 34 074 2.10
Change in fair value of investment property - - - - - -
Continuing operations headline earnings 26 296 (25 318) (6 255) (5 129) (10 406) (0.64)
Discontinued operation
Per the statement of comprehensive income 1 269 268 (30 242) 3 895 (13 835) 1 229 086 75.87
Adjustments
Gain on sale of discontinued operations* (1 153 710) - - - (1 153 710) (71.22)
Change in fair value of investment property (4 179) - - - (4 179) (0.26)
Discontinued operations headline gain 111 379 (30 242) 3 895 (13 835) 71 197 4.40
Per the statement of comprehensive income 1 261 490 (55 560) (2 360) (18 964) 1 184 606 73.97
Total Group headline earnings 137 675 (55 560) (2 360) (18 964) 60 791 3.76
* Including foreign exchange recyled from the foreign currency translation reserve.
R'000
Earnings Earnings
Non- attributable to attributable to
Profit before controlling FSP ordinary Cents per
2016 tax Tax interests shareholders shareholders share
Continuing operations
Per the statement of comprehensive income 40 040 (20 387) (4 969) (527) 14 157 0.88
Adjustments
Change in fair value of investement proprerty (3 403) - - 61 (3 342) (0.21)
Gain on partial sale of equity accounted investee (749) - - 13 (736) (0.05)
Loss on loss of control of subsidiary 5 818 - - (104) 5 714 0.36
Continuing operations headline earnings 41 706 (20 387) (4 969) (557) 15 793 0.98
Discontinued operation
Per the statement of comprehensive income 126 254 (26 815) (5 119) (1 422) 92 898 5.81
Discontinued operations headline earnings 126 254 (26 815) (5 119) (1 422) 92 898 5.81
Total
Per the statement of comprehensive income 166 294 (47 202) (10 088) (1 949) 107 055 6.69
Total Group headline earnings 167 960 (47 202) (10 088) (1 979) 108 691 6.79
6. Discontinued operations
2017 2016
Results of discontinued operation R'000 R'000
Revenue 335 608 367 264
Other income 13 907 1 453
Expenses (233 957) (242 463)
Share of profit/(loss) of equity accounted investment
Segment finance costs
Results from operating activities 115 558 126 254
Tax (30 242) (26 815)
Results from operating activities, net of tax 85 316 99 439
Gain on sale of discontinued operation* 1 153 710 -
Profit for the year 1 239 026 99 439
Basic earnings per share 76.49 5.81
* Included in the gain on sale of discontinued operatios is an amount of R92.4million relating to the excess payout as per the SENS announcement
released on 26 May 2017.
Profit from discontinued operations of R1.2 billion (2016: R94.3 million) was attributable to the
owners of the company. Of the loss from continuing operations of R33.1 million (2016: profit of R19.7
million), an amount of R39.4 million was attributable to the owners of the Company (2016: R14.7
million profit).
Cash flow from/(used in) discontinued operation
Net cash from/(used in) operating activities 1 552 62 309
Net cash used in investing activities 929 (27 932)
Net cash from financing activities (8 973) 7 931
Net cash flow for the year (6 492) 42 308
Major classes of assets and liabilities disposed of
Property & equipment 123
Investment property 49 346
Goodwill and intangible assets 22 722
Investment in associate 289
Financial assets at fair value through profit or loss 4 483
Trade and other receivables 3 149
Long-term loans receivable 673
Cash and cash equivalents 1 449
Deferred tax liability (67)
Long-term loans payable (8 106)
Trade and other payables (962)
Current tax payable (166)
Net assets and liabilities 72 933
Consideration received in cash 4 789
Cash and cash equivalents disposed off (1 449)
Net cash inflow 3 340
7. Goodwill and intangible assets
Patents Internally System Other
R'000 and developed Computer development intangible
Cost Goodwill trademarks software software costs Total
Opening balance - 1 April 2015 424 253 2 024 35 765 270 - - 462 312
Additions - - 359 656 7 367 - 8 382
Disposal (17 491) - - - - - (17 491)
Closing balance - 31 March 2016 406 762 2 024 36 124 926 7 367 - 453 203
Opening balance - 1 April 2016 406 762 2 024 33 020 2 689 7 367 7 339 459 201
Additions - - 485 758 - - 1 243
Classified as held for sale (22 722) - - - - - (22 722)
Disposal of discontinued operation (98 468) (2 024) - - (7 367) - (107 859)
Closing balance - 31 March 2017 285 572 - 33 505 3 447 - 7 339 329 863
Accumulated amortisation -
Opening balance - 1 April 2015 31 143 704 16 161 256 - - 48 264
Amortisation for the year - 200 6 192 37 550 - 6 979
Closing balance - 31 March 2016 31 143 904 22 353 293 550 - 55 243
Opening balance - 1 April 2016 31 143 904 26 588 2 055 550 - 61 240
Amortisation for the year - - 3 308 521 - - 3 829
Impairment loss 31 645 - 2 252 - - - 33 897
Disposal of discontinued operation (31 143) (904) - - (550) - (32 597)
Closing balance - 31 March 2017 31 645 - 32 148 2 576 - - 66 369
Carrying amounts
At 31 March 2016 375 619 1 120 13 771 633 6 817 - 397 960
At 31 March 2017 253 927 - 1 357 871 - 7 339 263 494
Impairment test of goodwill
The Group has recognised an impairment loss of R31.6 million in profit or loss relating to goodwill of PBT Group's CGUs based on the value-in-use
method to determine the recoverable amount. The value-in-use was determined by discounting future cash flows of the Group as a single CGU.
The key assumptions used in the estimation of the recoverable amount are set out below. The values assigned to the key assumptions represented
management's assessment of future trends in the relevant industries and were based on historical data from both external and internal sources.
2017 2016
Discount rate 17% 16%
Terminal value growth rate 6% 8%
Budgeted EBITDA growth rate 8% 8%
The discount rate was a post-tax measure estimated based on the historical industry average weighted-average cost of capital.
The cash flow projections included specific estimates for five years and a terminal growth rate thereafter. The terminal growth rate was determined
based on management's estimate of the long-term compound annual EBITDA growth rate, consistent with the assumption that a market participant would make.
A sensitivity was performed to analyse the impact of increasing the forecast risk premium from 2% to 5%. This would result in a discount rate of 20%.
Increasing the forecast risk premium by this factor, results in an impairment of approximately R94 million.
8. Trade and other receivables
2017 2016
Trade and other receivables include the following: R'000 R'000
Trade receivables 129 033 208 086
VAT receivable - 833
Deposits 1 408 1 177
Prepayments 720 3 059
Accrued income 656 708
Interest receivable - 1 096
Dividend receivable 92 397 -
224 214 214 959
9. Income tax expense
Tax recognized in profit or loss
Current tax expense
Current year 15 201 9 545
Adjustment to prior years (50) 3 934
15 151 13 479
Withholding tax - Section 6quat(1C) 16 584 5 272
31 735 18 751
Deferred tax expense
Origination and reversal of temporary differences (6 417) 1 636
(6 417) 1 636
Income tax expense on continuing operations 25 318 20 387
10. Fair value hierarchy
The table below analyses financial instruments carried at fair value by valuation method. Fair values are determined according
to the following hierarchy based on the requirements in IFRS 13 Fair Value Measurement:
Level 1 Unadjusted quoted market prices: financial assets and liabilities with quoted prices for identical instruments in active
markets that the Company can access at the measurement date.
Level 2 Valuation techniques using observable inputs: quoted prices (other than those included in level 1) for similar
instruments in active markets or quoted prices for identical or similar instruments in markets that are less than
active and financial assets and liabilities valued using models where all significant inputs are observable directly
or indirectly from market data.
Level 3 Valuation techniques using significant unobservable inputs: financial assets and liabilities valued using valuation
techniques where one or more inputs are unobservable and have a significant effect on the instrument's valuation.
R'000 Level 1 Level 2 Level 3 Total
2017
Financial assets
Financial assets at fair value through profit or loss - 722 - 722
Loans and receivables 10 385 10 385
Investments - - 22 787 22 787
Total financial assets measured at fair value - 722 33 172 33 894
Total financial liabilities measured at fair value - - - -
R'000 Level 1 Level 2 Level 3 Total
2016
Financial assets
Financial assets at fair value through profit or loss 112 716 38 723 - 151 439
Linked investments backing policyholder contract funds 10 244 977 730 235 - 10 975 212
Investment Property - 35 728 - 35 728
Total financial assets measured at fair value 10 357 693 804 686 - 11 162 379
Financial liabilities
Policyholder investment contract liabilities - 10 974 330 - 10 974 330
Total financial liabilities measured at fair value - 10 974 330 - 10 974 330
11. Prior period error
Restatement 1,2 & 3
1. An error was noted in the profit from discontinued operations in the 2018 comparative figures. This error was due to an account being
misallocated to profit instead of the equity. The profit from discontinued operations and equity were overstated by R13 627.
2. An error was noted between the non-controlling interest (NCI) for discontinued operations and profit from discontinued operations of R126.
The NCI and profit from discontinued operations were understated by 126. The adjustment to NCI was already corrected in the 2018 comparative
figures.
3. An error was noted in the HEPS calculation for the 2017 figures. The foreign exchange recycled from the foreign currency translation reserve
of R3 014 was excluded from the Gain on sale of discontinued operations for the HEPS calculation.
Weighted average number of ordinary shares 2017
In thousands of shares
Ordinary shares at 1 April 1 669 251
Effect of treasury shares held (23 022)
Effect of FSP shares (26 302)
Effect of shares issued
Weighted average number of ordinary shares at 31 March 2017 1 619 927
HEADLINE EARNINGS PER SHARE
R'000
Earnings Earnings
Non- attributable to attributable to
Profit before controlling FSP ordinary Cents per
2017 tax Tax interests shareholders shareholders share
Continuing operations
Per the statement of comprehensive income (7 778) (25 318) (6 255) (5 129) (44 480) (2.75)
Adjustments
Impairment loss on goodwill 34 074 - - - 34 074 2.10
Continuing operations headline earnings 26 296 (25 318) (6 255) (5 129) (10 406) (0.64)
Discontinued operation
Per the statement of comprehensive income 1 282 868 (30 242) 3 895 (13 835) 1 242 686 76.71
Restatement nr.1 (13 627) - - - (13 627) (0.84)
Restatement nr.2 126 - - - 126 0.01
1 269 367 (30 242) 3 895 (13 835) 1 229 185 75.88
Adjustments
Gain on sale of discontinued operations (1 150 696) - - - (1 150 696) (71.03)
Restatement nr.3 (3 014) - - - (3 014) (0.19)
Change in fair value of investment property (4 179) - - - (4 179) (0.26)
(1 157 889) - - - (1 157 889) (71.48)
Discontinued operations headline earnings 111 478 (30 242) 3 895 (13 835) 71 296 4.40
Total
Per the statement of comprehensive income 1 261 589 (55 560) (2 360) (18 964) 1 184 705 73.13
Total Group headline earnings 137 774 (55 560) (2 360) (18 964) 60 890 3.76
Restatement 1 & 2:
Refer to above restatement for explanation.
ABRIDGED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
for the year ended 31 March 2017
Impact of correction of error
As previously
reported Adjustments As restated
R´000 R´000 R´000
Continuing operations 595 877 595 877
Total income 563 766 563 766
Service fees 13 239 13 239
Interest and dividend income 18 872 18 872
Other investment income
Cost of information management services (447 985) (447 985)
Operating expenses (117 038) (117 038)
Impairment of goodwill and other (34 074) (34 074)
Share-based payment expense – –
Profit from operations (3,220) (3,220)
Other income 1 311 1 311
Finance costs (5 869) (5 869)
Profit before tax (7 778) (7 778)
Income tax expense (25 318) (25 318)
Profit from continuing operations (33 096) (33 096)
Discontinued operations
Profit for the period from discontinued operations 1,252 626 (13 501) 1 239 125
Profit for the year 1 219,530 (13 501) 1 206 029
Other comprehensive income
Items that are or may be reclassified to profit or loss
Foreign currency translation differences – foreign operations (8 183) (8 183)
Tax on other comprehensive income – –
Other comprehensive income for the year, net of tax (8 183) (8 183)
Total comprehensive income for the year 1 211 347 1 197 846
Restatement 3:
An error was noted on the comparative figures on the Statement of Cash Flows for the year ended 31 March 2017. The 'Acquisition of shares' on the
comparative figures was incorrectly shown as a cash inflow of R2 074. Consequently the 'Cash generated from operations' were understated by R4
148. The error was corrected by the restatement of the 'Acquisition of own shares' as a cash outflow of R2 074 and the 'Cash generated from
operations' increasing by R4 148 for the comparative figures.
The error only impacted the Statement of Cash Flows and was correctly accounted for in the other Statements to the Consolidated Financial
Statements.
The following tables summarise the impacts on the Group's consolidated Statement of Cash Flows
Impact of correction of error
As previously
reported Adjustments As restated
R´000 R´000 R´000
Cash flows from operating activities
Cash generated from operations 167 263 4 148 171 411
Dividends received 2 946 - 2 946
Dividends paid (97 679) - (97 679)
Interest received 19 358 - 19 358
Interest paid (10 862) - (10 862)
Taxation paid (50 998) - (50 998)
Net cash inflow from operating activities 30 028 4,148 34 176
Cash flows from investing activities
Acquisition of equipment (8 040) - (8 040)
Acquisition of intangible assets (8 382) - (8 382)
Proceeds on loss in control of subsidiary, net of cash disposed of 2 155 - 2 155
Disposal of equity-accounted investee 3 064 - 3 064
Disposal/(Acquisition) of financial assets at fair value through profit or loss 6 026 - 6 026
Advancement of long-tem loans receivable (2 313) - (2 313)
Cash outflow from investing activities (7 490) - (7 490)
Cash flows from financing activities
Acquisition of own shares 2 074 (4 148) (2 074)
Increase in loans payable 4 499 - 4 499
Cash inflow from financing activities 2 425 (4,148) 2 425
Net increase in cash and cash equivalents 29 111 - 29 111
Effect of exchange rate fluctuations on cash held 18 133 - 18 133
Cash and cash equivalents at beginning of the year 49 268 - 49 268
Cash and cash equivalents at end of the year 96 512 - 96 512
12. Segment Report
In 2016 the Group had two reportable segments according to strategic divisions. These two segments were financial services and information
management services. After the disposal of the financial services segment, the Group's core operations consisted of mainly information management
services. The reportable segments for the current financial year are according to geographical areas, namely South Africa,
Middle East/Africa and Australia.
- South Africa includes consulting and implementation of data, management information software and healthcare administration services.
- Australia includes consulting and implementation of data, management information software and healthcare administration services.
- Middle East/Africa includes consulting and implementation of data and management information software.
CONTINUING OPERATIONS
South Africa Australia Middle East Africa Other Total
2017 2016 2017 2016 2017 2016 2017 2016 2017 2016
Segment external total income 330 557 279 347 79 738 82 333 159 673 173 344 29 823 10 606 599 791 545 630
Segment profit before tax 25 746 26 142 12 061 8 738 (40 704) 8 135 26 765 (2 975) 23 868 40 040
Segment assets * 88 039 77 758 28 862 30 793 91 149 136 897 133 163 153 160 341 213 398 608
Segment liabilities (20 475) (102 262) (10 135) (9 724) (62 593) (47 766) (2 257) (13 292) (95 460) (173 044)
DISCONTINUED OPERATIONS
South Africa Australia Middle East Africa Other Total
2017 2016 2017 2016 2017 2016 2017 2016 2017 2016
Segment external total income - 351 226 - - - - 1 527 403 17 491 1 527 403 368 717
Segment profit before tax - 120 533 - - - - 1 269 268 5 721 1 269 268 126 254
Segment assets * - 11 940 949 - - - - 59 345 30 269 59 345 11 971 218
Segment liabilities - (11 719 256) - - - - (9 302) (1 904) (9 302) (11 721 160)
GROUP
South Africa Australia Middle East Africa Other Total
2017 2016 2017 2016 2017 2016 2017 2016 2017 2016
Segment external total income 330 557 630 573 79 738 82 333 159 673 173 344 557 226 28 097 2 127 194 914 347
Segment profit before tax 25 746 146 675 12 061 8 738 (40 704) 8 135 1 296 033 2 746 1 293 136 166 294
Segment assets * 88 039 12 018 707 28 862 30 793 91 149 136 897 192 508 183 429 400 558 12 369 826
Segment liabilities (20 475) (11 821 518) (10 135) (9 724) (62 593) (47 766) (11 559) (15 196) (104 762) (11 894 204)
Reconciliation of reportable segment profit or loss 2017 2016
Total consolidated profit before tax for reportable segments 1 293 136 166 294
Less impairment of goodwill (31 645) -
Elimination of discontinued operations (1 269 268) (126 254)
Profit before tax (7 777) 40 040
Company information
Directors: AJ Taylor (Independent Non-Executive Chairman)
PJ de Wet (Chief Executive Officer)
AM Louw (Financial Director)
CL Dyers (Independent Non-Executive Director)
HC Steyn (Non-executive Director)
AL Winkler (Independent Non-Executive Director)
Registered office: PBT House, 2 Mews Close, Waterford Mews,
Century City, 7441, South Africa
Postal address: PO Box 276, Century City 7446
Auditors: BDO Cape Inc.
Sponsor: Bridge Capital Advisors Proprietary Limited
Transfer secretaries: Link Market Services
Website: www.pbtgroup.co.za
Cape Town
05 October 2018
Date: 05/10/2018 12:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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