TOTAL CLIENT SERVICES LIMITED - Quarterly Progress Report

Release Date: 11/01/2019 13:50
Code(s): TCS
 
Wrap Text
Quarterly Progress Report

TOTAL CLIENT SERVICES LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/025018/06)
Share code: TCS ISIN: ZAE000116208
(“TCS” or “the Company”)


QUARTERLY PROGRESS REPORT

In terms of paragraph 1.10(c) of the JSE Listings Requirements pertaining to the continuing obligations of
suspended companies, shareholders are hereby provided with a quarterly progress report on the current
state of affairs of the Company.

The rectification of all outstanding compliance matters remains a priority for the Company, and the
completion and publication of all outstanding financial statements is the most important area of focus.

The Company and the auditors are still focussed on the completion of the 2017 annual financial
statements, as well as the 2018 annual financial statements. Although the audit process has been largely
concluded, the auditors are unable to finalise the financial statements due to ongoing uncertainty around
the SARS debt settlement.

Settlement was reached with SARS in April 2017, with the Company having fulfilled all its obligations in
terms of such agreement. Since June 2017 however, the Company has been unable to get SARS to fulfil
its obligations in terms of said agreement. During April 2018, the Company received unexpected indication
from SARS that they were now querying the legitimacy of the 2017 settlement agreement and reviewing
matters internally.

During August 2018, the Company managed to secure a meeting with SARS and agree on certain
processes to resolve the tax matters. While the Company subsequently provided SARS with the
requested information and documentation, the adjustment of the tax accounts is still ongoing.

Nonetheless, the progress made during October and November 2018 proved to be sufficient to enable
SARS to provide the Company with a tax clearance certificate early in December 2018. The expectation is
that this process will gain momentum following the December holiday period and that the parties can then
proceed to reach final conclusion on any remaining matters and agree on the way forward. The current
expectation is that the matter should be concluded during the first quarter of 2019.

The auditors will only be able to finalise the financial statements once the Company has obtained clarity
on the SARS issue.

There have been numerous previously reported completion timelines, which the Company believed to be
realistic based on the information available at that time. However, the information, specifically provided by
SARS and the auditors, was not always accurate or forthcoming. As a result, the Company has failed to
meet its reported deadlines and has had to adjust its completion targets on a regular basis.

While the Company is doing everything within its power to complete and publish all outstanding financial
statements, the matters currently delaying conclusion are not under its control. The Company will continue
to work with its auditors and all other parties to expedite matters where possible, but cannot commit to a
fixed timeline of completion at this point.

Once the audit has been completed, the Company will publish all results as soon as possible thereafter.
Once all the annual financial statements and the annual reports have been published and distributed, as
the case may be, the Company will attend to the necessary shareholder general meetings to, inter alia,
ratify the annual financial statements.

Given the aforementioned circumstances, the Board has had to reconsider its initial planning, but remains
hopeful to have the shareholder meetings scheduled and concluded in due course.
Operational update
Although the unresolved SARS matters still has a negative impact on the Company, the new tax clearance
certificate is expected to improve operational matters and cash flow. Regardless of the remaining
constraints, the operational focus remains on improving performance and creating a stable and sustainable
business.

The Company is constantly increasing and adjusting its marketing activities to raise awareness of its
products and services. The focus is not only on traditional government clients, but also on potential
applications in the private sector.


Centurion
11 January 2019

Designated Adviser
Merchantec Capital

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