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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 1.11(c) of the Listings Requirements of the JSE Limited (“JSE”) 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 focused on the completion of the 2017 annual financial
statements, as well as the 2018, 2019, 2020 and 2021 annual financial statements.
Although the discussions with SARS are still ongoing and positive, the Company is still uncertain about
the expected date of finalisation.
The aforementioned discussions relate to the settlement reached with SARS in April 2017 and events
subsequent thereto. In terms of this agreement, the Company fulfilled all of its obligations, but has been
struggling, without success, since June 2017 to get SARS to fulfil its obligations. During April 2018, the
Company unexpectedly received an indication from SARS that they were subsequently querying the
legitimacy of the 2017 settlement agreement and reviewing matters internally.
However, during August 2018, the Company managed to meet with SARS and agree on certain
processes to resolve the tax matters.
Although SARS initially indicated that they could conclude the matter by the end of September 2018, the
process proved to be more challenging than expected and SARS could only manage to finally complete
the required tax adjustments during January 2020.
As agreed with SARS, the parties started a process to reach final conclusion on any remaining matters.
Although SARS indicated that they can only receive and consider any proposals once all outstanding
audited financial statements and tax returns have been completed and filed, the Company nevertheless
prepared debt compromise and final settlement submissions, accompanied by unaudited financial
management accounts, and presented these to SARS in September 2020. On 5 May 2021, the Company
received notification from SARS that this compromise proposal was rejected. The Company is currently
working on a revised proposal, which it expects to present to SARS before the end of July 2021.
The Company’s listing status on the JSE remains suspended since the Business Rescue process of 2014.
The reason for the suspension largely relates to compliance matters associated with the abovementioned
outstanding audited financial statements and unresolved issues with SARS. On
19 April 2021, the JSE informed the Company that it is considering the removal of the listing due to said
non-compliance matters, and that it requires representations from the Company to motivate the retention
of the listing.
As a result thereof, the Company met with it’s necessary stakeholders and formulated a solution and an
implementation plan that it submitted as its appeal to the JSE on 20 May 2021. This solution includes the
settlement of the SARS debt, the settlement of the auditors’ account and finalisation of the 2017 financial
statements, completion of subsequent audits and financial statements (2018-2021), submission of annual
returns and the restructure of the board of directors of TCS (“the Board”) and it’s sub-committees.
Following a request from the JSE, the Company submitted further motivating documents on 2 June 2021
and it is currently waiting for a response from the JSE.
Once all outstanding annual financial statements and 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 therefore had to reconsider its initial planning
and aim to have the financial reports and shareholder meetings scheduled and concluded as soon as
possible.
Operational update
Although the issue with SARS remains unresolved and continues to have a negative impact on the
Company, SARS has been willing to assist by providing temporary tax clearance certificates to support
operations 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.
The primary focus of the Company at this stage is to have the suspension lifted and the listing reinstated.
The Company is focused on actions and activities to establish a compliant and sustainable business and
provide the necessary comfort to all parties concerned.
Centurion
30 June 2021
Designated Adviser
Merchantec Capital
Date: 30-06-2021 05:19:00
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