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SVB
SVB
SVB - SilverBridge Holdings Limited - Abridged Annual Financial
Statements for the year ended 28
February 2007
SilverBridge Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1995/006315/06)
JSE Share code: "SVB"
ISIN Code: ZAE000086229
("SilverBridge") or ("The Group")
Abridged Annual Financial Statements for the year ended 28 February 2007
- Revenue increased by 35,8%
- Operating profit increased by 49,5%
- Profit for the year increased by 121%
- Earnings per share increased by 105,1%
- Cash generated from operations increased by 365,8%
ABRIDGED INCOME STATEMENTS
for the year ended 28 February 2007
Group Company
2007 2006 2007 2006
R`000 R`000 R`000 R`000
Revenue 51 079 37 612 - 40
(Loss)/gain on disposal of (52) - - 611
subsidiary
Fair value adjustment to - - - 943
investment properties
Other income 1 013 674 161 21
Personnel expenses (28 (21 (27) (169)
242) 210)
Depreciation and (1 074) (855) - -
amortisation
Impairment losses - trade (264) (114) - -
receivables
Professional fees paid for (3 417) (2 056) (564) (302)
services
Other expenses (7 903) (6 598) (320) (162)
Operating profit/(loss) 11 140 7 453 (750) 982
Finance income 582 537 147 22
Finance expense (11) (1) (1) -
Share of loss in associate (53) - - -
Profit/(loss) before income 11 658 7 989 (604) 1 004
tax
Income tax expense (3 462) (4 281) 374 (119)
Profit/(loss) for the year 8 196 3 708 (230) 885
Attributable to:
Equity holders of the parent 8 177 3 701 (230) 885
Minority interests 19 7 - -
Profit/(loss) for the year 8 196 3 708 (230) 885
Earnings per share
Weighted average number of 26 936 25
ordinary shares in issue 000**
(`000)
Basic and diluted earnings 30,36 14,80*
per ordinary share (cents)
Headline and diluted 30,55 14,74*
headline earnings per
ordinary share (cents)
Reconciliation between basic
and headline earnings per
ordinary share
Basic earnings 8 177 3 701
Loss on disposal of 52 -
subsidiary
Gain on disposal of - (15)
equipment
Headline earnings 8 229 3 686
* There are no potential dilutive ordinary shares in issue which will cause
dilutive earnings per share and dilutive headline earnings per share to differ
from basic and headline earnings per share, respectively.
** 2006 weighted average number of shares in issue are deemed to be the number
of shares issued to the SDT Vendors, in the reverse acquisition transaction,
in terms of IFRS 3: Business combinations.
ABRIDGED CASH FLOW STATEMENTS
for the year ended 28 February 2007
Group Company
2007 2006 2007 2006
R`000 R`000 R`000 R`000
CASH FLOW FROM
OPERATING ACTIVITIES
Cash receipts from customers 51 715 48 403 562 336
Cash paid to suppliers and (36 582) (45 154) (1 534) (990)
employees
Cash generated 15 133 3 249 (972) (654)
from/(utilised in)
operations
Finance income received 582 537 147 1
Finance expense paid (11) (1) (1) -
Dividends paid (9 000) (5 000) - -
Dividends received - - - 21
Taxation paid (2 576) (2 603) - -
STC paid (1 125) (625) - -
Net cash inflow/(outflow) 3 003 (4 443) (826) (632)
from operating activities
CASH FLOW FROM
INVESTING ACTIVITIES
Equipment acquired to expand (1 316) (928) - -
operations
Proceeds from sale of 9 46 - -
equipment
Proceeds from sale of - - 1 800 -
investment property
Repayment received of loans - 303 383
to subsidiaries
Proceeds from disposal of (119) - - -
subsidiary
Additions to investments - - (50 618
981)
Acquisition of subsidiary, 3 161 31 - -
net of cash
Net cash inflow/(outflow) 1 735 (851) (48 1 001
from investing activities 878)
CASH FLOW FROM FINANCING
ACTIVITIES
Treasury shares acquired (78) - - -
Shares issued 4 701 54 701 -
Share issue costs paid - - (851) -
Net cash inflow from 4 623 - 53 850 -
investing activities
NET INCREASE/(DECREASE) IN 9 361 (5 294) 4 146 369
CASH AND CASH EQUIVALENTS
Cash and cash equivalents at 7 048 12 361 2 370 2 001
beginning of year
Effects of exchange rate (11) (19) - -
translations on cash and
cash equivalents
CASH AND CASH EQUIVALENTS AT 16 398 7 048 6 516 2 370
END OF YEAR
ABRIDGED BALANCE SHEETS
as at 28 February 2007
Group Company
2007 2006 2007 2006
R`000 R`000 R`000 R`000
ASSETS
Non-current assets
Equipment 1 703 1 186 - -
Intangible assets 11 191 2 845 - -
Investment in subsidiary - - 50 981 -
Investment in associate 71 - - -
Deferred tax assets 1 429 328 255 -
14 394 4 359 51 236 -
Current assets
Assets classified as - - - 1 800
held for sale
Income tax receivable 250 - - -
Loans to shareholders - - - 303
Revenue recognised not 2 066 - - -
yet invoiced
Trade and other 13 056 13 665 464 63
receivables
Cash and cash 16 398 7 048 6 516 2 370
equivalents
31 770 20 713 6 980 4 536
TOTAL ASSETS 46 164 25 072 58 216 4 536
EQUITY AND LIABILITIES
Equity
Issued capital 326 1 326 525
Share premium 14 872 - 70 447 16 398
Treasury shares (78) - - -
Retained 12 235 4 058 (13 019) (12 789)
earnings/(accumulated
loss)
Total equity 27 355 4 059 57 754 4 134
attributable to equity
holders of the parent
Minority interests - 7 - -
Total equity 27 355 4 066 57 754 4 134
Non-current liabilities
Deferred tax liability - - - 119
- - - 119
Current liabilities
Deferred revenue 5 514 3 058 - -
Trade and other payables 8 502 5 031 462 283
Shareholders for - 9 000 - -
dividends
Income tax payable - 708 - -
STC payable - 1 125 - -
Provisions 4 793 2 084 - -
18 809 21 006 462 283
Total liabilities 18 809 21 006 462 402
TOTAL EQUITY AND 46 164 25 072 58 216 4 536
LIABILITIES
ABRIDGED SEGMENT REPORTS TO THE ABRIDGED
ANNUAL FINANCIAL STATEMENTS
for the year ended 28 February 2007
Research Software
and rental
Implementat Support develop- and
ion
services services ment other Total
R`000 R`000 R`000 R`000 R`000
Business
segment
report
2007
Segment 30 100 9 358 - 11 621 51 079
revenue
Segment 21 659 3 629 (5 185) 12 897 33 000
result
Assets and
liabilities
Segment - - - - -
assets
Investment 71
in
associate
Unallocated 46 093
assets**
Total 46 164
assets
Segment - - - - -
liabilities
Unallocated 18 809
liabilities
**
Total 18 809
liabilities
2006
Segment 21 759 6 046 - 9 807 37 612
revenue
Segment 16 621 759 (4 688) 10 447 23 139
result
Assets and
liabilities
Segment - - - - -
assets
Investment -
in
associate
Unallocated 25 072
assets**
Total 25 072
assets
Segment - - - - -
liabilities
Unallocated 21 006
liabilities
**
Total 21 006
liabilities
South Zimbabwe Africa* Total
Africa
R`000 R`000 R`000 R`000
Geographical segment
report
2007
Segment revenue 28 123 2 331 20 625 51 079
Assets and liabilities
Segment assets 39 138 1 165 5 790 46 093
Investment in associate 71 71
Unallocated assets - -
Total assets 39 209 1 165 5 790 46 164
Segment liabilities - - - -
Unallocated liabilities 18 809
Total liabilities 18 809
2006
Segment revenue 20 989 1 760 14 863 37 612
Assets and liabilities
Segment assets 18 148 253 6 671 25 072
Investment in associate -
Unallocated assets -
Total assets 18 148 253 6 671 25 072
Segment liabilities - - - -
Unallocated liabilities 21 006
Total liabilities 21 006
* Africa = represents other African countries of Malawi, Nigeria, Kenya,
Namibia, Swaziland
** The assets and liabilities of the Group are organised and managed at a
corporate business support level. As the assets and liabilities contribute at
a corporate level, it is not practicable to determine a reasonable allocation
of the assets and liabilities to the business segments.
ABRIDGED STATEMENTS OF CHANGES IN EQUITY
for the year ended 28 February 2007
Retained
Issued Share Treasury earnings/
capital premium shares (accumulated
loss)
R`000 R`000 R`000 R`000
GROUP
Balance as at 1 1 - - 14 357
March 2005
Minority interest
in subsidiary on
acquisition
Profit for the 3 701
year
Total recognised 3 701
income and expense
for the year
Dividend to (14 000)
shareholders
Balance as at 28 1 - - 4 058
February 2006
Profit for the 8 177
year
Total recognised 8 177
income and expense
for the year
Deemed cost of 301 10 195
reverse
acquisition*
Allotment of 2 350 24 4 677
000 shares for
cash
Minority interest
removal on sale of
partial interest
in subsidiary
Treasury shares (78)
acquired
Balance as at 28 326 14 872 (78) 12 235
February 2007
COMPANY
Balance as at 1 525 16 398 - (13 674)
March 2005
Profit for the 885
year
Total recognised 885
income and expense
for the year
Balance as at 28 525 16 398 - (12 789)
February 2006
Loss for the year (230)
Total recognised (230)
income and expense
for the year
Par value (473) 473
reduction of
shares
Allotment of 25 250 49 750
000 000 shares for
reverse
acquisition
Allotment of 2 350 24 4 677
000 shares for
cash
Share issue costs (851)
Balance as at 28 326 70 447 - (13 019)
February 2007
Minority
Total interests Total
R`000 R`000 R`000
GROUP
Balance as at 1 March 14 358 14 358
2005
Minority interest in - -
subsidiary on
acquisition
Profit for the year 3 701 7 3 708
Total recognised income 3 701 7 3 708
and expense for the
year
Dividend to (14 000) (14 000)
shareholders
Balance as at 28 4 059 7 4 066
February 2006
Profit for the year 8 177 19 8 196
Total recognised income 8 177 19 8 196
and expense for the
year
Deemed cost of reverse 10 496 10 496
acquisition*
Allotment of 2 350 000 4 701 4 701
shares for cash
Minority interest - (26) (26)
removal on sale of
partial interest in
subsidiary
Treasury shares (78) (78)
acquired
Balance as at 28 27 355 - 27 355
February 2007
COMPANY
Balance as at 1 March 3 249 3 249
2005
Profit for the year 885 885
Total recognised income 885 885
and expense for the
year
Balance as at 28 4 134 4 134
February 2006
Loss for the year (230) (230)
Total recognised income (230) (230)
and expense for the
year
Par value reduction of - -
shares
Allotment of 25 000 000 50 000 50 000
shares for reverse
acquisition
Allotment of 2 350 000 4 701 4 701
shares for cash
Share issue costs (851) (851)
Balance as at 28 57 754 57 754
February 2007
* In terms of IFRS 3: Business Combinations the share capital of the Group
represents:
i. the original share capital of the acquirer (SDT); plus
ii. the deemed cost of the reverse business combination. (This represents the
fair value of the shares SDT would be required to issue in itself, in exchange
for the 82,65% controlling interest acquired in SilverBridge, to result in a
similar control structure).
iii. thereafter, equity changes are as per the legal parents` share changes.
The share capital of the Group is presented in terms of the share structure of
the legal parent company (SilverBridge).
COMMENTS
1. CORPORATE ACTIVITY
During the year under review the following transaction was effected:
The reverse acquisition of SilverBridge by SDT
On 6 November 2006, SilverBridge acquired 100% of the equity of SDT from the
then shareholders of SDT (SDT Vendors). The acquisition was settled through
the issue of 25 000 000 SilverBridge shares at R2 per share. As a result of
the transaction, SDT acquired effective control (82,65%) over SilverBridge and
it constituted a reverse acquisition in terms of IFRS 3: Business
Combinations. Accordingly, the Group results for the year ending 28 February
2007, and the related comparatives represent a continuation of the SDT Group
(representing SDT, its subsidiaries, and its interest in the associate) into
which SilverBridge is consolidated as a subsidiary as from 6 November 2006.
The deemed cost of the effective combination per IFRS 3 of R10 496 070
represents the fair value of shares that SDT would be required to issue, in
order for the SDT Vendors to retain 82,65% of the original SDT shares. The
name of the Company has been changed from Synergy Holdings Limited, to
SilverBridge Holdings Limited and the listing has been transferred to the AltX
on 27 November 2006.
The Group has been reconstituted as a specialist information technology
holding company. It plans to build a group of niche business application
software and related service businesses operating on a decentralised basis
through an acquisitive growth strategy.
2. ACCOUNTING POLICIES
2.1 Basis of presentation
The abridged annual financial statements for the year ended 28 February 2007
incorporate extracts of the Group and Company`s unqualified audited financial
statements, and are prepared in accordance with International Financial
Reporting Standards ("IFRS"), the Listing Requirements for the JSE Limited and
the Companies Act of South Africa. The accounting policies applied are
consistent with those of the previous financial year except for the Group`s
adoption of IFRS as detailed below.
For a better understanding of the Group`s financial position and results of
operations, these abridged financial statements are to be read in conjunction
with the Group`s audited annual financial statements for the year ended 28
February 2007 which include all disclosures required by IFRS, which are
expected to be posted on or about 7 May 2007
2.2 Adoption of IFRS - Applicable only to the Group
The Group (SDT) is reporting under IFRS for the first time for the year ended
28 February 2007, as SDT`s 28 February 2006 approved private company financial
statements were prepared under the basis of South African Generally Accepted
Accounting Practice (SA GAAP). The accounting policies adopted under IFRS have
been applied in preparing the Group annual financial statements for the year
ended 28 February 2007, the comparative information for the year ended 28
February 2006, and the preparation of the opening IFRS balance sheet at 1
March 2005 (SDT`s transition date).
A reconciliation of the transition from SA GAAP to IFRS has not been presented
as at the transition date of 1 March 2005, as the transition to IFRS has not
had an impact on the reported financial information of the Group.
The Company adopted IFRS for the first time for the year ended 28 February
2006.
2.3 Related party transactions
The Group has entered into various related party transactions, in the ordinary
course of its business. These transactions are no less favourable than those
arranged with third parties.
The acquisition of SDT, as per the Circular dated 6 November 2006, was
classified as a category 1 related party transaction in terms of the JSE
Listing Requirements, as the SDT Vendors were also shareholders in
SilverBridge prior to the transaction, with the exception of the SDT Share
Trust. The SDT Vendors are the Jaco Swanepoel Trust, the Freda du Toit Family
Trust, i Capital Growth Fund I Trust and the SDT Share Trust. The transaction
has been evaluated as fair and reasonable as to its terms and conditions.
3. POST BALANCE SHEET EVENT - DISTRIBUTION TO SHAREHOLDERS
Subsequent to the year-end the directors have recommended a repayment of
capital, from the share premium, amounting to R4 098 000 (2006: Nil), on 19
April 2007. This amounts to a repayment of 13 cents per ordinary share in
issue. The repayment of capital has been recommended for approval by the
shareholders at the Annual General Meeting to be held on 28 May 2007.
4. AUDIT REPORT
The annual financial statements for the year ended 28 February 2007 have been
audited by KPMG Inc., and their unmodified audit report is available for
inspection at the Company`s registered office.
5. FINANCIAL RESULTS AND PERFORMANCE
The Group`s results for the year exceeded the profit forecast published in the
Circular dated 6 November 2006. In particular:
i. Profit for the year exceeded the forecast by 17;84%
ii. Basic earnings per share and headline earnings per share exceeded the
forecast by 28,64% and 29,45% respectively.
The main factors contributing toward the higher than expected result were:
i. Higher than expected operating results from SDT; and
ii. A slight delay in the finalisation of the transaction which in turn
resulted in a slightly lower than expected weighted average number of shares
in issue for the period.
Overall, in comparison to performance in the previous year the Group has shown
an increase in revenue of 35,8%, which is supported, by annuity revenue, which
comprises approximately 41% of total revenue.
Revenue from African operations comprised 45% of total revenue, and the
development of the African market continues to be an important focus and is
expected to be an area of strong growth going forward. The emphasis was
previously on SADC and Eastern African Countries, but during the year the
focus has expanded to include Western Africa through a significant new project
for Metropolitan International in that region.
The group is cash generative and cash balances at the end of the year were R16
398 000.
Goodwill of R8,1 million was created by the reverse acquisition of
SilverBridge. The goodwill was tested for impairment against the cash
generative investment that SilverBridge has in SDT. No impairment was found
and the goodwill did not need to be adjusted for impairments.
Development costs are only capitalised to the extent that there is a proven
business case, and that, in all probability, the asset will provide an
acceptable return. During the year, development costs of R484 000 were
capitalised.
6. GROUP OUTLOOK
The structural adjustments in the local financial services industry continue
to create a sound market for the Group in South Africa. The market for
software in financial services is growing and we foresee a significant
increase in the demand for quality niche software applications. The economic
development in Africa and resultant evolution of financial services presents
an exciting opportunity for well-positioned solution providers, and the Group
expects continued growth on the Continent.
The Group is constantly seeking out reputable companies for acquisition and
incorporation into the Group, in order to expand and grow the SilverBridge
footprint.
7. SOCIAL RESPONSIBILITY
The Group is involved in a number of initiatives and is committed to continue
with the initiatives to uplift the community. Some of the intitatives are
POPUP, Future Forwards, as well as the Group`s own "Saturday School". The
Group also provides bursaries to students, to stimulate interest in the
software industry and increase skills within the industry.
Development of the Group`s employees` skills are a focal point. The Group
provides training and development to the employees in order to contribute to
heightened skills within the IT industry.
8. CORPORATE GOVERNANCE
The Board is committed to the promotion of good corporate governance as set
out in the King II report on Corporate Governance in South Africa. The board
of directors recognises the need for adherence to the report and is continuing
to implement procedures in order to ensure that the Group has an effective
corporate governance policy.
9. DIRECTORATE
During the year under review the Board of SilverBridge has undergone certain
changes in its composition:
i. Jaco Maritz was appointed as financial director on 6 November 2006;
ii. Ashley Regenass resigned as non-executive director on 16 February 2007.
During the year under review the Board of SDT has undergone certain changes in
its composition:
i. Johan Reyneke was appointed as non-executive director on 16 September 2006;
ii. Jaco Maritz was appointed as financial director on 1 March 2007,
subsequent to the year-end.
On behalf of the board of directors
Jaco Swanepoel David Smollan
Chief Executive Officer Chairman
Pretoria
23 April 2007
10. CORPORATE INFORMATION
Registered offices: Transfer secretaries
(SDT and SilverBridge)
First floor, Computershare Investor
Castle View North Services 2004 (Pty) Ltd
495 Prieska Street (Registration number:
2004/003647/07)
Erasmuskloof, 0048
E-mail: Business address:
www.silverbridge.co.za
70 Marshall Street,
Johannesburg, 2001
Postal address: Postal address:
(SDT and SilverBridge)
PO Box 11799 PO Box 61051
Erasmuskloof, 0048 Marshalltown, 2107
Company secretary: Designated advisers
(SDT and SilverBridge)
Sylvan CSI, Sasfin Capital
represented by Melinda van (a division of Sasfin Bank
den Berg Limited)
Registration number:
1951/002280/06)
Auditors: Corporate advisers:
KPMG Incorporated i-Capital fund managers (Pty)
Ltd
(Registration number: (Registration number:
4530188665) 1998/018719/07)
Directors of SilverBridge:
Jaco Swanepoel, Freda du Toit, Jaco Maritz, *David Smollan, *Rowan Williams
(All the directors are South African citizens).* Non-executive
Directors of SDT:
Jaco Swanepoel, Freda du Toit, Jaco Maritz, *David Smollan, *Johan Reyneke
(All the directors are South African citizens).* Non-executive
www.silverbridge.co.za
Date: 23/04/2007 17:00:01 Produced by the JSE SENS Department.
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