| Fri 28 May 2010, 13:39 | | Report For The Year Ended 28 February 2010 |
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SMSP - Stimulus Investments Limited - Condensed Consolidated Annual Financial
Report For The Year Ended 28 February 2010
Stimulus Investments Limited
(Incorporated in the Republic of Namibia)
(Registration number 2004/482)
("Stimulus")
NSX Share code: SMSP
ISIN: NA000A0DK7D9
CONDENSED CONSOLIDATED ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 28 FEBRUARY
2010
Condensed Consolidated Statement of Comprehensive Income for the year ended 28
February 2010
Reviewed Audited
2010 2009
N$ N$
Revenue 32,070,616 29,316,736
Cost of sales (11,698,068) (11,109,257)
Gross profit 20,372,548 18,207,479
Other income 381,089 184,895
Operating expenses (15,579,447) (14,743,089)
Operating profit 5,174,190 3,649,285
Investment revenue 214,575 347,247
Fair value adjustments 9,668,017 18,429,280
Finance costs (3,893,827) (8,452,796)
Profit before taxation 11,162,955 13,973,016
Taxation (220,980) (918,625)
Profit for the year 10,941,975 13,054,391
Other comprehensive income
Gains on revaluation of - 6,106,056
land and buildings
Taxation related to
components of other
comprehensive income - (626,028)
Total comprehensive income 10,941,975 18,534,419
Profit attributable to:
Owners of the parent 10,689,475 12,833,298
Non-controlling interest 252,500 221,093
10,941,975 13,054,391
Total comprehensive income attributable to:
Owners of the parent 10,689,475 16,988,967
Non-controlling interest 252,500 1,545,452
Profit 252,500 221,093
Gains on revaluation of - 1,324,359
land and buildings
10,941,975 18,534,419
Condensed Consolidated Statement of Financial Position at 28 February 2010
Reviewed Audited
2010 2009
N$ N$
Assets
Non-current assets 119,497,653 106,291,793
Investment property 2,500,000 -
Property, plant and equipment 13,870,562 12,047,719
Intangible assets 5,550,243 6,335,243
Other investments 97,576,848 87,908,831
Current assets 23,020,537 23,535,888
Inventories 1,264,324 1,387,705
Trade and other receivables 134,840 602,776
Prepayments - 334,967
Assets classified as held for - 2,500,000
sale
Cash and cash equivalents 21,621,373 18,710,440
Total assets 142,518,190 129,827,681
Equity and Liabilities
Equity 52,349,999 41,802,755
Share capital 1,000 1,000
Reserves 4,155,669 4,155,669
Retained earnings 46,639,157 35,949,682
Non-controlling interest 1,554,173 1,696,404
Non-current liabilities 87,420,950 86,219,061
Redeemable preference shares 80,392,000 80,392,000
Secured bank loans 3,383,964 1,507,158
Loan from related parties 2,821,997 3,146,972
Deferred tax liabilities 822,989 1,172,931
Current liabilities 2,747,241 1,805,865
Loans from related parties 43,170 64,149
Trade and other payables 2,469,319 1,732,415
Current tax payable 234,752 9,301
Total equity and liabilities 142,518,190 129,827,681
Condensed Consolidated Statement of Cash Flow for the year ended 28 February
2010
Reviewed Audited
2010 2009
N$ N$
Cash generated from operations
7,370,789 4,452,531
Interest income
214,575 347,247
Finance costs
(3,893,827) (8,452,796)
Tax paid
(270,285) (631,708)
Net cash from / (used in) operating
activities 3,421,252 (4,284,726)
Net cash used in investing activities
(2,251,165) (25,370,576)
Net cash from / (used in) financing
activities 1,740,846 (43,575,238)
Net increase / (decrease) in cash and
cash equivalents
2,910,933 (73,230,540)
Cash and cash equivalents at beginning
of year
18,710,440 91,940,980
Cash and cash equivalents at end of
year 21,621,373 18,710,440
Condensed Consolidated Statement of Changes in Equity for the year ended 28
February 2010
Share Revaluation Retained Non-
controlling
capital reserve income interest
N$ N$ N$ N$
Balance at 1 March 2008 1,000 - 23,116,384 392,622
Changes in equity
Total comprehensive
income for
the year - 4,155,669 12,833,298 1,545,452
Dividends - - - (241,670)
Total changes - 4,155,669 12,833,298 1,303,782
Balance at 1 March 2009 1,000 4,155,669 35,949,682 1,696,404
Changes in equity
Total comprehensive
income for
the year - - 10,689,475 252,500
Dividends - - - (216,670)
Changes in ownership (178,061)
interest
Total changes - - 10,689,475 (142,231)
Balance at 28 February 1,000 4,155,669 46,639,157 1,554,173
2010
NOTES
1. Statement of compliance
These Condensed consolidated financial statements have been prepared
in accordance with International Financial Reporting Standard (IFRS) IAS 34,
Interim Financial Reporting. The Condensed consolidated financial statements do
not include all information required for full annual financial statements,
however these are available on request.
2. Financial assets through profit and loss
Investments in unlisted equities are carried at fair value with fair value
adjustments recognised in profit and loss for the year.
3. Accounting policies
The accounting policies applied by the Group in these condensed consolidated
financial statements are the same as those applied by the Group in its
consolidated financial statements as at and for the year ended 28 February 2009,
except for the adoption of the new standards and interpretations which are now
effective, including IAS 1: Presentation of Financial Statements.
COMMENTARY: REVIEW OF RESULTS
Stimulus owns a majority stake in the Joe`s Beerhouse Group of Companies, which
results are therefore incorporated in the Stimulus Group Financial Statements
with effect from 1 March 2007. Revenue directly attributable to the investment
activities of Stimulus (excluding any consolidated results from group companies)
comprise dividends received from investee companies of N$5,296,170 (2009:
N$2,978,877) and returns generated from money market investments of N$1,251,138
(2009: N$2,961,767). The fair value gains of N$ 9,668,017 (2009: N$18,429,280)
are based on conservative valuations of the underlying unlisted equity
investments using the discounted cash flow method of valuation and where
necessary, discounting factors have been adjusted to take into account the
current economic environment.
In a year that was characterised by global and local macro-economic uncertainty,
the continuing increase in value of the portfolio is particularly pleasing as it
highlights the resilience of our portfolio and the fact that it is underpinned
by strong underlying investments. The investments which comprise the heaviest
weighting in the portfolio continue to show healthy growth. The portfolio is
well positioned to continue to deliver attractive returns going forward.
Risk management is a key ingredient in the successful management of the
portfolio and we will continue to review and update our post deal risk
management processes on an ongoing basis.
PROSPECTS
The portfolio is well-positioned through its participation in various market
leaders in Namibia. The portfolio is performing well and it is our expectation
that it should continue to do so. We are however seeing a belated slump in
consumer demand in the current year and therefore expect the retail focused
investments to show more muted growth during 2010. We have noticed developments
aimed at increasing private equity activity in Namibia and are excited about the
prospects that the development of the Namibian private equity market will hold
for the Stimulus portfolio. We equally welcome the developments towards reducing
the current policy- and regulation uncertainty towards Regulation 28. We hope
that these combined activities will allow the private equity asset class in
Namibia to strengthen and simultaneously provide Namibian entrepreneurs with an
alternative funding option.
DIVIDEND DECLARATION
The Directors have resolved that an amount of N$4,279,328 (2009: N$3,549,616) be
declared as a final dividend to the preference shareholders, which translates
into a dividend of 346 cents per preference share (2009: 287 cents per
preference share). This amount represents the total realised after-tax cashflow
profits of Stimulus Investments Limited, after adjusting for fair value gains
and outstanding receivables. The salient details of the dividend are:
Last day to trade: 18 June 2010
Securities start trading ex-dividend: 21 June 2010
Last day to register: 25 June 2010
Payment date: 09 July 2010
Note: Payments will be made electronically to the bank account details as
provided to Transfer Secretaries (Pty) Ltd. Holders who have changed banking
details are advised to inform Transfer Secretaries (Pty) Ltd accordingly.
AUDITORS REVIEW OPINION
The condensed financial statements for the period ended 28 February 2010 were
reviewed by SGA Chartered Accountants & Auditors. The unqualified review opinion
is available for inspection at the Company`s registered office.
ACKNOWLEDGEMENTS
Stimulus is entering its sixth year as Namibia`s leading private equity
investment company and it has managed to build a reputable and recognised track-
record in this highly specialised field. We would like to thank our investors
for their continued support, input and trust. We would furthermore like to thank
the management and staff of our underlying investment companies for the strong
growth reflected in the portfolio which is indicative of their hard work and
commitment to their respective businesses.
Peter Koep
Independent, Non-Executive Chairman
Windhoek
28 May 2010
Registered office
24 Orban Street
Klein Windhoek
Windhoek
Namibia
Sponsor
IJG Securities (Pty) Ltd
Member of the NSX
100 Robert Mugabe Avenue
P O Box 186, Windhoek, Namibia
Registration No. 95/505
Date: 28/05/2010 13:39:02 Produced by the JSE SENS Department.
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