| Fri 5 Aug 2005, 8:31 | | Results for the year ended 31 December 2004 |
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Industrial Credit Company Africa Holdings Limited - Audited Annual Results
Industrial Credit Company Africa Holdings Limited
(Formerly Explorer Corporation Holdings Limited)
(`ICC` or `the Company`)
(Incorporated in the Republic of South Africa)
(Registration Number: 1997/010950/06)
Share Code: ICC
ISIN Code: ZAE000053203
Audited Annual Results for the year ended 31 December 2004 and Notice of
Annual General Meeting
BALANCE SHEETS Audited Restated
AT 31 DECEMBER 2004 2003
R`000 R`000
ASSETS
Non current assets 128 553 102 450
Property, plant and equipment 4 741 4 215
Loans 2 2
Goodwill on acquisition 33 589 38 388
Net investment in finance leases 90 221 59 845
Current assets 81 720 114 379
Due from related companies 788 325
Net investment in finance leases 60 598 91 476
Short term deposits - 844
Trade and other receivables 19 202 17 970
Cash and cash equivalents 1 132 3 764
Total assets 210 273 216 829
EQUITY AND LIABILITIES
Shareholders Funds 42 394 51 226
Share capital and premium 132 297 132 297
General risk reserve (23 106) (19 639)
Accumulated loss 2 620 2 620
Foreign currency translation reserve (69 417) (64 052)
Non current liabilities 84 638 57 513
Long term loans 78 346 50 758
Deferred tax 6 292 6 755
Current liabilities 83 241 108 090
Short term borrowings 68 691 87 771
Due to related companies 1 722 4 225
Taxation 182 186
Trade and other payables 10 270 10 314
Cash and cash equivalents 2 376 5 594
Total equity and liabilities 210 273 216 829
Shares in issue at year end (`000) 116 667 116 667
Net asset value per share (cents) 36,3 43,9
(Previously reported 2003: 47,8 cents)
INCOME STATEMENTS Audited Restated
FOR THE YEAR ENDED 31 DECEMBER 2004 2003
CONTINUING OPERATIONS R`000 R`000
Revenue 30 114 29 616
Staff costs (3 865) (5 125)
Depreciation and amortisation (5 760) (5 339)
Other operating expenses (12 651) (23 955)
- Impairment of loans extended to (1 747) (16 952)
discontinued operations
- Impairment of investment in Lengana (20) -
- Normal operating expenditure (10 884) (7 003)
Total operating expenses (22 276) (34 419)
Profit/ (loss) from operating activities 7 838 (4 803)
Finance costs (11 144) (10 438)
Loss before taxation (3 306) (15 241)
Taxation (2 059) (1 173)
Net loss for the year (5 365) (16 414)
DISCONTINUED OPERATIONS
Revenue - 514
Staff costs - (2 237)
Depreciation and amortisation - (2 491)
Other operating expenses - (3 109)
Total operating expenses - (7 837)
Loss from operating activities - (7 323)
Finance costs - (30)
Loss before taxation - (7 353)
Taxation - -
Net loss for the year - (7 353)
After-tax gain on discontinuance of card - 7 452
business
- Gain on discontinuance of card business - 7 452
- Tax thereon - -
Net profit for the year after gain on -
discontinuance of card business 99
TOTAL GROUP
Group loss for the year (Previously (5 365) (16 315)
reported loss 2003: R11 793m)
Basic and diluted loss per share (cents) (4,6) (14,3)
(Previously reported 2003: 10,3 cents)
Weighted average number of shares (`000) 116 667 114 404
Reconciliation of headline loss
Headline loss per share has been calculated
in terms of Circular 7 of 2002
Attributable loss for year (5 365) (16 315)
Adjusted for:
Goodwill amortisation 4 798 4 798
Impairment provision against development - 1 708
costs
Impairment provision against trademarks - 1 395
Gain on discontinuance of card business - (7 452)
Headline loss (Previously reported loss (567) (15 866)
2003: R13 113)
Headline loss per share (cents) (Previously
reported loss 2003: 11,5 cents) (0,5) (13,9)
CASH FLOW STATEMENTS Audited Restated
FOR THE YEAR ENDED 2004 2003
R`000 R`000
Cash flow from operating activities (29 703) (7 334)
Cash flow from investing activities (3 569) (10 004)
Cash flow from financing activities 34 253 24 026
Net movement in cash and cash equivalents 981 6 688
Cash and cash equivalents at beginning of (1 830) (11 503)
year
Foreign exchange movements on cash and cash (396) 2 985
equivalents
Cash and cash equivalents at end of year (1 245) (1 830)
(net)
STATEMENT OF CHANGES IN EQUITY
Share Share Foreign General Acc Total
Capital Premium trans- reserves Loss
lation
reserve
R`000 R`000 R`000 R`000 R`000 R`000
Balance at 1 11 160 116 137 (12 451) - (46 953) 67 893
January 2003 - as
previously
reported
AC133 adjustment
to opening
balance
- Reversal of - - - - 1 836 1 836
impairment of
debtors
- - - - 1 836 (1 836) -
Reclassification
to general risk
reserve
Adjusted opening 11 160 116 137 (12 451) 1 836 (46 953) 69 729
balance
Net loss for the - - - - (16 315) (16 315)
year - restated
As previously (11 793) (11 793)
reported
Correction of - - - - (4 522) (4 522)
error
Foreign currency - - (7 188) - - (7 188)
translation
reserve
Transfer to - - - 784 (784) -
general risk
reserve
Issue of shares 507 4 493 - - - 5 000
Balance at 31 11 667 120 630 (19 639) 2 620 (64 052) 51 226
December 2003
Net loss for the - - - - (5 365) (5 365)
year
Foreign currency - - (3 467) - - (3 467)
translation
reserve
Balance at 31 11 667 120 630 (23 106) 2 620 (69 417) 42 394
December 2004
COMMENTS
The Board of Directors is pleased to present the audited annual financial
results for the Group for the year ended 31 December 2004.
BACKGROUND
Industrial Credit Company Africa Holdings Limited (`ICC`), formerly Explorer
Corporation Holdings Limited (`Explorer`), is the holding company of Industrial
Credit Company Zambia (`ICC Zambia`), which in turn owns all the shares in
Industrial Credit Company South Africa (Proprietary) Limited (`ICC South
Africa`). Explorer`s name change to ICC was effected by way of a special
resolution of the shareholders and became effective on 15 March 2004.
SOUTH AFRICAN STATEMENTS OF GAAP AND COMPANIES ACT REQUIREMENTS
The annual financial statements were drawn up in compliance with South African
Statements of Generally Accepted Accounting Practice. The Group has complied
with the requirements of the Companies Act. The accounting policies for the year
are consistent with those applied for the year ended 31 December 2003.
BUSINESS REVIEW
2004 saw the Group now focusing on developing and expanding the leasing products
and markets. The market in Zambia continued to be buoyant but due to ICC`s
dominant position (75% market share), little incremental impact was seen.
ICC Zambia made a significant investment in ICC South Africa during the course
of the year, enabling ICC South Africa to make significant progress on owner-
driver leasing activities within the Black Economic Empowerment sphere. This
investment has proved to be highly successful for ICC South Africa. The company
has embarked on a significant funding drive, which is expected to yield results
during the 2005 financial year.
ICC South Africa has subsequently acquired a 30% shareholding in the management
company responsible for the successful owner-driver programme. To date, there
has been a 100% collection rate on lease premium income, thus demonstrating the
benefits of an experienced management team in credit assessment and collection.
At year end, ICC South Africa`s outstanding lease debtor`s book amounted to R7m.
FINANCIAL REVIEW
The rand continued to strengthen against the dollar with the effects thereof
reflecting in the profits of the Group.
Due to restructuring of the Group, and in order to provide shareholders with
comparable information, the following table has been extracted from the Group
Income Statement.
Audited Restated
2004 2003
R`000 R`000
Loss before taxation (3 306) (15 241)
Add Back: Impairment provisions 1 767 16 952
Add Back: Amortisation of goodwill 4 798 4 798
Year on year decrease in net profits due to
Kwacha strengthening against the US Dollar 1 645 -
Comparable year on year profit 4 904 6 509
Where appropriate prior year income statements figures have been reclassified to
present more meaningful comparatives. More detailed disclosures on this has been
provided in the annual report.
Revenue has remained consistent with the prior year despite the strengthening of
the rand. This was achieved by a 10% growth in US dollar revenues. Normal
operating expenses have increased year on year mainly due to a trading foreign
exchange profit pertaining to kwacha / US dollar of R1,6m profit in 2003,
compared to a R0,2m loss in the current year.
Net investment in finance leases has remained consistent with the prior year:
Audited Restated
2004 2003
R`000 R`000
Non current portion of net investment in finance 90 221 59 845
leases
Current portion of net investment in finance 60 598 91 476
leases
Total 150 819 151 321
Long-term and short-term borrowings year on year has increased due to additional
financing from DBSA being raised in Zambia.
Audited Restated
2004 2003
R`000 R`000
Long term borrowings 78 346 50 758
Short term borrowings 68 691 87 771
Total 147 037 138 529
Goodwill is currently being amortised over 10 years, but in line with IFRS
reporting for the year ending 31 December 2005, this accounting policy will
change to only incorporate an annual impairment review and any resultant
impairment provisions. Excess cash resources were utilised to expand Zambian
and South African business operations. New markets have been explored in, inter
alia, Kenya and Ghana. No segmental reporting has been provided as the figures
mainly relate to one geographic region. The Zambian leasing business was the
main contributor for the year under review, with ICC South Africa`s contribution
still being immaterial.
PRIOR YEAR ADJUSTMENT - ERROR
The comparative figures have been restated to reflect the effect of adjustments
in respect of ICC, whereby certain liabilities of ICC, which were previously
included at subsidiary level, were included as liabilities of the discontinued
operations in error. The effect of the adjustments was to increase accumulated
losses and liabilities of the continuing operations by R4,5 million, while
reducing the previously reported gain on discontinuance of card operations by
R1,8 million. The difference is due to the impairment of loans accounted for in
the holding company, which were transferred from the discontinued subsidiaries.
In addition, ICC Zambia incorrectly included operating leases as part of the Net
investment in finance leases in 2003, instead of capitalising these assets to
property, plant and equipment. This was corrected in the current year as well
as the depreciation raised in the prior year in respect of these reclassified
assets.
CORPORATE GOVERNANCE
The Group has provided a full Corporate Governance report in its Annual Report.
DIVIDENDS
No dividends will be paid for the foreseeable future, as cash generated will be
retained and utilised to grow and expand the business of the Group.
CHANGE IN AUDITORS
The company changed its auditors from PriceWaterhouseCoopers Inc. to Gobodo
Chartered Accountants (SA) on 22 December 2004.
AUDIT REVIEW OPINION
Gobodo Chartered Accountants (SA)`s unmodified audit report on these annual
condensed financial statements is available for inspection at the company`s
registered office.
POSTING OF ANNUAL FINANCIAL STATEMENTS AND NOTICE OF ANNUAL GENERAL MEETING
The annual financial statements were posted to shareholders on Friday, 29 July
2005. Shareholders are advised that the Annual General Meeting will take place
at 10:00 on Friday, 16 September 2005 in the boardroom at the offices of
Industrial Credit Company Africa Holdings Limited, 2nd Floor, East Wing, 11
Alice Lane, Sandton.
For and on behalf of the board of directors
N. Justin Chinyanta
Chairman
01 August 2005
Registered office: c/o Loita Capital Partners International, 2nd Floor, East
Wing, 11 Alice Lane, Sandton
Transfer secretaries: Computershare Investor Services 2004 (Pty) Ltd, Ground
Floor, 70 Marshall Street, Johannesburg
Sponsor: Arcay Corporate Services, Number 3 Anerley Road, Parktown, Johannesburg
Directors: J Chinyanta*, Y Bazian, CM Van Nieuwkerk, A Fletcher*, A Karrim*, N
Molver*
*Non-executive
Date: 05/08/2005 08:18:16 AM
Produced by the JSE SENS Department
