| Thu 2 Feb 2006, 12:58 | | IFS - Abridged annual financial statements for the |
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IND
IND
IFS - Abridged annual financial statements for the year ended 30 June 2005
INDEPENDENT FINANCIAL SERVICES LIMITED
(Registration number 1950/037061/06)
Share code: IND
ISIN: ZAE000025300
("IFS" or "the Company")
ABRIDGED ANNUAL FINANCIAL STATEMENTS OF INDEPENDENT FINANCIAL SERVICES LIMITED
("IFS" or "the company") FOR THE YEAR ENDED 30 JUNE 2005
GROUP BALANCE SHEETS
AT 30 JUNE 2005
2005 2004
R"000 R"000
ASSETS
Non-current assets 4 837 14 173
Property, and equipment 1 009 4 294
Goodwill 3 828 9 731
Interest in subsidiaries - -
Loan receivable - 148
Current Assets 7 521 2 784
Inventory - 675
Accounts receivable 64 114
Taxation 80 -
Cash resources 7 377 1 995
12 358 16 957
EQUITY AND LIABILITES
Capital and reserves 11 749 14 164
Issued capital 339 339
Share premium 8 620 8 620
Non Distributable Reserve 372 372
Accumulated profits 2 418 4 833
Current liabilities 609 2 793
Accounts payable 609 733
Shareholders for dividends - 1 360
Taxation - 700
12 358 16 957
Net asset value per share (cents) 34,7 41,8
GROUP INCOME STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2005
2005 2004
R"000 R"000
Revenue 2 783 13 760
Operating expenses (3 287) (10 501)
(Loss) Profit from operations (504) 3 259
Investment income 347 160
Finance costs (9) (155)
(Loss) Profit before taxation (166) 3 264
Taxation (1 574) (1 764)
(Loss) Profit after taxation (1 740) 1 500
Outside shareholder"s interest - (68)
Extraordinary items 4 085 -
Net profit attributable to shareholders 2 345 1 432
Earnings per share (cents) 6,9 4,2
Adjustments for:
Goodwill amortization and impairment 17,4 5,9
(cents)
Capital profits (cents) (17,1) -
Headline earnings per share (cents) 7,2 10,1
Dividends per share (cents) 14,0 4,0
GROUP STATEMENT OF CHANGES IN EQUITY FOR YEAR ENDED 30 JUNE 2005
Distributable Non- Share Share Total
Reserve distributable Capital premium
Reserve
R"000 R"000 R"000 R"000 R"000
Balance at 30 June 5 186 372 340 8700 14 598
2003
Net profit for year 1 432 1 432
Dividends (1 785) - - - (1 785)
Own shares acquired (1) (80) (81)
by subsidiary
Balance at 30 June 4 833 372 339 8 620 14 164
2004
Net profit for year 2 345 - - - 2 345
Dividends (4 760) - - - (4 760)
Balance at 30 June 2 418 372 339 8 620 11 749
2005
GROUP CASH FLOW STATEMENTS FOR THE YEAR ENDED 30 JUNE 2005
2005 2004
R"000 R"000
Cash flow from operating activities (9 401) 5 187
Cash receipt from customers 2 202 16 243
Cash paid to suppliers and employees (3 481) (9 220)
Cash generated by operations (1 279) 7 023
Interest paid (9) (155)
Interest received 347 160
Taxation paid (2 354) (1 416)
Dividend paid (6 120) (431)
Dividend received 14 6
Cash flow from investing activities 14 629 (1 867)
Property and equipment acquired (296) (2 532)
(Increase) Decrease in loans to - (148)
subsidiaries
Proceeds on disposal of fixed assets 4 309 1 708
Proceeds on disposal of intangible 5 710 -
assets
Disposal of subsidiaries 4 906 (895)
Cash flowing from financing activities 154 (492)
Loans raised 154 -
Decrease in outside shareholders" - (492)
interest
Net increase/(decrease) in cash and 5 382 2 828
cash equivalents
Cash and cash equivalents at beginning 1 995 (833)
of the year
Cash and cash equivalents at end of the 7 377 1 995
year
BASIS OF PREPARATION
The principal accounting policies used in the preparation of the financial
statements for the year under review are in accordance with South African
Statements of Generally Accepted Accounting Practice and are consistent with
those of the previous year.
COMMENT
Nature of Business
The principle activities of the group have been that of short term insurance
brokers and property owners. Both activities have been disposed of during the
year as detailed below.
Disposals and distributions
During the year the board of IFS and its subsidiaries realised all the group
assets and distributed the net realisation proceeds to shareholders pursuant to
the receipt of unsolicited offers for the majority of the assets of the group.
This will result in IFS ultimately becoming a cash shell.
The disposals include:
* the sale of the business of IFS Insurance Brokers as a going concern to
Multifund Services;
* the sale by 62 Juta Street, of:
* the Smit Street properties to Jungle Holdings;
* the Juta Street property to Jungle Holdings;
* the Norwood property on public auction; and
* the disposal of all of the shares in and claims against Red Car Hire to
Multifund Administrators.
Following the disposals, the cash distribution the dividend in specie and the
special dividend, the company intends to have no remaining assets other than R3
million cash and 100 000 IFS shares held as treasury share by O"Cor Insurance
Brokers (Proprietary) Limited, a wholly-owned subsidiary of the company.
Events subsequent to year-end
The board of directors of IFS proposed and paid a cash distribution of 7,67
cents per share and a dividend, in specie on the basis of one share in IFS
Insurance Brokers for each IFS share held by ordinary shareholders recorded in
the register on the record date by means of a reduction of share premium as
announced on SENS on 17 August 2005.
The dividend in specie of one share in IFS Insurance Brokers for each IFS share
held by ordinary shareholders will enable IFS ordinary shareholders to receive
the final profit warranty-based portion of the IFS Insurance Brokers purchase
consideration. The further dividend in specie estimated to equal 17,99 cents
per share represented by a share in IFS Insurance Brokers Limited, will be
finally determined an d paid during December 2005.
The board of directors of IFS has also proposed and paid a special dividend of
6,25 cents per share to ordinary shareholders recorded in the register on the
record date, from the capital reserves of the company.
In terms of the SENS announcement dated 20 April 2005, entities owned or
controlled by Mr J W Simpson sold 26 640 000 IFS shares ex the dividends still
to be declared by IFS pursuant to its strategy t realise its assets and
distribute the net proceeds. The price of these shares was based on the express
term and warranty that IFS will be left with a net asset value of R3 million,
comprised entirely of cash, after such dividends, at the time of the
implementation of the above sale. On this basis the purchase price was
equivalent to the (ex dividend) net asset value per she at the relevant time.
Cash shell
After the disposals and the distributions, the majority of company"s remaining
assets will be cash and accordingly IFS will become a cash shell. The sector in
which the company is listed on the JSE may change and shareholders will be
advised of such change. The company will have six months from the date on which
shareholder approval for the disposals and distributions are obtained to inject
new asset into the shell, failing which shares in the company will be suspended
by the JSE. Should new assets not be injected into the shell within three
months following the suspension, the listing of the company"s share on the JSE
will be terminated.
TERMS AND CONDITIONS OF THE DISPOSALS
IFS Insurance Brokers ((Proprietary) Limited)
In terms of an agreement dated 10 September 2004, the insurance broking business
of IFS Insurance Brokers was sold "voetstoots" to Multifund Services as a going
concern, including all rights and obligations under the policies, the fixed
assets and the agency agreements of the business, but excluding any liabilities
other than prospective liabilities under the policies. The disposal was
effective 1 October 2004. The determination of the purchase consideration is
formula-lined, having regard to premium and commission income and underwriting
profit actually earned during the 12-month period ending 30 September 2005. The
purchase price is expected to total R11 million. Part of the purchase
consideration was paid in cash as to R4 891 124 on 1 October 2004, and, the
balance, subject to adjustment based on performance, is payable after the final
determination of the total purchase consideration following the first
anniversary of the effective date. Payment of that deferred extrapolated
balance estimated at approximately R6,1 million will be effected during December
2005. The disposal agreement is subject to warranties which are normal for a
transaction of this nature.
62 Juta Street, Braamfontein (Proprietary) Limited
Smit Street properties
The properties situated at 155 Smit Street, which includes all rights and
obligations in terms of existing leases, and all other assets necessary to carry
on such letting business, was sold, "voetstoots" to Jungle Holdings as a going
concern for total purchase consideration of R1 978 5600 in terms of an agreement
dated 12 August 2004. The effective date of the disposal, being the date of
transfer of ownership of the Smit Street properties, was 11 November 2004.
Juta Street property
Pursuant to the cancellation by the company of two prior agreements as a result
of the relevant purchasers failing to meet the stipulated terms and conditions,
the company"s head office building, situated at 62 Juta Street, which includes
all rights and obligations in terms of existing leases, and all other assets
necessary to carry on the business, was sold "voetstoots" to Jungle Holdings for
a total purchase consideration of R1 670 000, in terms of an agreement dated 4
November 204. The effective date of the disposal was 1 November 2004, although
the registration of transfer of the property only took place on 11 February
2005.
Norwood property
The Norwood property was sold by way of a public auction on 20 October 2004 for
a total purchase consideration of R1 340 000. The effective date of the
disposal will be the date of registration of transfer of ownership to the
purchaser, Mr J W Simpson, who is the Chief Executive Officer and controlling
shareholder of IFS and, as such, a related party in respect of this transaction.
Red Car Hire (Proprietary) Limited
In terms of an agreement dated 4 March 2005, all issued share in and claims
against Red Car Hire have been sold to Multifund Administrators. The disposal
will be effective from 28 February 2005 and is for a total purchase
consideration of R4 906 654. IFS has given the purchaser warranties which are
normal for a transaction of this nature.
REVIEW BY THE INDEPENDENT AUDITORS
The company"s auditors for the year ended 30 June 2005, Cohen Hill Funk & Co.
have reviewed these results. Their unqualified review is available for
inspection at the registered offices of the company.
Date: 02/02/2006 12:58:09 PM Produced by the JSE SENS Department
