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IDQ
IDQ
Indequity - Unaudited Interim Results for the Six Months Ended 31 March 2006
Indequity Group Limited
Incorporated in the Republic of South Africa
Registration number: 1998/015883/06
Share Code: IDQ
ISIN: ZAE000016606
("Indequity" or "the Group")
UNAUDITED CONDENSED CONSOLIDATED INTERIM RESULTS FOR THE SIX MONTHS
ENDED 31 MARCH 2006
CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT
6 months ended 6 months ended Year ended
31 March 2006 31 March 2005 30 September
Unaudited Unaudited 2005
R R Unaudited
R
Investment Income 1 932 424 611 006 1 980 164
Investment banking & private 467 921 468 184 834 009
equity income
Insurance income - 5 014 726 3 079 696 7 196 351
proprietary underwriting
Total revenue 7 415 071 4 158 886 10 010 524
(Income)/expenses - (12 587) 17 258
attributable to cell holders
Underwriting expenses and 2 822 605 1 554 872 4 709 391
claims incurred
Other operating expenses 3 858 534 3 087 875 7 145 923
Total operating expenses 6 681 139 4 630 160 11 872 572
Finance costs 129 459 115 163 224 690
Profit/ (Loss) before 604 473 (586 437) (2 086 738)
taxation
Taxation (602 188) 94 328 342 671
Profit/ (Loss) for the 2 285 (492 109) (1 744 067)
period
Attributable to:
Equity holders of the (111 789) (579 424) (1 898 188)
parent
Minority interest 114 074 87 315 154 121
Profit/ (Loss) for the 2 285 (492 109) (1 744 067)
period
Dividends per share (cents)
- paid - - -
- declared - - -
Basic earnings per share (0,92) (4,76) (15,60)
(cents)
Diluted earnings per share (0,92) (4,76) (15,60)
(cents)
CONDENSED CONSOLIDATED INTERIM BALANCE SHEET
31 March 31 March 30 September
2006 2005 2005
Unaudited Unaudited Unaudited
R R R
ASSETS
Non-current assets 11 609 524 8 718 847 9 733 316
Property and equipment 363 742 499 753 410 987
Investments 10 325 866 7 299 178 8 402 413
Goodwill 919 916 919 916 919 916
Current assets 7 204 758 8 884 543 8 803 632
Deferred tax asset 1 849 018 2 119 402 2 375 549
Inventory 36 039 49 424 66 539
Trade and other receivables 887 026 410 629 500 846
Cash and cash equivalents 4 432 001 6 304 414 5 860 024
Income tax receivable 674 674 674
Total assets 18 814 282 17 603 390 18 536 948
EQUITY AND LIABILITIES
Share capital and premium 14 109 766 14 109 766 14 109 766
Contingency reserves 1 619 784 1 128 831 1 407 757
Accumulated loss (10 460 022) (8 752 340) (10 136 206)
Minority interest (948 916) (1 129 796) (1 062 990)
Preference shareholders" 9 779 997 8 942 383 10 420 184
interest
Total equity 14 100 609 14 298 844 14 738 511
Non-current liabilities 2 437 881 2 040 627 1 481 379
Interest bearing borrowings 1 447 812 2 040 627 1 481 379
Director"s loan 990 069 - -
Current liabilities 2 275 792 1 263 919 2 317 058
Insurance contract 1 627 917 949 270 1 594 271
provisions
Trade and other payables 647 875 314 649 722 787
Total equity and liabilities 18 814 282 17 603 390 18 536 948
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
Share capital Accumulated Contingency
and premium loss reserves
R R R
Balance as at 1 October 2004 14 109 766 (7 876 816) 832 731
Net loss for the 6 months
ended 31 March 2005 as
previously reported under SA
GAAP (604 743)
Effect of first time
adoption of IFRS (refer
notes) 25 319
Net loss for the 6 months
ended 31 March 2005 in terms
of IFRS (579 424)
Transfer to contingency (296 100) 296 100
reserves
Transfer to minority
interest due to sale of
additional shares
Increase in preference
shareholders" interest
Balance as at 31 March 2005 14 109 766 (8 752 340) 1 128 831
Net loss for the 6 months
ended 30 September 2005 as
previously reported under SA (1 344 083)
GAAP
Effect of first time
adoption of IFRS (refer 25 319
notes)
Net loss for the 6 months
ended 30 September 2005 in
terms of IFRS (1 318 764)
Transfer to contingency (65 102) 278 926
reserves
Increase in preference
shareholders" interest
Balance as at 30 September 14 109 766 (10 136 206) 1 407 757
2005
Net loss for the 6 months
ended 31 March 2006 (111 789)
Transfer to contingency (212 027) 212 027
reserves
Decrease in preference
shareholders" interest
Balance as at 31 March 2006 14 109 766 (10 460 022) 1 619 784
CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY (Continued)
Minority Preference
Interest shareholders Total
R R R
Balance as at 1 October 2004 (1 542 111) 5 830 520 11 354 090
Net loss for the 6 months
ended 31 March 2005 as
previously reported under SA
GAAP 87 315 (517 428)
Effect of first time
adoption of IFRS (refer
notes) 25 319
Net loss for the 6 months
ended 31 March 2005 in terms
of IFRS 87 315 (492 109)
Transfer to contingency -
reserves
Transfer to minority
interest due to sale of 325 000 325 000
additional shares
Increase in preference
shareholders" interest 3 111 863 3 111 863
Balance as at 31 March 2005 (1 129 796) 8 942 383 14 298 844
Net loss for the 6 months
ended 30 September 2005 as
previously reported under SA 66 806 (1 277 277)
GAAP
Effect of first time
adoption of IFRS (refer 25 319
notes)
Net loss for the 6 months
ended 30 September 2005 in
terms of IFRS 66 806 (1 251 958)
Transfer to contingency 213 824
reserves
Increase in preference
shareholders" interest 1 477 801 1 477 801
Balance as at 30 September (1 062 990) 10 420 184 14 738 511
2005
Net loss for the 6 months
ended 31 March 2006 114 074 2 285
Transfer to contingency
reserves
Decrease in preference
shareholders" interest (640 187) (640 187)
Balance as at 31 March 2006 (948 916) 9 779 997 14 100 609
CONDENSED CONSOLIDATED INTERIM CASH FLOW STATEMENT
31 March 2006 31 March 2005 30 September
Unaudited Unaudited 2005
R R Unaudited
R
Net cash used in operating (492 323) (157 220) (787 031)
activities
Net cash used in investing (19 235) (6 719 250) (6 187 557)
activities
Net cash (used in)/from (916 465) 5 799 949 5 453 677
financing activities
Net decrease in cash and (1 428 023) (1 076 521) (1 520 911)
cash equivalents
Cash and cash equivalents at 5 860 024 7 380 935 7 380 935
beginning of period
Cash and cash equivalents at 4 432 001 6 304 414 5 860 024
end of period
SEGMENT INFORMATION
6 months ended 6 months ended Year ended
31 March 2006 31 March 2005 30 September
Unaudited Unaudited 2005
R R Unaudited
R
Investment 1 923 253 611 006 1 980 164
Investment Banking and 477 092 468 184 834 009
Private Equity
Insurance 5 014 726 3 079 696 7 196 351
Segment revenue 7 415 071 4 158 886 10 010 524
Investments (231 965) (367 354) (137 247)
Profit / (loss) before 405 648 (373 541) (70 488)
taxation
Taxation (584 553)
Minority interest (53 060) 6 187 (66 759)
Investment Banking and 97 916 123 306 180 070
Private Equity
Profit / (loss) before 158 929 216 808 267 432
taxation
Minority interest (61 014) (93 502) (87 362)
Insurance 22 260 (335 376) (1 941 011)
Profit / (loss) before 39 895 (429 704) (2 283 682)
taxation
Taxation (17 635) 94 328 342 671
Segment results (111 789) (579 424) (1 898 188)
COMMENTS ON RESULTS
The management and personnel of Indequity continues to build on the annuity
base established over the previous three years. The positive effect of this
strategy on the Group"s financial position is slowly becoming a reality. Both
the Insurance and Investment divisions performed exceptionally with strong
growth in the revenue flows.
PROSPECTS
The Group expects the positive trend in the business to continue through the
remainder of the financial year.
EVENTS SUBSEQUENT TO BALANCE SHEET DATE
There have been no significant post balance sheet events.
HEADLINE EARNINGS PER SHARE AND DILUTED HEADLINE EARNINGS PER SHARE
6 months ended 6 months ended Year ended
31 March 2006 31 March 2005 30 September
Unaudited Unaudited 2005
Unaudited
Headline earnings per share (0,92) (4,76) (15,60)
(cents)
Diluted headline earnings per (0,92) (4,76) (15,60)
share (cents)
Number of shares
- in issue 12 170 000 12 170 000 12 170 000
- weighted average 12 170 000 12 170 000 12 170 000
- Diluted 12 170 000 12 170 000 12 170 000
The number of shares has been used in the calculation of earnings per share,
diluted earnings per share and headline earnings per share.
ACCOUNTING POLICIES AND BASIS OF PREPARATION
The condensed interim financial statements for the six months ended 31 March
2006 were prepared in accordance with the principles of International
Financial Reporting Standards ("IFRSs") for interim financial statements, IAS
34 - Interim Financial Reporting and in compliance with the Listing
Requirements of the JSE Limited. These are the group"s first IFRS condensed
interim financial statements for part of the period for which annual
financial statements will be prepared in terms of IFRS.
IFRS 1 - First-time adoption of IFRS has been applied and for detail on the
adjustments please refer to the note below. The condensed interim financial
statements do no include all of the information required by IFRS for full
annual financial statements.
The financial information has been prepared in accordance with IFRSs that are
currently effective. This may differ from IFRS finally in effect at 30
September 2006 as a result of ongoing global developments and possible
amendment by interpretive guidance from the International Financial Reporting
Interpretations Committee of International Accounting Standards Board.
EFFECT OF FIRST TIME ADOPTION OF IFRS
The date of transition to IFRS for the Group is 1 October 2004. In prior
periods the Group prepared its financial statements in accordance with SA
GAAP, but the opening balance sheet at 1 October 2004 has now been prepared
in accordance with all existing IFRSs expected to be applicable at 30
September 2006 which have been complied consistently from the date of
transition.
At transition, IFRS 1 allows a number of exemptions to the retrospective
application principle. The Group made the following elections relating to the
transitional arrangements:
Property, plant and equipment - There were no adjustments to the value of
property, plant and equipment as the residual values and useful lives of the
assets were considered reasonable in terms of IAS 16, Property, Plant and
Equipment.
Share-based payments - To date no share options have been granted in terms of
the share option scheme.
Financial Instruments: Presentation and Disclosure - The group has elected
not to prepare comparative information that complies with IAS 32, Financial
Instruments: Presentation and Disclosure
IAS 39 Financial Instruments: Recognition and Measurement - The group has
elected not to prepare comparative information that complies with IAS 39,
Financial Instruments: Recognition and Measurement
The first time adoption of IFRS 4 - Insurance contracts, did not have any
significant impact on the recognition and measurement of assets and
liabilities in respect of insurance contracts for the period. The group"s
comprehensive consolidated financial statements for the year-ending 30
September 2006 will present the additional disclosure required by IFRS 4.
The first time adoption of IAS 36 and IFRS 3 resulted in a reversal of the
amortisation charge for the year ended 30 September 2005. Goodwill which was
previously carried at cost less accumulated amortisation and accumulated
impairment is now assessed only for impairment on an annual basis. The effect
on net income/ (loss) is summarised below. For the effect on equity please
refer to the "Condensed consolidated interim statement of changes in equity".
6 months Year ended
ended 30
31 March September
2005 2005
Unaudited Unaudited
R R
Loss for the period in terms of SA GAAP (604 743) (1 948 826)
Reversal of Goodwill Amortisation 25 319 50 638
Loss for the period in terms of IFRS (579 424) (1 898 188)
DIVIDENDS
In accordance with the Group"s current cash requirements, no interim
dividends have been declared.
On behalf of the board
LJ van Rensburg TC Meyer Johannesburg
Chief Executive Officer Director 2 June 2006
Directors: AV van Jaarsveldt* (British), LJ van Rensburg*, TC Meyer*, JF
Zwarts* (*non-executive)
Company secretary: S le Roux Transfer secretaries: Ultra Registrars (Pty) Ltd
Sponsor: KPMG Services (Pty) Ltd
Registered address: First Floor, Cascade House, Constantia Office Park, cnr
14th Avenue and Hendrik Potgieter Road, Constantia Kloof, 1709
Postal address: PO Box 5433, Weltevredenpark, 1715
Telephone: (+27 11) 475-0816 Fax: (+27 11) 475-0877
Website: www.indequity.com
Date: 02/06/2006 03:00:29 PM Produced by the JSE SENS Department
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