NOTES TO THE COMPANY FINANCIAL STATEMENTS

for the year ended 30 June 2009

 

    2009     2008  
    R’000     R’000  

41.

NOTES TO THE COMPANY FINANCIAL STATEMENTS

            
  41.1 CASH AND CASH BALANCES            
    Money on call   5 029     –  
        5 029     –  
               
  41.2 OTHER RECEIVABLES            
    Proceeds on sale of preference shares   6 711     –  
    Sundry debtors   170     25  
        6 881     25  
               
  41.3 INVESTMENT SECURITIES            
    Listed            
    Financial instruments held at fair value through profit and loss   –     33 666  
    Detailed information of all investments is obtainable from the Company Secretary.            
                 
  41.4 INVESTMENTS IN ASSOCIATED COMPANIES            
    Shares at book value   31 773     29 491  
                 
  41.5 SUBSIDIARY COMPANIES            
    Unlisted investments            
    Shares at carrying value – ordinary shares   70 483     66 062  
    Shares at carrying value – preference shares   60 000     –  
    Loans   320 215     236 187  
    Share-based payment reserve   995     1 103  
        451 693     303 352*  
    * Reclassified            
                 
    The loans to subsidiaries are unsecured, bear interest between prime less 2% and 4%, have no fixed terms of repayment and are not repayable in the next twelve months.

A detailed schedule of subsidiary companies appears in note 38.		            
                 
  41.6 DEFERRED TAX            
    Deferred tax on temporary differences arising from:            
    Tax losses   3 314        
    Fair value adjustments   –     2 286  
    Deferred taxation asset   3 314     2 286  
    Deferred taxation liability   –     –  
        3 314     2 286  
                 
  41.7 OTHER PAYABLES            
    Audit fees and other services   573     600  
    Accounts payable   548     195  
        1 121     795  
                 
  41.8 ORDINARY SHARE CAPITAL            
    Authorised            
    40 000 000 (2008: 40 000 000) ordinary shares of 1 cent each   400     400  
    Issued            
    28 032 620 (2008: 27 351 853) ordinary shares of 1 cent each            
    Balance at the beginning of the year   273     270  
    Issued during the year   7     3  
    Balance at the end of the year   280     273  
                 
    The Group has a share incentive trust in terms of which ordinary shares are issued and options are granted. Details of the share incentive trust are set out in note 35 as required by the JSE. The Group issued 80 238 (2008: 338 479) ordinary shares to the Sasfin Share Incentive Trust. The number of ordinary shares held by the Sasfin Share Incentive Trust amounts to 31 333 (2008: 64 192) or R595 327 (2008: R578 276) at year-end.

The unissued ordinary shares are under the control of the directors until the next Annual General Meeting.		            
                 
  41.9 ORDINARY SHARE PREMIUM            
    Balance at the beginning of the year   27 843     25 815  
    Issued during the year   15 946     2 028  
    Balance at the end of the year   43 789     27 843  
                 
  41.10 PREFERENCE SHARE CAPITAL            
    Authorised            
    5 000 000 (2008: 5 000 000) non-redeemable, non-cumulative, non-participating            
    preference shares of 1 cent each   50     50  
    Issued            
    1 905 000 (2008: 1 905 000) preference shares of 1 cent each            
    Balance at the beginning of the year   19     19  
    Balance at the end of the year   19     19  
                 
    The preference shares were listed under the Specialist Securities – Preference Shares sector of the JSE. Dividends are paid semi-annually at a rate of 75% of the prime rate.            
                 
  41.11 PREFERENCE SHARE PREMIUM            
    Balance at the beginning of the year   199 259     199 259  
    Balance at the end of the year   199 259     199 259  
                 
  41.12 INTEREST INCOME            
    Intercompany loans   32 334     17 055*  
    Other   3 667     3 443*  
    Interest earned on financial assets held at amortised cost   36 001     20 498  
                 
    * Reclassification in 2008 from dividend income to interest income totalling to R7 609 845.            
                 
  41.13 INTEREST EXPENSE            
    Intercompany loans   27 883     6 948  
    Interest paid on financial liabilities held at amortised cost   27 883     6 948  
                 
  41.14 OTHER INCOME            
    Fee income   1 873     1 398  
    Dividend income   62 892     87 731*  
    Fair value adjustments on investment securities   –     (8 163)  
    Loss on disposal of preference shares   (2 740)     –  
        62 025     80 966  
    * Reclassification in 2008 from dividend income to interest income totalling to R7 609 845.            
                 
  41.15 STAFF COSTS            
    The following disclosable items are included in staff costs:            
    Directors’ emoluments   828     712  
    Directors’ fees paid by the Company   828     712  
    Share-based payment costs   (542)     -  
        286     712  
                 
  41.16 OTHER OPERATING EXPENSES            
    The following disclosable items are included in operating expenses:            
    Auditors’ remuneration   1 171     916  
    Audit fees – current year   801     600  
    Audit fees – under provision prior year   315     192  
    Other services   55     124  
    Other   666     941  
        1 837     1 857  
                 
  41.17 INCOME TAX EXPENSE            
    South African normal tax   (1 086)     (797)  
    Current tax – current year   (58)     1 489  
    Deferred tax – current year   (1 028)     (2 286)  
    Secondary tax on companies   2 403     3 105  
        1 317     2 308  
    Reconciliation of rate of taxation   %     %  
    South African normal tax rate   28,0     28,0  
    Adjusted for:   (26,1)     (25,4)  
    Exempt income   (25,9)     (29,0)  
    Non-deductible expenses   –     0,2  
    Capital gains   –     –  
    Secondary tax on companies   3,5     3,4  
    Other   (3,7)     –  
                 
    Effective rate   1,9     2,6  
                 
  41.18 CASH FLOW NOTES            
    41.18.1 CASH RECEIPTS FROM CUSTOMERS            
      Interest Income   36 001     12 888  
      Other income   64 765     96 739  
          100 766     109 627  
                   
    41.18.2 CASH PAID TO CUSTOMERS, EMPLOYEES AND SUPPLIERS            
      Interest expense   27 883     6 948  
      Total operating expenses   2 870     2 569  
          30 753     9 517  
      Cash inflow from operating activities   70 013     100 110  
      RECONCILIATION OF OPERATING PROFIT TO CASH FLOWS FROM OPERATING ACTIVITIES            
      Profit before income tax   68 020     91 947  
      Share-based payments   (747)     –  
      Fair value adjustments on financial instruments held at fair value through profit and loss   2 740     8 163  
          70 013     100 110  
                   
    41.18.3 TAXATION PAID            
      Unpaid at the beginning of the year   (738)     704  
      Charge to the income statement   1 317     2 308  
      Unpaid at the end of the year   3 314     738  
          3 893     3 750  
                   
    41.18.4 DIVIDENDS PAID            
      Charge to distributable reserves   80 531     77 896  
      Shares issued in terms of script dividend option   (14 773)     –  
          65 758     77 896  
                   
  41.19 RELATED PARTY TRANSACTIONS            
    The following are defined as related parties of the Group:
  • Subsidiaries (refer to note 38)
  • Associated undertakings and joint ventures (refer to note 38)
  • Key management personnel
            
    Transactions between Group companies comprise:            
    Interest on funding accounts received   32 334     12 875  
    Interest on funding accounts paid   27 883     6 945  
    Administration fees received   1 873     1 398  
    IAS 24 – Related Parties requires the identification of “key management personnel”. Accordingly, the Group has defined key management personnel as those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company as well as close members of the family of any of these individuals. Key management personnel are considered to be the directors of the Company.

Details of directors’ emoluments and shareholding are disclosed in the Directors’ Report on page 41.		  
       
  41.20 CLASSIFICATION OF ASSETS AND LIABILITIES  
    Accounting classifications and fair values  
    The table below sets out the Group’s classification of each class of financial assets and liabilities, and their fair values.
 		  
      Designated

at fair
value
R’000

   Loans and

receivables
R’000

   Other non-

financial
assets and
liabilities
R’000

     Total

carrying
amount
R’000

     Fair

value
R’000

  
     
     
     
     
    2009                  
    Assets                  
    Cash and cash balances   5 029       5 029     5 029  
    Other receivables   6 881       6 881     6 881  
    Investments in subsidiary companies and associated companies     483 466     483 466     483 466  
    Other non-financial assets     3 314     3 314     3 314  
      –   11 910   486 780     498 690        
    Liabilities                  
    Other payables     1 121     1 121     1 121  
    Other non-financial liabilities     244 334     244 334     244 334  
                             
    2008                        
    Assets                        
    Investment securities 33 666             33 666     33 666  
    Other receivables     25         25     25  
    Investments in subsidiary companies and associated companies         332 843     332 843     332 843  
    Other non-financial assets         2 286     2 286     2 286  
      33 666   25   335 129     368 820        
    Liabilities                        
    Other payables         795     795     795  
    Other non-financial liabilities         1 548     1 548     1 548  
    Other non-financial assets         114 620     114 620     114 620  
      –   –   116 963     116 963        
    Carrying value has been used where it closely approximates fair value.  
                           
  41.21 LIQUIDITY, CREDIT AND MARKET RISK INFORMATION  
    Other assets and liabilities consist mainly of non-financial assets and liabilities or financial assets and liabilities at amortised cost which are not subject to liquidity, credit and market risk for IFRS 7 purposes. Investment securities consist of RNil (2008: R33,7 million) investments held at fair value. These investments are subject to market risk being the listed market prices of the instruments.  
                           

42.

RELEVANT STANDARDS AND INTERPRETATIONS BECOMING EFFECTIVE FOR YEARS ENDING AFTER 30 JUNE 2009

  
    Standard/Interpretation Effective date  
  IFRS 2 (AC 139) amendment IFRS 2 Share-based Payment:

Vesting Conditions and Cancellations

 Annual periods commencing on or after 1 January 2009*  
   
  IFRS 8 (AC 145) Operating Segments Annual periods commencing on or after 1 January 2009*  
  IAS 23 (AC 114) Borrowing Costs Annual periods commencing on or after 1 January 2009*  
  IAS 27 (AC 132) and
IFRS 1 (AC 138) amendment		 Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate Annual periods commencing on or after 1 January 2009*  
   
  IAS 32 (AC 125) and
IAS 1 (AC 101) amendment		 IAS 32 (AC 125) Financial Instruments: Presentation and IAS 1(AC 101) Presentation of Financial Statements: Puttable Financial Instruments and Obligations Arising on Liquidation Annual periods commencing on or after 1 January 2009*  
  Amendments to IFRS 7
(AC 144) 		Improving Disclosures about Financial Instruments Annual periods commencing on or after 1 January 2009*  
  AC 503 revised Accounting For Black Economic Empowerment (BEE) Transactions Annual periods commencing on or after 1 January 2009*  
  IFRS 3 (AC 140) Business Combinations Annual periods commencing on or after 1 July 2009*  
  IAS 27 (AC 132) amendment Consolidated and Separate Financial Statements Annual periods commencing on or after 1 July 2009*  
  IAS 39 (AC 133) amendment Eligible Hedged Items Annual periods commencing on or after 1 July 2009*  
  IFRS 5 (AC 142) amendment Improvements to IFRSs – IFRS 5
Non-current Assets Held for Sale and Discontinued Operations		 Annual periods commencing on or after 1 July 2009*  
  IFRS 2 (AC 139) amendment Share based Payment – Group Cash-settled Share-based Payment Transactions Annual periods commencing on or after 1 January 2010*  
  * The adoption of this accounting statement should not have a significant impact on the Group’s results.

IAS 1
The Group has early adopted IAS 1, effective financial periods ending 30 June 2009, and included a Statement of Comprehensive Income and has changed the format of the Statement of Changes in Equity accordingly.

IFRS 8
IFRS 8 will be adopted by the Group for the first time for its financial reporting period ending 30 June 2010.

In terms of this IFRS, segment reporting will be based on the information that management uses internally for evaluating segment performance and when deciding how to allocate resources to operating segments. Such information may be different from what is used to prepare the income statement and balance sheet.

The operating segments of the Group are the same as the current business segments based on IAS 14.

The adoption of IAS 39 will not have any impact on the accounting policies adopted for segments.		  

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