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Cartrack Holdings Limited (Registration number 2005/036316/06)
Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Grant Thornton Chartered Accountants (S.A.)
Registered Auditors These reviewed interim condensed consolidated financial statements have been independently reviewed in compliance with
the applicable requirements of the Companies Act, 71 of 2008. Issued 16 November 2015
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
General Information
Country of incorporation and domicile
Nature of business and principal activities
Directors
Registered office
Business address
Postal address
Holding company
Bankers
Reviewer
Secretary
Company registration number
South Africa
A holding company with the principle activities of the design and development of telematics equipment and software and the prov1sion of fleet management and mobile asset solutions and vehicle recovery services
I.J. Calista (Executive)
J.R. Edmeston (Executive)
D.J. Brown (Non - Executive)
A.T. lkalafeng (Non- Executive)
K. White (Non- Executive)
Cartrack Corner
Corner Jan Smuts & 7th Avenue
Rosebank, Johannesburg
South Africa
2196
Cartrack Corner
Corner Jan Smuts & 7th Avenue
Rosebank, Johannesburg
South Africa
2196
P.O. Box 4709
Rivonia
2128
Onecell Holdings (Pty) Ltd
incorporated in South Africa
First National Bank - a division of FirstRand Bank Limited Standard Bank Limited, Nedbank Limited, Mercantile Bank Limited
Grant Thornton
Chartered Accountants (S.A.)
Registered Auditors
A South African member firm of Grant Thornton International
A. De Villiers
2005/036316/06
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Index
The reports and statements set out below comprise the reviewed interim condensed consolidated financia l statements presented to the shareholders:
Index
Directors' Responsibilities and Approval
Independent Reviewer's Report
Reviewed Consolidated Interim Statement of Financial Position
Reviewed Consolidated Interim Statement of Profit or loss and Other Comprehensive Income
Reviewed Consolidated Interim Statement of Changes in Equity
Reviewed Consolidated Interim Statement of Cash Flows
Accounting Policies
Notes to the Reviewed Interim Condensed Consolidated Financial Statements
Level of assurance
Page
3
4
5
6
7
8
9
10-25
These reviewed interim condensed consolidated financial statements have been independently reviewed in compliance with the applicable requirements of the Companies Act, 71 of 2008.
Preparer
F. Hassim CA (SA) Group Reporting Accountant
Published
16 November 2015
2
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Directors' Responsibilities and Approval
The directors are required in terms of the Companies Act, 71 of 2008 to maintain adequate accounting records and are responsible for the content and integrity of the reviewed interim condensed consolidated financial statements and related financial information included in this report. It is their responsibility to ensure that the reviewed interim condensed consolidated financial statements fairly present the slate of affairs of the group as at the end of the financial 6 months and the results of its operations and cash flows for the 6 months then ended , in conformity with lAS 34 Interim Financial Reporting .
The reviewed interim condensed consolidated financial statements are prepared in accordance with lAS 34 Interim Financial Reporting and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgements and estimates.
The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the group and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the board sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the group and all employees are required to maintain the highest ethical standards in ensuring the group's business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the group is on identifying, assessing, managing and monitoring all known forms of risk across the group. While operating risk cannot be fully eliminated, the group endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.
The directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the reviewed interim condensed consolidated financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatement or loss.
The directors have reviewed the group's cash flow forecast for the 6 months to 28 February 2016 and , in light of this review and the current financial position, they are satisfied that the group has or had access to adequate resources to continue in operational existence for the foreseeable future.
The independent reviewer is responsible for independently reviewing and reporting on the group's reviewed interim condensed consolidated financial statements. The reviewed interim condensed consolidated financial statements have been examined by the group's independent reviewer and their report is presented on page 4. ..--
The reviewed interim condensed consolidated financial statements set o going concern basis, were approved by the board on 16 November 201
on pages 5 to 25, which have been prepared on the were signed on their behalf by:
I.J . Calisto (Executive} J.R. Edmeston (Executive}
Rosebank
16 November 2015
3
Grant Thornton
Independent Reviewer's Report To the shareholders of
Cartrack Holdings Limited
Report on the interim condensed consolidated financial statements for the period ended 31 August 2015 We have reviewed the interim condensed consolidated financial statements of Cartrack Holdings Limited set out on pages 5 to 25, which comprise the statement of financial position as at 31 August 2015, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the period then ended, and the notes, comprising a summary of significant accounting policies and other explanatory information.
Directors ' responsibility for the condensed consolidated financial statements The company's directors are responsible for the preparation of these condensed consolidated financial statements in accordance with the basis of accounting described in note 1 and the requirements of the Companies Act of South Africa, and for such internal control as the directors detennine is necessary to enable the preparation of the condensed consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial information Performed by the Independent Auditor. A Review of Interim financial information consists primarily of making inquiries of management and others within the entity involved in financial and accounting matters, applying analytical and other review procedures.
The procedures performed in a review engagement are substantially less that those performed in an audit conducted in accordance with International Standards on Auditing. Accordingly, we do not express an audit opinion on these interim condensed financial statements.
Conclusion Based on our review, nothing has come to our attention that causes us to believe that the interim condensed financial statements of Cartrack Holdings Limited are not prepared in all material respects in accordance with the basis described in note 1 to the interim condensed financial statements and the requirements of the Companies Act of South Africa.
GRANT THORNTON JOHANNESBURG PARTNERSHIP Chartered Accountants (SA) Registered Auditors
MZ Sadek Partner Chartered Accountant (SA) Registered Auditor
16 November 2015
@Grant Thornton Wanderers Office Park 52 Corlett Drive lllovo, 2196
Audit · Tu · Advloory
4
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Reviewed Consolidated Interim Statement of Financial Position as at 31 August 2015
Reviewed Audited Restated 31 August 28 February 31 August
Figures in Rand thousand Note(s) 2015 2015 2014
Assets
Non-Current Assets Property, plant and equipment 3 176,869 150,530 126,844
Goodwill 4 146,085 144,269 142,162 Deferred tax 11 ,728 8,910 6,330
334,682 303,709 275,336
Current Assets Inventories 91 ,932 62,532 52,106 Loans to related parties 8 5,346 5,263 2,810 Trade and other receivables 79,843 68,177 49,077 Current tax receivable 4,847 449 1,110 Cash and cash equivalents 67,044 110,047 57,279
249,012 246,468 162,382
Total Assets 583,694 550,177 437,718
Equity and Liabilities
Equity
Equity Attributable to Equity Holders of Parent Share capital 42,488 42,488 42,488 Reserves 37,451 32,317 22,481 Retained income 319,152 300,415 200,421
399,091 375,220 265,390 Non-controlling interest 31 ,255 24,082 32,367
430,346 399,302 297,757
Liabilities
Non-Current Liabilities Finance lease obligation 6,392 5,618 4,043 Deferred tax 908 236 55
7,300 5,854 4,098
Current Liabilities Trade and other payables 106,543 101 ,133 80,669 Loans from related parties 8 1 '113 1,235 1,587 Finance lease obligation 5,988 6,218 5,667 Current tax payable 31,853 36,321 38,254 Dividend payable 9,619 Bank overdraft 551 114 67
146,048 145,021 135,863
Total Liabilities 153,348 150,875 139,961
Total Equity and Liabilities 583,694 550,177 437,718
5
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Reviewed Consolidated Interim Statement of Profit or loss and Other Comprehensive Income
Reviewed Audited Restated 6 months 12 months 6 months
ended ended ended 31 August 28 February 31 August
Figures in Rand thousand Note(s) 2015 2015 2014
Revenue 5 469,728 843,701 397 ,647 Cost of sales (83,888) (185,536) (72,492)
Gross profit 385,840 658,165 325,155 Other income 5,942 6,852 3,737 Operating expenses (230,211) (366,539) (184,205)
Operating profit 161,571 298,478 144,687
Foreign exchange gains 2,328 433 10 Investment revenue 4,638 4,533 681 Finance costs (3,963) (924) (516)
Profit before taxation 164,574 302,520 144,862 Taxation 6 (46,757) (88,442) (40,714)
Profit for the period 117,817 214,078 104,148
Other comprehensive income:
Items that may be reclassified to profit or loss: Exchange differences on translating foreign operations 3,913 (7,292) 3,637
Other comprehensive income for the period net of taxation 3,913 (7,292) 3,637
Total comprehensive income for the period 121 ,730 206,786 107,785
Profit attributable to: Owners of the parent 108,737 195,244 96,935 Non-controlling interest 9,080 18,834 7,213
117,817 214,078 104,148
Total comprehensive income attributable to: Owners of the parent 113,871 190,490 97,998 Non-controlling interest 7,859 16,296 9,787
121 ,730 206,786 107,785
Earnings per share
Per share information Basic earnings per share (c) 9 0.36 0.65 0.32 Headline earnings per share (c) 10 0.37 0.65 0.32
6
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Reviewed Consolidated Interim Statement of Changes in Equity Share capital Share premium Total share Foreign Retained Total Non-controlling Total equity
capita l currency income attributable to interest translation equity holders
reserve of the group I Figures in Rand thousand company
Opening balance as previously reported - 42,488 42,488 22,481 155,523 220,492 32,367 252,859 Change in accounting policy - - - - 44,898 44,898 - 44,898
Balance at 01 September 2014 - 42,488 42,488 22,481 200,421 265,390 32,367 297,757
Profit 1 September 2014 to 28 February 2015 - - - - 99,994 99,994 11,450 111 ,444 Other comprehensive income 1 September 2014 to 28 - - - (6,181) - (6, 181) (4, 748) (1 0 ,929) February 2015
Total comprehensive income for the period - - - (6,181 ) 99,994 93,813 6,702 100,515
Foreign currency translation movements within equity - - - 16,017 - 16,017 (1 6,017) Acquisition of subsidiaries with NCI portion - - - - - 1,837 1,837 Share Issue* 42,488 (42,488) Buyback and cancellation of shares (510,000) - (510,000) - - (510,000) - (510,000) Issue of new shares 510,000 - 510,000 - - 510,000 - 510,000 Dividends - - - - - - (807) (807)
Total contributions by and d istributions to owners of 42,488 (42,488) - 16,017 - 16,017 (1 4,987) 1,030 company recognised directly in equity
Balance at 01 March 2015 42,488 - 42,488 32,317 300,415 375,220 24,082 399,302
Profit 1 March 2015 to 31 August 2015 - - - - 108,737 108,737 9,080 117,817 Other comprehensive income 1 March 2015 to 31 August - - - 5,134 - 5,134 (1 ,221) 3,913 2015
Total comprehensive income for the period - - - 5,134 108,737 113,871 7,859 121,730
Dividends - - - - (90,000) (90,000) (686) (90,686)
Total contributions by and distributions to owners of - - - - (90,000) (90,000) (686) (90,686) company recognised directly in equity
Balance at 31 August 2015 42,488 - 42,488 37,451 319,1 52 399,091 31,255 430,346
• R300 not displaying due to rounding.
7
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Reviewed Consolidated Interim Statement of Cash Flows Reviewed Audited Restated 6 months 12 months 6 months
ended ended ended 31 August 28 February 31 August
Figures in Rand thousand Note(s) 2015 2015 2014
Cash flows f rom operating activities
Cash generated from operations 7 171,929 343,832 163,165 Interest income 4,638 4,533 681 Finance costs (3,288) (360) (267) Tax paid (57,949) (81 ,491 ) (31 ,595)
Net cash from operating activities 115,330 266,514 131,984
Cash flows from investing activities
Purchase of property, plant and equipment (71 ,162) (119,698) (59,356) Sale of property, plant and equipment 507 4,651 1,843 Acquisition of subsidiaries. net of cash acquired (15) (53,428) (39,119)
Net cash from investing activities (70,670) (168,475) (96,632)
Cash flows from financing activities
Proceeds on share issue .. Increase/ (decrease) in loans from related parties (122) 498 856 (Increase)/ decrease in loans to related parties (83) 29,778 32,223 Finance lease (payments)/ receipts 1,217 3,576 1,888 Dividends paid (90,686) (58,832) (48,405) Acquisitions resu lting in increase in control of subsidiaries (5,000) (5,000) Buyback of company's own shares* (510,000) Proceeds of share issue* 510,000
Net cash from financing activities (89,674) (29,980) (18,438)
Total cash movement for the period (45,014) 68,059 16,914 Cash at the beginning of the period 109,933 41 ,656 41 ,656 Effect of exchange rate movement on cash balances 1,574 218 (1,358)
Total cash at end of the period 66,493 109,933 57,212
*This is additional disclosure not disclosed at year end, however the impact is nil .The amounts relate to the proceeds from the private placement used to settle the purchase price, in terms of the buyback agreement.
**R300 not displaying due to rounding.
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Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Accounting Policies
1. Presentation of reviewed interim condensed consolidated financial statements
The interim consolidated financial statements are prepared in accordance w ith the requirements of the JSE Limited Listings Requirements for interim reports, and the requirements of the Companies Act applicable to interim financial statements. The Listings Requirements requi re interim reports to be prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (I FRS) and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Counci l and to also, as a minimum, contain the information required by lAS 34 Interim Financial Reporting. The accounting policies applied in the preparation of the consolidated financial statements from which the condensed financial statements were derived are in terms of International Financial Reporting Standards and are consistent with those accounting policies applied in the preparation of the previous consolidated annual financial statements, apart from the improvements made to the accounting standards and interpretations.
This is the first interim report being prepared and the effect of the change in accounting policy,made in the year ended 28 February 2015, is reflected in note 2 for the comparative period ended 31 August 2014.
9
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Notes to the Reviewed Interim Condensed Consolidated Financial Statements
2. Changes in accounting policy
The reviewed interim condensed consolidated financial statements have been prepared in accordance with lAS 34 Interim Financial Reporting on a basis consistent with the annual financial statements for the year ended 28 February 2015.
For the year ended 28 February 2015, the group changed its accounting policy with respect to the treatment of capital rental units. The capital rental units meet the definition of property, plant and equipment in terms of lAS 16, and thus have been reclassified to property, plant and equipment as capital rental units. These were previously accounted for as a prepayment asset. Acquisition costs which are directly related to vehicle tracking contracts are now being capitalised to the capital rental units and depreciated over the period of the contracts. The typical duration of a rental contract is 36 months. These costs were previously expensed when incurred. This policy was adopted as management believes the policy will more closely match acquisition costs to revenue generation.
The aggregate effect of the changes in accounting policy on the interim condensed consolidated financial statements for the 6 months ended August 2014 was as follows:
Consolidated Statement of Financial Position
Property, plant and equipment Previously stated Adjustment
Net Deferred tax (liability)/asset Previously stated Adjustment
Retained earnings Previously stated Adjustment
Net Income tax asset (liability) Previously stated Adjustment
Trade and other receivables* Prepayment previously stated Adjustment
Subtotal Reclassification (Note 14) Trade debtors previously stated
10
Restated 31 August
2014 R'OOO
36,780 90,064
126,844
(3,616) 9,891
6,275
(155,523) (44,898)
(200,421 )
(14,876) (22,268)
(37,144)
43,642 (32,789)
10,853 (9,507) 47,731
49,077
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Figures in Rand thousand
2. Changes in accounting policy (continued)
Profit or Loss
Cost of sales* Previously stated Adjustment
Subtotal Reclassification (Note 14)
Operating expenses* Previously stated Adjustment
Subtotal Reclassification (Note 14)
Tax Previously stated Adjustment
Earnings per share (cents) Previously stated Adjustment
• To be read in conjunction with Note 14.
11
Restated 31 August
2014
73,778 (5,251)
68,527 3,965
72,492
199,880 (11 ,710)
188,170 (3,965)
184,205
35,964 4,750
40,71 4
0.28 0.04
0.32
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Notes to the Reviewed Interim Condensed Consolidated Financial Statements Figures in Rand thousand
3. Property, plant and equipment
Reviewed Audited 31 August 2015 28 February 2015
Cost Accumulated Carrying value Cost Accumulated Carrying value depreciation depreciation
Buildings 4,878 (458) 4,420 4,961 (212) 4,749 Plant and equipment 1,988 (1,131) 857 1,391 (1.004) 387 Furniture and fixtures 7,959 (3,405) 4,554 5,059 (1,751) 3,308 Motor vehicles 44,323 (23,845) 20,478 40,866 (20,988) 19,878 Office equipment 3,291 (2,772) 519 3,294 (1 ,907) 1,387 IT equipment 15,197 (10,649) 4,548 14,220 (9,206) 5,014 Computer software 1,023 (566) 457 814 (406) 408 Leasehold improvements 4,642 (4,637) 5 722 (666) 56 Capital rental units 235,121 (94,214) 140,907 174,570 (59,403) 115,167 Security equipment 464 (340) 124 459 (283) 176
Total 318,886 (142,017) 176,869 246,356 (95,826) 150,530
12
Restated 31 August 201 4
Cost Accumulated Carrying value depreciati on
4,624 (128) 4,496 3,991 (3,877) 114 4,831 (1 ,936) 2,895
37 ,484 (19,134) 18,350 7,626 (5,248) 2,378
12,775 (8,945) 3,830 755 (304) 451 722 (605) 117
132,191 (38,037) 94,154 306 (247) 59
205,305 (78,461 ) 126,844
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Notes to the Reviewed Interim Condensed Consolidated Financial Statements Figures in Rand thousand
Reconciliation of property, plant and equipment- 31 August 2015
Opening Additions Additions Disposals balance through
business combinations
Buildings 4,749 - - -Plant and equipment 388 382 75 -Furniture and fixtures 3,307 446 153 -Motor vehicles 19,879 3,760 - (225) Office equipment 1,387 129 - -IT equipment 5,014 1,456 10 (16) Computer software 409 130 30 -Leasehold improvements 57 - -Capital rental units 115,164 64,848 - -Security equipment 176 11 - -
150,530 71 ,162 268 (241)
13
Translation Depreciation Total adjustments
(283) (46) 4,420 65 (53) 857
1,094 (446) 4,554 (53) (2,883) 20,478
(846) (151) 519 (276) (1,640) 4,548
6 (118) 457 - (52) 5
1,831 (40,936) 140,907 - (63) 124
1,538 (46,388) 176,869
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Notes to the Reviewed Interim Condensed Consolidated Financial Statements Figures in Rand thousand
Reconciliation of property, plant and equipment- 28 February 2015
Opening Additions Additions Disposals Transfers and Translation balance through reclassifications adjustments
business combinations
Buildings 5,044 - - - - (105) Plant and equipment 156 64 8 - 125 87 Furniture and fixtures 2,125 1,820 518 (223) - (175) Motor vehicles 15,996 9,676 426 (2,310) - 1,822 Office equipment 2,114 1,766 47 (1,251) - (591) IT equipment 2,406 2,857 1,665 (130) - 843 Computer software 291 145 201 - - (28) Leasehold improvements 181 - - (125) -Capital rental units 73,181 100,354 - - 2,926 -Security equipment 69 153 - - - -Other fixed assets 2,926 - - - (2,926)
104,489 116,835 2,865 (3,914) - 1,853
14
Depreciation Total
(190) 4,749 (53) 387
(757) 3,308 (5,732) 19,878
(698) 1,387 (2,627) 5,014
(201) 408 - 56
(61 ,294) 115,167 (46) 176
(71,598) 150,530
Cartrack Holdings Limited (Registration number 20051036316106) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Notes to the Reviewed Interim Condensed Consolidated Financial Statements Figures in Rand thousand
Reconciliation of property, plant and equipment- 31 August 2014
Opening Additions Disposals Transfers and balance reclassifications
Buildings Plant and equipment Furniture and fixtures Motor vehicles Office equipment IT equipment Computer software Leasehold improvements Capital rental units Security equipment Other fixed assets
Assets subject to finance lease (net carrying amount)
The carrying value of assets subject to finance lease agreement are as follows:
Figures in Rand thousand
Motor vehicles
5,044 135
2,125 15,996 2,114 2,427
290 182
73,181 69
2,926
104,489
Reviewed 31 August
2015
157 1
1,376 5,519
622 2,695
228 -
46,174 -
2,584
59,356
Audited 28 February
2015
16,571 11 ,968
(559) -
(222) (309)
(12) (315)
-----
(1 ,417)
Restated 31 August
2014
7 ,346
A register containing the information required by Regulation 25(3) of the Companies Regulations, 2011 is available for inspection at the registered office of the company.
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--------
4,048 -
(4,048)
-
Foreign Depreciation Total exchange
movements (95) (51) 4,496
(2) (20) 114 (12) (372) 2,895
(9) (2,847) 18,350 60 (406) 2,378 (9) (968) 3,830
(67) 451 (65) 117
(29,249) 94,154 (10) 59
(168) (1 ,294)
(235) (35,349) 126,844
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Notes to the Reviewed Interim Condensed Consolidated Financial Statements Figures in Rand thousand
4. Goodwill
South Africa Africa - Europe Asia & Other Middle
East Balance 1 March 2014 1,499 95,100 2,834 Additions 382 37,400 471 Translation adjustments 4,966 (867) 377
31 August 2014 1,499 100,448 36,533 3,682 Addition 7,641 Translation adjustments (1 '1 92) (2,524) (1 ,818)
28 February 2015 1,499 99,256 41 ,650 1,864 Addition 157 Translation adjustments (4,322) 5,783 198
31 August 2015 1,656 94,934 47,433 2,062
Refer to note 12 for new acquisitions.
16
Total
99,433 38,253 4,476
142,162 7,641
(5,534)
144,269 157
1,659
146,085
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Notes to the Reviewed Interim Condensed Consolidated Financial Statements Figures in Rand thousand
5. Revenue
Sale of hardware Subscription revenue Sundry sales
6. Taxation
Major components of the tax expense
Current Local income tax - current period
Deferred Deferred tax
Reconciliation of the tax expense
Reconciliation between accounting profit and tax expense.
Accounting profit
Tax at the applicable tax rate of 28% (2015: 28%)
Tax effect of adjustments on taxable income Unrecognised deferred asset on tax losses Foreign tax differential Non-taxable income Non-deductible expenses
Reviewed 31 August
2015
69,313 394,177
6,238
469,728
49,083
(2,326)
46,757
164,574
46,081
1 ' 103 (2,579) 2,152
46,757
Audited 28 February
2015
130,685 711,173
1,843
843,701
90,573
(2,131)
88,442
302,520
84,706
3,160 2,357
(3,223) 1,442
88,442
Restated 31 August
2014
61,593 335,185
869
397,647
41 ,943
(1 ,229)
40,714
144,862
40,562
(1 ,737) 1,889
40,714
The income tax rate for the subsidiaries in South Africa is 28% and the foreign owned subsidiaries are taxed at the tax rate applicable in thei r countries.
7. Cash generated from operations
Profit before taxation 164,574 302,520 144,862 Adjustments for: Depreciation 46,388 71,598 35,349 ProfiU (Loss) on disposal of property, plant and equipment (266) (738) (426) ProfiU (Loss) on foreign exchange (2,328) (433) (10) Interest received - investment (4,638) (4,533) (681) Finance costs 3,963 924 516 Changes in working capital: Increase in inventories (29,400) (29,792) (19,366) Increase in trade and other receivables (1 1,666) (23,097) (3,997) Increase in trade and other payables 5,302 27,383 6,918
171,929 343,832 163,165
17
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Notes to the Reviewed Interim Condensed Consolidated Financial Statements
8. Related parties
Relationships Ultimate holding company Holding company Related Parties
Subsidiary companies
Related by virtue of control
Members of key management
18
Madeira Calisto Family Holdings (Pty) Ltd Onecell Holdings (Pty) Ltd
Onecell Community Phones (Pty) Ltd Onecell Community Services (Pty) Ltd Onecell Data Solutions (Pty) Ltd Onecell Namibia (Pty) Ltd Purple Rain Properties No. 444 (Pty) Ltd Onecell (Pty) Ltd Cartrack Education Fund (NPO) A.H.Nyimbo (shareholder) J.Marais (shareholder) P.Lim (shareholder) S.M.Machel Jr. (shareholder)
Cartrack (Pty) Ltd Retriever Ltd Cartrack Tanzania Ltd Retriever Rwanda Ltd Cartrack Engineering Technologies Ltd Cartrack Namibia (Pty) Ltd Cartrack Technologies (Pty) Ltd Cartrack Technologies Asia Pte. Ltd Cartrack Management Services (Pty) Ltd Cartrack Manufacturing (Pty) Ltd Cartrack North East (Pty) Ltd Cartrack Limitada Cartrack Polska.SP.ZO.O. Cartrack Fleet Management (Pty) Ltd Labohlano (Pty) Ltd Plexique (Pty) Ltd Combined Telematics Services (Pty) Ltd Cartrack Investments UK Ltd Cartrack Malaysia SON. BHD. Cartrack Technologies PHL. INC Cartrack Technologies South East Asia Pte. Ltd Cartrack Technologies (China) Ltd Cartrack Europe SGPS, S.A Cartrack Capital SGPS, S.A Cartrack Espana, S.L. Cartrack - Sistema de Controlo e ldentificacao de Veiculos, S.A PT. Cartrack Technologies Indonesia Cartrack Technologies (Thailand) Company Ltd Cartrack Technologies LLC
Pro-Fit Fitment Centre (Pty) Ltd
I.J. Calista J.R. Edmeston J. Marais C. Sanderson R.Schubert
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Notes to the Reviewed Interim Condensed Consolidated Financial Statements Figures in Rand thousand
8. Related parties (continued)
Related party balances
Loan accounts -Owing (to) by related parties A.H.Nyimbo Cartrack Education Fund J.Marais Onecell Community Services (Pty) Ltd Onecell Holdings (Pty) Ltd Onecell Manufacturing (Pty) Ltd * P.Lim Pro-Fit Fitment Centre (Pty) Ltd S.M.Machel Jr.
Current Assets Current Liabilities
Amounts included in Trade receivable (Trade Payable) regarding related parties Onecell Holdings (Pty) Ltd Onecell (Pty) Ltd Onecell Manufacturing (Pty) Ltd* Onecell Data Solutions (Pty) Ltd Bonito Recruitment Services (Pty) Ltd** Pro-Fit Fitment Centre (Pty) Ltd Onecell Holdings (Pty) Ltd Pro-Fit Fitment Centre (Pty) Ltd Onecell (Pty) Ltd Onecell Manufacturing (Pty) Ltd* Onecell Community Phones (Pty) Ltd Onecell Data Solutions (Pty) Ltd Bonito Recruitment Services (Pty) ltd** Onecell Community Services (Pty) Ltd Purple Rain Properties No. 444 (Pty) Ltd
Related party transactions
Sales to related parties Onecell Holdings (Pty) Ltd Cartrack Technologies (Pty) Ltd Onecell (Pty) Ltd Onecell Manufacturing (Pty) Ltd* Onecell Data Solutions (Pty) Ltd Pro-Fit Fitment Centre (Pty) Ltd Purple Rain Properties No. 444 (Pty) Ltd
Purchases from related parties Onecell Holdings (Pty) Ltd Cartrack Technologies (Pty) Ltd Onecell (Pty) Ltd
19
Reviewed Audited 31 August 28 February
2015 2015
(1 '113) 1,657
2,066
1,623
4,233
5,346 (1,113)
4,233
2,600
1 '101 (1,556)
(296) (32)
(187) (137)
1,493
(17)
(9,549)
(1,138)
606
170
(960) 1,573
2,066 (29)
(245) 1,623
4,028
5,263 (1 ,235)
4,028
852 1,692
386
(4,731)
(35) (14, 179)
(389) (263)
(3)
(16,670)
(350) (4,373)
(10,081 ) (7,325)
(461 )
6,702 4,373
467
Restated 31 August
2014
(889) 74 52
2,066
2 (698) 476 140
1,223
2,810 (1 ,587)
1,223
35 764 673 48
2
(422)
(2) (6,862)
(274)
(6,038)
(82)
(3,433) (3,493)
(121) (1 81 ) (288)
324
181
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated F1nanc1al Statements for the 6 months ended 31 August 2015
Notes to the Reviewed Interim Condensed Consolidated Financial Statements Figures in Rand thousand
8. Related parties (continued) Onecell Manufacturing (Pty) Ltd* Onecell Community Phones (Pty) Ltd Bonito Recruitment Services (Pty) Ltd** Onecell Data Solutions (Pty) Ltd Onecell Community Services (Pty) Ltd Pro-Fit Fitment Centre (Pty) Ltd
Rent paid to (received from) related parties Purple Rain Properties No. 444 (Pty) Ltd
Administration fees paid to (received from) related parties Onecell Holdings (Pty) Ltd
Reviewed 31 August
2015
872 1,473
2,130
Audited 28 February
2015
109,219
26 231
1,372 1,617
3,819
1,890
Restated 31 August
2014
45,825 606
23
1,317
1,890
* Cartrack Manufacturing (Pty) Ltd (previously Onecell Manufacturing {Pty) Ltd) was acquired by the group on 1 March 2015.
•• Cartrack Management Services {Pty) Ltd (previously Bonito Recruitment Services (Pty) Ltd) was acquired by the group on 1 March 2015.
20
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Notes to the Reviewed Interim Condensed Consolidated Financial Statements Figures in Rand thousand Reviewed Audited
31 August 28 February 2015 2015
9. Basic earnings per share
Continuing earnings per share (cents) 0 .36 0.65
Restated 31 August
2014
0.32
The calculation of basic earnings per ordinary share is based on the profits attributable to equity holders of the parent and a weighted average number of shares in issue as per the table below.
The shares in issue on 1 March 2014 were 142 ordinary par value shares. In preparation for the listing in December 2014 , these 142 par value shares were converted to 142 no par value shares and an additional299,999,858 shares were issued to Onecell Holdings Proprietary Limited for R300 to take the total issued shares to 300,000,000 ordinary shares of no par value. For purposes of determining the weighted average number of shares in issue, this share conversion and subsequent share issue have been treated as a share 'split'. Consequently, the weighted average shares in issue for each of the comparative periods have been determined to be 300,000,000 shares. This provides the user with more comparable and relevant information.
Weighted average number of ordinary shares ('000)
Profit attributable to ordinary shareholders Profit for the year attributable to the equity holders of parent
10. Headline earnings per share
Headline earnings per share (cents)
300,000
108,737
0.37
300,000 300,000
195,244 96,935
0.65 0. 32
The calculation of headline earnings per share has been based on the following profit attributable to ordinary shareholders and the weighted average number of shares in issue as determined above in note 9.
Weighted average number of ordinary shares ('000)
Reconciliation between basic earnings (loss) and headline earnings (loss) Basic earnings Adjusted fo r : Reversal of bargain purchase Gain on disposal of assets net of tax
21
300,000
108,737
3,278 (266)
111 ,749
300,000
195,244
(738)
194,506
300,000
96,935
(426)
96,509
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Notes to the Reviewed Interim Condensed Consolidated Financial Statements Figures in Rand thousand
11. Segment reporting
The group is organised into geographical business units and has four reportable segments. The group monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment.
Segment Report • 31 August 2015
Revenue lntersegment elimination of revenue
Revenue before segment elimination
Profit before taxation includes the following items Investment revenue Finance costs Foreign exchange gains Depreciation
Total tangible assets Total liabilities Goodwill
Equity
Segment Report • 28 February 2015
Revenue lntersegment elimination of revenue
Revenue before segment elimination
Profit before taxation includes the following items Investment revenue Finance costs Foreign exchange gains Depreciation
Total tangible assets Total liabilities Goodwill
Equity
South Africa
356,243 98,507
454,750
125478 2,388 3,698
465 37,298
281,633 (106,929)
South Africa
627,175 34,974
662,149
236,986 1,617
693 35
58,816
277,562 (107,459)
22
Africa -Other
62,618
62,618
31,403 2,250
240 1,996 1,004
87,393 (19,358)
Africa -Other
124,280
124,280
56,777 2,916
210 307
1,917
77.606 (25,042)
Europe
39,147
39,147
13,240 .
11 (115)
7,466
45,181 (19,064)
Europe
80,422
80.422
15,835 . 8 8
10,389
36,605 (13,097)
Asia & Middle
East 11 ,720
11 ,720
(5,547) .
14 (18) 620
23,402 (7,997)
Asia & Middle East
11 ,824
11 ,824
. (7 078) .
13 83
476
14.135 (5,277)
Total
469,728 98,507
568,235
164,574 4,638 3,963 2,328
46,388
437,609 (153,348) 146,085
430,346
Total
843,701 34,974
878,675
302,520 4,533
924 433
71 ,598
405,908 (150,875) 144,269
399,302
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Notes to the Reviewed Interim Condensed Consolidated Financial Statements Figures in Rand thousand
11 . Segment reporting (continued)
Segment Report • 31 August 2014
Revenue lntersegment elimination of revenue
Revenue before segment elimination
Profit before taxation includes the following items Investment revenue Finance costs Foreign exchange gains Depreciation
Total tangible assets Total liabilities Goodwill
Equity
South Africa
302,757 15,924
318,681
124,639 680 307
(130) 26,459
164,615 (55,533)
23
Africa· Other
53,046
53,046
15,358 1
203 137 818
64,897 (44,581)
Europe
36,914
36,914
6,514
5 3
7,936
27,698 (18,091)
Asia& Middle
East 4,930
4 ,930
(1,649)
136
2,346 (21,756)
Total
397,647 15,924
413,571
144,862 681 516
10 35,349
259,556 (139,961) 142,162
297,757
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Notes to the Reviewed Interim Condensed Consolidated Financial Statements
12. Business combinations
Immaterial Business Combinations occurring during the period ended 31 August 2015
On 1 March 2015, the group acquired 100% of the shares in Cartrack Manufacturing (Pty) Ltd (previously Onecell Manufacturing (Pty) Ltd) from Onecell Holdings (Pty) Ltd for a cash consideration. The group acquired this company in order to manage and control the procurement and manufacture of its products.
On 1 March 2015, the group acquired 100% of the shares in Cartrack Management Services (Pty) Ltd (previously Bon1to Recruitment Services (Pty) Ltd) from Onecell Holdings (Pty) Ltd for a cash consideration. The group acquired this dormant company in order to account separately for group management services and related costs from within the group.
Immaterial Business combinations occurring during the year ended 28 February 2015
In May 2014, the group acquired 60% of the shares in Retriever Rwanda Ltd from AH Nyimbo for a cash consideration, to increase its footprint in Africa.
In August 2014, the group acquired 100% of the shares in Cartrack Technologies (Pty) Ltd (previously Onecell Technologies (Pty) Ltd from Onecell Holdings (Pty) Ltd) for a cash consideration. The group acquired this entity for the development of technologies in the industry.
Material Business Combinations occurring during the year ended 28 February 2015
In March 2014, the group acquired 100% of the shares in Cartrack- Sistema de Controlo e ldentificacoa de Veiculos S.A, Cartrack Espana S.L, Cartrack Europe SGPS, Cartrack Capital SGPS, and Cartrack Investments UK Ltd from JMV Matias for a consideration of R46,223, 160. The group acquired these entities to obtain a global footprint in Europe. The acquisition has been accounted for using the acquisition method. The goodwill recognised is primarily attributed to the expected synergies from combining the assets and activities of the European acquisitions with those of the group and to the economies of scale to be achieved through future growth.
Fair value of assets acquired and liabilities assumed
Figures in Rand thousand
Property, plant and equipment Loan receivable Investments in subsidiaries Inventories Trade and other receivables Borrowings Trade and other payables Tax liabilities Cash Outside shareholders Goodwill
Cash consideration paid Net cash outflow on acquisition Cash consideration paid Cash acquired
24
Audited 28 February
2015
1,645 59,636 12,635 3,016
20,625 (78,682) (16,260)
(1 ,072) 736
(1 ,097) 45,041
46,223
(46,223) 736
(45,487)
Cartrack Holdings Limited (Registration number 2005/036316/06) Reviewed Interim Condensed Consolidated Financial Statements for the 6 months ended 31 August 2015
Notes to the Reviewed Interim Condensed Consolidated Financial Statements
13. Commitments
Mercantile Bank Limited has provided a facility of R40 million to Cartrack Manufacturing (Pty) Ltd. Cartrack (Pty) Ltd has provided limited suretyship in favour of Mercantile Bank Limited.
14. Comparative figures
Certain comparative figures have been reclassified from operating expenses to cost of sales to provide an appropriate allocation of expenses that directly relate to cost of sales.
The effect of the reclassifications is as follows:
Figures in Rand thousand Reviewed 31 August
2015
Audited 28 February
2015
Restated 31 August
2014
Profit o r Loss Cost of sales Operating expenses
Certain comparative figures have been reclassified from other income to foreign exchange gains.
The effect of the reclassifications is as follows:
Profit and Loss Other income Foreign exchange gains
10,544 (10,544)
(433) 433
3,965 (3,965)
(10) 10
Certain comparative figures have been reclassified in the consolidated statement of financial position. Other receivables, other payables and finance lease obligations have been reclassified to be consistent with the February 2015 reporting format.
The effect of the reclassifications is as follows:
Statement of f inancial position Trade and other receivables mcluding prepayments Deferred Income Trade and other payables Finance lease obligation long term Finance lease obligation short term
Certain comparative figures have been restated due to a change in accounting policy. Refer to note 2 of the financial statements.
25
(9 ,507) 3,399 6 ,108 5,667
(5,667)