namibia r a n d s t s g rb k e i n l m a annual integrated ......capital 69,5% pesca fresca lda...

Bidvest Namibia Annual Integrated Report 2018

Annual Integrated Report 2018

Namibia

LEADIN

G BRANDS

LO

CAL M

ARKETS

voltex

Welcome to the Bidvest Namibia annual integrated report 2018Bidvest Namibia Limited is a publicly owned company listed on the Namibian Stock Exchange since 26 October 2009. This report covers the year under review 1 July 2017 to 30 June 2018 and includes material issues up to board approval on 19 August 2018. The report covers all operations. It provides a holistic but concise view of social, environmental and economic factors affecting the ability of the business to create value over the short, medium and long term.

The report is aimed at a wide range of stakeholders, including, inter alia, shareholders, suppliers, employees, government and providers of funding.

The integrated reporting approach and structure allows for comparability of financial and non-financial data. Any restatement of comparable information has been noted as such. Materiality was applied to information gathered during the data collection, as well as board and management interviews.

The following frameworks and reporting requirements were considered:

– Corporate Governance Code for Namibia (NamCode), based on Third Report of the King Commission on Corporate Governance in South Africa (King III);

– Namibia Companies Act, No 28 of 2004; – Namibian Stock Exchange Listings Requirements; and

– International Financial Reporting Standards.

Further information is available on our website www.bidvestnamibia.com.na

For access on your mobile to the Bidvest Namibia website, scan the QR code above.

Namibia

Bidvest Namibia is a group

of companies listed on the

Namibian Stock Exchange.

Our automotive, freight and logistics, services, trading and distribution divisions employ

2 879people, creating shareholder value we report on.

We believe in creating opportunities and growing

people. We understand that

people create wealth, and

that companies only report it.

Who we are

CONSOLIDATED AND SEPARATE FINANCIAL STATEM

ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Performance overview

Chairman’s statement 10 – 11Chief executive’s review 12 – 14Corporate governance report 15 – 16Risk committee report 17 – 18Audit committee report 19 – 20Remuneration committee report 21 – 24Sustainability report 25 – 27Operational reviews 28 – 41Chief financial officer’s review 42 – 43Value added statement 44 – 45Ten-year review 46 – 47Segmental report 48 – 49

Group overview

Our philosophy 02Corporate social investment 02 – 03Abridged group structure 04 – 05Operational highlights 06Timeline 07Directorate 08 – 09

Consolidated and separate financial statements

Statement of directors’ responsibilities and approval 51Declaration by company secretary 51Independent auditor’s report 52 – 54Directors’ report 55 – 60Accounting policies 61 – 69Statements of financial position 70

Statements of profit or loss and other comprehensive income 71Statements of changes in equity 72 – 73Statements of cash flows 74Notes to the financial statements 75 – 114Shareholders’ diary 115Administration 116

What’s inside

We have a diverse portfolio

of businesses ranging from

automotive, freight and logistics, services, trading and distribution,

which comprises well

recognised brands within the Namibian market.

Our focus areas for our people are employment equity, industrial relations, employee health

and safety, developing

Namibians and attracting

and retaining skilled

Namibians.

In a big business environment we run our

company with determination

and commitment evident in a small business heart.

Bidvest Namibia Annual Integrated Report 2018 01

Bidvest Namibia Annual Integrated Report 2018 >> GROUP OVERVIEW02

Our philosophy in action CSI highlights

Bidvest Namibia contributed N$50 000 to Standard Bank’s Buy-a-Brick initiative, which raised N$3,7 million to be handed over to the Shack Dwellers Federation of Namibia (SDFN) whose aim is to build affordable housing for low-income earners. Bidvest Namibia has committed to partner with the initiative for the next five years, which will amount to a contribution of N$250 000. Namibia is currently facing a housing backlog of 100 000 and this number is growing by 3 700 every year.

Bidvest Namibia contributes N$10 000 annually for the Okakarara Town Council’s stationery needs for its Trade Fair.

NAMSOV Fishing Enterprises donated N$2,5 million to the poverty eradication ministry’s food bank.

For the past two years Bidvest Namibia has assisted and donated towards the NUST Faculty of Management Sciences Awards Ceremony. The best three students of the year receive cash prizes worth some N$2 500 each, and the Group also sponsors the trophies.

Bidvest IT donated 200 apples, bought from the Bank Windhoek Apple Cancer Project, to the SOS Children’s Village.

Penguin rescue – Manica assisted with the relocation of a stranded African Penguin. The penguin, named Daisy was found stranded near Swakopmund in a bad state. She was undernourished and covered in oil. After rehabilitation the penguin needed to be taken back to the nearest penguin colony in Lüderitz. With a planned visit to Lüderitz by one of Manica’s managers, Daisy was added to the passenger flight list. She was released safely in Guano Bay at the point closest to Halifax Island.

Transparency

Innovation

Integrity

Accountability

Excellence

Our philosophy we subscribe to in all

business dealings:


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

CSI highlights CSI highlights

Waltons Namibia participated in the NOAH Casual Day event that it sponsors every year. It distributes the wristbands and sponsors N$5 000 for the best dressed school.

The Automotive division sponsored Namibian Olympic athlete, Michelle Vorster, with clothing and a support vehicle for her team and one other mountain biking team. It also co-sponsored the 2017 Namibian Businesswoman of the Year Award, the Uis Land Rover festival and the Eagles Angling Club league event. It again provided a Ford Ranger 4x4 in support of Namibia’s effort to curb rhino poaching in the country and made another vehicle available to the Lady Pohamba Hospital to enable rapid response to accidents and other emergencies. Various initiatives were undertaken by the various dealerships, in partnership with the Red Cross, to collect and distribute clothing and food to the needy.

For 2017 to 2018 the Pandula Trust spent N$151 999. – 50 households in need were selected and

surprised with N$1 000 grocery vouchers for Christmas.

– Staff members were invited to a special performance by the Mascato Youth Choir and Pandula members nominated a household to support during Christmas (as per the 50 households donation above). A further N$60 000 was granted to the Mascato Youth Choir to assist with the choir members’ training, and overseas travel costs.

– Educational assistance of N$17 894 for stationery supplies and school clothes was provided to pre-primary schools and community members (including Kleuterkapperjollie, Wallies, Pebble Foundation and the Promiseland School project).

The Freight and Logistics division funds one full-time teacher at the Walvis Bay Sunshine Centre – a haven for children with special needs and their mothers – and has been involved in several other ad hoc projects during the year. Manica also devotes 1,5% of after-tax profit to CSI initiatives.

SPCA support – Manica donated N$1 000 monthly up to December 2017 to assist with food, the vet bill and kennel project at the Walvis Bay SPCA.

WFS launched a Cycling Challenge to raise funds and to promote wellness in the Group. The challenge raised about N$1 000 to purchase blankets for the SPCA. Manica also matched the funds raised and donated a further N$1 000 towards food for the animals.

Milk for babies – Manica continues to provide formula milk on a monthly basis to the state hospital to distribute to destitute mothers and their babies. (N$48 000).Manica and BIT staff members manning the traffic intersection during the Round Table Winter Knights Drive at the Walvis Bay Private High School. As usual, the Teletubbies joined in to soften the hearts of the motorists and hand out lollipops. Motorists, including many taxi drivers, were quite generous, often giving notes instead of loose change. Manica donated N$3 000 and generated more than N$6 000 in cash from passing motorists, and N$5 000 worth of blankets.



Bidvest Namibia Limited abridged Group structure

FISHINGDIVISION

INDUSTRIA ALIMENTAR CARNES DE MOZAMBIQUE

LIMITADA27,8%

COMET INVESTMENTS CAPITAL69,5%

PESCA FRESCA LDA32,6%

SHELFCO INVESTMENTSONE SEVEN ZERO

100%

AUTOMOTIVEDIVISION

BIDVEST NAMIBIA AUTOMOTIVE

(trading as Novel Motor Company) 100%

DIROYAL MOTORS

100%

CARHEIMINVESTMENTS

100%

FINANCIAL SERVICESDIVISION

NAMIBIA BUREAU DE CHANGE

49%

BIDVEST NAMIBIAAUTOMOTIVE

OTJIWARONGO 100%

GLENRYCK SOUTH AFRICA

51%

BIDVEST NAMIBIA INFORMATIONTECHNOLOGY

100%


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

BIDVEST NAMIBIA LIMITED

FREIGHT AND LOGISTICS, MATERIAL HANDLING

AND MARINE SERVICES DIVISION

MANICAGROUP NAMIBIA

100%

LUBRICATIONSPECIALISTS

100%

LÜDERITZ BAY SHIPPING& FORWARDING

100%

MANICA TRADING100%

MONJASANAMIBIA

57%

ORCA MARINE SERVICES

60%

WALVIS BAY AIRPORTSERVICES

100%

WALVIS BAY STEVEDORING COMPANY

55%

WOKER FREIGHT SERVICES

100%

FOOD AND DISTRIBUTION

DIVISION

TAEUBER & CORSSEN(SWA)100%

CATERPLUS NAMIBIA100%

MATADORENTERPRISES

100%

T&CTRADING

100%

COMMERCIAL AND INDUSTRIAL SERVICES

AND PRODUCTS DIVISION

BIDVEST NAMIBIA COMMERCIAL AND

INDUSTRIAL SERVICES AND PRODUCTS 100%

BIDVEST NAMIBIA STEINER

(division of Bidcom)

CECIL NURSE NAMIBIA(trading as CN Business

Furniture) 100%

BIDVEST PRESTIGE CLEANING

100%

KOLOK NAMIBIA100%

PROPERTYDIVISION

ELZETDEVELOPMENT

100%

T&C PROPERTIESNAMIBIA

100%

LENKOW100%

BIDVEST NAMIBIAINDUSTRIAL PROPERTIES

100%

BIDVEST NAMIBIAUNITED PROPERTIES

100%

MINOLCO (NAMIBIA)(trading as Konica Minolta)

100%

BIDVEST NAMIBIA PLUMBLINK

100%

RENNIES TRAVEL (NAMIBIA)

100%

VOLTEX (NAMIBIA) 100%

WALTONS NAMIBIA100%

BIDVEST NAMIBIA COMMERCIAL

HOLDINGS (BIDCOM)100%

BIDVEST NAMIBIAMANAGEMENT SERVICES

100%

BIDVEST NAMIBIAPROPERTY HOLDINGS

100%



Operational highlights from continuing operations

Revenue – decline to N$2 710,6 million

Revenue (N$’million)

1 2 3 4 5 6

2018 continuing

1

2017restated

continuing2

2017

3

2016

4

2015

5

2014

6

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

4 500

2 710,62 873,5

3 776,4 3 858,63 534,8

3 703,5

Trading profit – decline to N$28,5 million

Trading pro�t (N$’million)

2018 continuing

1

2017restated

continuing2

2017

3

2016

4

2015

5

2014

6

0

100

200

300

400

500

600

28,553,1

92,5

294,9

409,7

501,3

1 2 3 4 5 6

Headline earnings per share – decline to (10,0 cents)

(cents)Headline earnings per share

1 2 3 4 5 6

2018 continuing

1

2017restated

continuing2

2017

3

2016

4

2015

5

2014

6

(20,0)

0,0

20,0

40,0

60,0

80,0

100,0

120,0

140,0

(10,0) 3,8

22,4

86,2

103,2

116,0

Total assets– decline to N$2 692,6 million

(N$’million)Total assets

1 2 3 4 5 6

2018 continuing

1

2017restated

continuing2

2017

3

2016

4

2015

5

2014

6

2 400

2 500

2 600

2 700

2 800

2 900

3 000

3 100

3 200

2 692,6

3 086,9 3 086,9

3 160,0

3 024,6

2 764,5

Net tangible asset value per share – decline to 703 cents

(cents)Net tangible asset value per share

1 2 3 4 5 6

2018 continuing

1

2017restated

continuing2

2017

3

2016

4

2015

5

2014

6

640

660

680

700

720

740

760

780

703

737 737 734

769

688

Cash generated by operations – decline to N$19,9 million

Cash generated by operations(N$’million)

2018 continuing

1

2017restated

continuing2

2017

3

2016

4

2015

5

2014

6

0

100

200

300

400

500

600

19,951,2

185,0

388,2

531,7

413,8

1 2 3 4 5 6


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Timeline

2009

2011

2012

2013

2014

2015

2017

Acquisition of Taeuber & Corssen 100% – 1 December

Acquisition of Protrade into Taeuber & Corssen 100% – 1 March

Start-up of Rennies Transport – 1 December

Acquisition Prestige Cleaning 100% – 1 June

Start-up Glenryck SA 51% – 1 September

Start-up of Orca Marine – 1 January

Acquisition of Novel Motor Company 100% – 31 July

Acquisition of the Glenryck Brand 100% – 1 August

Start-up of Plumblink Namibia – 1 April

2018

Bidvest Namibia listing on the Namibian Stock Exchange – 26 October

Namibia

Start-up of Monjasa Bunkering Services – 1 July

2016 Start-up Lubrication Specialists in Botswana – 30 June

Buy-in Namibia Bureau de Change 49% – 30 June

Buy-in Industria Alimentar Cranes de Mozambique 40% – 30 June

The Bidvest Namibia Group has exited Fishing effective 30 June 2018. Bidfish was sold and the Angolan and Mozambican operations are held-for-sale.

Start-up of Steiner Namibia – 1 February



Directorate

Sebulon Inotila Kankondi 52CHIEF EXECUTIVE OFFICER

Qualification: Post-graduate degree: Business Administration (Unisa)

Appointed: 10 August 2007

Board committee memberships: Nomination, acquisition and risk

Director of several Bidvest Namibia subsidiaries, Sebby rejoined Bidvest Namibia after he spent six years as the Managing Director of the Namibian Ports Authority. He was trained as a mechanical engineer and holds a degree in Business Administration.

He has also successfully completed UCT and Stellenbosch Business School Programmes in Marketing and Business Management and Leadership. He took part in more than three assignments in the Middle East, Norway and the USA exposing him to modern management practices in freight and logistics.

Lindsay Ralphs 62NON-EXECUTIVE CHAIRMAN

Qualification: CA(SA)

Appointed: 3 March 2014

Board committee membership: Remuneration (chairman)

Lindsay is chief executive of Bidvest South Africa and a director of various Bidvest subsidiaries. Lindsay joined Bidvest as operations director in 1992.

In 1994, he was appointed managing director of Steiner. Following the acquisition of Prestige, Bidserv was created. Lindsay became its chief

executive. Lindsay was appointed CE of Bidvest South Africa in February 2011. Lindsay was appointed to the board of Adcock Ingram in 2014.

RISKCOMMITTEE

AUDITCOMMITTEE

ACQUISITIONCOMMITTEE

NOMINATIONCOMMITTEE

BOARD OFDIRECTORS

REMUNERATIONCOMMITTEE


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Martin Kaali Shipanga 50Qualification: BCom (Wits), Masters in Public Policy and Administration


Board committee membership: Audit and risk (chairman)

Martin completed in-service training at De Beers prior to serving the City of Windhoek for 10 years, initially as deputy head of finance and then as deputy chief executive before becoming the city’s chief executive. In 2004, he became a member of the founding executive team at Nedbank Namibia and was the bank’s first indigenous managing director. Martin subsequently established SmartSwitch Namibia, a joint venture between Nampost and Net 1 Technologies.

He has served as a director of various public and private companies and currently sits on the boards of Zebra Holdings, Ebank and Mutual & Federal. He is chairman of the Frans Indongo Group. Martin is a full-time entrepreneur and manages a property portfolio. In addition, he is the founder of Mamma Fresh, Moola Mobile and Tusk Mobile & Electronics.

Jerome Davis 76Qualification: CA(SA)

Appointed: 1 December 2015

Board committee membership: Risk and acquisitions

Jerome grew up in Namibia and is currently a director of a number of companies in the public and private sectors, and also runs his own management consultancy.

He qualified as a Chartered Accountant at the age of 25, at which point he left private practice for the world of commerce and industry. He has been active in diverse industries ranging from fishing; motor dealerships and assembly; to electronics and logistics.

He returned to Namibia in 2011, when the late Harold Pupkewitz invited him to serve on the board of Pupkewitz Holdings. With the passing of Mr Harold Pupkewitz, Jerome led the Pupkewitz Group for a number of years as CEO.

Mark John Steyn 48Qualification: CA(SA)

Appointed: 23 May 2018

Board committee membership: Audit

Mark joined Bidvest Group Ltd in May 1997 and had held various financial positions within Bidvest Freight. Since 2012, Mark held the position of chief financial officer of Bidvest Freight. Mark was appointed to the Bidvest Group board as group chief financial officer on 1 March 2018. Mark now also serves on all the South African divisional boards, audit committees and also serves as a trustee on the various group retirement plans.

NON-EXECUTIVE DIRECTORS

Hans-Harald Müseler 69Qualification: CA(Nam)/(SA) MBA (Stellenbosch) Post-graduate diploma: Compliance and Board Governance (UJ)


Board committee memberships: Audit (chairman), remuneration and risk

Hans-Harald, a professional with 29 years’ experience as an accountant and auditor, retired as a partner in the assurance division of PricewaterhouseCoopers. He is an independent full-time non-executive director and trustee and serves on the boards of entities in the private and public sectors of Namibia, with audit committee responsibilities.

Martina Mokgatle-Aukhumes 49Appointed: 10 August 2007

A director of several boards in the fishing industry, Martina is a communication and public relations specialist. She has executive experience in the Ministries of Education, Regional and Local Government and Fisheries and Marine Resources and has held senior positions with Sea Harvest and Alexander Forbes Group Namibia. Martina is currently executive director of Naneni Investments and the Bonsai Fishing and Aquaculture Project.

Pieter Christiaan Steyn 70Qualification: PMD, Harvard

Appointed: 17 January 2007

Board committee membership: Nomination and acquisitions

Director of several Bidvest subsidiaries. Pieter has 39 years’ experience in the fishing, freight, logistics, terminals and travel industries.


Bidvest Namibia Annual Integrated Report 2018 >> PERFORMANCE OVERVIEW10

year, the trading profit from continuing operations declined 46.4% while overall earnings before interest and tax (EBIT) was 50.9% lower.

Headline earnings per share (HEPS) declined by 83.1% to 3.8 cents per share (2017: 22.4 cents). The Bidvest Namibia board of directors declared a final cash dividend of 10 cents per share. This brings the total annual dividend to 10 cents per share (2017: 10 cents per share).

DISPOSAL OF FISHING INTERESTSThis year’s results include Bidfish results for the last time after 28 years of ownership by Bidvest. In July 2018, Bidvest Namibia announced the disposal of

“Bidvest Namibia includes a diverse portfolio of businesses ranging from freight and logistics, services, products, automotive, trading, food and distribution, and commercial interests, which comprise well-recognised brands in the Namibian market”.

This has been another challenging year for the Namibian economy and, therefore, Bidvest Namibia. The recessionary environment, coupled with national policy changes in the country, has hampered growth opportunities and has made trading difficult.

While it is pleasing that some divisions, specifically Freight and Logistics as well as Industrial and Commercial Products and Services returned positive results, the Fishing, Automotive, Food and Distribution divisions faced numerous challenges, which ultimately affected overall growth and profitability.

Bidvest Namibia’s revenue from continuing operations decreased by 5.7%, but cost of sales were exceptionally well contained, being 7.5% better than last year, resulting in a gross profit that was 3.8% up on 2017. Following various extraordinary items that arose as a result of significant disposal and restructuring during the

Revenue from ongoing operations declined to N$2,7 billion.

Cost of sales were exceptionally well contained, being 7,5% better than last year, resulting in a gross profit that was 3,8% up on 2017.

The recessionary environment, coupled with national policy changes in the country, has hampered growth opportunities and has made trading difficult.

Total annual dividend of 10 cents per share.

“This year’s results include Bidfish’s results for the last time after 28 years of ownership by Bidvest.”

Lindsay Ralphs, non-executive chairman

Chairman’s statement

MOCK-UP PIC

Our partnerships with NUST and UNAM continues in a bid to contribute to the career development of young Namibians.


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

business. This will ultimately strengthen our relationships going forward.

FUTURE We do not expect any improvement in trading conditions over the next year. We may, however, and true to Bidvest’s philosophy, consider bolt-on acquisitions as, and if, these materialise.

Regardless, the management team is intent on growing current sales, successfully concluding the exit from our fishing business, ensuring a turnaround at lossmaking businesses (particularly T&C and Voltex), and reviewing the Glenryck investment. The property portfolio will be assessed and optimised, and we aim to further simplify and rationalise operational structures and processes.

I am convinced the Bidvest Namibia team has the wherewithal to achieve these objectives and better position the business for a more sustainable future. I wish you all the very best for the year ahead.

Lindsay RalphsChairman

Bidfish to Tunacor Fisheries. Namibian policy changes on reduced fishing quotas made it impossible to operate the fishing division successfully and the board had little option but to agree a structured and carefully managed sale of the business.

Tunacor Fisheries is wholly owned by the Tunacor Group, which is a 100% Namibian owned and controlled entity focused on fishing and fish processing. Tunacor Fisheries acquired Bidfish for cash and the sale consideration was confirmed following the finalisation of the audited annual financial statements of Bidfish for the year ended 30 June 2018.

This sale does, however, exclude the Bidfish businesses in Angola and Mozambique, certain vessels, plant and equipment, cash in excess of the stated and agreed working capital requirements and any dividends declared and/or to be declared in respect of these businesses and assets. Bidvest Namibia is actively seeking the disposal of these assets, and as an interim measure, Tunacor Fisheries has agreed to manage these assets on behalf of Bidvest Namibia.

NAMIBIAN ECONOMYNamibia’s GDP growth in 2017 contracted by just less than 1% as a result, largely, of a slowdown in both the construction and mining sectors, as well as the drought conditions that have been experienced. Namibia’s economy remains heavily dependent on the extraction and processing of minerals for export. The mining industry, which delivers a significant portion of foreign exchange earnings has been impacted by numerous factors, including dwindling commodity prices and rising costs. While Namibian authorities have emphasised the need to add value to raw materials, do more in-country manufacturing, and exploit the services market, especially in the logistics and transportation sector, this is all still to materialise in any meaningful way.

While some modest economic growth was expected this past year, Bidvest Namibia did not anticipate any major improvement in trading conditions. This proved to be true, and the internal focus on cost control and efficiencies has continued unabated. Various successes have been achieved within Bidvest Namibia’s key divisions, and these are now being enhanced in every division to ensure the profit decline is arrested and reversed.

NATIONAL VISION The Group’s performance is dependent on the innovation and resourcefulness of its people. The Group constantly examines new ways of improving recognition and staff communication and collaborating with the government to boost skills

and create jobs. We view skill constraints as a major obstacle to continued progress and regard investment in training and education as the best method of removing it. Bidvest Namibia supports the aims of the Namibia Training Authority (NTA) and pays the government training levy.

Bidvest Namibia remains a proud supporter of the President’s Harambee Prosperity Plan, a key component of which is the upskilling of young Namibians. As such, we are committed to the development and training of the nation’s young people and the Group stepped up its longstanding support of the government-endorsed CATS programme, which complements university study with work experience. Under the scheme, the Namibian University of Science and Technology (NUST) provides a theoretical base and a private sector partner provides work exposure. Over the past 10 years, various Bidvest Namibia divisions have given work experience to a total of 39 students while paying for their NUST education.

We are working with the Namibian Training Authority to leverage the centre of excellence inherent in our South African sister company’s McCarthy Academy to technically train our young people hoping for a career in the automotive sector, and to develop and qualify our learners into internationally recognised professionals.

Our partnerships with NUST and the University of Namibia (UNAM) continues in a bid to contribute to the career development of young Namibians. Meanwhile, we are on standby to support one or more vocational training centre (VTC) student per region once the Namibian government’s VTCs are up and running countrywide.

APPRECIATION This has been a difficult year, and I must extend my appreciation to the entire Bidvest Namibia team. Your hard work and significant contribution in these trying times has not gone unnoticed. On behalf of the Bidvest Group, I thank you for your commitment.

The senior team’s support and dedicated efforts ensured we remain focused on the strategic implementation to ensure a better, more robust business into the future. My thanks also to my fellow board members for your guidance and hard work.

We will ensure that our product quality, pricing, innovation, as well as superior service and delivery will always remain the critical components to successfully retaining our customer base. The support from our market partners has been invaluable and the Bidvest Namibia team remains intent on improving on all the aspects of the


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW



“All divisions remain focused on achieving sustainable growth and profitability through the economic cycle.”

Sebulon Kankondi, chief executive officer

and the regulatory decision not to allocate quotas to listed entities into the future. As such the investment in fishing became too unpredictable to maintain in the Group context of delivering value to our shareholders. We are proud of how we have grown the fishing industry in Namibia and that Bidfish is now in local hands to ensure its continuity.

The Namibian economy shrank 0,9% in calendar 2017, according to the final accounts of the Namibia Statistics Agency (NSA) – the second drop in the gross domestic product (GDP) since independence, with weak performances from the secondary and

OPERATING CONTEXT Results for 2018 were disappointing in the face of a sustained recessionary environment, but I must commend the management team for their vigorous focus on navigating the business through these times. They have shown resilience and innovative thinking in their efforts to maintain market share in a falling market, and in the face of budget cuts.

The management team was strengthened during the year and tasked with stringent cost containment, while keeping service and quality standards high. All new spending was closely examined to ensure it added value to the business.

The main corporate event for the year was Bidvest Namibia’s exit from the fisheries business. The Group disposed of the entire issued share capital of Bidvest Namibia Fisheries Holdings (Pty) Ltd (Bidfish) to Tunacor Fisheries Limited, which is 100% Namibian owned and controlled. This was a complex and interwoven transaction that took 11 months to conclude and took up much management time and attention.

The decision to dispose of Bidfish was taken for a number of strategic reasons, including the lower catch rates, fishing moratoriums, reduced biomass,

Chief executive’s statement

MOCK-UP PIC

The management team was strengthened during the year and tasked with stringent cost containment, while keeping service and quality standards high.

Teams across the Group reduced expenses, and in some cases curtailed activities, in line with the new commercial reality in the country.

The main corporate event for the year was our exit from the fisheries business.

Trading profit from ongoing operations declined by 46,4% to N$28,5 million.


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

In addition, the revival of the heritage brand, Glenryck, continued with good market awareness and brand activation. Market share gains continued to exceed expectations, confirming the underlying strength of the quality pilchard brand. Bidvest Namibia holds the brand’s Africa rights, and the company, Glenryck South Africa, was launched to support growth in this market. The operations in South Africa and Mauritius are doing well and the aim is to increase market share in the next two years. The Glenryck unit’s financials have been moved from Fisheries to the Food and Distribution division.

Commercial and Industrial Services and Products posted an overall improvement, but it was a challenging year for all entities. Waltons, Minolco, Kolok, Cecil Nurse and Steiner delivered better results, Rennies Travel did well to stay in positive territory, but Voltex, Plumblink and Prestige struggled.

The Automotive division faced another extremely tough year due mainly to the prevailing recessionary economic environment in Namibia and in line with the pressures facing the automotive sector in the region. Reduced spending by government departments, businesses and consumers continues to depress the sector and the effects of amendments to the National Credit Act (NCA) are still being felt.

COMMUNITY The Group actively encourages the small business sector, which, as a job creator, makes an invaluable contribution to the economy. SMEs are particularly vulnerable during the type of prolonged economic downturn we are witnessing. The Nampro Fund, which was set up several years ago, channels small loans to small businesses, enabling them to buy materials, tools and other equipment from Group subsidiaries. We are committed to continuing this programme. The Bidvest culture emphasises the need to build partnerships with suppliers and customers and the fund demonstrates our support for entrepreneurship and assists in job creation.

While training and development spend saw a significant decrease due to the Group-wide stringent focus on cost-cutting during the year, we remained committed to supporting the President’s Harambee Prosperity Plan, with its focus on upskilling of young Namibians. To this end we work closely with the Namibian University for Science and Technology to achieve our mutual objective of upskilling the nation.

We are incredibly proud of our support of the Commercial Advancement Training Scheme (CATS) programme, and have a cohort of quality, highly motivated Grade 12 school leavers who have a trainee contract with us for two years. Many of our

tertiary industries. After a faltering start to 2018, the second quarter of 2018 was also a damper as the general outlook for southern Africa and world economies deteriorated.

The local growth numbers have continued to disappoint, with the first quarter GDP numbers for calendar 2018 showing a further economic contraction of 0,1%. Effectively, the Namibian economy has been in a recessionary environment for two years.

Public sector capital projects have ground to a halt in Namibia, where government accounts for more than half of gross national product, and the impact has been felt across all Group divisions. Sustained high interest rates meant consumers and businesses implemented their own cutbacks, which also had Group-wide consequences. In this context, we failed to meet overall divisional targets.

FINANCIAL HIGHLIGHTSAt N$2,7 billion (2017: N$2,9 billion), revenue from continuing operations was down by 5,7%. Trading profit from continuing operations was lower at N$28,5 million (2017: N$53,2 million), a decline of 46,4%. Trading margin from continuing operations contracted to 1,1% (2017: 1,8%), mainly due to recessionary conditions.

Cash generation from continuing operations was under pressure and dropped to N$19,9 million (2017: N$51,3 million). Bidvest Namibia’s balance sheet remains strong and the Group was in a net cash position at year-end.

Current assets include N$188 million relating to dividends received in full, post year-end, from Bidfish and N$190,7 million due by Tunacor Fisheries relating to the disposal of Bidfish. Non-current assets have reduced by 40,9% mainly due to the disposal of Bidfish.

Replacement capital expenditure at all businesses was maintained. Net working capital increased to N$29,3 million as a result of the Bidfish disposal. Provisions for doubtful debtors and obsolete stock are adequate.

STRATEGIC RESPONSEAs the recession continued to bite and the challenges facing each division deepened, management redoubled its efforts to achieve sustainable growth in a market that will remain challenging in the short to medium term. Growth is Bidvest Namibia’s long-term goal and core objective through market cycles.

Our people drive our performance. As such, we focused on strengthening management teams and training our people, instilling a high-performance

culture and investing in the systems and infrastructure to enable this. Training investment for the year was N$1,9 million (2017: N$3,3 million).

Costs were even more rigorously managed than in the previous year, and the hard decision to exit Bidfish was made. Teams across the Group reduced expenses, and in some cases curtailed activities, in line with the new commercial reality in the country. Operations were rightsized, and the focus was on ensuring operations were in good shape. Agility became a key focus to enable the businesses to take competitive opportunities.

Every effort was made to avoid retrenchments – by not replacing staff after resignations, reassigning staff from downsized units to new areas, using innovative shift systems, and cutting the salary bill. However, job cuts became unavoidable in certain continuing units and 68 people were retrenched.

In some units, selective recruitment strengthened teams in areas where new opportunities are being explored. We remain one of Namibia’s largest employers and at year-end the Group headcount in continuing operations stood at 2 879.

Consolidation was a key feature of the year. However, diversification and strategic balance remain a strategic imperative.

DIVISIONAL HIGHLIGHTSAlthough the Group’s overall results are down, some divisions – notably, Freight and Logistics, and Commercial and Industrial Services and Products – returned positive results. Other divisions continue to face various challenges.

The Fisheries division’s results are included in Group results for the last time after 28 years of ownership after the conclusion of the Bidfish disposal. Namsov, Comet and Glenryck SA (11 months) were the biggest operating profit generators. Namsea operations generated a substantial loss. Results from other units were negligible.

The Freight and Logistics division saw Manica Group Namibia deliver a reasonable result under the tough circumstances, with all operational pillars showing pleasing positive results except for the trading and cargo pillars, which reflected lower profitability due to equipment impairments.

Food and Distribution saw the hospitality sector struggling to cope with the trading challenges posed by the general downturn, downtrading remained a feature in the sector and competition remained stiff. Distribution and stock losses due to legacy systems was addressed by reorganisation, restructuring and updating the methods and systems necessary to ensure efficiency gains.


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW



CATS trainees stay with us after completing their programme.

Bidvest Namibia is an equal opportunity employer and takes pride in efforts to train and develop Namibians for leadership roles in the Namibian economy. Our Namibianisation programmes have helped to ensure that people from previously disadvantaged groups increasingly take responsible positions. Black Namibians constitute most employees.

There were no strikes during the review period – reflecting the Group’s positive relationship with the trade unions, and no work-related fatalities were recorded.

Our CSI spend in 2018 amounted to N$16,7 million. Group investment is complemented by individual contributions by the people of Bidvest Namibia and the employee driven, funded and run Pandula Trust.

FUTUREThe Bank of Namibia has projected an overall GDP growth of around 0,6% for calendar 2018, citing a more supportive global economy, contained local inflation, accommodative monetary policy, and the low-base effect created with the depressed figures. Given the beleaguered construction industry, the conclusion of many large-scale mining and infrastructure projects, worrying figures from wholesale and retail trade, public administration and fishing as well as soaring public debt, the Namibian economy is likely be in a low-growth environment for the medium term.

Nevertheless, we look forward to growth in key areas of our business and are excited by the potential offered by a revival of oil and gas exploration off the coast.

The freight business has been structured to withstand economic pressures and grow, where appropriate, and will strategically invest in new areas. Manica Group will continue to ensure that the structure and costs remain aligned to revenue expectations.

The Commercial and Industrial Services and Products division is also in good shape to maximise new opportunities. The focus is on a turnaround at Voltex and Plumblink and consolidating the newest unit, Prestige. The other business units will seek to retain and grow their momentum.

Food and Distribution will start to capitalise on the efficiencies introduced during a year of management and structural change. Cost control and efficiencies are the key strategic focus areas in the push to return to sustainable profitability.

Automotive industry analysts expect the market to take some time to recover. As such the division continues to drive its cost absorption model, ensure stringent working capital management and inventory control, and take steps to grow used vehicle sales and parts sales.

All divisions remain focused on achieving sustainable growth and profitability through the economic cycle.

APPRECIATIONIn what has been a trying year for all Namibians, I thank our loyal customers and suppliers for their continued partnership, collaboration and support. I also thank all our people for their hard work in extremely challenging business conditions, and for making Bidvest Namibia a source of excellence. While it has been a disappointing year, our teams put in their best efforts to sustain the business and position it for the future. I also thank my fellow directors and the chairman for strategic guidance and support.

Sebulon Kankondi Chief executive officer

Chief executive’s statement – continued


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Corporate governance report

PHILOSOPHYBidvest Namibia is committed to the highest level of ethics, integrity and corporate governance and embraces the NamCode of Governance Principals for Namibia, which is based on the South African King III report.

Our directors regard good corporate governance as pivotal to delivering sustainable growth in the interest of all stakeholders. The board of directors considers corporate governance vitally important to the success of our business and is unreservedly committed to applying the principles necessary to ensure good governance is practiced.

Corporate governance, which is ultimately the responsibility of the board and its committees, ensures that we conduct business in a responsible, ethical and transparent manner. Senior management, through the accountable and transparent operation of our structures and systems, helps to instil a culture of compliance.

Companies within the Bidvest Namibia Group operate in a decentralised and incentivised environment. In accordance with our corporate governance policy, they adopt and implement Bidvest Namibia’s policies, processes and procedures with a view to maintaining a sustainable economic, social and environmental performance in the interest of all stakeholders, at every level, in the industries in which they operate.

CODE OF ETHICSThe Company’s core values of accountability, open communication and excellence are instilled via a code of ethics applicable to all employees throughout the Group. This code is revised annually. Employees behave ethically and honestly under the leadership of the Bidvest Namibia executive committee and board. The code sets out our business principles and provides guidance to employees on how to apply them. Bidvest Namibia acts with honesty, transparency, fairness,

responsibility and professional integrity in its dealings with employees, shareholders, customers, suppliers and society at large.

A fraud hotline through an independent third party enables employees to confidentially report any perceived irregular or unethical behaviour. Any irregularities and the way in which they were resolved are reported to the audit committee. During the year under review, three issues were reported, investigated and handled appropriately.

GROUP BOARD OF DIRECTORSProcedures for appointments to the board are transparent and handled by a nomination committee consisting of CEO Sebulon Kankondi and Piet Steyn. All directors are subject to retirement by rotation and re-election by shareholders. A third of the directors rotate annually in accordance with the articles of association, ensuring continuity of expertise and experience.

Board composition reflects a balance of executive and non-executive directors. The majority of non-executive directors is independent. The board currently comprises seven non-executive (*) directors and one executive director.

Peter Meijer and Theresa Weitz resigned from the board, effective 28 February 2018 and 6 March 2018 respectively. Mark Steyn was appointed to the board, effective 23 May 2018.

The chairman is a non-executive director but is not considered an independent director due to his role at the Bidvest Group (a significant shareholder of the Company). The board is, however, of the opinion that this does not impede his ability to act independently. The composition of the board, most of whom are independent non-executives, also acts as a mitigating factor in ensuring the objectives of this principle are met. The board believes the individuals make quality, independent judgements in the best interests of the Company on all relevant issues. The

roles of chairman and CEO are separate and clearly defined. No individual director has unconstrained decision-making powers.

The board is governed by a board charter, which sets out its roles and responsibilities. The board is responsible and accountable for providing effective and ethical leadership. Responsibilities include the addressing of material and strategic issues, directing the strategy and operations of the Group to ensure the building of a sustainable business, monitoring regulatory compliance and codes of best practice, ensuring the communication of adequate and timely information to stakeholders, securing new acquisitions, monitoring operational and investment performance, empowering executive management, risk management and IT governance, and promoting good corporate governance within Group subsidiaries.

An effectiveness appraisal of the board is conducted every two years through internal evaluation. The development of directors and the induction of new directors is conducted informally. The main issues highlighted in the previous evaluation include improving public perception, engaging key stakeholders and driving growth through projects and opportunities.

DIRECTORS DEALING IN SECURITIES POLICY AND DECLARATIONS OF INTERESTThe policy on directors trading in shares accords with NSX listings requirements governing securities dealings by directors. The policy covers Bidvest Namibia shares and other listed investment securities in which Bidvest Namibia has a material beneficial interest. Any Bidvest Namibia share transactions entered into by our directors require the prior approval of the CEO and are notified on NENS.

Directors’ declarations of interests are disclosed at quarterly board meetings and updated as and when required.

Directors’ attendance at board, budget and strategy meetings

MembersAugust

2017

October 2017

(strategy)November

2017February

2018

February2018

(strategy)May

2018

June2018

(budget)

L Ralphs* (chairman) ✓ A ✓ ✓ A ✓ A

SI Kankondi (CEO) ✓ ✓ ✓ ✓ ✓ ✓ ✓

T Weitz (FD) (resigned 6/3/2018) ✓ ✓ ✓ ✓ ✓ R R

JD Davis* ✓ ✓ ✓ ✓ ✓ ✓ A

HP Meijer* (resigned 28/2/2018) ✓ A ✓ ✓ A R R

M Mokgatle-Aukhumes* ✓ ✓ ✓ ✓ ✓ ✓ ✓

HH Müseler* ✓ ✓ ✓ ✓ ✓ ✓ ✓

MK Shipanga* ✓ ✓ ✓ ✓ ✓ ✓ ✓

PC Steyn* ✓ ✓ ✓ ✓ ✓ ✓ ✓

M Steyn* (appointed 23/5/2018) – – – – – ✓ ✓

* Non-executive director ✓ – Present A – Apologies R – Resigned



Each committee operates under a formal charter that defines its powers and duties. These charters are approved by the board.

EXECUTIVE COMMITTEEThe committee, under the chairmanship of CEO Sebulon Kankondi, meets regularly, usually once a month. The committee is mandated and responsible for implementing the strategies approved by the Bidvest Namibia board and for managing the Group’s day-to-day affairs.

Melanie A Hodgson was appointed as CFO, effective 10 April 2018.

LEGISLATIVE COMPLIANCEThe board is ultimately responsible for overseeing Group compliance with all applicable laws, non-binding rules, codes, standards and regulations. This responsibility is delegated to management, which is additionally responsible for implementing an effective legislative compliance framework and associated processes. The board is informed of compliance and any non-compliance through proactive quarterly reporting. This reporting system is monitored by the relevant compliance officers and internal audit professionals.

BOARD COMMITTEESA wide array of structures, guidelines and auditing, accounting and financial controls supports rigorous corporate governance within an ethical framework. These structures are complemented by our authority matrix, corporate values and transparent systems of stakeholder communication. Structures to assist the board in discharging its duties include audit, risk, executive, remuneration, nomination and acquisition committees. All committees, excluding the executive committee, are chaired by non-executive directors. Group board, risk, audit and divisional board meetings of all operating entities are held quarterly.

MembersAugust

2017September

2017October

2017

October 2017

(strategy)November

2017January

2018

February 2018

(strategy)April 2018

June 2018

(budget)June 2018

SI Kankondi (CEO) ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓

T Weitz (FD) (resigned 6/3/2018) ✓ ✓ ✓ ✓ ✓ ✓ ✓ R R R

H Feris (resigned 30/9/2017) ✓ ✓ R R R R R R R R

MA Hodgson (appointed as CFO on 10/4/2018) – – – – – – – ✓ ✓ ✓

G Hough ✓ ✓ ✓ ✓ A ✓ ✓ ✓ ✓ A

T Mberirua ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ A

MW Samson ✓ ✓ ✓ ✓ ✓ A ✓ ✓ ✓ ✓

TJ van Rooyen (attendance by invitation) ✓ ✓ A A ✓ ✓ ✓ ✓ A ✓

A van Wyk (attendance by invitation) ✓ ✓ ✓ ✓ A ✓ ✓ ✓ ✓ ✓

✓ – Present A – Apologies R – Resigned

ACQUISITION COMMITTEEAny major acquisitions are referred to this committee for an in-principle decision on whether the acquisition should be investigated and pursued. Meetings are scheduled as required. Depending on their magnitude, acquisitions are sanctioned by the executive committee and submitted to the board for approval.

The acquisition committee does not have formally scheduled meetings but meets as and when acquisitions are being considered. Members include Jerome Davis, Sebulon Kankondi and Piet Steyn. The CFO and relevant divisional MDs attend by invitation. Acquisitions of more than N$5 million require approval by the Bidvest Namibia board.

Corporate governance report – continued


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

The risk committee is governed by a charter approved by the board of directors in terms of the NamCode of Governance Principles for Namibia, which is based on the South African King III report.

The board of directors holds the ultimate responsibility for risk management. The risk management process includes identifying risks, assessing the potential impact and likelihood of the risk materialising, implementing cost-effective mitigating actions, and reporting the results of this

process to the risk committee. Our directors are responsible for determining the Group’s risk appetite and delegates this task to the Group risk committee. Risks are managed at operational level.

This committee monitors threats, pursues opportunities and ensures Group-wide risks are identified and managed. A key element of the process is the promotion of a risk management culture in all businesses.

MembersAugust

2017November

2017February

2018May

2018

M Shipanga (Chairman)* ✓ ✓ ✓ ✓

H-H Müseler* ✓ ✓ ✓ ✓

J Davis* ✓ ✓ ✓ ✓

H Feris (resigned 30/09/2017) ✓ – – –

G Hough ✓ ✓ ✓ ✓

S Kankondi ✓ ✓ ✓ ✓

T Mberirua ✓ ✓ ✓ ✓

M Samson ✓ ✓ A ✓

T van Rooyen ✓ ✓ ✓ ✓

A van Wyk (attendance by invitation) ✓ ✓ ✓ ✓

T Weitz (resigned 06/03/2018) ✓ ✓ ✓ –

M Hodgson (appointed as CFO 10/04/2018) – – – ✓

* Non-executive director ✓ – Present A – Apologies

GROUP RISK MANAGEMENT PROCESSIn accordance with NamCode recommendations, senior managers and executive directors of all businesses convene annual risk review meetings at which they interrogate risk-rating criteria, key risks, mitigating steps and the effectiveness of risk management processes. The Group risk committee receives a report on these deliberations.

Typical focus areas when assessing the possible impact on the business should a risk materialise include potential monetary impacts, reputation management, systems, operational practices, legislation and its interpretation, the industrial relations climate and people.

Senior managers update material business risks and risk exposures at operational level quarterly. Risk mitigation efforts and action plans to reduce or manage inherent risk are also documented. Business unit level risk matrices are consolidated into sub-divisional and divisional risk matrices for reporting to quarterly risk committee meetings.

Risk committee report

In addition, and on behalf of the board, the Group risk committee sets risk management policies and ensures these policies and associated controls function effectively.

Risk committee meetings are held quarterly. The chairman reports quarterly to the audit committee.



GROUP RISKSIn June 2018, the key risks for the Bidvest Namibia Group were:

Risk Mitigating actions

Namibia’s recessionary economic environment and depressed spending in the economy continues to put pressure on the financial performance of the entities in the group, which is represented across the national economy.

Constant review of business plans and practices to ensure a rapid and appropriate response to changing market conditions, while encouraging creative solution finding and new thinking by all management teams, with management empowered to make the best strategic decisions for the business.

Continued, intense management focus on performance, cost and efficiency and a commitment to optimum asset management to secure profit in the continued unfavourable conditions.

Businesses in Angola and Mozambique (fishing assets held for sale at June 2018) run the risk of depreciating in value due to currency devaluations (Angolan kwanza, US$, and Mozambican metical) the longer it takes to conclude their disposal.

An offer for the Angolan business, Comet (including Pesca Fresca) is currently under discussion. The offer is US$ denominated, is subject to exchange rate volatility, and is payable in Namibia. At year end the US$ to NAD used for reporting purposes was US$1=NAD13.6. Until the sale is concluded the risks and rewards remain with Bidvest Namibia (69.55%) and the Namsov minorities (30.45%). It is important to conclude this transaction, to reduce exposure to currency devaluation and to conclude the Fishing exit strategy.

A buyer for the investment in Mozambique is actively being sought. As with the Angolan assets, it is important to conclude this transaction to reduce exposure to currency devaluation and to conclude the Fishing exit strategy.

The Food and Distribution division’s potential for continued losses in a recessionary environment.

Senior executive management made various statutory structural changes to streamline reporting. Some personnel changes were made and business unit accounting resources were beefed up. Inventory and logistics processes and controls, including mix and stockholdings, are receiving significant focus. This is an ongoing process.

Bidvest Namibia Automotive’s exposure to depressed spending in the economy, particularly in new vehicle sales.

Certain cost-savings measures have already been put in place. A “Business Unusual” project is underway, which has targeted areas for additional cost saving and revenue enhancement. Significant focus is being put on after-sales services and pre-owned vehicles.

Turnaround of Voltex, as Voltex continues to incur losses Management changes were made where required. Various cost-savings and right-sizing measures have been implemented. Tight controls have also been put in place to ensure operational efficiencies.

Loss of a principal for Food & Distribution (FMCG), risk of cancellation of an OEM franchise agreement, another franchise agreement granted to another entity in Namibia (Automotive).

We maintain positive stakeholder relationships and ensure achievement of performance targets.

We are continuously aligning our cost structures with expected revenue.

Providing assurance on risk mitigation actions is a key responsibility of our internal auditors. They continually assess risks and preparedness to combat these. An effectiveness appraisal of the risk management system is performed annually by the internal audit function.

Signed on behalf of the committee by:

Martin Kaali ShipangaChairman

Risk committee report – continued


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

EXTERNAL AUDITThe committee:

– Nominated Deloitte & Touche for appointment as the Group’s lead auditors and RH Mc Donald as the independent auditor and designated audit partner, with PwC as the component auditors of the Bidfish Group, KPMG as component auditors of the associate Namibia Bureau De Change, and Zeelie Auditors as component auditors for Glenryck SA, for the financial year ended 30 June 2018;

– Approved the external audit engagement letter, the audit plan and the budgeted audit fees payable to the external auditors;

– Determined the nature and extent of all non-audit services provided by the independent auditors and pre-approved all non-audit services undertaken;

– Obtained assurances from the independent auditors that adequate accounting records were being maintained; and

– Confirmed that no material irregularities had been identified or reported by the independent auditors under the Public Accountants’ and Auditors’ Act.

INDEPENDENCE OF EXTERNAL AUDITORSThe committee is satisfied that Deloitte & Touche, PwC, KPMG and Zeelie Auditors are independent of the Group after taking the following factors into account:

– Representations made by them to the committee; – The auditors do not, except as external auditors

or in rendering permitted non-audit services, receive any remuneration or other benefit from the Group;

– The auditors’ independence was not impaired by any consultancy, advisory or other work undertaken;

– The auditors’ independence was not prejudiced because of any previous appointment as auditors; and

– The criteria specified for independence by local and international regulatory bodies.

INTERNAL CONTROL AND INTERNAL AUDITThe committee:

– Considered and recommended an internal audit charter for approval by the board;

– Reviewed and approved the annual internal audit plans and evaluated the independence, effectiveness and performance of the internal audit function;

The audit committee is governed by a charter approved by the board of directors in terms of the NamCode of Governance Principles for Namibia, which is based on the King III report. The committee charter mandates members to ensure effective and appropriate internal financial and operational controls on behalf of the board. The committee assists the board in terms of the financial reporting processes, internal controls, risk management, compliance with legislation and the internal and external audit processes.

The committee provides effective communication between directors, management and internal and external auditors, reviews accounting policies and financial information issued to the public and recommends the appointment of external auditors.

The committee is assessed annually through self-assessment. The committee members are appointed by the board, consisting of a minimum of three non-executive directors and chaired by an independent non-executive director. Meetings are held quarterly, attended by executive committee members, senior management and internal and external auditors.

MembersAugust

2017November

2017February

2018May

2018

H-H Müseler (chairman) ✓ ✓ ✓ ✓

Peter Meijer (resigned 28 February 2018) ✓ ✓ ✓ R

M Shipanga ✓ ✓ ✓ ✓

Mark Steyn (in attendance; formally appointed on 23 May 2018) ✓

✓ – Present R – Resigned

– Annually review the committee’s work and charter to make recommendations to the board to ensure its effectiveness.

DUTIES CARRIED OUTThe committee has performed its duties and responsibilities according to its charter during the financial year.

FINANCIAL STATEMENTSThe committee:

– Confirmed, based on managements’ review, that the interim and consolidated and separate financial statements were prepared on the going concern basis;

– Examined the interim and consolidated and separate financial statements and other financial information made public, prior to their approval by the board;

– Considered accounting treatments, significant or unusual transactions and accounting judgements;

– Considered the appropriateness of accounting policies and any changes made thereto;

– Reviewed the representation letters relating to the consolidated and separate financial statements;

– Considered any problems identified as well as any legal and tax matters that could materially affect the financial statements; and

– Met separately with management, external audit and internal audit and satisfied themselves that no material control weakness exists.

Audit committee report

The chairman of the committee reports quarterly to the board and to the Bidvest Group Limited audit committee on the activities and the recommendations made by the committee.

PURPOSEThe purpose of the committee, which in certain instances operates in conjunction with the risk committee, is to:

– Assist the board in discharging its duties relating to the safeguarding of assets, the operation of adequate systems, control and reporting processes, and the preparation of accurate reporting and financial statements in compliance with the applicable legal requirements and accounting standards;

– Oversee the activities of, and to ensure coordination between, the activities of internal and external audit;

– Provide a forum for discussing financial, enterprise-wide, market, regulatory, safety and other risks and control issues; and to monitor controls designed to minimise these risks;

– Oversee the Company’s integrated annual report for recommendation to the board, including the consolidated and separate financial statements, as well as its interim report and any other public reports or announcements containing financial information;

– Perform duties assigned to it under the Companies Act and other legislation; and



– Considered the reports of the internal auditors on the Group’s systems of internal control, including financial controls, business risk management and maintenance of effective internal control systems;

– Received assurances that proper accounting records were maintained and that the systems safeguarded the Group’s assets against unauthorised use or disposal;

– Reviewed issues raised by internal audit and the adequacy of corrective action taken by management in response thereto;

– Assessed the adequacy of the performance of the internal audit function and found it satisfactory; and

– Concluded that there were no material breakdowns in internal control.

RISK MANAGEMENT AND LEGAL REQUIREMENTSThe committee:

– Reviewed the Group’s policies on risk management, including information technology risks, and found them to be sound;

– Reviewed with management legal matters that could have a material impact on the Group;

– Reviewed the adequacy and effectiveness of the Group’s procedures to ensure compliance with legal and regulatory responsibilities; and

– Considered reports provided by management, internal assurance providers and the independent auditors regarding compliance with legal and regulatory requirements.

COMBINED ASSURANCEThe committee reviewed the plans and reports of the external and internal auditors and other assurance providers, including management, and concluded that these were adequate to address all significant financial risks facing the business.

FINANCIAL DIRECTOR/CHIEF FINANCIAL OFFICER AND FINANCE FUNCTIONThe committee:

– Considered the appropriateness of the experience and expertise of the Group financial director/chief financial officer and concluded that these were appropriate; and

– Considered the expertise, resources and experience of the finance function and concluded that these were appropriate.

Following the resignation of the Group financial director, the Company does not comply with the requirement of the NamCode to have two executive directors. M Hodgson was appointed acting chief financial officer with effect from 10 April 2018. M Hodgson is a CA(SA), MBA, with in excess of 35 years’ experience in the financial and governance fields, more than 20 years of this being with the Bidvest Group in South Africa and Namibia.

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTSFollowing the audit committee review of the consolidated and separate annual financial statements of Bidvest Namibia Limited for the year ended 30 June 2018, the committee is of the view that, in all material respects, it complies with the relevant provisions of the Companies Act and IFRS and fairly presents the financial position at that date and the results of its operations and cash flows for the year. In conjunction with the risk committee, the committee has also satisfied itself as to the integrity of the remainder of the integrated annual report.

Having achieved its objectives for the financial year, the committee recommended the consolidated and separate financial statements and integrated annual report for the year ended 30 June 2018, for approval to the board.

Signed on behalf of the committee by:

Hans-Harald MüselerChairman

Audit committee report – continued


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

number nearest to but not less than one-third of the aggregate number of directors (excluding the CEO) shall retire from office. All directors (excluding the CEO) should retire after a period of two years.

Executive directors of the Bidvest Namibia Group of Companies are permitted to serve as non-executive directors on two other external boards, with the express permission of the remuneration committee. Fees are retained by the director, but annual leave should be taken for time spent on other boards. The other board memberships should not constitute a conflict of interest.

ELEMENTS OF REMUNERATIONThe Group operates on a total cost-to-company (CTC) philosophy, whereby cash remuneration and benefits (including a defined contribution retirement fund and medical aid) form part of employees’ fixed total CTC remuneration. Senior management and executive directors also participate in short-term incentives (in the form of a performance bonus plan). A long-term incentive plan, namely the Bidvest Namibia Share Incentive Scheme (for senior management and executive directors), is in place.

The different components of remuneration, their objectives, the policy which governs them and their link to the business strategy are summarised below.

This committee, consisting of two non-executive directors, reviews and approves the remuneration and terms of employment of executive directors and senior employees of Bidvest Namibia. The committee establishes remuneration principles, incentive scheme policies and recommends emolument structures and levels to the board chairman for his consideration and approval.

The Bidvest Namibia incentive scheme was adopted and implemented in 2012. Qualifying employees have received 3 492 500 share options to date, while 46 employees currently benefit from the scheme.

MembersOctober

2017April 2018

L Ralphs ✓ ✓

H-H Müseler ✓ ✓

✓ – Present

The committee meets bi-annually or as required. Meetings were attended by Sebulon Kankondi, Theresa Weitz or Melanie Hodgson.

REMUNERATION POLICYA critical success factor of the Group is its ability to attract, retain and motivate the entrepreneurial talent required to achieve operational and strategic objectives. Both short and long-term incentives are used to this end.

Delivery specific short-term incentives are viewed as strong drivers of performance. A significant portion of senior management’s reward is variable

and is determined by achieving realistic profit-growth targets. Only when warranted by exceptional circumstances, special bonuses might be considered as additional awards.

Long-term incentives align the objectives of management, shareholders and other stakeholders for a sustainable period.

ROLE OF BENCHMARKINGBenchmarking and position in the marketThe Bidvest Namibia remuneration policy aims to position the Group as a preferred employer. The Group believes its remuneration policy plays a vital role in realising business strategy and, therefore, it should be competitive in the markets in which the Group operates.

EXECUTIVE DIRECTORS AND MEMBERS OF GROUP EXECUTIVE COMMITTEE Terms of serviceThe minimum terms and conditions applied to Namibian executive directors and group executive committee members are governed by labour legislation. The notice period for these directors is between two and three months. In exceptional situations of termination of the executive directors’ services, the remuneration committee (assisted by independent labour law advisors) oversees the settlement of terms.

Executive directors are included in the Group’s rotation plan, whereby one-third of the aggregate number of directors (excluding the CEO) or, if their number is not three or a multiple thereof, then the

Remuneration committee report

Table 1: Summary of remuneration components for executive directors and group executive committee members.

Component Objective and practice Link to business strategy PolicyChanges for FY2019

Part 1 – Section 1 guaranteed pay (CTC)

Base package Attract and retain the best talent.

Reviewed annually and set on 1 July.

This component aligns with business strategy as it considers internal and external equity, ensuring competitiveness and rewarding individuals fairly based on a similar job in the market.

Level of skill and experience, scope of responsibilities and competitiveness of the total remuneration package are considered when determining CTC.

No changes proposed.

Benefits Providing employees with contractually agreed basic benefits, such as retirement fund benefits (defined contribution), medical aid, risk benefits, and life and disability insurance on a CTC basis.

Benefits recognise the need for a holistic approach to a guaranteed package and are part of the overall employee value proposition offered by Bidvest Namibia.

The Company contributes towards retirement benefits as per the rules of its retirement funds. Medical aid contributions depend on each individual’s needs and the package selection.

Risk and insurance benefits are Company contributions, all of which form part of the total cost of employment.

No changes to standard employment benefits.



Component Objective and practice Link to business strategy PolicyChanges for FY2019

Part 1 – Section 2 short-term incentives

Short-term incentive

To motivate and incentivise delivery of performance over the one-year operating cycle.

Bonus levels and the appropriateness of measures and weightings are reviewed annually to ensure these continue to support Bidvest Namibia’s strategy.

The annual bonus is paid in cash in August/September each year for Company financial performance during the previous financial year.

Encourages growth in trading profit targets, earnings per share and return on equity for shareholders in a sustainable manner over the short term.

Rewards executive directors for their measurable contribution to the Group based on predetermined metrics.

For the 2018 financial year, target and stretch performance targets are set for the following metrics:

– Company financial performance. – Trading profit targets. – Measured against prior year’s performance and

budgets.

Earning potential: – At target performance the earning potential is 25%

of guaranteed package. – Stretch earning potential is limited to 50% of

guaranteed package and is subject to exceptional performance.

Discretion of remuneration committee: – The remuneration committee has discretion, when

warranted by exceptional circumstances and where considerable value has been created for shareholders and stakeholders of Bidvest by specific key employees, to award special bonuses or other ex gratia payments to individuals.

– In exercising this discretion, the remuneration committee must satisfy itself that such payments are fair and reasonable and are disclosed to shareholders as required by remuneration governance principles.

To combine the company financial performance metrics with strategic metrics, such as leadership, to ensure well-balanced KPIs.

Part 1 – Section 3 long-term incentives

Long-term incentive – Bidvest Namibia Share Incentive Scheme

To motivate and incentivise delivery of sustained performance over the long term.

Alignment of executives’ interests with that of shareholders through options exercisable to future delivery of equity.

Vesting of option instruments are subject to retention in the Group.

Motivates long-term, sustainable performance.

Award levels are set according to best practice benchmarks and to ensure support of the Group’s business strategy. Awards consist of share options, subject to continued employment for the duration of the vesting periods of three years (50% of the award), four years (75% of the award) and five years (100% of the award) respectively.

No structural changes are anticipated for 2018.

FURTHER DETAILS ON LONG-TERM INCENTIVE PLANSBidvest Namibia Share Incentive SchemeAt the 2012 AGM, shareholders approved a share option scheme.

Bidvest long-term incentive plans and dilutionIn terms of the rules of the Bidvest long-term incentive plan, an overall limit of approximately 1% of the issued shares of the Company has been imposed when shares are allocated and issued in terms of the share options. The total award that may be allocated to any one individual may not exceed 10% of the total awards made in that year.

Non-executive directorsTerms of serviceNon-executive directors are appointed by the shareholders at the AGM. Interim board appointments are permitted between AGMs.

Appointments are made in accordance with Group policy. Interim appointees retire at the next AGM, when they may make themselves available for re-election. They are included in the Group rotation plan, whereby one-third of the aggregate number of directors or, if their number is not three or a multiple thereof, then the number nearest to but not less than one-third of the aggregate number of directors shall retire from office, but may offer themselves for re-election. As appropriate, the board, through the nominations committee, proposes their re-election to shareholders. There is no limit on the number of times a non-executive director may make him or herself available for re-election.

FeesGroup policy is to pay competitive fees for the role while recognising the required time commitment. The fees comprise an attendance fee for scheduled meetings, as tabulated in part 2 of this report.

No contractual arrangements are entered into to compensate non-executive directors for the loss of office.

Non-executive directors do not receive short-term incentives, nor do they participate in any long-term incentive schemes, except where non-executive directors previously held executive office, and they remain entitled to unvested benefits arising from their period of employment. The Group does not provide retirement contributions to non-executive directors.

The remuneration committee proposes non-executive directors’ fees (based on independent advice) to shareholders annually for shareholder vote.

Directors’ interests in contractsAll interest in contracts are declared at the meetings and directors recuse themselves on decisions where they may have a conflict of interest.

Remuneration committee report – continued


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

A decision was taken by the executive committee that, with effect from 1 July 2018, a 6,5% annual cost of living increase will be paid at a Group-wide level. The remuneration for the executive committee members and executive directors is debated and authorised by the remuneration committee.

2. Short-term incentives 2018Short-term incentives for 2018 were based on profit growth targets, and only applicable to those entities that achieved their targets.

All transactions in which directors may have a private interest are declared in the annual financial statements under the related-party balances and transactions note.

Non-binding advisory voteShareholders are requested to cast an advisory vote on the remuneration policy as summarised on this page, section 1, Guaranteed pay (CTC); section 2, Short-term incentives; section 3, Long-term incentives; and any other policy matters not contained in the aforementioned summary.

IMPLEMENTATION OF REMUNERATION POLICY1. Guaranteed pay – base pay and benefitsGuaranteed pay increases for 2018/19In determining the CTC increases for executive directors and group executive committee members, the remuneration committee considered the average increases to general staff and also used relevant market data.

Benchmarks were selected based on a number of factors, including but not limited to, company size and complexity of comparable listed companies by reference to market capitalisation, turnover, profitability, number of employees and sector.

Summary of executive directors’ guaranteed pay and short-term incentives

Director

Basic remuneration

N$’000

Retirement/medical benefits N$’000

Bonuses accrued,

leave paid

N$’000

Total emoluments

N$’000

S Kankondi 2 556 527 132 3 216T Weitz 1 437 368 29 1 835

2018 total 3 993 895 161 5 050

S Kankondi 2 723 493 0 3 216T Weitz 1 398 338 0 1 736

2017 total 4 121 831 0 4 952

3. Long-term incentivesDisclosure of the value of long-term incentivesThe table below illustrates, on an individual executive director level, the details of long-term incentive participation.

Held in terms of the Bidvest Namibia Share Incentive SchemeDetails of the directors’ outstanding share options:

Share options at 30 June 2017

Share options granted during the year Share options exercised

Share options at 30 June 2018

Director Number

Average price

N$ Number

Average price

N$ Number

Market price

N$ Number

Average price

N$

SI Kankondi 250 000 10,74 – – – – 250 000 7,83T Weitz 125 000 10,74 – – – – 125 000 7,83



4. Non-executive directors’ remunerationNon-executive directors’ fees paidThe remuneration paid to non-executive directors, while in office of the Company during the year ended 30 June 2018, can be analysed as follows:

Director

2018Directors’

feesN$’000

2017Directors’

feesN$’000

PC Steyn 730 606

M Mokgatle-Aukhumes 208 154

HH Müseler 520 358

MK Shipanga 440 373

JD Davis 678 259

Proposed non-executive directors’ fees for 2018/2019

Basicper annum

Per meeting

Chairman 180 391 –

Non-executive director 30 064 22 548

Audit committee chairman 112 725 22 548

Audit committee member 15 033 22 548

Remuneration committee chairman 60 131 22 548

Remuneration committee member – 22 548

Acquisition committee chairman 45 099 15 033

Acquisition committee member – 15 033

Risk committee chairman 60 131 22 548

Risk committee member – 22 548

Refer to ordinary resolution 3 on page 01 of the notice of annual general meeting for approval of the fees by shareholders.

There is no increase proposed for the non-executive directors’ fees for 2018/2019.

Signed on behalf of the board of directors

Lindsay Ralphs Remuneration committee chairman

Remuneration committee report – continued


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Energy managementKilowatt

2017 (restated)

2018 (continuing) % change

7 095 683 6 024 187

-15%

Rising utility bills make energy costs an obvious target in our drive to improve operational efficiency. Wherever possible, our businesses maximised natural light and adopted energy-efficient lighting and air conditioning. Optimum efficiency in the operation of cold storage systems is another priority.

Food safety

Food quality and safety remains a source of pride and competitive advantage for our people. International standards are maintained as our foodservice and FMCG businesses work closely with international brands – rigorous compliance with safety standards is a priority. Our modernised warehouse management and product-tracking systems ensure prompt stock rotation, ensuring products are properly stored, expiry dates are respected and product integrity assured. Compliance with product specifications laid down by brand principals is rigorous. Any disposal of expired foodstuffs is carried out in line with local authority requirements and certifications. The cold chain, where applicable, is maintained throughout the storage and distribution cycle.

Our peopleNumber of employees

2017 (restated)


2 856 2 8791%

The Group’s performance is dependent on the innovation and resourcefulness of its people. To achieve higher productivity and boost motivation, businesses across the Group constantly examine new ways of improving recognition and staff communication.

Bidvest Namibia supports the aims of the Namibia Training Authority (NTA) and pays the government training levy, which was introduced in 2015. We wish to achieve growth and create jobs. We view skills constraints as a major obstacle to continued progress and regard investment in training and education as the best method of removing it.

SUSTAINABILITY ETHOSSustainability is an integral part of the Bidvest Namibia business model. We are committed to the development of sustainable businesses, the creation of sustainable jobs and the delivery of sustainable shareholder value, while protecting the wider environment. A key part of our mission is to develop a corporate brand Namibians are proud to be part of.

Profit – a sustainability issue Ongoing profit is a prerequisite for sustainable business development. We expect and seek to entrench a performance-based culture across all management structures and into the wider workforce. To achieve sustainable profit, costs are rigorously managed. Every asset must contribute to our growth and our bottom line. If not, asset disposal is indicated, and appropriate action taken.

We encourage local initiative in the pursuit of opportunities. Growth and diversification are challenging in a recessionary Namibian environment, and every decision is interrogated. We strive for outperformance by our teams in good times and bad. This is a central feature of our commitment to the development of a sustainable business.

BUSINESS MODELEach individual business within Bidvest Namibia commits to sustainable business practices. Local enthusiasm on entity level is reflected in focused efforts in areas such as energy efficiency, waste management and recycling. The Bidvest Namibia decentralised business model ensures local involvement and our people’s buy in. Smart business practice and environmental practice go hand in hand. Our teams seek to couple business efficiencies with community and environmental gains.

STAKEHOLDERSOur stakeholders include our employees and shareholders, as well as customers, consumers, communities, suppliers, unions, investors, industry bodies, interest groups, professional associations, regulators, official departments and the government. We endeavour to regularly communicate with all our key stakeholders. Entity-related matters are addressed by individual businesses. Wider issues are escalated to divisional or Group level.

Stakeholder communication includes SENS announcements, presentations to shareholders, analysts and the business media, press releases, profiles, articles in industry and national directories, newsletters and community interaction.

ENVIRONMENTAll divisions commit to sustainable environmental practice, notably fuel and energy efficiency and responsible waste management. Sustainable environmental practises create cost-saving efficiencies which assist in driving improved performances.

Bidvest Namibia has disposed of its Bidvest Fisheries (Bidfish) to Tunacor Fisheries and accordingly no information is included in our reports. However, during the year under review, we continued to liaise with the Ministry of Fisheries and Marine Resources on issues relating to fishing quotas and long-term fish biomass management. Bidfish honoured all official limits and practices, focused on by-catch reduction, exceeded minimum legal requirements in terms of its onboard controls, and observed rigorous compliance with dumping and wastage guidelines.

Other environmental factors We restated our prior year figures to reflect continuing operations.

Water consumptionKilolitres – Water

2017 (restated)


40 436 27 448

-32%

Water management remained a priority in 2018 as the effects of widespread drought, which began in the previous comparable period, resulted in prolonged water restrictions across Namibia. Our land-based businesses made strenuous efforts to reduce consumption. Ships that were in our fleet until their disposal date continued to adopt responsible water management processes.

FuelLitres – Fuel

2017 (restated)


1 802 471 1 656 993

-8%

Group gasoline usage in 2018 was 441 828 litres (2017: 483 947 litres) and the diesel usage in 2018 was 1 215 165 litres (2017: 1 318 524). The fact that the Namibian economy was in a recession resulted in lower activity and reduced consumption.

Sustainability report



Bidvest Namibia also partners with like-minded organisations and, from time to time, cooperates with third parties on health, safety and wellness issues.

Training and developmentTraining spend – N$

2017 (restated)


3 275 371 1 855 388

-43%

Training and development spend saw a significant decrease due to the Group-wide stringent focus on cost-cutting during the year. Our purpose-built Walvis Bay Training and Development Centre is a key asset in our effort to continually develop our people. Use is also made of a satellite centre in Windhoek. Several customised training courses were run in 2018 to support the strategy of retaining customers through enhanced service standards.

Government’s CATS programme is supported by many Group companies. In addition, our divisions equip our people with specific skill sets designed to foster their personal development and lead to increased job satisfaction.

SME developmentThe Group remains active in small business development. As job creators, small and medium-sized enterprises make a tremendous contribution to our economy. However, their limited financial resources make them vulnerable during an economic downturn. Their ability to carry on is often dependent on their access to funding. Even a small injection of working capital can be the difference between continued viability and shutting up shop. Bidvest Namibia continues to support the Nampro Fund, which was set up several years ago.

The fund channels small loans to small businesses, enabling them to buy materials, tools and other equipment from Group subsidiaries. The fund was designed to be self-sustaining. As loans were repaid the fund was replenished, enabling further loans to be advanced to new borrowers. In many cases, this has ensured their continued participation in the economy. In tough trading conditions, we believe the fund has a vital role to play and we plan to continue this programme.

Our culture emphasises the need to build a sense of partnership with suppliers and customers. The fund demonstrates our support for entrepreneurship and assists in job creation.

Bidvest Namibia is a supporter of the President’s Harambee Prosperity Plan, a key component of which is the upskilling of young Namibians. As such, we are committed to the development and training of the nation’s young people.

The Group stepped up its longstanding support of the government-endorsed Commercial Advancement Training Scheme (CATS) programme, which complements university study with work experience. Under the scheme, the Namibian University of Science and Technology (NUST) provides a theoretical base and a private sector partner provides work exposure. Over the past 10 years, various Bidvest Namibia divisions have given work experience to a total of 39 students while paying for their NUST education.

Our CATS trainees are quality, highly motivated grade 12 school leavers who have a trainee contract with us for two years. The students work at the Company for four days a week gaining on-the-ground skills and experience and spend one-and-a-half days a week at a higher education institution offering theoretical studies. Many of our CATS trainees stay with us after completing their programme.

The Group is still seeking to work with our sister company in South Africa, where the McCarthy Academy has become the sector’s foremost trainer of mechanics and auto electricians. The plan is to technically train our young people hoping for a career in the automotive sector, and to develop and qualify our learners into internationally recognised professionals. We are working with the Namibian Training Authority on this plan.

The Namibianisation of officer grades within the commercial fishing industry has been a success, with 10 marine engineers and navigation officers completing academy courses. The disposal of Bidfish to Tunacor Fisheries means the Bidvest Namibia’s contribution to this initiative came to an end.

Our partnerships with NUST and the University of Namibia (UNAM) continue in a bid to contribute to the career development of young Namibians.

The vocational training centres (VTC) the Namibian government is setting up across the country requires private sector support, and, to this end, Bidvest Namibia is on standby to support one or more VTC students per region.

Our Group remains one of the largest employers in the Namibian private sector and in 2018 employed 2 879 (2017: 2 856) staff members in our continuing operations.

Employment equityBidvest Namibia is an equal opportunity employer and takes pride in efforts to train and develop Namibians for leadership roles in the Namibia economy. The Group complies with all employment equity legislation; specifically, the Affirmative Action Act. Workplace diversity is a strategic imperative. We continue the practice of sharing information on our recruitment needs with the Ministry of Labour, in line with the Employment Services Act. We maintain our long-running commitment to non-discriminatory training and development, without regard for race, gender or disability.

Each decentralised business submits annual affirmative action plans and reports to the Employment Equity Commissioner and offers development opportunities to those from designated groups.

Our Namibianisation programmes have helped to ensure that people from previously disadvantaged groups increasingly take responsible positions. Black Namibians constitute the most employees. Men predominate, and women are increasingly taking on supervisory and managerial roles. Employment of those with disabilities remains a priority.

Industrial relationsThere were no strikes during the review period – a reflection of the Group’s positive relationship with the trade unions. Local relationships between management and workers were also positive, despite the recessionary operating environment. Our decentralised business model keeps managers close to local issues. Scrupulous compliance with labour law is one reason our union relationships have been so positive for so many years.

Health and safety No work-related fatalities were recorded. Group-wide, a total of 86 (2017: 159) lost-time incidents were logged. Our businesses comply with all laws and standards governing worker health and safety. Appropriate environmental controls are mandatory across the Group.

We endeavour to create and maintain a safe and healthy workplace. We supply all necessary safety and protective equipment and engage in ongoing safety training. We also institute regular awareness programmes to ensure our people know the relevant standards and procedures and their safety responsibilities.

HIV/Aids has been a focus area for many years. Group companies decide on appropriate interventions in each working environment.

Sustainability report – continued


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

– The Freight and Logistics division funds one full-time teacher at the Walvis Bay Sunshine Centre, a haven for children with special needs and their mothers, and has been involved in several other ad hoc projects during the year. Manica also devotes 1,5% of after-tax profit to CSI initiatives.

– The Automotive division sponsored Namibian Olympic athlete Michelle Vorster with clothing and a support vehicle for her team and one other mountain biking team. We also co-sponsored the 2017 Namibian Businesswoman of the Year Award, the Uis Land Rover festival and the Eagles Angling Club league event. We again provided a Ford Ranger 4x4 in support of Namibia’s effort to curb rhino poaching in the country and made another vehicle available to the Lady Pohamba Hospital to enable rapid response to accidents and other emergencies. Various initiatives were undertaken by our dealerships, in partnership with the Red Cross, to collect and distribute clothing and food to the needy.

– Each entity with the Commercial and Industrial Services and Products division contributes in its own way to communities where they operate on a case-by-case basis. Collaboration with the Mister Sister mobile health service continued at Cecil Nurse and Kolok to ensures basic health cover for lower paid workers. Bidvest IT donated 200 apples, bought from the Bank Windhoek Apple Cancer Project, to the SOS Children’s Village. Waltons participated in the Namibia Old Age Helpfund (NOAH) Casual Day event that its sponsors every year, distributing wristbands and sponsoring N$5 000 for the best-dressed school. The NOAH Casual Day benefits those who do not belong to a medical aid and who are unable to afford their required medical expenses.

– Food and Distribution donated all pet food damaged or returned from the trade to animal welfare organisation, the SPCA, and participated in a programme to distribute graphic entry level dictionaries to rural schools.

– The Fisheries division’s 10% shareholding by the NCT is being transferred to a workers’ trust. The trust continued its work during financial 2018 to contribute to the development of underresourced communities across Namibia, driving numerous grassroots initiatives.

Corporate social investmentCSI – N$

2017 (restated)


20 616 802 16 732 586

-19%

Our CSI spend in 2018 amounted to N$16,7 million (2017: N$20,6 million). Group investment is complemented by individual contributions by the people of Bidvest Namibia and the employee-driven, funded and run Pandula Trust. The trust channels money to a wide range of community efforts, often after input from our people who are close to community needs.

The trust is run by a board of trustees mandated to manage the accumulated funds, identify and consider initiatives or community requests for assistance. No cash is distributed to any cause, only goods are donated. For 2017 – 2018 the trust spent N$151 999. Some of these initiatives are listed below.

– 50 Households Christmas (N$50 000): 50 households in need were selected and surprised with N$1 000 grocery vouchers for Christmas.

– Mascato Youth Choir (N$60 000): Staff members were invited to a special performance by the Mascato Youth Choir and Pandula members nominated a household to support during Christmas (as per the 50 households donation above). A further N$60 000 was granted to the Mascato Youth Choir to assist with the choir members’ training and overseas travel costs.

– School support (N$17 894): Educational assistance, stationery supplies and school clothes were provided to pre-primary schools and community members (including Kleuterkapperjollie, Wallies, Pebble Foundation and the Promiseland School project).

– Christmas Drive (N$10 000): Pandula supported the Macs Lines’ Christmas Charity drive, “for the children”, that collected more than N$25 000 worth of dry food, fresh produce and clothing. The Pandula Trust donated N$10 000 worth of dry food as well as fruit and vegetables. The two “bakkie”-loads of food and clothing were donated to the Kids Haven centre for neglected and orphaned children and to the Helping Hands charity.

– Smaller Angel Deeds (N$14 105): Assistance was granted to a number of smaller causes and needs including covering the travel costs of a small boy who required eye surgery in Cape Town, providing an aspiring athlete with proper running shoes, assisting the SPCA and assisting a family whose home had burnt down.

Another source of community support is the Namsov Community Trust (NCT). The NCT is a 10% Namsov shareholder and vehicle for numerous upliftment efforts. The NCT’s primary areas of intervention are regional and community development, education, health and natural resources. After the sale of Bidfish to Tunacor Fisheries, the 10% shareholding of Namsov held by the NCT is in the process of being transferred to a workers’ trust for the benefit of Namsov employees.

Company initiativesThere were many contributions by the Group and NCT during the year, complemented by initiatives at individual companies. Some key highlights for 2018 are listed below:

– Bidvest Namibia contributed an impressive N$50 000 to Standard Bank’s Buy-a-Brick initiative, which raised N$3,727 million to be handed over to the Shack Dwellers Federation of Namibia (SDFN) whose aim is to build affordable housing for low-income earners. Bidvest Namibia has committed to partner with the initiative for the next five years, which will amount to a contribution of N$250 000. Namibia is currently facing a housing backlog of 100 000 and this number is growing by 3 700 every year.

– The Group contributes N$10 000 annually for the Okakarara Town Council’s stationary needs for its Trade Fair.

– For the past two years Bidvest Namibia has assisted and donated towards the NUST Faculty of Management Sciences Awards Ceremony. The best three students of the year receive cash prizes worth some N$2 500 each, and the Group also sponsors the trophies.

– The Group sponsored N$10 000 towards material and a sewing machine for the newly established Charisma Academy in Kavango East, which makes school uniforms.

– Bidvest Namibia tries to assist the Namibia Chamber of Commerce and Industry where funds are urgently needed. In 2018 we sponsored N$20 000 towards the National Council Meeting.



Operational review – Bidvest Namibia Commercial and Industrial Services and Products

Theo MberiruaActing managing director of Bidvest Namibia Commercial and Industrial Services and Products

Age: 55

Qualification: BSc (Mercy College, New York), MBA (Accounting) (Baruch College of the City University of New York)

Theo has held senior executive positions at several major corporates, including Namibia Breweries, Lonrho, Telecom and Standard Bank and has lectured on business subjects in both the USA and Namibia. He was a member of the Presidential Economic Advisory Council. In addition, Theo is part of the executive team at the Namibia Chamber of Commerce and Industry and is a former chairperson of the SADC Banking Association. He joined Bidcom as commercial and business development director in April 2012.


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

industry. The operation sold more accessories and higher gross profit products, while focusing on its core business, and increased its product mix. A big contributor to the results was the new CUBOT phone range, introduced to the market in August 2017. Cost efficiencies were achieved, and staff numbers continued the downward trend. Staff training was stepped up with a renewed focus on customer service to protect market share. With increased sales and decreased costs, Kolok performed very well.

Minolco had another good year, benefiting from a noteworthy trend in the multi-function printer market, which has seen many more companies requesting and implementing print management services. Growth was achieved nationwide. Once again, high levels of customer retention underpinned growth. Leases on existing equipment were extended and customer relationships deepened as highly trained teams helped clients get the most out of their capital investments.

OPERATING CONTEXT The division was affected by the ongoing negative economic situation prevailing in Namibia and management upped the ante to counter this and to achieve better results than expected. The division achieved a growth of 3,3% in revenue and 22,1% growth in trading profit.

Economic activity in Namibia is hugely dependent on government spending, and government’s continued austerity measures affected volumes while late payments by customers created cash flow pressures. The division felt the pressure directly

when serving public sector customers, and the knock-on effect in the business-to-business environment – many of our private sector customers work on government projects.

The downturn in the construction sector had a negative impact on Voltex, Cecil Nurse and Plumblink whose business relies on this sector.

STRATEGIC RESPONSEThe recessionary environment required that we keep our back-to-basics strategy in place. We continued to review our cost base across all operations, and where possible any fat was removed. The businesses are now lean and mean and should benefit greatly when the economic cycle turns.

Investment continued in growth, systems and infrastructure, with an interrogation of all business cases before capital was committed. Staffing levels were reviewed, and unfortunately some retrenchments were unavoidable. We must stress that retrenchments were kept to a minimum.

Sales and customer service remained a focus as growth became a function of gaining market share. Pleasingly, many of our businesses made good progress in highly competitive markets. We trained more than 90% of our sales staff to sharpen their sales skills.

As cash flow constraints kept many customers under pressure, stringent debtor management continued in all our operations.

OPERATIONAL OVERVIEWWaltons performed admirably in a subdued Namibian economy and difficult trading conditions. The continued focus on reducing expenses throughout the year and a disciplined approach to improve efficiencies resulted in an increase in profits compared to the prior year. This was supported by the successful implementation of strategic initiatives aimed at applying best practices in procurement and optimising supply chain effectiveness. Windhoek and coastal branches performed above expectation while branches in the outlying regions experienced the brunt of the economic downturn. Customer service remained a priority focus for all managers. Traditional and social media marketing efforts were stepped up to ensure Waltons became more visible in the market. The Waltons Namibia corporate identity was overhauled, offering the market a refreshed new Walton’s look and feel. The rollout will continue in the 2018/2019 financial year.

Kolok grew profits in the period under review and maintained market share despite the harsh economic conditions in the retail and wholesale

SUSTAINABILITY

2017 2018 % change

Kilolitres

8 286 10 250

kW

748 949 894 049

Number

974 922

CSI N$

464 549 240 760

Litres

344 173 328 124

N$

735 308 249 837

24%

19%

-5%

-48%

-5%

-66%

Revenue – improved to N$490,2 million

0

100 000

200 000

300 000

400 000

500 000 490 249 473 665

20182017

Revenue (N$’000)

Trading profit – improved to N$20,5 million

0

5 000

10 000

15 000

20 000

25 000

20 461

16 764

20182017

Trading pro�t (N$’000)



Operational review – Bidvest Namibia Commercial and Industrial Services and Products – continued

OUR PEOPLE Training was ongoing in the various entities throughout the year, while expenses were rigorously managed. A highlight on the training calendar was our centrally managed training for the sales forces of all divisional companies – the biggest training initiative we undertook during the year. Training support for new managers, supervisors and employees remains a priority. Staff development is complemented by the ongoing effort to improve workplace safety. No significant safety incidents were reported.

COMMUNITYEach entity within the Commercial and Industrial Services and Products division contributes in its own way to communities where they operate, on a case-by-case basis. As such, support for community initiatives is built into standard practice at divisional businesses. Collaboration with the Mister Sister mobile health service continued at Cecil Nurse and Kolok. This ensures basic health cover for lower paid workers.

FUTUREWe all hope that the sentiments being expressed about the economy turning the corner will hold water going forward. The economy is still struggling, but we will continue to improve our efforts to fight for the little business that is available. We are using all possible methods to reach our customers, and make sure that we deliver excellent customer service.

The businesses have become very lean due to the cost savings and rightsizing measures we have introduced over the past few years, and we believe this division will come out very strong when the Namibian economy eventually turns. Within the division, a priority is to ensure Voltex reaches break-even and then profitability under the current contracted economy. We are confident Plumblink and Prestige will turn the corner and show a profit, albeit small, for the new financial year.

The print management industry will continue to flourish in these economically testing times. Konica Minolta Namibia looks forward to further implementation of its Y-soft print management software in the new financial year.

Rennies Travel sustained market share despite one of its biggest clients (Bechtel Project) being phased out from December 2017 and the down trading due to economic hardship. New accounts were won and there was a huge focus on customer retention and sales/customer service training. Online bookings are no longer making big inroads into volumes. Travellers are again seeking personal service. Our knowledgeable staff performed well in this environment, growing volumes and profit. Further investment was made in product and customer service training. Rennies Travel is currently implementing, reviewing and amending all company policies and procedures specific for Rennies Travel Namibia. The new webpage is about 60% complete and should be rolled out in the last quarter of calendar 2018, followed by an online/self-booking tool shortly. The inbound division is taking off.

Cecil Nurse posted an above-average performance for the year due largely to the performance of its manufacturing arm, and despite its main business being derived from the depressed construction industry. The operational focus remains on manufacturing where the business is involved with designers and architects on shop fittings and bespoke furniture design. The catalogue was improved, and new products introduced. Training continued, and the business is well positioned for any uptick in business activity.

Plumblink sales grew 25% despite the difficult economic environment, especially in the construction industry. Plumblink is now entrenched as one of the preferred suppliers for plumbing and sanitaryware in the industry. The move to the new premises in Lazarett Street has proven successful – an easier location for our customers – and cash sales have greatly increased. The Ongwediva store opened and we see great potential for a specialised plumbing supplier in the area.

Steiner has a solid customer base and continued to grow volumes in its core business, which is the provision of corporate hygiene services, while expanding its hygiene and pest control offering to

branches outside the Windhoek hub. The company was profitable for the period under review. Revenue growth remained positive, even in challenging market conditions. The move to a new warehouse in Windhoek has improved operational efficiencies and the new branch in Ongwediva has started to deliver positive returns.

Voltex Namibia moved to new premises to be closer to its customers and now has retail outlets in Windhoek, Ongwediva and Swakopmund. The company increased its branding and visibility and grew its customer base, despite the difficult market condition. The economy and the involvement of the government in the building and construction industries, the core Voltex sectors, continues to be a risk factor. Business is very slow since most big projects in Namibia are linked to the government. However, Voltex secured scarce specialised skills in the year under review, introduced stringent inventory controls, and revamped buying processes. A new warehouse and stock control system was set up, which anticipates demand patterns and improves stock availability. Training investment focused on customer service. “Face time” with customers rose as sales team became increasingly proactive. The turnaround strategy rolled out just as the national economy slowed and construction came to a halt. Debtors management became a growing challenge. Fundamental changes have been made to the business. The turnaround strategy will continue in the coming period.

Prestige, which we took over from the Bidvest Services division in South Africa in financial 2017, started to reduce losses in the period under review. Revenue growth was slow due to challenging market conditions. Operational stability improved due to improved cost-of-sales management and an improved human resources department. The business has nationwide reach and an established book of business. Management is prioritising the renegotiation of loss-making contracts. In cases where a continued relationship would result in unacceptable losses, it may be necessary to exit the business. Investment in equipment and uniforms is continuing as it is essential to build staff morale as part of the effort to improve service quality and grow the business. We continue to cut the rate of losses and set the scene for a return to profitability.


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Operational review – Bidvest Namibia Automotive

Alan DuncanActing Managing Director of Bidvest Namibia Automotive

Franchise CEO – Jaguar, Land Rover, Ford – McCarthy Motor Holdings

Age: 48

Qualification: NHDP Mechanical Engineering, Bidvest Executive Development Programme – Gordon Institute of Business Science

Appointed: 1 October 2016

Alan has 28 years of experience in the automotive industry, having spent some time in each area applicable to the industry, from warranties to sales, from export sales to key account management. His experience was obtained at various original equipment manufacturers, dealerships and brands until he found his home at McCarthy Motor Holdings 11 years ago. He has been the Franchise CEO for Jaguar, Land Rover, Ford and Mazda for the last ten years.



dealerships, being at the end-of-product ranges for passenger and light commercial vehicles detracted.

We moved the underperforming Mazda facility to a lower-cost strategic location with high foot fall, effected cost efficiencies and improved productivity at all workshops, and secured additional showroom space in the southern part of Windhoek.

SALES ACTIVITY New vehicle sales fell by 36,28% to 727 units (2017: 1 141 units) in line with the industry drop in new vehicle sales. Used vehicle sales responded to increased management focus and stronger demand for pre-owned stock by increasing 23,36% to 375 units (2017: 304 units). Almost all after-sales workshops showed a turnaround during the period under review and our parts and accessories business, which was bought in-house from third-party providers, did well.

OPERATING CONTEXT The Automotive division faced another extremely tough year due mainly to the prevailing recessionary economic environment in Namibia and in line with the pressures facing the automotive sector in the region. The vehicle market declined with 14% for the 2018 financial year.

Results were disappointing as the division saw a 73,4% drop in trading profit.

Reduced spending by government departments, businesses and consumers continues to depress the sector and the effects of amendments to the

National Credit Act (NCA), effective from July 2016, are still being felt. The amended NCA demands a minimum 10% deposit on new car purchases, repayment periods were capped at a maximum of 54 months, and residual values in purchase prices were banned.

Data on the Namibian automotive sector, and our own experience, indicates that instead of buying new vehicles, consumers are holding on to the vehicles they own or purchasing second-hand or imported vehicles. Meanwhile, commercial vehicles sales continue to slow down, in response to lower business confidence in general and less capital available for expenditure.

STRATEGIC RESPONSE The drop in new car sales has been a persistent feature for the past two years, and we do not expect an uptick in the immediate future. As such, management has actively focused on optimising used-vehicle sales, after-sales service, parts and accessories offerings, and aligning the expense base with the adjusted revenue base.

Management is driving a cost-absorption model with a view to covering the company’s overhead costs from the proceeds of after sales and used-car sales. Tremendous headway was made in implementing this model in the year under review – and there is still further progress to be made to reach optimal cost-absorption levels, the benefits of which will flow through in subsequent years.

In addition, excellent progress was made in turning around customer satisfaction levels – from relatively low levels historically, to meeting all factory targets during the year under review. This is a significant positive development given the pressures Namibian consumers are feeling. Our brand principals conduct regular customer satisfaction surveys. Consistent improvement across these scorecards is a business imperative. This entails strategic commitment to customer service and technical training.

Our dealerships in Windhoek and Walvis Bay sell and support models from the Ford, Mazda, Land Rover and Jaguar ranges. Automotive embarked on a concerted outside marketing campaign to bring our products to potential customers and we were present in the major malls, the tourism, agricultural and other exhibitions nationwide, and the well-attended Meatco Annual Braai Competition in Gobabis. We improved our digital presence via an upgraded Namibian Call-a-Car website, which has proved a cost-effective lead generator, and increased our social media advertising presence and engagement.

New products were leveraged to boost sales. The Jaguar E-Pace and the Range Rover Velar were launched into the market. However, at our Ford

SUSTAINABILITY

2017 2018 % change

Kilolitres

9 239 7 575

kW

590 800 635 147

Number

247 234

CSI N$

1 015 309 830 427

Litres

199 008 183 254

N$

591 600 202 011

-18%

8%

-5%

-18%

-8%

-66%

Revenue – decline to N$583 million

550 000

584 000

618 000

652 000

686 000

720 000

582 981

701 012

20182017

Revenue (N$’000)

Trading profit – decline to N$6,1 million

0

5 000

10 000

15 000

20 000

25 000

6 118

23 028

20182017


Operational review – Bidvest Namibia Automotive – continued


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

event we co-sponsored. Automotive was very involved in sponsorships for the Uis Land Rover festival and the Eagles Angling Club league event. We again provided a Ford Ranger 4x4 in support of Namibia’s effort to curb rhino poaching in the country and made another vehicle available to the Lady Pohamba Hospital to enable rapid response to accidents and other emergencies. Various initiatives were undertaken by our dealerships, in partnership with the Red Cross, to collect and distribute clothing and food to the needy.

FUTURE The market will take some time to recover. We have secured our position in two new locations in Walvis Bay and are looking at other franchise opportunities to broaden our footprint in the country. However, consolidation is a key focus as Automotive seeks to extract results from the strategic initiatives undertaking during financial 2018.

Management will further drive the cost-absorption model, ensure stringent working capital management and inventory control, and take steps to grow used-vehicle sales and parts sales. Having secured good-quality talent, the division is poised to unlock more value from its current operations.

NEW INVESTMENT The new Ford satellite facility in Lazarett Street, Windhoek, was completed in October 2017. The Group also began its new strategic partnership with the Ford Finance and Nedbank, under the Ford Credit brand. The marketing drive and products were launched in the latter part of the year with enticing deals of up to prime less 5% to unlock the potential of the partnership.

During 2018, the upgrade of the Novel Ford Windhoek dealership in Independence Avenue, was completed, and its state-of-the-art facilities are comparable with the best-in-class facilities in neighbouring South Africa. This N$8,5 million capital expenditure is a significant investment in a tough market.

OUR PEOPLE The management team was strengthened via the appointment of key people into the marketing, service, and used-vehicle sales functions, and promoting key talent from within. The staff complement reduced somewhat during the year due to natural attrition, and management focused on extracting efficiencies rather than filling vacant seats, thus avoiding retrenchments, which have been rife in the sector.

Despite the pressured trading environment our teams continued to excel. The Jaguar Land Rover service manager won the service manager of the year award, and in customer satisfaction ratings the dealership is regularly placed among the top three as a Jaguar Land Rover service provider.

Training and retraining in-house, in South Africa, and online continued extensively for all key sales and service staff. A key highlight during 2018 is that for the first time, we developed a Namibian workshop technician to a level 4 at our Land Rover dealership.

Automotive is still pursuing plans for McCarthy South Africa to provide opportunities for some workshop staff to attend the McCarthy training centre in South Africa. This initiative is supported by the Namibia Training Authority.

COMMUNITY COMMITMENT Our support of the wider community continued, despite the tough operating environment. We sponsored Namibian Olympic athlete Michelle Vorster with clothing and a support vehicle for her team and one other mountain biking team. We were delighted that our brand ambassador for Jaguar Land Rover, Nangula Kauluma, won the 2017 Namibian Businesswoman of the Year Award, an



Operational review – Bidvest Namibia Freight and Logistics

Michael SamsonManaging director: Freight and Logistics

Age: 58

Qualification: BCom, Dip Acc, Management Development and CA

Appointed: Mike joined Manica Group Namibia on 26 October 2015

Mike was financial director of Manica Zimbabwe and left in 1997. In 2006, Mike started a bottled water company in South Africa which was subsequently sold. He was appointed as the managing director of Nampak Cartons, Nigeria, from 2013 to 2015.


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

OPERATIONAL OVERVIEW The Freight and Logistics unit derives its revenue from customs clearing and the associated bond fees as well as transport broking, all of which had limited activity. However, the unit has a good mix of projects, including local industry and cross-border business, and saw steady revenues and an increase in copper exports from Zambia and the DRC. There is potential for an increase in clearing activity for oil and gas projects.

Marine Services was again impacted by low offshore activity. Ships agency Ocean Liner Services’ revenue was down, in line with reduced vessel activity in the port, which is consistent with a general decrease in vessels calling at Walvis Bay and reduced oil and gas activity. Lüderitz Bay Shipping and Forwarding showed revenue growth, largely from increased De Beers activity and the wind turbine project. Work on renewable energy installations is ongoing in the Lüderitz area. The division has been successful in delivering support

OPERATING CONTEXT The regional and national economies continued to range from depressed to subdued during the period under review. This impacted on the division, which provides freight, logistics and marine services. Lower retail sales, muted trading activity, changing supply and demand fundamentals for African commodities, and low-to-absent levels of domestic investment in infrastructure and mining impacted transit volumes and the business. We have seen the gradual upturn in the world economy starting to pull through commodities from central Africa, but shipping activity remained low.

Overall, the business is operating at a sustainable level. Manica Group Namibia experienced a good year, with all operational pillars showing positive results except for the trading and cargo pillars, which were affected by equipment impairments.

STRATEGIC RESPONSEThe division is focused on optimising its structure, boosting static revenue levels, continuing its cost- reduction initiatives and focusing on potential areas for expansion. The end of the oil boom saw the oil and gas industry scale back. This was matched by a similar rightsizing at Freight and Logistics to create leaner, more nimble businesses.

The beginnings of some renewed activity in the oil and gas sector is a positive development for the division, which is providing goods and services to the Tullow exploration drilling campaign ramping up outside Walvis Bay. We actively investigate every opportunity, whether in oil and gas, distribution services or transit cargo.

Freight and Logistics has embraced technology changes and information transfer to remain relevant, including introducing transparent and real-time tracking to ensure operations are competitive with their global counterparts.

We have also reinforced multi-disciplinary systems and product solutions for our customers in the stevedoring, transport and warehousing sectors. The marketing of the division has provided valuable support to our efforts to grow market share in our four activities – marine services, freight and logistics, cargo management, and trading.

Service quality, customer service and client retention remained a key focus area and the division’s leaner structure enabled quick reaction times to opportunities. Manica Support Services, which handles management systems, administration and finance, HR, marketing and business development, continues to play a critical role in the performance of the division.

SUSTAINABILITY

2017 2018 % change

Kilolitres

3 289 1 804

kW

1 235 992 496 906

Number

903 1 155

CSI N$

75 354 115 776

Litres

328 551 267 338

N$

1 193 608 834 509

-45%

-62%

28%

54%

-19%

-30%

Revenue – decline to N$263,1 million

260 000

261 000

262 000

263 000

264 000

265 000

263 108

264 493

20182017

Revenue (N$’000)

Trading profit – improved to N$16,7 million

10 000

11 400

12 800

14 200

15 600

17 000 16 734

11 658

20182017




Operational review – Bidvest Namibia Freight and Logistics – continued

services to the project teams. MACS’ import and export freight volumes were steady, contributing to operating profits for the marine-focused unit, and Orca Marine showed good growth from increased market share.

Cargo Management was impacted by the overall level of business in general, which had a negative impact on volumes moving through the warehouses, but Rennies Consolidated (Warehousing and Container Terminal) maintained a steady revenue with increasing copper activity, and the Swakop Uranium contract being extended, albeit at reduced rates. Rennies Materials Handling and Transport made a strong trading recovery. Meanwhile, the rework of the Walvis Bay Stevedoring flexible employment and shift system to reposition permanent jobs continued apace, showing positive but marginal effects, and the quayside and trans-shipment businesses contributed well.

The Trading unit saw increased pressure on the supply of industrial, automotive and marine lubricants. Lubricant Specialists’ revenue reduced due to the drop off in fishing activity and the loss of a major mining customer because of the challenges facing the uranium sector. Monjasa Namibia, meanwhile, posted a consistent performance, winning tenders for two storage bunkers for the National Petroleum Corporation of Namibia (Namcor).

OUR PEOPLE Employment levels have remained largely static, and industrial relations stable. Increased efficiencies are constantly being sought to ensure costs are aligned with level of business.

People development remains a key focus for management with significant ongoing training at all levels. In addition, the division has embarked on a “One Manica” culture change initiative, focused on driving a multi-disciplinary and multi-product business mindset and to shift the culture away from solo mentality of the past.

We have kept our relationship with the Namibian University of Science and Technology (NUST) and the University of Namibia (UNAM). We provide internships in logistics, finance and human resources for students requiring practical work experience to complement their tertiary education. This is part of the Group’s active involvement with CATS (Commercial Advancement Training Scheme), which is outlined in more detail in the Food and Distribution review.

Efforts from management towards a safe and healthy working environment are continuing.

COMMUNITY COMMITMENTThe division funds one full-time teacher at the Walvis Bay Sunshine Centre – a haven for children with special needs and their mothers – and has been involved in several other ad hoc projects during the year. The focus is on health, education, the environment, youth development, educational bursaries and sport.

FUTUREDepressed economic conditions, although showing a marginal improvement, are expected to keep container traffic and bulk cargoes at low levels in the short term. However, we are excited about the potential growth in the oil and gas sector, which will depend on the success of the current exploratory Tullow drilling programme. We are also watching with interest the development of a world-class container terminal in Walvis Bay, which will serve the local industry and inland Africa as a trans-shipment port.

We have refined the business structure of the division and are well positioned to maximise trading opportunities in a more cost-efficient way.


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Michael SamsonManaging director: Food and Distribution

Age: 58

Qualification: BCom, Dip Acc, Management Development and CA

Appointed: November 2017

Mike was financial director of Manica Zimbabwe and left in 1997. In 2006, Mike started a bottled water company in South Africa which was subsequently sold. He was appointed as the managing director of Nampak Cartons, Nigeria, from 2013 to 2015.

Operational review – Bidvest Namibia Food and Distribution



facilities serving different elements of the business, particularly ambient and cold chain, was rationalised. The number of distribution hubs was reduced to four with centralised stock holding using a hub-and-spoke model to store and distribute more efficiently. The high levels of obsolete, damaged and expired stock saw increased management focus during the period and serious consideration is being given to outsourcing more of the distribution functions. Warehousing and distribution will be responsible for the T&C Retail and T&C Hospitality warehousing and distribution functions via an independent service provider. The aim is to grow this division’s customer base to include outside companies for which only warehousing and distribution services are provided.

The planning and procurement unit is newly created, comprising the former demand and supply unit that was linked to warehousing and distribution. Now a standalone unit, planning and procurement has managed to significantly reduce stock levels and has introduced an updated forecasting tool, providing a good scientific foundation for stock management.

OPERATING CONTEXT Given the extended recessionary environment in Namibia, consumers continued to feel the pinch, which saw wages and employment numbers dropping across the country. The retail sector came under sustained pressure due to the overall economic downturn, with sales declining 4,5% and strong brands under pressure.

The division posted a 4,5% decrease in revenue. This translated into significant losses at the trading profit level due to stock losses, claims and damages.

The hospitality sector struggled to cope with the trading challenges posed by the general downturn, downtrading continued in the sector and competition remained stiff.

In addition, legacy systems meant distribution and stock loss costs needed focused management attention. As such, the year under review was typified by reorganisation, restructuring and updating methods and systems to stem unnecessary losses and ensure efficiency gains.

STRATEGIC RESPONSEFinancial 2018 saw a management and structural shakeup at Food and Distribution. Historically, the businesses were family owned and autocratically controlled, without the necessary investment into systems and controls. As such, inventory management, customer claims, working capital management and cash flows were sub-optimal.

Management embarked on cost savings and overall business rationalisation. In tandem, a culture change programme took place to instil a culture of discipline and of pride in doing things the right way, to create a much more invested workforce.

Management teams were strengthened, and new and improved systems and control mechanisms were put in place to manage variable operating costs, such as stock loss costs. A reworked distribution model was introduced. Management at different facilities serving different elements of the business, particularly ambient and cold chain, was rationalised, and the number of distribution hubs was reduced to four. Cost control and efficiencies are a key strategic focus.

OPERATIONAL OVERVIEW Retail operations saw resilient sales levels given the trading environment which was partly due to (coupled with) the decision to reduce margin to maintain sales volumes. However, there were enormous in-trade stock losses resulting from the legacy systems. These were primarily due to inefficiencies in the in-store expiry and damage processes, which has been the key focus for cost reduction and streamlining. A team of three is currently working full time on resolving long-outstanding claims and the current damages and expiry claims are now consistently under target. Newly implemented stock rotation systems are also bringing stock levels and ageing toward target levels.

Warehousing and distribution, as the core of the Food and Distribution division, is the focus of management turnaround efforts. New systems and distribution management were introduced during the period under review. Management at different

SUSTAINABILITY

2017 2018 % change

Kilolitres

19 443 7 624

kW

4 381 548 3 814 701

Number

473 515

CSI N$

628 261 23 404

Litres

928 329 875 941

N$

413 245 72 000

-61%

-13%

9%

-96%

-6%

-83%

Revenue – decline to N$1 346,9 million

1 330 000

1 341 250

1 352 500

1 363 750

1 375 000

1 386 250

1 397 500

1 408 750

1 420 000

1 346 904

1 411 690

20182017

Revenue (N$’000)

Trading loss– decline to (N$34,3 million)

(35 000)

(30 000)

(25 000)

(20 000)

(15 000)

(10 000)

(5 000)

0

(34 306)

(7 680)

20182017


Operational review – Bidvest Namibia Food and Distribution – continued


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

FUTURE The primary focus in the immediate term is to continue this period of consolidation and bed down the changes to ensure sustainable profitability. Continued efficiencies will limit stock-related wastage and costs, reduce operational running costs and improve trade execution in terms of sales and merchandising.

We have stepped up efforts to deepen our partnership with customers and are in discussion with several principals to be awarded their full sales and distribution business and develop the logistics business.

Food and Distribution has already become a nimbler, more efficient division, and the intention is to continue this trajectory, with reduced stock holding and a more focused warehousing and distribution offering.

Hospitality was structured as separate business unit due to its business model being inherently different to the rest of the division, was branded T&C Hospitality, and now offers a greater basket of goods other than purely food products. All operations have been centred in Windhoek to reduce costs and stock expiries, which have been affecting margins. A high value of obsolete and expired stock was written off in the period under review. As such, a lot-control system was implemented to allow accurate tracking of expiry dates and the value of outstanding claims was significantly reduced.

Lifestyle is another newly created standalone business unit, previously part of the retail unit, focused on product ranges, selling trends, outlets and methodologies that are different from the classic FMCG goods business. The unit did well, and stockholding is being addressed. Meanwhile, the IT business unit is receiving attention to bring its functioning in line with the more real-time needs of the division.

OUR PEOPLE The permanent headcount fell due to the loss of the Parmalat cold storage business coupled with rationalisation to cut costs and increase productivity. Ongoing headcount reduction is likely as rationalisation and reorganisation continues.

As a Group we are very active with the CATS (Commercial Advancement Training Scheme). Our CATS trainees are quality, highly motivated grade 12 school leavers who have a trainee contract with us for two years. The students work at the company for four days a week gaining on-the-ground skills and experience and spend one-and-a-half days a week at a higher education institution offering theoretical studies. Many of our CATS trainees stay with us after completing their programme. We have also employed several interns from the Namibia University of Science and Technology (NUST).

Training of our people continues in a bid to actively build succession at all levels and create a pool of trained and trainable people, so that the division can be self-sufficient in terms of skills. We were early adopters of the sales academy programme and have four people on a management development programme and eight on supervisory level training.

COMMUNITY COMMITMENTWe remain committed to community participation. During the year under review, all pet food damaged or returned from the trade was given to animal welfare organisation, the SPCA. We also participated in a programme to distribute graphic entry level dictionaries to rural schools.



Operational review – Financial Services

Namibia Bureau de Change (NBDC)Namibia Bureau de Change (NBDC), in which we hold 49%, remains competitive and driven in the market. The internationally recognised World Traveller Card picked up well and NBDC launched Money Transfer in the period under review, which expanded its footprint into Western Union corridors. A new branch was opened in Gobabis adding to the two added in the previous period. We now have two branches in Windhoek, two at the international airport, two at the coast and one in the east of the country. The focus will now turn to the northern part of the country in the new financial year. NBDC caters for inbound tourists in forex dealings and Namibians wanting to go abroad.


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Operational review – Bidvest Namibia Fisheries Holdings

The Mozambican sales and distribution operation, Industria Alimentar Carnes De Moçambique, is based in Maputo and sells a wide range of food products, including meat, chicken and fish. The business, in which Bidfish holds 40%, made good progress in terms of volumes and expanded its cold store facilities into Beira. But margins were under pressure as Mozambique suffered foreign currency devaluation and import restrictions on products from Brazil. A 20% import tax on horse mackerel was introduced late in 2017, which did not apply to imports from Southern African Development Community countries, giving Namibian horse mackerel a key market advantage.

The revival of the Glenryck brand continued apace in Namibia, South Africa and Mauritius. Glenryck was not included in the disposal of Bidfish to Tunacor. Glenryck’s results will be included under the Food and Distribution division, and the business will report directly to the Bidvest Namibia CEO.

OUR PEOPLE Unfortunately, there were 966 job losses during the period under review as the economic climate, trading conditions, fleet reduction and factory closures hit hard. Bidfish is a responsible employer and endeavoured wherever possible to reduce the impact. There was an absolute focus on cost containment all year.

COMMUNITY COMMITMENTThe 10% shareholding in Namsov, currently beneficially held by the Namsov Community Trust, is being transferred to a workers’ trust. The Namsov Community Trust continued during financial 2018 to contribute to the development of under-resourced communities across Namibia, providing funding to help drive numerous grassroots initiatives.

FUTURE The disposal of Bidfish to Tunacor excludes the Angolan and Mozambican businesses, and certain vessels, plant and equipment. Bidvest Namibia is actively seeking the disposal of these assets. As an interim measure, Tunacor has agreed to manage them on behalf of Bidvest Namibia.

The story of the Fisheries division in 2018 was one that saw a continuation of the pressures the unit has faced from several fronts over the past few years. Due to sustained shocks – from the natural environment, the Namibia economic downturn, and the government’s regulatory decision to no longer award fishing quotas to publicly listed companies – Bidvest Namibia sold its entire shareholding in Bidvest Namibia Fisheries (Bidfish) to Tunacor Fisheries Limited.

Bidfish held a 69.55% interest in Namsov, which caught, processed and distributed fresh and frozen fish and canned fish products for national and international distribution. Namsov and its subsidiaries hold fishing rights for horse mackerel and pilchards as well as investments in oyster farming activities.

The disposal enabled Bidvest Namibia to act on its strategic decision to exit the fishing industry, and to hand over one of Namibia’s most successful empowerment businesses into local hands to ensure its continuity. Bidvest Namibia is passing the baton to a 100% Namibian-owned and controlled entity, enabling the future of a viable and indigenous business going forward.

OPERATING CONTEXT Overall, Fisheries faced extreme pressure in terms of revenue, profit and cash flow. The horse mackerel business did not perform well against its budget or the prior year with trading profit decreasing by 83% year-on-year. The fish size mix remained under pressure, competition was fierce as fish volumes from foreign sources rose, market prices remained depressed and margins suffered. Depressed fish prices were the feature of the year again as falling personal income levels saw competition for cheap protein products across Africa. New taxes and levies, and an export levy added to the cost of doing business and impacted earnings, while additional costs arose following the required application of income taxes to foreign crew.

The pilchard business had an incredibly tough year, largely due to the cannery factory closure and a moratorium placed on pilchard fishing.

OPERATIONAL REVIEW Low private-sector quotas continued to typify the market. In the 2018 calendar year, a TAC of 340 000 metric tonnes was determined, equivalent to the previous year’s allocation. The Ministry of Fisheries and Marine Resources (MFMR) continued

its practice of announcing allocations at various times of the year. For pilchards, the total allowable catch for the 2018 season was set at zero metric tonnes (2017: 14 000 metric tonnes), and a three-year moratorium was placed on pilchard catches. During the period under review Namsov received notice from the MFMR that its right will not be renewed upon expiry on 31 December 2018 and it is expected to apply for a new right once public invitations open.

Namsov performed below budget expectations for the year, largely due to the foreign exchange losses, reduced catching capacity following the sale of MFV Sunfish vessel early in the financial year and the MFV Carapau spending time in dry dock. This was compounded by poor daily extraction volumes, poor size mixes, depressed markets, unfavourable exchange rates and increased and new quota, fund and bycatch levies and taxes. Sales prices remained under pressure, mostly due to an oversupply of small fish and adverse economic conditions in our main markets.

Pesca Fresca, the Angolan operations specialising in sardinella fishing and processing, reported strong operating profits despite forex losses from the devaluation of the Angolan kwanza and the strengthening of the Namibian dollar versus the US dollar. Both Angolan vessels spent time in Namibia on planned repairs, maintenance and safety certificate renewals. Profits were mostly driven by good sardinella catches, albeit at lower-than-expected sales prices.

Namsea recorded low production, which resulted in low sales volumes for the year and translated into operating losses, exacerbated by the three-year moratorium placed on pilchard catches, the mothballing of the factory and the associated retrenchment costs.

Tetelestai Mariculture, the oyster-farming business, showed a loss mainly due to slow stock growth, the write-off of obsolete stock and accelerated depreciation on farm lines. All cultivation is now concentrated on the salt pan site near Walvis Bay, which resulted in lower mortality rates and better efficiencies. However, a sulphur eruption near year-end impacted mortality rates. The strategy is to continue right-sizing the operation to a manageable and profitable level.

Twafika Fishing Enterprises is dormant until its rights renewal by the MFMR.



“The disposal of the fishing assets enables clearer strategic direction for future growth, and consideration is being given to restructuring and boosting the remaining assets, together with systems and management teams.” Melanie Hodgson, acting chief financial officer (59)

The disposal of Bidfish to Tunacor excludes the Angolan and Mozambican businesses, and certain vessels, plant and equipment. These businesses are classified as held-for-sale while Bidvest Namibia is actively seeking the disposal of these assets. Glenryck is now reported as part of Food and Distribution, and Namsov Industrial Properties and United Fishing Enterprises were acquired by Bidvest Namibia for a net cash outflow of N$74,9 million.

OVERVIEW The challenging market environment in which Bidvest Namibia operates has again affected this year’s financial performance. Most divisions performed at lower levels than in the previous period, with only Corporate Services and Properties delivering growth, largely due to dividends received from funds invested.

The year’s most significant event, however, occurred at the end of the financial year when the stated strategic objective of exiting the fishing business was largely achieved after the entire shareholding in

Bidfish was sold to Tunacor Fisheries with effect from 30 June 2018. Due to stringent policy changes the Fishing division has faced pressure in terms of revenue, profit and cash flow for some years. Additionally, the consumer market is constrained, and the fish size mix remained under pressure, while competition was fierce. Market prices remained depressed and margins suffered, with new taxes, levies and an export levy added to the cost of doing business, negatively impacting earnings. Additional costs also arose following the required application of income taxes to foreign crew.

Chief financial officer’s review

MOCK-UP PIC

Significant focus is being directed at operations where performance and/or cash management is below expectation.

Imperative to ensure better productivity and efficiencies, as well as enhancing cost management across all businesses to ensure future profitability.

Our focus on cost control, working capital management and the generation of acceptable returns on funds employed continued.

Revenue from ongoing operations decreased by 5,7% to N$2,7 billion.


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

of acceptable returns on funds employed. Naturally, a significant focus is being directed at operations where performance and/or cash management is below expectation.

PROSPECTS It is expected that the Namibian economy will continue to experience challenging circumstances. The imperative will therefore be on ensuring better productivity and efficiencies, as well as enhancing cost management across all businesses to ensure future profitability.

The disposal of the fishing assets will enable a clearer strategic direction for future growth, and consideration is being given to restructuring and boosting the remaining assets, together with systems and management teams. This is urgently needed to enhance returns and ensure the sustainability and strength for the business going into the future.

Melanie HodgsonChief financial officer

FINANCIAL POSITION Total revenue from continuing operations declined by 5,7% to N$2,7 billion from N$2,9 billion. Trading profit from continuing operations reduced by 46,4% to N$28,5 million from N$53,2 million.

Bidvest Namibia’s balance sheet remains strong and the Group was in a net cash position at year-end.

The effective tax rate is high due to losses incurred in certain statutory entities, for which no deferred tax assets were raised. Current assets include amounts of N$188 million relating to dividends received in full, post year-end, from Bidfish and the N$190,7 million due by Tunacor Fisheries relating to the disposal of Bidfish: N$175,4 million was paid in July 2018 with the balance due within five business days after delivery of the effective date financial statements. Non-current assets have reduced by 40,9% mainly due to the disposal of Bidfish.

Property, plant and equipment purchases totalled N$30,3 million. Replacement capital expenditure at all businesses was maintained.

Net working capital increased to N$29,3 million due to the Bidfish disposal. Provisions for doubtful debtors and obsolete stock are adequate.

Currency risk remains an integral part of certain business operations, where we match foreign assets and liabilities as far as possible.

DIVISIONAL REVIEWAll other Bidvest Namibia divisions experienced pressure on revenue due to the recession in Namibia.

The Automotive division faced an extremely difficult year as reflected in the 14% decline in the vehicle market. The used vehicle market did not make up for the overall negative performance, while efforts continue to reduce the dependence on the new-vehicle segment in this division. Although Freight and Logistics revenues were flat year-on-year, the trading profit improved, largely because of a well-managed cost-saving programme.

Food and Distribution revenue, excluding Glenryck, did not grow in line with expectations and generated trading losses for the year. Management and structural changes have occurred with cost savings, and an overall business rationalisation project is underway. The economic climate negatively affected many entities in the Commercial and Industrial Services and Products division, bar Cecil Nurse, Kolok, Minolco, Steiner and Waltons. Voltex continued to generate losses despite actions taken to turn the business around.

Despite the difficult operating environment, Bidvest Namibia’s decentralised and entrepreneurial business model continues as a focused imperative. The head office structure remains lean, while the Company has augmented its focus on cost control, working capital management and the generation CONSOLIDATED AND SEPARATE

FINANCIAL STATEMENTS

GROUP OVERVIEW

PERFORMANCE

OVERVIEWBidvest Namibia Annual Integrated Report 2018 43


Value added statement

Note2018

N$’0002017

N$’000

Revenue – continuing operations 2 710 612 2 873 524

Revenue – discontinued operations 670 413 902 924

Paid to suppliers for materials and services (2 699 187) (2 983 763)

Value added 681 838 792 685

Income from investments 4 43 565 38 425

Total value created 725 403 831 110

VALUE DISTRIBUTIONSalaries, wages and other employment costs 1 574 411 597 977

Providers of capital

Dividends to shareholders 12 717 46 630

Dividends to non-controlling interest 245 807 72 981

Finance costs 29 010 21 962

Central and local government 2 100 429 95 010

Total distributions 962 374 834 560

Reinvested in the Group to maintain and develop operations: (236 971) (3 450)

Amortisation and depreciation 71 521 81 430

Deferred taxation (20 025) (27 087)

Undistributed profit/(loss) attributable to equity holders of the Company (52 858) 3 980

Non-controlling interest (235 609) (61 773)

Total wealth distributed 725 403 831 110

574

259

101

29

(237)

598

120

9319

(3)

Employees

Finance cost and borrowings

Central and local government

Reinvested in operations

Dividends to shareholdersand non-controlling interest

Wealth distribution 2017 (N$’million)Wealth distribution 2018 (N$’million)


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Note2018

N$’0002017

N$’000

NOTES TO THE VALUE ADDED STATEMENT1. Salaries, wages and other employment costs

Salaries, wages, overtime payments, commissions, bonuses and allowances 346 199 308 650

Employer contributions 42 473 41 649

Total continuing operations 388 672 350 299

Discontinued operations 185 739 247 678

574 411 597 977

2. Central and local governmentsCurrent normal company taxation – continuing operations 20 201 18 890

– discontinued operations 47 703 65 523

Quota levies, royalty fees, environmental taxes 28 211 7 450

Rates and taxes paid on properties 4 314 3 147

100 429 95 010

3. Additional amounts collected on behalf of central and local governmentValue added tax collected on revenue 498 666 428 618

Customs and excise duties 115 212 48 181

Pay-as-you-earn deducted from remuneration paid 84 112 98 067

Non-resident shareholders’ tax deducted from dividends paid 336 1 233

698 326 576 099

4. Income from investmentsDividends received on other investments 17 636 4 007

Finance income – continuing operations 4 553 5 878

– discontinued operations 21 376 28 540

43 565 38 425



Financial history2018

continuing

2017 restated

continuing 2017 2016 2015 2014 2013 2012 2011 2010 2009

Extract from financial statements N$’000Revenue 2 710 612 2 873 524 3 776 448 3 858 596 3 534 769 3 703 495 3 294 235 2 730 667 1 918 804 1 608 101 1 387 590

Trading profit 28 488 53 160 92 521 294 887 409 655 501 313 601 497 646 616 544 922 368 869 284 496

Net finance (expense)/income (24 457) (13 194) 12 457 17 133 27 111 16 298 15 690 17 606 6 085 1 253 3 402

Attributable (loss)/profit (20 828) 12 765 61 818 235 114 412 466 343 742 426 505 460 880 384 079 229 680 183 344

Shareholders’ interest 1 854 508 2 229 780 2 229 780 2 303 911 2 278 030 2 065 162 1 959 047 1 711 976 1 401 728 1 156 007 655 795

Total assets 2 692 611 3 086 850 3 086 850 3 160 024 3 024 579 2 764 518 2 778 557 2 468 625 1 940 353 1 724 735 1 073 018

Funds employed 1 381 704 1 374 709 1 374 709 1 485 273 1 436 838 1 372 372 1 199 271 1 038 630 680 991 564 526 414 208

Cash generated by operations 19 918 51 270 185 067 388 187 531 746 413 761 585 583 625 123 545 332 431 704 240 378

Wealth created by trading operations* 725 403* 831 110* 831 110 1 040 544 1 215 976 1 158 871 1 204 599 1 203 998 – – –

Employee benefits and remuneration 388 672 350 299 597 977 595 728 577 896 550 960 483 638 435 779 365 669 315 896 263 301

Share statisticsHeadline earning per share (cents) (10,0) 3,8 22,4 86,2 103,2 116,0 129,5 140,3 120,0 87,4 79,0

Ordinary distribution per share (cents) 10,0 10,0 10,0 38,0 56,0 63,0 69,0 63,0 54,0 36,0 15,0

Distribution cover (times) (1) 1 3 3 3 3 3 3 3 3 7

Distribution yield (%) 1% 1% 1% 4% 5% 5% 6% 6% 7% 5% not listed yet

Earnings yield (%) 3% 3% 3% 8% 12% 9% 10% 13% 16% 12% not listed yet

Net tangible asset value per share (cents) 703 737 737 734 769 688 638 578 500 410 240

Share price (cents)

High 7,85 10,49 10,49 10,51 13,28 12,73 12,71 10,71 8,20 7,20 not listed yet

Low 7,78 7,78 7,78 10,45 10,99 12,50 10,71 8,02 7,20 6,99 not listed yet

Closing (30 June) 7,78 7,86 7,86 10,50 10,99 12,73 12,51 10,71 8,02 7,20 not listed yet

Market capitalisation (N$’million) 1 648 994 1 665 951 1 665 951 2 225 507 2 329 363 2 698 162 2 651 532 2 270 017 1 659 763 1 490 062 not listed yet

Volumes traded (000’s) 1 007 2 100 2 100 8 559 2 261 1 304 4 340 2 935 1 846 1 561 not listed yet

Volumes traded as % of weighted number of shares 0% 1% 1% 4% 1% 1% 2% 1% 1% 1% not listed yet

Ratios and statisticsReturn on total shareholders’ interest (%) 2% 2% 4% 13% 18% 24% 31% 38% 39% 32% 43%

Return on average funds employed (%) 2% 4% 6% 20% 29% 39% 54% 75% 88% 75% 69%

Trading profit margin (%) 1% 2% 2% 8% 12% 14% 18% 24% 28% 23% 21%

Interest cover 1 (1) 5 14 15 21 27 26 63 183 54

Current asset ratio 2,4 2,7 2,7 2,8 3,6 3,8 3,0 3,0 3,2 2,5 1,8

Quick asset ratio 1,8 2,0 2,0 2,1 2,8 2,9 2,4 2,4 2,7 2,0 1,3

Number of employees 2 879 2 857 3 481 2 738 3 305 3 239 3 203 3 110 2 690 2 568 1 998

Revenue per employee (N$’000) 942 1 006 1 085 1 409 1 070 1 143 1 028 878 713 626 694

Value added per employee (N$’000)* 252* 291* 239 380 368 358 376 387 – – –

Number of shares in issue (000’s) 211 953 211 953 211 953 211 953 211 953 211 953 211 953 211 953 206 953 206 953 163 303

Number of weighted shares in issue (000’s) 211 953 211 953 211 953 211 953 211 953 211 953 211 953 209 862 206 953 192 363 163 303

Exchange rate comparisonsRand/US dollar

Closing rate 13,75 12,94 12,94 14,77 12,12 10,70 10,24 8,33 6,75 7,62 8,27

Average rate 12,87 13,55 13,55 14,39 11,41 10,32 8,86 7,77 6,98 7,61 9,28

* Amount includes both continuing and discontinued operations.

Ten-year review


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Financial history2018

continuing

2017 restated

continuing 2017 2016 2015 2014 2013 2012 2011 2010 2009

Extract from financial statements N$’000Revenue 2 710 612 2 873 524 3 776 448 3 858 596 3 534 769 3 703 495 3 294 235 2 730 667 1 918 804 1 608 101 1 387 590

Trading profit 28 488 53 160 92 521 294 887 409 655 501 313 601 497 646 616 544 922 368 869 284 496

Net finance (expense)/income (24 457) (13 194) 12 457 17 133 27 111 16 298 15 690 17 606 6 085 1 253 3 402

Attributable (loss)/profit (20 828) 12 765 61 818 235 114 412 466 343 742 426 505 460 880 384 079 229 680 183 344

Shareholders’ interest 1 854 508 2 229 780 2 229 780 2 303 911 2 278 030 2 065 162 1 959 047 1 711 976 1 401 728 1 156 007 655 795

Total assets 2 692 611 3 086 850 3 086 850 3 160 024 3 024 579 2 764 518 2 778 557 2 468 625 1 940 353 1 724 735 1 073 018

Funds employed 1 381 704 1 374 709 1 374 709 1 485 273 1 436 838 1 372 372 1 199 271 1 038 630 680 991 564 526 414 208

Cash generated by operations 19 918 51 270 185 067 388 187 531 746 413 761 585 583 625 123 545 332 431 704 240 378

Wealth created by trading operations* 725 403* 831 110* 831 110 1 040 544 1 215 976 1 158 871 1 204 599 1 203 998 – – –

Employee benefits and remuneration 388 672 350 299 597 977 595 728 577 896 550 960 483 638 435 779 365 669 315 896 263 301

Share statisticsHeadline earning per share (cents) (10,0) 3,8 22,4 86,2 103,2 116,0 129,5 140,3 120,0 87,4 79,0

Ordinary distribution per share (cents) 10,0 10,0 10,0 38,0 56,0 63,0 69,0 63,0 54,0 36,0 15,0

Distribution cover (times) (1) 1 3 3 3 3 3 3 3 3 7

Distribution yield (%) 1% 1% 1% 4% 5% 5% 6% 6% 7% 5% not listed yet

Earnings yield (%) 3% 3% 3% 8% 12% 9% 10% 13% 16% 12% not listed yet

Net tangible asset value per share (cents) 703 737 737 734 769 688 638 578 500 410 240

Share price (cents)

High 7,85 10,49 10,49 10,51 13,28 12,73 12,71 10,71 8,20 7,20 not listed yet

Low 7,78 7,78 7,78 10,45 10,99 12,50 10,71 8,02 7,20 6,99 not listed yet

Closing (30 June) 7,78 7,86 7,86 10,50 10,99 12,73 12,51 10,71 8,02 7,20 not listed yet

Market capitalisation (N$’million) 1 648 994 1 665 951 1 665 951 2 225 507 2 329 363 2 698 162 2 651 532 2 270 017 1 659 763 1 490 062 not listed yet

Volumes traded (000’s) 1 007 2 100 2 100 8 559 2 261 1 304 4 340 2 935 1 846 1 561 not listed yet

Volumes traded as % of weighted number of shares 0% 1% 1% 4% 1% 1% 2% 1% 1% 1% not listed yet

Ratios and statisticsReturn on total shareholders’ interest (%) 2% 2% 4% 13% 18% 24% 31% 38% 39% 32% 43%

Return on average funds employed (%) 2% 4% 6% 20% 29% 39% 54% 75% 88% 75% 69%

Trading profit margin (%) 1% 2% 2% 8% 12% 14% 18% 24% 28% 23% 21%

Interest cover 1 (1) 5 14 15 21 27 26 63 183 54

Current asset ratio 2,4 2,7 2,7 2,8 3,6 3,8 3,0 3,0 3,2 2,5 1,8

Quick asset ratio 1,8 2,0 2,0 2,1 2,8 2,9 2,4 2,4 2,7 2,0 1,3

Number of employees 2 879 2 857 3 481 2 738 3 305 3 239 3 203 3 110 2 690 2 568 1 998

Revenue per employee (N$’000) 942 1 006 1 085 1 409 1 070 1 143 1 028 878 713 626 694

Value added per employee (N$’000)* 252* 291* 239 380 368 358 376 387 – – –

Number of shares in issue (000’s) 211 953 211 953 211 953 211 953 211 953 211 953 211 953 211 953 206 953 206 953 163 303

Number of weighted shares in issue (000’s) 211 953 211 953 211 953 211 953 211 953 211 953 211 953 209 862 206 953 192 363 163 303

Exchange rate comparisonsRand/US dollar

Closing rate 13,75 12,94 12,94 14,77 12,12 10,70 10,24 8,33 6,75 7,62 8,27

Average rate 12,87 13,55 13,55 14,39 11,41 10,32 8,86 7,77 6,98 7,61 9,28

* Amount includes both continuing and discontinued operations.



Segmental reporting

The segment information for the reportable segments for the year ended 30 June 2018 is as follows:

30 June 2018

Corporate Services

N$’000Automotive

N$’000

Freight and Logistics

N$’000

Commercialand Industrial

Servicesand Products

N$’000

Food and Distribution

N$’000

Total continuing operations

N$’000

Fishing(discontinued)

N$’000Total

N$’000

Total segment revenue 78 285 584 083 322 689 499 638 1 346 772 2 831 467 673 283 3 504 749 Inter-segment revenue (50 915) (1 103) (59 580) (9 389) 132 (120 855) (2 869) (123 724)

Revenue from external customers 27 370 582 981 263 108 490 249 1 346 904 2 710 612 670 413 3 381 025

EBITDA 33 555 5 900 19 560 33 827 (29 020) 63 822 41 408 105 230 Depreciation on property, plant and equipment (3 150) (2 590) (6 882) (17 276) (7 879) (37 777) (29 176) (66 953)Amortisation and impairment of intangibles (312) (71) (69) (511) (287) (1 251) (22 587) (23 838)

Operating profit/(loss) 30 576 3 238 12 609 16 040 (37 186) 25 277 (10 356) 14 921 Share of profit of joint venture – – – – – – 134 134 Share of profit of associates 1 273 – – – – 1 273 5 745 7 018 Finance income (2 614) 334 634 1 878 4 320 4 553 21 376 25 929 Finance costs (4 881) (13 117) (1 070) (2 267) (7 675) (29 010) – (29 010)

Profit/(loss) before tax 24 354 (9 545) 12 173 15 651 (40 540) 2 093 16 899 18 993

Total assets (excluding current and deferred taxation) 1 203 640 319 983 329 926 261 046 521 200 2 635 795 47 531 2 683 326

Total assets include:Additions to property, plant and equipment, goodwill and intangible assets 6 368 2 110 968 17 159 4 496 31 101 49 558 80 659

Total liabilities (excluding current and deferred taxation) 47 745 142 189 149 196 103 771 335 319 778 220 – 778 220

Total assets include assets classified as held for sale of N$334,1 million relating to the fishing segment. Total liabilities include liabilities related to the asset held for sale to the value of N$64,3 million.

238461

1 384

380

332

283

330

261

521

48

1 204

320

Corporate Services


Commercial and Industrial Services and Products


Automotive

Fishing (discontinued)

Total assets (excluding current and deferred taxation) 2017 (N$’million)

Total assets (excluding current and deferred taxation) 2018 (N$’million)

242

78

166

110

107

14

48

142

149

104

335

Corporate Services




Automotive


Total liabilities (excluding current and deferred taxation) 2017 (N$’million)

Total liabilities (excluding current and deferred taxation) 2018 (N$’million)


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

The segment information for the reportable segments for the year ended 30 June 2017 is as follows:

30 June 2017

Corporate Services(restated)N$’000

Automotive(restated)N$’000

Freight and Logistics(restated)N$’000

Commercialand Industrial

Servicesand Products

(restated)N$’000


(restated)N$’000

Total continuing operations

(restated)N$’000

Fishing(discontinued)

(restated)N$’000

Total(restated)N$’000

Total segment revenue 78 151 701 915 376 076 479 331 1 429 946 3 065 419 919 349 3 984 768

Inter-segment revenue (55 487) (903) (111 583) (5 666) (18 256) (191 895) (16 425) (208 320)

Revenue from external customers 22 664 701 012 264 493 473 665 1 411 690 2 873 524 902 924 3 776 448

EBITDA 13 195 25 480 15 872 32 549 (3 326) 83 770 96 595 180 365

Depreciation on property, plant and equipment (3 553) (2 380) (5 961) (14 455) (4 292) (30 641) (41 314) (71 955)

Amortisation of intangibles (168) (72) (154) (976) (193) (1 563) (7 912) (9 475)

Operating profit 9 474 23 028 9 757 17 118 (7 811) 51 566 47 371 98 937

Share of profit of joint venture – – – – – – (82) (82)

Share of profit of associates 935 – – – – 935 6 899 7 834

Finance income 1 869 899 972 1 145 993 5 878 28 540 34 418

Finance costs (631) (13 642) (792) (2 176) (1 831) (19 072) (2 890) (21 962)

Profit before tax 11 647 10 285 9 937 16 087 (8 649) 39 307 79 838 119 145

Total assets (excluding current and deferred taxation) 380 447 331 913 282 688 238 492 461 395 1 694 935 1 384 101 3 079 036

Total assets include:Additions to property, plant and equipment, goodwill and intangible assets 11 538 3 397 2 124 19 466 7 879 44 404 16 097 60 501

Total liabilities (excluding current and deferred taxation) 14 292 166 343 109 755 107 092 242 066 639 548 77 539 717 087

Total assets include assets classified as held for sale of N$36,6 million relating to the fishing segment. No liabilities are associated with the asset held for sale.

1 412

903 701

264

474

2327

583

263

4901 347

670 Corporate Services




Automotive


Revenue per segment 2017 (N$’million)Revenue per segment 2018 (N$’million)

24

(10)

12

16

(41)

17

(9)

80

1210

10

16

Corporate Services




Automotive


Profit/(loss) per segment 2017 (N$’million)Profit/(loss) per segment 2018 (N$’million)


Bidvest Namibia Annual Integrated Report 2018 >> CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS50

Contents

Consolidated and separate financial statements

Statement of directors’ responsibilities and approval 51Declaration by company secretary 51Independent auditor’s report 52 – 54Directors’ report 55 – 60Accounting policies 61 – 69Consolidated and separate statements of financial position 70

Consolidated and separate statements of profit or loss and other comprehensive income 71Consolidated and separate statements of changes in equity 72 – 73Consolidated and separate statements of cash flows 74Notes to the consolidated and separate financial statements 75 – 114Shareholders’ diary 115Administration 116


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

The directors are required by the Companies Act of Namibia (Companies Act) to maintain adequate accounting records and are responsible for the content and integrity of the annual financial statements and related financial information included in this report. It is their responsibility to ensure that the annual financial statements fairly present the state of affairs of the Company and of Bidvest Namibia Limited and its subsidiaries (“the Group”) as at the end of the financial year and the results of their operations and cash flows for the year then ended, in conformity with International Financial Reporting Standards (IFRS) and the Companies Act. The external auditors are engaged to express an independent opinion on the annual financial statements.

The annual financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and the Companies Act 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 Company and by the Group and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the directors set the standards for the 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 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 Company and the Group endeavour 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 annual financial statements. However, any system of internal financial control can provide only reasonable, and not absolute, assurance against material misstatements or loss.

The directors are satisfied that the Company and Group have access to adequate resources to continue in operational existence for the foreseeable future.

The external auditors, Deloitte & Touche, have audited the separate financial statements and consolidated annual financial statements, and their report is presented on pages 52 to 54.

The Group annual financial statements and annual financial statements of the Company are set out on pages 48 and 49 and 55 to 114 which have been prepared on the going concern basis, were approved by the board of directors and are hereby signed on its behalf:

Statement of directors’ responsibilities and approvalfor the year ended 30 June 2018

In my capacity as company secretary, I hereby confirm that for the year ended 30 June 2018, the Company has lodged with the Registrar of Companies all such returns as are required in terms of the Act and that all such returns are true, correct and up to date.

Declaration by company secretary

Lindsay Ralphs Sebulon KankondiChairman Chief executive officer

31 August 2018 31 August 2018

Veryan HocuttCompany secretary

31 August 2018



Independent auditor’s report

TO THE MEMBERS OF BIDVEST NAMIBIA LIMITEDOpinion We have audited the consolidated and separate financial statements of Bidvest Namibia Limited and its subsidiaries (the Group) set out on pages 48 and 49 and 55 to 114, which comprise the consolidated and separate statements of financial position as at 30 June 2018 and the consolidated and separate statements of profit or loss and other comprehensive income, the consolidated and separate statements of changes in equity and the consolidated and separate statements of cash flows for the year then ended and notes to the financial statements, including a summary of significant accounting policies and the directors’ report.

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of the Group as at 30 June 2018 and their consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) and the requirements of the Companies Act of Namibia.

Basis for opinionWe conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the auditor’s responsibilities for the audit of the consolidated and separate financial statements section of our report. We are independent of the Group in accordance with the independence requirements applicable to performing audits of financial statements in Namibia, which is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B). We have fulfilled our other ethical responsibilities in accordance with the ethical requirements applicable to performing audits in Namibia. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. We have determined that there are no key audit matters identified in respect of the separate financial statements of Bidvest Namibia Limited.

Key audit matter (KAM) How the matter was addressed in the audit

KAM 1: Assessment of the recoverable value of goodwill

Goodwill constitutes 10% of the Group's total assets and arises as a result of the acquisitive nature of the Group. During the current year, significant difficulties were faced by the Group and deteriorating macro-economic conditions resulted in the financial performance in most divisions being below expectation.

As disclosed in note 2, goodwill of N$224 million is allocated to cash-generating units (CGUs).

The directors conducted their annual impairment test to assess the recoverable amount of goodwill in respect of the 2018 financial year. This is consistent with the Group’s policy. This assessment is performed with reference to a value in use calculation for each CGU.

The determination of the recoverable amount of the CGU is subjective as significant estimation and key assumptions are required, in particular regarding forecast future cash flows, future growth rates, the discount rates applied and the determination of the level at which impairments should be assessed. As such this has been noted as a KAM.

Our audit work for goodwill included evaluating the design and implementation of key controls around the impairment review process, evaluating the appropriateness of the CGUs to which goodwill is allocated and challenging the key assumptions used in the directors’ future cash flow forecasts with particular focus on the budgeted and forecast figures given the current year performance.

The growth rate used in the cash flow model has been independently assessed by us for each significant segment with comparison to economic and industry forecasts as well as the condition of the local economy, specifically the expected gross domestic product growth rate and inflation rate to actual revenue growth.

The weighted average cost of capital (discount rate) has been assessed based on the funding capacity of the Group and in comparison to data obtained independently taking into account the CGUs specific operating markets.

Furthermore, we performed a sensitivity analysis on the key inputs to establish those assumptions to which the valuation is highly sensitive. This was performed in order for us to determine the extent to which the key assumptions needed to change in order to result in an impairment.

We verified the mathematical accuracy of the cash flow forecast and compared the inputs used in the cash flow forecasts against historical performance and in comparison to budgeted amounts in respect of each significant cash-generating unit.

We evaluated the directors’ assessment of impairment indicators against current local economic conditions, challenges in the local market, the Group’s historical performance and the impact of external factors on the performance of the CGUs, future budgets, as well as expected future outlook.

Overall, we found the cash flow models, allocation of goodwill, assumptions applied in the goodwill impairment assessments and the determination of objective evidence of impairment to be appropriate.

We considered the likelihood of changes in the key inputs occurring and concluded that the key assumptions applied in the cash flow model were reasonable. The disclosure in relation to the assessment of the recoverable amount of goodwill as well as assumptions applied were considered appropriate.


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Key audit matter (KAM) How the matter was addressed in the audit

KAM 2: Assessing the carrying value of the investment in associates

As reflected in notes 4 and 11, the Group’s 40% shareholding in an associate, Industria Alimentar Carnes De Moçambique Limitada (Mozambique) amounts to N$47,5 million. An impairment of N$21,7 million was recorded in the current year.

The assessment of whether the Group retains significant influence over the associate requires the directors’ judgement.

The accounting for the recoverable amounts of the investments in associate involves directors’ judgement relating to the determination of the carrying value of the investment. The recoverable amount at year-end was determined using fair value less costs to sell compared to the value in use method which was used in the prior year.

The associate is included in the fishing segment disposal group, however was not yet disposed of at the year-end. Accounting for this complexity requires directors’ judgement in assessing the carrying value and decision to include in the segment disposal group. As such this has been identified as a KAM.

We evaluated the key facts and judgements made in the directors’ assessment with relevant documentary evidence by taking into account future plans and budgets and assessing the reasonableness of the assumptions used.

We assessed the estimates, judgements and assumptions made by the directors in accordance with the requirements of IAS 36 Impairment of Assets as well as IAS 28 Investments in Associates.

Assessed the possibility of whether the investment will be sold and whether the change in the recoverable amount calculation is appropriate.

Compared the entity’s recoverable net asset value to the carrying value of the investment and independently assessed the directors’ judgement on the impairment assessment.

Assessed whether the associate met the requirements of IFRS 5 Non-current Assets Held-for-Sale and Discontinued Operations. The investment in the associate met the requirements of IFRS 5 and was appropriately reflected as an asset held-for-sale and included in the disposal group held-for-sale at year-end.

Based on the fair value determined by the directors, we concur that an impairment of the carrying value of the investment of N$21,7 million was required and that the carrying value of N$47,5 million at year-end was appropriate. The judgements and assumptions used to determine the carrying amount are deemed appropriate.

We are satisfied that the related disclosures are sufficient as well as the change in the determination of the recoverable amount to fair value less costs to sell is appropriate.

KAM 3: Disposal of fishing segment

The Group decided to dispose its interest in the fishing segment in the current year and pursuant to this decision, the Group concluded various sale transactions during the course of the financial year.

This disposal of the fishing segment as disclosed in note 18 has been identified as a KAM due to:

– The disposal being a significant and unusual event outside the normal course of business in the current year;

– The significance of the operations on the Group results, financial performance and cash flows for the year;

– The complexity of the transactions given the number of companies involved and the execution of multiple contracts to account for this disposal; and

– Furthermore, not all of the operations in Bidfish were disposed of at year-end. This required the directors to separately analyse and account for these “excluded assets” that were retained and to account for all elements appropriately.

We analysed the sale contracts and evaluated the accounting treatment adopted for the different aspects of the sale against the relevant accounting standards of IFRS 5 as well as IFRS 10 Consolidated Financial Statements in order to evaluate the various transactions under common control.

We reviewed the information provided from management to confirm that the sale conditions were met as at 30 June 2018 and that the segment has been appropriately separated into discontinued operations and the remaining continuing operation moved into the food and distribution operating segment. We evaluated whether the remaining assets not sold were appropriately accounted as assets held-for-sale as per the recognition and measurement criteria of IFRS 5. We assessed the disclosure requirements of the transactions in terms of IFRS 5.

We inspected all related statutory documentation, such as board approvals, Government Gazette and share certificates in cases of changes in shareholding.

We are satisfied that the transaction was appropriately accounted for and disclosed in accordance with the sale contracts and the relevant accounting standards.

Other InformationThe directors are responsible for the other information. The other information included in the annual financial statements, comprises the statement of directors’ responsibilities and approval, the declaration by the company secretary on page 51 and shareholders’ diary (page 115) which we obtained prior to the date of this report and the annual integrated report which is expected to be made available to us after that date. Other information does not include the consolidated and separate financial statements, the directors’ report and our auditor’s report thereon.

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed on the other information obtained prior to and after the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.



Responsibilities of the Directors for Consolidated and Separate Financial Statements The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with International Financial Reporting Standards and the requirements of the Companies Act of Namibia and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and separate financial statements, the directors are responsible for assessing the Group’s and Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and/or Company, to cease operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Consolidated and Separate Financial StatementsOur objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: – Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit

procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

– Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s and the Company’s internal control.

– Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. – Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty

exists related to events or conditions that may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group and/or the Company to cease to continue as a going concern.

– Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

– Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with the audit committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and, where applicable, related safeguards.

From the matters communicated with the audit committee, we determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless laws or regulations preclude public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Deloitte & Touche Registered Accountants and AuditorsChartered Accountants (Namibia)Per: RH Mc DonaldPartner Windhoek31 August 2018

Partners: E Tjipuka (Managing Partner), RH Mc Donald, H de Bruin, J Cronjé, A Akayombokwa, AT Matenda, J Nghikevali, G Brand*, M Harrison** Director

Associate of Deloitte Africa, a Member of Deloitte Touche Tohmatsu Limited

Independent auditor’s report– continued


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

The directors have pleasure in presenting their report which forms part of the Group annual financial statements and annual financial statements of the Company for the year ended 30 June 2018.

NATURE OF BUSINESSThe Company is the holding company of two main subsidiaries, Bidvest Namibia Fisheries Holdings (Proprietary) Limited (“Bidfish”) and Bidvest Namibia Commercial Holdings (Proprietary) Limited (“Bidcom”).

Bidvest Namibia Management Services (Proprietary) Limited, Bidvest Namibia Property Holdings (Proprietary) Limited and Bidvest Namibia Information Technology (Proprietary) Limited are also direct subsidiaries of the holding company. Bidvest Namibia Management Services (Proprietary) Limited and Bidvest Namibia Property Holdings (Proprietary) Limited act solely as support companies for the Bidvest Namibia Group, Bidvest Namibia Information Technology (Proprietary) Limited acts mainly as a support company for the Bidvest Namibia Group and also provides services to companies outside the Group. These companies receive administration income, receive rental income from subsidiaries in the Group as well as directors’ fees, if applicable, from all underlying entities and incur related support, staff and administration expenses. Bidvest Namibia Information Technology (Proprietary) Limited also receives income from companies outside the Group.

Bidvest Namibia Commercial Holdings (Proprietary) Limited (“Bidcom”) has operational arms including cleaning services, stationery and office furniture, electrical supplies, food services, office solutions, printer consumables, freight management services, travel management services, vehicle dealership and foreign exchange services.

Bidvest Namibia Fisheries Holdings (Proprietary) Limited (“Bidfish”), having operational arms mainly in the fishing industry was disposed of effective 30 June 2018, with the exception of certain excluded assets, which remain under the control of the Group. Please refer to notes 11 and 18 of the financial statements for details regarding the disposal transaction.

RESULTS OF OPERATIONSThe results of operations and state of affairs of the Group and the Company are fully set out in the attached consolidated and separate annual financial statements and do not in our opinion require further comment.

GOING CONCERNThe directors have satisfied themselves that no material uncertainty that casts significant doubt about the ability of the Group and the Company to continue as a going concern has been identified and they have a reasonable expectation that the Group and the Company have adequate financial resources to continue in operational existence for the foreseeable future. Therefore, these financial statements have been prepared on a going concern basis.

EVENTS AFTER THE END OF THE REPORTING PERIODThe following events relating to the disposal of the Fishing business took place after the reporting period:

– proceeds and dividends receivable by the Group relating to the sale were received in cash during July and August 2018, with the exception of a remaining N$15 million of the purchase consideration which is payable within five days from delivery of the effective date financial statements;

– sale addendum signed on 24 August 2018 accepting additional purchase consideration. The balance of the purchase consideration as reflected in the annual financial statements is thus due on 3 September 2018; and

– directors of the Group resigned from Bidvest Namibia Fisheries Holdings (Proprietary) Ltd effective 18 July 2018 and from Namsov Fishing Enterprises (Proprietary) Ltd, effective 19 July 2018.

Bidvest Namibia Properties Holdings concluded the agreements for the purchase of two additional properties for the Automotive segment during August 2018.

A final cash dividend of 10 cents per share has been awarded to members recorded in the register of the Company at the close of business on Friday, 5 October 2018.

Except for the events disclosed above, the directors are not aware of any other matters that have arisen subsequent to the year-end and up to date of the approval of the financial statements.

AUTHORISED AND ISSUED SHARE CAPITALThere were no changes to the authorised and issued share capital during the year under review.

DIVIDENDSDividends amounting to N$12,7 million (2017: N$46,6 million) were declared and paid by the Company during the year under review.

SEGMENTAL ANALYSISManagement has determined the operating segments based on the reports reviewed by the executive committee that are used to make strategic decisions. The committee considers the business from a product perspective.

Segmental results include revenue and expenses directly relating to a business segment but excludes net finance charges and taxation which cannot be allocated to any specific segment. Segmental trading profit is defined as operating profit excluding items of a capital nature and is the basis on which management’s performance is assessed.

Segment operating assets and liabilities include property, plant and equipment, investments, inventories, trade and other receivables, trade and other payables and post-retirement obligations, but excludes current taxation and deferred taxation. Intangible assets are allocated to the cash-generating unit in the segment to which they relate.

Fishing derived revenue from its horse mackerel, monk and pilchard fishing rights in Namibia and Angola. The division also derived revenue from its Glenryck rights and shared in profits from its distribution agreement in Mozambique. Revenue derived from Glenryck rights previously disclosed as part of this segment has been moved to the Food and Distribution services segment. Namsov Industrial Properties (Proprietary) Limited and United Fishing Enterprises (Proprietary) Limited, whose major assets are properties previously disclosed in this segment, has been moved to the Corporate Services segment with effect from 30 June 2018 and the comparatives restated.

The Fishing division has been discontinued and the comparative information of the segment has been restated to exclude this division. The Glenryck operations previously included in the Fishing division have now been included in the Food and Distribution services division and comparative information has been restated.

Directors’ reportfor the year ended 30 June 2018



Directors’ report – continuedfor the year ended 30 June 2018

Industrial and Commercial Products supplies electrical equipment and consumables, stationery, office equipment and furniture, printer consumables and hardware, travel, foreign exchange and copier services, plumbing, sanitary ware, brassware and allied products and cleaning services.

Food and Distribution services supplies foods to the hospitality, wholesale and retail industries in Namibia. In the current year, the division also derived revenue from Glenryck, which was previously disclosed as part of Fishing.

Freight and Logistics provides ships agency, clearing and forwarding, stevedoring, container handling, general warehousing, airport services and fuel bunkering services.

Automotive supplies new and used motor vehicles, parts, accessories and after-sales service.

Corporate Services includes corporate services provided to the Group as well as the Group’s properties portfolio. The acquisitions from the Fishing division of Namsov Industrial Properties (Proprietary) Limited and United Fishing Enterprises (Proprietary) Limited, whose major assets are properties, are included in this segment with effect from 30 June 2018.

Sales between segments were carried out on terms and conditions as agreed between the parties. The revenue from external parties is measured in a manner consistent with that in the statements of comprehensive income.

The executive committee assesses the performance of the operating segments based on a measure of adjusted EBITDA. This measurement basis excludes the effects of non-recurring expenditure from the operating segments such as restructuring costs, legal expenses and goodwill impairments when the impairment is the result of an isolated, non-recurring event. Since the strategic steering committee reviews adjusted EBITDA, the results of discontinued operations are not included in the measurement of adjusted EBITDA.

The full segmental report is set out on pages 48 and 49.

INFORMATION ABOUT DIRECTORS’ SERVICE CONTRACTSEach of the executive directors has a contract of appointment from Bidvest Namibia Limited, containing terms that are normal for such contracts.

INTEREST OF DIRECTORS AND SENIOR KEY PERSONNEL IN SHARE CAPITALThe interests, direct and indirect, of the directors and officers are as follows:

Ordinary shares

Beneficial Indirect

At 1 July 2017 10 789 743 10 000

Comprising:

Non-executive directors 201 100 10 000

Executive directors

SI Kankondi 1 377 200 –

Senior key personnel 9 211 443 –

At 30 June 2018 10 783 843 143 750

Comprising:

Non-executive directors 201 100 143 750Executive directors

SI Kankondi 1 377 200 –Senior key personnel 9 205 543 –

DIRECTORS’ INTERESTS IN CONTRACTSNo material contracts in which the directors have an interest were entered into in the current year other than the transactions detailed in note 37 to the financial statements.

SHAREHOLDERS’ SPREADAn analysis of holdings extracted from the register of ordinary shareholders at 30 June 2018 is listed below:

Number of shareholders

Percentage of share capital (nearest 1%)

The Bidvest Group Limited 1 52%Public:

Companies 20 8%Trusts 6 0%Individuals 506 1%

Pension and provident funds 55 25%Non-public:

Directors 5 1%Broad-Based Economic Empowerment partner

Ovanhu Investments (Proprietary) Limited – related party 1 13%

594 100%


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

DIRECTORS’ REMUNERATIONThe remuneration paid or accrued to directors while in office of the Company during the year ended 30 June 2018 can be analysed as follows:

Fees forservices

N$’000

Basic salary and allowances

N$’000

BonusesaccruedN$’000

Pension and medical aid

contributionsN$’000

TotalN$’000

30 June 2018Executive directorsSI Kankondi 2 556 132 527 3 216T Weitz 1 437 29 368 1 835

– 3 993 161 895 5 050

Non-executive directorsP Steyn 730 730 M Mokgatle-Aukhumes 208 208 H Müseler 520 520 MK Shipanga 440 440 JD Davis 678 678

2 576 2 576

30 June 2017Executive directorsSI Kankondi – 2 723 – 493 3 216

T Weitz – 1 398 – 338 1 736

– 4 121 – 831 4 952

Non-executive directorsP Steyn 606 606

M Mokgatle-Aukhumes 154 154

H Müseler 358 358

MK Shipanga 373 373

JD Davis 259 259

1 750 1 750

Directors’ long-term incentivesNumber of

optionsAverage price

N$

Executive directorsSI Kankondi 250 000 10,74T Weitz 125 000 10,74

375 000 10,74

These options were granted to directors on 23 May 2013 and 22 May 2015. Options vest in three tranches on the third, fourth and fifth years’ anniversaries respectively from the grant date and expire within 10 years of their issue, or one month after the resignation of the director.

Directors’ share-based payment expense2018

N$’0002017

N$’000

SI Kankondi 49 123

J Arnold – –

T Weitz – 61

49 184

Major shareholdersAccording to the share register, the following are the only shareholders beneficially holding, directly or indirectly, in excess of 5% of the share capital at 30 June 2018:

Percentageholding

The Bidvest Group Limited 52%Ovanhu Investments (Proprietary) Limited 13%Government Institution Pension Fund 11%




SUBSIDIARIESPrincipal subsidiary undertakings

Total comprehensive income/(loss)

Effectiveholding

%

Issuedshare capital

N$2018

N$’0002017

N$’000

The Bidvest Namibia Limited subsidiaries and associates are all incorporated in Namibia, except for Comet Investments Capital Incorporated, a company registered in the British Virgin Islands, Frigocentre Limitada and Pesca Fresca Limitada which are registered in Angola and Glenryck South Africa (Proprietary) Limited a company registered in South Africa. The associate Industria Alimentar Carnes De Moçambique is incorporated in Mozambique.

By the companyBidvest Namibia Commercial Holdings (Proprietary) Limited 100,00 100 10 814 10 814

Bidvest Namibia Information Technology (Proprietary) Limited 100,00 100 (292) 1 615

Bidvest Namibia Property Holdings (Proprietary) Limited 100,00 5 000 5 647 5 345

Bidvest Namibia Management Services (Proprietary) Limited 100,00 100 (783) 5 995

Glenryck South Africa (Proprietary) Limited^^^ and^^^^^^ 51,00 120 1 290 (2 573)

Through subsidiariesBidvest Namibia Automotive (Proprietary) Limited 100,00 1 000 (58) (22)

Bidvest Namibia Automotive Otjiwarongo (Proprietary) Limited 100,00 100 – –

Bidvest Namibia Commercial and Industrial Services

and Products (Proprietary) Limited 100,00 200 1 502 405

Bidvest Namibia Plumblink (Proprietary) Limited 100,00 100 (4 086) (2 469)

Bidvest Prestige Cleaning (Proprietary) Limited 100,00 100 (1 393) 75

Carheim Investments (Proprietary) Limited 100,00 4 000 (1 154) (1 204)

Caterplus Namibia (Proprietary) Limited 100,00 1 (16 885) (12 130)

Cecil Nurse (Namibia) (Proprietary) Limited 100,00 100 751 798

Diroyal Motors (SWA) (Proprietary) Limited 100,00 4 000 (5 292) 6 518

Elzet Development (Proprietary) Limited 100,00 100 213 432

GSA Trading Namibia (Proprietary) Limited 51,00 100 233 –

Kolok (Namibia) (Proprietary) Limited 100,00 100 1 115 343

Lenkow (Proprietary) Limited 100,00 2 000 3 807 4 034

Lubrication Specialists (Proprietary) Limited 100,00 200 (1 222) (953)

Lubes Specialists (Proprietary) Limited 100,00 151 (480) (1 266)

Luderitz Bay Shipping & Forwarding (Proprietary) Limited 100,00 100 3 245 547

Manica Group Namibia (Proprietary) Limited 100,00 279 187 2 722 5 754

Manica Trading (Proprietary) Limited 100,00 100 (583) (262)

Matador Enterprises (Proprietary) Limited 100,00 1 000 (1 921) (3 462)

Minolco (Namibia) (Proprietary) Limited 100,00 100 9 236 7 536

Monjasa Namibia (Proprietary) Limited 57,00 100 2 568 2 149

Namsov Industrial Properties (Proprietary Limited)^^^^^ and (i) 100,00 1 000 174 160

Orca Marine (Proprietary) Limited 60,00 100 945 397

Rennies Travel (Namibia) (Proprietary) Limited 100,00 1 000 3 472 5 167

Shelfco Investment One Seven Zero (Proprietary) Limited 100,00 100 (26) –

Taeuber & Corssen SWA (Proprietary) Limited 100,00 6 000 000 (31 772) (276)

T&C Properties Namibia (Proprietary) Limited 100,00 8 000 7 991 7 564

T&C Trading (Proprietary) Limited 100,00 4 000 (538) 508

United Fishing Enterprises (Proprietary) Limited^^^^^ and (ii) 100,00 4 000 (90 112) (31 475)

Voltex (Namibia) (Proprietary) Limited 100,00 100 (9 963) (10 347)

Waltons Namibia (Proprietary) Limited 100,00 6 5 914 4 774

Walvis Bay Stevedoring Company (Proprietary) Limited 55,00 100 (2 102) (5 043)

Walvis Bay Airport Services (Proprietary) Limited 100,00 5 000 734 (583)

Woker Freight Services (Proprietary) Limited 100,00 28 636 1 903 1 508


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Effective holding %Total comprehensive

income/(loss)

2018 2017

Issued share capital

N$2018

N$’0002017

N$’000

AssociatesNamibia Bureau de Change (Proprietary) Limited 49,00 49,00 500 000 1 273 1 907

Discontinued operationsPrincipal subsidiary undertakingsBy the companyBidvest Namibia Fisheries Holdings (Proprietary) Holdings – 100,00 1 613 662 275 113 789

Through subsidiariesAtlantic Harvesters of Namibia (Proprietary) Limited – 69,55 300 – 4 764

Comet Investments Capital Incorporated 69,55 69,55 762 11 359 1 285

Namibian Sea Products (Proprietary) Limited – 69,55 1 000 140 608 (76)

Namsov Fishing Enterprises (Proprietary) Limited – 69,55 100 000 418 289 52 888

Ocean Fresh (Proprietary) Limited – 69,55 2 – –

Sarusas Development Corporation (Proprietary) Limited – 69,55 1 000 (1 777) 207

Starting Right Investments (Proprietary) Limited – 69,55 100 2 124 2 412

Tetelestai Mariculture (Proprietary) Limited – 69,55 100 (3 863) (4 431)

Trachurus Fishing (Proprietary) Limited – 69,55 60 524 1 666 15 238

Twafika Fishing Enterprises (Proprietary) Limited – 52,23 1 000 (24) (64)

Pesca Fresca Limitada* 34,08 34,08 152 486 – –

Frigocentre Limitada^^ 34,74 34,74 76 243 – –

AssociatesCarapau Fishing (Proprietary) Limited – 17,39 4 000 15 243 9 667

Industria Alimentar Carnes De Moçambique Limitada^ 27,82 27,82 117 834 328 943 11 206

Joint venture

!OE#GAB Fishing Enterprises (Proprietary) Limited – 37,48 100 – –

* The Group has de facto control as a result of the management agreement between Comet Investment Capital Incorporated and Pesca Fresca Limitada.^ The Group has significant influence as a result of the management agreement between Bidvest Namibia Limited and Tunacor Fisheries Limited.^^ The Group has a direct shareholding of 99% in Frigocentre Limitada through its de facto control of Pesca Fresca Limitada.^^^ The subsidiary is managed by Simply Pesche (Proprietary) Limited through a management agreement.^^^^^ The subsidiary is now owned 100% by Bidvest Namibia Property Holdings (Proprietary) Limited, a 100% owned subsidiary of the Company.^^^^^^ The subsidiary is now directly owned as a result of the disposal of the shares in Bidvest Namibia Fisheries Holdings (Proprietary) Limited to the Company.(i) The subsidiary’s name was changed after year-end to Bidvest Namibia Industrial Properties (Proprietary) Limited.(ii) The subsidiary’s name was changed after year-end to Bidvest Namibia United Properties (Proprietary) Limited.

HOLDING COMPANYThe Company is a subsidiary of The Bidvest Group Limited, a company registered in the Republic of South Africa and listed on the Johannesburg Stock Exchange (JSE).




DIRECTORS AND SECRETARY The following persons were directors of the Company during the year and up to the report signing date:

Date appointed /resigned Nationality

SI Kankondi (Chief executive) Appointed: 10 August 2007 Namibian

M Mokgatle-Aukhumes Appointed: 10 August 2007 Namibian

HH Müseler Appointed: 10 August 2007 Namibian

PC Steyn Appointed: 17 January 2007 South African

MK Shipanga Appointed: 21 August 2009 Namibian

LP Ralphs (Chairman) Appointed: 26 February 2014 South African

JD Davis Appointed: 1 December 2015 South African

M Steyn Appointed: 23 May 2018 South African

T Weitz (Financial director) Resigned: 6 March 2018 Namibian

HP Meijer Resigned: 28 February 2018 South African

Following the resignation of the financial director, the Company does not comply with the requirement of NamCode to have two executive directors. M Hodgson was appointed acting chief financial officer with effect from 10 April 2018. M Hodgson is a CA(SA), MBA, with in excess of 35 years’ experience in the financial and governance fields, more than 20 years of this being with the Bidvest Group in South Africa and Namibia.

The company secretary is V Hocutt whose business and postal addresses are:

Business address Postal address

1 Ballot Street PO Box 6964

Windhoek Ausspannplatz

Namibia Windhoek

Namibia

AuditorsDeloitte & Touche will continue in office in accordance with section 278(2) of the Companies Act of Namibia.

Approval of annual financial statementsThe annual financial statements were approved by the board of directors and authorised for issue on 31 August 2018.


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Accounting policiesfor the year ended 30 June 2018

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe principal accounting policies applied in the preparation of these separate and consolidated financial statements are set out below. These accounting policies have been consistently applied to all years presented, unless otherwise stated.

2. BASIS OF PREPARATIONThe consolidated and separate financial statements of Bidvest Namibia Limited have been prepared in accordance with, and comply with International Financial Reporting Standards (IFRS), adopted by the International Accounting Standards Board (IASB) and interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) of the IASB, Financial Pronouncements as issued by the Financial Reporting Standards Council and the Companies Act of Namibia, 2004. The financial statements are prepared in accordance with the going concern principle under the historical cost basis, except for financial instruments, which are stated at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

It is important to note that this financial information has been prepared in accordance with IFRS that are effective 30 June 2018. Standards and Interpretations that are not yet effective and will be adopted in future years as they become effective for the Group are listed in note 41. The directors and management have not yet assessed the implications of standards and interpretations that are not yet effective.

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Although estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances (the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources), the actual outcome may differ from these estimates in note 39.

The financial statements are presented in Namibia dollar (N$), which is the Group’s functional currency. All financial information has been rounded to the nearest thousand unless stated otherwise.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Comparative amounts have been restated to give effect to the disclosure requirements of discontinued operations as reflected in accounting policy note 16.

3. NEW AND REVISED ACCOUNTING STANDARDSThe Group adopted the following amendments to standards with an initial application date of 1 July 2017:

Amendments to IAS 12 Income Taxes – Recognition of Deferred Tax Assets for Unrealised LossesThe amendments clarify that the existence of a deductible temporary difference depends solely on a comparison of the carrying amount of an asset and its tax base at the end of the reporting period, and is not affected by possible future changes in the carrying amount or expected manner of recovery of the asset.

At present, various methods are used to calculate future taxable profit to establish whether a deferred tax asset can be recognised. Some have been using the expected bottom line on the tax return, ie future taxable income less tax deductible expenses. The amendments clarify that this approach will no longer be appropriate.

The amendment had no material impact on the Group.

Amendments to IAS 7 Cash Flows – Disclosures relating to finance liabilitiesThe amendment clarifies that entities shall provide disclosures about changes in their financing liabilities that enable users of financial statements to evaluate changes in liabilities arising from financing activities.

The amendment had no material impact on the Group.

4. CONSOLIDATION(a) Business combinations

The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.

(b) SubsidiariesSubsidiaries are all entities (including special purpose entities) controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The term Group refers to the consolidated results of Bidvest Namibia Limited and all its subsidiaries.

Inter-company transactions, balances and unrealised gains of transactions between Group companies are eliminated. Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

The investment in subsidiaries are recognised at cost less accumulated impairment in the separate financial statements of the Company.



Accounting policies – continuedfor the year ended 30 June 2018

4. CONSOLIDATION (continued)(c) Non-controlling interests

Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

(d) Interest in equity-accounted investeesThe Group’s interests in equity-accounted investees comprise interests in associates.

Associates are all entities over which the Group has significant influence but not control or joint control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The Group’s investment in associates includes goodwill identified on acquisition, net of any accumulated impairment loss.

The Group’s share of its equity-accounted investees’ post-acquisition profits or losses are recognised in the statement of comprehensive income, and its share of post-acquisition movements in reserves are recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group’s share of losses in an equity-accounted investee equals or exceeds its interest in the equity-accounted investee, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the equity-accounted investee.

The Group determines at each reporting date whether there is any objective evidence that the investment in the equity-accounted investee is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the equity-accounted investee and its carrying value and recognises the amount in profit or loss.

Unrealised gains on transactions between the Group and its equity-accounted investees are eliminated to the extent of the Group’s interest in the equity-accounted investees. Unrealised losses are also eliminated in the same way as unrealised gains, unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of equity-accounted investees have been changed where necessary to ensure consistency with the policies adopted by the Group. Dilution gains and losses arising in investments in equity-accounted investees are recognised in either profit or loss or other comprehensive income.

The Group has elected to eliminate unrealised gains or losses resulting from transactions between the Group and its equity-accounted investees against the underlying assets.

5. SEGMENT REPORTINGOperating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive committee that makes strategic decisions.

The reportable segments of the Group have been identified based on the nature of the businesses. This basis is representative of the internal structure for management purposes.

“Segmental operating profit” includes revenue and expenses directly relating to a business segment but exclude net finance charges and taxation which cannot be allocated to any specific segment.

“Segmental trading profit” is defined as operating profit excluding items of a capital nature and is the basis on which management’s performance is assessed.

Segment operating assets and liabilities include property, plant and equipment, investments, inventories, trade and other receivables, trade and other payables, banking assets and liabilities, insurance funds and post-retirement obligations but excludes current taxation and deferred taxation. Intangible assets are allocated to the cash-generating unit in the segment to which they relate. The segment report is included in the directors’ report.

6. TRANSLATION OF FOREIGN CURRENCIES(a) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (Namibia dollar). The consolidated financial statements are presented in Namibia dollar (N$), which is the Group’s functional and presentation currency.

(b) Transactions and balancesForeign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Foreign currency gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.

Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale are analysed between translation differences resulting from changes in the amortised cost of the security, and other changes in the carrying amount of the security. Translation differences related to changes in amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in other comprehensive income.

Translation differences on non-monetary financial assets and liabilities are reported as part of the fair value gain or loss. Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit and loss are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets such as equities classified as available for sale are included in the available-for-sale reserve in other comprehensive income.


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

6. TRANSLATION OF FOREIGN CURRENCIES (continued)(c) Group companies

The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) Assets and liabilities: each statement of financial position balance presented is translated at the closing rate at the date of that statement of financial position;

(ii) Income and expenses: each statement of comprehensive income presented is translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the date of the transactions); and

(iii) All resulting exchange differences are recognised as a separate component of equity.

On consolidation, exchange differences arising from the translation of the net investment in foreign operation and of borrowings and other instruments designated as hedges of such investments, are taken to other comprehensive income. When a foreign operation is partially disposed of such that control, significant influence or joint control is lost or sold in its entirety, exchange differences that were recorded in other comprehensive income are recognised in the profit or loss as part of the gain or loss on the sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

7. PROPERTY, PLANT AND EQUIPMENTAll property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/(losses) on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.

Subsequent costs are included in the carrying amount of the asset or are recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Depreciation is calculated on the straight-line method to write off the cost of each asset to its residual value over its estimated useful life as follows:

Item Useful life

Buildings 48 – 84 years

Plant and machinery 3 – 20 years

Office furniture, fittings and equipment 3 – 10 years

Motor vehicles 4 years

Computer equipment 3 years

Rental assets in field 3 years

Depreciation is generally recognised in profit or loss.

Land is not depreciated as it is deemed to have an indefinite life.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease.

The residual values and useful lives of the assets are reviewed, and adjusted if appropriate on a prospective basis, at each financial year-end. The residual value of an item of property, plant and equipment is the amount it estimates it would receive currently for the asset if the asset were already of the age and in the condition expected at the end of its useful life. Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

Repairs and maintenance are generally charged to expenses during the financial period in which they are incurred. However, major renovations are capitalised and included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Group. Major renovations are depreciated over the remaining useful life of the related asset. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are recognised within profit or loss.

8. INTANGIBLE ASSETS(a) Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in “intangible assets”. Goodwill on acquisition of associates is included in “investments in associates” and is tested for impairment as part of the overall balance. Separately recognised goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which the goodwill arose identified according to operating segment. The recoverable amount of cash-generating units to which goodwill is allocated is estimated as at the end of the reporting period.




8. INTANGIBLE ASSETS (continued)(b) Trademarks and licences

Acquired trademarks and licences are shown at historical cost. Trademarks and other intangible assets have a finite useful life and are carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of the intangible assets over their estimated useful lives (five to 20 years). An intangible asset is recognised when it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably.

(c) Computer softwareCosts associated with maintaining computer software programs are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the required criteria are met. Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate portion of relevant overheads. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs previously recognised as an expense are not recognised as an asset in a subsequent period.

Computer software development costs that are recognised as assets are amortised over their estimated useful lives which do not exceed seven years.

The amount related to the amortisation of intangible assets is included under administration expense in the profit or loss.

9. FINANCIAL INSTRUMENTS9.1 Financial assets9.1.1 Classification

The Group classifies its financial assets as subsequently measured at either amortised cost or at fair value through profit or loss on the basis of both the entity’s business model for managing financial assets and the contractual cash flow characteristics of the financial asset. Financial assets are measured at amortised cost if both of the following conditions are met: the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and the contractual term of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. If a measurement or recognition inconsistency is eliminated or significantly reduced by designating a financial asset as measured at fair value through profit or loss, the Group has the discretion to elect this option at the financial asset’s initial recognition. Classification is not based on an instrument-by-instrument approach, but is determined at a higher level of aggregation.

This classification is determined at initial recognition of a financial asset. At this point, the Group may make an irrevocable election to present in profit or loss subsequent changes in fair value of an investment in an equity instrument that is not held for trading.

Trade and other receivables are classified as financial assets at amortised cost.

9.1.2 Recognition and measurementInitial measurementRegular purchases and sales of financial assets are recognised on the trade date, the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in profit or loss.

DerecognitionFinancial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.

Subsequent measurementFinancial assets at fair value are subsequently carried at fair value. Financial assets at amortised cost are carried at amortised cost using the effective interest method.

Realised and unrealised gains or losses arising from changes in the fair value of a financial asset that is measured at fair value and is not part of a hedging relationship shall be recognised in profit or loss within “realised gains/(losses) on financial assets” or “unrealised gains/(losses) on financial assets” in the period in which they arise, unless the financial asset is an investment in an equity instrument and the entity has elected to present gains and losses on that investment in other comprehensive income.

Gains or losses on a financial asset that is measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when the financial asset is derecognised, impaired or reclassified, and through the amortisation process.

Dividend income from financial assets at fair value and financial assets at amortised cost is recognised in profit or loss as part of investment income when the Group’s right to receive payments is established. Interest on financial assets at fair value and financial assets at amortised cost calculated using the effective interest rate method is recognised in profit or loss as part of investment income.

9.2 Financial liabilities9.2.1 Classification

The Group classifies its financial liabilities as at fair value through profit or loss or as financial liabilities at amortised cost. The Group has the option to classify the financial liability as at fair value through profit or loss if it is held for trading or if the prerequisites in IAS 39 par 9(b) are met and it is designated upon initial recognition at fair value through profit or loss.

Trade and other payables are classified as financial liabilities at amortised cost.


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

9. FINANCIAL INSTRUMENTS (continued)9.2 Financial liabilities (continued)9.2.2 Recognition and measurement

Initial measurementFinancial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. They are initially recognised at fair value plus, in the case of financial liabilities not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the liability. Financial liabilities carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in profit or loss.

DerecognitionFinancial liabilities are derecognised when they are extinguished – the obligation specified in the contract is discharged or cancelled or expires. The difference between the carrying amount of the financial liability derecognised and consideration paid/payable is recognised in profit or loss.

Subsequent measurementFinancial liabilities at amortised cost are carried at amortised cost using the effective interest method. Financial liabilities at fair value are subsequently carried at fair value, unless the exceptions in IAS 39 par 47 apply.

Gains or losses on a financial liability that is measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when the financial liability is derecognised, impaired or reclassified, and through the amortisation process.

Realised and unrealised gains or losses arising from changes in the fair value of a financial liability that is measured at fair value and is not part of a hedging relationship shall be recognised in profit or loss within “realised gains/(losses) on financial liabilities” or “unrealised gains/(losses) on financial liabilities” in the period in which they arise.

10. OFFSETTING FINANCIAL INSTRUMENTSFinancial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

11. IMPAIRMENT OF FINANCIAL ASSETSThe Company and the Group assess at each financial year-end whether there is objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

The criteria that the Company and the Group use to determine that there is objective evidence of an impairment loss include:

– significant financial difficulty of the issuer or obligor;

– a breach of contract, such as a default or delinquency in interest or principal payments;

– the Company, for economic or legal reasons relating to the borrower/debtor’s financial difficulty, granting to the borrower/debtor a concession that the lender would not otherwise consider;

– it becomes probable that the borrower/debtor will enter bankruptcy or other financial reorganisation;

– the disappearance of an active market for that financial asset because of financial difficulties; or

– observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio, including: adverse changes in the payment status of borrowers in the portfolio; and national or local economic conditions that correlate with defaults on the assets in the portfolio.

The Company and Group first assess whether objective evidence of impairment exists.

(a) Assets carried at amortised costThe amount of the loss is measured as the difference between the carrying amount of the asset and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the original effective interest rate of the financial asset. The carrying amount of the financial asset is reduced and the amount of the loss is recognised in profit or loss. If the financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Company may measure impairment on the basis of an instrument’s fair value using an observable market price.

Receivables with a short duration are not discounted.

(b) Equity instruments for which the entity has elected to present gains and losses in other comprehensive incomeIn the case of equity instruments for which the entity has elected to present gains and losses in other comprehensive income, a significant or prolonged decline in the fair value of the instrument below its cost is also evidence that the assets are impaired. If any such evidence exists, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from equity and recognised in profit or loss.

(c) Reversals of impairmentIf, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in profit or loss, unless the investment is an equity instrument and the entity has elected to present gains and losses on that investment in other comprehensive income, in which case impairment losses recognised in profit or loss on equity instruments are reversed through other comprehensive income.




12. INVENTORIESInventories are stated at the lower of cost and net realisable value. Cost is determined on either the first-in, first-out (FIFO) method or average costs basis. The cost of the finished goods comprises raw materials, direct labour, other direct cost and related production overheads, but excludes borrowing costs. Net realisable value is the estimate of the selling price in the ordinary course of business, less the cost of completion and selling expenses.

13. TRADE AND OTHER RECEIVABLESTrade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

14. CASH AND CASH EQUIVALENTSCash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.

15. IMPAIRMENT OF NON-FINANCIAL ASSETSAssets that have an indefinite useful life, for example goodwill, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation or depreciation are reviewed for impairment at each reporting date. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of the fair value less cost to sell of the asset and its value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels at which there are separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date. Impairment losses and reversal of impairment losses are recognised in profit or loss. Reversal of an impairment loss is recognised to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or a cash-generating unit.

16. NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONNon-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale and are carried at the lower of carrying value and fair value less cost to sell. Immediately before classification as assets held for sale, the measurement of the assets (and all assets and liabilities in a disposal group) is determined in accordance with applicable IFRS. Then, on initial classification as assets held for sale, non-current assets and disposal groups are recognised at the lower of the carrying amounts and fair value less costs to sell. Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, and employee benefit assets, which continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.

A discontinued operation results from the sale or abandonment of an operation that represents a separate major line of business or geographical area of operations and of which the assets, net profit or loss and activities can be distinguished physically, operationally and for financial reporting purposes. A subsidiary acquired exclusively with the view to resale is also classified as a discontinued operation. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of profit or loss and other comprehensive income is restated as if the operation had been discontinued from the start of the comparative period.

17. SHARE CAPITAL AND EQUITYAn equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Ordinary shares and non-redeemable preference shares with discretionary dividends are classified as equity. Other shares, including mandatory redeemable preference shares, are classified as liabilities.

Incremental cost directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Where any group company purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

18. CURRENT AND DEFERRED INCOME TAXThe tax expense for the year comprises current and deferred tax. Tax is recognised in the profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the financial year-end in the countries where the Company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognised in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not recognised if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the financial year-end and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

18. CURRENT AND DEFERRED INCOME TAX (continued)Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

19. TRADE AND OTHER PAYABLESTrade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

20. PROVISIONS AND CONTINGENT LIABILITIESProvisions are recognised when the Group has a legal or constructive obligation as a result of past events, for which it is probable that an outflow of economic benefits will occur, and where a reliable estimate can be made of the amount of the obligation. Where the effect of discounting is material, provisions are discounted. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan and the restructuring has either commenced or has been announced publicly. Future operating costs are not provided for.

The Group discloses a contingent liability when: – it has a possible obligation arising from past events, the existence of which will be confirmed only by occurrence or non-occurrence of one or more uncertain

future events not wholly within the control of the entity; or – it is not probable that an outflow of resources would be required to settle an obligation; or – the amount of the obligation cannot be measured with sufficient reliability.

Contingent liabilities are not recognised as a liability.

21. BORROWINGSBorrowings are recognised initially at the fair value of the proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.

Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the year-end.

22. REVENUE RECOGNITIONRevenue comprises the fair value of the consideration received or receivable for the sale of good and services in the ordinary course of the Group’s and Company’s activities and includes net billings, commission related to clearing and forwarding transactions, fees earned for services rendered and payments received in exchange for goods. Revenue is shown net of value-added tax, returns, rebates and discounts and after eliminating sales within the Group.

The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when specific criteria have been met, for each of the Group’s activities as described below. The amount of revenue is not considered to be reliably measured until all contingencies relating to the sales, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement and there is no continuing involvement of management.

Where the Group acts as an agent and is remunerated on a commission basis, only net commission income, and not the value of the business handled, is included in revenue.

Revenue is recognised as follows:(i) Sale of goods

Revenue from the sale of goods is recognised when significant risks and rewards of ownership of the goods are transferred to the buyer.

(ii) Rendering of servicesRevenue arising from rendering of services is based on the stage of completion determined by reference to services performed to date as a percentage of total services to be performed.

(iii) Interest incomeInterest income is recognised on a time proportion basis using the effective interest rate method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flows discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans is recognised using the original effective interest rate.

(iv) Rental incomeRental income is recognised over the period of the lease on a straight-line basis.

(v) Dividend incomeDividends are recognised when the right to receive payment is established.

(vi) Commissions and fees earnedWhere the Company acts as an agent and is remunerated on a commission basis, only net commission income and not the value of the business handled, is included in revenue.




23. FINANCE CHARGESFinance charges comprise interest payable on borrowings calculated using the effective interest rate method. The interest expense component of finance lease payments is recognised in profit or loss using the effective interest rate method.

Finance charges directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

24. LEASESLeases that transfer substantially all the risks and rewards of ownership of the underlying asset to the Group are classified as finance leases. Assets acquired in terms of finance leases are capitalised at the lower of fair value of the respective assets and the present value of the minimum lease payments at inception of the lease, and depreciated over the estimated useful life of the asset. The capital element of future obligations under the leases is included as a liability in the statement of financial position. Lease payments are allocated using the effective interest rate method to determine the lease finance cost, which is charged against income over the lease period, and the capital repayment, which reduces the liability to the lessor.

Assets effectively disposed of under finance leases are treated as receivables, and are presented at an amount equal to the net investment in the lease. Lease receipts are apportioned between capital and finance income portions using the interest rate implicit in each lease.

Leases where the lessor retains the risks and rewards of ownership of the underlying asset are classified as operating leases. Operating leases, which have a fixed determinable escalation, are charged against income on a straight-line basis. Leases with contingent escalations are expensed as and when incurred.

25. EMPLOYEE BENEFITSShort-term employee benefitsThe cost of short-term employee benefits (those payable within 12 months after the service is rendered, such as paid vacation leave, bonuses, and non-monetary benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted. The expected cost of compensated absences is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absences occur. The expected cost of profit-sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments as a result of past performance.

Profit-sharing and bonus plansThe Group recognises a liability and an expense for bonuses and profit-sharing, based on a formula that takes into consideration the profit attributable to the Group’s shareholders after certain adjustments. The Group recognises an accrual where contractually obliged or where there is past practice that has created a constructive obligation.

Defined contribution plansPayments to defined contribution retirement benefit plans are charged as an expense as they fall due.

Other post-employment obligationsCertain companies in the Group provide post-retirement healthcare defined benefits to their retirees. The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and is applicable to employees employed prior to 31 December 1998. The expected costs of these benefits are accrued over the period of employment. The post-retirement value shown is the proportion of the total accrued liability as at the valuation date, assuming that the liability accrues uniformly over the member’s working lifetime, where the total accrued liability is calculated as the discounted value of the expected benefits that become payable after retirement based on the assumptions regarding the expected increase in medical aid premiums and the expected number of debts and withdrawals. The cost is actuarially determined. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged to other comprehensive income. The obligations are valued annually by independent actuaries.

The Group’s obligation for post-retirement medical aid benefits to past and current employees is actuarially determined and provided for in full. The movement is recognised through other comprehensive income.

Statutory termination obligationsThe statutory termination obligations are classified as a defined benefit and are payable on death, retrenchment and at retirement at age of 65. Severance pay payable upon retirement at age of 65, as per the Labour Act, is applicable to the Group, as the employees have a normal retirement age of 65 in some of the entities. The obligation for severance benefits is calculated in respect of all employees that qualify in terms of the Labour Act, and is provided for in full. The cost of providing the benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each reporting period. The movement for the year is recognised in profit or loss when it is incurred.


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

26. DIVIDENDS TO SHAREHOLDERSDividends to shareholders are accounted for once they have been approved by the board of directors.

27. SHARE-BASED PAYMENTSThe Bidvest Namibia Share Incentive Scheme grants options to acquire shares in the Company to executive directors and management. The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. The fair value of the options is measured using the Black-Scholes-Merton model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that vest. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.

28. BEE ownership transactionEquity instruments issued to a BEE partner at less than fair value are accounted for as share-based payments.

The difference between the fair value of the equity instruments issued and the consideration received is accounted for as an expense in profit or loss at the date the goods and services are received, with a corresponding increase in equity. No service or other conditions exist for BEE partners. A restriction on the BEE partner to transfer the equity instrument subsequent to its vesting is not treated as a vesting condition, but is factored into the fair value determination of the instrument.

The fair value is measured using the Monte Carlo option pricing valuation model. The valuation technique is consistent with generally acceptable valuation methodologies for pricing financial instruments, and incorporates all factors and assumptions that knowledgeable willing participants would consider in setting the price of the equity instrument.

29. HEADLINE EARNINGS PER SHAREThe Group presents headline earnings per share in accordance with the SAICA circular 4 of 2018.



Statements of financial positionat 30 June

Group Company

Notes2018

N$’0002017

N$’0002018

N$’0002017

N$’000

ASSETSNon-current assetsProperty, plant and equipment 1 450 105 790 606 – –

Intangible assets 2 19 915 37 574 – –

Goodwill 2 224 368 244 254 – –

Investment in subsidiaries 3 – – 4 014 363 377

Investment in associates 4 10 191 90 228 – –

Other financial assets 6 – – 47 531 –

Deferred tax assets 13 4 995 1 772 – –

Trade and other receivables 9 – 36 203 – –

709 574 1 200 637 51 545 363 377

Current assetsInventories 7 392 857 528 233 – –

Biological assets 8 – 2 705 – –

Short-term portion of lease receivables 5 20 34 – –

Other financial assets 6 419 12 714 419 12 714

Trade and other receivables 9 952 332 556 946 1 198 025 477 401

Current tax assets 26 4 289 6 042 – –

Cash and cash equivalents 10 299 035 742 986 190 734 36 917

1 648 952 1 849 660 1 389 178 527 032

Non-current assets classified as held for sale 11 334 085 36 553 96 765 –

1 983 037 1 886 213 1 485 943 527 032

Total assets 2 692 611 3 086 850 1 537 488 890 409

EQUITY AND LIABILITIESCapital and reserves attributable to equity holdersShare capital 12 2 120 2 120 2 120 2 120

Share premium 12 660 272 660 272 660 272 660 272

Other reserves 43 739 45 026 16 988 16 988

Retained earnings 1 027 628 1 137 489 843 550 210 948

1 733 759 1 844 907 1 522 930 890 328

Non-controlling interest in equity 3 120 749 384 874 – –

Total equity 1 854 508 2 229 781 1 522 930 890 328

Non-current liabilitiesDeferred tax liabilities 13 58 939 137 857 – –

Post-employment obligations 14 14 932 16 956 – –

Borrowings 16 2 137 10 230 – –

Operating lease liability 31 1 721 1 444 – –

77 729 166 487 – –

Current liabilitiesTrade and other payables 15 494 954 459 200 14 543 45

Borrowings 16 200 083 229 223 – –

Short-term portion of finance lease liability 32 20 34 – –

Current tax payable 26 945 2 126 15 36

696 002 690 583 14 558 81

Liabilities associated with non-current assets classified as held for sale 11 64 373 – – –

Total liabilities 838 104 857 070 14 558 81

Total equity and liabilities 2 692 612 3 086 851 1 537 488 890 409


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Statements of profit or loss and other comprehensive incomefor the year ended 30 June

Group Company

Notes2018

N$’000

2017 N$’000

Restated*2018

N$’0002017

N$’000

Continuing operationsRevenue 19 2 710 612 2 873 524 721 091 39 254

Cost of sales 19 (2 227 099) (2 407 774) – –

Gross profit 483 513 465 750 721 091 39 254

Administration expenses (480 014) (418 477) (438) (432)

Other gains/(losses) 20 21 778 4 293 (75 710) –

Operating profit 22 25 277 51 566 644 943 38 822

Finance income 23 4 553 5 878 553 1 139

Finance costs 24 (29 010) (19 072) – –

Share of profit of associates 4 1 273 935 – –

Profit before income tax 2 093 39 307 645 496 39 961

Income tax expense 26 (22 181) (27 423) (177) (363)

(Loss)/profit for the year from continuing operations (20 088) 11 884 645 319 39 598

Discontinued operations(Loss)/profit after tax from discontinued operations 18 (9 854) 49 935 – –

(Loss)/profit for the year (29 942) 61 819 645 319 39 598

Other comprehensive incomeItems that will not be reclassified to profit or loss

Actuarial gains on post-employment obligations 14 1 778 153 – –

Items that are or may be reclassified subsequently to profit or loss

Movement on translation of foreign subsidiary 98 (16 851) – –

Total comprehensive (loss)/income for the year (28 066) 45 121 645 319 39 598

(Loss)/profit attributable to:Equity holders of the Company

From continuing operations (20 828) 12 765 645 319 39 598

From discontinued operations (19 313) 37 846 – –

(40 141) 50 611 645 319 39 598

Non-controlling interest

From continuing operations 740 (881) – –

From discontinued operations 9 459 12 089 – –

10 199 11 208 – –

(Loss)/profit for the year (29 942) 61 819 645 319 39 598

Comprehensive (loss)/income attributable to:Equity holders of the company (38 294) 42 484 645 319 39 598

Non-controlling interest 10 228 2 637 – –

(28 066) 45 121 645 319 39 598

Basic (loss)/earnings per share from continuing operations (cents)** 29 (9,83) 6,02

Basic (loss)/earnings per share from discontinued operations (cents)** 29 (9,11) 17,86

* The comparatives have been represented in order to reflect the discontinued operation in accordance with accounting policy note 16.** There is no difference between basic and diluted earnings per share.



Attributable to equity holders of the parent

Share capitalN$’000

Share premium

N$’000

Retained earnings

N$’000

Foreign currency

translation reserveN$’000

Share-based

payment reserveN$’000

BEE share-based


TotalN$’000

Non-controlling

interest in equity

N$’000

Total equity

N$’000

GROUPBalance at 1 July 2016 2 120 660 272 1 133 355 31 766 4 192 16 988 1 848 693 455 218 2 303 911

Comprehensive income

Profit for the year – – 50 611 – – – 50 611 11 208 61 819

Other comprehensive income/(loss) for the year – – 153 (8 280) – – (8 127) (8 571) (16 698)

Total comprehensive income – – 50 764 (8 280) – – 42 484 2 637 45 121

Transactions with equity holders

Employee share option scheme – value of employee services

– – – – 360 – 360 – 360

Dividends declared and paid – – (46 630) – – – (46 630) (72 981) (119 611)

Total transactions with equity holders – – (46 630) – 360 – (46 270) (72 981) (119 251)

Balance at 30 June 2017 2 120 660 272 1 137 489 23 486 4 552 16 988 1 844 907 384 874 2 229 781


Profit for the year – – (40 141) – – – (40 141) 10 199 (29 942)

Other comprehensive income for the year – – 1 778 69 – – 1 847 29 1 876

Total comprehensive income – – (38 363) 69 – – (38 294) 10 228 (28 066)

Transactions with equity holdersEmployee share option scheme – value of employee services – – – – (344) – (344) – (344)

Acquisition of minority share in subsidiaries (58 781) (58 781) 58 781 –

Movement on disposal of business (note 18) 10 (1 022) (1 012) (87 327) (88 339)


Total transactions with equity holders – – (71 498) 10 (1 366) – (72 854) (274 353) (347 207)

Balance at 30 June 2018 2 120 660 272 1 027 628 23 565 3 186 16 988 1 733 759 120 749 1 854 508



Share premium

N$’000

Retained earnings

N$’000

BEE share-based


TotalN$’000

COMPANYBalance at 1 July 2016 2 120 660 272 217 980 16 988 897 360

Comprehensive incomeProfit for the year – – 39 598 – 39 598

Total comprehensive income – – 39 598 – 39 598

Transactions with equity holdersDividend declared and paid – – (46 630) – (46 630)

Total transactions with equity holders – – (46 630) – (46 630)

Balance at 30 June 2017 2 120 660 272 210 948 16 988 890 328





Balance at 30 June 2018 2 120 660 272 843 550 16 988 1 522 930

Statements of changes in equityfor the year ended 30 June


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW



Share premium

N$’000

Retained earnings

N$’000

Foreign currency

translation reserveN$’000

Share-based


BEE share-based


TotalN$’000

Non-controlling

interest in equity

N$’000

Total equity

N$’000

GROUPBalance at 1 July 2016 2 120 660 272 1 133 355 31 766 4 192 16 988 1 848 693 455 218 2 303 911


Profit for the year – – 50 611 – – – 50 611 11 208 61 819

Other comprehensive income/(loss) for the year – – 153 (8 280) – – (8 127) (8 571) (16 698)

Total comprehensive income – – 50 764 (8 280) – – 42 484 2 637 45 121

Transactions with equity holders

Employee share option scheme – value of employee services

– – – – 360 – 360 – 360


Total transactions with equity holders – – (46 630) – 360 – (46 270) (72 981) (119 251)

Balance at 30 June 2017 2 120 660 272 1 137 489 23 486 4 552 16 988 1 844 907 384 874 2 229 781


Profit for the year – – (40 141) – – – (40 141) 10 199 (29 942)

Other comprehensive income for the year – – 1 778 69 – – 1 847 29 1 876

Total comprehensive income – – (38 363) 69 – – (38 294) 10 228 (28 066)

Transactions with equity holdersEmployee share option scheme – value of employee services – – – – (344) – (344) – (344)

Acquisition of minority share in subsidiaries (58 781) (58 781) 58 781 –

Movement on disposal of business (note 18) 10 (1 022) (1 012) (87 327) (88 339)


Total transactions with equity holders – – (71 498) 10 (1 366) – (72 854) (274 353) (347 207)

Balance at 30 June 2018 2 120 660 272 1 027 628 23 565 3 186 16 988 1 733 759 120 749 1 854 508



Share premium

N$’000

Retained earnings

N$’000

BEE share-based


TotalN$’000

COMPANYBalance at 1 July 2016 2 120 660 272 217 980 16 988 897 360





Balance at 30 June 2017 2 120 660 272 210 948 16 988 890 328





Balance at 30 June 2018 2 120 660 272 843 550 16 988 1 522 930



Group Company

Notes2018

N$’000

2017 N$’000

Restated*2018

N$’0002017

N$’000

Cash flows from operating activitiesCash receipts from customers 2 149 996 2 903 563 624 326 39 254

Cash paid to suppliers and employees (2 130 078) (2 852 293) (721 037) (401)

Cash generated/(utilised) by operations 33 19 918 51 270 (96 711) 38 853

Finance income 23 4 553 5 878 553 1 139

Finance costs (excluding post-retirement medical obligation) 24 (27 706) (17 856) – –

Dividends received 19, 20 17 636 4 007 – –

Dividends paid to equity holders 30 (12 717) (46 630) (12 717) (46 630)

Dividends paid to non-controlling interest – (779) – –

Income tax paid 34 (19 759) (29 773) (198) (373)

Net operating cash flows from discontinued operations 18 (138 978) 21 723 – –

Net cash outflow from operating activities (157 053) (12 160) (109 073) (7 011)

Cash flows from investing activitiesProceeds on disposal of subsidiary – – 190 741 –

Proceeds from other financial instruments 12 295 – 12 295 –

Intangible assets acquired 2 (777) (1 488) – –

Property, plant and equipment acquired (30 324) (42 916) – –

Proceeds on disposal of property, plant and equipment 4 688 1 864 – –

Net investing cash flows from discontinued operations 18 (176 622) 51 058 – –

Net cash (outflow)/inflow from investing activities (190 740) 8 518 203 036 –

Cash flows from financing activitiesAcquisition of non-controlling interest in subsidiary (58 781) – – –

Borrowings repaid (33 251) (3 757) – –

Proceeds from share buy-back in subsidiary – – 59 854 –

Repayments from related parties 9 – – – 36 775

Net financing cash flows from discontinued operations 18 – 10 480 – –

Net cash (outflow)/inflow from financing activities (92 032) 6 723 59 854 36 775

Net (decrease)/increase in cash and cash equivalents (439 825) 3 080 153 817 29 764

Foreign exchange differences from discontinued operations 36 (145) (6 881) – –

Cash and cash equivalentsBalance at the beginning of the year 669 270 673 070 36 917 7 153

Cash and cash equivalentsBalance at the end of the year 10 229 300 669 269 190 734 36 917

* The comparatives have been represented in order to reflect the discontinued operation in accordance with accounting policy note 16.

Statements of cash flowsfor the year ended 30 June


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Notes to the financial statementsfor the year ended 30 June

Land andbuildings

N$’000

Fishing vesselsN$’000

OtherassetsN$’000

TotalN$’000

1. PROPERTY, PLANT AND EQUIPMENT1.1 Group

30 June 2018Opening net book amount 379 567 214 558 196 481 790 606 Exchange differences (63) (220) (709) (992)Additions 22 930 8 631 48 320 79 881 Disposals (3 712) (26 391) (25 542) (55 645)Disposals of businesses (1 477) (154 032) (37 779) (193 288)Transferred to disposal group held for sale (44 477) (35 678) (23 290) (103 445)Depreciation (12 624) (4 026) (46 275) (62 925)Impairment – – (4 027) (4 027)Transfers 1 146 1 240 (2 446) (60)

Closing net book amount 341 290 4 082 104 733 450 105

Cost 388 821 4 773 272 636 666 230 Accumulated depreciation (47 531) (691) (167 903) (216 125)


Group30 June 2017Opening net book amount 378 722 254 380 231 111 864 213

Acquisition through a business combination (note 39) – – 862 862

Exchange differences (6 107) (3 982) (3 223) (13 312)

Additions 20 727 2 142 36 144 59 013

Disposals (456) (1 043) (10 163) (11 662)

Depreciation (13 509) (386) (58 060) (71 955)

Transferred to asset held for sale – (36 553) – (36 553)

Transfers 190 – (190) –


Cost 425 461 263 615 472 409 1 161 485

Accumulated depreciation (45 894) (49 057) (275 928) (370 879)


1.2 Land and buildings A register of land and buildings is available for inspection at the registered office of the Company by members or their duly authorised representatives.

The property in Lenkow (Proprietary) Limited has been bonded in favour of Nedbank Namibia Limited for the amount of N$6,6 million and N$13,4 million by registering a first and second mortgage bond over Erf 32 as security for the banking facilities of a related party. The property has been bonded in favour of Ford Finance South Africa for the amount of N$6,0 million by registering a third mortgage bond over Erf 32. The property has a carrying value of N$85,2 million.



Plant andmachinery

N$’000Vehicles

N$’000

Office furniture/

equipmentand computer

equipmentN$’000

TotalN$’000

1. PROPERTY, PLANT AND EQUIPMENT (continued)1.3 Other assets consist of:

Group30 June 2018 Opening net book amount 127 049 34 643 34 789 196 481 Exchange differences (618) (75) (16) (709)Additions 35 913 3 113 9 294 48 320 Disposals (22 667) (826) (2 049) (25 542)Disposals of businesses (38 161) (621) 1 003 (37 779)Transferred to disposal group held for sale (20 077) (1 981) (1 232) (23 290)Depreciation charge for the year (32 589) (8 170) (5 516) (46 275)Impairment – – (4 027) (4 027)Transfers 103 – (2 549) (2 446)


Cost 105 383 77 183 90 070 272 636 Accumulated depreciation (56 430) (51 100) (60 373) (167 903)


Group30 June 2017

Opening net book amount 165 055 35 299 30 757 231 111

Acquisition through a business combination 428 272 162 862

Exchange differences (2 699) (371) (153) (3 223)

Additions 12 620 9 530 13 994 36 144

Disposals (8 666) (1 292) (205) (10 163)

Depreciation charge for the year (39 689) (8 795) (9 576) (58 060)

Transfers – – (190) (190)


Cost 293 186 87 267 91 956 472 409

Accumulated depreciation (166 137) (52 624) (57 167) (275 928)


Notes to the financial statements – continuedfor the year ended 30 June


ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

GoodwillN$’000

Computer software,

trademarks and warehouse

developmentN$’000

Fishing rightsN$’000

TotalN$’000

2. INTANGIBLE ASSETS2.1 Group

30 June 2018Opening net book amount 244 254 23 347 14 227 281 828 Impairment (15 258) (100) – (15 358)Disposals – (1) – (1)Disposal of business (4 628) – – (4 628)Transferred to disposal group held for sale – – (9 784) (9 784)Exchange differences – – 27 27 Additions – 778 – 778 Amortisation – (3 551) (5 028) (8 579)

Closing net book amount 224 368 20 473 (558) 244 283

Cost 241 392 39 605 630 281 627 Impairment (17 024) (100) – (17 124)Accumulated amortisation – (19 590) (630) (20 220)

Closing net book amount 224 368 19 915 – 244 283

Group30 June 2017Opening net book amount 244 311 25 939 21 746 291 996

Impairment (57) – – (57)

Exchange differences – – (2 181) (2 181)

Additions – 1 488 – 1 488

Amortisation – (4 080) (5 338) (9 418)


Cost 246 020 39 396 76 641 362 057

Impairment (1 766) – (168) (1 934)

Accumulated amortisation – (16 049) (62 246) (78 295)




Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

2. INTANGIBLE ASSETS (continued)2.2 Goodwill allocation

Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to the operating segment. An operating segment-level summary of the goodwill allocation is presented below:

Fishing – 19 886 – –

Freight and Logistics 40 228 40 228 – –

Food and Distribution 49 881 49 881 – –

Commercial and Industrial Services and Products 5 448 5 448 – –

Properties 6 163 6 163 – –

Automotive 122 648 122 648 – –

224 368 244 254 – –

2.3 Goodwill impairment testsThe recoverable amount of a CGU is determined based on value in use calculations. The carrying amounts of the Freight and Logistics, Food and Distribution, Commercial and Industrial Services and Products, Properties and Automotive divisions were determined to be lower than their recoverable amounts of N$182 million, N$267 million, N$135 million, N$92 million and N$292 million respectively.

The current year assessment of recoverable amounts were not based on past performance and historical results but on expected future cash flows. Due to structured turnaround strategies being implemented for various loss making businesses, the historic results are not considered to be a true reflection of the future economic value expected from the businesses. These calculations use pre-tax cash flow projections based on budgets approved by management covering a four-year period. In determining the rates used, management has taken into account industry specific risks and the economic outlook.

Cash flows beyond the four-year period are extrapolated using the growth rates stated below:

All segmentsGrowth rate 4% – 8% 4% – 8%

Growth in perpetuity after forecast period 4% – 8% 4% – 8%

Internal rate of return (WACC)/discount rate 11% 11%

Management considers the growth rates used to be in line with current and expected inflationary growth and the discount rate to compare reasonably with what is achievable in the market. The rates used have been applied consistently from year to year within reportable segments.



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Group

2018

N$’000

% change in recoverable

amount

2. INTANGIBLE ASSETS (continued)2.3 Goodwill impairment tests (continued)

The sensitivity of the recoverable amounts as indicated is illustrated on the assumption of a 1% increase/ decrease in the valuation assumptions:

Sensitivity – GroupTotal recoverable amount as at 30 June 2018 968 252 Growth rate +1% 163 912 17%Growth rate -0,5% (62 251) -6%Internal rate of return (WACC)/discount rate +1% (136 566) -14%Internal rate of return (WACC)/discount rate -0,5% 87 640 9%

Goodwill of N$15,3 million related to the Fishing segment was impaired in full in the current year prior to disposal of the business. The facts and circumstances that gave rise to the impairment was the fact that the related fishing rights will expire at the end of 2018 and there is no guarantee that the rights will be renewed.

The Group’s CGUs all have significant headroom with the exception of the Freight and Logistics and Food and Distribution segments. The goodwill allocated to both of these divisions are most sensitive to fluctuations in both the assumptions applied and to the achievement of their budgets for the 2019 financial year. The budgets for these divisions are based on forecasts for revenue, staff costs and other overheads which have been estimated based on current commitments and expectations of future market conditions. The budgets have been considered and approved by the Board.

For the Food and Distribution segment, the achievement of the budgeted results is most sensitive to planned cost reductions and improved efficiencies. For the Freight and Logistics segment, the revenue projections are sensitive to the level of activity in the Port of Walvis Bay.

Automotive segment goodwill is not considered to be impaired considering the fact that the business has a track record of profitability. Achievement of the budgeted results for the segment is sensitive to the planned benefits of cost reduction and efficiency strategies that have been put in place.

Company

2018 N$’000

2017 N$’000

3. INVESTMENT IN SUBSIDIARIESUnlisted share investmentBidvest Namibia Fisheries Holdings (Proprietary) Limited – 359 363

Bidvest Namibia Property Holdings (Proprietary) Limited 4 014 4 014

4 014 363 377

The carrying amounts of subsidiaries are shown net of impairment losses. For more information on the subsidiary undertakings refer to the directors’ report. Refer to the directors’ report for the full segmental report.

Composition of the GroupNumber of wholly owned

subsidiaries

Segments

Place of incorporation and operation 2018 2017

Fishing Walvis Bay – 14

Freight and Logistics Walvis Bay 7 7

Commercial and Industrial Services and Products Windhoek 12 12

Food and Distribution Windhoek 6 3

Automotive Windhoek 4 3

Corporate Services Windhoek 9 6

Number of non-wholly owned subsidiaries

Segments 2018 2017

Fishing Walvis Bay 4 5

Freight and Logistics Walvis Bay 3 3

Food and Distribution Windhoek 1 –



3. INVESTMENT IN SUBSIDIARIES (continued)

Proportion of non-controlling interests

Comprehensive income/(loss) allocated to non-controlling

interestsAccumulated non-controlling

interests

2018 20172018

N$’0002017

N$’0002018

N$’000

2017N$’000

Restated

Details of non-wholly owned subsidiaries that have material non-controlling interestsName of subsidiaryGlenryck South Africa (Proprietary) Limited 49,00% 49,00% 204 (719) (514) (719)

Monjasa Namibia (Proprietary) Limited 36,44% 36,44% 1 104 924 2 092 1 367

Orca Marine (Proprietary) Limited 40,00% 40,00% 378 160 441 63

Walvis Bay Stevedoring Company (Proprietary) Limited 45,00% 45,00% (946) (1 246) 2 486 3 432

Namsov Fishing Enterprises (Proprietary) Limited* – 30,45% 195 9 404 – 273 778

Comet Investment Capital Incorporated, including Pesca Fresca Limitada** 65,92% 65,92% 15 282 1 337 101 771 86 410

Industria Alimentar Carnes Mocambique Limitada** and ^ 30,45% 30,45% (6 012) 1 364 14 473 20 487

Oshivelelwa Trading Enterprises (Proprietary) Limited* – 50,00% – – – –

Twafika Fishing Enterprises (Proprietary) Limited* – 24,90% (6) (16) – 54

10 199 11 208 120 749 384 872

The Group has de facto control over Pesca Fresca Limitada, incorporated in Angola, and significant influence over Industria Alimentar Carnes Mocambique Limitada, incorporated in Mozambique, as a result of management agreements.

The comparatives have been restated to reflect the minority interest components of the Group to align with discontinued operation and disposal group disclosures.

* Disposed of in the current year.** Classified as held for sale in the current year.^ Although the Group only has significant influence over this entity, minority interest exists due to the fact that the interest is held through a subsidiary.



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Proportion of ownership interest

2018 2017 2018 2017

4. INVESTMENT IN JOINT VENTURE AND ASSOCIATESJoint venture!OE#GAB Fishing Enterprises (Proprietary) Limited – 34,77%

N$’000 N$’000 N$’000 N$’000

The Group’s share of loss (discontinued operations) – (82) – –

Carrying amount of the Group’s interest in joint venture – – – –

Proportion of ownership interest

2018 2017 2018 2017

AssociatesCarapau Fishing (Proprietary) Limited* – 25,00%

Namibia Bureau de Change (Proprietary) Limited 49,00% 49,00%

Industria Alimentar Carnes Mocambique Limitada^ 27,82% 27,82%

^ The Group has significant influence over Industria Alimentar Carnes Mocambique Limitada as a result of the management agreement.

N$’000 N$’000 N$’000 N$’000

Share of profitContinuing operationsNamibia Bureau de Change (Proprietary) Limited 1 273 935 – –

Discontinued operationsCarapau Fishing (Proprietary) Limited 3 811 2 417 – –

Industria Alimentar Carnes Mocambique Limitada 1 934 4 482 – –

The Group’s share of profit 7 018 7 834 – –

Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

Carapau Fishing (Proprietary) Limited* – 13 154 – –

Namibia Bureau de Change (Proprietary) Limited 10 191 9 794 – –

Industria Alimentar Carnes Mocambique Limitada** – 67 280 – –

Carrying amount of the Group’s interest in associates 10 191 90 228 – –

* Disposed of in the current year.** Classified as held for sale in the current year.

Reconciliation of movement in associates

Opening balance 90 228 83 374 – –

Disposed during the year (16 964) – – –

Reclassified as held for sale (47 531) – – –

Impairment (21 684) – – –

Share of current year profit 7 018 7 834 – –

Dividend received (876) (980) – –

Carrying amount of the Group’s interest in associates 10 191 90 228 – –

All associates and the joint venture, with the exception of Namibia Bureau de Change (Proprietary) Limited, are involved in activities related to the Fishing division. Namibia Bureau de Change (Proprietary) Limited is involved in financial service activities.



TotalN$’000

Carapau Fishing

(Proprietary) LimitedN$’000

Namibia Bureau

de Change (Proprietary)

LimitedN$’000

Industria Alimentar

Carnes Mocambique

LimitadaN$’000

4. INVESTMENT IN JOINT VENTURE AND ASSOCIATES (continued)Summarised financial information of the associates are set out below:30 June 2018Current assets 24 870 – 12 483 12 387

Non-current assets 107 307 – 867 106 440

Current liabilities 428 – 428 –

Non-current liabilities 41 – 41 –

Revenue 378 173 – 12 134 366 039

Profit for the year 7 433 – 2 598 4 835

Other comprehensive income for the year – – – –

Total comprehensive income for the year 7 433 – 2 598 4 835

Summarised financial information of the associates are set out below:30 June 2017Current assets 138 477 54 600 12 258 71 619

Non-current assets 249 482 126 659 967 121 856

Current liabilities 136 853 62 212 1 127 73 514

Non-current liabilities 61 461 61 432 29 –

Revenue 680 691 230 645 10 349 439 697

Profit for the year 22 781 9 667 1 908 11 206

Other comprehensive income for the year – – – –

Total comprehensive income for the year 22 781 9 667 1 908 11 206

The above financial information has been equity accounted in the Group’s results. The joint venture was not material to the Group and was disposed of in the current year and therefore no disclosure was made thereof. Industria Alimentar Carnes Mocambique Limitada’s functional currency is Mozambique metical and was transferred to non-current assets held for sale at year-end.



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

5. FINANCE LEASE RECEIVABLESGross finance lease receivable– within one year 20 34 – –

Amounts receivable under finance leases 20 34 – –

Less: Unearned finance income – – – –

Present value of finance lease receivables 20 34 – –

Current assets 20 34 – –

20 34 – –

Minolco (Namibia) (Proprietary) Limited signed an agreement with Standard Bank Namibia Limited to cede the rights relating to rental agreements signed between Minolco (Namibia) (Proprietary) Limited and customers to Standard Bank Namibia Limited whilst maintaining the service obligations related thereto. The average lease period is less than one year and the average effective borrowing rate is the prime interest rate.

6. OTHER FINANCIAL ASSETSNon-current other financial assetsNamsov Fishing Enterprises (Proprietary) Limited (i) – – 47 531 –

Current other financial assetsLoan to other entity (ii) 419 12 714 419 12 714

(i) This represents the receivable from Namsov Fishing Enterprises (Proprietary) Limited relating to the agency agreement in respect of the Group’s interest in the associate in Mozambique. The amount will be recovered on eventual disposal of the interest in associate held through the agency agreement with Tunacor Fisheries Limited.

(ii) The loan was provided to the Namibia Procurement Fund and carries interest at fixed rate of 5,5% and is repayable as a single bullet payment on 30 September 2017. The fair value of the loan is N$411 574 (2017: N$12,5 million) at the Namibian prime rate of 10,75% (2017: 10,75%).

7. INVENTORIESFinished goods 271 255 314 299 – –

Raw material 427 6 416 – –

New vehicles 58 173 70 739 – –

Used vehicles 42 338 26 399 – –

Demonstration vehicles 18 832 22 772 – –

Parts and accessories 17 078 99 173 – –

408 103 539 798 – –

Less: Provision for obsolete inventory (15 246) (11 565) – –

392 857 528 233 – –

Carrying value of inventory at net realisable value (included above) 12 000 14 217 – –

The cost of inventories recognised as an expense during the year was N$1,9 billion (2017: N$2,4 billion). A financial interest is registered over the vehicles to secure the floor plan liabilities.

Inventories to the value of N$81,1 million included in the prior year relate to discontinued operations.



Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

8. BIOLOGICAL ASSETSOpening balance 2 705 3 413 – –

Value changes caused by:

Birth and growth of animals 4 877 9 898 – –

Increase due to purchases 1 570 1 249 – –

On disposal of business (1 382) – – –

Mortalities (2 276) (4 854) – –

Samples/donations (9) (10) – –

Loss due change in fair value 15 (167) – –

Decrease due to sales (5 500) (6 824) – –

Oysters – 2 705 – –

Current – 2 705 – –

Biological asset consists of oysters.

The Group was exposed to a number of risks relating to its growing of oysters arising from environmental and climatic changes, toxic algae blooms and other contamination of water space. The Group has disposed of all the biological assets as at the year-end.

9. TRADE AND OTHER RECEIVABLES

Trade receivables – third parties 460 479 384 660 – –

Trade receivables – related parties (note 37) 1 746 13 011 – –

Less: Allowance for impairment (14 269) (15 189) – –

Trade receivable 447 956 382 482 – –

Related-party loans (note 37) – 66 418 818 775 477 398

Dividend receivable 188 494 – 188 494 –

Proceeds receivable on disposal of business 190 741 – 190 741 –

Other receivables 48 831 87 805 15 3

Less: Allowance for impairment – (24 758) – –

Financial instruments trade and other receivables 876 022 511 947 1 198 025 477 401

Prepayments 9 257 25 467 – –

Receiver of Revenue – VAT 67 053 55 735 – –

Non-financial instruments trade and other receivables 76 310 81 202 – –

952 332 593 149 1 198 025 477 401

Non-current assets – 36 203 – –

Current assets 952 332 556 946 1 198 025 477 401

952 332 593 149 1 198 025 477 401

Trade receivables to the value of N$134,3 million included in the prior year relate to discontinued operations.

Trade receivables are provided for based on estimated irrecoverable amounts from the sale of goods or rendering of services, determined by reference to past default experience.

Included in the Group’s trade receivables balance are debtors with a carrying amount of N$120,5 million (2017: N$102,9 million) which were past due at the reporting date but not impaired. The Group has not provided for these as there has not been a significant change in credit quality.



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

9. TRADE AND OTHER RECEIVABLES (continued)The ageing of amounts past due but not impaired is as follows:

Past due 0 to 30 days 69 550 57 830 – –

Past due 31 to 90 days 33 962 29 653 – –

Past due 91 to 180 days 11 048 9 214 – –

Past due 181 + days 5 896 6 243 – –

120 456 102 940 – –

Movements in the Group’s allowance for impairment of trade receivables are as follows:

Balance at the beginning of the year (15 189) (19 233) – –

Net provisions raised during the year (4 004) (107) – –

Bad debts written off during the year 1 043 3 818 – –

Exchange difference (400) 550 – –

On disposal of business 4 296 – – –

Assumed through a business combination (15) (217) – –

(14 269) (15 189) – –

In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date.

Trade receivables amounting to N$10,6 million (2017: N$11, 5 million) were placed under liquidation during the year and have been provided for.

At 30 June 2018, the carrying amounts of accounts receivable approximate their fair values due to the short-term maturities of these assets.

10. CASH AND CASH EQUIVALENTSFor the purposes of the statement of cash flows the year-end cash and cash equivalents comprise the following:

Bank and cash balances 126 186 705 290 317 620

Money market fundsBank Windhoek Corporate Fund 35 274 19 497 52 917 18 167

Old Mutual Unit Trust Corporate Fund 137 500 18 130 137 500 18 130

IJG Securities EMH Prescient Unit Trust Fund 75 69 – –

299 035 742 986 190 734 36 917

Bank overdraft (note 16) (69 735) (73 717) – –

Cash and cash equivalents 229 300 669 269 190 734 36 917

Cash and equivalents to the value of N$618,4 million included in the prior year relate to discontinued operations.

Bank overdraft facilities amounting to N$294,5 million (2017: N$280,7 million) are secured by suretyships given by the Group (38.1(c) for detail on the overdraft facilities).

The money market funds can be converted to cash within a notice period of 24 hours.

At 30 June 2018, the carrying amounts of cash and cash equivalents approximate the fair values due to its short-term maturities.



11. NON-CURRENT ASSET CLASSIFIED AS HELD FOR SALEAs part of the single plan to dispose of the fishing segment in its entirety, the Group intends to dispose of its investments in Comet Investment Capital Incorporated, including Pesca Fresca Limitada, and Industria Alimentar Carnes Mocambique Limitada subsequent to the financial year-end. Accordingly these have been classified as held for sale for the first time in the 2018 financial period.

Loans receivable and investment in associate were impaired by N$32,6 million and N$21,7 million respectively. A loss of N$6,7 million was recognised on the reclassification as held for sale to bring the disposal group to its realisable value.

A buyer has been identified for Comet Investment Capital Incorporated, including Pesca Fresca Limitada, but as at year-end the agreement had not yet been finalised. The Group is actively pursuing various alternatives in respect of the interest in Industria Alimentar Carnes Mocambique Limitada.

The major classes of assets and liabilities of the disposal group are as follows:

Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

Vessel – 36 553 – –

Interest in Comet Investments Capital Incorporated – – 96 765 –

Investment in associate 47 531 – – –

Property, plant and equipment 103 445 – – –

Intangibles 9 784 – – –

Inventories 17 213 – – –

Trade and other receivables 40 149 – – –

Trade and other payables (64 373) – – –

Loss on classification as held for sale (6 688) – –

Net assets held for sale 147 061 36 553 96 765 –

Movement on assets held for sale (269 712) (36 553) (96 765) –

Cash and cash equivalents included in disposal group (122 651) – – –

Disclosed as:

Non-current assets held for sale 334 085 36 553 96 765 –

Liabilities related to non-current assets held for sale (64 373) – – –

269 712 36 553 96 765

12. SHARE CAPITAL, PREMIUM AND RESERVESShare capitalAuthorised share capital540 000 000 ordinary shares of N$0,01 each 5 400 5 400 5 400 5 400

Issued share capitalNumber of shares issued 2 120 2 120 2 120 2 120

Balance at the beginning of the year 2 120 2 120 2 120 2 120

Shares issued during the year – – – –

Issued share capital 2 120 2 120 2 120 2 120

The unissued ordinary shares are under the control of the directors until the next annual general meeting.

Share premiumOpening balance 660 272 660 272 660 272 660 272

Issued during the year – – – –

Closing balance 660 272 660 272 660 272 660 272



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

13. DEFERRED TAX ASSETS/(LIABILITIES)Deferred taxation assets 4 995 1 772 – –

Deferred taxation liabilities (58 939) (137 857) – –

(53 944) (136 085) – –

Movement in deferred tax balances:Opening balance (136 085) (162 990) – –

Acquisition through a business combination – (182) – –

Per statement of comprehensive income (temporary differences) (note 26) (1 287) (8 558) – –

Charge for the year included in discontinued operations 20 951 35 619 – –

Balance on disposal of business 62 116 – – –

Prior period adjustment 361 26 – –

Closing balance (53 944) (136 085) – –

Assets Liabilities Net

Tax effect of temporary differences – 2018Capital allowances on property, plant and equipment (4 965) (58 896) (63 861)Capital allowances on intangible assets (95) (262) (357)Computed tax losses 6 360 835 7 195 Trade and other receivables (45) (1 124) (1 169)Trade, other payables and provisions 72 (442) (370)Staff-related allowances and liabilities 3 312 1 226 4 538 Inventory-related – (131) (131)Operating lease liabilities 356 335 691 Unrealised foreign exchange difference – (493) (493)Other – 13 13

Net temporary differences subject to deferred tax 4 995 (58 939) (53 944)

Tax effect of temporary differences – 2017Capital allowances on property, plant and equipment (191) (165 081) (165 272)

Capital allowances on intangible assets (5) (589) (594)

Computed tax losses 1 336 33 963 35 299

Trade and other receivables (86) (2 394) (2 480)

Trade, other payables and provisions 17 2 850 2 867

Staff-related allowances and liabilities 662 3 421 4 083

Inventory-related – (13 943) (13 943)

Operating lease liabilities 39 614 653

Unrealised foreign exchange difference – 3 320 3 320

Other – (18) (18)

Net temporary differences subject to deferred tax 1 772 (137 857) (136 085)

Deferred income taxes are calculated on all temporary differences under the liability method using a tax rate of 32% (2017: 32%).

Deferred income tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the related tax benefit through future taxable profits is probable. Management has performed projections to support future taxable profits. The Group did not recognise deferred income tax assets of N$80,7 million (2017: N$36,0 million) in respect of losses amounting to N$252,4 million (2017: N$112,5 million). The assessed losses do not expire, they can be carried forward indefinitely, unless the respective companies cease trading for two consecutive years.



Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

14. POST-EMPLOYMENT OBLIGATIONSTotal liability recognised in the statement of financial position:

Post-retirement medical benefit obligation 12 689 13 841 – –

Statutory severance benefits 2 243 3 115 – –

14 932 16 956 – –

14.1 Post-retirement medical benefit obligationOpening balance 13 841 13 447 – –

Imputed interest costs 1 304 1 216 – –

Payments to medical aid in respect of retired employees (838) (829) – –

Actuarial gains (1 778) (153) – –

Current service cost 160 160 – –

Actuarially determined present value of total obligation 12 689 13 841 – –

Certain companies in the Group provide post-retirement medical benefit subsidies to certain retired employees and are responsible for provision of post-retirement medical benefit subsidies to a limited number of current employees.

The Group’s policy is to perform a valuation every second year. The last valuation was done during June 2018 by Towers Watson, independent actuaries.

The post-retirement value shown is the proportion of the total accrued liability as at the valuation date, assuming that the liability accrues uniformly over the member’s working lifetime, where the total accrued liability is calculated as the discounted value of the expected benefits that become payable after retirement based on the assumptions regarding the expected increase in medical aid premiums and the expected number of deaths and withdrawals. The following key actuarial assumptions were used:

Discount rate 8,65% 9,60%

Healthcare cost inflation 7,70% 7,00%

Mortality rate:Mortality before retirement has been based on the SA 85-90 mortality table and on the PA(90) ultimate mortality table adjusted less one year of age for post-retirement medical benefits.

The post-retirement medical benefit obligation is based on the assumption that the required contributions to the medical aid scheme will increase at a faster rate than the normal inflation rate. The discount rate and the healthcare cost inflation assumptions should be considered in relation to each other.

The sensitivity of the liability is illustrated on the assumption of a 1% increase/decrease in the healthcare cost and consumer price inflation compared to the valuation assumptions keeping the investment return assumption constant:

2018 2017

N$’000% change in liability N$’000

% change in liability

Sensitivity – GroupBase liability as at 30 June 2018 12 689 13 841

Discount rate +1% 11 442 (10) 12 836 (10)

Discount rate -1% 14 190 12 15 919 12

Medical subsidy inflation rate +1% 14 203 12 15 933 12

Medical subsidy inflation rate -1% 11 411 (10) 12 802 (10)

Post-retirement mortality PA(90) -3 years 13 158 4 14 761 4

Post-retirement mortality PA(90) -1 year 12 225 (4) 13 714 (4)



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Group Company

2018 2017 2018 2017

14. POST-EMPLOYMENT OBLIGATIONS (continued)14.1 Post-retirement medical benefit obligation (continued)

Current employees 9 11

Retirees 29 30

Total number of beneficiaries 38 41

This benefit is available to all employees employed prior to 31 December 1998 for Manica Group Namibia (Proprietary) Limited and its subsidiaries and Rennies Travel (Namibia) (Proprietary) Limited. The benefit is available to all employees employed prior to 2004 by Taeuber & Corssen SWA (Proprietary) Limited and its subsidiaries, except for those to whom the liability has been paid out in cash.

N$’000 N$’000 N$’000 N$’000

14.2 Statutory severance benefitsLiability recognised in statement of financial position:Defined benefit obligation 2 243 3 115 – –

Changes in the present value of the defined statutory severance benefit obligation are as follows:Opening defined benefit obligation 3 115 2 589 – –

On disposal of business (586) – – –

Total expense – as shown below (286) 1 061 – –

Benefit payments – (535) – –

Closing defined benefit obligation 2 243 3 115 – –

The amounts recognised in the statement of comprehensive income are as follows:

Interest cost 74 137 – –

Actuarial loss (2 981) (2 198) – –

Current service cost 2 621 3 122 – –

(286) 1 061 – –

The principal actuarial assumptions used for accounting purposes are:

Discount rate 9,76% 9,89% n/a n/a

Salary increase rate 5,00% 6,50% n/a n/a

N$’000 N$’000 N$’000 N$’000

15. TRADE AND OTHER PAYABLESTrade payables – third parties 367 324 335 567 – –

Trade payables – related parties (note 37) 6 271 11 336 – –

Minorities in Namsov Fishing Enterprises (Proprietary) Limited – – 14 473 –

Accruals 37 437 46 025 – –

Unpresented cheques 10 238 3 090 70 45

Customer deposits 6 630 12 410 – –

Financial instruments trade and other payables 427 900 408 428 14 543 45

Accruals – employee liabilities 61 918 41 559 – –

Receiver of Revenue – VAT 5 136 9 213 – –

Non-financial instruments trade and other payables 67 054 50 772 – –

494 954 459 200 14 543 45

Trade and other payables to the value of N$59,9 million included in the prior year relate to discontinued operations.

At 30 June 2018, the carrying amounts of accounts payable approximate their fair values due to the short-term maturities of these liabilities.



Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

16. BORROWINGSBank overdraft (note 10) 69 735 73 717 – –

Floor plan liabilities (i) 128 974 148 186 – –

Secure bank loan (ii) – 12 927 – –

Call loan facility (iv) 1 800 – – –

Finance lease liabilities (iii) 722 3 634 – –

Other 989 989 – –

202 220 239 453 – –

Non-current assets 2 137 10 230 – –

Current assets 200 083 229 223 – –

202 220 239 453 – –

(i) The floor plans are provided by Ford Financial Services South Africa (Proprietary) Limited, First National Bank of Namibia Limited and Bank Windhoek Limited. The floor plans carry interest at: Ford Financial Services South Africa (Proprietary) Limited (South African prime plus 1%), First National Bank of Namibia Limited (Namibian prime less 0,75%) and Bank Windhoek Limited (Namibian prime less 0,5%). The floor plans are repayable within 12 months. The floor plan with Ford Financial Services South Africa (Proprietary) Limited is secured by a property in Lenkow (Proprietary) Limited to an amount of N$6 million and N$125 million is secured by a surety given by Bidvest Namibia Limited. A financial interest is registered over vehicles inventory as security for the floor plan liability.

(ii) The loan was settled in full on disposal of business.

(iii) Capitalised finance lease liabilities carry interest at Namibian prime rate of 10,75% and have repayment terms of between less than 12 months and three years. The capitalised finance lease liabilities are secured by various fixed assets.

(iv) The loan is unsecured and bears interest at prime less 2%.

17. CONTINGENCIES AND COMMITMENTSCapital commitmentsThe following commitments were entered into in respect of capital expenditure at year-end:

Approved by directors and contracted (i) 53 579 16 214 – –

Approved by directors but not yet contracted (ii) 1 680 82 398 – –

The committed expenditure relates to property, plant and equipment and will be financed by available resources and bank facilities.

(i) Included in the prior year amounts are N$5,3 million related to discontinued operations.

(ii) Included in the prior year amounts are N$79,5 million related to discontinued operations.

Contingent liabilitiesIn 2016, Walvis Bay Stevedoring (Proprietary) Limited won its arbitration case which relates to the 64 employees that were retrenched in the 2014 financial year. The union has appealed against the ruling and there is uncertainty whether the arbitration case will result in a favourable outcome. The total exposure to reinstate the affected employees is N$25,1 million (2017: N$19,8 million).

Rennies Travel (Namibia) (Proprietary) Limited issued travel-related vouchers of N$2,4 million (2017: N$1,9 million) in favour of its customers for services to be rendered subsequent to the reporting date. This results in a maximum exposure of N$2,4 million (2017: N$1,9 million) in favour of its service providers. The customers were not invoiced for these vouchers at the reporting date.



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

17. CONTINGENCIES AND COMMITMENTS (continued)Guarantees by third partiesGuarantee facilities have been arranged for the Group with Standard Bank Namibia Limited, First National Bank Namibia Limited and Nedbank Namibia Limited to a maximum exposure of: 148 743 98 335 294 529 289 455

Guarantees in favour of:Customs and Excise 64 383 64 383 – –

Maersk (Proprietary) Limited 650 650 – –

Erongo Regional Electricity Distributor 18 148 – –

National Petroleum Corporation of Namibia 1 620 – – –

Namibian Ports Authority 4 500 5 100 – –

MACS Maritime Carrier Shipping 1 226 – – –

Suretyships for bank overdrafts 73 500 26 070 294 529 289 455

Other 2 846 1 984 – –

148 743 98 335 294 529 289 455

Most of the facilities above have been secured by interlinking suretyships provided by the Group and its subsidiaries restricted to the amount of the limit allocated to each subsidiary. The bank overdrafts at the reporting date amounted to N$69,7 million (2017: N$73,7 million) (note 16). The security for the floor plan liabilities provided by the Company at the reporting date amounted to N$129,0 million (2017: N$148,2 million).

The Company has issued letters of support to third parties for various subsidiaries in the Company amounting to N$38,5 million where the subsidiaries have shareholder deficits.

18. DISCONTINUED OPERATIONOn 30 June 2018, the Group sold its Fishing segment (excluding certain assets) through the disposal of Bidvest Namibia Fisheries Holdings (Proprietary) Limited. Management committed to a plan to sell this segment in 2017, following a strategic decision to place greater focus on the Group’s key competencies, which was announced to the public on 8 November 2017.

The disposal of the Comet Investment Capital Incorporated, including Pesca Fresca Limitada, and Industria Alimentar Carnes Mocambique Limitada businesses have not been finalised and thus these are classified as non-current assets held for sale and included in the disclosure of discontinued operations as part of the disposal group held for sale.

The Fishing segment was not previously classified as held for sale or as a discontinued operation. The comparative consolidated statement of profit or loss and other comprehensive income has been re-presented to show the discontinued operation separately from continuing operations.



Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

18. DISCONTINUED OPERATION (continued)The contribution of discontinued operation included in the Group’s results until the loss of control, 30 June 2018, is detailed below:

Results of discontinued operationRevenue 670 413 902 924 – –

Cost of sales (589 036) (796 624) – –

Gross profit 81 377 106 301 – –

Administration expenses (127 843) (66 939) – –

Other income 36 108 8 009 – –

Operating (loss)/profit (10 358) 47 371 – –

Finance income 21 378 28 540 – –

Finance costs – (2 890) – –

Share of profit/(loss) of a joint venture 134 (82) – –

Share of profit of associates (note 4) 5 745 6 899 – –

Profit before income tax 16 899 79 838 – –

Income tax expense (26 753) (29 903) – –

(Loss)/profit for the year from discontinued operation activities (9 854) 49 935 – –

Profit attributable to:

Equity holders of the company (19 313) 37 846 – –

Non-controlling interest 9 459 12 089 –

(9 854) 49 935 – –

Cash flows from/(used in) discontinued operations

Net operating cash flows from discontinued operations (138 978) 21 723 – –

Net investing cash flows from discontinued operations (176 622) 51 058 – –

Net financing cash flows from discontinued operations – 10 480 – –

Effects of foreign exchange differences on cash and cash equivalents from discontinued operations – (6 881) – –

Cash disposed from discontinued operations (317 700) – – –

(633 300) 76 380 – –

The following impairments were recognised in the process of writing down assets to realisable value:

Impairment of goodwill 15 258 – – –

Impairment of interest in associate 21 684 – – –

Impairment of loans and other financial assets 32 633 – – –



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

18. DISCONTINUED OPERATION (continued)Effect of the disposal on the financial position of the GroupAssetsInvestment in Bidvest Namibia Fisheries Holdings (Proprietary) Limited – – 266 451 –

Property, plant and equipment 193 288 – – –

Goodwill 4 628 – –Interest in associates 16 964 – –Other investments and loans 2 561 – –Inventories 65 128 – – –

Biological assets 1 382 – –Trade and other receivables 125 081 – – –

Taxation (3 096) – – –

Equity and liabilities –Deferred tax liabilities (62 116) – – –

Trade and other payables (378 191) – – –

Statutory severance benefits (586) – – –

Minority interest (87 327) – – –

Loss on disposal of business (refer notes 11 and 20) (4 675) – (75 710) –

Net assets and liabilities (126 959) – 190 741 –

Cash and cash equivalents disposed of 317 700 – – –

Proceeds on disposal 190 741 – 190 741 –

N$’000N$’000

Restated* N$’000 N$’000

19. REVENUEContinuing operationsSale of goods 2 397 232 2 589 772 – –

Rendering of services 281 559 229 313 – –

Dividend income – subsidiaries – – 609 698 38 000

Dividend in specie – subsidiary – – 96 765 –

Dividend income – local – – 14 628 1 254

Commissions and fees earned 31 821 54 438 – –

2 710 612 2 873 524 721 091 39 254

Revenue is derived as follows:Revenue including disbursements 3 292 589 3 329 899 721 091 39 254

Disbursements on behalf of principals and clients (581 977) (456 375) – –

2 710 612 2 873 524 721 091 39 254

Related cost of sales:Sale of goods 2 057 144 2 206 790 – –

Rendering of services 148 551 179 982 – –

Commissions and fees earned 21 404 21 002 – –

2 227 099 2 407 774 – –

20. OTHER GAINS/(LOSSES)Loss on disposal of property, plant and equipment (1 845) (1 678) – –

Dividend income – local 17 636 4 007 – –

Loss on disposal of business – – (75 710) –

Other 5 987 1 964 – –

21 778 4 293 (75 710) –



Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

21. BEE SHARE-BASED PAYMENT RESERVEThe BEE ownership transaction charge is recognised as the difference of the net value of the consideration received and the net value of shares issued 16 988 16 988 16 988 16 988

During the 2010 financial year the Bidvest Group Limited concluded agreements with the BEE partners to facilitate the acquisition of an effective interest of 15,46% in Bidvest Namibia Limited. The BEE groups are Endeni Investments (Proprietary) Limited (0,64%) and Ovanhu Investments (Proprietary) Limited (13,10%). The transaction was valued at N$207 360 000 and was financed by the issue of N$170 969 834 A class and N$42 742 460 B class preference shares and a loan from Bid Industrial Holdings (Proprietary) Limited. The fair value recognised at the grant date was N$16 987 708 and was determined using the Monte Carlo simulation.

N$’000N$’000


22. OPERATING PROFITOperating profit from continuing operations is stated after charging:Auditors’ remuneration

Audit fees 6 729 5 658 – –

Other services 345 68 – –

7 074 5 726 – –

Share-based payments (182) 403 – –

Depreciation and impairment of property, plant and equipment 37 777 30 641 – –

Amortisation and impairment of intangible assets 1 251 1 563 – –

Statutory severance benefits – current service cost 2 621 3 085 – –

Non-executive directors’ compensation

Attendance fees 2 576 1 750 – –

Operating lease charges

Premises 28 681 24 652 – –

Equipment and vehicles 3 931 4 559 – –

32 612 29 211 – –

Foreign exchange losses/(gains)

Realised (1 320) (232) – –

Unrealised (1 593) 703 – –

(2 913) 471 – –

Expenses of continuing operations by natureAdministrative fees 4 594 4 099 – –

Auditor’s remuneration 7 074 3 697 – –

Bad debts written off 989 3 726 – –

Inventory, materials and consumables 1 919 063 2 130 852 – –

Depreciation, amortisation and impairments 39 028 32 205 – –

Non-executive directors’ attendance fees 2 576 1 750 – –

Employee salaries and related benefits 388 672 350 298 – –

Foreign exchange (gain)/loss (2 913) 471 – –

Operating lease charges 32 612 29 211 – –

Other expenses 262 663 230 543 438 432

Port-related costs, cold storage costs 52 575 39 220 – –

Royalties paid 180 180 – –

Total cost of sales and administration expenses by nature 2 707 113 2 826 252 438 432



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Group Company

2018 N$’000

2017 N$’000

Restated*2018

N$’0002017

N$’000

23. FINANCE INCOMEContinuing operationsInterest income – bank 1 892 3 483 279 387

Interest income – related party – – 19 62

Interest income – other 2 661 2 395 255 690

4 553 5 878 553 1 139

Interest income is derived from loans and receivables at amortised cost.

24. FINANCE COSTSContinuing operationsCash itemsInterest expense – bank overdraft 5 260 3 850 – –

Interest expense – floor plan 13 120 13 612 – –

Interest expense – other 9 326 394 – –

27 706 17 856 – –

Interest expense is derived from financial liabilities at amortised cost.

Non-cash itemInterest expense – post-retirement medical obligation 1 304 1 216 – –

29 010 19 072 – –

25. STAFF AND RETIREMENT BENEFIT COSTSContinuing operationsSalaries and wages paid to employees 388 672 350 299 – –

Employer contributions to retirement benefits of current employees 30 043 30 844 – –

418 715 381 143 – –

At 30 June 2018, approximately 2 879 (2017: 3 481) staff members were employed by the Group.

26. INCOME TAX Continuing operationsNamibian normal taxCurrent income tax – current year 20 201 18 993 177 363

– prior year – (103) – –

20 201 18 890 177 363

Deferred income tax – current year 1 287 8 558 – –

– prior year (361) (26) – –

926 8 532 – –

South African normal taxCurrent income tax – current year 1 054 – – –

1 054 – – –

22 181 27 423 177 363



Group Company

2018 N$’000

2017 N$’000

Restated*2018

N$’0002017

N$’000

26. INCOME TAX (continued)Reconciliation of the tax expenseReconciliation between applicable tax charge and the profit before tax:

Profit before tax 2 093 39 307 645 496 39 961

Tax at the applicable tax rate of 32% (2017: 32%) 670 12 578 206 559 12 788

Exempt income (9 142) (1 352) (230 749) (12 561)

Expenses of capital nature – 24 227 –

Profit from associate (407) (299) – –

Prior period adjustment (361) (130) – –

Non-deductible expenses 3 645 1 902 140 136

Lower foreign tax rates 117 – – –

Withholding tax on foreign income – 2 184 – –

Deferred tax asset not raised 17 350 12 540 – –

11 871 27 423 177 363

Income tax assets and liabilitiesCurrent tax assetsTax refunds receivable 4 289 6 042 – –

Current tax liabilitiesIncome tax payable 945 2 126 15 36

27. RETIREMENT BENEFIT INFORMATIONContinuing operationsRetirement fundThe total value of contributions to the Bidvest Namibia Limited Retirement Fund during the year amounted to:

Members’ contributions 14 007 15 277 – –

Employer’s contributions 30 043 30 844 – –

44 050 46 121 – –

This is a defined contribution plan fund and is regulated by the Pension Funds Act. The fund is valued actuarially on an annual basis. The fund was last valued at 30 June 2018 and its assets were found to exceed its actuarially calculated liabilities.

Medical aid fundsThe total value of Company contributions during the year 21 987 22 767 – –



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

28. SHARE-BASED PAYMENTSThe Bidvest Namibia Share Incentive Scheme grants options to executive directors and senior employees of the Group to acquire shares in the Company. The share option scheme has been classified as an equity-settled scheme and therefore an equity-settled share-based payment reserve has been recognised.

Each employee’s share option converts into one ordinary share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry no rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.

The Bidvest Namibia remuneration committee recommends the number of options to be granted during a financial year and provides guidelines which include the individual’s performance and the individual’s ability to influence Bidvest Namibia’s results. The Group chief executive officer and Group financial director then propose the number of options to be allocated to the various employees, subject to approval by the board of directors.

Number Grant date Expiry date

Exercise price

(N$)

Fair value at grant

date (N$)

Option series1. Granted on 23 May 2013 2 015 000 23 May 2013 22 May 2023 11,30 12,55

2. Granted on 22 May 2015 1 477 500 22 May 2015 21 May 2025 9,90 10,99

The average share price of Bidvest Namibia Limited during the year was N$7,81 (2017: N$9,20).

Options vest in three tranches on the third, fourth and fifth year’s anniversaries respectively from the initial grant date. Options lapse upon the termination of an option holder’s employment in the Group.

Options granted were priced using the Black-Scholes-Merton model. Expected volatility is based on the historical share price volatility.

Inputs to the model: Option series

1 2

Grant date share price N$12,55 N$10,99

Exercise price N$11,30 N$9.90

Expected volatility 45% 30%

Option life 5 – 10 years 5 – 10 years

Dividend yield 5,04% 5,00%

Risk-free interest rate 6,00 – 6,75% 8,00 – 8,93%

Reconciliation of movements in share options during the year:

2018 2017

Number

Average price

(N$) Number

Average price (N$)

Option series 1Beginning of the year 1 159 000 11,30 1 461 000 11,30

Granted during the year – –

Resignations (265 000) (302 000)

End of the year 894 000 1 159 000

Option series 2Beginning of the year 1 105 500 9,90 1 327 500 9,90

Granted during the year – –

Resignations (290 000) (222 000)

End of year 815 500 1 105 500

2018 N$’000

2017 N$’000

Equity-settled share-based payment reserveBalance at the beginning of the year 4 552 4 192

On disposal of business (1 726) –

Share-based payment expense recognised relating to share options 1 325 1 325

Resignations (965) (965)

Balance at the end of the year 3 186 4 552



Group Company

2018 ’000

2017 ’000

2018 ’000

2017 ’000

29. EARNINGS PER SHAREWeighted average number of sharesWeighted average number of shares in issue for basic earnings per share and headline earnings per share 211 953 211 953 – –

No adjustments to the weighted average number of shares were considered necessary as outstanding staff share options do not have a dilutive effect.

N$’000N$’000


Attributable earnings/(loss)Basic earnings/(loss) per share are based on profit attributable to equity holders of the Company.

From continuing operations (20 828) 12 765 – –

From discontinued operations (19 313) 37 846 – –

Basic earnings per share from continuing operations (cents) (9,83) 6,02 – –

Basic (loss)/earnings per share from discontinued operations (cents) (9,11) 17,86 – –

Headline earningsContinuing operationsProfit attributable to equity holders of the Company (20 828) 12 765 – –

Loss/(profit) on the disposal of property, plant and equipment* 2 268 (5 978) – –

Impairment of intangible assets* 1 57 – –

Impairment of property, plant and equipment* 1 366 – – –

Losses on disposal groups held for sale* – – – –

Non-controlling interest (3 960) 1 262 – –

* After tax effect adjusted. (21 153) 8 106 – –

Discontinued operations(Loss)/profit attributable to equity holders of the Company (19 313) 37 846 – –

(Profit)/loss on the disposal of property, plant and equipment* (43 313) 1 678 – –

Profit on the disposal of business* 8 152 – – –

Bargain purchase* – (140) – –

Impairment of intangible assets* 15 358 57 – –

Impairment of other financial assets and loans* 54 317 – – –

Impairment of property, plant and equipment* 2 661 – – –

Losses on disposal groups held for sale* 17 890 – – –

Non-controlling interest (6 564) – – –

* After tax effect adjusted. 29 188 39 441 – –

Headline earnings per share from continuing operations (cents) (9,98) 3,82 – –

Headline earnings per share from discontinued operations (cents) 13,77 18,61 – –

3,79 22,43 – –

No unissued shares have a dilutive effect.

30. DIVIDENDSNo interim dividend was declared for the year (2017: N$8,5 million).

A final dividend amounting to N$21,2 million (2017: N$12,7 million) was declared payable to shareholders registered on 5 October 2018, payable on 19 October 2018. This amounts to a final dividend payable of 10 cents per share, based on ordinary shares in issue of 211 953 002.



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Group Company

2018 N$’000

2017 N$’000

Restated*2018

N$’0002017

N$’000

31. OPERATING LEASESThe Group has entered into various operating lease agreements in respect of premises.

Leases which have fixed determinable escalations are charged to profit or loss on a straight-line basis and liabilities are raised for the difference between the actual lease expense and the charge recognised in profit or loss. The liabilities are classified based on the timing of the reversal which will occur when the actual cash flow exceeds the income statement amounts.

Operating lease liability 2 324 1 828 – –

Less: Current portion included in trade and other payables (603) (384) – –

Non-current portion 1 721 1 444 – –

Operating lease commitmentsAt year-end, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:

Land and buildings

Due within one year 26 009 20 467 – –

Due between one year and five years 48 319 36 244 – –

Due thereafter 15 129 1 804 – –

89 457 58 515 – –

Equipment

Due within one year 181 629 – –

Due between one year and five years 172 95 – –

353 724 – –

Exposure 89 810 59 239 – –

32. FINANCE LEASE LIABILITYMinimum lease payments due

Due within one year 20 34 – –

20 34 – –

Less: Future finance charges – – – –

Present value of minimum lease payments 20 34 – –

Current liabilities 20 34 – –

20 34 – –

Minolco (Namibia) (Proprietary) Limited signed an agreement with Standard Bank Namibia Limited to cede the rights relating to rental agreements signed between Minolco (Namibia) (Proprietary) Limited and customers to Standard Bank Namibia Limited whilst maintaining the service obligations related thereto. The average lease period is less than one year and the average effective borrowing rate is the prime interest rate.



Group Company

2018 N$’000

2017 N$’000

Restated*2018

N$’0002017

N$’000

33. CASH GENERATED/(UTILISED) BY CONTINUING OPERATIONSProfit before income tax 2 093 39 307 645 496 39 961

Adjustments for:Depreciation and impairment on property, plant and equipment 37 777 30 641 – –

Amortisation and impairment of intangible assets 1 351 1 563 – –

Share-based payments reserve – 403 – –

Profit on disposal of property, plant and equipment 1 845 1 678 – –

Loss on disposal of business – – 75 710 –

Finance income (4 553) (5 878) (553) (1 139)

Finance costs (excluding retirement medical obligation) 27 706 17 856 – –

Dividends received (17 636) (4 007) – –

Dividend in specie – – (96 765) –

Bargain purchase – (140) – –

Increase/(decrease) in statutory severance obligation – 686 – –

Movement on post-retirement medical obligation (1 438) 547 – –

Movement in associates and joint ventures 876 (37) – –

(Decrease)/increase in lease charges for straight-lining of leases (277) 374 – –

Foreign exchange differences 145 – – –

Other movements in assets 1 293 – – –

Changes in working capital (excluding the effects of business acquisitions and disposals and exchange rate differences):Decrease/(increase) in inventories 53 035 (82 403) – –

Decrease in biological assets – (14 232) – –

(Increase)/decrease in trade and other receivables (560 616) 30 040 (720 624) 22

Increase in trade and other payables 478 317 34 872 25 9

19 918 51 270 (96 711) 38 853

34. INCOME TAX PAIDBalance receivable/(due) at the beginning of the year – continuing operations 3 702 (6 850) (36) (46)

Balance receivable at the beginning of the year – discontinued operations 214 – – –

Current tax for the year – continuing operations (21 255) (18 890) (177) (363)

Current tax for the year – discontinued operations (47 703) – – –

Assumed in a business combination – (117) – –

Tax paid by discontinued operations 45 531 – – –

Balance on disposal of business 3 096 – – –

Balance due/(receivable) at the end of the year (3 344) (3 916) 15 36

(19 759) (29 773) (198) (373)

35. NON-CASH FLOW MOVEMENTDividend in specie – – 96 765 –

Asset held for sale (96 765)Other financial asset – – 47 531 –

Other payable – – (14 473) –

Investment in subsidiary – – (33 058) –

Proceeds on disposal of business – – – –

Capitalised leased asset 382 463 – –

382 463 – –



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Group

2018 N$’000

2017 N$’000

Restated*

36. EFFECTS OF EXCHANGE RATE FLUCTUATIONS ON CASH AND CASH EQUIVALENTS – GROUPContinuing operationsProperty, plant and equipment 992 13 312

Intangibles (28) 2 181

Movement in foreign currency translation reserve 67 (8 316)

Minority shareholders 80 (8 571)

Net borrowings (623) (1 182)

Trade and other receivables 400 (550)

Inventories 1 461 1 990

Trade and other payables (2 494) (5 745)

(145) (6 881)

37. RELATED-PARTY BALANCES AND TRANSACTIONSRelationshipsDuring the year the Group, in the ordinary course of business, entered into various sale and purchase transactions with its holding company and all other related parties.

The transactions occurred under terms that are negotiated between the parties.

The following parties are included as related parties:

The Company is controlled by The Bidvest Group Limited, a company registered in the Republic of South Africa and listed on the JSE Limited. All its subsidiaries, associates and joint ventures are considered to be related parties. Please refer to the directors’ report for a list of subsidiaries, associates and joint ventures.

The following persons are included as key management:SI KankondiM SamsonGS HoughT Weitz (Resigned: 6 March 2018)M HodgsonT MberiruaH Feris (Resigned: 30 September 2017)

Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

Non executive directors’ compensationAttendance fees 2 576 1 750 – –

Executive directors’ and key management’s compensationSalaries and other short-term employee benefits 13 177 16 250 – –

Receivable from related partiesLoans to related partiesBidvest Namibia Commercial Holdings (Proprietary) Limited – (i) – – 384 813 317 148

Bidvest Namibia Management Services (Proprietary) Limited – (i) – – 26 834 10 734

Bidvest Namibia Property Holdings (Proprietary) Limited -(i) – – 384 855 144 995

Bidvest Namibia Information Technology (Proprietary) Limited – (i) – – 4 221 4 521

Shelfco 170 (Proprietary) Limited – – 18 052 –

Carapau Fishing (Proprietary) Limited – (iv) – 66 418 – –

– 66 418 818 775 477 398

Non-current asset – 36 203 – –

Current asset – 30 215 818 775 477 398

– 66 418 818 775 477 398

The loans to related parties are unsecured, bear no interest and have no fixed terms of repayment.



Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

37. RELATED-PARTY BALANCES AND TRANSACTIONSTrade receivablesBidvest Car Rental (Namibia) (Proprietary) Limited – (ii) 149 155 – –


CaterPlus (Proprietary) Limited – (ii) 82 453 – –

Manica Africa (Proprietary) Limited – (ii) 170 166 – –

Minolco (Proprietary) Limited – (ii) 32 50 – –

Plumblink (South Africa) (Proprietary) Limited – (ii) 13 – – –

Namibia Bureau de Change (Proprietary) Limited – (iv) 28 13 – –

Southern African Welding and Industrial Supplies (Proprietary) Limited – (ii) 3 – – –

Safcor Freight (Proprietary) Limited – (ii) 1 269 9 – –

Solid State Power (Proprietary) Limited – (ii) – 723 – –

1 746 13 011 – –

Payable to related parties Trade payablesBid Corporate Services (Proprietary) Limited – (ii) 58 162 – –

BidOffice Furniture Manufacturing (Proprietary) Limited – (ii) 172 262 – –

Bidvest Car Rental (Namibia) (Proprietary) Limited – (ii) 194 77 – –

Bidvest Paperplus (Proprietary) Limited – (ii) 3 – – –

Blue Marine Frozen Foods (Proprietary) Limited – (ii) – 1 425 – –


Cecil Nurse (Proprietary) Limited – (ii) 563 386 – –

G Fox Swaziland (Proprietary) Limited – (ii) 64 39 – –

Hortors Stationery (Proprietary) Limited – (ii) 11 41 – –

Kolok (Proprietary) Limited – (ii) 28 3 593 – –

Lithotech Sales Cape (Proprietary) Limited – (ii) 16 47 – –

Lithotech Listing and Logistics (Proprietary) Limited – (ii) 68 121 – –

Minolco (Proprietary) Limited – (ii) 1 537 1 012 – –

Plumblink (South Africa) (Proprietary) Limited – (ii) 377 516 – –

Rennies Travel (Proprietary) Limited – (ii) 2 49 –

Safcor Freight (Proprietary) Limited – (ii) 6 – –Silveray Statmark Company (Proprietary) Limited – (ii) 755 354 – –

Seating (Proprietary) Limited – (ii) 457 375 – –

Steiner Hygiene (Proprietary) Limited – (ii) 125 261 – –

Voltex (Proprietary) Limited – (ii) 1 318 756 – –

Waltons (Proprietary) Limited – (ii) 516 431 – –

6 271 11 336 – –



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

37. RELATED-PARTY BALANCES AND TRANSACTIONS (continued)Sales to related parties (including discontinued operations)Alimentar Carnes De Mocambique Limitada – (iv) 16 036 138 555 – –

Bidvest Car Rental (Namibia) (Proprietary) Ltd – (ii) 1 089 273 – –

Bidvest Food Services (Proprietary) Ltd – (ii) 498 1 786 – –

BidFood (Proprietary) Ltd 3 040 – – –

Bidvest Paperplus (Proprietary) Limited – (ii) – 10 – –

Manica Africa (Proprietary) Limited – (ii) 882 346 – –

Royalserve Cleaning (Proprietary) Ltd – (ii) – 2 006 – –

Safcor Freight (Proprietary) Limited – (ii) – 688 – –



Foreal Investments (Proprietary) Limited – (iii) 2 932 1 905 – –

Namibia Bureau de Change (Proprietary) Limited – (iv) 252 – – –

Rennies Express Freight (Namibia) (Proprietary) Ltd 3 – – –

Bidvest Panalpina Logistics (Proprietary) Ltd 3 354 – – –

28 117 151 044 – –

Finance income (including discontinued operations)Carapau Fishing (Proprietary) Limited – (iv) 5 568 8 607 – –

Purchases from related parties (including discontinued operations)Academy Brushware (Proprietary) Limited – (ii) 133 –

Bidvest Afcom (Proprietary) Limited – (ii) 271 207 – –

Bidoffice Furniture Manufacturing (Proprietary) Limited – (ii) 147 4 090 – –

Bidserv Industrial Products (Proprietary) Ltd – (ii) 1 – – –

Bidvest Bakery Solutions (Proprietary) Ltd – (ii) – 1 226 – –

Bidvest Car Rental (Namibia) (Proprietary) Ltd – (ii) 7 729 6 181 – –

Bidvest Paperplus (Proprietary) Limited – (ii) 99 – – –

Blue Marine Frozen Foods (Proprietary) Limited – (ii) 7 527 18 314 – –

Carapau Fishing (Proprietary) Limited – (iv) 5 512 12 517 – –

Cecil Nurse (Proprietary) Limited – (ii) 6 592 5 306 – –

Crown National (Proprietary) Ltd – (ii) – 25 – –

Dauphin Office Seating S.A. (Proprietary) Ltd – (ii) 93 46 – –

Execuflora (Proprietary) Limited – (ii) 3 – – –

G Fox Swaziland (Proprietary) Limited – (ii) 251 196 – –

Hortors Stationery (Proprietary) Limited – (ii) 689 1 492 – –

Kolok (Proprietary) Limited – (ii) 48 744 54 683 – –

Lithotech Listing and Logistics (Proprietary) Limited – (ii) 853 804 – –

Lithotech Sales Cape (Proprietary) Limited – (ii) 165 231 – –

Lithotech Sales Johannesburg (Proprietary) Limited – (ii) 17 – – –

Minolco (Proprietary) Limited – (ii) 20 040 21 236 – –

Namibia Bureau de Change (Proprietary) Limited – (iv) 252 – – –

Plumblink (South Africa) (Proprietary) Limited – (ii) 2 828 4 519 – –

Royalserve Cleaning (Proprietary) Limited – (ii) – 70 – –

Sea World (Proprietary) Limited – (ii) 812 10 600 – –

Seating (Proprietary) Limited – (ii) 3 318 4 012 – –

Silveray Statmark Company (Proprietary) Limited – (ii) 11 040 10 385 – –

Steiner Hygiene (Proprietary) Limited – (ii) 1 898 1 952 – –

Voltex (Proprietary) Limited – (ii) 12 335 12 047 – –

Waltons (Proprietary) Limited – (ii) 10 207 8 483 – –

141 556 178 622 – –



Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

37. RELATED PARTY BALANCES AND TRANSACTIONS (continued)Administration and royalties fees paid to related partiesBid Corporate Services (Proprietary) Limited (royalties) – (ii) 225 290 – –

Bid Corporate Services (Proprietary) Limited (fees) – (ii) 1 010 960 – –

Bidvest Services (Proprietary) Limited 98 –

McCarthy Limited – (ii) 840 338 – –

Waltons (Proprietary) Limited – (ii) 490 486 – –

Cecil Nurse (Proprietary) Limited – (ii) 1 469 1 386 – –


5 014 4 279 – –

Administration fees received from related parties (including discontinued operations)Namibia Bureau de Change (Proprietary) Limited – (iv) 240 –

Carapau Fishing (Proprietary) Limited – (iv) 12 504 11 260 – –

12 744 11 260 – –

Quota rental fees paid to related parties (discontinued operations)Spoto Fishing (Proprietary) Limited – 14 210 – –

Quota rental fees received from related parties (discontinued operations)Carapau Fishing (Proprietary) Limited 3 661 – – –

The Group paid quota rental fees to the above mentioned company. M Shipanga is a director of Spoto Fishing (Proprietary) Limited. S Kankondi, M Mokgatle-Aukhumes and M Shipanga hold indirect shareholdings in Spoto Fishing (Proprietary) Limited.

(i) Direct subsidiary.

(ii) Fellow subsidiary of the Group.

(iii) M Shipanga is a director and shareholder in Foreal Investments (Proprietary) Limited and Oshivelelwa (Proprietary) Limited.

(iv) An associate of the Group.

Related-party transactions were carried out on terms and conditions as agreed between the parties.



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

38. FINANCIAL RISK MANAGEMENT38.1 Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

The financial risk management function is carried out by local management at a subsidiary level.

(a) Market risk(i) Foreign exchange risk

Currency risk is created due to the influence of exchange rate fluctuations. The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar, euro, Angolan kwanza and Mozambique metical. Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Group’s functional currency. The Group has a policy to consider the need to take out cover on outstanding foreign currency transactions on an ad hoc basis, as and when such transactions occur. Upon the final decision and discretion of management, cover is then taken out from time to time.

At 30 June 2018, if the currency had weakened/strengthened by 10% against the US dollar, euro and Angolan kwanza with all other variables held constant, post-tax profit for the year would not have been materially impacted. This can be seen in the analysis of foreign currency financial instruments at year-end:

Eurodenominated

’000

USDdenominated

’000

Angola Kwanzadenominated

’000Totals in

N$’000

GroupAs at 30 June 2018Trade and other receivables* 307 401 8 975 25 402 Cash and cash equivalents 1 3 – 45 Trade and other payables* – (3 691) (109 739) (161 058)

308 (3 287) (100 764) (135 611)

Equivalent in N$ 4 435 (45 380) 126 159 85 214

GroupAs at 30 June 2017Other borrowings – – (174 444) (12 927)

Trade and other receivables* 700 856 – 19 822

Cash and cash equivalents 5 4 250 1 327 355 180 111

Trade and other payables* (27) (4 246) – (18 544)

678 860 1 152 911 168 462

Equivalent in N$ 9 792 46 574 112 096 168 462

Forward foreign exchange contracts – asset 6 470 264 – –

Forward foreign exchange contracts – liability (986) (529) – –

5 484 (265) – –

* Derivative financial instruments included in trade and other receivables/payables.

The hedged transactions denominated in foreign currency are expected to occur at various dates within the next 12 months. Gains or losses recognised on forward foreign exchange contracts are recognised in the income statement in the period during which the hedged transaction affects the income statement.



38. FINANCIAL RISK MANAGEMENT (continued)38.1 Financial risk factors (continued)

(a) Market risk (continued)(ii) Price risk

The Group is not exposed to any significant commodity price risk or equity securities price risk.

(iii) Interest rate riskThe Group’s significant interest-bearing assets are cash and cash equivalents and loans granted. The Group also has significant interest-bearing borrowings. The Group’s interest rate risk arises mainly from cash invested in current and call accounts, loans granted and from its bank overdraft and borrowings.

The Group’s trade and other receivables and trade and other payables do not expose the Group to any significant interest rate risks due to their short-term non-interest nature.

The table below provides the interest rates for monetary financial instruments at year-end:

Group Company

2018 %

2017 %

2018 %

2017 %

Cash and cash equivalents 2,60 3,76 6,78 6,78

Bank overdraft 8,75 8,75 – –

Other financial assets 5,50 5,50 – –

Floor plan liabilities 10.50 – 11.50 10.25 – 11.50 – –

Secure bank loan – 11,00 – –

Cash flow sensitivity analysis for floating interest rate bearing instrumentsA change of 100 basis points in interest rates at the reporting date would have increased or (decreased) accumulated losses and surplus by the amounts shown below. This analysis assumes that all other variables remain constant. The analysis was performed on the same basis for 2017.

Group Company

Effect on profit and equity Effect on profit and equity

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

Cash and cash equivalents 2 990 7 430 1 907 369

Floor plan liabilities 1 290 1 482 – –

Other financial assets 4 127 4 127

Secure bank loan – 129 – –



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW


(b) Credit riskCredit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to customers and committed transactions. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. The Group has policies that limit the amount of credit risk exposure to any one financial institution, and cash transactions are limited to high credit quality financial institutions. Bidvest Namibia Limited issued suretyships of N$294,5 million (2017: N$289,5 million) to commercial banks to secure overdraft facilities of its subsidiaries.

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:Group Company

Carrying amount Carrying amount

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

Trade receivables 447 956 382 482 – –

Related-party loans – 66 418 818 775 477 398

Other financial assets 419 12 714 419 12 714

Other receivables 428 066 63 047 379 250 3

Trade and other receivables 876 441 524 661 1 198 444 490 115

Cash and cash equivalents (note 10) 299 035 742 986 190 734 36 917

1 175 476 1 267 647 1 389 178 527 032

The ageing of the components of trade receivables at year-end was:

Gross 2018

N$’000

Impairment 2017

N$’000

Gross 2018

N$’000

Impairment 2017

N$’000

GroupTrade debtorsNot past due 327 585 (85) 279 715 (174)

Past due 1 to 30 days 72 646 (3 096) 57 916 (86)

Past due 31 to 90 days 35 010 (1 049) 29 855 (201)

Past due 91 to 180 days 13 118 (2 070) 10 930 (1 715)

Past due more than 180 days 13 866 (7 969) 19 255 (13 013)

462 225 (14 269) 397 671 (15 189)

CompanyOther debtorsNot past due 379 250 – 3 –




(b) Credit risk (continued)Credit quality of financial assetsThe Group has not renegotiated the terms of receivables and has collaterals or guarantees as security for all significant debtors. The Group limits its exposure to credit risk by investing in high-quality credit worthy counterparties. Given these high credit ratings, the directors do not expect any counterparty to fail to meet its obligations. The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical information about counterparty default rates.

The Group only banks with high credit quality financial institutions. The Group has bank accounts with First National Bank of Namibia Limited, Standard Bank Namibia Limited, Nedbank Namibia Limited and Bank Windhoek Limited.

Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

Counterparties without external credit ratings net of provision for impairment:

Other financial assets 419 12 714 – 12 714

Other receivables 428 066 63 047 379 250 3

Loan to related party – 66 418 818 775 477 398

Trade receivables 447 956 382 482 – –

876 441 524 661 1 198 025 490 115

Counterparties with strong external credit ratings:

Cash and cash equivalents and money market fundsCash on hand 401 1 018 – –

Old Mutual Corporate Fund 137 500 18 130 137 500 18 130

Bank Windhoek Corporate Fund – 19 497 52 917 18 167

IJG Securities EMH Prescient Unit Trust Fund – 69 – –

First National Bank of Namibia Limited 29 807 62 615 – –

Nedbank Namibia Limited 1 834 7 783 – –

Standard Bank Namibia Limited 41 223 477 861 317 620

Bank Windhoek Limited 88 270 156 013 – –

299 035 742 986 190 734 36 917

The Group’s standard credit terms are cash on or before delivery, 0 and 30 days from statement date. The average credit period on sales of goods of the Group is 30 days (2017: 30 days). In some instances interest is charged on overdue accounts at prime plus 2% on the outstanding balance. Some sales are insured by a credit guarantee cover. Included in the past due trade and other receivables are balances totalling N$87,1 million (2017: N$79,2million) with no collateral, none of which in its own right is material to the Group.

The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW


(c) Liquidity riskPrudent liquidity risk management implies maintaining sufficient cash and availability of funding through an adequate amount of committed credit facilities. Due to the dynamic nature of the business, the Group aims at maintaining flexibility in funding by keeping committed credit lines available.

The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date.

Less than1 year

N$’000

Between 1 and 2 years

N$’000

Between 2and 5 years

N$’000

Over5 yearsN$’000

Interest adjustment

N$’000Total

N$’000

GroupAs at 30 June 2018Bank overdraft 69 735 – – – – 69 735 Borrowings 132 147 312 44 – (18) 132 485 Trade and other payables 427 900 – – – – 427 900

629 782 312 44 – (18) 630 120

GroupAs at 30 June 2017Bank overdraft 73 717 – – – – 73 717

Borrowings 159 903 5 695 1 784 198 (1 844) 165 736

Trade and other payables 408 428 – – – – 408 428

642 048 5 695 1 784 198 (1 844) 647 881

CompanyAs at 30 June 2018Trade and other payables 14 543 – – – – 14 543

As at 30 June 2017Trade and other payables 45 – – – – 45

The average credit period on the purchase of certain goods from major creditors is current to 90 days. No interest is charged on the trade payables for the first 30 to 90 days from the date of the invoice. Thereafter, interest is charged at varying rates ranging from nil to 30% per annum on the outstanding balance. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through committed credit facilities with the Group’s bankers. The credit facilities of the Group are reviewed annually and consist of the following unsecured and secured bank overdraft facilities:

Group Company

2018 N$’000

2017 N$’000

2018 N$’000

2017 N$’000

Unsecured bank overdraft facilities, reviewed annually and payable on demandStandard Bank Namibia Limited 187 000 225 200 – –

First National Bank of Namibia Limited 50 000 55 000 – –

Nedbank Namibia Limited 8 500 – – –

Bank Windhoek Limited 500 500 – –

246 000 280 700 – –

38.2 Capital risk management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders.

The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including “current and non-current borrowings” as shown in the consolidated statement of financial position) less cash and cash equivalents. Total capital is calculated as equity as shown in the consolidated statement of financial position plus net debt. The Group’s capital exceeds its net debt and thus the capital risk is assessed as low.



38. FINANCIAL RISK MANAGEMENT (continued)Loans and

receivables atamortised

costN$’000

Financial liabilities at

amortisedcost

N$’000Total

N$’000

38.3 Financial instruments per categoryGroupAs at 30 June 2018Financial assetsTrade and other receivables 876 022 – 876 022 Related-party loans – – –Other financial assets 419 – 419 Cash and cash equivalents 299 035 – 299 035 Financial liabilitiesBank overdraft – (69 735) (69 735)Borrowings – (132 485) (132 485)

Trade and other payables – (427 900) (427 900)

Total financial instruments 1 175 476 (630 120) 545 355

GroupAs at 30 June 2017Financial assetsTrade and other receivables 445 529 – 445 529

Related-party loans 66 418 – 66 418

Other financial assets 12 714 – 12 714

Cash and cash equivalents 742 986 – 742 986

Financial liabilitiesBank overdraft – (73 717) (73 717)

Borrowings – (165 736) (165 736)

Trade and other payables – (408 428) (408 428)

Total financial instruments 1 267 647 (647 881) 619 766

CompanyAs at 30 June 2018Financial assetsTrade and other receivables 1 198 025 – 1 198 025 Other financial assets 419 – 419 Cash and cash equivalents 190 734 – 190 734 Financial liabilitiesTrade and other payables – (14 543) (14 543)

Total financial instruments 1 389 178 (14 543) 1 374 635

CompanyAs at 30 June 2017Financial assetsTrade and other receivables 477 401 – 477 401

Other financial assets 12 714 – 12 714

Cash and cash equivalents 36 917 – 36 917

Financial liabilitiesTrade and other payables – (45) (45)

Total financial instruments 527 032 (45) 526 987



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

38. FINANCIAL RISK MANAGEMENT (continued)38.4 Fair value measurements

(a) ValuationIn terms of IFRS, the Group is required to measure certain assets and liabilities at fair value. The Group has established control frameworks and processes to independently validate its valuation techniques and inputs used to determine its fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, ie an exit price. Fair value is therefore a market-based measurement and when measuring fair value the Group uses the assumptions that market participants would use when pricing an asset or liability under current market conditions, including assumptions about risk. When determining fair value it is presumed that the entity is a going concern and the fair value is therefore not an amount that represents a forced transaction, involuntary liquidation or a distressed sale.

Fair value measurements are determined by the Group on both a recurring and non-recurring basis.

Recurring fair value measurementsRecurring fair value measurements are those for assets and liabilities that IFRS requires or permits to be recognised at fair value and are recognised in the statement of financial position at reporting date. This includes financial assets, financial liabilities and non-financial assets that the Group measures at fair value at the end of each reporting period.

Financial instrumentsWhen determining the fair value of a financial instrument, where the financial instrument has a bid or ask price (for example in a dealer market), the Group uses the price within the bid-ask spread that is most representative of fair value in the circumstances. Although not a requirement, the Group uses the bid price for financial assets or the ask-offer price for financial liabilities where this best represents fair value.

When determining the fair value of a financial liability or the Group’s own equity instruments the quoted price for the transfer of an identical or similar liability or own equity instrument is used. Where this is not available, and an identical item is held by another party as an asset, the fair value of the liability or own equity instrument is measured using the quoted price in an active market of the identical item, if that price is available, or using observable inputs (such as the quoted price in an inactive market for the identical item) or using another valuation technique.

Where the Group has any financial liability with a demand feature the fair value is not less than the amount payable on demand, discounted from the first date that the amount could be required to be paid where the time value of money is significant.

Non-financial assetsWhen determining the fair value of a non-financial asset, a market participant’s ability to generate economic benefits by using the assets in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use, is taken into account. This includes the use of the asset that is physically possible, legally permissible and financially feasible.

Non-recurring fair value measurementsNon-recurring fair value measurements are those triggered by particular circumstances and include the classification of assets and liabilities as non-current assets or disposal groups held for sale under IFRS 5 where fair value less costs to sell is the recoverable amount, IFRS 3 business combinations where assets and liabilities are measured at fair value at acquisition date, and IAS 36 impairments of assets where fair value less costs to sell is the recoverable amount. These fair value measurements are determined on a case-by-case basis as they occur within each reporting period.

Other fair value measurementsOther fair value measurements include assets and liabilities not measured at fair value but for which fair value disclosures are required under another IFRS, eg financial instruments at amortised cost. The fair value for these items is determined by using observable quoted market prices where these are available or in accordance with generally acceptable pricing models such as a discounted cash flow analysis. For all other financial instruments at amortised cost the carrying value is equal to or a reasonable approximation of the fair value.

(b) Fair value hierarchy and measurementsThe Group classifies assets and liabilities measured at fair value using a fair value hierarchy that reflects whether observable or unobservable inputs are used in determining the fair value of the item. If this information is not available, fair value is measured using another valuation technique that maximises the use of relevant observable inputs and minimises the use of unobservable inputs. The valuation techniques employed by the Group include, inter alia, quoted prices for similar assets or liabilities in an active market, quoted prices for the same asset or liability in an inactive market, adjusted prices from recent arm’s length transactions, option-pricing models, and discounted cash flow techniques.

Level 1Fair value is determined using unadjusted quoted prices in active markets for identical assets or liabilities where this is readily available and the price represents actual and regularly occurring market transactions. An active market is one in which transactions occur with sufficient volume and frequency to provide pricing information on an ongoing basis.

Level 2Fair value is determined using inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly such as quoted prices for similar items in an active market or for an identical item in an inactive market, or valuation models using observable inputs or inputs derived from observable market data.

Level 3Fair value is determined using a valuation technique and significant inputs that are not based on observable market data (ie unobservable inputs) such as an entity’s own assumptions about what market participants would assume in pricing assets and liabilities.



38. FINANCIAL RISK MANAGEMENT (continued)38.4 Fair value measurements (continued)(b) Fair value hierarchy and measurements (continued)

The table below sets out the valuation techniques applied by the Group for recurring fair value measurements of assets and liabilities categorised as Level 1 and Level 3 in the fair value hierarchy:

Instrument

Fair value hierarchy level

Valuation technique

Description of valuation technique and main assumptions Observable inputs

Significant unobservable inputs of Level 3 items

Financial assets and liabilities not measured at fair value but for which fair value is disclosed

Level 3 Discounted cash flows

The future cash flows are discounted using a market-related interest rate

Market interest rates Credit inputs

Biological assets Level 1 Market prices Fair value less estimated point of sale costs Market prices Not applicable

Assets held for sale Level 3 Negotiated sales agreements and market prices

Fair value less estimated point of sale costs Draft sales agreement Not applicable

During the year there were no changes in the valuation techniques used by the Group.

39. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTSThe Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results.

The preparation of the Group’s financial statements necessitates the use of estimates, assumptions and judgements. These estimates and assumptions affect the reported amounts of assets and liabilities at the reporting date as well as affecting the reported income and expenses for the year. Although estimates are based on management’s best knowledge and judgement of current facts as at the reporting date, the actual outcome may differ from these estimates.

Estimated recoverable amount of certain cash-generating unitsThe Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy. The recoverable amounts of cash-generating units have been determined based on value in use calculations. These calculations require the use of estimates. Assumptions used are referred to under note 2.3.

Deferred taxation assetsDeferred taxation assets are recognised to the extent that it is probable that taxable income will be available against which they can be utilised. Management estimates that there will be sufficient taxable profit in the future against which to utilise the deferred tax asset.

Contingent liabilitiesContingent liabilities are raised based on management’s assessment of whether a possible obligation exists whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain events. Contingent liabilities which could not previously be recognised as liabilities due to the uncertainty surrounding the amount or the outcome of the event, are recognised as liabilities as soon as there is certainty that the outcome of an event will not be in favour of the Group or as soon as the amount can be measured reliably. Proceeds received from the Group’s insurers as compensation for an unfavourable outcome of a contingent event are accounted for separately from the liability arising from the contingent event.



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

39. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)Asset lives and residual valuesProperty, plant and equipment is depreciated over its useful life taking into account residual values, where appropriate. The actual lives of the assets and residual values are assessed annually and may vary depending on a number of factors. In reassessing asset lives, factors such as technological innovation, product life cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of the asset and projected disposal values.

Investment in associateIndustria Alimentar Carnes de Mocambique Limitada has been adversely impacted by the depreciation of the local Mozambiquan currency and the strengthening of the US dollar against the Namibian dollar and as a result, at year-end the Group share of the net asset value of the Company was less than the carrying value of the investment by N$21,7 million. Management felt that the net asset value will not improve and an impairment of the investment was deemed necessary.

As a result of the agency agreement with Tunacor Fisheries Limited, the Group maintains significant influence over the investment. The directors have applied their judgement in the treatment of the interest as an asset held for sale and the disclosure as part of the disposal group held for sale.

Disposal of subsidiaryThe effective date for the disposal of the Group’s interest in Bidvest Namibia Fisheries Holdings (Proprietary) Holdings was determined to be 30 June 2018 as stated in the agreement of sale, although the agreement was only signed on 11 July 2018. All major requirements and conditions for the sale, including Competition Commission approval, were finalised by the effective date. The only outstanding items at that date were of an administrative nature, thus not affecting the validity of the sale.

Non-current assets classified as held for saleAs part of the single plan to dispose of the Fishing segment, the Group plans to dispose of its investments in Comet Investment Capital Incorporated, including Pesca Fresca Limitada, and Industria Alimentar Carnes Mocambique Limitada subsequent to the financial year-end. These have been classified as held for sale at year-end. A buyer has been identified for Comet Investment Capital Incorporated, including Pesca Fresca Limitada, but as at year-end the agreement has not been finalised. The Group is actively pursuing various alternatives in respect of the interest in Industria Alimentar Carnes Mocambique Limitada and expects that a sale will be concluded within the 12 months following year-end. Both are available for sale within the next 12 months.

Judgement has been applied in determining the fair value less costs to sell for the assets and disposal groups held for sale.



40. EVENTS AFTER THE END OF THE REPORTING PERIODThe following events relating to the disposal of the Fishing business took place after the reporting period:

– proceeds and dividends receivable by the Group relating to the sale were received in cash during July and August 2018, with the exception of a remaining N$15 million of the purchase consideration which is payable within five days from delivery of the effective date financial statements;

– sale addendum signed on 24 August 2018 accepting additional purchase consideration. The balance of the purchase consideration as reflected in the annual financial statements is thus due on 3 September 2018.

– directors of the Group resigned from Bidvest Namibia Fisheries Holdings (Proprietary) Ltd effective 18 July 2018 and from Namsov Fishing Enterprises (Proprietary) Ltd, effective 19 July 2018.

Bidvest Namibia Properties Holdings concluded the agreements for the purchase of two additional properties for the Automotive segment during August 2018.

A final cash dividend of 10 cents per share has been awarded to members recorded in the register of the Company at the close of business on Friday, 5 October 2018.

Except for the events disclosed above, the directors are not aware of any other matters that have arisen subsequent to the year-end and up to date of the approval of the financial statements.

41. STANDARDS AND AMENDMENTS ISSUED BUT NOT YET EFFECTIVEAt the date of authorisation of these annual financial statements, the following standards were in issue but not yet effective, and were not early adopted. The Group intends to adopt these standards when they become effective. Management has not yet assessed the impact of these new and revised standards and interpretations on the Group.

New/Revised International Financial Reporting Standards

Effective for annual periods beginning on or after

IFRS 9 Financial Instruments – Finalised version of IFRS 9 which contains accounting requirements for financial instruments, replacing IAS 39 Financial Instruments: Recognition and Measurement.

1 January 2018

IFRS 15 Revenue from Contracts with Customers – IFRS 15 provides a single, principles-based five-step model to be applied to all contracts with customers.

1 January 2018

IFRS 16 Leases – IFRS 16 specifies how an IFRS reporter will recognise, measure, present and disclose leases. 1 January 2019

IFRS 2 Share-based payments – Clarification in relation to the accounting for cash-settled share-based payment transactions that include a performance condition, the classification of share-based payment transactions with net settlement features, and the accounting for modifications of share-based payment transactions from cash-settled to equity-settled.

1 January 2018

IAS 40 Transfer of investment property – The amendments to IAS 40 Investment Property: Amends paragraph 57 to state that an entity shall transfer a property to, or from, investment property when, and only when, there is evidence of a change in use. A change of use occurs if property meets, or ceases to meet, the definition of investment property. A change in management’s intentions for the use of a property by itself does not constitute evidence of a change in use.

1 January 2018

IFRIC 22 Foreign Currency Transactions and Advance Consideration – The interpretation addresses foreign currency transactions or parts of transactions where: there is consideration that is denominated or priced in a foreign currency; the entity recognises a prepayment asset or a deferred income liability in respect of that consideration, in advance of the recognition of the related asset, expense or income; and the prepayment asset or deferred income liability is non-monetary.

The Interpretations Committee came to the following conclusion:

The date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability.

If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. 1 January 2018

IFRIC 23 Uncertainty over Income Tax Treatments:

The interpretation addresses the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under IAS 12. It specifically considers:

– Whether tax treatments should be considered collectively

– Assumptions for taxation authorities’ examinations

– The determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates

– The effect of changes in facts and circumstances 1 January 2019



ENTSGROUP

OVERVIEWPERFORM

ANCE OVERVIEW

Shareholders’ diary

Financial year-end 30 June

Annual general meeting November

Reports and accountsInterim report for the half year ending 31 December February/March

Announcement and annual results August/September

Annual report September/October

DistributionsInterim distribution March

Final distribution September/October



BIDVEST NAMIBIA LIMITEDIncorporated in the Republic of NamibiaRegistration number: 89/271Share code: BVNISIN code: NA000A0Q5TN0

COMPANY SECRETARY Ms Veryan Hocutt

Registered address1 Ballot Street, Windhoek(PO Box 6964, Ausspannplatz, Windhoek, Namibia)Telephone: +264 (61) 417 450Facsimile: +264 (61) 229 290

SPONSOR AND CORPORATE ADVISORPSG Konsult (Namibia)Member of the Namibian Stock ExchangeRegistration number 98/5285 Conradie StreetWindhoek, Namibia(PO Box 196, Windhoek, Namibia)Telephone: +264 (61) 378 900Facsimile: +264 (61) 378 901

COMMERCIAL BANKERSStandard Bank Namibia LimitedRegistration number 78/01799Standard Bank Centre, Post Street MallWindhoek, Namibia(PO Box 3327, Windhoek, Namibia)Telephone: +264 (61) 294 9111Facsimile: +264 (61) 294 2555

TRANSFER SECRETARIESTransfer Secretaries (Proprietary) LimitedRegistration number 93/7134 Robert Mugabe Avenue, WindhoekWindhoek, Namibia(PO Box 2401, Windhoek, Namibia)Telephone: +264 (61) 227 647Facsimile: +264 (61) 248 531

LEGAL PRACTITIONERSH.D. Bossau & Co15th Floor, Frans Indongo Gardens19 Dr Frans Indongo StreetWindhoek, Namibia(PO Box 1975, Windhoek, Namibia)Telephone: +264 (61) 370 850Facsimile: +264 (61) 370 855

AUDITORS Deloitte & ToucheRegistered Accountants and AuditorsICAN practice number 9407Deloitte Building, Maerua Mall ComplexJan Jonker RoadWindhoek, Namibia(PO Box 47, Windhoek, Namibia)Telephone: +264 (61) 285 5000Facsimile: +264 (61) 285 5050

WEBSITEwww.bidvestnamibia.com.naEmail: [email protected]

ETHICS LINEFree call: 0800 28 68 82Cellular free call: 081 91 847Email: [email protected]

Administration

www.bidvestnamibia.com.na

Namibia

Bidvest Namibia Annual Integrated Report 2018

namibia r a n d s t s g rb k e i n l m a annual integrated ......capital 69,5% pesca fresca lda...

Documents