Annual Integrated Report 2017 - My · 2017-10-24 · Annual Integrated Report 2017 Bidvest Namibia Annual Integrated Report ... Cranes de Mozambique 40% – 30 June Total assets –

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Namibia

Annual Integrated Report 2017

Bidvest Namibia Annual Integrated Report 2017

Namibia

PERFORMANCE OVERVIEW

10 – 11 Chairman’s statement

12 – 15 Chief executive’s review

16 – 18 Corporate governance report

19 – 20 Risk committee report

21 – 22 Audit committee report

23 – 26 Remuneration committee report

27 – 29 Sustainability report

30 – 47 Operational reviews

48 – 50 Financial director’s review

51 Value added statement

52 – 53 Nine-year review

54 – 55 Segmental report

GROUP OVERVIEW

1 Who we are

3 Corporate social investment

4 – 5 Abridged group structure

6 – 7 Operational highlights8 – 9 Directorate

What’s inside

CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

59 Statement of directors’ responsibilities and approval

59 Declaration by company secretary

60 – 62 Independent auditor’s report

63 – 67 Directors’ report

68 – 77 Accounting policies

78 Statements of financial position

79 Statements of profit or loss and other comprehensive income

80 – 81 Statements of changes in equity

82 Statements of cash flows

83 – 114 Notes to the financial statements

115 Shareholders’ diary

116 Administration

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

About this report

Bidvest 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 2016 to 30 June 2017 and includes material issues up to board approval on 19 August 2017. 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

Who we are

Our philosophy we subscribe to in all business

dealings:

Excellence

Accountability Integrity

Innovation

Transparency

Bidvest Namibia is a group

of companies listed on the

Namibian Stock Exchange.

We believe in creating opportunities and growing

people. We understand that

people create wealth, and

that companies only report it.

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.

We have a diverse portfolio

of businesses ranging from

automotive, fishing, freight and logistics, services,

trading and distribution,

which comprises well recognised brands within the Namibian

market.

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

3 481people, creating shareholder value we report on.

GROUP OVERVIEW


CONSOLIDATED AND SEPARATE FINANCIAL

STATEMENTS

Bidvest Namibia Annual Integrated Report 2017 01


Bidvest NamibiaBidvest Namibia supports various local pillars of the society, from education over health to sports and other ad hoc projects.

Corporate social investment“To be able to help those who cannot help themselves creates a greater purpose to our being” – Sebby Kankondi, CEO

Graduation at Promise LandOver 50 children of “Promise Land”, a pre-school for underprivileged children, graduated from the pre-school and received school uniforms, school bags, stationery, lunch boxes and other school accessories to aid them in this new phase of their lives.

Fill this boot with hopeThe Land Rover “Fill this boot with hope” initiative was very successful. The community was requested to donate tinned foods, clothes, blankets, toys and toiletries. All items were then distributed by Land Rover to the outlying regions.

Pandula Trust The Pandula Trust is a voluntary Bidvest Namibia employee initiative whereby our people have the opportunity to donate directly from their salaries to a central pool. Volunteers of the staff have formed a committee that finds and allocates these funds to so-called “Angel deeds” which are aimed at helping those in need in our communities.

A box of necessitiesPandula Trust Angels delivered boxes to coastal rural areas during Christmas to those who have nothing containing food and toiletries to the value of N$1 500. Over 150 boxes were delivered.

GROUP OVERVIEW



STATEMENTS


Bidvest Namibia Limited abridged Group structure

BIDVEST NAMIBIA LIMITED

BIDVEST NAMIBIA INFORMATIONTECHNOLOGY

100%

BIDVEST NAMIBIA FISHERIES

HOLDINGS (BIDFISH)100%

BIDVEST NAMIBIAPROPERTY HOLDINGS

100%

AUTOMOTIVEDIVISION

FISHINGDIVISION

NAMSOV FISHING ENTERPRISES

69,55%

TWAFIKA FISHING ENTERPRISES

75,10%

NAMSOV INDUSTRIAL PROPERTIES

100%

TETELESTAI MARICULTURE

100%

CARAPAU FISHING

25%

COMET INVESTMENTS CAPITAL100%

PESCA FRESCA LDA47%

NAMIBIAN SEA PRODUCTS

100%

INDUSTRIA ALIMENTAR CARNES DE MOZAMBIQUE

LIMITADA40%

BIDVEST NAMIBIA AUTOMOTIVE

(trading as Novel Motor Company) 100%

DIROYAL MOTORS

100%

CARHEIMINVESTMENTS

100%

T&C PROPERTIESNAMIBIA

100%

ELZETDEVELOPMENT

100%

LENKOW100%

GLENRYCK SOUTH AFRICA

51%

UNITED FISHINGENTERPRISES

100%

ATLANTIC HARVESTERSOF NAMIBIA

100%

PROPERTYDIVISION


We remain alert to acquisitive growth opportunities to diversify our commercial interests.

BIDVEST NAMIBIA COMMERCIAL

HOLDINGS (BIDCOM)100%

BIDVEST NAMIBIAMANAGEMENT SERVICES

100%

FINANCIAL SERVICESDIVISION

FREIGHT AND LOGISTICS, MATERIAL HANDLING AND

MARINE SERVICES DIVISION

FOOD AND DISTRIBUTION DIVISION

COMMERCIAL AND INDUSTRIAL SERVICES

AND PRODUCTS DIVISION

NAMIBIA BUREAU DE CHANGE

49%

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%

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 NAMIBIA 100%

MINOLCO (NAMIBIA)(trading as Konica Minolta)

100%

BIDVEST NAMIBIA PLUMBLINK

100%

RENNIES TRAVEL (NAMIBIA)

100%

VOLTEX (NAMIBIA) 100%

MANICAGROUP NAMIBIA

100%

LUBRICATIONSPECIALISTS

100%

TAEUBER & CORSSEN(SWA)100%

CATERPLUS NAMIBIA100%

MATADORENTERPRISES

100%

T&CTRADING

100%

WALTONS NAMIBIA100%

GROUP OVERVIEW



STATEMENTS


Operational highlights

2010 2012

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

Start-up of Rennies Transport – 1 December

2013Acquisition of Taeuber & Corssen 100% – 1 December

20112009Bidvest Namibia listing on the Namibian Stock Exchange – 26 October Namibia

Start-up of Steiner Namibia – 1 February

Revenue – decline to N$3 776,4 million

17 16 15 14 13

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000 3 776,5 3 858,6

3 534,83 703,5

3 294,2

Revenue (N$’million)

Trading profit – decline to N$92,5 million

0

100

200

300

400

500

600

700

92,5

294,9

409,7

501,3

601,5

Trading pro�t (N$’million)

17 16 15 14 13

Headline earnings per share – decline to 22,4 cents

0

20

40

60

80

100

120

140

160

22,4

86,2

103,2

116,0

129,5

(cents)Headline earnings per share

17 16 15 14 13


2014 2016

Start-up of Orca Marine – 1 January

2015

Acquisition of Novel Motor Company 100% – 31 July

Acquisition of the Glenryck Brand 100% – 1 August

Start-up of Plumblink Namibia – 1 April

2017Acquisition Prestige Cleaning 100% – 1 June

Start-up Lubrication Specialists in Botswana – 30 June

Start-up of Monjasa Bunkering Services – 1 July

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

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

Total assets– decline to N$3 086,9 million

0

500

1 000

1 500

2 000

2 500

3 000

3 5003 086,9 3 160,0

3 024,62 764,5 2 778,6

(N$’million)Total assets

17 16 15 14 13

Net tangible asset value per share – increase to 737 cents

0

100

200

300

400

500

600

700

800

900

737 734769

688638

(cents)Net tangible asset value per share

17 16 15 14 13

Cash generated by operations – decline to N$185,1 million

0

100

200

300

400

500

600

700

185,1

388,2

531,7

413,8

585,6

Cash generated by operations(N$’million)

17 16 15 14 13

Start-up Glenryck SA 51% – 1 September

GROUP OVERVIEW



STATEMENTS


1. Sebulon Inotila Kankondi 51Qualification: 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.

2. Lindsay Ralphs 61Qualification: 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.

3. Theresa Weitz 40Financial director

Qualification: CA(Nam), B Accounting (Hons) (Stellenbosch)


Board committee membership: Acquisition and risk

Director of several Bidvest Namibia subsidiaries, Theresa has 15 years’ managerial experience across various industries. She is a former group financial manager of the Ohlthaver & List group of companies.

Directorate

2.

CHIEF EXECUTIVE OFFICER NON-EXECUTIVE CHAIRMAN

RISKCOMMITTEE

AUDITCOMMITTEE

REMUNERATIONCOMMITTEE

ACQUISITIONCOMMITTEE

NOMINATIONCOMMITTEE

BOARD OFDIRECTORS

1.

FINANCIAL DIRECTOR

3.


4. Martin Kaali Shipanga 49Qualification: 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.

5. Jerome Davis 75Qualification: 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.

6. Hans Peter Meijer 61Qualification: BCompt, MBL

Appointed: 17 February 2017

Board committee membership: Audit

Peter joined the Bidvest SA corporate office in 1990, then in 1995 moved into a subsidiary divisional financial role as financial director of Steiner, appointed as financial director of the Bidserv division in 2001, and finally the Bidvest South Africa division in 2011. Peter serves on all Bidvest SA divisional boards and divisional audit committees, and was appointed to The Bidvest Group board as Group financial director in May 2016.

7. Hans-Harald Müseler 68Qualification: 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.

8. Martina Mokgatle-Aukhumes 48


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.

9. Pieter Christiaan Steyn 69Qualification: PMD, Harvard

Appointed: 17 January 2007

Board committee membership: Nomination and acquisitions

Director of several Bidvest subsidiaries. Pieter has 38 years’ experience in the fishing, freight, logistics, terminals and travel industries.

4.

NON-EXECUTIVE DIRECTORS

5. 8.7.6. 9.

GROUP OVERVIEW



STATEMENTS


Chairman’s statement

In what proved to be a challenging year, Bidvest Namibia continued to make progress with the strategy of growing the business base across a more diversified group. These gains were made despite a dramatic shift in national fortunes as Namibia moved from strong GDP growth to recession in a surprisingly short space of time.

Austerity measures were introduced by government, projects went on hold and official spending dried up. The cutbacks had wide-ranging effects across the economy, but were successful in reducing the country’s mounting budget deficit.

Bidvest Namibia was materially affected by deteriorating economic conditions and our Group experienced a disappointing 12 months. All divisions failed to meet financial objectives. This represents a significant setback and strenuous efforts by managers and their teams will be necessary to rebuild the momentum.

Strategic progressWe made no outright acquisitions in 2017, but integration of the new Automotive division was completed and made its first full-year contribution. The new Plumblink operation rapidly established itself within the Commercial and Industrial Services and Products division and a second branch was opened. Prestige, a cleaning services company, was taken over from our South African counterparts in June 2017. Namibian managers now have the task of reinvigorating the Company and placing operations on a more sustainable footing. In the process, they will ensure continued employment for more than 500 workers.

A significant concern is the continued fall in profits at Bidfish, which can be attributed to various external factors – among others lower market prices, lower quota allocations, pressure on the horse-mackerel and pilchard resources and higher levies and taxes. We continued rightsizing this operation in line with our quota allocations, which resulted in the sale of MFV Namibian Star during the current financial year.

Though our core fishing business faces continued pressure, the division’s downstream diversification planning is very much on track. Investment into sales and distribution via a strategic stake in a Mozambican operation met expectations and good progress was made with the Glenryck brand revitalisation.

Refocusing at Freight and Logistics proved timely as Namibia – and our division – can no longer rely on the oil and gas industry as a constant source of substantial revenue. More flexible structures were needed across a broader spread of activities. Our divisional team had put these structures in place.

Our people worked hard to win new business in tough markets while protecting market share. Managers in all divisions sought efficiencies and cut costs, but training investments were maintained and staff numbers in core operations were stable.

Earnings and dividendsRegrettably, trading profit for the 2017 year fell by 68,6% while revenue decreased by 2%.

As a result, headline earnings per share (HEPS) declined by 74% to 22,4 cents per share (2016: 86,2 cents). At 23,9 cents (2016: 86,9 cents) earnings per share (EPS) were down by 72,5%.

The Group’s board of directors declared a final cash dividend of 6 cents per share. This brings the total annual dividend to 10 cents per share (2016: 38 cents per share)

National visionIn many important respects, we share the same objectives as the nation we serve. 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.

We are supporters of the President’s Harambee Prosperity Plan, a key component of which is the upskilling of young Namibians.

The Group has therefore decided that over the next three years it will commit sustained investment to the Bidvest Namibia Youth Development Programme. This supersedes another youth-focused initiative, our three-year sponsorship of the Bidvest Namibia Cup to provide support for amateur soccer nationwide.

An investment in the new initiative of N$3 million is envisaged.

“All assets must be effectively deployed in every division if profit decline is to be arrested and reversed.”

Lindsay Ralphs, non-executive chairman


Vocational training centresGovernment plans to set up vocational training centres in all regions. It is vital this initiative is embraced by the private sector. Bidvest Namibia therefore plans to provide financial support for one or more VTC students per region.

AppreciationI extend my appreciation to the people of Bidvest Namibia for all their hard work in challenging circumstances. It can be frustrating when intense effort is not reflected in financial results. However, the hard work did not go unnoticed and I thank you for it.

Senior members of the executive team faced intense pressure and I also extend my thanks to them. I am also indebted to the board of directors for their guidance and insight during a difficult 12 months.

Of course, the progress of our business is impossible without our customers and suppliers. Their support was invaluable in 2017. We look forward to strengthening these relationships in the year to come.

FutureRapid improvement in trading conditions is unlikely in the next 12 months.

Acquisitive growth is possible in tough times and we will continue to look for possible acquisitions. As always, we will focus on businesses with strong management and the potential to complement our own core activities.

Internally, continued focus will fall on cost control and efficiencies. All assets must be effectively deployed in every division if profit decline is to be arrested and reversed.

Thankfully, our teams are highly motivated and benefit from continued investment in training and systems. They have a proven capacity for making gains, even in the toughest conditions, and I wish them every success in the year to come.

Lindsay Ralphs Non-executive chairman

The programme has five pillars: – Commercial Advancement Training Scheme

(CATS) – Automotive academy – Namibianisation of officer grades – University partnerships – Vocational Training Centre support.

CATSThe Group will step up its longstanding support of this government-endorsed effort to complement university study with work experience. Under the scheme, the Namibian University of Science and Technology (NUST) provides a theoretical base while a private sector partner provides exposure to the world of work.

We already have a proud record of CATS support. Over the past nine years, various divisions have given work experience to a total of 32 students while paying for their NUST education. On completion of their studies, our businesses provided fulltime employment to all these students.

Automotive academyThis concept looks to build on the model developed by our sister company in South Africa, where the

Revenue – decline to N$3,8 billion

McCarthy Academy has become the sector’s foremost trainer of mechanics and auto electricians.

The plan is to set up an academy dedicated to the technical training of young people hoping for a career in the automotive sector.

Close cooperation with the Namibian Training Authority will be necessary to drive the plan forward.

Namibianisation of officer gradesBidfish has made a major contribution to the Namibianisation of officer grades within the commercial fishing industry by sponsoring the training of Namibian officer cadets at the Russian naval academy. Ten marine engineers and navigation officers have completed academy courses. Seven now seek an even higher level of accreditation.

University partnershipsThe Group will further entrench its relationships with NUST and the University of Namibia (UNAM) by contributing to the career development of young Namibians.

Total annual dividend of 10 cents per share

Progress made with growing a more diversified group

Bidvest Namibia youth development programme established

GROUP OVERVIEW



STATEMENTS

11Bidvest Namibia Annual Integrated Report 2017

Chief executive’s review

Macro-viewResults disappointed in 2017, but our people didn’t. They faced challenges throughout the year and sought efficiencies and savings in a determined effort to secure profits even as volumes tumbled and margin pressures increased.

It took hard work and resilience to maintain market share in the face of increasingly tough competition. By year-end, it was clear many of our teams had held their own and increased their share of market – a notable achievement.

Managers – some newly promoted or newly appointed – were expected to maintain service and quality standards, even as operational budgets were cut and new spending was closely scrutinised to ensure every investment added value to the business.

Unfortunately, we failed to meet overall divisional targets, but this was hardly a shock once the scale of the economic challenge was realised and official figures finally confirmed the national economy had been in recession for some time.

The Namibian economy contracted by 1,7% for each of the first two quarters of 2017 and also showed a contraction for the second and third quarter of 2016. A year earlier, the economy had been growing by an annualised 5%.

As the scale of the challenge became clear, government announced significant cuts to spending. Austerity is never popular, but fiscal controls were essential to rein in a fast growing

deficit. Government should be congratulated for taking action when it did.

As a result, capital projects in the public sector came to a halt. Even Namibian sports teams were grounded as government support came to an end and the Sports Ministry returned budgetary allocations to the Treasury.

These constraints would have been difficult to manage in any economy. In Namibia, where government accounts for an estimated 58% of gross national product, the impact was significant and was felt across all our divisions.

At much the same time, interest rates rose half a percent to 9,75%.

In these circumstances, consumers and businesses found themselves implementing their own cutbacks, with significant consequences for our Group.

The challenge was particularly evident within our Automotive business.

Financial snapshotAt N$3,8 billion (2016: N$3,9 billion), revenue was down by 2,1%. Trading profit was significantly lower at N$92,5 million (2016: N$294,9 million), a decline of 68,6%.

Trading margin contracted to 2,4% (2016: 7,6%), mainly of a result of pressure on the Fishing division’s margin.

Cash generation was also under pressure and dipped to N$185,1 million (2016: N$388,2 million).

Despite these challenges, we maintain a robust balance sheet and retain the capacity to fund continued growth, whether organic or acquisitive.

Strategic responseAs recession deepened and divisional challenges increased, Bidvest Namibia rededicated itself to the strategic task of achieving sustained growth. For us, growth is not something to be sought only when all the economic indicators are in our favour. Growth is our long-term goal and should remain our core objective across market cycles.

We have a performance-based culture. If the economy under-performs our divisions must out-perform to ensure a fair profit. We can’t sit on our hands and wait for the economic horizon to clear.

The principal driver of profit is the performance of our people. They must have the right tools for the job. Therefore, investment in systems and infrastructure was maintained.

Capital expenditure in 2017 stood at N$59,0 million (2016: N$120,7 million).

People also need the requisite knowledge and skill-sets. For this reason, training continued. Training investment for the year was N$6,3 million (2016: N$6,8 million).

“Change is inevitable, without change in our world, we would stagnate.”

Sebulon Kankondi, chief executive officer


We remain one of Namibia’s largest employers and at year-end the Group headcount stood at 3 481 (2016: 2 738).

Consolidation and diversificationConsolidation was a key feature of the year as the new Automotive division bedded in and Plumblink – a 2016 addition – got into its stride. However, diversification and strategic balance remain a strategic imperative.

The need for a broader base has been confirmed by continuing challenges at Bidfish, previously the biggest contributor to Group profit by a substantial margin. Reductions in the biomass and low ministerial quotas have resulted in much lower revenues and profit, with little indication this situation will change any time soon.

In the recent past, we not only acquired a vehicle retailer, we introduced corporate hygiene services to Namibia and specialist plumbing supplies.

PrestigeThe Group has acquired Prestige Cleaning Services from The Bidvest Group towards the end of the financial year, helping to preserve the jobs of 508 office cleaners.

The strategic justification is clear.

Office cleaning is a core component of the outsourced services industry. While providing cleaning solutions we can obtain insights into demand for other outsourced services – potential avenues for further growth into this space.

Furthermore, Prestige has relationships with corporate clients across Namibia.

We see potential in Prestige as a business in its own right and will give it the necessary attention and investment as we look to put operations on a sustainable footing.

New risksIn global terms, Namibia is a small market. It is also some distance from major centres of international business in East Asia, North America and Europe. However, this is no defence against cyber-attack by international criminals.

All businesses should be prepared for hacking of their systems by highly sophisticated gangs. In 2017, one of our businesses was targeted. Its automated telephone system was hacked, enabling international calls to be routed through

Cost containmentCosts must be rigorously managed at all times, but especially when trading conditions deteriorate. Assets have to deliver the necessary return. If envisaged rates of return are not possible, then the asset should be sold.

This philosophy was applied at Bidfish and the fishing vessel the Namibian Star, was sold when it became apparent fleet utilisation levels would remain depressed for some time to come.

To contain costs, our fishing business also made the strategic decision to exit the secondary market in fishing quotas when bidding goes too high. Improved fleet utilisation is a priority, but not at any price.

Similar thinking is being applied across our Group as teams reduce expenses in line with new commercial realities. Some costs are being cut and some activities curtailed.

A business is either in good shape for marketplace success or it’s not. All management teams are now engaged in strenuous efforts to ensure their operations are in good shape and the right size for prevailing conditions.

Agility is also important if we are to maximise every commercial opportunity in an increasingly competitive environment.

Job pressuresThough business sustainability necessitates cost reductions – including cuts to the salary bill – every effort was made to avoid retrenchments. Where possible, staff in downsized operations were reassigned to new work. On other occasions, non-replacement of staff led to the de facto creation of leaner business units.

In some cases, selective recruitment beefed up teams in areas where new opportunities are being explored. This process will continue as many divisions are keen to investigate growth potential, either in coastal areas or in the north of the country.

Staff numbers remained stable in most core teams, though overall job numbers rose in the last month of the year when we took over the Prestige business and 508 office cleaners and associated staff came on to our payroll.

All assets have to deliver the necessary return

Cost needs to be rigorously managed

Trading profit declined by 68,6% to N$92,5 million

All divisions should optimise every opportunity

GROUP OVERVIEW



STATEMENTS


our switchboard. The net loss from this incident amounted to N$1,4 million.

Improved cyber security measures have been put in place.

Government cooperationWe prize efficiency and do everything we can to avoid duplication of effort. Therefore, in the realm of social investment we look to partner with initiatives that are already in place and have the structures necessary to deliver help where it is needed the most. Often, this means we work in tandem with government programmes.

Our recently announced Bidvest Namibia Youth Development Programme (covered in depth in our chairman’s report) achieves added effectiveness by looking to collaborate with government initiatives wherever possible.

For example, we will provide practical workplace experience in conjunction with the Commercial Advancement Training Scheme and the internship programme run by the Namibian University of Science and Technology and the University of Namibia. We also stand ready to sponsor students who are admitted to government’s new vocational training centres.

Furthermore, our plans for an automotive academy will entail ongoing cooperation with the Namibian Training Authority and its Key Priority Skills Funding initiative.

Of course, our efforts to train engineering and navigation officers for commercial fishing vessels dovetails nicely with government’s Namibianisation strategy. High levels of accreditation entail cooperation with international training programmes, but at local level we work closely with the Namibian Maritime and Fisheries Institute to equip crew with additional skills.

In the field of artisan training, we also maintain strong relationships with the Namibia Institute of Mining and Technology.

At the same time, our empowerment and upliftment partners at the Namsov Community Trust (NCT) ensure cost-effectiveness by channelling social investment into the development programmes run by Namibia’s regional governors.

These investments make a difference in numerous communities. At a time of austerity, continued commitments like these are even more important and at a recent Governors’ Forum the NCT’s regional development effort was applauded as a pillar of social transformation at grassroots level.

Small business supportWe are also “on the same page” with government when it comes to SME development. As job creators, small and medium-size 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.

Several years ago, we set up the Bidvest Namibia Enterprise Development Fund for just this reason. The fund channels small loans to small businesses, thereby 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 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.

This philosophy came into sharp focus as the recession took hold and severe cash flow challenges impacted all businesses. Debtor’s management became a key issue for us, but at the same time teams in our divisions did all they could to assist loyal customers. A balancing act on this pattern may be necessary for some time to come.

Divisional snapshotBidfish had a disappointing year, with declines in revenue and profit. The horse-mackerel resource – the mainstay of the business – was under severe pressure and no improvement was seen in quota allocations by the Ministry of Fisheries. Market prices were also depressed. Sardine fishing experienced similar pressures and the canning factory remained closed.

Our Automotive division also reported falling volumes and profit. Government cutbacks were just one challenge. Businesses held back on new car purchases. So did consumers. Changes to the National Credit Act also impacted sales. Efforts are under way to rebalance the division and reduce the dependence on new vehicle sales. Investment in dealership upgrades and training continued.

Commercial and Industrial Services and Products fared somewhat better, it was also negatively impacted by the Namibian economy. Voltex reduced losses but was severely affected by the slow down in the construction industry. Minolco had another good year. Prestige significantly widened the service offering at year-end.

Food and Distribution disappointed. A loss was reported. Increased tourist inflows were insufficient to counteract the effects of austerity and consumer cutbacks. Premium products in the brand basket were impacted by down-trading. Promotional activity was stepped up, but gains were short-lived. Management were not able to get all the planned improvements in efficiencies to fruition.

Chief executive’s review – continued

Bidvest Namibia has over the past two years diversified into automotive, corporate hygiene service and specialised plumbing supplies.


Freight and Logistics experienced a drop in revenue, but management slowed the decline in profits after vigorous efforts to rebalance the business. For the last few years, the division benefited from a buoyant oil and gas industry. As offshore activities stalled, it has become necessary to refocus resources. Business units are now leaner and more adaptable. Regrettably, some jobs were lost as stevedoring staff were cut.

AppreciationI thank all our people for their hard work in extremely challenging business conditions. Results don’t always reflect it, but our people did well to maintain our marketplace position in the face of intense competition. Our people, their supervisors and managers did a good, solid job and I salute them for it.

In addition, I welcome 508 newcomers from Prestige to the Bidvest Namibia family. We’re pleased to see them and look forward to working together in the year ahead.

I also extend my thanks to our directors and chairman for their support and strategic guidance. Every year, they make a telling contribution to our development and growth; never more so than in 2017.

During the year under review, we also had good reason to thank our loyal customers and suppliers. We believe in partnerships and collaboration with those we do business with. We thank these partners for their contribution in a tough year and look forward to more of the same in 2018.

FutureUnfortunately, it may be some time before we see a return to buoyant economic conditions. Even so, we look forward to growth in key areas of our business while the full-year effect of recent cost-containment measures will assist efforts to restore profitability.

Fishing challenges will continue, but Bidfish now has a more manageable cost base and is well placed to halt the recent slide in profitability. For the longer term, its diversification efforts remain on track, with the promise of improved growth in new markets.

Our freight business is also in better shape to withstand recessionary pressures and develop new areas of growth. Government, as well as our division, is looking to a future that is not reliant on healthy oil and gas revenues. It is also investing in new areas, though Walvis Bay’s new government-funded container terminal is not scheduled to open until calendar 2018. As new opportunities occur, Freight and Logistics will follow up strongly.

The Commercial and Industrial Services and Products division is also in good shape to maximise new opportunities. The major losses at Voltex are in the past. Other parts of the business demonstrated great resilience in 2017 and grew market share. It is important to maintain this momentum.

Automotive expects ongoing pressure on new vehicle sales, but is better placed to seek growth in workshop and parts business while exploring opportunities in the used vehicle market.

Food and Distribution had a tough year, but new systems are being put in place to drive considerable improvements in efficiency, setting the scene for a return to profitability.

All divisions face a similar challenge. They need to optimise every opportunity while interrogating every cost driver.

Sebulon Kankondi Chief executive officer

GROUP OVERVIEW



STATEMENTS


Corporate governance report

BOARD OF DIRECTORS

* Non-executive

EXECUTIVE COMMITTEE

Monthly

S KANKONDI(CEO)

T WEITZ(FD)

H FERIS

G HOUGH

T MBERIRUA

M SAMSON

T VAN ROOYEN(by invitation)

A VAN WYK(by invitation)

AUDIT COMMITTEE

Quarterly

H MÜSELER*(CHAIRMAN)

M SHIPANGA*

HP MEIJER*

INTERNALAUDIT

MEETINGS ATTENDED BY

EXCO AND AUDITORS

RISK COMMITTEE

Quarterly

M SHIPANGA*(CHAIRMAN)

J DAVIS*

H MÜSELER*

S KANKONDI

T WEITZ

H FERIS

G HOUGH

T MBERIRUA

M SAMSON

T VAN ROOYEN

ACQUISITIONS COMMITTEE

As needed

J DAVIS*

PC STEYN*

S KANKONDI

T WEITZ

+ RELEVANT DIVISIONAL MD

REMUNERATION COMMITTEE

As needed

S KANKONDI

L RALPHS*(CHAIRMAN)

T WEITZ

P STEYN*

H MÜSELER*

Meetings attended by:

A VAN WYK(by invitation)

ACQUISITIONS ABOVE N$5 MILLION

APPROVED BY BVN BOD


PhilosophyBidvest Namibia is committed to the highest level of ethics, integrity and corporate governance and embraces the NamCode Report. In alignment with our South Africa-based parent, we also embrace the principles established in South Africa’s King IV Report.

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

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 sustainable economic, social and environmental performance in the interest of all stakeholders at every level through 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 adopted annually. Employees behave ethically and honestly under the leadership of the Bidvest Namibia executive committee and board of directors. 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 report any perceived irregular or unethical behaviour in a confidential manner. Any irregularities are reported to the audit committee. During the year under review, six issues were reported which were investigated and handled appropriately.

Jan Arnold resigned from the board effective 1 July 2016 taking an early retirement. Jerome Davis was appointed to the board effective 1 December 2015.

The chairman is not considered an independent director. The board believes the individuals on the board 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 that sets out the roles and responsibilities of the board. The board is responsible and accountable for providing effective and ethical leadership. Responsibilities include addressing 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 of directors is conducted every two years through internal evaluation. The development of directors and induction of new directors are conducted informally. The main issues highlighted by 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 not only covers Bidvest Namibia shares but 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 SENS.

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

Attendance at meetings

Members AUG NOV FEB MAR MAY

L Ralphs* (chairman) ✓ ✓ ✓ ✗ ✗

SI Kankondi (CEO) ✓ ✓ ✓ ✓ ✓

T Weitz (FD) ✓ ✓ ✓ ✓ ✓

JD Davis* ✓ ✓ ✓ ✓ ✓

HP Meijer* (appointed 17/2/2017) ✗ ✗ ✓

M Mokgatle-Aukhumes* ✓ ✓ ✓ ✓ ✓

H Müseler* ✓ ✓ ✓ ✓ ✗

MK Shipanga* ✓ ✓ ✓ ✓ ✓

PC Steyn* ✓ ✓ ✓ ✓ ✓

* Non-executive director ✓Present ✗ Apologies

GROUP OVERVIEW



STATEMENTS


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 support 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.

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 of directors and for managing the Group’s day-to-day affairs.

Corporate governance report – continued

Members SEP OCT NOV JAN MAR APRIL JUNE

SI Kankondi (CEO) ✓ ✓ ✓ ✓ ✓ ✓ ✓

T Weitz (FD) ✓ ✓ ✓ ✓ ✓ ✓ ✓

H Feris ✓ ✓ ✓ ✓ ✓ ✓ ✓

G Hough ✓ ✓ ✓ ✓ ✓ ✓ ✓

T Mberirua ✓ ✓ ✓ ✗ ✓ ✗ ✓

R Raposo (resigned 30/9/2016) ✓ – – – – – –

MW Samson ✓ ✗ ✓ ✓ ✓ ✓ ✓

W Schuckmann (resigned 21/4/2017) ✓ ✓ ✓ ✓ ✓ ✓ –

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

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

✓Present ✗ Apologies

Acquisitions 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 of directors for approval.

The acquisitions committee does not have formally scheduled meetings but meets as and when acquisitions are being considered. Members include Jerome Davis, Sebulon Kankondi, Theresa Weitz, Piet Steyn and the relevant divisional MD. Acquisitions over N$5 million are approved by the Bidvest Namibia board of directors.


Risk committee report

The committee is governed by a charter approved by the board of directors (board) under the NamCode, the Corporate Governance Code for Namibia, which is based on the King III Report on Corporate Governance for South Africa. The committee identifies and analyses risks to all businesses and reports findings and proposed mitigation measures to the audit committee. Risks are managed at operational level.

The board holds ultimate risk management responsibility. Our directors are responsible for determining the Group’s risk appetite and delegate this task to the risk committee.

This committee monitors threats, pursues opportunities and ensures Group-wide risks are identified and managed. Maintaining a strong risk management culture in all businesses fosters the

Group-wide risk management process which includes the identification of risks, assessing the potential impact and likelihood of the risk materialising, implementing cost-effective mitigating actions and reporting on the results of this process to the risk committee.

On behalf of the board, the risk committee sets policies and ensures these policies and associated controls to implement these policies function effectively.

Risk committee meetings are held quarterly. Members are mandated to apply the combined assurance model Group-wide, ensuring a coordinated approach to all assurance activities.

The chairman reports quarterly to the audit committee.

To help address these risks, the Group has developed a performance-based culture. Cost management is rigorous and managers are challenged to deliver performance improvements in tough trading conditions. Furthermore, the Group takes a conservative attitude to debt and leverage, ensuring our businesses do not carry an excessive debt burden.

Material risks for fishing businessesThe biggest potential risk facing our Fishing division is “the perfect storm” of low market prices, low catch rates, small catch sizes, low fleet utilisation, low fishing quotas, high prices in the secondary market for quotas, rising costs, pressure on the biomass, growing foreign competition, low consumer demand and adverse currency markets. In many respects, this perfect storm impacted our fishing operations in 2017.

Total mitigation of all potential threats is impossible as fishing per se carries inherent risks. However, impacts can be lessened by rigorous management and prompt remedial action.

Sustainability demands ongoing profit. Therefore, mitigation is supported at Bidvest Namibia by an objective “what’s best for the business” approach. In the fishing industry, specific action may include the exit of the secondary market for quotas when right-holders look to realise excessive gains on the sale of their quotas. When low fleet utilisation persists, vessels will be sold or laid up.

Consumer economy risksExposure to the risk of consumer belt-tightening increased in 2016 with the acquisition of the Novel Motor Company, now repositioned as our Automotive division. The consumer’s propensity to take on debt has significant influence on new vehicle sales. As consumer confidence fell in 2017 so did the appetite for credit. New vehicle sales quickly stalled.

These risks can best be managed by growing emphasis on used vehicle sales while building up the volumes generated by service business and the sale of spare parts. As vehicle replacement periods lengthen, so demand grows for vehicle service and repair. Expansion of these aspects of the business will therefore receive focused management attention in the Automotive division.

Members AUG 2016 NOV 2016 FEB 2017 MAY 2017

M Shipanga (chairman)* ✓ ✓ ✓ ✓

S Kankondi (CEO) ✓ ✓ ✓ ✓

T Weitz (FD) ✓ ✓ ✓ ✓

J Davis* (appointed November 2016) ✓ ✓ ✓

H Müseler* ✓ ✓ ✓ ✓

H Feris ✓ ✓ ✓ ✓

G Hough ✗ ✓ ✓ ✓

T Mberirua ✓ ✓ ✓ ✓

R Raposo (resigned September 2016) ✗ – – –

M Samson ✓ ✓ ✗ ✓

W Schuckmann (resigned April 2017) ✓ ✓ ✓ –

T van Rooyen ✓ ✓ ✓ ✓

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

* Non-executive director ✓Present ✗ Apologies

Group risk management processEvery business establishes risk rating criteria. Criteria are formally reviewed annually and revised as appropriate. Senior managers identify and assess material business risks and mitigating measures on a quarterly basis and report to the risk committee, highlighting changes and explaining the reasons for the change.

Typical focus areas include potential monetary impacts, reputation management, systems and processes, operational practices, legislation and its interpretation, cybersecurity, the industrial relations climate and people.

Business unit level risk matrices are then consolidated into divisional and sub-divisional risk matrices for reporting to quarterly risk committee meetings.

In 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 risk management effectiveness. The Group risk committee receives a full report on these deliberations.

Strategic riskA diversified business like ours has a measure of protection from depressed business conditions in a specific sector, but is vulnerable should Namibia’s macro-economy face pressure across the board. The impact on revenues, costs and profits can then be substantial, as we witnessed in the second half of our 2017 year.

GROUP OVERVIEW



STATEMENTS


Group risks identifiedIn June 2017, the Group’s principal risks were:

Risk Mitigating actions

Financial performance pressure, specifically pressure on revenue and costs.

Macro-economic risks as the Group is represented across the national economy.

Fundamental fishing viability challenges when faced with low fish prices, low quotas, high quota purchase costs, adverse currency factors, low fleet utilisation and a fish resource under pressure.

Renewal of fishing rights as these are granted for a specific period only. As rights lapse, application for renewal must be made to government. Our rights have to be renewed in 2018.

Specific risks relate to low horse-mackerel selling prices as prices might drop to levels below our operating costs.

Intense management focus on performance and efficiency, constant review of business plans and practices while encouraging creative solution finding and new thinking by all management teams.

Rapid response to changing marketing conditions, relentless commitment to efficiency and optimum asset management to secure profit in unfavourable conditions.

Constant review of costs and profitability, with management empowered to make the best strategic decisions for the business, including the sale and/or laying up of vessels.

Bidfish is scrupulous in its adherence to all regulations and requirements. The renewal process is well understood by all parties. Bidfish liaises closely with government to keep abreast with renewal requirements.

Align fishing activities with times when the optimum size mix is most likely to be available.

Fishing resource risk: pressure on fish stock could increase (especially as Angola has begun fishing for horse-mackerel and this resource is shared).

Namibia’s Ministry of Fisheries and Marine Resources runs a replaced fisheries management programme based on scientific research.

Access to quotas. Cooperation with government via “growth at home”, Harambee, NEEEF and ministry’s quota allocation strategy, thereby retaining strong relationships.

Voltex’s potential for continued losses in a tough construction sector. Turnaround plan under way.

Manica’s exposure to knock-on effects when project work, port visits and freight volumes stagnate.

Prompt remedial action by management and implementation of cost savings.

Food and Distribution’s exposure to depressed spending in the retail economy. Focused management efforts to curtail costs while maintaining service levels.

Food and Distribution’s need for regular investment in quality solutions (eg ammonia cooling plant replacement at cold stores).

Refurbishment and replacement of cooling plant at Food and Distribution premises in Windhoek is imminent.

Loss of key skills/need for succession planning for critical positions. Attractive market-related packages, succession planning and transfer of skills.

Industrial action leading to disruption in services. Manage relationships with employees and unions.

Need for business continuity planning. Offsite backups are maintained for IT. Business units have been given guidance to enable them to document their business continuity measures.

Risk of cancellation of an OEM franchise agreement in vehicle retailing or loss of a brand principal in the FMCG sector.

Effectively manage relationships with OEMs and brand principals. Maintain geographical scale and quality standards, thereby making the Group the partner of choice for international brands.

Disputes with partners or associates in foreign jurisdictions (eg Angolan shareholder dispute).

A fair and ethical approach to deal-making, including international deals, to ensure lasting relationships, along with optimum utilisation of legal, commercial and other channels to protect our rights and realise anticipated returns.

Growing compliance pressures. Closeness to government and industry bodies to ensure early notification of regulatory change. Legal review of contracts, identification of all related laws and regulations for business units.

Unsuccessful acquisitions. Rigorous due diligence reviews of proposed acquisitions.

An effectiveness appraisal of the risk management process is performed annually by the Group internal audit function and providing assurance on risk mitigation actions are key responsibilities of the internal audit function.

Signed on behalf of the committee by:

Martin Kaali ShipangaChairman

Risk committee report – continued


Audit committee report

The committee is governed by a charter approved by the board of directors (board) in terms of the NamCode of Governance Principles for Namibia which is based on King III. The audit 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.

auditors of the Bidfish Group and KPMG as component auditors of the newly acquired associate Namibia Bureau De Change for the financial year ended 30 June 2017;

– 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 Professional Accountants’ and Auditors’ Act.

Independence of external auditorsThe committee is satisfied that Deloitte & Touche, PwC and KPMG 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 as a result 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 evaluate the independence, effectiveness and performance of the internal audit function;

– 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;

Members AUG 2016 NOV 2016 FEB 2017 MAY 2017

H Müseler (chairman) ✓ ✓ ✓ ✓

P Meijer (in attendance and formally appointed 18 May 2017) ✓ ✗ ✓ ✓

M Shipanga ✓ ✓ ✓ ✓


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

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 co-ordination 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 annual integrated 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

– 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 during the financial year according to its charter.

Financial statementsThe committee:

– Confirmed, based on management’s 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 critical accounting estimates and 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.

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

GROUP OVERVIEW



STATEMENTS


– 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 and finance functionThe committee:

– Considered the appropriateness of the experience and expertise of the group financial director and concluded that these were appropriate; and

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

Consolidated and separate financial statementsFollowing the review by the committee of the consolidated and separate annual financial statements of Bidvest Namibia Limited for the year ended 30 June 2017, 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 annual integrated 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 2017 for approval to the board.

Signed on behalf of the committee by:

Hans-Harald Müseler Chairman

Audit committee report – continued


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 to date received 3 492 500 share

options, while 81 employees benefit from the

scheme.

Members AUG OCT

H Müseler ✓ ✓

L Ralphs (appointed 17 August 2017)


The committee meets bi-annually or as required.

Meetings are attended by S Kankondi, T Weitz and

P Steyn.

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. As significant

portion of senior management’s reward is variable

and is determined by achievement of 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 policy aims at positioning the Group as a

preferred employer. The Group believes that its

remuneration policy plays an essential, vital role in

realising business strategy and therefore should

be competitive in the markets in which the Group

operates.

Executive directors and members of group executive committee membersTerms 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 legal advisers) oversees

the settlement of terms.

Remuneration committee report

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

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 are permitted to serve as

non-executive directors on two other 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.

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

COMPONENTOBJECTIVE AND PRACTICE LINK TO BUSINESS STRATEGY POLICY

CHANGES FOR 2017

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 takes into account internal and external equity. Hereby, 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 taken into account 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 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 total cost of employment.

No changes to standard employment benefits.

GROUP OVERVIEW



STATEMENTS


COMPONENTOBJECTIVE AND PRACTICE LINK TO BUSINESS STRATEGY POLICY

CHANGES FOR 2017

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 that 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 2017 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 potentialAt 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 committeeThe 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 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 Group business strategy. Awards consist of share options, subjected to continued employment period for the duration of the vesting periods of three years (50% of the award) and four years (75% of the award) and five years (100% of the award) respectively.

No structural changes are anticipated for 2017.

Remuneration committee report – continued

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 Bidvest long-term incentive plan rules 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.

Management 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. All transactions where directors have private interest on are declared in the annual financial statements under related-party balances and transactions note.

Non-binding advisory voteShareholders are requested to cast an advisory vote on the remuneration policy as summarised on pages 23 and 24: 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 2017 and 2018In 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.

Due to the state of the Namibian economy a decision was taken at exco level that, with effect from 1 July 2017, no annual cost of living increases will be paid at a Group-wide level which includes executive directors. This will be reviewed with effect 1 January 2018.

2. Short-term incentives 2017Short-term incentives for 2017 were based on profit growth targets. As the Group did not achieve the targets, no short-term incentives were accrued.

Summary of executive directors’ guaranteed pay and short-term incentives 2017

Director

Basic remuneration

N$’000

Retirement/medical benefits N$’000

Bonuses accrued

leave paid N$’000

Total emoluments

N$’000

S Kankondi 2 732 493 – 3 216T Weitz 1 398 338 – 1 736

2017 total 4 121 831 – 4 952

S Kankondi 2 748 319 – 3 067T Weitz 1 419 237 – 1 656J Arnold 2 373 1 196 3 344 6 913

2016 total 6 540 1 752 3 344 11 636

3. Long-term incentivesDisclosure of the value of long-term incentivesThe tables below illustrate 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 2016

Share options granted during the year Share options exercised

Share options at 30 June 2017

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 10,74T Weitz 125 000 10,74 – – – – 125 000 10,74

GROUP OVERVIEW



STATEMENTS


4. Non-executive remunerationNon-executive directors’ fees paidThe remuneration paid to non-executive directors while in office of the Company during the year ended 30 June 2017 can be analysed as follows:

Director

2017 Directors’

fees N$’000

2016 Directors’

fees N$’000

P Steyn 606 288

M Mokgatle-Aukhumes 154 145

H Müseler 358 360

MK Shipanga 373 353

JD Davis 259 57

Proposed non-executive directors’ fees for 2017/2018

Basic per 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

Acquisitions committee chairman 45 099 15 033

Acquisitions committee member – 15 033

Risk committee chairman 60 131 22 548

Risk committee member – 22 548

Refer to ordinary resolution 3 on page 1 of the notice of annual general meeting for approval of the fees by shareholders in terms of section 66 of the Companies Act.There is a 6% increase proposed for the non-executive directors’ fees for 2017/2018.

Signed on behalf of the remuneration committee

Lindsay Ralphs Remuneration committee chairman

Remuneration committee report – continued


Corporatesocial

investment

People

EnvironmentStakeholders

Sustainability

Sustainability report

professional associations, regulators, official departments and government.

We strive to communicate with them all. 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. Efficiencies here generate cost savings and drive performance improvements.

We have a strategic interest in national fish stocks and our fishing businesses liaise closely with the Ministry of Fisheries and Marine Resources. The ministry’s total allowable catch (TAC) determination and fishing quotas are material to our business. Bidfish is therefore fully engaged in long-term fish biomass management.

Our food and distribution businesses rigorously monitor and control fuel usage and their cold storage and air-conditioning systems. Food safety is a priority.

Bidfish contributes significantly to food security. Millions of Africans rely every day on our fish as a source of affordable protein.

It is therefore essential that we maintain ongoing cooperation on fish resource management with the Ministry of Fisheries.

The TAC for horse-mackerel, pilchard and monk fish is a key sustainability issue for our fishing businesses.

In the 2017 calendar year, the horse-mackerel TAC was 340 000mt (2016: 335 000mt). The pilchard resource remained under pressure and the 2017 TAC was set at 14 000mt (2016: 14 000mt).

Bidfish helps manage the national fish resource through its longstanding commitment to good industry practice. The division honours all official limits and practices.

Our crews focus on by-catch reduction. Onboard controls exceed minimum legal requirements.

The numbers confirm our rigorous resource management and scrupulous application of gear restrictions, thereby keeping the harvesting of juveniles to a minimum. What’s more, the fishing techniques used by our midwater trawlers minimise impacts on coral and the seabed.

Compliance with dumping and wastage guidelines is rigorous.

Sustainability ethosSustainability is built into the business model at Bidvest Namibia. We commit to the development of sustainable businesses, the creation of sustainable jobs and the delivery of sustainable shareholder value, while protecting the wider environment.

An abiding strategic objective of our board of directors (the board) and executive committee (exco) is the maintenance of an unblemished corporate reputation.

A key part of our mission is to develop a corporate brand Namibians are proud to be part of.

Profit – a sustainability issueOngoing profit is a prerequisite for sustainable business development. To this end, we are at pains to entrench a performance-based culture across all management structures and into the wider workforce.

To achieve sustainable profit, costs must be rigorously managed. Every asset must contribute to our growth and our bottom line. If not, asset disposal is indicated and appropriate action is taken.

We encourage local initiative in the pursuit of both savings and opportunities. The energy of the people of Bidvest Namibia is the primary driver of our performance and long-term growth.

Strategic growth helps drive diversification and vice versa. Focus on a narrow operational base can add to business risks. However, growth and diversification carry their own challenges in

scenarios in which the Namibian economy as a whole comes under pressure.

Representation in sectors across the Namibian economy means that what’s good for Namibia is generally good for our Group. Conversely, when the broad economy suffers, these adverse conditions may also impact Bidvest Namibia.

That said, underperformance by the wider economy can never be an excuse for Group underperformance. Which is why we emphasise the need 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 modelOur decentralised business model ensures local involvement on entity level and our people’s buy-in. Each individual business commits to sustainable business practice. Local enthusiasm on entity level is reflected in focused efforts in areas such as energy efficiency, waste management and recycling.

Smart business practice and environmental practice go hand in hand. Our teams seek a win-win outcome, whereby business efficiencies accompany community and environmental gains.

StakeholdersStakeholders are not only our employees and shareholders. They also include customers, consumers, communities, suppliers, unions, investors, industry bodies, interest groups,

GROUP OVERVIEW



STATEMENTS


Sustainability report – continued

Other environmental factors Waste managementA culture of environmental awareness and responsible, eco-friendly behaviour is evident across Group businesses. Our employees take pride in achieving savings by applying the mantra of “reduce, recycle, reuse”.

At sea, the responsible treatment of waste material is standard working practice as waste is stored onboard for recycling when back in port.

2016 2017 % change

Litres

16 937 855 16 719 934-1%

Water consumptionWater management was even more of a priority in 2017 as widespread drought resulted in water restrictions across Namibia.

Ships in our fleet are known for responsible water management while our land-based businesses made strenuous efforts to reduce consumption.

2016 2017 % change

Kilolitres

135 457 71 236 -47%

FuelGroup gasoline usage fell in 2017 to 499 395 litres (2016: 533 919 litres). Intermediate fuel oil usage was 16,1 million litres (2016: 15,8 million litres) while heavy fuel oil usage was 0,6 million litres (2016: 1,1 million litres). Diesel consumption of 4,4 million litres was logged (2016: 5,4 million litres).

Sluggish levels of economic activity contributed to lower usage. Further reductions in the size of the horse-mackerel fleet should contribute to further reductions in consumption in 2018.

Continual efforts to improve operational efficiency will also help to further contain fuel usage.

Our vehicle fleets benefit from proper maintenance programmes, regular replacement of vehicles and the implementation of vehicle tracking and driver monitoring to ensure acceptable fuel consumption levels and the safe and responsible use of the assets.

The Bidfish fishing fleet is also well maintained.

2016 2017 % change

Litres

5 971 261 4 873 352 -18%

Energy managementRising utility bills make energy costs an obvious target in our drive to improve operational efficiency. Wherever possible, our businesses maximise natural light and adopt energy-efficient lighting and air conditioning.

Optimum efficiency in the operation of cold storage systems is another priority.

2016 2017 % change

Kilowatt

4 960 368 4 336 307 -13%

Food safetyFood quality, freshness and safety remain a source of competitive advantage and are a priority for our people and managers.

Food is a highly regulated industry and our teams ensure rigorous compliance with safety standards.

International standards are maintained as our foodservice and FMCG businesses work closely with international brands. We ensure products are properly stored, expiry dates are respected and product integrity assured.

Compliance with product specifications laid down by brand principals is rigorous.

Modern warehouse management and product tracking systems ensure prompt stock rotation.

Rigorous stock turn and stock control help to prevent or reduce food waste. Any disposal of 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.

All Bidfish vessels hold HACCP certification and safety certifications from the Department of Maritime Affairs and the Russian Maritime Register which covers the physical suitability of the vessels to conduct safe fishing operations.

As per law all fishermen have six-monthly health inspections and certificates declaring they are fit to work at sea.

Our people

2016 2017 % change

Number

2 738 3 481 27%

Performance is driven by our innovative and resourceful people. Constant improvement is the goal.

In the quest for higher productivity and 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 introduced in 2015.

We are deeply committed to the development and training of the nation’s young people and in 2017 launched the Bidvest Namibia Youth Development Programme, an initiative characterised by close collaboration with government agencies.

A key element is our support of the two-year Commercial Advancement Training Scheme (CATS),

which gives young entrants to the job market practical workplace experience. Another component of the new Group initiative is our participation in the internship programme run by the Namibian University of Science and Technology and the University of Namibia.

The Group’s youth development programme also stands ready to sponsor students who plan to attend government’s new vocational training centres across Namibia.

Another crucial feature of the programme is a planned automotive academy for young people eager to embark on a career in the motor industry. Planning for this exciting development entails collaboration and consultation with the Namibian Training Authority and its Key Priority Skills Funding initiative.

The Bidvest Namibia Youth Development Programme now provides a comprehensive framework for the support of initiatives such as these.

Our Group remains one of the largest employers in the Namibian private sector and in 2017 employed 3 481 (2016: 2 738) staff members.

Employment equityBidvest Namibia complies with all employment equity legislation; specifically, the Affirmative Action Act. We are an equal opportunity employer and take pride in our efforts to train and develop Namibians for leadership roles in the Namibia economy. Workplace diversity is a strategic imperative for us.

We continue the practice of sharing information on our recruitment needs with the Ministry of Labour in line with the Employment Services Act.

In addition, 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 continues to offer 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 vast majority of employees. Men predominate, though women increasingly take on supervisory and managerial roles.

Employment of those with disabilities remains a priority.

Phased Namibianisation of officer grades on our fishing vessels continues.

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. Our decentralised business model keeps managers close to local issues.

HealthNo work-related fatalities were recorded. Group-wide, a total of 159 (2016: 67) lost-time incidents was logged.

Our businesses comply with all laws and standards governing worker health and safety. Appropriate


environmental controls are mandatory across the Group.

Scrupulous compliance with labour law is one reason our union relationships have been so positive for so many years.

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.

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

SafetySome of our operations involve inherent safety risks, eg fishing on the high seas and logistic services in port and over long distances.

Bidfish assigns safety officers to all vessels. Larger vessels have full onboard health and safety committees. Regular firefighting, first-aid and safety courses are run. Officers take advanced courses and undergo personal survival training. Firefighting training and basic medical training are mandatory for navigation and engineering officers.

Officer training in radio communication is obligatory.

Regular fire drills are carried out on all vessels and emergency procedures are tested and reviewed. A regular health and fitness check-up by a medical practitioner is mandatory for seagoing crew.

Training and developmentOur 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 2017 to support the strategy of retaining customers through enhanced service standards.

Up to class 5 for navigation and class 4 for engineering, Namsov makes use of training facilities at NAMFI (the Namibian Maritime and Fisheries Institute). Above that level, Bidfish conducts some officer training at the Cape Peninsular University of Technology (South Africa), in collaboration with NAMFI.

Namsov also invests annually in the SA-based training of one deck officer and one engineering student. Total spending for this programme until June 2017 was N$3,5 million, of which N$0,4 million was spent in 2017.

Namibianisation of seagoing engineering and navigation personnel at the highest level is driven by continued collaboration with the Russian naval academy in Kaliningrad.

The investment over several years has been considerable and by 2017 amounted to N$9,3 million. In 2017, N$0,5 million was spent as some of the officers continue with part-time studies in Kaliningrad to obtain higher levels of accreditation.

Government’s Commercial Advancement Training Scheme 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. For example, in 2017 Freight and Logistics launched its Customer Service Movement, a vehicle for customer awareness training covering all elements of professional customer service and cross-selling.

Total spend on training across the Group amounted to N$6,3 million (2016: N$6,9 million).

2016 2017 % change

N$

6 870 670 6 328 441-8%

Staff retentionStaff retention levels are generally high, reflecting our record as a responsible employer who pays market-related wages, offers quality training and fosters career development.

We focus on the identification of high-potential staff. Junior managers are alerted to opportunities for further development and given the training and work experience to equip them for a role in middle and, ultimately, senior management.

Succession planning is undertaken across the Group, providing further scope for ambitious go-getters who are keen to reach executive positions.

Appropriate remuneration fosters talent retention and an independent remuneration committee determines executive remuneration. The Group monitors pay levels in various industries to ensure remuneration at Bidvest Namibia remains attractive.

Unionised employees receive increases in line with wage agreements reached with the various trade unions.

Recruitment is aligned with the provisions of the Affirmative Action Act and the Employment Services Act. All positions are graded on the Patterson grading system.

We are a performance-minded business. We reward excellence, initiative and hard work. Performance is incentivised through bonuses, awards and payment for reaching and\or exceeding targets.

Corporate social investment

2016 2017 % change

CSI N$

15 761 670 23 802 594 51%

Our CSI in 2017 amounted to N$23,8 million (2016: N$15,8 million).

Group investment is complemented by individual contributions by the people of Bidvest Namibia and the employee-driven 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.

Another source of community support is the Namsov Community Trust. The NCT is a 10% Namsov shareholder and vehicle for numerous upliftment efforts.

The NCT’s primary areas of intervention are regional development, employee programmes and general social investment.

During 2017 the following amounts were spent in the various categories:

Community development N$3,6 millionEducation N$2,7 millionHealth N$14 000Natural resources N$467 000

Multiple interventionsIn cooperation with the office of the Deputy Prime Minister, continued support was given in 2017 to the Ondera model farm at Oshikoto, a key component of a wide-ranging San resettlement programme.

Initial focus is on plot cultivation and basic farming skills, but the intention is to encourage small-scale commercial farming. Support for horticulture is backed by provision of cattle and assistance with stock-rearing.

Official recognitionNCT successes are so meaningful they were recently highlighted in feedback to the Poverty Eradication Programme driven by President Hage Geingob.

Efforts to combat poverty are high on the agenda of the Governors’ Forum. Several regional governors at this gathering acknowledged the difference being made by the NCT.

It was praised in particular for its assistance with water supply to informal settlements, its support for a Penduke Trust-led aquaponics project and its financial backing for Aisha Training Academy.

Erongo governor Cleopas Mutjavikua listed the recipients of funds from Namsov’s contribution to regional development in his region and noted: “Namsov has been a key pillar in the social transformation of our people.”

Governor Festus Uitele of Omaheke described Namsov support for various projects, from assistance with vegetable and produce gardens, to poultry rearing, small business development and help for a local kindergarten.

Oshana governor Clemence Kashuupulwa, in his capacity as Governors’ Forum chairperson, said “the fishing giant has become a torch bearer of regional development”.

SME development The Group remains active in small business development. A Bidvest Namibia Enterprise Development Fund was set up some time ago. Loans from the fund (at attractive rates) provide short-term working capital for small businesses. In many cases, this ensures their continued participation in the economy. The fund demonstrates our support for entrepreneurship and assists in job creation.

Company initiativesContributions by the Group and NCT are complemented by initiatives at individual companies.

Manica, for one, devotes 1,5% of after-tax profit to CSI initiatives. The Company supports health and education initiatives, youth development, the environment, enterprise development and the Walvis Bay Sunshine Centre, a shelter for children with special needs and a haven for abused women and children. It also assists Swakopmund’s Mondesa Youth Organisation, another channel for bringing help to children with special needs.

GROUP OVERVIEW



STATEMENTS


Operational review – Bidvest Namibia Fisheries Holdings (Bidfish)

Gerrie HoughManaging director

Age: 45

Qualification: CA(SA), CA(Nam), CIS, MBL (Unisa)

Appointed: 1 December 2016

Gerrie, a qualified chartered accountant, attained his master’s at the University of South Africa’s Business School in 2004. Before being appointed as MD of Namsov, Gerrie attended to the function of finance director of this division. He gained extensive experience in the fishing industry, being the general manager of finance and administration for the NovaNam Limited group of companies, a primary operator in the Namibian hake fishing industry, before moving to Bidvest.

Macro-factorsResults were extremely disappointing. Pressure was severe on revenue, profit and cash flow as a consequence of “headwinds” from several directions.

The fish size mix remained under pressure, competition intensified as fish volumes from foreign sources rose in markets traditionally served by the division, market prices remained depressed in most categories and margins suffered. Horse-mackerel prices (in USD terms) fell to levels last seen in 2009.

Fishing for horse-mackerel remains the core activity of the division.

Depressed fish prices are directly linked to falling personal income levels and the introduction of competitive protein products such as blue whiting and chicken in markets across Africa. Economic growth has stalled and families are exploring all forms of cheap protein, buying less and buying down.

In the past, frequent depreciation of the South African rand and the linked Namibian dollar provided a “windfall” once the proceeds of our fish exports were repatriated into home currency. This year a stronger rand ensured no such boost to our bottom line.

Simultaneously, we saw a significant increase in expenses as inflation rose. New taxes and levies added to the cost of doing business while export earnings were further squeezed late in the period

when an export levy was introduced. An additional substantial cost arose when income taxes were applied to foreign crew.

This series of developments had a severe impact on results. The division suffered one of the most challenging years in recent memory. Profit fell substantially and some jobs were lost.

Strategic responseLow private sector quotas have become enduring features of our market. Our traditional response has been to maximise fleet utilisation for as long as possible by buying additional quotas (purchasing from government’s Fishcor and other right-holders). This drives up operational costs as high quota demand ensures that secondary market prices are bid higher, year after year. This resulted in vessels operating at or below the profit line.

Our view was that our modern fishing fleet was a national asset that should be kept at optimum capacity to support African food security. We also felt it was important to protect fishing industry jobs.

However, the pattern of recent years cannot be ignored. Pressure on profit and margins rises every year.

We must assure long-term business sustainability in the face of this challenge. This can only be achieved by aligning our asset base with probable activity levels. This may result in vessels being sold or laid up for a period.

It was therefore decided to sell the MFV Namibian Star. Late in the period, we completed the sale of this vessel from the Namsov fleet to a New Zealand company. The proceeds bolster our 2017 bottom line by an amount of N$9,7 million.

We have made a strategic decision to interrogate all cost drivers and contain all expenses. One consequence is that we will only enter the secondary quota market at levels that appear reasonable to us. Bidding up quota prices is unsustainable in the long term. We do not wish to add fuel to the fire.

QuotasIn the 2017 calendar year, a TAC of 340 000mt was determined. Bidfish received 33 609mt from this allocation and purchased another 13 000mt in the secondary market (down from 41 637mt of purchased quota in 2016).

The Ministry of Fisheries continued its practice of announcing allocations at various times of the year. In 2016, three announcements were made. In 2017, allocations were notified in January and June.

No new information was received on the progress of the previously announced review of criteria for right and quota allocations and the development of a right and quota allocation scorecard to make official processes more transparent and predictable. The 2017 quota allocations were still issued on a pro rata basis.


Revenue – decline to N$1 081,932 million

500,000

620,000

740,000

860,000

980,000

1 100,000


1 081,932 1 089,247

20172016


0

50,000

100,000

150,000

200,000

250,000

39,856

197,443

20172016


With little clarity and an uncertain planning horizon, it became difficult to effectively allocate our own resources and manage fleet activity. A stop-start pattern became the norm – initial fishing for one’s own quota, idle time, followed by fishing for purchased quotas and more idle time.

Fleet downtime added to cost pressures, though the contracting of a fishing research quota helped to lift fleet utilisation levels.

CarapauCarapau Fishing, in which we have equal equity with three other indigenous Namibian horse-mackerel right-holders, also specialises in fishing for horse-mackerel and was impacted by similar challenges to those faced by Namsov. It concentrated on expense containment in a difficult year. Profit fell.

PilchardsPilchard operations were hard hit as the resource remained under severe pressure, resulting in poor catches and consequent pressure on margins. The 2016 pilchard TAC was announced at 14 000mt, of which 4 800mt was contracted to the Group. The research allocation of 4 000mt was purchased to augment these volumes. As a result of the pressure on the resource, the 2016 fishing season began much later and the vessels spent more time fishing for smaller catches. Only 1 725mt of the 4 880mt quota was landed.

The 2017 pilchard TAC was announced at 14 000mt of which 4 000mt is kept in reserve. 4 800mt was contracted to the Group.

To keep costs in check, cooperation with another private-sector player was extended. Our focus was offshore operations. Our collaborator focused onshore. This meant our canning factory remained closed for pilchard operations, though some

Sustainability

2016 2017 % change

Kilolitres

99 055 30 799 -69%

kW

2 722 760 1 617 788-41%

Number

838 632-25%

CSI N$

13 756 883 21 318 597 55%

Litres

4 088 533 3 070 881-25%

N$

3 449 290 3 053 070-11%

Litres

16 937 855 16 719 934-1%

GROUP OVERVIEW



STATEMENTS


Operational review – Bidvest Namibia Fisheries Holdings (Bidfish) – continued

horse-mackerel canning was undertaken to fulfil a Zimbabwe-focused poverty eradication contract.

Despite stringent cost control, the pilchard business recorded significant losses.

SardinellaPesca Fresca, the Angolan business specialising in sardinella fishing and processing, maintained pleasing progress and returned a profit. Maintenance and investment were stepped up. To ensure optimal efficiency, the jetty was enlarged while after year-end, good progress was made on the installation of a larger boiler, the upgrade of the fishmeal discharge system and the upgrade of the fishmeal plant. Skilled technical staff are being employed in an effort to minimise unnecessary delays caused by breakdowns in the factory, fishmeal plant and on board the vessels.

One of the vessels is ageing, but is undergoing major maintenance and repair to ensure a two-vessel operation. Maintenance facilities in Angola are limited. Full repair often means a vessel has to be taken out of service and sent to Namibia, lengthening downtime.

Further gains are targeted in the coming year, though the business faces challenges in the form of a devalued kwanza and high maintenance costs. Even so, the Pesca Fresca turnaround strategy remains on track.

OystersTetelestai Mariculture, the oyster-farming business, made pleasing progress with efforts to cut costs and stem the rate of loss.

Offshore operations have been shut down and lagoon operations have been minimised. Offshore oyster cultivation was bedevilled by worrying levels of cadmium in the water and animals while sulphur challenges contributed to high mortality rates at the lagoon site.

Cultivation is now concentrated on the salt-pan site near Walvis Bay. Mortality rates were cut and cost efficiencies achieved.

Strategically, the decision was made to focus on profitable business with existing customers rather than invest in a larger operational base. The business has been rightsized in line with this strategy. A small loss was recorded.

GlenryckEfforts to revitalise the Glenryck brand made encouraging progress. Market share gains in the first year of trading exceeded expectations, confirming the underlying strength of this pilchard brand. Bidfish acquired the brand’s Africa rights more than a year ago.

A new company, Glenryck South Africa, was launched to support growth in this important

market. By year-end, operations in South Africa and Mauritius were close to break-even point.

Equity investmentStrong progress was reported by Industria Alimentar Carnes De Moçambique, the sales and distribution company in which Bidfish took a 40% equity stake in the previous period. The business, based in Maputo, Mozambique, sells a wide range of food products, including meat, chicken and fish.

The Company offers Bidfish companies an important distribution channel into the Mozambican market while its diversified range has strong appeal for African consumers looking for affordable sources of protein.

The firm continues to secure organic growth. Operations are doing well. Cold store facilities were commissioned in Beira.

Job pressuresThe effort to rightsize divisional operations in line with current levels of activity is delivering significant savings. Regrettably, the smaller base has meant job losses.

Bidfish is a responsible employer and endeavoured wherever possible to reduce the impact through non-replacement of staff.

Reduction in the size of the Namsov fleet clearly had implications for jobs, though the impact on permanent staff was kept to a minimum. However, temporary staff were not re-employed once their contracts expired. Fifty temporary posts were affected. Permanent employees were reallocated to other vessels. Only four permanent jobs were lost.

Lower activity levels at United Fishing Enterprises, the pilchard business, and the prolonged closure of its Walvis Bay canning factory resulted in the

retrenchment of 18 permanent staff while 650 temporary factory workers lost seasonal job opportunities.

Three permanent sea-going staff lost their positions as Tetelestai Mariculture scaled back its operations.

TrainingDespite pressure on costs, the division continued to invest in the development of its people. The 2017 training cost was N$2,446 million (2016: N$3,793 million).

Skills training, career development and safety are focus areas and we maintain close relationships with the Namibian Maritime and Fisheries Institute, the Cape Peninsular University of Technology and the Russian naval academy.

We contribute significantly to the country’s Namibianisation strategy by supporting the development of Namibian naval officers.

The education and accreditation of properly trained navigation and engineering officers is a long-term commitment demanding substantial investment. To date, we have funded the development of 10 officers. All took up responsible positions on vessels in our fleet. Seven continue with part-time studies at the naval academy in Kaliningrad to further their studies and obtain higher levels of accreditation.

We are proud of this investment and the strides made by the young Namibians who take full advantage of this programme.

Community commitmentBidfish and Namsov Community Trust continue to contribute to the development of underresourced communities across Namibia. We not only commit to poverty alleviation, we provide funding to help drive numerous grassroots initiatives.


The division and its developmental partners are active in projects as diverse as training and education for disadvantaged children, water reticulation for informal settlements, food security and the cultivation of backyard gardens, the seeding of start-up businesses in marginalised communities and assistance for the San.

FutureBidfish is fast positioning itself for a new future.

Fishing industry challenges are expected to persist for some time to come. Resources and quotas will almost certainly remain under pressure. Our task is to create a new base for sustained growth by controlling costs while ensuring our assets are properly aligned with current business volumes and the volumes we can reasonably expect in the coming years.

Though profits were subdued and some costs remained stubbornly high, our people put in a resilient performance in 2017 as they optimised the few opportunities that came their way.

The level of loss at loss-making operations has been much reduced while profitable operations are leaner and better able to respond to market shifts.

In the year to come, we plan to cut costs even further while preparing the way for a return to improved levels of profitability.

GROUP OVERVIEW



STATEMENTS


Macro-factorsThe economic climate in Namibia negatively affected all entities in this division, except for Minolco.

Drought had a severe impact on the construction industry. Work halted at many sites. This had knock-on effects at several businesses as construction sector contractors are an important customer category.

Government austerity measures affected volumes while late payments by official departments created cash flow pressures. Clearly, the pressure was felt when directly serving public sector customers. Additional indirect pressures occurred in the business-to-business environment as many of our private sector customers work on government projects.

Strategic responseOur cost base came under intense scrutiny as management teams looked for savings and efficiencies. The back-to-basics strategy championed in the previous period remained in place.

Investment continued in growth, systems and infrastructure, but a strong business case had to be made before capital was committed. Staffing levels were reviewed, though outright retrenchments were minimised.

Strong emphasis was placed on sales and customer service as growth became a function of market share gains. Many of our businesses made pleasing progress in highly competitive markets.

Debtors management became key as cash flow constraints kept many customers under pressure. The process became a balancing act as prudent controls had to be maintained while extending repayment periods for customers with solid repayment records who had been hit by government’s spending clampdown.

Security was stepped up after one of the entities was targeted by cyber criminals. The Company’s automated phone systems were hacked, enabling criminals to route international calls through the switchboard. This resulted in a N$1,4 million negative impact on this year’s trading profit.

Strategic developmentLate in the period, we acquired Prestige Namibia cleaning business. This entity was previously run by the Services division of our parent company, Bidvest South Africa. By taking over Prestige Namibia we have kept 508 workers in employment, taking our divisional staff complement to 992.

The realignment creates new opportunities in an important area of the outsourced services industry. Initial soundings among Prestige customers confirm the operation’s profit potential.

WaltonsThe team put in another pleasing performance. The new MD and his managers did well and finished the year strongly. To maintain momentum, it is necessary to constantly refresh the product mix – a major challenge as the business stocks 10 000 different SKUs. The team did well to achieve sales success in the face of sluggish demand.

The Oshikango branch was closed. However, new stores opened in Outapi and Tsumeb in the north of the country. The flagship Windhoek store was rebranded and relocated to larger premises. The Keetmanshoop branch in south-central Namibia was also revamped.

PlumblinkThe bathroom, kitchenware and plumbing supplies business made its first full-year contribution to the division. Pleasing progress was made as the start-up moved close to break-even point on a monthly basis.

Strong momentum was achieved by the initial Windhoek store as sales staff demonstrated the benefit of specialisation and much improved stock availability. They rapidly created a firm customer base among local plumbers who were previously served by general suppliers of building materials.

A second Plumblink branch was opened in Swakopmund and had a promising start. Growth potential in northern Namibia is under scrutiny.

KolokThe business did well to achieve a measure of sales growth in a difficult market. Margin pressure was intense. Kolok faced challenges in the first three quarters in the form of heavy discounting as products came on to the market at below cost.

Cost efficiencies were achieved and staff numbers fell. Staff training was stepped up and renewed focus put on customer service to protect market share.

Operational review – Bidvest Namibia Commercial and Industrial Services and Products

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

Age: 54

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.


A stable Namibian dollar meant there were no windfall gains from currency movements.

Volumes improved in the final quarter as the market showed signs of moving back to price stability. New lines were being tested as the year came to a close.

Minolco The team had another superb year as Minolco emerged as the division’s star performer.

Longstanding emphasis on customer service and technical training paid dividends as capital spending on new office automation solutions was cut by all customers. Leases on existing equipment were extended and customer relationships deepened as highly trained teams helped clients get the most out of their existing capital investment.

Growth was achieved nationwide. Once again, high levels of customer retention underpinned growth.

Training was stepped up. Personal development was encouraged and assistance given to staff looking to obtain their driver’s licence. Two interns were given the opportunity to gain practical work experience.

Rennies TravelOur travel business put in another strong performance by maximising opportunities flowing from higher tourist inflows. Previously, visitors from the UK and Europe accounted for most tourist volumes. Today, Namibia is becoming increasingly popular with visitors from east and north America as new national carriers enter our market.

It is also apparent that online bookings are no longer making big inroads into volumes. Travellers

are again putting strong emphasis on personal service. Our knowledgeable staff performed well in this environment, growing volumes and profit. Further investment was made in product and customer service training.

Cecil NurseConstruction industry challenges impacted the business. In effect, water shortages shut down the sector. As no new buildings were being completed, the office furniture project pipeline dried up, putting an instant brake on Cecil Nurse volumes. Profit was significantly reduced.

In this economic climate, the manufacturing arm did well to avoid factory lay-offs.

The catalogue was improved and new products introduced. Training continued as the business looked to establish a firm base ahead of any uptick in business activity.

Revenue – decline to N$473,665 million


0

5,000

10,000

15,000

20,000

25,000


16,764

22,894

20172016

465,000

470,000

475,000

480,000

485,000

490,000

495,000

473,665

490,134


20172016

Sustainability

2016 2017 % change

Kilolitres

7 268 8 286 14%

Litres

327 780 344 173 5%

kW

811 045 748 949

-8%

Number

420 974 132%

N$

488 683 735 308 50%

CSI N$

278 590 464 549 67%

GROUP OVERVIEW



STATEMENTS


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

SteinerThe business made continued progress. Two years of market education are beginning to pay off. Steiner now has a solid customer base and continued to grow volumes in its core business (provision of corporate hygiene services) while expanding its dust and pest control offering to branches outside the Windhoek hub.

In the fourth quarter, a new branch opened in Ongwediva in the north of Namibia.

Training was stepped up and job growth achieved. Management was further strengthened. The team plans to move into profit in the coming year.

VoltexA brake was applied to the previously steep rate of losses. A completely new management team is now in place.

Inventory levels were reviewed and stringent controls introduced. Buying processes were revamped. A new warehouse and stock control system has been set up with the ability to anticipate demand patterns and improve stock availability.

Training investment focused on customer service. “Face time” with customers rose as the sales team became increasingly proactive.

Unfortunately, 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.

PrestigeTakeover was only effective from 1 June, but management spent several months prior to that familiarising themselves with the business. Though Prestige Namibia has been loss-making for some time, the business has nationwide reach and an established book of business. At the time of takeover this entity was incurring marginal losses on a monthly basis.

The strategy is to create a sense of partnership with customers. Many customers appreciate it is in their interest that contracts are put on a sustainable basis, ensuring quality office cleaning solutions at fair rates. Renegotiation of loss-making contracts is a priority.

New investment in equipment and uniforms will be necessary as it is essential to build staff morale as part of the effort to improve service quality and grow the business. In the coming year, management plans to get this entity on its way back to profitability.

TrainingExpenses are rigorously managed, but training was not affected and budgets were maintained across the division. Training support for new managers and supervisors was a priority.

Staff development is complemented by the ongoing effort to improve workplace safety. No significant safety incidents were reported.

CommunitySupport for community initiatives is built into standard practice at business units within the division. Collaboration with the Mister Sister mobile health service continued at Cecil Nurse and Kolok. This ensures basic health cover for lower paid workers. Waltons launched a successful effort to extend medical aid to employees, removing the need for NGO interventions.

FutureTrading conditions show little sign of improvement. However, the division is looking for further gains. Most of the “pain” appears to be behind us at Voltex. Kolok and Cecil Nurse are positioned for a better 2018. Steiner is also well placed and Plumblink is making promising progress. Waltons and Rennies will look to keep up recent momentum while star performer Minolco has good prospects of continued growth. Prestige requires focused attention, but represents a strategic opportunity. We plan to put the business on a firm footing in 2018.


Katima Mulilo

Oshakati

OshikangoRundu

TsumebGrootfontein

Otjiwarongo

Keetmanshoop

Namibia

Lüderitz

Walvis BaySwakopmund

OndangwaOngwediva

Windhoek

Gobabis

NAMIBIA

NamibiaBidvest Namibia Commercial and Industrial Services and Products

voltex

GROUP OVERVIEW



STATEMENTS


Allan DuncanActing Managing Director of Bidvest Namibia AutomotiveFranchise CEO – Jaguar, Land Rover, Ford – McCarthy Motor Holdings

Age: 47

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

Appointed: 1 October 2016

Alan has 27 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 10 years’ ago. He has been the Franchise CEO for Jaguar, Land Rover, Ford & Mazda for the last nine years.

Operational review – Bidvest Namibia Automotive

Macro-factorsDuring the financial year, the automotive industry faced extreme pressure. Comparing year-to-date new vehicle sales across the Namibian motor industry between the end of June 2017 and the end of June 2016, accumulated sales fell 24,41%. New vehicle volumes in the first six calendar months are also at the lowest level for this period in the last five years.

Results were disappointing across all the division’s franchises as the business experienced a double-digit drop in both revenue and profit.

The impact of much reduced spending by government departments, businesses and consumers was compounded by legislative changes that were material for all companies in the credit retail sector.

Amendments to the National Credit Act (NCA), effective from July 2016, made a minimum 10% deposit on new car purchases mandatory, while repayment periods were capped at a maximum of 54 months.

The amendments also banned the practice of including residual values in purchase price and credit offerings.

Interest rates also increased. The net effect was to drive up monthly repayment levels, deterring new vehicle buying.

Traditionally, when new vehicle sales stall, the pre-owned market ticks higher. This creates another opportunity to balance the business and efforts were made to step up used vehicle sales. However, longstanding challenges are evident in this marketplace.

For many years, “grey” vehicle imports have been a feature of Namibia’s used car market. Importers bring in large volumes, affecting the ability of a franchise to market its used vehicle stock. The situation is further complicated by some South African vehicle fleets that sell ageing stock directly into Namibia when they defleet.

Despite these challenges, efforts are ongoing to create a more compelling used vehicle sales proposition. We also strengthened our management team by the addition of a used car specialist manager. The number of used car salesmen was also increased.

We implemented a number of initiatives in an effort to maximise sales. We increased our attendance at marketing events and agricultural and tourism expos across Namibia and put on displays in shopping malls. We also secured additional showroom space in the southern part of Windhoek.

We strengthened the focus on digital and social media platforms. McCarthy South Africa has a strong background in this area and is assisting us as we seek a higher profile on platforms such as Facebook and Twitter. McCarthy also assisted during the installation and upgrade of the Namibian Call-a-Car website.

Affordability challenges mounted when motor manufacturers across all marques and vehicle types announced significant price increases on all new model introductions, more than negating the effect of a more stable Namibian dollar.

Our new vehicle sales for the 12 months – the core of our business – dropped to the lowest level in five years.

Strategic responseOur dealerships in Windhoek and Walvis Bay sell and support models from the Ford, Mazda, LandRover and Jaguar ranges.

However, in the downturn experienced in 2016/2017, buyers did not simply amend their purchase behaviour and “shop” the ranges by moving down the affordability curve. In many cases, they stopped buying altogether.

This does not represent a complete market exit, however. In effect, purchasing is delayed and vehicle replacement cycles are extended. This creates potential for increased service and repair work at our service centres. Owners can also be expected to “renew and refurb” their ride by adding new accessories and refreshing vehicle aesthetics. This results in customisation opportunities in the “aftermarket”.

Reliance on new vehicle sales can therefore be reduced by optimising sales of labour, parts and accessories. This received focused management attention, supported by increased investment in facilities and training.


At showroom level, marketing teams sought to optimise all opportunities flowing from new vehicle introductions.

At Jaguar LandRover, the first Jaguar SUV made its debut, the new Jaguar XF came into our market and the new F-type special vehicle was introduced. The Ford Focus RS was launched along with the Ford Everest SUV. However, much of the activity centred on upgrades and facelifts rather than all new models.

Significant cost increases were a feature of the first half. They related to facility upgrades, rising wages, increased staffing costs and training. As the second half came to a close, new efficiencies came through as management sought to better align the cost base with a much changed market.

In the face of depressed trading conditions, teams at all centres put in a robust performance. The Jaguar LandRover dealership received recognition in the form of a “Most Improved Dealer of the Year” award from its brand principals. Ford teams were recognised as the most successful in Namibia in the parts sales category and came third in South Africa in their dealership category.

Sales activityOur sales of new vehicles fell by 29,13% to 1 141 units (2016: 1 610 units). Used vehicle sales held firm at the same level as last year, with a dip of 1,49% to 265 units (2016: 269 units), despite the decline in new vehicle volumes. Stronger consumer interest in pre-owned stock was especially evident toward the end of the period.

New investmentA major revamp was completed at our Windhoek Ford dealership. The upgrade included the new and used vehicle showrooms, workshops and customer service facilities. We also made changes to service centre workflows, part of our effort to drive ongoing efficiency and productivity improvements.

Our facilities are now comparable to the mega dealerships in South Africa, ensuring a comparable brand experience when customers enter Ford franchises.

Furthermore, we opened a satellite facility in the southern part of Windhoek where we display the same mix of vehicles as our main showroom. We also have space for the display of commercial units as we have secured the Ford commercial franchise for Windhoek.

In March, a new offsite fitment centre was opened to pursue opportunities in the automotive accessories market. By the end of the fourth quarter, it had moved into profit. Our Walvis Bay premises were given a new corporate identity and a facilities upgrade.

JobsCore staff remained stable. However, 20 new jobs were created as we broadened our representation, increased the focus on workshop quality and used vehicle retailing and employed staff at our satellite facility and fitment centre. Some management teams were strengthened. A new dealer principal was appointed in Walvis Bay and a new service manager came on board.

TrainingTraining and retraining are continuous.

Our brand principals conduct regular customer satisfaction surveys. For us, consistent improvement across these scorecards is a business imperative. This entails strategic commitment to customer service and technical training.

Dealership personnel are sent on regular courses run at the South African training facilities provided by our principals. Staff also participate in online courses. Equipment and facilities have been provided to enable classroom and workstation training on this pattern.

Plans for significantly expanded in-house, Namibia-based training are being drawn up. McCarthy South Africa also provides opportunities for some workshop staff to attend the McCarthy training centre in South Africa. These initiatives are supported by the Namibia Training Authority.

Safety training is another focus area.

A health and safety officer has been appointed and makes daily safety checks at various operations. An independent service provider was also appointed during the year to run regular safety audits. This will enable us to identify areas for improvement. Targeted awareness initiatives and training courses can then be run.

Community commitmentAll efforts in support of the wider community were maintained. We continue to provide a Ford Ranger 4x4 to the national effort to combat rhino poaching. Another sponsored vehicle is made available to the Lady Pohamba Hospital. This enables rapid response to accidents and other emergencies.

Various initiatives are undertaken by our dealerships, including clothing, food and blanket collection and distribution in support of government’s national drive to combat poverty.

FutureWe cannot look for an uptick in the national economy to drive improvements in our business as no growth or low growth is expected for some time. Therefore, our focus will be on efficiency gains while looking to optimise every marketplace opportunity. Priorities include improved inventory control and steps to contain funding costs.

Efforts will be strengthened to achieve growth in workshop volumes and productivity. Used vehicle sales and returns and parts sales are areas of focused management attention. This will lessen the reliance on new vehicle sales and ensure our cost absorption model is optimised for current economic conditions.

GROUP OVERVIEW



STATEMENTS


Operational review – Bidvest Namibia Automotive – continued

Pressure is expected to remain on new vehicle sales. A more stringent NCA creates challenges, but our sales teams have now adapted to the new reality and will vigorously pursue all opportunities for growth. Replacement cycles cannot be extended indefinitely. Our recently upgraded facilities give us a strong platform from which to serve customers as they re-enter the market.

The full-year contribution of our fitment centre and anticipated volumes from our new satellite operation in Windhoek will prove beneficial. The beefed-up presence in the commercial vehicle sector also improves the balance of our business.

Our focus in 2018 will be on stabilising the revenue decline while seeking profit growth through higher productivity and greater operational efficiency.



0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

23,028

42,620


20172016

670,000

680,000

690,000

700,000

710,000

720,000

730,000

740,000

750,000

760,000

701,012

755,152


20172016

Sustainability

2016 2017 % change

Kilolitres

2 555 9 239 262%

Litres

340 754 199 008

-42%

kW

422 393 590 800 40%

Number

234 247 6%

N$

540 868 591 600 9%

CSI N$

683 793 1 015 309 48%


Michael Wayne SamsonManaging director: Freight and Logistics

Age: 57

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.

Macro-factorsAs a leading provider of freight, logistics and marine services, the division is vulnerable to any downturn in national and regional economic activity. Lower retail sales, muted trading activity, falling demand for African commodities and stalled domestic investment in infrastructure and mining all impact transit volumes and our business.

In 2017, all of these adverse factors were felt by the national economy, with substantial knock-on effects at Freight and Logistics.

It became apparent the moribund state of the offshore gas and oil industry – in both Namibia and Angola – represents the new reality. Buoyant oil prices can no longer be relied on to provide a welcome boost for Namibia’s national economy and the division’s bottom line.

As a result, revenue was substantially down, though the fall in profit was less severe than the top-line decline as a result of stringent cost management.

Strategic responseThe business benefited from early management actions to cushion the impact of shifts in the national economy.

In the previous period, it became clear the division had to be rebalanced. During the oil boom, our business had geared up to meet the growing demands of the oil companies and associated offshore exploration teams. Scaling down in the oil

and gas industry had to be matched by similar right sizing at Freight and Logistics.

The goal was the creation of a leaner business able to react quickly to every opportunity, whether in oil and gas, distribution services or transit cargo.

Rebalancing work began in 2016 and gathered pace in 2017 as trading conditions deteriorated rapidly. By year-end, the division’s previous oil industry bias had been corrected while savings and efficiencies were being delivered across all parts of the business. Leaner structures have now been put in place.

Clear focus on four activities (marine services, freight and logistics, cargo management, and trading) had been established in 2016. This framework was retained and proved its worth as growth in market share was witnessed in several sectors.

Service qualityCustomer service and client retention became key as trading conditions worsened and competition intensified.

There were no major project tenders during the review period, though the term of the previously won tender for short-haul logistics services and warehouse storage for the Swakop uranium mine was extended. We retained the business, confirmation our client service focus is achieving its objectives.

IT investment was maintained as our increasingly sophisticated systems contribute to service quality improvements.

Opportunistic mindsetAnother key aspect of divisional strategy is our enhanced ability to react quickly to market opportunities. Again, there are solid indications we are achieving our objectives.

Work on renewable energy resources (wind farms and solar energy installations) is ongoing in the Lüderitz area. The division has no direct responsibility for any of these projects, but has been successful in delivering support services to the project teams.

Marine servicesThe business was severely impacted by lack of offshore activity by the oil industry and the fall-off in port visits by bulk carriers as demand for African commodities remained low.

Demand fell in all categories – ships agency and husbandry services, chandeling, crew transfers, launch service and ships’ repair. Management worked to cut costs and create efficiencies.

Freight and logisticsTeams worked to align assets and staffing with a reduced customer base. As a result of cost containment and productivity improvements, the trucking business remained profitable despite a continued drop in revenue, largely attributable to a significant fall in corridor business (traffic between Namibia’s major urban centres and ports and other southern African countries).

Operational review – Bidvest Namibia Freight and Logistics

GROUP OVERVIEW



STATEMENTS


Operational review – Bidvest Namibia Freight and Logistics – continued

Cargo managementThe dramatic fall-off in ships visits to Namibian ports had severe effects on our terminals business and stevedoring services. Management and unions worked on new structures to reduce fixed staffing costs. This entailed a repositioning of permanent stevedoring jobs and greater recourse to flexible working arrangements.

The expected increase in grain volumes to support drought relief work in Zimbabwe failed to materialise.

However, by year-end, pleasing efficiency gains and cost savings were being delivered.

TradingBunkering volumes were largely static, though the business unit won the contract to meet the fuel requirements of a major fishing fleet.

Activities relating to the supply of industrial, automotive and marine lubricants achieved pleasing growth. A Botswana branch was opened and the product mix was widened when a new oil brand was introduced to meet demand for an affordable option to complement the existing range of quality offerings.

Job pressuresPermanent staff numbers fell as there was no automatic replacement of employees who left the Company. Where possible, jobs were changed to a more flexible variable cost staffing model.

Industrial relations remained positive. There were no strikes and trade unions took a realistic view of changing economic conditions as port activity remained low for protracted periods.

TrainingWe maintained our training effort as our reshaped business relies on knowledgeable people to deliver a competitive advantage.

We embarked on a strong customer awareness training initiative (our Customer Service Movement) and employees across the division received training on all key elements of professional customer service and optimised cross-selling across the Manica range of services.

Some of our activities carry an inherent level of risk and safety training remained a focus area.



11,550

11,600

11,650

11,700

11,750

11,800

11,850

11,900

11,658

11,873


20172016

240,000

250,000

260,000

270,000

280,000

290,000

300,000

310,000

320,000

264,493

309,862


20172016

Sustainability

2016 2017 % change

Kilolitres

6 988 3 289

-53%

Litres

310 244 328 551 6%

kW

962 908 1 235 922 28%

Number

637 903 42%

N$

1 715 391 1 193 608

-30%

CSI N$

296 882 75 354

-75%


Maintaining a safe workplace is a business imperative at the division. There were no major accidents and we achieved a 27% fall in safety incidents. We believe the reduction is largely the result of safety awareness training and the in-depth focus on specific themes each month.

Community commitmentThe division maintained its 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.

The division continues to devote 1,5% of after-tax profits to health, education, the environment, youth development, educational bursaries and sport. Employee contributions to marginalised communities, individually or through the Pandula Trust, remain a feature of our business.

We remain members of the Walvis Bay Corridor Group (WBCG) Health Helpdesk and continue to drive HIV/Aids awareness and support training for peer educators. We also provide premises for the WBCG clinic.

Specific community interventions include the provision of baby formula for babies at the Walvis Bay state hospital and support for the Walvis Bay Sunshine Centre, a haven for children with special needs and their mothers. We also support the Mondesa Youth Organisation in Swakopmund, another initiative to assist special needs children.

FutureDepressed economic conditions can be expected to continue for some time. We therefore believe that container traffic and bulk cargoes will remain at low levels. However, we are confident our rebalanced business now has the nimble structure necessary to maximise trading opportunities in a cost-efficient manner.

Efficiency gains will continue to be sought.

Customer service levels show continued improvement and customer retention has been good in a highly competitive environment.

Any isolated losses have been contained and expenses are expected to fall now restructuring costs have been absorbed. We therefore look to maintain overall levels of profitability while preparing the way for renewed growth in the medium and long term.

GROUP OVERVIEW



STATEMENTS


Operational review – Bidvest Namibia Food and Distribution

Macro-factorsConsumers felt the pressure as the economic slowdown affected wages and employment. Tourist inflows improved in some areas, providing a measure of relief for some restaurants, hotels and lodges. However, this sole highlight in the hospitality sector could not offset the trading challenges caused by the general downturn in the domestic economy.

Pressures were felt across our business and revenue fell in real terms. The division recorded small growth of 2,9%.

The incidence of out-of-home eating fell as Namibian consumers tightened their belts. Some restaurants were severely affected and some restaurant closures occurred.

No new store openings were seen across the quick service restaurant chains. Swakopmund’s Platz am Meer mall opened, but otherwise there were no significant additions to retail infrastructure.

Downtrading became common and competition intensified.

Strategic responseA key challenge affected premium ranges in our brand basket. One range that in recent years had achieved in excess of 20% annualised growth saw growth slashed by more than half.

Consumers not only traded down, they blurred category distinctions as they sought cheaper alternatives. For instance, bubble bath foam from a low-cost range was bought by some consumers for, among other uses, washing dishes and cleaning clothes, affecting sales of classic dishwasher and washing powder brands.

The breadth of the division’s range provides a measure of recession proofing as we can respond to the call for affordable food and non-food lines when demand for premium products stalls. However, in the current recession, there were instances of consumers not only switching brands, but ceasing purchases altogether until major promotions rolled out.

The division stepped up promotional activities and achieved some short-term successes only to see volumes dip significantly once a sales drive came to an end.

The result was the erosion of margins.

Cost control and efficiencies had to become a focus point. Four trucks were removed from the vehicle fleet and not replaced as smarter scheduling and routing systems were introduced.

Efforts were taken to optimise inventory levels through the newly implemented system. Even so, customer claims increased and stock write-offs became significant. As the year progressed, management engaged in a balancing act, looking to cut stock-related costs while preserving customer service levels (stock-in-trade).

By year-end, some improvement in working capital management and cash flow was apparent. However, the efficiencies and the related stock issues still negatively affected the division’s bottom line. In the final quarter, dedicated supply chain focus demonstrated the potential for significant gains in efficiency and service quality. However, these benefits will only be reflected in the figures in the coming year.

Reviews were conducted to decide what management tools were needed to drive further efficiencies and to determine the best fit for various product ranges.

T&CThe FMCG distribution business maintained its relationships with leading brands, including Nestlé, Unilever, Hudson & Knight, SC Johnson, Beiersdorf, Illovo and Lion Match, and introduced several new lines as changing shopping patterns became evident. These included yoghurts, energy drinks, personal care products and carbonated soft drinks.

Some lines were discontinued as demand became sluggish in several categories. Sales reporting became more dynamic. Activity is tracked daily as a service to customers, while providing data to assist delivery and stockholding efficiency.

T&C received several “best distributor” awards from brand principals, recognition of our extensive footprint and quality commitment.

CaterplusOur foodservice supplier to the catering and hospitality industries increased its ambient product offering and introduced new speciality retail products. Efforts gathered pace in the second half to increase market share and better exploit Caterplus’s position as the multi-temp leader with Namibia’s most extensive footprint.

Stock control in the warehouses remained a challenge and an area of focus. Further improvements are targeted following investment into an expiry and lot control system for the warehouse. Efforts to significantly reduce food waste were given priority.

JobsThe permanent headcount fell by 38 employees to 465 as a result of the strategy to cut costs and increase productivity. Some positions were filled by temporary employees in anticipation of further efforts to reduce costs, especially in our supply chain operations.

Henry Francois FerisManaging director: Food and Distribution

Age: 49

Qualification: BCom (Unam/Unisa) and BCom (Hons) (Unisa)

Henry has held senior positions in the financial, human resource and general management disciplines at leading Namibian corporates, including Standard Bank, Rossing Uranium Mine, Namibia Breweries and Pick n Pay Namibia. He was appointed as managing director since 2004 within the Ohlthaver & List group of companies.

His managerial experience covers the financial, mining, manufacturing, hospitality and retail industries. He also possesses additional qualifications in the field of industrial psychology.

Henry was a board member of Team Namibia (2015) and chairman of Namibia’s Retail Charter (FMCG) task group. He joined Bidvest Namibia in January 2015.


TrainingTraining investment was maintained, with strong emphasis on system training, customer service and product training.

Food safety and awareness remain pivotal issues for us. Staff are trained to ensure high standards of hygiene and food packaging integrity while adhering to all World Health Organisation protocols, municipal regulations and the guidelines laid down by brand principals.

Workplace safety is a continuing priority. No workplace accidents involving personal injury were recorded.

Community commitmentWe remain committed to environmental protection and are making a strenuous effort to reduce “food miles” and fuel usage through optimised vehicle fleet utilisation.

FutureThe overriding aim is a return to solid profit, irrespective of trading conditions, which may remain difficult for some time. The challenge therefore is to reduce waste, especially in stock-related costs, reduce operational running costs and improve our trade execution in terms of sales and merchandising.

Volume growth may be difficult to achieve. Therefore, the continuous search for good product range additions remains a priority. We will strive to optimise the top line and promotional activity will be stepped up. Efforts to protect margins will be intensified.

Renewed emphasis on expense management is already evident. Efforts to align the cost base with turnover growth will be a continuing feature of the business.

Staffing, warehouse infrastructure and the vehicle fleet will be reviewed as we look to create a more agile business. Outsourcing options will be investigated in certain parts of the business.

Investment will continue and was apparent at year-end as new systems came on stream.

A new stock forecasting tool will make it possible to anticipate the demands of our customers. Our aim is to obviate lost sales through incomplete order fulfilment – instead of perhaps meeting 85%+ of a late order it is hoped to meet it in full. The ultimate objective is to maintain a 95% service level to customers every month.

New systems make it possible to achieve a tight stock control cycle. Significant reduction in stock losses in the warehouses has been targeted and was achieved in comparison to the previous year.

A newly installed vehicle control and planning system is already achieving fleet utilisation

efficiencies through improved routing and scheduling.

Better stock control, improved order fulfilment in tandem with smart routing is intended to optimise vehicle loads per “run”.

The previous manual system for vehicle maintenance scheduling, licensing and fuel usage has been phased out. A new automated system is expected to deliver ongoing savings while giving management “live” data day by day. Fuel supply arrangements have also been renegotiated for improved efficiencies.

Further efforts will be made to deepen the partnership with customers. Simultaneously, even closer partnership will be fostered with brand principals as ongoing collaboration is necessary in the current recession if premium positioning and margins are to be protected while reducing stock-related costs from customers.

A nimbler, more efficient division is a prerequisite if a return to profit is to be achieved. We have the strategy to achieve this objective. In 2018, we plan to put it in place.

Trading loss(N$8,175 million)

(10,000)

(5,000)

0

5,000

10,000

15,000

20,000

25,000

(8,175)

19,546

Trading (loss)/pro�t (N$’million)

20172016

Revenue – increase to N$1 232,682 million

1 180,000

1 190,000

1 200,000

1 210,000

1 220,000

1 230,000

1 240,000

1 232,682

1 197,802


20172016

GROUP OVERVIEW



STATEMENTS


Operational review – Bidvest Namibia Food and Distribution – continued

NamibiaBidvest Namibia Food and Distribution

Oshakati

OshikangoRundu

TsumebGrootfontein

Otjiwarongo

Windhoek Gobabis

KeetmanshoopLüderitz

Walvis Bay

Swakopmund

OndangwaOngwediva

NAMIBIAKatima Mulilo

Namibia

Sustainability

2016 2017 % change

Kilolitres

19 504 19 443 0%

Litres

903 950 928 329 3%

kW

4 664 4 382

-6%

Number

496 565 14%

N$

417 653 413 245

-1%

CSI N$

593 044 628 261 6%


Operational review – Financial Services – Namibia Bureau de Change

Namibia Bureau de Change (NBDC)Bidvest Namibia bought 49% of NBDC effective 15 July 2015. The major shareholder is Bidvest Bank who ensures, with its dedicated expertise, that NBDC remains competitive and driven in the market. NBDC is a specialist in foreign exchange

dealings therefore broadening Bidvest Namibia’s footprint in the tourism industry. It has branches at the Hosea Kutako International Airport, Windhoek city centre, Walvis Bay and opened a new branch in Swakopmund during the year.

Not only does NBDC cater for inbound tourists in forex dealings but also for Namibians wanting to go abroad with their unique World Traveller Card which is internationally recognised.

GROUP OVERVIEW



STATEMENTS


Financial director’s review

OverviewBidvest Namibia experienced a very challenging financial year. All divisions performed at lower levels than in the previous period. Fishing division’s profits were severely impacted by external market pressures and environmental factors. All the other divisions experienced pressure on revenue as a result of Namibia’s recession.

Although the Fishing division’s revenue was almost on par with the previous year, trading profit declined by 79,8% to N$39,8 million for the year under review.

Fishing for horse-mackerel is still the core activity of the Fishing division and its revenue was significantly impacted by continuing pressure on the horse-mackerel resource. This resulted in smaller fish sizes being landed while lower fish tonnages were recorded per day. The average hard currency price per ton declined and the exchange rate strengthened, further compounding revenue pressures.

In addition, costs increased significantly as a result of higher quota purchase costs as less of the division’s own quota allocation was available for harvesting during our financial year – partly the result of lower quota allocations being made available to commercial operators in 2016 and timing factors relating to the fishing of own versus purchased quota in the second six months of that year. Quotas are allocated per calendar year, creating a mismatch with our reporting period.

Trading profit from the horse-mackerel division declined by 72,5%. The decrease in gross profit from horse-mackerel fishing is the main reason for the fall in the Group’s overall gross profit margin from 19,0% to 15,1%.

Another horse-mackerel vessel was sold during the 2017 financial year for USD4,7 million. To operate more efficiently, it has become essential to streamline the division, aligning the size of the fleet to own-quota availability.

The Namibian pilchard resource is also under great strain and a very low quota allocation did not justify the full operation of our cannery. Instead, we pooled resources with another local cannery. Unfortunately, losses were still made by our pilchard operations. These losses absorbed a substantial amount of profit from the horse- mackerel operation.

Angola generated profits, but less than the previous year as a result of increased vessel repair costs. Oysters incurred losses for the financial year, though the loss was inflated by a number of once-off costs following the down-sizing of this business.

Glenryck South Africa is a new addition to the Fishing division. This entity was launched to market the Glenryck brand that was acquired during the previous period. Glenryck South Africa acquires pilchards, cans them on contract and then sells the canned product in South Africa, Namibia and Mauritius. The business incurred

losses in the startup phase, but the brand is growing well.

Automotive had a tough year and experienced a steep fall in sales in the new vehicle market. The decline was attributable to the downturn of the Namibian economy and changes to the National Credit Act that make the conditions for lending to new vehicle buyers more onerous. As a result, fewer consumers can fund a new vehicle purchase.

The focus has shifted to used vehicles, but sales of pre-owned stock failed to offset the fall-off in the new vehicle market. However, we have not lost market share.

This division’s results cover the full 12 months in the 2016-17 year, compared to the 11 months covered in the previous year. The actual decline in Automotive’s turnover was 15,6% year on year while the division’s contribution to the Group’s trading profit fell by 46% to N$23,0 million.

Freight and Logistics revenue declined by 14,6% due to a stagnant oil and gas industry and the lack of other project activity. As a result of cost savings and the streamlining of the division, the trading profit dropped by only 1,8% to N$11,7 million. The division’s reduced size enables cost bases to be rigorously controlled without impacting service delivery to clients. However, the division is ready for action should a large project appear on its horizon. This division is well managed and controlled and has proven that when times are tough, one can streamline for a new norm.

“Our financial strategy focuses on cost control, internal efficiencies and optimising synergies.”

Theresa Weitz, financial director


Financial positionBidvest Namibia’s balance sheet remains strong and the Company has sufficient cash resources for potential acquisitions.

Property, plant and equipment purchases totalled N$59,0 million. Replacement capital expenditure at all businesses was maintained.

Net working capital decreased by N$13,6 million. This is a result of lower activity in Fishing and Freight and Logistics. Provisions for doubtful debtors and obsolete stock are adequate.

The Group remains focused on cost control, working capital management and the generation of acceptable returns on funds employed. Significant focus is being directed at operations where performance is below expectation.

Business risksThere is significant pressure on profitability in a number of our businesses.

The Food and Distribution division’s revenue failed to grow in line with expectation. The principal challenge involved stock-related costs and internal inefficiencies. The division recorded a trading loss of N$8,2 million, which is a 141,8% decrease on the prior year’s profit of N$19,5 million. However, the previous year’s figures included the N$7 million settlement received from Namibian Poultry Industries.

Various initiatives have been implemented to correct the inefficiencies that plagued the division in 2016-17. These include software programmes for better fleet management and more effective re-ordering systems for improved stock control.

Unfortunately, a brand principal within the perishables sector has given notice that their distribution agreement will come to an end, effective from 31 August 2017. This will result in a loss of revenue of N$200 million per annum. Restructuring of the relevant business unit has already begun. Savings are also expected from improved control of damaged items and better management of stock expiry dates.

Most businesses in the Commercial and Industrial Products and Services division performed well in challenging circumstances. Revenue was down on the prior year by 3,4% at N$473,7 million, reflecting the recessionary state of the national economy. Trading profit declined by 26,8% to N$16,8 million. Minolco performed very well. Voltex still generated losses despite management interventions to turn the business around. Plumblink, which only opened in Namibia last year, performed in line with expectations and a new branch was opened at the coast.

Bidvest Namibia Prestige Cleaning was acquired, effective 1 June 2017, and a management team was appointed from within the current Bidvest Namibia pool of employees.

Namibia Bureau de Change remains a leading foreign exchange transaction services provider and widened its footprint with the opening of a coastal branch.

Revenue decreased by 2% to N$3,8 billion

Operating profit decreased by 66,2% to N$98,9 million

Trading profit declined by 68,6% to N$92,5 million

Significant decline in Fishing division’s operating profit, the result of multiple external factors

All other divisions experienced pressure on revenue

Management committed to make structures leaner

All assets are measured on return basis

GROUP OVERVIEW



STATEMENTS


The Fishing division’s profitability is under strain, and the business is being right-sized in line with lower quota allocations while loss-making entities are being scaled down.

Due to the recession in Namibia, revenue in our commercial businesses remains under pressure. Even revenue growth in line with inflation is far from certain as consumers and businesses are reducing their spending. Growth then becomes a function of gains in market share. Lower sales activity puts pressure on profitability and costs need to be cut to keep expenses in line with revenue. In the past financial year, we have been able to successfully implement significant cost savings at Freight and Logistics and we are currently busy rightsizing business units and containing costs in our other divisions. Efforts to grow revenue through an increase in market share are also a priority.

Challenging economic conditions also have the effect of increasing credit risk. Bidvest Namibia is therefore putting increased focus on debtor management.

To bring greater balance to our overall business, we continue to pursue acquisition opportunities or look to start businesses that reflect the broad spread of activities for which our holding company is known in South Africa.

Currency risk is an integral part of business operations at a Group with international exposure. To balance such exposure, we ensure that assets and liabilities in foreign currency are matched.

Bidvest Namibia’s decentralised and entrepreneurial business model continues to prove itself. Our head office structures remain lean. We are a big business, but we have an entrepreneurial spirit and a small business culture.

SustainabilityBidvest Namibia has always committed to sustainable business practice and since inception has behaved with a sense of responsibility to the community, the environment and our people.

In the 2017 financial year, CSI spend increased from N$15,8 million to N$23,8 million (including disbursements by the Namsov Community Trust). Namsov Community Trust is a 10% shareholder in Namsov and lower dividends affected the level of its CSI spend.

We are a responsible corporate citizen and emphasise the need for accountability, fairness and transparency in our dealings with all stakeholders. In our view, strategy, sustainability and risk are inseparable.

Voluntary announcementOn 18 August 2017, a voluntary announcement was made, advising shareholders that the Company has entered into discussions which, if successfully concluded, may have a material effect on the Group’s share price.

FutureThere is little indication of rapid recovery in Namibia’s economic climate and within the market segments in which Bidvest Namibia is active. Even greater attention will therefore be given to efficiency improvements. Management is committed to making structures leaner and more effective across all our businesses. All assets are being thoroughly measured on a returns basis and, where necessary, corrective action is being taken.

Theresa Weitz

Financial director

Financial director’s review – continued


Note2017

N$’0002016

N$’000

Revenue 3 776 448 3 858 596

Paid to suppliers for materials and services (2 983 764) (2 856 110)

Value added 792 684 1 002 486

Income from investments 4 38 426 38 058

Total wealth created 831 110 1 040 544

WEALTH DISTRIBUTIONSalaries, wages and other employment costs 1 597 977 595 728

Providers of capital

Dividends to shareholders 46 630 114 455

Dividends to non-controlling interest 72 981 50 354

Finance cost on borrowings 21 962 18 750

Central and local government 2 95 010 138 959

Total distributions 834 560 918 246

Reinvested in the Group to maintain and develop operations: (3 450) 122 298

Amortisation, depreciation and impairments 81 430 84 469

Deferred taxation (27 087) (32 477)

Undistributed profit for the year attributable to owners of the parent 3 980 69 767

Undistributed income attributable to non-controlling interest (61 773) 539

Total wealth distributed 831 110 1 040 544

Notes to the value added statement1. Salaries, wages and other employment costs

Salaries, wages, overtime payments, commissions, bonuses and allowances 542 258 540 648

Employer contributions 55 719 55 080

597 977 595 728

2. Central and local governmentsCurrent normal company taxation 84 413 120 725

Quota levies and royalty fees 7 450 15 402

Rates and taxes paid on properties 3 147 2 832

95 010 138 959

3. Additional amounts collected on behalf of central and local governmentValue added tax collected on revenue 527 886 513 869

Customs and excise duties 48 181 37 361

Pay-as-you-earn deducted from remuneration paid 98 067 73 852

Non-resident shareholders’ tax deducted from dividends paid 1 233 3 054

675 367 628 136

4. Income from investmentsDividends received on other investments 4 007 2 175

Finance income 34 419 35 883

38 426 38 058

Value added statementWealth distribution 2017 (N$’million) Wealth distribution 2016 (N$’million)

598

120

9522

(3)

596165

139

122

19

Employees

Finance cost and borrowings

Central and local government

Reinvested in operations

Dividends to shareholdersand non-controlling interest

GROUP OVERVIEW



STATEMENTS


Financial history 2017 2016 2015 2014 2013 2012 2011 2010 2009

Extract from financial statements (N$’000)Revenue 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 92 521 294 887 409 655 501 313 601 497 646 616 544 922 368 869 284 496

Net finance income 12 457 17 133 27 111 16 298 15 690 17 606 6 085 1 253 3 402

Attributable profit 61 818 235 114 412 466 343 742 426 505 460 880 384 079 229 680 183 344

Shareholders’ interest 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 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** 1 374 709 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 185 067 388 187 531 746 413 761 585 583 625 123 545 332 431 704 240 378

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

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

Share statisticsHeadline earning per share (cents) 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 38,0 56,0 63,0 69,0 63,0 54,0 36,0 15,0

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

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

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

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

Share price (cents)

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

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

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

Market capitalisation (N$’million) 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) 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 1 4 1 1 2 1 1 1 not listed yet

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

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

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

Interest cover 5 14 15 21 27 26 63 183 54

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

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

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

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

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

Number of shares in issue (’000) 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) 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 12,94 14,77 12,12 10,70 10,24 8,33 6,75 7,62 8,27

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

* Value added statement only prepared from 2012 onwards.** Funds employed – total assets excluding cash and cash equivalents, taxes (current and deferred) and goodwill less total liabilities excluding taxes (current and deferred).

Nine-year review


Financial history 2017 2016 2015 2014 2013 2012 2011 2010 2009

Extract from financial statements (N$’000)Revenue 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 92 521 294 887 409 655 501 313 601 497 646 616 544 922 368 869 284 496

Net finance income 12 457 17 133 27 111 16 298 15 690 17 606 6 085 1 253 3 402

Attributable profit 61 818 235 114 412 466 343 742 426 505 460 880 384 079 229 680 183 344

Shareholders’ interest 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 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** 1 374 709 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 185 067 388 187 531 746 413 761 585 583 625 123 545 332 431 704 240 378

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

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

Share statisticsHeadline earning per share (cents) 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 38,0 56,0 63,0 69,0 63,0 54,0 36,0 15,0

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

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

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

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

Share price (cents)

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

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

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

Market capitalisation (N$’million) 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) 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 1 4 1 1 2 1 1 1 not listed yet

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

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

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

Interest cover 5 14 15 21 27 26 63 183 54

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

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

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

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

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

Number of shares in issue (’000) 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) 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 12,94 14,77 12,12 10,70 10,24 8,33 6,75 7,62 8,27

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

* Value added statement only prepared from 2012 onwards.** Funds employed – total assets excluding cash and cash equivalents, taxes (current and deferred) and goodwill less total liabilities excluding taxes (current and deferred).

GROUP OVERVIEW



STATEMENTS


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

TotalN$’000

Corporate Services

N$’000FishingN$’000

AutomotiveN$’000

Freight and Logistics

N$’000

Commercial and Industrial

Servicesand Products

N$’000

Food andDistribution

N$’000

30 June 2017Total segment revenue 3 951 918 78 151 1 083 727 701 915 376 076 479 331 1 232 718 Inter-segment revenue (175 470) (55 487) (1 795) (903) (111 583) (5 666) (36)

Revenue from external customers 3 776 448 22 664 1 081 932 701 012 264 493 473 665 1 232 682

EBITDA 180 365 13 195 93 118 25 480 15 872 32 549 151 Depreciation on property, plant and equipment (71 955) (3 553) (37 341) (2 380) (5 961) (14 455) (8 265)Amortisation and impairment of intangibles (9 475) (168) (7 912) (72) (154) (976) (193)

Operating profit/(loss) 98 935 9 474 47 865 23 028 9 757 17 118 (8 307)Share of profit of joint venture (82) – (82) – – – –Share of profit of associates 7 834 935 6 899 – – – –Finance income 34 419 1 869 28 679 899 972 1 145 855 Finance costs (21 962) (631) (2 890) (13 642) (792) (2 176) (1 831)

Profit/(loss) before tax 119 144 11 647 80 471 10 285 9 937 16 087 (9 283)

Total assets (excluding current and deferred taxation) 3 079 036 319 384 1 529 173 331 913 282 688 238 492 377 386

Total assets include:Additions to property, plant and equipment, goodwill and intangible assets 60 501 11 538 16 244 3 397 2 124 19 466 7 732

Total liabilities (excluding current and deferred taxation) 717 087 14 230 164 658 166 343 109 755 107 092 155 009

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.

Segmental reporting

Revenue per segment(N$’million)

Profit/(loss) before tax per segment(N$’million)

Corporate Services

Fishing

Automotive


Commercial and Industrial Services and Products

Food and Distribution

16

1 089

310755

1 198

490

2016

80

10

10

(9) 1216

2017

11

2

236

34

1723

2016

23

1 082

264

701

1 233

474

2017


The segment information for the reportable segments for the year ended 30 June 2016 is as follows:

TotalN$’000

Corporate ServicesN$’000

FishingN$’000

AutomotiveN$’000


N$’000

Commercial and Industrial

Servicesand Products

N$’000

Food and Distribution

N$’000

30 June 2016Total segment revenue 3 999 175 65 330 1 093 352 756 460 390 674 495 265 1 198 094 Inter-segment revenue (140 579) (48 931) (4 105) (1 308) (80 812) (5 131) (292)

Revenue from external customers 3 858 596 16 399 1 089 247 755 152 309 862 490 134 1 197 802

EBITDA 375 598 4 223 246 860 44 144 19 087 33 625 27 659 Depreciation on property, plant and equipment (71 302) (3 713) (41 151) (1 464) (6 865) (9 983) (8 126)Amortisation of intangibles (11 457) (192) (9 729) (65) (291) (789) (391)

Operating profit 292 839 318 195 980 42 615 11 931 22 853 19 142 Share of profit of joint venture 2 873 – 2 873 – – – –Share of profit of associates 10 517 1 363 9 154 – – – –Finance income 35 883 1 850 30 775 1 303 270 1 454 231 Finance costs (18 750) (1 088) (2 575) (10 250) (1 694) (995) (2 148)

Profit before tax 323 362 2 443 236 207 33 668 10 507 23 312 17 225

Total assets (excluding current and deferred taxation) 3 150 141 282 588 1 599 449 359 279 284 274 243 578 380 973

Total assets include:Additions to property, plant and equipment, goodwill and intangible assets 272 982 13 715 83 888 130 650 9 003 20 008 15 718

Total liabilities (excluding current and deferred taxation) 676 390 14 143 112 078 179 076 111 039 106 887 153 167

Total assets include assets classified as held for sale of N$50,6 million relating to the fishing segment. No liabilities are associated with the asset held for sale.

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

Corporate Services

Fishing

Automotive


Commercial and Industrial Services and Products

Food and Distribution283

359 1 599

244

381

284 2016

14

165

110166

155

1072017

14

112

111

179

153

107

2016

319

332 1 529

238

377

283 2017

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

GROUP OVERVIEW



STATEMENTS


56 Bidvest Namibia Annual Integrated Report 2017

Corporate social investment

“Decentralisation, one of our business philosophies, includes corporate social investment. Each entity contributes to initiatives they can identify with, seeking harmony with people, society and the environment. This creates a diverse and country-wide spread of social responsibility.”

International expert training was provided to a disabled student, aiding him to obtain his Master’s degree in the field of Global Logistics and Supply Chain Management, in Hamburg, Germany. Salmon Kambunga will be returning to Namibia after two years abroad and plough back his expert knowledge into Manica.

Book prizes were handed to eight coastal schools in Swakopmund, Walvis Bay and Luderitz. The schools were specifically chosen based on attendance of the staff’s children of Manica.

“His House Hospice” was supported by teams of the Manica Group while attending their biathlon sports event. Manica also used the event to donate a large amount.

GROUP OVERVIEW



STATEMENTS


Namsov Community Trust – a 10% shareholder of our horse mackerel company Namsov Fishing Enterprises (Pty) Ltd, uses its dividends

received to help uplift a variety of communities around Namibia. In an effort to erode poverty across the nation, the NAMSOV Community Trust has committed N$1,5 million per region, to be rolled out in three financial years starting in 2015 as part of its corporate social responsibility. Many projects were enabled during this generous gesture, such as Water Supply Project in Moses/Garoëb Constituency; Aquaponics Project for Penduka Trust in Samora Machel Constituency; Aisha Training Academy to name but a few. All regions deployed the monies received in educational activities, community development and sports initiatives. Many lives were positively affected.

Community Trust

Waltons supports where they deem fit donating from their line of products, e.g. stationery, information technology products and many more. This year, their mascot took part in the Private School Swakopmund Big Walk along the beach. The students were thrilled to walk with this cheerful companion.

HRG Rennies Travel Namibia supports initiatives identified by their employees that align themselves to its own principles such as, sports initiatives, support of school events attended by its employee’s children. Annually a charity is chosen to be the benefactor of the SAGES golf day which is also supported by Rennies.

An avid swimmer attempted the English Channel as the first Namibian to raise funds for the “Cancer Care Namibia Fund”, which aids cancer patients in financing their treatments and medical expenses. Rennies supported this wonderful cause.


CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

59 Statement of directors’ responsibilities and approval

59 Declaration by company secretary

60 – 62 Independent auditor’s report

63 – 67 Directors’ report

68 – 77 Accounting policies

78 Statements of financial position

79 Statements of profit or loss and other comprehensive income

80 – 81 Statements of changes in equity

82 Statements of cash flows

83 – 114 Notes to the financial statements

115 Shareholders’ diary

116 Administration

Contents

GROUP OVERVIEW



STATEMENTS


Statement of directors’ responsibilities and approvalfor the year ended 30 June 2017

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 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 endeavours to minimise it by ensuring that appropriate infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.

The directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the 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 60 to 62.

The Group annual financial statements and annual financial statements of the Company are set out on pages 68 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:

Lindsay Ralphs Sebulon KankondiChairman Chief executive officer

24 August 2017 24 August 2017

Declaration by company secretary

In my capacity as company secretary, I hereby confirm, that for the year ended 30 June 2017, the Company has lodged with the Registrar of Companies, all such returns as are required in terms of this Act and that all such returns are true, correct and up to date.

Veryan HocuttCompany secretary

24 August 2017


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 59 to 114, which comprise the consolidated and separate statements of financial position as at 30 June 2017 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 2017 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 Public Accountants’ and Auditors’ Act 1951 (as amended) (PAAB Act) and other independence requirements applicable to performing audits of financial statements in Namibia.

We have fulfilled our other ethical responsibilities in accordance with the PAAB Act code of ethics and in accordance with other ethical requirements applicable to performing audits in Namibia. The PAAB Act code of ethics is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B). 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.

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

KAM 1: Assessment of the recoverable value of goodwill

Goodwill constitutes 8% of the Group’s total assets and arises as a result of the acquisitive nature of the Group.

As disclosed in note 2, goodwill of N$244 million is allocated to cash-generating units, identified according to operating segments.

The directors conducted the annual impairment test to assess the recoverable amount of goodwill in respect of the 2017 financial year consistent with the Group’s policy. This assessment is performed with reference to a value-in-use calculation for each operating segment.

The determination of the recoverable amount of the cash-generating unit 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 key audit matter.

Our audit work for goodwill included evaluating the design and implementation of key controls around the impairment review process, evaluating the appropriateness of the cash-generating units to which goodwill is allocated and challenging the key assumptions used in directors’ future cash flow forecasts with particular focus on the growth rate and discount rate.

The growth rate used in the cash flow model has been independently assessed for each significant segment by us 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 segment’s 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 cause an impairment. We considered the likelihood of such changes occurring and concluded that the key assumptions applied in the cash flow model were reasonable.

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 concluded that inputs used in the cash flow forecast for these cash-generating units are appropriate.

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

Overall, we found the cash flow models, allocation of goodwill to operating segments, assumptions applied in the goodwill impairment assessments and the determination of objective evidence of impairment to be appropriate. We concur with the directors’ assessment that no material impairment was required.

The disclosure in relation to the impairment reviews, assumptions applied and goodwill were considered appropriate.

Independent auditor’s report

GROUP OVERVIEW



STATEMENTS


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

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

As reflected in note 4, the Group has a 40% shareholding in an associate, Industria Alimentar Carnes de Moçambique Limitada of N$67,2million.

The assessment of the recoverable amount of the investment involves the directors’ judgement and estimates around the inputs to the cash flow projections used and the valuation of land and buildings. As a result, this has been noted as a key audit matter.

We evaluated the key facts and judgements made in the directors’ assessment with relevant documentary evidence and 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.

Based on the fair value determined by the directors, it was concluded that no impairment of the carrying value of the investment was required.

We are satisfied that the related disclosures are sufficient.

KAM 3: Fishing segment assets

The Fishing segment of the Group has typically been the most significant contributor to the Group’s revenue and profit in prior years.

This segment has been significantly adversely impacted by severe external market and environmental factors as well as a shortage of own quota allocations. The directors have responded to these external factors noted which has impacted on amounts and disclosures provided in the consolidated financial statements.

Due to the judgement involved in the assessment of residual values of vessels, recoverable amounts of segment assets, determining the carrying value of non-current assets held for sale, accounting for complex quota purchase agreements and whether or not to raise deferred tax assets on estimated tax losses incurred in certain subsidiaries in the Fishing segment, this is considered to be a key audit matter.

We considered the directors’ plans to respond to the adverse external factors noted.

The directors obtained independent valuations for the affected assets and determined that there was no impairment necessary in the current financial year. The independent valuators and the valuations received were critically evaluated against current market evidence available in respect of similar properties in Walvis Bay.

The directors’ assessment of the residual values of the vessels and the estimates and judgements applied in respect of setting the residual values were evaluated against prior experience and industry norms taking into account the fair values at the end of the vessel’s useful life.

Independent expectations of the assumptions used by the directors in computing the recoverable amounts of the assets were developed.

The relevant judgements and estimates applied by the directors in assessing the impact of any of the impairment indicators were assessed and tested.

The assumptions and judgements applied by the directors in the assessment of the probability of future taxable income in the loss making subsidiaries were evaluated when considering the implication on deferred tax assets.

The estimates, assumptions and judgements applied by the directors in deciding to reflect the MFV Sunfish as a non-current asset held for sale as required by IFRS 5 Non-Current Asset held for Sale and Discontinued Operations were assessed against the factual evidence supported by appropriate board resolutions.

Contractual obligations in respect of quota purchase agreements entered into were assessed to determine whether the terms and conditions of the contracts have been complied with and whether contractual commitments and contingencies have been accounted for and disclosed appropriately.

We are satisfied with the accounting treatment, assessment of the asset balances, the recoverable amounts of assets at year-end and the related disclosures in respect of the division as reflected in the statement of financial position.

Separate financial statementsWe have determined that there are no Key Audit Matters identified in respect of the separate financial statements of Bidvest Namibia Limited.

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 and the declaration by the company secretary which is made available to us before the date of this report. The following other information included in the annual integrated report: chairperson’s review, chief executive’s review, corporate governance report, risk committee report, audit committee report, remuneration committee report, sustainability report, operational reviews, financial director’s review, value added statement and eight-year review is expected to be made available to us after the date of this report. Other information does not include the consolidated and separate financial statements, the directors’ report, segmental 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)ICAN practice number: 9407Per: Ramsay Mc DonaldPartner PO Box 47Windhoek, Namibia

25 August 2017

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

GROUP OVERVIEW



STATEMENTS


Directors’ reportfor the year ended 30 June 2017

The directors have pleasure in presenting their annual report which forms part of the Group annual financial statements and annual financial statements of the Company for the year ended 30 June 2017.

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) has operational arms mainly in the fishing industry.

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.

Acquisition of subsidiary in the current yearThe Group acquired 100% shareholding in Bidvest Prestige Cleaning (Proprietary) Limited (Prestige) with effect 1 June 2017. Prestige was acquired from The Bidvest Group Limited.

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 Group through its subsidiary, Taeuber & Corssen SWA (Proprietary) Limited, lost a distribution agreement with Parmalat with effect from 31 August 2017.

Authorised and issued share capitalThere were no changes to the authorised and issued share capital during the year under review.

DividendsDividends amounting to N$46,6 million (2016: N$114,5 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 derives revenue from its horse-mackerel, monk and pilchard fishing rights in Namibia and Angola. The division also derives revenue from its Glenryck rights and shares in profits from its distribution agreement in Mozambique.

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, sanitaryware, brassware and allied products and cleaning services.

Food and Distribution services supplies foods to the hospitality, wholesale and retail industries in Namibia.

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.

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 54 and 55.

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 2016 17 901 926 110 000

Comprising:

Non-executive directors 201 100 110 000

Executive directors

SI Kankondi 1 377 200 –

Senior key personnel 16 323 626 –

At 30 June 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 –

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 36 to the financial statements.

Shareholders’ spreadAn analysis of holdings extracted from the register of ordinary shareholders at 30 June 2017 is listed below:

Number of shareholders

Percentage of share capital (nearest 1%)

The Bidvest Group Limited 1 52%Public:

Companies 20 8%Trusts 5 0%Individuals 518 1%

Pension and Provident Funds 50 25%Non-public:

Directors 5 1%Broad Based Economic Empowerment partner

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

600 100%

Directors’ report – continuedfor the year ended 30 June 2017

GROUP OVERVIEW



STATEMENTS


Directors’ remunerationThe remuneration paid or accrued to directors while in office of the Company during the year ended 30 June 2017 can be analysed as follows:

Fees forservices

N$’000

Basic salary and allowances

N$’000

Bonusesaccrued

leave paidN$’000

Pension andmedical aid

contributionsN$’000

TotalN$’000

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

30 June 2016Executive directorsSI Kankondi – 2 748 – 319 3 067T Weitz – 1 419 – 237 1 656J Arnold – 2 373 3 344 1 196 6 913

– 6 540 3 344 1 752 11 636

Non-executive directorsP Steyn 288 288 M Mokgatle-Aukhumes 145 145 H Müseler 360 360 MK Shipanga 353 353 JD Davis 57 57 B Eimbeck 69 69

1 272 1 272

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 expense2017

N$’0002016

N$’000

SI Kankondi 123 170 J Arnold – 143 T Weitz 61 85

184 398

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 2017:

Percentage holding

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


Subsidiaries Principal subsidiary undertakings

Total comprehensive income/(loss)

Effective holding

%

Issued share capital

N$2017

N$’0002016

N$’000

The Bidvest Namibia Limited subsidiaries 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.By the CompanyBidvest Namibia Commercial Holdings (Proprietary) Limited 100,00 100 10 814 38 901 Bidvest Namibia Fisheries Holdings (Proprietary) Limited 100,00 1 613 113 789 111 177 Bidvest Namibia Foreign Exchange (Proprietary) Limited 100,00 100 – –Bidvest Namibia Information Technology (Proprietary) Limited 100,00 100 1 615 384 Bidvest Namibia Property Holdings (Proprietary) Limited 100,00 5 000 5 345 3 292 Bidvest Namibia Management Services (Proprietary) Limited 100,00 100 5 995 3 219 Through subsidiariesAtlantic Harvesters of Namibia (Proprietary) Limited 69,55 300 4 764 4 924 Bidvest Namibia Automotive (Proprietary) Limited 100,00 1 000 (22) (49)Bidvest Namibia Commercial and Industrial Servicesand Products (Proprietary) Limited 100,00 200 405 (574)Bidvest Namibia Plumblink (Proprietary) Limited 100,00 100 (2 469) (1 289)Bidvest Prestige Cleaning (Proprietary) Limited 100,00 100 75 –Carheim Investments (Proprietary) Limited 100,00 4 000 (1 204) 1 177 Caterplus Namibia (Proprietary) Limited 100,00 1 (12 130) (170)Cecil Nurse (Namibia) (Proprietary) Limited 100,00 100 798 3 666 Comet Investments Capital Incorporated 69,55 762 1 285 4 852 Diroyal Motors (SWA) (Proprietary) Limited 100,00 4 000 6 518 23 102 Elzet Development (Proprietary) Limited 100,00 100 432 115 Frigocentre Limitada^^ 34,74 76 243 – –Glenryck South Africa (Proprietary) Limited^^^^ 51,00 120 (1 467) –GSA Trading Namibia (Proprietary) Limited^^^ 51,00 100 – –Kolok (Namibia) (Proprietary) Limited 100,00 100 343 2 559 Lenkow (Proprietary) Limited 100,00 2 000 4 034 3 828 Lubrication Specialists (Proprietary) Limited 100,00 200 (953) (107)Luderitz Bay Shipping & Forwarding (Proprietary) Limited 100,00 100 547 621 Manica Group Namibia (Proprietary) Limited 100,00 279 187 5 754 201 Matador Enterprises (Proprietary) Limited 100,00 1 000 (3 462) 17 179 Minolco (Namibia) (Proprietary) Limited 100,00 100 7 536 5 660 Monjasa Namibia (Proprietary) Limited 57,00 100 2 149 1 923 Mukorob Pelagic Processors (Proprietary) Limited 69,55 19 014 – 815 Namfish Pelagic Industries (Proprietary) Limited 69,55 100 – 1 874 Namibian Sea Products (Proprietary) Limited 69,55 46 997 005 (76) 8 552 Namsov Fishing Enterprises (Proprietary) Limited 69,55 100 000 52 888 194 284 Namsov Industrial Properties (Proprietary) Limited 69,55 1 000 160 201 Ocean Fresh (Proprietary) Limited 69,55 2 – –Orca Marine (Proprietary) Limited 60,00 100 397 (106)Pesca Fresca Limitada* 34,08 152 486 – –Rennies Travel (Namibia) (Proprietary) Limited 100,00 1 000 5 167 4 840 Sarusas Development Corporation (Proprietary) Limited 69,55 1 000 207 (311)Starting Right Investments Two Zero Five (Proprietary) Limited 69,55 100 2 412 2 301 Taeuber & Corssen SWA (Proprietary) Limited 100,00 6 000 000 (276) (10 960)T&C Properties Namibia (Proprietary) Limited 100,00 8 000 7 564 6 562 T&C Trading (Proprietary) Limited 100,00 4 000 508 2 248 Tetelestai Mariculture (Proprietary) Limited 69,55 100 (4 431) 2 298 Trachurus Fishing (Proprietary) Limited^ 69,55 60 524 15 238 (7 792)Twafika Fishing Enterprises (Proprietary) Limited 52,23 1 000 (64) 591 United Fishing Enterprises (Proprietary) Limited 69,55 4 000 (31 475) (21 156)Voltex (Namibia) (Proprietary) Limited 100,00 100 (10 347) (12 848)Waltons Namibia (Proprietary) Limited 100,00 6 4 774 8 233 Walvis Bay Stevedoring Company (Proprietary) Limited 55,00 100 (5 043) (2 014)Walvis Bay Airport Services (Proprietary) Limited 100,00 5 000 (583) (135)Woker Freight Services (Proprietary) Limited 100,00 28 636 1 508 5 608

Directors’ report – continuedfor the year ended 30 June 2017

GROUP OVERVIEW



STATEMENTS


Total comprehensive income/(loss)

Effective holding

%

Issued share capital

N$2017

N$’0002016

N$’000

Associates

Carapau Fishing (Proprietary) Limited 17,39 4 000 9 667 30 137

Industria Alimentar Carnes De Moçambique Limitada 27,82 117 834 328 11 206 2 021

Namibia Bureau de Change (Proprietary) Limited 49,00 500 000 1 907 2 781

Joint venture!OE#GAB Fishing Enterprises (Proprietary) Limited 34,78 100 – –

* 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 a direct shareholding of 84% in Trachurus Fishing (Proprietary) Limited.^^ The Group has a direct shareholding of 99% in Frigocentre Limitada through its de facto control of Pesca Fresca Limitada.^^^ The company’s name was changed from Shelfco Investments One Five Three (Proprietary) Limited.^^^^ The company is managed by Simply Pesche (Proprietary) Limited through a management agreement.

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 secretaryThe 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

T Weitz (Financial director) Appointed: 18 August 2011 Namibian

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

JD Davis Appointed: 1 December 2015 South African

HP Meijer Appointed: 17 February 2017 South African

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

Business address Postal address1 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 24 August 2017.


1. Summary of significant accounting policies The 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 preparation The 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 biological assets and 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 2017. 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 38.

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.

3. New and revised accounting standards The Group adopted the following amendments to standards with an initial application date of 1 July 2016:

IFRS 7 Financial Instruments: Disclosures – Amendments resulting from Annual Improvements 2012 – 2014 Cycle IFRS 7 was amended to clarify when servicing arrangements are in the scope of its disclosure requirements on continuing involvement in transferred financial

assets in cases when they are derecognised in their entirety.

The Group did not transfer any financial asset during the current financial year. Future transfers will be treated based on the amended standard.

IFRS 11 Joint Arrangements – Amendments regarding the accounting for acquisitions of an interest in a joint operation The amendments require business combination accounting to be applied to acquisitions of interests in joint operations that constitute a business combination.

The Group did not acquire any interest in joint operations. Future acquisitions will be treated based on the amended standard.

IFRS 12 and IFRS 10 Consolidated Financial Statements – Amendments regarding the application of the consolidation exception IASB issued Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28). Clarity was given on how to account for

investment entities.

The Group does not have investment entities, as a result the amendment had no impact.

IAS 1 Amendments resulting from the disclosure initiative It has been made explicit that companies should disaggregate line items on the statement of financial position and in the statement of profit or loss and other

comprehensive income if this provides helpful information to users and those line items specified by IAS 1 on the statement of financial position can be aggregated if they are immaterial.

The adoption of the changes to this statement has had no impact on the Group. No adjustment has been made to the results for the year ended 30 June 2017.

IAS 16 Property, plant and equipment – Amendments bringing bearer plants into the scope of IAS 16 Bearer plants are now in the scope of IAS 16 Property, Plant and Equipment for measurement and disclosure purposes.

The amendment had no impact on the Group.

IAS 19 Employee Benefits – Amendments resulting from Annual Improvements 2012 – 2014 Cycle IAS was amended to clarify that high-quality corporate bonds or government bonds used in determining the discount rate should be issued in the same currency

in which benefits are to be paid.

The amendment had no material impact on the Group.

Accounting policiesfor the year ended 30 June 2017

GROUP OVERVIEW



STATEMENTS


3. New and revised accounting standards (continued) IAS 27 Separate Financial Statements Amendments reinstating the equity method as an accounting option for investments in subsidiaries, joint ventures and associates in an entity’s separate financial

statements.


IAS 38 Intangible Assets The amendment introduces a rebuttable presumption that the use of revenue-based amortisation methods for intangible assets is inappropriate.


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) Subsidiaries Subsidiaries 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.

(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 investees The Group’s interests in equity-accounted investees comprise interests in associates and a joint venture.

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.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement and have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

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 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 reporting Operating 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 balances Foreign 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.

(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.

Accounting policies – continuedfor the year ended 30 June 2017

GROUP OVERVIEW



STATEMENTS


7. Property, plant and equipment All 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

Fishing vessels dry docking and fishing equipment 3 – 10 years

Computer equipment 3 years

Fishing vessels 25 – 55 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.

Refits of fishing vessels which relate to separate components are capitalised when incurred, and amortised over their useful lives.

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 annually on 31 March each year.

(b) Trademarks and licences and fishing quota rights Acquired trademarks and licences are shown at historical cost. Fishing quota rights, 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 (5 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.



8. Intangible assets (continued)(c) Computer software

Costs 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 does 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 give 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 measurement Initial measurement Regular 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.

Derecognition Financial 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 measurement Financial 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.

GROUP OVERVIEW



STATEMENTS


9. Financial instruments (continued)9.2.2 Recognition and measurement Initial measurement Financial 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.

Derecognition Financial 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 measurement Financial 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 instruments Financial 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 assets The Company and the Group assesses 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 uses 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 first assesses whether objective evidence of impairment exists.

(a) Assets carried at amortised cost The 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 income In 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 impairment If, 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. Inventories Inventories 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. Biological assets Biological assets consist of oysters.

Biological assets are stated at fair value less estimated point-of-sale cost. The fair value of oysters is determined using the present value of expected net cash flows from the oysters, discounted using a pre-tax market determined rate. Fair value changes are recognised in profit or loss. All expenses incurred in establishing and maintaining the assets are recognised in profit or loss. All costs incurred in acquiring biological assets are capitalised. Finance charges are not capitalised.

14. Trade and other receivables Trade 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.

15. Cash and cash equivalents Cash 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.

16. Impairment of non-financial assets Assets 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.

17. Non-current assets held-for-sale Non-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 the 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.

18. Share capital and equity An 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.

GROUP OVERVIEW



STATEMENTS


19. Current and deferred income tax The 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.

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.

20. Trade and other payables Trade 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.

21. Provisions and contingent liabilities Provisions 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.

22. Borrowings Borrowings 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.

23. Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the sale of goods 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.



23. Revenue recognition (continued) 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 services Revenue 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 income Interest 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 income Rental income is recognised over the period of the lease on a straight-line basis.

(v) Dividend income Dividends are recognised when the right to receive payment is established.

(vi) Commissions and fees earned Where 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.

24. Finance charges Finance 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.

25. Leases Leases 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 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.

26. Employee benefits Short-term employee benefits The 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 plans The 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 plans Payments to defined contribution retirement benefit plans are charged as an expense as they fall due.

GROUP OVERVIEW



STATEMENTS


26. Employee benefits (continued) Other post-employment obligations Certain 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 obligations The 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.

27. Dividends to shareholders Dividends to shareholders are accounted for once they have been approved by the board of directors.

28. Share-based payments The 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.

29. BEE ownership transaction Equity 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.

30. Headline earnings per share The Group presents headline earnings per share in accordance with the SAICA circular 2 of 2015.


Statements of financial positionat 30 June

Group Company

Notes2017

N$’0002016

N$’0002017

N$’0002016

N$’000

ASSETSNon-current assetsProperty, plant and equipment 1 790 606 864 213 – –

Intangible assets 2 37 574 47 685 – –

Goodwill 2 244 254 244 311 – –

Investment in subsidiaries 3 – – 363 377 363 377

Investment in joint venture 4 – – – –

Investment in associates 4 90 228 83 374 – –

Other financial assets 6 – 12 714 – 12 714

Deferred tax assets 13 1 772 7 956 – –

Trade and other receivables 9 36 203 55 445 – –

1 200 637 1 315 698 363 377 376 091

Current assetsInventories 7 528 233 486 560 – –

Biological assets 8 2 705 3 413 – –

Short-term portion of lease receivables 5 34 608 – –

Other financial assets 6 12 714 – 12 714 Trade and other receivables 9 556 946 557 088 477 401 514 198

Current tax assets 25 6 042 1 927 – –

Cash and cash equivalents 10 742 986 744 167 36 917 7 153

1 849 660 1 793 763 527 032 521 351

Assets classified as held for sale 11 36 553 50 563 – –

1 886 213 1 844 326 527 032 521 351

Total assets 3 086 850 3 160 024 890 409 897 442

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 45 026 52 946 16 988 16 988

Retained earnings 1 137 488 1 133 355 210 948 217 980

1 844 906 1 848 693 890 328 897 360

Non-controlling interest in equity 3 384 874 455 218 – –

Total equity 2 229 780 2 303 911 890 328 897 360

Non-current liabilitiesDeferred tax liabilities 13 137 857 170 946 – –

Post-employment obligations 14 16 956 16 036 – –

Borrowings 16 10 230 17 398 – –

Operating lease liability 30 1 444 1 070 – –

166 487 205 450 – –

Current liabilitiesTrade and other payables 15 459 200 409 092 45 36

Borrowings 16 229 223 232 186 – –

Short-term portion of finance lease liability 31 34 608 – –

Current tax payable 25 2 126 8 777 36 46

690 583 650 663 81 82

Total liabilities 857 070 856 113 81 82

Total equity and liabilities 3 086 850 3 160 024 890 409 897 442

GROUP OVERVIEW



STATEMENTS


Group Company

Notes2017

N$’0002016

N$’0002017

N$’0002016

N$’000

Revenue 18 3 776 448 3 858 596 39 254 158 818

Cost of sales 18 (3 204 399) (3 127 135) – –

Gross profit 572 049 731 461 39 254 158 818

Administration expenses (485 416) (451 642) (432) (841)

Other income 19 12 302 13 020 – –

Operating profit 21 98 935 292 839 38 822 157 977

Finance income 22 34 419 35 883 1 139 1 437

Finance costs 23 (21 962) (18 750) – –

Share of (loss)/profit of a joint venture 4 (82) 2 873 – –

Share of profit of associates 4 7 834 10 517 – –

Profit before income tax 119 144 323 362 39 961 159 414

Income tax expense 25 (57 326) (88 248) (363) (458)

Profit for the year 61 818 235 114 39 598 158 956

Other comprehensive incomeItems that will not be reclassified to profit or loss

Actuarial gains/(losses) on post-employment obligations 14 153 (212) – –

Items that are or may be reclassified subsequently to profit or loss

Movement on translation of foreign subsidiary (16 851) 24 198 – –

Total comprehensive income for the year 45 120 259 100 39 598 158 956

Profit attributable to:Equity holders of the Company 50 610 184 222 39 598 158 956

Non-controlling interest 11 208 50 892 – –

61 818 235 114 39 598 158 956

Comprehensive income attributable to:Equity holders of the Company 42 483 195 867 39 598 158 956

Non-controlling interest 2 637 63 233 – –

45 120 259 100 39 598 158 956

Basic earnings per share (cents) 28 23,88 86,92

Statements of profit or loss and other comprehensive incomefor the year ended 30 June


Statements of changes in equityfor the year ended 30 June

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 2015 2 120 660 272 1 074 061 19 909 2 200 16 988 1 775 550 502 480 2 278 030

Comprehensive incomeProfit for the year – – 184 222 – – – 184 222 50 892 235 114

Other comprehensive income for the year – – (212) 11 857 – – 11 645 12 341 23 986

Total comprehensive income – – 184 010 11 857 – – 195 867 63 233 259 100

Transactions with equity holdersEmployee share option scheme – value of employee services – – – – 1 992 – 1 992 – 1 992

Acquisition of non-controlling without a change in control (10 261) (10 261) (60 141) (70 402)

Dividends declared and paid – – (114 455) – – – (114 455) (50 354) (164 809)

Total transactions with equity holders – – (124 716) – 1 992 – (122 724) (110 495) (233 219)

Balance at 30 June 2016 2 120 660 272 1 133 355 31 766 4 192 16 988 1 848 693 455 218 2 303 911


Other comprehensive income for the year – – 153 (8 280) – – (8 127) (8 571) (16 698)

Total comprehensive income – – 50 763 (8 280) – – 42 483 2 637 45 120

Transactions with equity holdersEmployee 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 1 137 488 23 486 4 552 16 988 1 844 906 384 874 2 229 780



Share premium

N$’000

Retained earnings

N$’000

BEE share-based


TotalN$’000

CompanyBalance at 1 July 2015 2 120 660 272 173 479 16 988 852 859

Comprehensive incomeProfit for the year – – 158 956 – 158 956

Total comprehensive income – – 158 956 – 158 956

Transactions with equity holdersDividend declared and paid – – (114 455) – (114 455)

Total transactions with equity holders – – (114 455) – (114 455)

Balance at 30 June 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

GROUP OVERVIEW



STATEMENTS




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 2015 2 120 660 272 1 074 061 19 909 2 200 16 988 1 775 550 502 480 2 278 030


Other comprehensive income for the year – – (212) 11 857 – – 11 645 12 341 23 986

Total comprehensive income – – 184 010 11 857 – – 195 867 63 233 259 100

Transactions with equity holdersEmployee share option scheme – value of employee services – – – – 1 992 – 1 992 – 1 992

Acquisition of non-controlling without a change in control (10 261) (10 261) (60 141) (70 402)


Total transactions with equity holders – – (124 716) – 1 992 – (122 724) (110 495) (233 219)

Balance at 30 June 2016 2 120 660 272 1 133 355 31 766 4 192 16 988 1 848 693 455 218 2 303 911


Other comprehensive income for the year – – 153 (8 280) – – (8 127) (8 571) (16 698)

Total comprehensive income – – 50 763 (8 280) – – 42 483 2 637 45 120

Transactions with equity holdersEmployee 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 1 137 488 23 486 4 552 16 988 1 844 906 384 874 2 229 780



Share premium

N$’000

Retained earnings

N$’000

BEE share-based


TotalN$’000

CompanyBalance at 1 July 2015 2 120 660 272 173 479 16 988 852 859





Balance at 30 June 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


Statements of cash flowsfor the year ended 30 June

Group Company

Notes2017

N$’0002016

N$’0002017

N$’0002016

N$’000

Cash flows from operating activitiesCash receipts from customers 3 780 160 3 896 969 – –

Cash paid to suppliers and employees (3 595 093) (3 508 782) (401) (837)

Cash generated/(absorbed) by operations 32 185 067 388 187 (401) (837)

Finance income 22 34 419 35 883 1 139 1 437

Finance costs (excluding post-retirement medical obligation) 23 (20 746) (17 671) – –

Dividends received 19 4 007 2 175 39 254 158 818

Dividends paid to equity holders 29 (46 630) (114 455) (46 630) (114 455)

Dividends paid to non-controlling interest (72 981) (50 354) – –

Income tax paid 33 (95 296) (108 914) (373) (432)

Net cash (outflow)/inflow from operating activities (12 160) 134 851 (7 011) 44 531

Cash flows from investing activitiesAcquisition of subsidiary, net of cash acquired 39 – (205 334) – –

Acquisition of equity-accounted investees 4 – (70 467) – –

Intangible assets acquired 2 (1 488) (25 211) – –

Property, plant and equipment acquired 1 (58 550) (120 669) – –

Proceeds on disposal of property, plant and equipment 68 556 8 032 – –

Net cash inflow/(outflow) from investing activities 8 518 (413 649) – –

Cash flows from financing activitiesBorrowings (repaid)/raised 16 (12 751) 24 015 – –

Repayments from/(loans to) related parties 9 19 474 44 219 36 775 (234 877)

Acquisition of non-controlling interest – (14 372) – –

Net cash inflow/(outflow) from financing activities 6 723 53 862 36 775 (234 877)

Net increase/(decrease) in cash and cash equivalents 3 081 (224 936) 29 764 (190 346)

Foreign exchange differences 35 (6 882) 6 973 – –

Cash and cash equivalentsBalance at the beginning of the year 673 070 891 033 7 153 197 499

Cash and cash equivalentsBalance at the end of the year 10 669 269 673 070 36 917 7 153

GROUP OVERVIEW



STATEMENTS


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 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)Reclassified as held-for-sale – (36 553) – (36 553)Transfers 190 – (190) –

Closing net book amount 379 567 214 558 196 481 790 606

Cost 425 461 263 615 472 409 1 161 485 Accumulated depreciation (45 894) (49 057) (275 928) (370 879)


Group30 June 2016Opening net book amount 273 335 338 415 216 918 828 668

Acquisition through a business combination 69 000 – 3 107 72 107

Exchange differences 8 071 (1 560) 5 915 12 426

Additions 34 931 7 552 78 186 120 669

Disposals (999) (34 616) (12 177) (47 792)

Depreciation (10 255) (4 848) (56 199) (71 302)

Reclassified as held-for-sale – (50 563) – (50 563)

Transfers 4 639 – (4 639) –


Cost 413 502 313 932 480 885 1 208 319

Accumulated depreciation (34 780) (59 552) (249 774) (344 106)


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 Ford Finance South Africa for the amount of N$6,0 million by registering a mortgage bond over Erf 52. The property has a carrying value of N$83,5 million.

A fishing vessel with a carrying value of N$33,9 million has been pledged as security on a loan from Banco Fomento de Angola.

Leasehold improvement payable to Oryx Properties Limited is secured by a leasehold property with a carrying value of N$3,3 million.


Notes to the financial statements – continuedfor the year ended 30 June

Plant andmachinery

N$’000Vehicles

N$’000

Office furniture/ equipment

and computerequipment

N$’000Total

N$’000

1. Property, plant and equipment (continued)1.3 Other assets consist of:

Group30 June 2017Opening net book amount 165 055 35 299 30 757 231 111 Acquisition through a business combination (note 39) 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)



Acquisition through a business combination 2 152 – 955 3 107

Exchange differences 5 111 629 175 5 915

Additions 52 453 11 512 14 221 78 186

Disposals (10 302) (1 431) (444) (12 177)

Depreciation charge for the year (39 298) (8 810) (8 091) (56 199)

Transfers 18 – (4 657) (4 639)


Cost 317 056 83 125 80 704 480 885

Accumulated depreciation (152 001) (47 826) (49 947) (249 774)


GROUP OVERVIEW



STATEMENTS


GoodwillN$’000

Computer software,

trademarks and warehouse

developmentN$’000

Fishing rights

N$’000Total

N$’000

2. Intangible assets2.1 Group

30 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)



Impairment (1 709) – – (1 709)

Acquisition through a business combination 127 102 214 – 127 316

Disposals – – (390) (390)

Exchange differences – – 4 677 4 677

Additions – 25 211 – 25 211

Amortisation – (3 923) (5 825) (9 748)


Cost 246 020 37 905 84 524 368 449

Impairment (1 709) – (168) (1 877)

Accumulated amortisation – (11 966) (62 610) (74 576)




Group Company

2017N$’000

2016N$’000

2017N$’000

2016N$’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 19 886 – –

Freight and Logistics 40 228 40 228 – –

Food and Distribution 49 881 49 913 – –

Commercial Industrial and Products 5 448 5 473 – –

Properties 6 163 6 163 – –

Automotive 122 648 122 648 – –

244 254 244 311 – –

2.3 Goodwill impairment testsThe recoverable amount of a CGU is determined based on value-in-use calculations. The carrying amounts of the fishing, freight and logistics, food and distribution, commercial industrial and products, properties and automotive divisions were determined to be lower than their recoverable amounts of N$2 billion, N$175 million, N$384 million, N$114 million, N$90 million and N$249 million respectively. 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 have 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% 6% – 8%

Growth in perpetuity after forecast period 4% – 8% 6% – 8%

Internal rate of return (WACC)/discount rate 11% 11%

3. Investment in subsidiariesUnlisted share investmentBidvest Namibia Fisheries Holdings (Proprietary) Limited 359 363 359 363

Bidvest Namibia Foreign Exchange (Proprietary) Limited – –

Bidvest Namibia Commercial Holdings (Proprietary) Limited – –

Bidvest Namibia Management Services (Proprietary) Limited – –

Bidvest Namibia Information Technology (Proprietary) Limited – –

Bidvest Namibia Property Holdings (Proprietary) Limited 4 014 4 014

363 377 363 377

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.

GROUP OVERVIEW



STATEMENTS


3. Investment in subsidiaries (continued)Composition of the Group

Place of incorporation and operation

Number of wholly owned subsidiaries

Segments 2017 2016

Fishing Walvis Bay 13 13

Freight and Logistics Walvis Bay 5 5

Services Windhoek 4 3

Industrial and Commercial Products Windhoek 6 5

Food and Distribution Windhoek 4 4

Automotive Windhoek 3 3

Corporate Services Windhoek 8 8

Number of non-wholly owned subsidiaries

Segments 2017 2016

Fishing Walvis Bay 5 4

Freight and logistics Walvis Bay 3 3

Proportion of non-controlling interests

Comprehensive income/(loss) allocated to non-controlling

interestsAccumulated non-controlling

interests

2017 20162017

N$’0002016

N$’0002017

N$’0002016

N$’000

Details of non-wholly owned subsidiaries that have material non-controlling interestsName of subsidiaryNamsov Fishing Enterprises (Proprietary) Limited 30,45% 30,45% 10 768 53 795 333 172 371 125

Glenryck South Africa (Proprietary) Limited 49,00% 0,00% (719) – (719) –

Pesca Fresca Limitada 51,00% 51,00% 1 337 5 050 47 503 77 472

Trachurus Fishing (Proprietary) Limited 0,00% 0,00% – (7 974) – –

Twafika Fishing Enterprises (Proprietary) Limited 24,90% 24,90% (16) 147 (54) 817

Walvis Bay Stevedoring Company (Proprietary) Limited 45,00% 45,00% (1 246) (911) 3 432 4 678

Monjasa Namibia (Proprietary) Limited 36,44% 36,44% 924 827 1 367 1 222

Orca Marine (Proprietary) Limited 40,00% 40,00% 160 (42) 63 (96)

Oshivelelwa Trading Enterprises (Proprietary) Limited 50,00% 50,00% – – – –

11 208 50 892 384 764 455 218

The Group has de facto control over Pesca Fresca Limitada, incorporated in Angola, as a result of the management agreement.



Proportion of ownership interest

2017 2016 2017 2016

4. Investment in joint venture and associatesJoint venture!OE#GAB Fishing Enterprises (Proprietary) Limited 50% 50%

N$’000 N$’000 N$’000 N$’000

The Group’s share of (loss)/profit (82) 2 873 – –

Carrying amount of the Group’s interest in joint venture – – – –

Proportion of ownership interest

2017 2016 2017 2016

AssociatesCarapau Fishing (Proprietary) Limited 25% 25%

Namibia Bureau de Change (Proprietary) Limited 49% 49%

Industria Alimentar Carnes Moçambique Limitada 40% 40%

N$’000 N$’000 N$’000 N$’000

Share of profitCarapau Fishing (Proprietary) Limited 2 417 8 346 – –

Namibia Bureau de Change (Proprietary) Limited 935 1 363 – –

Industria Alimentar Carnes Moçambique Limitada 4 482 808 – –

The Group’s share of profit 7 834 10 517 – –

Investment in associatesCarapau Fishing (Proprietary) Limited 13 154 10 736 – –

Namibia Bureau de Change (Proprietary) Limited 9 794 9 840 – –

Industria Alimentar Carnes Moçambique Limitada 67 280 62 798 – –

Carrying amount of the Group’s interest in associates 90 228 83 374 – –

Reconciliation of movement in associates

Opening balance 83 374 3 203 – –

Acquired during the year – 70 467 – –

Share of current year profit 7 834 10 517 – –

Dividend received (980) – – –

Elimination of unrealised (profit)/loss – (813) – –

Carrying amount of the Group’s interest in associates 90 228 83 374 – –

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.

GROUP OVERVIEW



STATEMENTS


TotalN$’000

Carapau Fishing

(Proprietary) LimitedN$’000

Namibia Bureau

de Change (Proprietary)

LimitedN$’000

Industria Alimentar

Carnes Moçambique

LimitadaN$’000

4. Investment in joint venture and associates (continued)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


Other comprehensive income for the year – – – –


Summarised financial information of the associates are set out below:30 June 2016Current assets 226 220 39 028 12 420 174 772

Non-current assets 261 310 138 832 567 121 911

Current liabilities 218 162 54 006 808 163 348

Non-current liabilities 76 838 75 906 16 916

Revenue 385 519 236 682 10 365 138 472


Other comprehensive income for the year – – – –


The above financial information has been equity accounted in the Group’s results. The joint venture is not material to the Group and therefore no disclosure was made thereof. Industria Alimentar Carnes Moçambique Limitada’s functional currency is Mozambique Metical.



Group Company

2017N$’000

2016N$’000

2017N$’000

2016N$’000

5. Finance lease receivablesGross finance lease receivable– within one year 34 619 – –

Amounts receivable under finance leases 34 619 – –

Less: Unearned finance income – (11) – –

Present value of finance lease receivables 34 608 – –

Current assets 34 608 – –

34 608 – –

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 while 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 assetsLoan to other entity (i) – 12 714 – 12 714

Current other financial assetsLoan to other entity (i) 12 714 – 12 714 –

(i) 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$12,5 million (2016: N$11,5 million) at the Namibian prime rate of 10,75% (2016: 10,75%).

7. InventoriesFinished goods 314 299 302 456 – –

Raw material 6 416 – – –

New vehicles 70 739 74 159 – –

Used vehicles 26 399 16 346 – –

Demonstration vehicles 22 772 15 540 – –

Parts and accessories 99 173 90 022 – –

539 798 498 523 – –

Less: Provision for obsolete inventory (11 565) (11 963) – –

528 233 486 560 – –

Carrying value of inventory at net realisable value (included above) 14 217 10 625 – –

The cost of inventories recognised as an expense during the year was N$2,4 billion (2016: N$2,4 billion). Financial interest registered over the vehicles to secure the floor plan liabilities.

8. Biological assetsOpening balance 3 413 4 064 – –

Value changes caused by

Birth and growth of animals 9 898 9 493 – –

Increase due to purchases 1 249 2 408 – –

Mortalities (4 854) (4 887) – –

Samples/donations (10) (21) – –

(Loss)/profit due change in fair value (167) 538 – –

Decrease due to sales (6 824) (8 182) – –

Oysters 2 705 3 413 – –

Current 2 705 3 413 – –

Biological asset consists of oysters.

The Group is 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 extensive processes in place to monitor and mitigate these risks.

GROUP OVERVIEW



STATEMENTS


Group Company

2017N$’000

2016N$’000

2017N$’000

2016N$’000

9. Trade and other receivablesTrade receivables – third parties 384 660 374 560 – –

Trade receivables – related parties (note 36) 13 011 14 772 – –

Less: Allowance for impairment (15 189) (19 233) – –

Trade receivable 382 482 370 099 – –

Related-party loans (note 36) 66 418 83 708 477 398 514 173

Other receivables 87 805 87 438 3 25

Less: Allowance for impairment (24 758) (26 132) – –

Financial instruments trade and other receivables 511 947 515 113 477 401 514 198

Prepayments 25 467 54 312 – –

Receiver of Revenue – VAT 55 735 43 108 – –

Non-financial instruments trade and other receivables 81 202 97 420 – –

593 149 612 533 477 401 514 198

Non-current assets 36 203 55 445 – –

Current assets 556 946 557 088 477 401 514 198

593 149 612 533 477 401 514 198

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$102,9 million (2016: N$66,4 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.

The ageing of amounts past due but not impaired is as follows:

Past due 0 – 30 days 57 830 47 529 – –

Past due 31 – 90 days 29 653 13 647 – –

Past due 91 – 180 days 9 214 1 879 – –

Past due 181 + days 6 243 3 387 – –

102 940 66 442 – –

Movement in the Group’s allowance for impairment of trade receivables are as follows:

Balance at the beginning of the year (19 233) (11 170) – –

Net provisions raised during the year (107) (5 277) – –

Bad debts written off during the year 3 818 2 072 – –

Exchange difference 550 (771) – –

Assumed through a business combination (217) (4 087) – –

(15 189) (19 233) – –

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$11,5 million (2016: N$26 113) were placed under liquidation during the year.

At 30 June 2017 the carrying amounts of accounts receivable approximate their fair values due to the short-term maturities of these assets.

Another receivable amounting to N$13,6 million (2016: N$13,6 million) was reflected as a receivable from Merit Investments (Proprietary) Limited at year-end relating to facilitation fees paid in respect of the quota purchased from the Namibia Fish Consumption Promotion Trust. Management have provided for this receivable as they regard it as doubtful. In addition other receivables include an amount of N$11,2 million (2016: N$12,5 million), which has been fully provided for, relating to amounts owed by RJ Industrial for assets removed by the interim management of Pesca Fresca Limitada during prior years in which they had assumed the role of management of that company.



Group Company

2017N$’000

2016N$’000

2017N$’000

2016N$’000

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 705 290 717 355 620 7 153

Money market fundsBank Windhoek Corporate Fund 19 497 14 862 18 167 –

Old Mutual Unit Trust Corporate Fund 18 130 – 18 130 –

IJG Securities EMH Prescient Unit Trust Fund 69 11 950 – –

742 986 744 167 36 917 7 153

Bank overdraft (note 16) (73 717) (71 097) – –

Cash and cash equivalents 669 269 673 070 36 917 7 153

Bank overdraft facilities amounting to N$280,7 million (2016: N$254,0 million) are secured by suretyships given by the Group (37.1(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 2017, the carrying amounts of cash and cash equivalents approximate the fair values due to its short-term maturities.

11. Asset classified as held-for-saleFishing vessel 36 553 50 563 – –

The Group disposed of a fishing vessel, MFV Namibian Star, during the current financial period which was classified as held-for-sale for the first time in the 2016 financial period, a profit of N$9,7 million was recognised on the sale of the vessel. The Group intends to dispose of a fishing vessel within the fishing segment, MFV Sunfish, in the next 12 months. The fishing vessel is being sold as the Group does not have a sufficient fishing quota. No impairment loss was recognised on reclassification of the fishing vessel as the directors expect that the fair value less costs to sell to be higher than the carrying amount. No liabilities are associated with the asset held-for-sale.

12. Share capital, premium and reservesShare capitalAuthorised share capital

540 000 000 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 beginning of 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

GROUP OVERVIEW



STATEMENTS


Group Company

2017N$’000

2016N$’000

2017N$’000

2016N$’000

13. Deferred tax assets/(liabilities)Deferred taxation assets 1 772 7 956 – –

Deferred taxation liabilities (137 857) (170 946) – –

(136 085) (162 990) – –

Movement in deferred tax balances:Opening balance (162 990) (192 410) – –

Change in rate – Namibian rate change – 5 965 – –

Acquisition through a business combination (182) (2 678) – –

Per statement of comprehensive income (temporary differences) (note 25) 27 061 27 177 – –

Exchange rate difference – 22 – –

Prior period adjustment 26 (666) – –

Recognised directly in equity – (400) – –

Closing balance (136 085) (162 990) – –

AssetsN$’000

LiabilitiesN$’000

NetN$’000

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)

Tax effect of temporary differences – 2016Capital allowances on property, plant and equipment (4 521) (181 740) (186 261)

Capital allowances on intangible assets (5) (692) (697)

Computed tax losses 11 996 34 103 46 099

Trade and other receivables (737) (11 906) (12 643)

Trade, other payables and provisions 16 958 974

Staff-related allowances and liabilities 1 265 4 906 6 171

Inventory related (86) (14 645) (14 731)

Operating lease liabilities 28 469 497

Unrealised foreign exchange difference – (2 453) (2 453)

Other – 54 54

Net temporary differences subject to deferred tax 7 956 (170 946) (162 990)

Deferred income taxes are calculated on all temporary differences under the liability method using a tax rate of 32% (2016: 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$36,0 million (2016: N$12,3 million) in respect of losses amounting to N$112,5 million (2016: N$38,4 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

2017N$’000

2016N$’000

2017N$’000

2016N$’000

14. Post-employment obligationsTotal liability recognised in the statement of financial position:Post-retirement medical benefit obligation 13 841 13 447 – –

Statutory severance benefits 3 115 2 589 – –

16 956 16 036 – –

14.1 Post-retirement medical benefit obligationOpening balance 13 447 12 800 – –

Imputed interest costs 1 216 1 079 – –

Payments to medical aid in respect of retired employees (829) (785) – –

Actuarial (gains)/losses (153) 212 – –

Current service cost 160 141 – –

Actuarially determined present value of total obligation 13 841 13 447 – –

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 2016 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 9,60% 9,60% – –

Healthcare cost inflation 7,00% 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:

2017 2016

N$’000% change in liability N$’000

% change in liability

Sensitivity – GroupBase liability as at 30 June 2017 13 841 13 447

Discount rate +1% 12 480 (10) 12 125 (10)

Discount rate -1% 15 479 12 15 038 12

Medical subsidy inflation rate +1% 15 492 12 15 051 12

Medical subsidy inflation rate -1% 12 447 (10) 12 093 (10)

Post-retirement mortality PA(90) – 3 years 14 353 4 13 944 4

Post-retirement mortality PA(90) – 1 years 13 335 (4) 12 955 (4)

GROUP OVERVIEW



STATEMENTS


Group Company

2017 2016 2017 2016

14. Post-employment obligations (continued)14.1 Post-retirement medical benefit obligation (continued)

Current employees 11 12

Retirees 30 30

Total number of beneficiaries 41 42

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 3 115 2 589 – –

Changes in the present value of the defined statutory severance benefitOpening defined benefit obligation 2 589 3 020 – –

Total expense – as shown below 1 061 (152) – –

Benefit payments (535) (279) – –

Closing defined benefit obligation 3 115 2 589 – –

The amounts recognised in the statement of comprehensive income are as follows:

Interest cost 137 187 – –

Actuarial loss (2 198) (3 206) – –

Current service cost 3 122 2 867 – –

1 061 (152) – –

The principal actuarial assumptions used for accounting purposes are:

Discount rate 9,89% 10,50% n/a n/a

Salary increase rate 6,50% 6,10% n/a n/a

N$’000 N$’000 N$’000 N$’000

15. Trade and other payablesTrade payables – third parties 335 567 270 988 – –

Trade payables – related parties (note 36) 11 336 12 657 – –

Accruals 46 025 49 954 – –

Unpresented cheques 3 090 2 339 45 36

Contingent consideration – 5 499 – –

Customer deposits 12 410 4 993 – –

Financial instruments trade and other payables 408 428 346 430 45 36

Accruals – employee liabilities 41 559 52 181 – –

Receiver of Revenue – VAT 9 213 10 481 – –

Non-financial instruments trade and other payables 50 772 62 662 – –

459 200 409 092 45 36

At 30 June 2017, the carrying amounts of accounts payable approximate their fair values due to the short-term maturities of these liabilities.



Group Company

2017N$’000

2016N$’000

2017N$’000

2016N$’000

16. BorrowingsBank overdraft (note 10) 73 717 71 097 – –

Floor plan liabilities (i) 148 186 152 812 – –

Secure bank loan (ii) 12 927 20 739 – –

Finance lease liabilities (iii) 3 634 3 947 – –

Other 989 989 – –

239 453 249 584 – –

Non-current assets 10 230 17 398 – –

Current assets 229 223 232 186 – –

239 453 249 584 – –

(i) The floor plans were 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 2%), 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$50 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 provided by Banco Fomento de Angola and carries interest at a fixed rate of 11,00% and is repayable over four years. The loan is secured by a fishing vessel, MFV St Padarn, which has a book value of N$33,9 million. The fair value of the loan is N$12,9 million at the Namibian prime rate of 10,75%.

(iii) Capitalised finance lease liabilities carry interest at the Namibian prime rate of 10,75% and have repayment terms of between three and seven years. The capitalised finance lease liabilities are secured by a leasehold property with a carrying amount of N$3,3 million.

17. Contingencies and commitmentsCapital commitmentsThe following commitments were entered into in respect of capital expenditure at year-end:

Approved by directors and contracted 16 214 8 416 – –

Approved by directors but not yet contracted 82 398 65 076 – –

The committed expenditure relates to property, plant and equipment and will be financed by available resources and bank facilities.

Commitment to provide loans – 7 458 – 7 458

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$19,8 million.

Rennies Travel (Namibia) (Proprietary) Limited issued travel related vouchers of 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$1,9 million in favour of its service providers. The customers were not invoiced for these vouchers at the reporting date.

Namsov Fishing Enterprises (Proprietary) Limited is defending a legal case brought by a former employee. If the defence against the case is unsuccessful, then cost claimed by the former employee could amount to N$18 million.

GROUP OVERVIEW



STATEMENTS


Group Company

2017N$’000

2016N$’000

2017N$’000

2016N$’000

17. Contingencies and commitments (continued)Guarantees by third partiesGuarantee facilities have been arranged for the Group with Standard Bank Namibia Limited and First National Bank Namibia Limited to a maximum exposure of: 98 335 70 982 289 455 232 360

Guarantees in favour of:Customs and Excise 64 383 60 283 – –

Maersk (Proprietary) Limited 650 650 – –

Erongo Regional Electricity Distributor 148 148 – –

Philip Morris South Africa (Proprietary) Limited – 3 100 – –

Namibian Ports Authority 5 100 6 300 – –

Suretyships for bank overdrafts 26 070 – 289 455 232 360

Other 1 984 501 – –

98 335 70 982 289 455 232 360

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$73,7 million (2016: N$71,1 million) (note 16). The security for the floor plan liabilities provided by the Company at the reporting date amounted to N$148,2 million (2016: N$152,8 million).

The Group has issued letters of support to third parties for various subsidiaries in the Group amounting to N$38,5 million.

18. RevenueSale of goods 3 411 569 3 554 954 – –

Rendering of services 310 441 249 810 – –

Dividend income – subsidiaries – – 38 000 157 880

Dividend income – local – – 1 254 938

Commissions and fees earned 54 438 53 832 – –

3 776 448 3 858 596 39 254 158 818

Revenue is derived as follows:Revenue including disbursements 4 232 823 4 275 949 39 254 158 818

Disbursements on behalf of principals and clients (456 375) (417 353) – –

3 776 448 3 858 596 39 254 158 818

Related cost of sales:Sale of goods 3 003 415 2 929 966 – –

Rendering of services 179 982 176 979 – –

Commissions and fees earned 21 002 20 190 – –

3 204 399 3 127 135 – –

19. Other incomeProfit on disposal of property, plant and equipment 6 331 218 – –

Dividend income – local 4 007 2 175 – –

Other 1 964 10 627 – –

12 302 13 020 – –

20. 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 (0,66%) and Ovanhu Investments (Proprietary) Limited (14,80%). 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.



Group Company

2017N$’000

2016N$’000

2017N$’000

2016N$’000

21. Operating profitOperating profit from continuing operations is stated after charging:Auditors’ remunerationAudit fees 7 687 7 719 – – Other services 665 336 – –

8 352 8 055 – –

Share-based payments 360 1 992 – –Depreciation and impairment of property, plant and equipment 71 955 71 302 – –Amortisation and impairment of intangible assets 9 475 11 457 – –Statutory severance benefits – current service cost 3 122 2 867 – –Non-executive directors’ compensationAttendance fees 1 750 1 272 – 407Operating lease chargesPremises 25 956 20 015 – –Equipment and vehicles 8 660 8 070 – –

34 616 28 085 – –

Foreign exchange losses/(gains)Realised 3 068 (2 269) – –Unrealised 14 109 (2 876) – –

17 177 (5 145) – –

Expenses by natureAdministrative fees 4 099 3 528 – –Auditor’s remuneration 8 352 8 055 – –Bad debts written off 3 818 2 072 – –Inventory, materials and consumables 2 430 355 2 375 922 – –Depreciation, amortisation and impairments 81 430 84 469 – –Non-executive directors’ attendance fees 1 750 1 272 – 407Employee salaries and related benefits 597 977 595 728 – –Foreign exchange gains 17 177 (5 145) – –Fuel and lubricants for fishing vessels 120 947 111 878 – –Operating lease charges 34 616 28 085 – –Other expenses 201 424 238 535 432 434 Port-related costs, cold storage costs 52 575 51 591 – –Quota-related fees 135 115 82 608 – –Royalties paid 180 180 – –

Total cost of sales and administration expenses by nature 3 689 815 3 578 777 432 841

22. Finance incomeInterest income – bank 23 198 22 461 387 672 Interest income – related party 8 607 11 489 62 73 Interest income – other 2 614 1 933 690 692

34 419 35 883 1 139 1 437

Interest income is derived from loans and receivables at amortised cost.

23. Finance costsCash itemsInterest expense – bank overdraft 5 710 6 210 – –Interest expense – floor plan 13 612 10 239 – –Interest expense – other 1 424 1 222 – –

20 746 17 671 – – Interest expense is derived from financial liabilities at amortised cost.Non-cash itemInterest expense – post-retirement medical obligation 1 216 1 079 – –

21 962 18 750 – –

GROUP OVERVIEW



STATEMENTS


Group Company

2017N$’000

2016N$’000

2017N$’000

2016N$’000

24. Staff and retirement benefit costsSalaries and wages paid to employees 567 133 565 509 – –

Employer contributions to retirement benefits of current employees 30 844 30 219 – –

597 977 595 728 – –

At 30 June 2017 approximately 3 481 (2016: 2 738) staff members were employed by the Group.

25. Income taxNamibian normal taxCurrent income tax – current year 82 332 120 725 363 458

– prior year (103) – – –

82 229 120 725 363 458

Deferred income tax – current year (27 061) (27 177) – –

– change in rate – (5 965) – –

– prior year (26) 665 – –

(27 087) (32 477) – –

Non-Namibian taxForeign withholding taxes 2 184 – – –

57 326 88 248 363 458

Reconciliation of the tax expenseReconciliation between applicable tax charge and the profit before tax:

Profit before tax 119 144 323 362 39 961 159 414

Tax at the applicable tax rate of 32% (2016: 32%) 38 126 103 476 12 788 51 012

Exempt income (8 893) (20 034) (12 561) (50 822)

Change in tax rate – (5 965) – –

Prior period adjustment (129) 665 – –

Non-deductible expenses 374 1 523 136 137

Lower foreign tax rates 77 – – –

Withholding tax on foreign income 2 184 – – –

Deferred tax asset not raised 25 587 8 583 – –

57 326 88 248 363 328

Income tax assets and liabilitiesCurrent tax assetsTax refunds receivable 6 042 1 927 – –

Current tax liabilitiesIncome tax payable 2 126 8 777 36 46

26. Retirement benefit informationRetirement fundThe total value of contributions to the Bidvest Namibia Limited Retirement Fund during the year amounted to:

Members’ contributions 15 277 15 612 – –

Employer’s contributions 30 844 30 219 – –

46 121 45 831 – –

This is a defined contribution plan fund and is regulated by the Pension Fund Act. The fund is valued actuarially on an annual basis. The fund was last valued at 30 June 2016 and its assets were found to exceed its actuarially calculated liabilities.

Medical aid fundsThe total value of company contributions during the year 22 767 22 677 – –



27. 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$9,20 (2016: N$10,50).

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:

2017 2016

Number

Average price

(N$) Number

Average price

(N$)

Option series 1Beginning of the year 1 461 000 11,30 1 576 000 11,30

Granted during the year – –

Resignations (302 000) (115 000)

End of year 1 159 000 1 461 000

Option series 2Beginning of the year 1 327 500 9,90 1 477 500 9,90

Granted during the year – –

Resignations (222 000) (150 000)

End of year 1 105 500 1 327 500

2017N$’000

2016N$’000

Equity-settled share-based payment reserveBalance at the beginning of the year 4 192 2 200

Share-based payment expense recognised relating to share options 1 325 2 180

Resignations (965) (188)

Balance at the end of year 4 552 4 192

GROUP OVERVIEW



STATEMENTS


Group Company

2017’000

2016’000

2017’000

2016’000

28. 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$’000 N$’000 N$’000 N$’000Attributable earningsBasic earnings per share are based on profit attributable to equity holders of the Company. 50 610 184 222 – –

Basic earnings per share (cents) 23,88 86,92 – –

Headline earningsProfit attributable to equity holders of the Company 50 610 184 222 – – Profit on the disposal of property, plant and equipment (4 300) (1 023) – – Bargain purchase (140) – – – Impairment of intangible assets 57 2 267 – – Non-controlling interest in equity 1 262 (2 850) – –

47 489 182 616 – –

Headline earnings per share (cents) 22,41 86,16 – –

No unissued shares have a dilutive effect.

29. DividendsAn interim dividend for the year amounting to N$8,5 million (2016: N$42,4 million) was declared and paid to shareholders registered on 10 March 2017. This amounted to an interim dividend paid of 4,0 cents per share, based on ordinary shares in issue of 211 953 002.

A final dividend amounting to N$12,7 million (2016: N$38,2 million) was declared payable to shareholders registered on 1 September 2017, payable on 22 September 2017. This amounts to a final dividend payable of 6,0 cents per share, based on ordinary shares in issue of 211 953 002.

Group Company

2017N$’000

2016N$’000

2017N$’000

2016N$’000

30. 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 1 828 1 580 – – Less: Current portion included in trade and other payables (384) (510) – –

Non-current portion 1 444 1 070 – –

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 20 467 24 650 – – Due between one year and five years 36 244 28 952 – – Due thereafter 1 804 3 414 – –

58 515 57 016 – –

EquipmentDue within one year 629 2 073 – – Due between one year and five years 95 4 044 – –

724 6 117 – –

Exposure 59 239 63 133 – –



Group Company

2017N$’000

2016N$’000

2017N$’000

2016N$’000

31. Finance lease liabilityMinimum lease payments due

Due within one year 34 619 – –

34 619 – –

Less: Future finance charges – (11) – –

Present value of minimum lease payments 34 608 – –

Current liabilities 34 608 – –

34 608 – –

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 while 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.

32. Cash generated/(absorbed) by operationsProfit before income tax 119 144 323 362 39 961 159 414

Adjustments for:Depreciation and impairment on property, plant and equipment 71 955 71 302 – –

Amortisation and impairment of intangible assets 9 475 11 457 – –

Share-based payments reserve 360 1 992 – –

Profit on disposal of property, plant and equipment (6 331) (218) – –

Adjustment of intangible assets – 558 – –

Finance income (34 419) (35 883) (1 139) (1 437)

Dividends received (4 007) (2 175) (39 254) (158 818)

Finance costs (excluding retirement medical obligation) 20 746 17 671 – –

Bargain purchase (140) – – –

Increase/(decrease) in statutory severance obligation 526 (431) – –

(Decrease) in post-retirement medical obligation (669) (644) – –

Interest on post-retirement medical obligation 1 216 1 079 – –

Movement in associates (6 854) (10 517) – –

Movement in joint venture 82 (2 873) – –

Increase in lease charges for straight-lining of leases 374 220 – –

Changes in working capital (excluding the effects of business acquisitions and disposals and exchange rate differences):(Increase)/decrease inventories (43 635) 100 455 – –

Decrease biological assets 708 651 – –

Decrease/(increase) trade and other receivables 3 712 38 373 22 (5)

Increase/(decrease) trade and other payables 52 824 (126 192) 9 9

185 067 388 187 (401) (837)

33. Income tax paidBalance receivable/(due) at the beginning of the year (6 850) 6 321 (46) (20)

Current tax for the year (82 229) (120 725) (363) (458)

Withholding tax on foreign income (2 184) – – –

Assumed in a business combination (117) (1 360) – –

Balance due/(receivable) at the end of the year (3 916) 6 850 36 46

(95 296) (108 914) (373) (432)

34. Non-cash flow movementProceeds on disposal of property, plant and equipment – 56 030 – –

Capitalised leased asset 463 – – –

463 56 030 – –

GROUP OVERVIEW



STATEMENTS


Group

2017N$’000

2016N$’000

35. Effects of exchange rate fluctuations on cash and cash equivalents – GroupProperty, plant and equipment 13 311 (12 426)

Intangibles 2 181 (4 677)

Movement in foreign currency translation reserve (8 316) 11 857

Minority shareholders (8 571) 12 341

Net borrowings (1 182) (1 029)

Trade and other receivables (550) (4 926)

Inventories 1 990 (2 151)

Trade and other payables (5 745) 7 984

(6 882) 6 973

36. 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.

Group Company

2017N$’000

2016N$’000

2017N$’000

2016N$’000

The following persons are included as key management:

SI Kankondi

M Samson

GS Hough

T Weitz

T Mberirua

H Feris

W Schuckmann

Non-executive directors’ compensationAttendance fees 1 750 1 272 – –

Executive directors and key management compensationSalaries and other short-term employee benefits 16 250 20 894 – –

Receivable from related partiesLoans to related partiesBidvest Namibia Commercial Holdings (Proprietary) Limited – (i) – – 317 148 335 404

Bidvest Namibia Management Services (Proprietary) Limited – (i) – – 10 734 24 753

Bidvest Namibia Property Holdings (Proprietary) Limited – (i) – – 144 995 148 995

Bidvest Namibia Information Technology (Proprietary) Limited – (i) – – 4 521 5 021

Carapau Fishing (Proprietary) Limited – (iv) 66 418 83 708 – –

66 418 83 708 477 398 514 173

Non-current asset 36 203 55 445 – –

Current asset 30 215 28 263 – –

66 418 83 708 – –

The Group has provided a loan to Carapau Fishing (Proprietary) Limited, an associate company, in which it holds a 25% interest. The loan carries interest at the Namibian prime rate of 10,75% and is repayable over 60 months and is secured by a marine bond over a fishing vessel owned by the associate company that has a carrying amount of N$151,3 million.



Group Company

2017N$’000

2016N$’000

2017N$’000

2016N$’000

36. Related-party balances and transactions (continued)Trade receivablesAlimentar Carnes De Moçambique Limitada – (iv) – 7 448 – –

Bidvest Car Rental (Namibia) (Proprietary) Limited – (ii) 155 15 – –

Bidvest Paperplus (Proprietary) Limited – (ii) – 11 – –


CaterPlus (Proprietary) Limited – (ii) 453 – – –

Express Air Services (Namibia) (Proprietary) Limited – (ii) – 93 – –

Manica Africa (Proprietary) Limited – (ii) 166 3 – –

Minolco (Proprietary) Limited – (ii) 50 146 – –

Namibia Bureau de Change (Proprietary) Limited – (iv) 13 139 – –

Pureau Fresh Water Company (Proprietary) Limited – (ii) – 2 – –

Royalserve Cleaning (Proprietary) Limited – (ii) – 154 – –

Safcor Freight (Proprietary) Limited – (ii) 9 196 – –

Solid State Power (Proprietary) Limited – (ii) 723 5 – –

13 011 14 772 – –

Payable to related parties

Trade payablesBid Corporate Services (Proprietary) Limited – (ii) 162 126 – –

Bid Information Exchange (Proprietary) Limited – (ii) – 1 387 – –

BidOffice Furniture Manufacturing (Proprietary) Limited – (ii) 262 85 – –

Bidserv Industrial Products (Proprietary) Limited – (ii) – 18 – –

Bidvest Bakery Solutions (Proprietary) Limited – (ii) – 170 – –



Blue Marine Frozen Foods (Proprietary) Limited – (ii) 1 425 2 070 – –

Carapau Fishing (Proprietary) Limited – (iv) 1 429 – – –

Cecil Nurse (Proprietary) Limited – (ii) 386 362 – –

Express Freight (Namibia) (Proprietary) Limited – (ii) – 1 – –

G Fox Swaziland (Proprietary) Limited – (ii) 39 – – –

Hortors Stationery (Proprietary) Limited – (ii) 41 45 – –

Kolok (Proprietary) Limited – (ii) 3 593 1 072 – –

Lithotech Sales Cape (Proprietary) Limited – (ii) 47 33 – –

Lithotech Listing and Logistics (Proprietary) Limited – (ii) 121 165 – –

Minolco (Proprietary) Limited – (ii) 1 012 – – –

Plumblink (South Africa) (Proprietary) Limited – (ii) 516 202 – –

Pureau Fresh Water Company (Proprietary) Limited – (ii) – –

Rennies Travel (Proprietary) Limited – (ii) 49 –

Royalserve Cleaning (Proprietary) Limited – (ii) – 41

Silveray Statmark Company (Proprietary) Limited – (ii) 354 1 282 – –

Sea World (Proprietary) Limited – (ii) – 575 – –

Seating (Proprietary) Limited – (ii) 375 550 – –

Steiner Hygiene (Proprietary) Limited – (ii) 261 344 – –

Voltex (Proprietary) Limited – (ii) 756 3 421 – –

Waltons (Proprietary) Limited – (ii) 431 462 – –

11 336 12 657 – –

GROUP OVERVIEW



STATEMENTS


Group Company

2017N$’000

2016N$’000

2017N$’000

2016N$’000

36. Related-party balances and transactions (continued)Sales to related partiesAlimentar Carnes De Moçambique Limitada – (iv) 138 555 70 578 – –


Bidvest Food Services (Proprietary) Limited – (ii) 1 786 426 – –

Bidvest Paperplus (Proprietary) Limited – (ii) 10 10 – –

Manica Africa (Proprietary) Limited – (ii) 346 241 – –

Patleys (Proprietary) Limited – (ii) – 14 900 – –

Royalserve Cleaning (Proprietary) Limited – (ii) 2 006 1 399 – –

Safcor Freight (Proprietary) Limited – (ii) 688 1 142 – –

Solid State Power (Proprietary) Limited – (ii) – 4 – –

Minolco (Proprietary) Limited – (ii) 25 3 – –


Foreal Investments (Proprietary) Limited – (iii) 1 905 2 792 – –

151 044 94 003 – –

Finance incomeCarapau Fishing (Proprietary) Limited – (iv) 8 607 11 489 – –

Purchases from related partiesBidvest Afcom (Proprietary) Limited – (ii) 207 1 460 – –

Bid Information Exchange (Proprietary) Limited – (ii) – 11 – –

Bidoffice Furniture Manufacturing (Proprietary) Limited – (ii) 4 090 3 213 – –

Bidserv Industrial Products (Proprietary) Limited – (ii) – 183 – –

Bidvest Bakery Solutions (Proprietary) Limited – (ii) 1 226 3 358 – –

Bidvest Car Rental (Namibia) (Proprietary) Limited – (ii) 6 181 5 621 – –


Blue Marine Frozen Foods (Proprietary) Limited – (ii) 18 314 19 338 – –


Cecil Nurse (Proprietary) Limited – (ii) 5 306 4 903 – –

Crown National (Proprietary) Limited – (ii) 25 – – –

Dauphin Office Seating S.A. (Proprietary) Limited – (ii) 46 552 – –

G Fox Swaziland (Proprietary) Limited – (ii) 196 – – –

Hortors Stationery (Proprietary) Limited – (ii) 1 492 791 – –

Kolok (Proprietary) Limited – (ii) 54 683 94 303 – –

Lithotech Listing and Logistics (Proprietary) Limited – (ii) 804 1 054 – –

Lithotech Sales Cape (Proprietary) Limited – (ii) 231 211 – –

Minolco (Proprietary) Limited – (ii) 21 236 27 063 – –

Namibia Bureau de Change (Proprietary) Limited – (iv) – 661 – –

Plumblink (South Africa) (Proprietary) Limited – (ii) 4 519 2 087 – –

Royalserve Cleaning (Proprietary) Limited – (ii) 70 35 – –

Sea World (Proprietary) Limited – (ii) 10 600 7 502 – –

Seating (Proprietary) Limited – (ii) 4 012 3 679 – –

Silveray Statmark Company (Proprietary) Limited – (ii) 10 385 7 288 – –

South African Diaries (Proprietary) Limited – (ii) – 55 – –

Steiner Hygiene (Proprietary) Limited – (ii) 1 952 2 199 – –

Voltex (Proprietary) Limited – (ii) 12 047 12 581 – –

Waltons (Proprietary) Limited – (ii) 8 483 12 508 – –

178 622 219 269 – –



Group Company

2017N$’000

2016N$’000

2017N$’000

2016N$’000

36. Related-party balances and transactions (continued)Administration and royalty fees paid to related partiesBid Corporate Services (Proprietary) Limited (royalties) – (ii) 290 267 – –Bid Corporate Services (Proprietary) Limited (fees) – (ii) 960 880 – –McCarthy Limited – (ii) 338 – – –Waltons (Proprietary) Limited – (ii) 486 489 – –Cecil Nurse (Proprietary) Limited – (ii) 1 386 1 307 – –Minolco (Proprietary) Limited – (ii) 819 765 – –

4 279 3 708 – –

Administration fees received from related partiesCarapau Fishing (Proprietary) Limited – (iv) 11 260 11 984 – –

Quota rental fees paid to related partiesSpoto Fishing (Proprietary) Limited 14 210 13 887 – –

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. These transactions occurred under terms that are market related.(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.

37. Financial risk management37.1 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 2017, 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

US dollardenominated

’000

Angola kwanzadenominated

’000Totals in

N$’000

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

GroupAs at 30 June 2016Other borrowings – – (248 889) (20 740)Trade and other receivables 270 3 147 – 39 547 Cash and cash equivalents 323 2 617 835 894 138 548 Trade and other payables – (2 518) – (14 772)

593 3 246 587 005 142 583

Equivalent in N$ 9 223 58 919 74 441 142 583

GROUP OVERVIEW



STATEMENTS


37. Financial risk management (continued)37.1 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, 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

2017%

2016%

2017%

2016%

Cash and cash equivalents 3,76 5,39 6,78 4,17

Bank overdraft 8,75 8,75 – –

Other financial assets 5,50 5,50 – –

Floor plan liabilities 10,25 – 11,50 10,25 – 11,50 – –

Secure bank loan 11,00 11,00 – –

Cash flow sensitivity analysis for floating interest rate bearing instruments.

A 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 2016.

Group Company

Effect on profit and equity Effect on profit and equity

2017N$’000

2016N$’000

2017N$’000

2016N$’000

Cash and cash equivalents 7 430 7 442 369 72

Floor plan liabilities 1 482 1 528 – –

Other financial assets 127 127 127 127

Secure bank loan 129 207 – –




(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. The Group’s credit risk relating to its loan to related party is mitigated as the loan to the associate company is secured by a marine bond over a fishing vessel owned by the associate company. Bidvest Namibia Limited issued suretyships of 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

2017N$’000

2016N$’000

2017N$’000

2016N$’000

Trade receivables 382 482 370 099 – –

Related-party loans 66 418 83 708 477 398 514 173

Other financial assets 12 714 12 714 12 714 12 714


Trade and other receivables 524 661 527 827 490 115 526 912

Cash and cash equivalents 742 986 744 167 36 917 7 153

1 267 647 1 271 994 527 032 534 065

The ageing of the components of trade receivables at year-end was:

Gross2017

N$’000

Impairment2017

N$’000

Gross2016

N$’000

Impairment2016

N$’000

GroupTrade debtorsNot past due 279 715 (174) 303 698 (40)

Past due 1 – 30 days 57 916 (86) 48 301 (772)

Past due 31 – 90 days 29 855 (201) 14 012 (365)

Past due 91 – 180 days 10 930 (1 715) 5 088 (3 210)

Past due more than 180 days 19 255 (13 013) 18 233 (14 846)

397 671 (15 189) 389 332 (19 233)

CompanyTrade debtorsNot past due – – – –

Other debtors

Not past due 3 – 25 –

GROUP OVERVIEW



STATEMENTS



(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 creditworthy 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

2017N$’000

2016N$’000

2017N$’000

2016N$’000

Counterparties without external credit ratings net of provision for impairment:

Other financial assets 12 714 12 714 – –


Loan to related party 66 418 83 708 – –

Angolan banks 125 023 95 181 – –

Trade receivables 382 482 370 099 – –

649 684 623 008 3 20

Counterparties with strong external credit ratings:

Cash and cash equivalents and money market fundsCash on hand 1 018 1 162 – –

Old Mutual Corporate Fund 18 130 – 18 130 –

Bank Windhoek Corporate Fund 19 497 14 862 18 167 –

IJG Securities EMH Prescient Unit Trust Fund 69 11 950 – –

First National Bank of Namibia Limited 28 236 41 605 – –

Nedbank Namibia Limited 7 783 26 620 – –

Standard Bank Namibia Limited 512 240 519 369 620 7 113

Bank Windhoek Limited 30 990 33 418 – 40

617 963 648 986 36 917 7 153

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 (2016: 38 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$79,2 million (2016: N$66,2 million) 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.

(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.




(c) Liquidity risk (continued)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 1and 2 years

N$’000

Between 2and 5 years

N$’000

Over5 yearsN$’000

Interestadjustment

N$’000Total

N$’000

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

GroupAs at 30 June 2016Bank overdraft 71 097 – – – – 71 097

Borrowings 162 648 8 226 18 981 792 (12 160) 178 487

Trade and other payables 346 430 – – – – 346 430

580 175 8 226 18 981 792 (12 160) 596 014

CompanyAs at 30 June 2017Trade and other payables 45 – – – – 45

As at 30 June 2016Trade and other payables 36 – – – – 36

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

2017N$’000

2016N$’000

2017N$’000

2016N$’000

Unsecured bank overdraft facilities, reviewed annually and payable on demandStandard Bank Namibia Limited 225 200 198 500 – –

First National Bank of Namibia Limited 55 000 55 000 – –

Bank Windhoek Limited 500 500 – –

280 700 254 000 – –

Secured bank overdraft facilities, reviewed annually and payable on demandNedbank Namibia Limited – 8 500 – –

– 8 500 – –

37.2 Capital risk managementThe 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.

GROUP OVERVIEW



STATEMENTS


37. Financial risk management (continued)Loans and

receivables atamortised

costN$’000

Financialliabilities at

amortisedcost

N$’000Total

N$’000

37.3 Financial instruments per categoryGroupAs 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

GroupAs at 30 June 2016Financial assetsTrade and other receivables 431 405 – 431 405

Related-party loans 83 708 – 83 708

Other financial assets 12 714 – 12 714

Cash and cash equivalents 744 167 – 744 167

Financial liabilitiesBank overdraft – (71 097) (71 097)

Borrowings – (178 487) (178 487)

Trade and other payables – (346 430) (346 430)

Total financial instruments 1 271 994 (596 014) 675 980

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

CompanyAs at 30 June 2016Financial assetsTrade and other receivables 514 198 – 514 198

Other financial assets 12 714 – 12 714

Cash and cash equivalents 7 153 – 7 153

Financial liabilitiesTrade and other payables – (36) (36)

Total financial instruments 534 065 (36) 534 029



37. Financial risk management (continued)37.4 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 measurements Recurring 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 measurements Non-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 3 Fair 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.

GROUP OVERVIEW



STATEMENTS


37. Financial risk management (continued)37.4 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 1 Market prices Fair value based on willing buyer and willing seller basis

Market prices Not applicable

During the year there were no changes in the valuation techniques used by the Group.

38. 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.

Fishing vesselsThe residual values of fishing vessels are based on valuations performed by independent external valuators. Revaluations are made with sufficient regularity to ensure that the carrying amounts do not differ materially from the revalued amounts. The residual values are calculated using management’s best estimates and using the exchange rates at the reporting date.

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.

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 Moçambique Limitada has been adversely impacted by the depreciation of the local Mozambique currency and as result, at year-end the Group share of the net asset value of the Company was less than the carrying value of the investment at year-end by N$19 million. The fair value determined using the cash flow projections of the operating activities and the fair value of the land and buildings of the associate was compared to the carrying value, based on this, management is confident that the net asset value will improve therefore no impairment of the investment was deemed necessary.



39. Acquisition of subsidiaryThe Group acquired 100% of the shares of Bidvest Prestige Cleaning (Proprietary) Limited (Prestige) therefore obtaining control of the company with effect 1 June 2017. Prestige was acquired from The Bidvest Group. Prestige is a company operating in Namibia. Taking control of Prestige will enable the management of Bidvest Namibia to take over the decision-making of the company.

Identifiable assets acquired and liabilities assumedThe following table summarises the acquisition date fair value of assets and liabilities acquired.

N$’000

Property, plant and equipment 862Inventories 31Trade and other receivables 971Cash and cash equivalents 1 604

Total assets 3 468Deferred tax liabilities 182Taxation 117Trade and other payables 3 029

Total liabilities 3 328

Total identifiable net assets acquired 140

Bargain purchaseNegative goodwill arising from the acquisition has been recognised as follows.

Consideration transferred –Fair value of identifiable net assets (140)

Bargain purchase (140)

The bargain purchase gain has been included in administration expenses.

40. Events after the end of the reporting periodThe Group through its subsidiary, Taeuber & Corssen SWA (Proprietary) Limited, lost a distribution agreement with Parmalat with effect from 31 August 2017.

41. Standards and amendments issuedAt 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, incorporating requirements for classification and measurement, impairment, general hedge accounting and derecognition.

1 January 2018

IFRS 15 Clarifications to IFRS 15 1 January 2018

IFRS 16 Amendments as the result of the first comprehensive review 1 January 2019

IAS 12 Amendments regarding the recognition of deferred tax assets for unrealised losses 1 January 2017

IFRS 10 and IAS 28

Sale or contribution of assets between an investor and its associate or joint venture To be determined

GROUP OVERVIEW



STATEMENTS


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


Administration

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) 229 920

Sponsor and corporate adviserPSG 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

Koep & Partners33 Schanzen RoadWindhoek, Namibia(PO Box 3516, Windhoek, Namibia)Telephone: +264 (61) 382 800Facsimile: +264 (61) 382 888

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] [email protected]

Ethics lineFree call: 0800 28 68 82Cellular free call: 081 91 847Email: [email protected]

www.bidvestnamibia.com.na

Namibia


Documents

Annual Integrated Report 2017 - My · 2017-10-24 · Annual Integrated Report 2017 Bidvest Namibia Annual Integrated Report ... Cranes de Mozambique 40% – 30 June Total assets –