TRANSACTION CAPITAL YEAR END RESULTS 2016 7 6 GROUP PORTFOLIO MIX 1. Attributable to the group, excluding minority interest 2. High yielding loan to Bayport repaid in Jan 2016 Headline

TRANSACTION CAPITAL YEAR END RESULTSFOR THE YEAR ENDED 30 SEPTEMBER

CO

NTE

NTS

pg 01UNAUDITED RESULTS PRESENTATION

pg 31AUDITED FINANCIAL RESULTS

pg 55UNAUDITED GROUP DATA SHEET

pg 67FORMULAE AND DEFINITIONS

FOR THE YEAR ENDED 30 SEPTEMBERFOR THE YEAR ENDED 30 SEPTEMBER

TRANSACTION CAPITAL RESULTS PRESENTATION

2 TRANSACT ION CAP I TAL

RESULTS PRESENTAT ION 2016

TRANSACTION CAPITAL YEAR END RESULTS PRESENTATIONFOR THE YEAR ENDED 30 SEPTEMBER

TRANSACT ION CAP I TAL


3

2



4

GROUPSTRATEGIC & OPERATIONAL HIGHLIGHTS

UNGEARED & LIQUIDBALANCE SHEET

After acquisitions• Capital adequacy >35%• Liquid capital ~R300 million• Continue to invest in organic & acquisitive

opportunities

ACQUISITION ACTIVITY

3 acquisitions within Transaction Capital Risk Services (TCRS)• 100% of Recoveries Corporation • 75% of Road Cover • Majority share of The Beancounter• Accretive utilisation of capital

DEBT CAPITAL MARKETS

Uninterrupted access to the debt capital markets • SA Taxi raised >R3.5 billion in FY16 • R513 million Transsec 2 tap issuance• 2017 almost fully funded

Future initiatives• Created R2 billion domestic note

programme• Accessed >R1.5 billion of debt funding

from European DFIs since 2010• Successfully penetrating global DFI

markets

Credit ratings• S&P upgraded Transsec 1 (SA Taxi)• GCR awarded zaA- rating to

Transaction Capital’s domestic note programme

STRATEGIC POSITIONINGOF OPERATING DIVISIONS

• Occupy leading market positions • Highly defensive businesses• Experienced & skilled management teams • Continued investment in technology

& data• Platforms to develop new products

& expand into new markets

IMPROVED DIVIDEND POLICY

• Total dividend per share ▲36% to 30cps• Total dividend cover of 2.7 times

(FY12: 3.8 times; FY15 3.1 times)• Dividend policy amended to

2.5 to 3 times• Previously 3 to 4 times

3

TRANSACTION CAPITAL GROUP STRUCTURE2016 FINANCIAL & OPERATIONAL HIGHLIGHTS (FY16 vs. FY15)

1. Headline earnings attributable to the group, excluding minority interest | 2. Market capitalisation as at 18 November 2016

A vertically integrated taxi platform utilising specialist capabilities & enriched proprietary data to judiciously deploy developmental credit & allied business services to empower SMEs, thus ensuring the sustainability of a fundamental mode of transport

A technology-led, data-driven provider of customer management & capital solutions through a scalable & bespoke platform, enabling its clients to mitigate risk through their customer engagement lifecycle

CEO: Terry Kier, 9-year group tenure

R249 MILLION¹

HEADLINEEARNINGS

R7.2 BILLION

GROSS LOANS& ADVANCES

R315 MILLION

NON-INTERESTREVENUE

CEO: Dave McAlpin, 8-year group tenure

R168 MILLION

HEADLINEEARNINGS

R728 MILLION

PURCHASEDBOOK DEBTS

77.4%COST-TO-INCOMERATIO

71.1%ASSET TURNOVER RATIO

CEO: David Hurwitz, 11-year group tenure

R458 MILLION¹

HEADLINEEARNINGS

80.6 CPS

HEADLINEPER SHARE

2.7 TIMES

TOTAL DIVIDENDCOVER

30 CPS

TOTAL DIVIDENDPER SHARE

R8.3 BILLION²

MARKET CAPITALISATION

3.1%CREDIT-LOSS RATIO

25.5%

RETURN ON EQUITY

17.4%

NON-PERFORMING LOANRATIO

16.9%

RETURN ON EQUITY

2 395EMPLOYEES

31.5%

RETURN ON EQUITY

▲20% ▲15% ▲17% ▲17% ▲25% ▲30%

▼6%▲36%▲30% FY15 3.9%

FY15 16.7% FY15 27.8%▼27%

FY15 28.4% FY15 18.2%

5

GROUPSTRATEGIC & OPERATIONAL HIGHLIGHTS

RESTRUCTURE OFFOUNDERS SHAREHOLDING

Founders’ individual shareholdings consolidated into a single holding structure:• Committed shareholder of reference• Displays founders’ continued confidence

in Transaction Capital• Enhances Transaction Capital’s rating in

capital markets ORGANISATIONAL CHANGES

Independent non-executive directors: • Dave Woollam not available for

re-election post March 2017 AGM• Appointment of Kuben Pillay & Moses

KgosanaExecutive directors: • Ronen Goldstein appointed as FD

CONDITIONAL SHARE PLAN

• Approved on 20 October 2016• Mechanism to attract & retain key

executives• Provides alignment with shareholders• Executives participate in value created

within their division & at a group level

EARLY ADOPTION OF IFRS 9

• More conservative provisioning methodology

• Higher quality of earnings • Removes uncertainty re implementation

of IFRS 9 on future results & ratios



5

NOTES



7

6

GROUP PORTFOLIO MIX

1. Attributable to the group, excluding minority interest2. High yielding loan to Bayport repaid in Jan 2016

Headline earningsRm Growth Contribution

2016 2015 2016 2016 2015SA Taxi¹ 249 208 20% 54% 53%TCRS 168 134 25% 37% 34%GEO 41 51 (20%)² 9% 13%Total 458 393 17% 100% 100%Cents per share 80.6 69.0 17%

54%

37%9%

SA Taxi TCRS GEO

53%

34%

13%

2015IFRS 9

2016IFRS 9

COMPOSITION OF EARNINGS POST ACQUISITIONS TO BE MORE EVENLY WEIGHTED

8

ENVIRONMENT

MACRO-ECONOMIC ENVIRONMENT • Macro- & socio-economic challenges constrain growth in South Africa

› Political: political instability & potential sovereign rating downgrade

› Social: persistent low employment levels with low real wage growth; continued social unrest

› Economic: currency related inflation; drought-related food inflation

› Household debt-to-disposable income ratio remains elevated at 75%

› Consumer & SME sector of economy remains vulnerable

REGULATORY ENVIRONMENT• More stable regulatory environment• DTI’s caps on credit life insurance pricing & NCR’s regulations re affordability assessments,

prescription, caps on interest rates & fees› SA Taxi: unaffected by these changes or proposals

› TCRS: regulations not conducive to credit extension, which in the medium term may impact volume of matters handed over. TCRS continues to expand into non-NCA regulated adjacent markets, including public sector, telecommunications & insurance sectors

• Authenticated collections: legislation delayed to October 2019

DEFENSIVE & MARKET LEADING POSITIONING ENABLES TRANSACTION CAPITAL TO GROW EARNINGSDESPITE A CHALLENGING & LOW GROWTH SOUTH AFRICAN ECONOMIC ENVIRONMENT



7

NOTES



10

CAPABILITIES

• Deep knowledge of its industry & chosen market segments• Strong management team

• Scalable business platforms, whose competitiveness &value can be developed & enhanced by Transaction Capital

• Intellectual property & expertise that can augment ourexisting capabilities & facilitate access to new verticals

CULTURE

• Alignment with our values• Client & solutions-orientated

• Entrepreneurial management that are co-invested• Strong relationships with its clients

• Experienced teams whose skills will benefit our own

ACQUISITION CRITERIA

MARKET POSITION

• Established platforms with robust organic growth• Delivering predictable, quality earnings with high cash conversion

rates • Niche market participant within Transaction Capital’s

existing or adjacent market segments• Potential for consolidating market position• Strong organic & acquisitive growth prospects • International targets that will grow portfolio &

diversify risk, & contribute hard currency earnings

BUSINESS MODEL

• Scalable business model with a proven track record• Focused business with potential for high return on equity• Driven by systems, data & analytics, & ability to

augment these with our technology capabilities• Ease of integration into our existing businesses• Ability to enhance our current services to clients• Scalable business platforms, whose competitiveness &

value can be developed & enhanced by Transaction Capital

INVESTMENT CRITERIATarget quality assets operating within

our focussed market segments that will enable Transaction Capital to enhance its

capabilities, & whose business model& value can be enhanced through

active management

11

ACQUISITIONS

• Founded in 1991 in Melbourne Australia• Provides consumer customer management solutions to a well-diversified blue-chip client base

within government, insurance, banking & finance, utilities & telecommunications market sectors • Services include debt recovery solutions, insurance claims recoveries, customer services, & litigation management services• Offices in Melbourne & Sydney, Australia; & a near shore call centre & corporate services centre in Suva, Fiji• Employs ~600 staff members• Maximum purchase consideration of A$43 million

› A$33 million payable upfront; A$10 million subject to achieving profit warranties› PE multiple 8x

• Rationale: › Strong entry point into Australian market, earning hard currency based returns› High quality business generating predictable earnings with high cash conversion rates & strong organic growth prospects› Australian debt collection industry highly fragmented (with ~20 companies accounting for 85% of the market) providing an

opportunity to expand acquisitively› Transaction Capital will apply its expertise & capital to the purchase of non-performing loan portfolios in Australia› Recoveries Corporation’s expertise in insurance recoveries will be applied to Transaction Capital’s fledgling insurance

recoveries business in South Africa

100% OF RECOVERIES CORPORATION GROUP LIMITED



9

NOTES



12

ACQUISITIONS

• Founded in 2005• Offers proprietary value-added services to mass consumer market on a subscription basis• Services include administration of RAF claims, COID Act claims & claims against various road agencies & municipalities• Products typically embedded in other subscription-based products in insurance, banking, motor & retail industries, & are also

distributed to consumers via direct marketing channels• Rationale:

› Strong entry point into the value added services market in South Africa › High quality business generating predictable earnings with high cash conversion rates & strong organic growth prospects › Partnering exceptional entrepreneur to develop the business to its full potential› Offer Road Cover’s products to mass consumer market through TCRS’s existing banking, retail, insurance, telecommunications clients› Road Cover’s products can be offered into SA Taxi’s client & commuter base› Efficiencies achieved with regard to client origination, management (i.e. payment) & collection processes

75% OF ROAD COVER

• Founded in 2008• Provides full outsourced accounting, payroll and tax services through “software-as-a-service” technology to SMEs on a monthly retainer basis• Rationale:

› Early entry into the specialist, cloud accounting services market in South Africa› Well-positioned with solid organic growth prospects › Partnering young entrepreneur to develop the business to its full potential› Augment Transaction Capital Business Solutions’ existing offering to its SME clients› Working capital funding offered into The Beancounter’s SME client base

MAJORITY SHARE OF THE BEANCOUNTER

14

TRANSACTION CAPITAL RISK SERVICES (TCRS)

TRANSACTION CAPITALRISK SERVICES IS A TECHNOLOGY-LED,DATA-DRIVEN PROVIDER OFCUSTOMER MANAGEMENTAND CAPITAL SOLUTIONSTHROUGH A SCALABLEAND BESPOKE PLATFORM,ENABLING ITS CLIENTS TOMITIGATE RISK THROUGHTHEIR CUSTOMERENGAGEMENT LIFECYCLE

Innovative & bespoke technology systems thatdrive superior performance& efficiency

1

2 Generating in-depth insights from the continuous collection of accurate & valuable data to develop a consolidated view of an individual that enables precise & informed internal& external decisioning

3 Improving its clients’ ability to originate, manage & collect from their customers through their lifecycles, thus maximising value

Assisting its clients to optimise their balance sheet by accelerating cash flow through structured capital solutions

Proactive workforce management& technology facilitate a flexible & dynamic servicing capability able to meet a client’s unique requirements

Regarded as a trusted partner by large consumer-facing businesses & credit providers across multiple industries

4

Enabling clients to generate higherrisk-adjusted returns through their engagements with their customers at the point of origination, management& collection

5

6

7



11

NOTES



16

TCRS MARKET POSITIONING DATA & ANALYTICS

• Opportunity to monetise data• POPI compliant

MASTER DATA UNIVERSE (MDU)

9.2 MILLIONUNIQUE & VALID ID NUMBERSEach uniquely scored with a TCRSpropensity to pay score

95%COVERAGE OF SOUTH AFRICA’SNON-PERFORMING CREDIT CONSUMERS

1 in 4South African adults

Up to 5per unique ID number

ASSOCIATEDTELEPHONE NUMBERS

1 in 3credit-active people

Data is current, relevant & accurate as per:

CREDITBUREAU

DATA

OTHER DATA SOURCESsuch as the Department of Home Affairs

& the Deeds Office

Data fromPRINCIPAL

PORTFOLIOS ACQUIRED

6 MILLION

POSTALADDRESSES

unique & valid

>

1515

TCRS MARKET CONTEXTCHALLENGING CONSUMER CREDIT ENVIRONMENT

* Aged 15 to 65# R81bn comprises credit monitored by NCR at 31 December 2015 (at 30 June 2016 R79.7bn). TCRS’ target market also includes SMEs, education, insurance, Public Sector, telecommunications, SOEs & utilitiesSource: StatsSA | NCR June 2016 | Accountancy SA February 2016 | World Bank report | Global Findex database

31

36

43

61

69

81#

105

89 78

67 63

59

2010 2011 2012 2013 2014 2015

TCRS target market (unsecured)

Mortgages & vehicle finance

NON-PERFORMING LOAN MARKET SIZE & GROWTH (Rbn)

2010 - 2015 CAGR: 21%2010 - 2015 CAGR: (11%)

Non-

perfo

rming

loan

value

• Adverse environment stimulates demand from new & existing clients for debt recovery & related credit risk management services

• Increased number of NPL portfolios available to acquire at beneficial prices from clients requiring immediate recovery from their NPLs

21%

(11%)

IN SOUTH AFRICA, OF THE 35 MILLION ADULTS* THERE ARE:

Household debtto disposable income

at 75%

24 MILLIONCREDIT ACTIVE CONSUMERS

9.7 MILLIONNON-PERFORMINGCREDIT CONSUMERS(NCR Q2 2016)

OVER 11 MILLIONSOUTH AFRICANS DESCRIBEDAS “OVER-INDEBTED”(UP FROM 5 MILLION IN 2014)

A GROWING UNSECURED CONSUMER

Between 2013 & 201486% of South Africans

borrowed money(COMPARED TO 40% WORLDWIDE)

2014: South Africans were the biggest

borrowers in the world(WORLD BANK REPORT)

NON-PERFORMING LOAN MARKET

17

TCRS MARKET POSITIONINGSCALABLE TECHNOLOGY PLATFORM

TRANSACTIONAL DATA

MASTER DATA UNIVERSE

• PREDICTIVE ANALYTICS• OPTIMISED CAMPAIGN

• ENHANCED CUSTOMER INTERACTION

• ENABLED OVERANY OMNI-CHANNEL

• COLLECTIONSRESULT

Data sourcedfrom MDU

for maximised ContactAbility

Transactional Data enriched with collection & ContactAbility results

TECHNOLOGY

CORETRANSACTIONAL

SYSTEM

1

CAMPAIGNBUILDER

2

DIALER& WORKFORCE MANAGEMENT

3

MANAGEMENT& BUSINESS

INFORMATION

4

CORE TRANSACTIONAL SYSTEM• Customised per client• Ease of use • Quick to train• ▼ Staff turnover• ▼ Cost of collection

1 CAMPAIGN BUILDER• Real time management tools• Automated messaging• Champion ChallengingPredictive analytics to determine:• Propensity to pay • Right time to call• Right day to pay• Dynamic matter prioritisation

2 DIALER & WORK-FORCE MANAGEMENT• Enhances scale of

ContactAbility• Schedule the workforce• Flexible work hour selection• ▲ Talk time (> 3 hours per

6 hour shift)• ▲ Activations (deeper

penetration of customer base)

3

56

MANAGEMENT& BUSINESS INFORMATION • Customised value add

insights to clients• Allowing TCRS to win more

mandates• Enhanced management of

compliance & reputation

4 ENABLED OVER ANY OMNI-CHANNEL• Capability to contact

customer on preferred contact method› SMS› Mobile phones › Chat box› Smartapp

5 COLLECTIONS• Promise to pay management• Multiple payment channels

› Banks› Client infrastructure› EFT› Digital/internet› 14 000 spaza shops

6



13

NOTES



19

TCRS OPERATIONAL PERFORMANCE

1. R80bn comprises credit monitored by the NCR as at 30 June 2016. TCRS target market also includes SMEs, education, insurance, Public Sector, telecommunications, SOEs & Utilities

2. Gross principal book revenue as a percentage of average carrying value of purchased book debts

We rank 1st or 2nd

by our clients in 91%of 254 MANDATES (▲41%)

on panels where we are represented

FACE VALUE OF UNSECURED CONSUMER

DEBT MONTOREDBY THE NCR

R80bn¹

Other fragmentedparticipants inaddressable market

R16bn Customer Management

Solutions

Capital Solutions167 booksAsset turnover ratio 71.1%2

GCR upgradedTransaction Capital

Recoveries’primary & special servicer ratings

to SQ1-(ZA) & SQ1(ZA) respectively

~400 000PAYMENTS RECEIVED EACH MONTH

R300 MILLION

COLLECTED EACH MONTH, RESULTING FROM

~300 000DEBIT ORDERS PROCESSED

EACH MONTH

~25 MILLION

OUTBOUND CALLS FROMTHE DIALER EACH MONTH

~4.2 MILLION

VOICE INTERACTIONSEACH MONTH

▲38%

REVENUE PER EMPLOYEEIN 2016

~200 000DISBURSEMENTS

FOR CLIENTS EACH MONTH

~300 000DEBIT ORDERS & NAEDO

TRANSACTIONS PROCESSEDFOR CLIENTS EACH MONTH

R19bn

18

TCRS DEFENSIVE BUSINESS MODELIN AN ENVIRONMENT OF FALLING YIELDS, TCRS PRODUCES STEADY RETURNS

Oct 13 Dec 13 Feb 14 Apr 14 Jun 14 Aug 14 Oct 14 Dec 14 Feb 15 Apr 15 Jun 15 Aug 15 Oct 15 Dec 15 Feb 16 Apr 16 Jun 16 Aug 16

Gross profit % Yield %

PRINCIPAL BOOKS YIELD PERFORMANCE

Monthly gross yields have compressed due to: • Changing legislation• Adverse consumer credit environment

TCRS’ competitive advantage: • Data & analytics• Scalable technology platform enhancing productivity• People (training, management & incentivisation)• Reputation of high performance & compliance• Large balance sheet

20

ORIGINATEIDENTIFY & WIN NEW CUSTOMERS

USING DATA ANALYTICS

LEAD GENERATION &

CUSTOMER ACQUISITION

CUST

OMTE

R MA

NAGE

MENT

SOL

UTIO

NS

MANAGEENABLE PAYMENT PROCESSINGAND CUSTOMER MANAGEMENT

PAYMENT & ACCOUNT MANAGEMENT

COLLECTSOLVE CLIENTS’ IMPAIRED DEBT PROBLEM

THROUGH COLLECTIONS & RECOVERIES

COLLECTION SERVICES

49%

9%

42% Insurance

Credit retail

Telcos

• Payment processing

• Customer retention & profitability modelling• Predictive analytics• Systems (Smart & FICO)

• Receivables management

• Leads generation• Predictive analytics• Segmentation modelling• Systems (Smart & FICO)

• Early stage rehabilitation• Late stage collections• Legal recoveries• Business-to-business collections

• Predictive analytics• Segmentation modelling• Systems (Smart & FICO)

31%21%

2%

22% 21%

3% Insurance

Credit retail

Banking

Telcos

52%

5%7%

11%25%

Credit retail

BankingSpecialised

lending

Other

Specialisedlending

Telcos

Public sector

TCRS DIVERSIFIED BUSINESS MODELCUSTOMER MANAGEMENT SOLUTIONS

Sectors split by revenue per segment as at 30 September 2016



15

NOTES



2222

TCRS FINANCIAL PERFORMANCE

• Headline earnings ▲25% to R168m› All organic growth

• Services EBITDA (TC Recoveries & Principa) ▲27% to R239m

• Agency revenue ▲2%› Focus on margin generative revenue› Selective on mandates

• Principal revenue ▲10%• Cost-to-income ratio improved to 77.4% from 82.5%

› Continued investment in technologies (dialer & workforce management), data (MDU) & analytics yielding efficiencies

› Frugal cost management• Transaction Capital Business Solutions focus on:

› High quality earnings with robust credit quality› Conservative book growth given challenging SA

macro environment

471

561

728

971

1 086

1 100

88 134

168

121

188

239

86.982.5

77.4

51 51 53

2014Pro forma IFRS 9

2015IFRS 9

2016IFRS 9

Purchased book debts (Rm) Total income (Rm)

Headline earnings (Rm) Services EBITDA* (Rm)

Cost to income (%) Principal/agency collections revenue split

* Services EBITDA (Transaction Capital Recoveries & Principa)

21

TCRS DIVERSIFIED BUSINESS MODELCAPITAL SOLUTIONS

CAPI

TAL S

OLUT

IONS

MANAGERECEIVABLES MANAGEMENT& WORKING CAPITAL FINANCE

SME FINANCING

COLLECTSOLVE CLIENTS’ IMPAIRED DEBT PROBLEM THROUGH ACQUISITION OF NPLs & OTHER CAPITAL SOLUTIONS

DEBT PURCHASING

• Invoice discounting• Trade finance• Property finance

• Spot book acquisition• Bespoke capital solutions• Forward flow & gain share agreements

100%27%

36%

13% 2%20%

2% Education &SMEs

Credit retail

Banking

SMEs

Specialisedlending

Telcos

Public sector

Sectors split by revenue per segment as at 30 September 2016

2323

0.29

0.98

1.09

1.50

2.23

2.45

1.16

0.68

2.52

3.43

2.25

2.18

2016

2015

2014

2013

Collections to date (30 September 2016) 96-month ERC

times

TCRS FINANCIAL PERFORMANCEPURCHASED BOOK DEBTS PERFORMANCE

• Principal revenue ▲10%› Purchased book debts ▲30% to R728m› 13 portfolios acquired for R184m this year› 167 principal books owned in total

• Focus on innovative bespoke capital transactions › 2 exclusive transactions› Forward flow & gain share agreements

• Continued but cautious progress in municipal sector• Asset-turnover ratio remains high at 71.1%

(FY15: 71.7%)› Reflects principal revenue as a percentage of

average book value of purchased book debts• ERC is the estimated undiscounted remaining gross

cash collections from purchased book debts to be recovered over the next 96 months, expressed as a multiple of the purchase price

• ERC cover of 2.52 times › Portfolios acquired at beneficial prices

(stimulated by current environment)› Longevity in the yield of principal portfolios on book

Excludes contracts where TCRS does not have title of the underlying claim

Vinta

ge

ESTIMATED REMAINING COLLECTIONS (ERC)

VINTAGE PERFORMANCE AS AT 30 SEPTEMBER

Collection multiple of Rand value deployedto acquire purchased book debt portfolios



17

NOTES



24

TCRS BRAND INTEGRATION

• Further integration with one centralised management team & one overarching strategy• Integrated “Go-to-Market” strategy & team marketing an expanded & comprehensive range of services• Rebrand to leverage Transaction Capital’s strong brand equity

Operational competencies include:• Collection & recovery services & debt purchasing• Working capital, property & trade finance &

commercial receivables management solutions to SMEs• Payment processing services• Data analytics & technology capabilities

for customer management

REBRANDED IN 2016

MBD

Rand Trust

BDB

26

SA TAXI IS A VERTICALLYINTEGRATED TAXIPLATFORM UTILISINGSPECIALIST CAPABILITIES AND ENRICHEDPROPRIETARY DATA TOJUDICIOUSLY DEPLOYDEVELOPMENTAL CREDITAND ALLIED BUSINESSSERVICES TO EMPOWERSMES THUS ENSURINGTHE SUSTAINABILITY OFA FUNDAMENTAL MODEOF TRANSPORT

SA TAXI

An innovative & pioneering business model withoperations expanding throughout the financing & asset value chain, building a scalable platform that can be leveraged in adjacent markets

1

2 A unique blend of vehicle procurement, retail,repossession & refurbishment capabilities, with financing& comprehensiveinsurance competencies for focused vehicle types

3 Valuable client & market insights developed from overlaying granular telematics, credit, vehicle & other data to enable precise & informed origination & collection decisioning & proactive risk management

Enabling financial inclusion by proficiently securing funding from both local & international debt investors to judiciously extend developmental credit to SMEs that may otherwise not have access to credit from traditional financiers

Providing complementary business services that assist SMEs to maximise cash flow & protect their income-generating asset, thus improving their ability to succeed

Empowering under-served & emerging SMEs to build their businesses, which in turn creates further direct & indirect employment opportunities

4

Contributing to the recapitalisation& sustainability of the taxi industry– a critical pillar of the public transport sector servicing the majority of South Africa’s working population

5

6

7



19

NOTES



28

SA TAXI MARKET CONTEXT INTEGRATED PUBLIC TRANSPORT NETWORK - JOHANNESBURG

Source: SA Taxi telematics data as at 11 October 2016 | National Land Transport Strategic Framework 2015

Bus & train rely on minibus taxis infrastructure

27

SA TAXI MARKET CONTEXTMINIBUS TAXI INDUSTRY IS RESILIENT & DEFENSIVE DESPITE SA’S ECONOMIC CLIMATE

Source: National Land Transport Strategic Framework 2015 | Passenger statistics from Arrive Alive & StatsSA noting individuals can take more than one mode of transport | SABOA website | ‘HERE’ Point of Interest Dataset (version Q4 - 2015)

25% 28%32%

34%

Up to R500 R501-R1 000 R1 001-R2 000 R2 001-R3 000

Walk Minibus Bus Train Car Other

Mode

s of tr

ansp

ort

• 50% of the South African population earn under R3 000 per month• Walking & minibus taxis are their main modes of transport

Monthly income bracket

66%

13%21%

Publictransportchoices

Minibus taxi

TrainBus

40%

38%

21% 1%

Share of transportchoices

Public transport

Car

Walk

Other• Minibus taxis are the dominant form of public transport• Majority of commuters who utilise public transport are heavily

reliant on minibus taxis• Usage of minibus taxis has been consistently high throughout

the industry’s existence & shows no sign of slowing• Minibus taxi transport is a non-discretionary

expense for the majority of the nation’scommuters

MINIBUSOVER

COMMUTER TRIPS DAILY

15 MILLIONTRAIN


2 MILLION

BUS


9 MILLION

~200 000 MINIBUS TAXIS

>2 600 TAXI RANKS~3 180 KM NATIONAL NETWORK

~550 TRAIN STATIONS

~19 000 REGISTERED BUSES

>100 BUS STATIONS

COMMERCIALLY SELF-SUSTAINABLE

GOVERNMENT SUBSIDISED

GOVERNMENT SUBSIDISED

29

SA TAXI MARKET CONTEXTSTRUCTURALLY DEMAND FOR MINIBUS VEHICLES EXCEEDS SUPPLY

Source: National Household Travel Survey | SA Taxi’s best estimate through our engagement with the industry & extrapolation of internal data

IN SOUTH AFRICA THERE AREON AVERAGE OVER 9 YEARS OLDAN AGEING FLEET THAT IS UNSAFE, REQUIRING REPLACEMENT & RECAPITALISATIONDRIVING HIGHER DEMAND FOR VEHICLES, FINANCE & ALLIED SERVICES SUPPLIED BY SA TAXI

~200 000MINIBUS TAXIS

DEMAND: AN AGEING NATIONAL FLEET

SUPPLY: MINIBUS TAXI SALES IN SOUTH AFRICA

• Improved credit performance as SA Taxi can be selective on credit risk, due to limited supply• Improved recoveries as asset retains value due to demand exceeding supply• Liquid market for high quality & affordable SA Taxi pre-owned vehicles

TOYOTA SESFIKILEMost prevalent vehicle in the minibus taxi industry

TOYOTA PRE-OWNEDPredominantly SA Taxi refurbished vehicles

NISSAN NV350Although relatively new, steadily gaining market acceptance

MERCEDES SPRINTERMainly used for long-distance routes

MINIBUS TAXIS VEHICLE SALES PER MONTH ~1 380MAJOR PREMIUM BRANDS

SA TAXI’S SHARE OF FINANCED VEHICLES 38%

CHINESE MANUFACTURED VEHICLES ~140SA TAXI’S MARKET SHARE 0%



21

NOTES



31

SA TAXI MARKET POSITIONINGVERTICALLY INTEGRATED BUSINESS MODEL

Approved route vs. route actually travelled Average distance travelled on an hourly basis

FINANCE INSURANCE RETAIL DEALERSHIP

REFURBISHMENT PROPRIETARY TELEMATICS DATA USED THROUGHOUT THE VALUE CHAIN

0

5

10

15

20

25

30

00:00

- 01

:0001

:00 -

02:00

02:00

- 03

:0003

:00 -

04:00

04:00

- 05

:0005

:00 -

06:00

06:00

- 07

:0007

:00 -

08:00

08:00

- 09

:0009

:00 -

10:00

10:00

- 11

:0011

:00 -

12:00

12:00

- 13

:0013

:00 -

14:00

14:00

- 15

:0015

:00 -

16:00

16:00

- 17

:0017

:00 -

18:00

18:00

- 19

:0019

:00 -

20:00

20:00

- 21

:0021

:00 -

22:00

22:00

- 23

:0023

:00 -

24:00

30

SA TAXI MARKET POSITIONING

1. 100% of taxis financed by SA Taxi are fully insured. 85% of SA Taxi’s taxi owners choose to insure with SA Taxi. Additionally SA Taxi insures ~3 700 non-financed minibus taxisSource: National Household Travel Survey 2013 | SA Taxi’s best estimate through our engagement with the industry & extrapolation of internal data

IN SOUTH AFRICA THERE ARE68% OF ALL PUBLIC TRANSPORT TRIPS TO WORK

69% OF HOUSEHOLDS UTILISE MINIBUS TAXIS

70% OF INDIVIDUALS WHO ATTEND EDUCATIONALINSTITUTIONS ARE ESTIMATED TO USE MINIBUS TAXIS

~17 000TO

20 000METERED TAXIS

IN SOUTH AFRICA

260METERED TAXIS ON

BOOK

2020 TARGET:

3 000

R7.2 BILLIONCURRENTLY FINANCED

26 352FINANCED VEHICLESON BOOK

22 136¹INSURED THROUGH

SA TAXI

3.4 YEARSAVERAGE AGE OFVEHICLES ON BOOK

6 866VEHICLES

FINANCED IN 2016

1.2VEHICLES

PER CUSTOMER

ON AVERAGE EACH OFOUR VEHICLES TRAVELS6 500KM PER MONTH

OUR VEHICLES TRAVEL ON6 500 ROUTES COVERING

OVER ~800 000KM

~1.5 BILLION KMTRAVELLED BY SA TAXI’s FLEET

IN 2016

1 IN 4OF NATIONAL FINANCED MINIBUS

TAXI FLEET IS FINANCED & INSUREDBY SA TAXI

~200 000MINIBUS TAXIS

32

SA TAXI MARKET POSITIONING VERTICALLY INTEGRATED BUSINESS MODEL

PROPRIETARY TELEMATICS DATA USED THROUGHOUT THE VALUE CHAIN PROVIDES CRITICAL INSIGHT FOR BUSINESS DECISIONS:

Data applied into credit vetting process to better understand credit risk & route profitability

Historical data used to bolster accuracy in pricing a taxi owner’s insurance risk as well as to identify when there is a lack of movement, which could indicate an insurance claim

Data used to obtain an understanding of minibus taxi’s monthly performance before collection action is taken.This informs how collection agents interact with the taxi owner

Live location data along with a drivers’ historical data are utilised in aiding the vehicle recovery process

Service offering to customers Data to be provided to the taxi owner,giving them a deeper understandingof their business operations & further

empowering them as business owners

FINA

NCIA

L SER

VICE

SVE

HICL

ESPA

SSEN

GER

PLAT

OFRM

ENABLING SMEs SERVICING SMEs MANAGING RETURNS FROM SMEs

EQUITY ALLOCATION

& DEBT RAISING

CREDIT UNDERWRITING

& LOAN ORIGINATION

INSURANCE COLLECTIONS REPOSSESSION

VEHICLE SUPPLYREPAIRS &

MAINTENANCE SERVICE

REFURBISHMENTS RESALE

Owner-driver management• Robust vehicle management & dispatch system• Bespoke driver training• Creating an industry standard, vehicle & driver quality

Trip acquisitions• Building a standard value proposition for clients• Improving safety, transparency & reliability

Technology platforms & payments• Systems that manage stock, dispatch, trips

& payments (secure & reliable)• Apply metered taxi technology to minibus taxi data

• Adequately capitalised• Conservatively geared with

debt• >30 debt investors• Focus on reducing cost of debt

Dealerships:• Midrand & KwaZulu Natal • >2 600 vehicles sold per year

Niche credit philosophy:• Route via telematics• Vehicle • Operator• AssociationImproved credit metrics

• 85% of financed customers choose SA Taxi’s insurance

• >3 700 policies tonon-financed clients

• <1% claims repudiated• Cost of claim ▼via SA Taxi’s

refurbishment facility

• >R250m collected per month • Call centre collections• Limited use of debit order

• Asset retains value due to demand exceeding supply

• Live location through telematics

• Recovery rates stable at >72%

• Estimated to be the biggest buyer of Toyota spare parts in Africa

• Apply competency to insurance & metered taxi business

• ~20 000m² refurbishment facility

• Supplies ~200 vehicles to SA Taxi retail dealerships per month

• >260 jobs created

• Re-sell vehicles at superior prices in liquid second-hand market

• Increasing new vehicle prices supports second-hand price

• High quality refurbished vehicle• Sold at a discount to price of new• Yielding similar income

& RETAIL

Growth opportunity



23

NOTES



3434

SA TAXI FINANCIAL PERFORMANCE

• Headline earnings ▲20% to R249m› All organic growth

• NIM ▼ from 11.3% to 11.1%› Funding costs ▲ by 60bps to 10.6%

o 100bps ▲ in the repo rateo ▲ foreign debt component, fully hedged to rando Pre-funding results in temporary negative cost of

carryo Credit loss ratio improved from 3.9% to 3.1%

› Risk-adjusted NIM ▲to 8.0% from 7.4%• Non-interest revenue ▲30% to R315m

› 21% of loans originated via SA Taxi’s dealership› Comprehensive insurance

o 85% of financed clients also insured by SA Taxio 3 756 non-financed minibus taxis insured, ▲30%

• Cost-to-income ratio ▲ from 48.7% to 51.1% › Investment in retail dealership, auto body repair

centre, metered taxi business• Effective tax rate stabilised at 18.6%

* Headline earnings attributable to the group

1 344

1 532

1 801

175

208

249

11.3 11.3 11.1

48.9 48.751.1

9.710.0 10.6

4.4 3.93.1


2015IFRS 9

2016IFRS 9

Total income (Rm) Headline earnings* (Rm)Net interest margin (%) Cost to income (%)Average cost of borrowing (%) Credit loss ratio (%)

3333

33%

22%9%

11%

8%

6%6% 3%2%

SA TAXICUSTOMER

DISTRIBUTION

SA TAXI OPERATIONAL PERFORMANCE

Percentages calculated based on rand value1. Average deposit on new vehicles

GautengKwaZulu-NatalMpumalangaWestern CapeEastern CapeNorth WestLimpopoFree StateNorthern Cape

0%

4%

8%

12%

450 500 550 600 650 700 750Empirica score

Prop

ortio

n of c

ustom

er ba

seScore below which traditional banks are unlikely to offer finance

Average score at which SA Taxi grants finance

GEOGRAPHIC DISTRIBUTIONCUSTOMER PROFILE

DEMOGRAPHICS VEHICLES ON BOOK

CREDIT PROFILE OF LOANS ON BOOK

100%BLACK OWNEDSMEs

21%WOMEN OWNEDSMEs

16%UNDER THE AGEOF 35 YEARS

46 YEARSAVERAGE AGEOF OWNER

1.2VEHICLESPER CUSTOMER

83%TOYOTAVEHICLES

3.4 YEARSAVERAGE AGEOF VEHICLE

85%INSURED WITHSA TAXI

67 MONTHSAVERAGE LOAN TERM

>R6 000MINIMUM MONTHLY PROFIT

25.2%WEIGHTED AVERAGEINTEREST RATEAT ORIGINATION

44 MONTHSWEIGHTEDAVERAGEREMAINING TERM

17.3%AVERAGE DEPOSIT¹

59%AVERAGEAPPROVALRATE

602AVERAGEEMPIRICASCORE

CREDIT DISTRIBUTION

3535

SA TAXI CREDIT PERFORMANCE

• Gross loans & advances ▲15% to R7.2bn› Number of Toyota loan clients ▲ 9.2%› Toyota vehicle prices ▲13.6% since 1 Oct 2015› Active wind-down of Chinese vehicle portfolio› Credit granting criteria remain conservative

• NPL ratio improved to 17.4% from 18.2%› Continued strong collection performance› Superior credit quality via retail dealership› Enhanced via analytics applied to telematics data

• Credit-loss ratio improved from 3.9% to 3.1%› Recover more than 72% of settlement value› Pre-owned minibus prices ▲10.4%› Improved quality & efficiencies in refurbishment centre › Average repair cost ▼9% (~R84 000 from ~R92 000)› Target credit-loss ratio remains 3% to 4%

• Provision coverage at 6.7%› After tax credit-loss conservatively covered at

3.1 times (FY15: 3.1 times)› IFRS 9 adopted in 2015; more conservative

provisioning methodology

24 34

6

25 03

3

26 35

2

5 592

6 238

7 151

9.48.6

6.74.4 3.9

3.1

20.518.2 17.4

45.9 47.0

38.3


2015IFRS 9

2016IFRS 9

Number of loans Gross loans and advances (Rm)Provision coverage (%) Credit loss ratio (%)Non-performing loan ratio (%) Non-performing loan coverage (%)



25

NOTES



36

Stage 1 Stage 2 Stage 3 RepoIMPAIRMENT STAGE

IAS 39 Provisions IFRS 9 Provisions

SA TAXI CREDIT PERFORMANCE IFRS 9 ADOPTION IN 2015: MORE CONSERVATIVE PROVISIONING METHODOLOGY

PROV

ISIO

NS

ADOP

TION

Improved construct of the book

Sep 2016 Sep 2015 Movement

Stage 1 70.5% 68.6% 2.7%

Stage 2 19.6% 21.1% (6.9%)

Stage 3 9.9% 10.3% (4.0%)

Improved quality of SA Taxi’s loans & advances since listing

2011 2016 CAGR %

Gross loans & advances (Rm) 4 045 7 151 ▲12%

Non-performing loan ratio (%) 27.5 17.4 ▼ 9%

Credit-loss ratio (%) 6.0 3.1 ▼12%

ULTIMATE LOSS REMAINS UNCHANGED

3838

CAPITAL MANAGEMENT

• Total debt issued R4.7bn ▲62%• Uninterrupted access to the debt capital markets

› 2017 almost fully funded› R513 million Transsec 2 tap issuance

(40 bps < than initial Transsec 2 issuance)› Diverse debt investor base (>30)

• Future initiatives› R2bn zaA- rated & JSE listed domestic note

programme › Successfully penetrating global DFI markets

• Credit ratings› S&P upgraded Transsec 1 class B, C, & D notes

(SA Taxi)› GCR awarded zaA- corporate rating to Transaction

Capital’s domestic note programme• Group cost of borrowing ▲ from 10.7% to 11.3%

› Repo ▲100bps over last 12 months› Margin above repo improved to 4.6%

• Capital adequacy position remains robust at 38.9%› 28.9% equity› 10.0% subordinated debt

• Net ungeared & liquid group balance sheet• Liquid cash of R300m on balance sheet

1. Calculated using Transaction Capital’s average cost of borrowing for the period and the South African Reserve Bank’s average repo rate for the period

5.4%

5.4%

6.7%

5.6%

5.0% 4.6

%

11.0% 10.4% 11.3%

FY 2012 FY 2014 FY 2016SA Reserve Bank's repo rate¹ Cost of borrowing margin above repo rate

3 290

2 855

4 63745.4 43.3

38.9

3.9 3.83.8

10.4 10.7 11.316.0

22.0

30.0

3.3 3.1 2.7


2015IFRS 9

2016IFRS 9

Total debt issued (Rm) Capital adequacy ratio (%)Gearing ratio (times) Average cost of borrowing (%)Total dividend per share (cps) Total dividend cover (times)

COST OF BORROWING SINCE LISTING

PERFORMANCE



27

NOTES



4040

SHAREHOLDING

• Directors shareholding holding unchanged at 46%• Founder’s shareholding ▲from 43.2% to 43.5%• Institutional shareholding ▲from 46% to 48%

› Allan Gray ▲from 8% to 10%› Old Mutual ▲from 8% to 10%

• Retail investors ▼from 8% to 6%• Foreign ownership ▲from 1.7% to 3.4%• Average daily liquidity in ZAR increased by 34%

in FY16 compared to FY15

46%10%

10%

28%6%

Directors of Transaction Capital and its subsidiariesOld Mutual Investment GroupAllan Gray Proprietary LimitedRemaining institutional shareholdersRetail investors

30 September 2016

39

FUNDING PHILOSOPHY

DIVERSIFIED & ENGAGED DEBT INVESTORS• Diversification by geography, capital pool, debt investor

& funding structure• Recurring investment motivated by performance, the ease

of transacting & appropriate risk adjusted returns• Transparent & direct relationships with debt investors,

& where necessary facilitated by valued intermediaries

JUDICIOUS RISK MITIGATION• Positive liquidity management between asset & liability

cash flows• No exposure to overnight debt instruments & limited

exposure to short term instruments • No exposure to currency risk & effective management

of interest rate risk• Minimising roll over risk

OPTIMAL CAPITAL STRUCTURES• Bespoke & innovative funding structures to meet

investment requirements & risk appetite of a range of debt investors

• Targeted capital structure per asset class• No cross-default or guarantees between structures

34%45%

21%

Structured financeOn-balance sheetRated listed securitisation

23%

35%

15%

13%13% 1%

Life companiesSpecialised asset managers & debt fundsBanksTraditional asset managersDFIsHedge funds

INNOVATIONInnovation is encouraged to cultivate unorthodox thinking& develop pioneering funding solutions

0-6 months 6-12 months 1-2 years 2-3 years 3-4 years 4-5 years 5+ years

Assets Liabilities Cumulative

POSITIVE LIQUIDITY MISMATCH

DIVERSIFICATION BY DIVERSIFICATION BY

FUNDING STRUCTURE DEBT INVESTOR CATEGORY

41



29

NOTES



43

DISCLAIMER

This presentation may contain certain "forward-looking statements" regarding beliefs or expectations of the TC Group,

its directors and other members of its senior management about the TC Group's financial condition, results of operations,

cash flow, strategy and business and the transactions described in this presentation. Forward-looking statements include

statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and

other statements, which are other than statements of historical facts. The words "believe", "expect", "anticipate", "intend",

"estimate", "forecast", "project", "will", "may", "should" and similar expressions identify forward-looking statements but are not

the exclusive means of identifying such statements. Such forward-looking statements are not guarantees of future

performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties

and other factors, many of which are outside the control of the TC Group and are difficult to predict, that may cause the actual

results, performance, achievements or developments of the TC Group or the industries in which it operates to differ materially

from any future results, performance, achievements or developments expressed by or implied from the forward-looking

statements. Each member of the TC Group expressly disclaims any obligation or undertaking to provide or disseminate any

updates or revisions to any forward-looking statements contained in this announcement.

42

TRANSACTION CAPITAL

IS POSITIONEDIN ATTRACTIVE

MARKET SEGMENTS

WITH SPECIALISEDCAPABILITIES

THAT ENABLE A DEEP

UNDERSTANDING OF ITS CHOSEN

MARKETS

INVESTMENT CASECOMPELLING & UNIQUE AS WE EXECUTE ON OUR MISSION

› Businesses occupy strong market positions› Highly defensive businesses able to withstand difficult

economic conditions› Ongoing replacement of the national taxi fleet stimulates

demand for finance in an industry that remains the cornerstone of South Africa’s public transport infrastructure

› Current economic environment stimulates demand for consumer credit risk services. TCRS to acquire an increased number of non-performing loan portfolios from clients requiring an immediate recovery at beneficial pricing

› Deep vertical integration within chosen niched market segments enabling application of specialised expertise to mitigate risk, participate in margin & provide a fuller service to clients, thus entrenching our competitive advantage

› Superior data & leading-edge technology & analytics capabilities differentiate our offerings, inform business decisions & mitigate risk

› Decentralised expertise, robust processes and skilled people enable effective capital and credit risk management

AND A BESPOKE & ROBUST CAPITAL

STRUCTURE GENERATING

APPROPRIATE RISK-ADJUSTED

RETURNS

› Sufficient equity capital geared conservatively to fund organic growth, & medium-term acquisition activity

› Proven ability to raise debt capital efficiently from a diversified range of debt investors

› Track record of delivering predictable high-quality earnings with high cash conversion rates & strong organic growth prospects

IS LED BY SKILLEDAND EXPERIENCED

MANAGEMENTTEAMS

› Experienced & specialised leadership › Apply specialised intellectual capital over a

much smaller asset base than in larger organisations

› Continual, focused group-wide investment in executive education, expertise & experience

AND UNDERPINNED BY A ROBUST

GOVERNANCE FRAMEWORK &

SOUND GOVERNANCEPRACTICES

› Experienced, diverse & independent directors at group & subsidiary level

› Institutionalised governance, regulatory & risk management practices

WHICH TOGETHER POSITION IT FOR

SUSTAINABLE GROWTH

› Decentralised businesses that are self-sustaining & sizable in their own right

› Organic growth driven through innovating solutions deeper into existing market segments & leveraging capabilities to enter adjacent markets (local & international)

› A focused acquisition strategy supported by a strong balance sheet

AND THE DELIVERYOF A MEANINGFUL

SOCIAL IMPACT

› Businesses intentionally positioned to take advantage of demographic & socio-economic trends, delivering both social & economic benefit

AUDITEDFINANCIAL RESULTSFOR THE YEAR ENDED 30 SEPTEMBER

CO

NTE

NTS

pg 33COMMENTARY

pg 42INDEPENDENT

AUDITOR’S REPORT

pg 44SUMMARISED

CONSOLIDATED STATEMENT OF FINANCIAL

POSITION

pg 45SUMMARISED

CONSOLIDATED INCOME STATEMENT

pg 45SUMMARISED

CONSOLIDATED STATEMENT OF

COMPREHENSIVE INCOME

pg 46SUMMARISED HEADLINE EARNINGS RECONCILIATION

pg 46SUMMARISED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

pg 47SUMMARISED CONSOLIDATED STATEMENT OFCASH FLOWS

pg 48SUMMARISEDSEGMENT REPORT

pg 50FAIR VALUE DISCLOSURE


AUDITED RESULTS 2016

33

INTRODUCTIONTransaction Capital comprises two autonomous and decentralised divisions of scale, being SA Taxi and Transaction Capital Risk Services (“TCRS”). Both of these divisions are intentionally positioned within carefully chosen markets to take advantage of South Africa’s demographic and socio-economic trends, enabling them to deliver both a social and commercial benefit. This alignment has enabled consistent organic earnings growth since listing on the Johannesburg Stock Exchange more than four years ago, which continued during the 2016 financial year.

Transaction Capital’s strategy is to drive organic and acquisitive growth within these divisions, by enhancing and developing their distinctive competencies to achieve deep vertical integration within current and adjacent market segments.

While both SA Taxi and TCRS perform better in a positive economic environment, they are also highly defensive businesses intentionally positioned to withstand a challenging macro- and socio-economic context, as currently experienced in South Africa. Thus it is gratifying that Transaction Capital has made strong progress towards its strategic and operational objectives during the 2016 financial year, delivering pleasing results in line with expectations.

FINANCIAL PERFORMANCEThe information presented below is based on the preliminary summarised consolidated annual financial statements for the year ended 30 September 2016.

For the year ended 30 September 2016

SA Taxi TCRSTransaction

Capital Group

Growth in headline earnings 20% 25% 17%

Return on average equity (ROE) 25.5% 31.5% 16.9%

Transaction Capital’s operations delivered strong financial results despite challenging market conditions persisting throughout the 2016 financial year. Headline earnings and headline earnings per share increased by 17% to R458 million and 80.6 cents per share respectively. SA Taxi grew headline earnings by 20% whilst TCRS grew headline earnings by 25%.

Transaction Capital is in the process of finalising three acquisitions which will be funded out of Transaction Capital’s excess cash.

Shareholders are reminded that IFRS 9 was early adopted in the 2015 financial year, resulting in a higher quality of earnings as a result of a more conservative provisioning methodology against loans and advances and the amortisation profile of purchased book debts being better aligned with the collection profile. This early adoption has reduced balance sheet risk for Transaction Capital and removed uncertainty relating to the implementation of IFRS 9 on future financial results and ratios.

The financial tables and commentary incorporated in this SENS announcement provide a comparison of the 2016 results and the 2015 published results, both of which have been prepared in accordance with IFRS 9.

COMMENTARY

R458 MILLION 17% 2015 R393 MILLIONHEADLINE EARNINGS

80.6 CENTS 17% 2015 69.0 CENTSHEADLINE EARNINGS

PER SHARE

30.0 CENTS 36% 2015 22.0 CENTSTOTAL DIVIDEND

PER SHARE

16.9% 2015 16.7%RETURN ON AVERAGE

EQUITY (ROE)

2.7 TIMES 13% 2015 3.1 TIMESTOTAL DIVIDEND

COVER

HIGHLIGHTS



OPERATIONAL HIGHLIGHTS AND STRATEGY

SA TAXI

For the year ended 30 September

2016 2015

IFRS 9 IFRS 9 Movement

Financial performance

Headline earnings attributable to the group Rm 249 208 20%

Non-interest revenue Rm 315 242 30%

Net interest income Rm 744 672 11%

Net interest margin % 11.1 11.3

Average cost of borrowing % 10.6 10.0

Credit performance

Gross loans and advances Rm 7 151 6 238 15%

Impairment provision Rm (476) (535) (11%)

Non-performing loan ratio % 17.4 18.2

Credit loss ratio % 3.1 3.9

Provision coverage % 6.7 8.6

Non-performing loan coverage % 38.3 47.0

SA Taxi is a vertically integrated minibus and metered taxi platform utilising specialist capabilities and enriched proprietary data to judiciously deploy developmental credit and allied business services to empower SMEs, ensuring the sustainability of a fundamental mode of transport.

This is achieved via:

> An innovative and pioneering business model with operations expanding throughout the financing and asset value chain, building a scalable platform that can be leveraged into adjacent markets;

> A unique blend of vehicle procurement, retail, repossession, refurbishment and spare part procurement capabilities, with financing and comprehensive insurance competencies for focused vehicle types;

> Valuable client and market insights developed from overlaying granular telematics, credit, vehicle and other data to enable precise and informed loan origination and collection decisioning and proactive risk management;

> Providing complimentary business services that assist SMEs to maximise cash flow and protect their income generating assets, thus enabling taxi operators to build sustainable and profitable businesses;

> Enabling financial inclusion by proficiently securing funding from both local and international debt investors to judiciously extend developmental credit to SMEs that may not otherwise have had access to credit from traditional financiers;

> Empowering under-served and emerging SMEs to acquire, manage and protect their businesses with the ripple effect of creating jobs both directly and indirectly; and

> Ensuring the recapitalisation and sustainability of the minibus taxi industry, a critical pillar of public transport sector, transporting a significant portion of the population daily.

SA Taxi applies the above competencies predominantly towards independent SMEs in the minibus taxi industry, with the intention to expand into adjacent markets or asset classes, as it has done with metered taxis. SA Taxi has discontinued its pilot to finance “bakkies” used by SMEs as income producing assets, as the credit vetting process lacked uniformity which impacted SA Taxi’s ability to achieve scale in this adjacent market.

The national minibus taxi fleet of approximately 200 000 privately owned vehicles is responsible for 69% of all South African household commuter trips, estimated to encompass more than 15 million commuter trips per day. Minibus taxis are thus the dominant mode of public transport providing the commuter with a convenient, affordable and accessible service that is integrated with rail and bus modes of transport. This dominant position, together with the fact that public transport is a non-discretionary expense for the majority of the nation’s commuters, makes the minibus taxi industry resilient and defensive despite the difficult economic climate.

COMMENTARY continued



35

SA Taxi estimates that of the 200 000 national minibus taxi fleet, only 70 000 to 80 000 of these are financed. This under-capitalised and ageing fleet, intensified by the under-supply of premium minibus taxi vehicles in our local market, continues to create a robust demand for the new and refurbished vehicles, finance, short-term comprehensive insurance and related services provided by SA Taxi. SA Taxi has been intentionally positioned as a provider of asset-backed developmental credit and allied services in this growing segment of a defensive industry, where it is able to be selective on credit risk. As at 30 September 2016, SA Taxi’s R7.2 billion loans and advances portfolio comprised 26 352 vehicles, accounting for approximately one in every three of the financed national minibus taxi fleet. Further, due to SA Taxi’s ability to refurbish and re-finance repossessed vehicles, it has created a unique position within the vehicle retail market to re-sell repossessed vehicles at superior prices in the liquid second hand market.

In line with SA Taxi’s strategic objective to achieve deep vertical integration within South Africa’s taxi industry, in February 2016 SA Taxi established a retail dealership in Midrand exclusively selling taxi vehicles. This dealership is considered to be one of the largest dedicated taxi dealerships in the country selling Toyota, Nissan and Mercedes minibuses, and bespoke Toyota Corolla metered taxi vehicles. SA Taxi is piloting a second dealership in KwaZulu-Natal selling pre-owned vehicles only, with a further dealership in Polokwane currently under consideration. SA Taxi anticipates selling, financing and insuring more than 2 600 vehicles per year directly via its retail dealerships, which will constitute approximately 30% of the vehicles financed by SA Taxi. The profitability of vehicles financed directly through SA Taxi’s dealership outstrips the profitability of loans originated through other sales channels (i.e. affiliated and non-affiliated dealerships). This can be ascribed to a greater proportion of non-interest revenue earned (being product margin and insurance revenue) and better loan performance.

Although the Nissan minibus taxi is still relatively new to the industry, it is gaining market acceptance from taxi operators with the price differential between the Nissan and Toyota models widening.

SA Taxi’s autobody repair centre commenced operations at the beginning of February 2016. SA Taxi’s combined auto body repair and mechanical refurbishment centre now spans more than 20 000 square metres and has resulted in more than 260 new jobs created since inception. This centre is estimated to be the largest buyer of Toyota spare parts in Africa, is designed to feed SA Taxi’s dealerships with approximately 200 quality refurbished taxi vehicles per month.

In addition to direct sales of vehicles, SA Taxi also continues to uplift, diversify and enhance its non-interest revenue via its short-term comprehensive vehicle insurance product. A greater component of SA Taxi’s earnings is derived from cash generative revenue which increased by 30% to R315 million driven mainly by the increase in SA Taxi’s vehicle retail and short-term insurance activities. SA Taxi requires its financed minibus taxis to be fully insured, and has thus designed a bespoke insurance product to meet its taxi owners’ specific needs, including comprehensive vehicle cover, passenger liability as well as business interruption cover. As at 30 September 2016, 84.5% of SA Taxi’s financed portfolio was insured directly through SA Taxi (compared to 81.4% at the half-year), with an additional 3 756 insurance policies taken up by non-financed clients (compared to 2 687 this time last year). SA Taxi is responsible for distributing the insurance product, collecting premiums and managing claims. Given these responsibilities, SA Taxi participates in the underwriting profits associated with this insurance business. Looking forward, SA Taxi intends to enhance its control over the parts procurement and refurbishment processes wherever possible via its combined auto body repair and mechanical refurbishment centre, providing an opportunity to earn additional margin and improve underwriting profits.

SA Taxi continues to leverage its distinctive competencies to create defensible positions within identified adjacent market segments, financing asset classes such as metered taxis. Via Zebra Cabs, SA Taxi intends consolidating, recapitalising and formalising the existing metered taxi industry, estimated to comprise 17 000 to 20 000 vehicles nationally, including an estimated 4 000 vehicles on the Uber platform. Zebra Cabs provides customised luxury vehicles, a technology platform (including a booking app and multiple payment channels) and a niched combined sales channel (incorporating booking apps, web based sales, corporate sales and centralised call centre and dispatch) that the industry does not currently have access to. Zebra Cabs commenced operations in Gauteng, and in time will expand its footprint into the Western Cape and KwaZulu-Natal.

Following SA Taxi’s vertically integrated business model, Zebra Cabs procures its vehicles via SA Taxi’s established procurement channels and thereafter retails these vehicles via its retail dealership in Midrand. Zebra Cabs provides the finance, insurance, telematics data, vehicle servicing capability, multiple booking systems and payments channels required to support the metered taxi operator, thus enhancing their chances of establishing a sustainable metered taxi business. Zebra Cabs currently operates approximately 260 metered taxis on its platform, and aims to have 3 000 in its portfolio by 2020.

SA Taxi’s strategic and operational results have translated into pleasing financial performance in 2016, with headline earnings increasing by 20% to R249 million.

SA Taxi’s number of active loan clients increased by 2%. The total number of clients was impacted by the active wind-down of SA Taxi’s loan portfolio to entry-level manufactured vehicles, together with constrained supply of new Toyota minibus taxis as a result of Toyota closing its local assembly facility for five months during the prior year to enable a full plant rebuild. Toyota supply subsequently normalised, with the number of active clients within the Toyota loan portfolio increasing by 9.2% for the year. Growth in gross loans and advances was further positively impacted by Toyota steadily increasing vehicle prices by 13.6% since 1 October 2015, resulting in 15% growth in SA Taxi’s gross loans and advances for year.



The net interest margin decreased marginally to 11.1%. SA Taxi’s average cost of borrowing increased slightly by 60 basis points to 10.6%, due to the 100 basis points increase in the repo rate over the past 12 months, and an increased component of SA Taxi’s funding being raised in foreign currency and fully hedged to Rand. In addition, with growing concerns of a potential downgrade of South Africa’s credit rating, SA Taxi raised more than R3.5 billion of debt during the 2016 financial year, filling most of its annual debt requirement for the 2017 financial year but resulting in excess cash on hand and thus a negative cost of carry. To counter this SA Taxi selected better quality clients, with the combined effect of the increased funding cost and reduced credit losses yielding an improved risk-adjusted net interest margin of 8.0%, compared to 7.4% the prior year.

SA Taxi’s credit loss ratio continued to improve to 3.1% for the year, compared to 3.9% for the 2015 year. SA Taxi is able to recover more than 72% of the loan value when re-selling repossessed vehicles, as the security value of a taxi vehicle is enhanced via SA Taxi’s mechanical refurbishment centre, now one of the largest Toyota repair centres in Africa. The average cost to repair repossessed stock has continued to reduce, resulting from further efficiencies achieved post SA Taxi’s investment into its combined auto body repair and mechanical refurbishment centre, offset slightly by more expensive spare part procurement as a result of the weaker Rand. Further, a positive second order effect of Toyota increasing new vehicle prices is that pre-owned minibus taxi vehicle prices follow a similar trend, increasing by 10.4% this year in SA Taxi’s retail dealership.

The non-performing loan ratio continued to improve to 17.4% from 18.2% in the prior year, due to a combination of continued strong collection performance, loans of superior credit quality being originated via its retail dealership and conservative credit granting criteria, which are continuously enhanced via the analytics applied to SA Taxi’s telematics data. This data is accumulated daily from each minibus taxi and applied to credit score cards, route profitability assessments, collection strategies and insurance pricing.

A more conservative provisioning methodology against loans and advances was assumed during the 2015 financial year with the early adoption of IFRS 9. This accounting statement requires SA Taxi’s loans and advances portfolio to be segregated based upon expected credit risk/loss. A greater component of the portfolio is currently categorised as lower risk when compared to the prior year (70.5% currently in the lowest risk stage (being Stage 1), versus 68.6% at 30 September 2015). This is driven by SA Taxi’s record collection levels, lower non-performing loans and lower credit losses. Thus provision coverage has reduced but remains adequate as evidenced by the better quality loans and advances portfolio. With provision coverage levels at 6.7%, SA Taxi’s after tax credit loss remains conservatively covered at 3.1 times (2015: 3.1 times).

SA Taxi’s financial and operational risk exposure to entry-level manufactured vehicles has significantly reduced resulting in improving credit quality for the portfolio. Entry-level manufactured vehicles now account for less than 1.0 % of the value of SA Taxi’s loan portfolio.

SA Taxi’s cost-to-income ratio has increased to 51.1% from 48.7% mainly due to investment in Zebra Cabs, further investment in SA Taxi’s retail dealership and insurance businesses, and the establishment of the auto body repair centre.

With moderate growth in gross loans and advances, improving credit metrics, strong growth in non-interest revenue and a marginally increasing cost-to-income ratio, it is evident that SA Taxi’s credit, operational and financial performance remained robust in the 2016 financial year.

TRANSACTION CAPITAL RISK SERVICES (TCRS)

For the year ended 30 September

2016 2015

IFRS 9 IFRS 9 Movement

Financial performance

Headline earnings Rm 168 134 25%


Total costs Rm 796 845 (6%)

Cost-to-income ratio % 77.4 82.5

Return on sales (ROS) % 15.3 13.1

Purchased book debts

Number of purchased book debts acquired Number 13 7 86%

Value of purchased book debts acquired Rm 184 166 11%

Purchased book debts Rm 728 561 30%

Estimated remaining collections (ERC) Rm 1 313 1 034 27%

Asset turnover ratio (ATO) % 71.1 71.7




37

TCRS is a technology-led, data-driven provider of customer management and capital solutions through a scalable and bespoke platform, enabling its clients to mitigate risk through their customer engagement lifecycle.

This is achieved via:

> Innovative and bespoke technology systems that drive superior performance and efficiency;

> Generating in-depth insights from the continuous collection of accurate and valuable data to develop a consolidated view of an individual that enables precise and informed internal and external decisioning;

> Improving its clients’ ability to originate, manage and collect from their customers through their lifecycles, thus maximising value;

> Assisting its clients to optimise their balance sheet by accelerating cash flow through structured capital solutions;

> Proactive workforce management and technology facilitating a flexible and dynamic servicing capability able to meet a client’s unique requirements;

> Trusted partner status by large consumer-facing businesses and credit providers across multiple industries; and

> Enabling its clients to generate higher risk-adjusted returns through their engagements with their customers at the point of origination, management and collection.

Of the 24.08 million credit-active South African consumers as of June 2016, 9.67 million have impaired credit records. TCRS’s ability to grow agency revenue and generate returns from acquired non-performing loan portfolios has remained constrained during the year, mainly caused by negative key economic indicators such as increased inflation, increased interest rates, low economic growth and static employment rates, all contributing to increased financial pressure on an already distressed and vulnerable consumer credit sector. Thus TCRS’ non-interest revenue grew by 1% impacted mainly by modest growth in both agency collections (increased by 2%) and principal collections (increased by 10%) in particularly difficult trading conditions.

However, TCRS is a defensive business intentionally positioned to withstand difficult economic conditions. In this environment, TCRS can apply its strong balance sheet and extensive data towards the selective acquisition of an increased number of non-performing loan portfolios available for purchase from clients who require an immediate recovery of non-performing loans in this difficult consumer credit market. In total 13 new portfolios were purchased during the 2016 financial year for R184 million. TCRS has also initiated exclusive negotiations for the structured and ongoing sales of portfolios with several of its larger clients.

TCRS currently owns 167 principal portfolios valued at R728 million as at 30 September 2016, increasing by 30% from R561 million in the prior year. The asset turnover ratio remains high at levels greater than 70%, with estimated remaining collections increasing to R1 313 million, from R1 034 million as at 30 September 2015. Thus recent successful book acquisitions are expected to deliver positive future performance.

Further, in this depressed consumer economy TCRS is able to take advantage of its strong market position and reputation, as well penetrated and new clients display increased demand for collection and related credit risk management services. In 91% of its 254 mandates, TCRS continues to be the top or second ranked recoveries agent. As a result, TCRS enjoys deep penetration into the credit retail and specialist lending segments of its market, and aims to increase revenue from the Tier 1 banks where its penetration has been disproportionately lower.

In addition to the economic factors referred to above, the changes to the legislative environment regarding affordability rules, prescription, interest rate caps and credit life insurance are also not conducive to the extension of credit, which in the medium term may result in declining volumes of matters handed over to TCRS by clients governed by the NCA. Cognisant of this environment, TCRS’s strategy includes increasing revenue from non-NCA regulated clients, including the outsourced collection of outstanding claims in the insurance, telecommunication and public sectors.

TCRS is also well positioned to assist municipalities in enhancing the collection of both their performing and non-performing loan portfolios and remains cautiously optimistic about its prospects in this market. Many municipalities remain financially unstable due to inefficient collection processes compounded by poor financial management. Accordingly, TCRS’s ability to recover outstanding amounts due to it remains a challenge and legal action is often required to enforce payments. TCRS continues to work closely with municipal clients to refine its business model and is confident that the municipal business will mature.

Recent technological enhancements include the establishment of TCRS’s Master Data Universe (“MDU”), an internal database of 9.2 million unique consumer records, which is expected to create significant operational leverage in the years to come. Further, post a successful pilot performed by TCRS earlier in the year, an enhanced predictive dialer was implemented alongside the existing preview dialer in the Johannesburg, Durban and Cape Town call centres in July 2016 resulting in increased call centre activity, improved right party contact and an associated increase in payments. The integration of the MDU and dialer, with planned workforce management enhancements to be implemented in the 2017 financial year, is expected to have a positive impact in the 2017 year via both a lift in revenue and cost savings. This together with other aggressive cost containment initiatives contributed to an improved cost-to-income ratio of 77.4% from 82.5%.

In the context of this challenging operating environment, it is pleasing to report that TCRS grew headline earnings by 25% to R168 million in the 2016 financial year. Earnings from the Transaction Capital Business Solutions division (formerly Rand Trust) were only marginally higher this year, as management maintained credit risk by targeting better quality SME clients and thus yielding high quality earnings. Operational leverage was achieved as total operating costs across TCRS reduced by 6%, with return on sales increasing to 15.3% from 13.1% in the prior year.



During the year, all companies within TCRS were rebranded to leverage off Transaction Capital’s brand equity. This rebranding exercise is the culmination of a two year journey to integrate all of TCRS’s operations under one management team with an overarching strategy, focused on managing risk for all its clients across their customers’ lifecycle.

The strength of TCRS’s services was reaffirmed in 2016 with the Global Credit Ratings (GCR) upgrade of the primary and special servicer ratings assigned to Transaction Capital Recoveries (previously MBD) to SQ1-(za) and SQ1(za) respectively; with the outlooks accorded as stable.

Finally, whilst the migration from non-authenticated early debit order (NAEDO) to authenticated collections was originally set by regulators for 1 October 2016, the implementation of this legislation has been delayed and is to be phased in up until October 2019. In addition, TCRS welcomes the Constitutional Court judgment on 13 September 2016 regarding emolument attachment orders (EAOs) and as a matter of policy does not initiate new EAOs as a collection mechanism. Previously EAOs were only used as a last resort, with considerably less than 0.2% of TCRS revenue as at 30 September 2016 being generated from historical EAOs.

GROUP EXECUTIVE OFFICEThe group executive office contributed R41 million to the group’s headline earnings in the 2016 financial year, a decrease of 20% from the 2015 financial year’s earnings, largely due to lower interest earned on cash on hand post the scheduled receipt of the R215 million vendor loan from Bayport as part of the sale of that business during 2014.

FUNDING AND CAPITAL ADEQUACY Transaction Capital’s balance sheet remains well capitalised, liquid and ungeared at a holding company level. Capital adequacy levels at 30 September 2016 remain high at 38.9% and the group is well positioned to take advantage of and fund organic and acquisitive growth opportunities.

In line with Transaction Capital’s strategy to diversify its funding structures and instruments, it is in the process of establishing a R2 billion credit rated and JSE listed Domestic Note Programme, namely TransCapital Investments Limited. Transaction Capital has been awarded a A- (Long Term, National Scale) and A1- (Short Term, National Scale) credit rating from GCR. It is expected that this programme will enable Transaction Capital to gain access to a new capital pool at an attractive cost to fund organic growth and acquisitive activity.

With growing concerns regarding a potential downgrade of South Africa’s credit rating, Transaction Capital intensified its fundraising activities. SA Taxi raised more than R3.5 billion of debt during the year, enjoying continued uninterrupted access to both local and international funding pools, with a strong funding pipeline available. Despite the above-mentioned market sentiment, SA Taxi has already fulfilled most of its annual debt requirements for the 2017 financial year.

SA Taxi returned to the local listed debt capital markets during August 2016 tapping its S&P Global rated and JSE listed securitisation programme, Transsec 2, successfully issuing R513 million of debt. The tap issuance was privately placed with nine investors, three of which were first time investors, at a weighted average cost of funding of 241 basis points above 3 month JIBAR, which is approximately 100 basis points lower than SA Taxi’s average cost of funding. In October 2016 S&P Global performed their annual review of the Transsec 1 structure, upgrading the ratings on the class B notes (from zaAA to zaAA+), class C notes (from zaA to zaA+), and class D notes (from zaBBB- to zaBBB+), and reaffirming the ratings on the class A notes (zaAAA). The improvement in credit ratings correlates to the strong performance of SA Taxi.

SA Taxi continues to diversify its funding sources, pursuing offshore capital pools. SA Taxi has accessed more than R1.5 billion of debt funding from the European DFI (Developmental Finance Institution) capital markets since 2010, and is successfully penetrating global DFI markets.

ACQUISIT IVE ACTIVITY – DEPLOYMENT OF EXCESS CAPITALShareholders are referred to the SENS announcement released on 14 November 2016, whereby Transaction Capital entered into an agreement to acquire 100% of the equity in Recoveries Corporation Group Limited (“Recoveries Corporation”) for a maximum purchase consideration of A$43 million, with A$33 million being payable upon the acquisition becoming effective and a further potential A$10 million becoming payable over an earn-out period ending on 30 June 2018.

Founded in 1991 in Melbourne Australia, Recoveries Corporation provides consumer customer management solutions to a well-diversified blue-chip client base within the government, insurance, banking and finance, utilities and telecommunications market sectors within Australia. Services include debt recovery solutions (including early stage rehabilitation, late stage collections and legal recoveries), insurance claims recoveries (including claims recoveries and claim file audits), customer services (including reminder calls for pre-collection, courtesy calls, payment arrangement reminders and demand calls), and litigation management via its legal firm, Mason Black Lawyers. Recoveries Corporation employs approximately 600 staff members across its entire business comprising its Australian operations in Melbourne and Sydney, and its near off shore call centre and corporate services centre in Suva, Fiji.




39

Recoveries Corporation is an efficient platform that Transaction Capital intends to develop and scale. The Australian debt collection industry is highly fragmented (with approximately 20 companies accounting for 85% of the market), which provides Transaction Capital with an opportunity to expand acquisitively in Australia. In addition, Recoveries Corporation is a debt collection agency, receiving fees-for-services. Transaction Capital will apply its analytics, pricing expertise and capital management capabilities to the purchase of non-performing loan portfolios in Australia to facilitate Recoveries Corporation’s expansion into this adjacent market. The purchasing of non-performing loan portfolios comprises the majority of debt recovery activity in the Australian industry and accordingly presents an attractive growth prospect.

Recoveries Corporation is a leading market participant with proven technology, strong data analytics skills, and deep industry knowledge operating within the credit risk services market segment. Recoveries Corporation thus possesses intellectual property and expertise that can enhance Transaction Capital’s specialist capabilities thereby assisting Transaction Capital to grow its share in existing market segments and/or facilitate access to new verticals. Recoveries Corporation’s vast expertise in the insurance recoveries industry will augment Transaction Capital’s competencies and facilitate the growth of its fledgling insurance recoveries offering in South Africa.

The acquisition provides Transaction Capital with a strong entry point into the Australian market and the opportunity to expand geographically into a developed, English-speaking economy. Transaction Capital will thus diversify concentration risk as it earns hard currency based returns. Post this acquisition, Recoveries Corporation’s founders will retain their executive director positions and remain closely involved in the organic growth and day-to-day operations of the business.

Further, during November 2016, Transaction Capital concluded an agreement to acquire a 75% interest in RC Value Added Services (Pty) Ltd (“Road Cover”).

Founded in 2005, Road Cover offers its proprietary value added services to the mass consumer market on a subscription basis. Subscribing members obtain access, at no additional cost, to high quality legal and administrative services aimed at assuming the complexity and expense associated with lodging and processing claims against state-run public schemes or state insurance funds, with members receiving 100% of their awarded claims. Services include the administration of Road Accident Fund claims, Compensation for Occupational Injuries and Diseases Act claims and the administration of claims against various road agencies and municipalities relating to damage to a member’s motor vehicle due to poor road conditions.

Road Cover’s products are typically embedded in other subscription based products in the insurance, banking, motor and retail industries, and are also distributed to consumers as a standalone product via direct marketing channels.

The acquisition provides TCRS with a strong entry point into an adjacent market (i.e. the value added services market), where TCRS’s existing competencies can be leveraged to enhance Road Cover’s existing market position. The rationale is to offer Road Cover’s products to the mass consumer market via TCRS’s existing banking, retail, insurance, telecommunications and other clients, thus enabling these clients to generate higher risk-adjusted returns through their engagements with their customers at point of origination. Similarly Road Cover products can be offered into SA Taxi’s client and commuter base. Finally, in addition to enhancing the scale of Road Cover, efficiencies can also be achieved specifically as regards client origination, management (i.e. payment) and collection processes.

Post this acquisition, Road Cover’s founder will retain a 25% ownership of the company and will remain the company’s CEO, responsible for the continued organic growth of Road Cover’s high quality earnings and the consolidation of this highly fragmented market segment via a build-by-acquisition strategy.

Transaction Capital also concluded an agreement to acquire a majority share in The Beancounter Financial Services Proprietary Limited (“The Beancounter”).

Founded in 2008, The Beancounter provides fully outsourced accounting, payroll and tax services through “software-as-a-service” technology to SMEs on a monthly retainer basis. The acquisition provides Transaction Capital with an early entry into the specialist, cloud accounting services market in South Africa, and will augment Transaction Capital Business Solutions’ existing offering to its SME clients. Furthermore, working capital funding can be offered into Beancounter’s SME client base.

It is evident that Transaction Capital has applied stringent investment criteria when evaluating acquisitions, favouring a narrow focus on quality assets operating within its existing or adjacent market segments. Recoveries Corporation, Road Cover and The Beancounter satisfy the following characteristics:

> Niche market participants with proven skills and deep industry knowledge within Transaction Capital’s existing or adjacent market segments;

> Delivering predictable, quality earnings with high cash conversion rates and strong organic growth prospects;

> Driven by technology, data and analytics;

> Intellectual property and expertise that can grow Transaction Capital’s existing businesses and/or facilitate access to new verticals;

> Entrepreneurial and strong management team that are co-invested, with value systems aligned to Transaction Capital’s; and

> Specifically, Recoveries Corporation operates in a developed economy generating hard currency returns, which will diversify Transaction Capital’s risk.

Based on the above, Transaction Capital’s rationale for these acquisitions is justified on a standalone basis. However, Recoveries Corporation, Road Cover and The Beancounter have scalable business models and proven track records, whose competitiveness and value can be enhanced by Transaction Capital through active management, sharing of skills, enhancing technology and monetising Transaction Capital’s proprietary data.

In terms of the JSE Listings Requirements, the Recoveries Corporation acquisition was a Category 2 transaction where the Road Cover and The Beancounter acquisitions were not categorised.

Post the abovementioned acquisitions, the group has R300 million of liquid cash on the balance sheet.



DIRECTOR APPOINTMENTS AND ORGANISATIONAL CHANGESAs previously reported on SENS, from 1 August 2016, Mark Herskovits was appointed to the role of capital markets executive for the Transaction Capital group holding exclusive responsibility for Transaction Capital’s funding and capital markets engagements, with a predominant focus on SA Taxi. Mark remains an executive director of Transaction Capital and a member of the group’s ALCO. With effect from that date, Ronen Goldstein was appointed as the financial director of Transaction Capital, and Kuben Pillay was appointed as an independent non-executive director. Dave Woollam has indicated that he will not be available for re-election at the next Annual General Meeting (AGM), expected to be in early March 2017.

RESTRUCTURE OF SHAREHOLDING A circular proposing a restructure of shareholding was distributed to shareholders on 21 September 2016, which was approved by shareholders at the General Meeting held on 20 October 2016. JMR Holdings (Pty) Ltd, a company controlled by Transaction Capital’s founding shareholders now owns approximately 43.5% of the company. This clear and effective control of the founding shareholders will facilitate continued confidence in Transaction Capital, thus enhancing its debt and equity capital market activities and ability to attract and retain management talent and skills.

CONDITIONAL SHARE PLANIn addition to the restructure of shareholding mentioned above, the circular proposed the implementation of the Transaction Capital Conditional Share Plan (“CSP”). This proposal was also approved by shareholders at the same General Meeting on 20 October 2016. The CSP is seen as a key mechanism to attract and retain key employees while providing them with the opportunity to share in the success of the relevant division in which they are employed and provide alignment with shareholders.

PROSPECTSTransaction Capital is pleased with the current composition of its portfolio and the defensive positioning of its divisions, which enables it to prosper despite South Africa’s challenging macro- and socio-economic context. The constitution of Transaction Capital’s portfolio of assets under two distinct divisional pillars has enabled Transaction Capital to focus on deploying its capital and resources to drive organic and acquisitive growth, thus enhancing the scale and entrenching the leading market positions of its divisions.

Transaction Capital has remained conservative in its acquisitive search, favouring a narrow focus on assets operating within Transaction Capital’s existing or adjacent market segments. The assets acquired generate quality earnings with high cash conversion rates and present strong organic growth prospects, rendering them sound acquisitions on a standalone basis. However, Transaction Capital views these businesses as platforms to be developed and enhanced via active management, by sharing skills and technology, and by utilising TCRS’s proprietary data to offer value added services which will enhance our clients’ risk-adjusted returns.

Transaction Capital remains committed to investing in the organic and acquisitive growth of SA Taxi and TCRS, to augment and develop these platforms, to enhance their scale and entrench their leading market positions, thereby generating societal and stakeholder value. Transaction Capital has a proven track record of creating value by identifying, pricing, acquiring and integrating new businesses, and then developing them to achieve scale and leading positions in their market segments.

In light of Transaction Capital’s positioning within this socio-economic context, management believes that it is well positioned to achieve continued growth in the medium term. In addition the composition of earnings will become more evenly weighted between its two divisions post the acquisitions. The financial information on which this prospect statement is based has not been reviewed and reported on by Transaction Capital’s external auditors.

DIVIDEND POLICYThe dividend policy has been amended to a reduced cover ratio of 2.5 to 3 times (previously 3 to 4 times). This change has been implemented due to the improved quality of earnings as evidenced by high cash conversion rates and lower balance sheet risk, the stable capital requirements of the group, and the ungeared net position of the holding company. All of these factors allow for a higher sustainable dividend policy going forward.




41

DIVIDEND DECLARATIONFollowing the interim dividend of 12 (2015: 10) cents per share, the board has declared a final gross cash dividend of 18 (2015: 12) cents per share for the six months ended 30 September 2016, to those members recorded in the register of members on the record date appearing below. The dividend is declared out of income reserves. A dividend withholding tax of 15% will be applicable to the dividend to all shareholders that are not exempt from the dividend withholding tax, resulting in a net dividend of 15.3 cents per share. The salient features applicable to the final dividend are as follows:

Issued shares as at declaration date 575 228 064

Declaration date Tuesday 22 November 2016

Last day to trade cum dividend Monday 12 December 2016

Final day to trade ex-dividend Tuesday 13 December 2016

Record date Thursday 15 December 2016

Payment date Monday 19 December 2016

Tax reference number: 9466/298/15/6

Share certificates may not be dematerialised or rematerialised between Tuesday, 13 December 2016 and Thursday, 15 December 2016, both dates inclusive.

On Monday, 19 December 2016 the cash dividend will be electronically transferred to the bank accounts of all certificated shareholders where this facility is available. Where electronic fund transfer is not available or desired, cheques dated 19 December 2016 will be posted on that date. Shareholders who have dematerialised their share certificates will have their accounts at their CSDP or broker credited on Monday, 19 December 2016.

BASIS FOR PREPARATIONThe auditors, Deloitte & Touche, have issued their opinion on the consolidated financial statements for the year ended 30 September 2016. The audit was conducted in accordance with International Standards on Auditing. They have issued an unmodified audit opinion.

The summarised consolidated financial statements have been prepared under the supervision of R Goldstein (CA) SA. They represent a summary of the complete set of audited consolidated financial statements of Transaction Capital approved on 22 November 2016. The directors take full responsibility and confirm that this information has been correctly extracted from the consolidated financial statements. The complete set of consolidated financial statements is available at Transaction Capital’s registered office for inspection.

The summarised consolidated financial statements have been prepared in accordance with the requirements of the JSE Limited Listings Requirements for preliminary reports, and the requirements on the Companies Act, no 71 of 2008, applicable to summary financial statements. The Listings Requirements require preliminary reports to be prepared in accordance with the framework concepts as a minimum and the measurement and recognition requirements of IFRS, IAS 34: Interim Financial Reporting and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council.

The accounting policies applied in the preparation of the consolidated financial statements from which the summarised consolidated financial statements were derived are in terms of International Financial Reporting Standards (IFRS) and are consistent, in all material respects, with those details in Transaction Capital’s prior year annual financial statements.

Shareholders are therefore advised that in order to obtain a full understanding of the nature of the auditor’s engagement they should obtain a copy of the unmodified ISA 810 audit report together with the consolidated financial statements and financial information from the Company’s registered office.

APPROVAL BY THE BOARD OF DIRECTORSSigned on behalf of the board of directors:

D M Hurwitz R GoldsteinChief executive officer Financial Director

22 November 2016

Sponsor: Deutsche Securities (SA) Proprietary Limited



TO THE SHAREHOLDERS OF TRANSACTION CAPITAL L IMITED The summarised consolidated financial statements of Transaction Capital Limited, contained in the accompanying preliminary report, which comprise the summarised consolidated statement of financial position as at 30 September 2016, the summarised consolidated income statement, the summarised consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended are derived from the audited consolidated financial statements of Transaction Capital Limited for the year ended 30 September 2016. We expressed an unmodified audit opinion on those consolidated financial statements in our report dated 22 November 2016. Our auditor’s report on the audited consolidated financial statements contained an Other Matter paragraph “Other reports required by the Companies Act” (refer below).

The summarised consolidated financial statements do not contain all the disclosures required by the International Financial Reporting Standards and the requirements of the Companies Act of South Africa as applicable to annual financial statements. Reading the summarised consolidated financial statements, therefore, is not a substitute for reading the audited consolidated financial statements of Transaction Capital Limited.

DIRECTORS’ RESPONSIBILITY FOR THE SUMMARISED CONSOLIDATED FINANCIAL STATEMENTSThe directors are responsible for the preparation of the summarised consolidated financial statements in accordance with the requirements of the JSE Limited Listings Requirements for preliminary reports, set out in the Basis For Preparation paragraph of the summarised consolidated financial statements, and the requirements of the Companies Act of South Africa as applicable to summarised financial statements, and for such internal control as the directors determine is necessary to enable the preparation of the summarised consolidated financial statements that are free from material misstatement, whether due to fraud or error.

The Listings Requirements require preliminary reports to be prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council, and to also, as a minimum, contain the information required by IAS 34, Interim Financial Reporting.

AUDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion on the summarised consolidated financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing (ISA) 810, Engagements to Report on Summary Financial Statements.

INDEPENDENT AUDITOR’S REPORTON SUMMAR ISED F INANCIA L STATEMENTS



43

OPINIONIn our opinion, the summarised consolidated financial statements derived from the audited consolidated financial statements of Transaction Capital Limited for the year ended 30 September 2016 are consistent, in all material respects, with those consolidated financial statements, in accordance with the requirements of the JSE Limited Listings Requirements for preliminary reports, set out in the Basis For Preparation paragraph of summarised consolidated financial statements, and the requirements of the Companies Act of South Africa as applicable to summarised financial statements.

OTHER REPORTS REQUIRED BY THE COMPANIES ACTThe “other reports required by the Companies Act” paragraph in our audit report dated 22 November 2016 states that as part of our audit of the consolidated financial statements for the year ended 30 September 2016, we have read the Directors’ Report, the Audit, Risk and Compliance Committee’s Report and the Company Secretary’s Certificate for the purpose of identifying whether there are material inconsistencies between these reports and the audited consolidated financial statements. These reports are the responsibility of the respective preparers. The paragraph also states that, based on reading these reports, we have not identified material inconsistencies between these reports and the audited annual consolidated financial statements. The paragraph furthermore states that we have not audited these reports and accordingly do not express an opinion on these reports. The paragraph does not have an effect on the summarised consolidated financial statements or our opinion thereon.

Deloitte & Touche Registered Auditors

Per: Mgcinisihlalo JordanPartner22 November 2016



2016Audited

Rm

2015Audited

RmMovement

%

Assets

Cash and cash equivalents 1 276 1 169 9

Tax receivables 28 27 4

Trade and other receivables 472 483 (2)

Inventories 201 21 >100

Loans and advances 7 190 6 160 17

Leased assets 40 – 100

Purchased book debts 728 561 30

Other loans receivable 35 257 (86)

Other investments 477 481 (1)

Intangible assets 93 32 >100

Property and equipment 104 60 73

Goodwill 200 197 2

Deferred tax assets 247 255 (3)

Total assets 11 091 9 703 14

Liabilities

Bank overdrafts 173 52 >100

Tax payables 8 13 (38)

Trade and other payables 286 253 13

Provisions 14 17 (18)

Interest-bearing liabilities 7 477 6 640 13

Senior debt 6 512 5 446 20

Subordinated debt 965 1 194 (19)

Deferred tax liabilities 155 117 32

Total liabilities 8 113 7 092 14

Equity

Ordinary share capital and premium 510 468 9

Reserves 149 122 22

Retained earnings 2 285 1 991 15

Equity attributable to ordinary equity holders of the parent 2 944 2 581 14

Non-controlling interest 34 30 13

Total equity 2 978 2 611 14

Total equity and liabilities 11 091 9 703 14

SUMMAR ISED CONSOL IDATED STATEMENT OF F INANCIA L POS I T ION AT 30 SEPTEMBER 2016



45

2016Audited

Rm

2015Audited

RmMovement

%

Interest and other similar income 1 688 1 504 12

Interest and other similar expense (809) (683) 18

Net interest income 879 821 7

Impairment of loans and advances (209) (233) (10)

Risk-adjusted net interest income 670 588 14

Non-interest revenue 1 279 1 195 7

Operating costs (1 348) (1 295) 4

Non-operating profit – 14 (100)

Equity accounted earnings – (3) (100)

Profit before tax 601 499 20

Income tax expense (138) (94) 47

Profit for the year 463 405 14

Attributable to non-controlling equity holders 5 4 25

Attributable to ordinary equity holders of the parent 458 401 14

Basic earnings per share (cents) 80.6 70.4 14

Diluted basic earnings per share (cents) 80.0 69.8 15

Headline earnings per share (cents) 80.6 69.0 17

2016Audited

Rm

2015Audited

RmMovement

%

Profit for the year 463 405 14

Other comprehensive income 24 14 71

Fair value losses arising on the cash flow hedge during the year (4) (1) >100

Deferred tax 1 <1 100

Fair value gains arising on valuation of assets held at fair value through other comprehensive income 27 15 80

Total comprehensive income for the year 487 419 16

Attributable to non-controlling equity holders 5 4 25

Attributable to ordinary equity holders of the parent 482 415 16

SUMMAR ISED CONSOL IDATED INCOME STATEMENT FOR THE YEAR ENDED 30 SEPTEMBER 2016

SUMMARISED CONSOL IDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 SEPTEMBER 2016



2016Audited

Rm

2015Audited

RmMovement

%

Profit attributable to ordinary equity holders of the parent 458 401 14

Headline earnings adjustable item added

Profit on sale of joint venture – (8) (100)

Headline earnings 458 393 17

Share capital and

premiumOther

reservesRetained

earnings

Ordinary shareholders

equity

Non- controlling

interestsTotal

equity

Balance at 30 September 2014 483 96 2 384 2 963 – 2 963

IFRS 9 transitional adjustments – – (672) (672) – (672)

Revised opening balance 483 96 1 712 2 291 – 2 291

Total comprehensive income – 14 401 415 4 419

Profit for the year – – 401 401 4 405

Other comprehensive income for the year – 14 – 14 – 14

Dividends paid – – (114) (114) – (114)

Grant of share appreciation rights – 16 – 16 – 16

Share appreciation rights – settlements – (4) (8) (12) – (12)

Issue of shares 12 – – 12 – 12

Repurchase of shares (27) – – (27) – (27)

Transactions with non-controlling equity holders – – – – 26 26

Balance at 30 September 2015 468 122 1 991 2 581 30 2 611

Total comprehensive income – 24 458 482 5 487

Profit for the year – – 458 458 5 463

Other comprehensive income for the year – 24 – 24 – 24

Dividends paid – – (135) (135) (1) (136)

Grant of share appreciation rights – 16 – 16 – 16

Share appreciation rights – settlements – (13) (29) (42) – (42)

Issue of shares 53 – – 53 – 53

Repurchase of shares (11) – – (11) – (11)

Balance at 30 September 2016 510 149 2 285 2 944 34 2 978

SUMMAR ISED HEADL INE EARN INGS RECONCI L IAT ION FOR THE YEAR ENDED 30 SEPTEMBER 2016

SUMMAR ISED CONSOL IDATED STATEMENT OF CHANGES IN EQU I TY FOR THE YEAR ENDED 30 SEPTEMBER 2016



47

2016Audited

Rm

2015Audited

RmMovement

%

Net cash utilised in operating activities (108) (9) >100

Net cash generated from/(utilised) in investing activities 105 (91) >100

Net cash utilised by financing activities (11) (27) (59)

Net decrease in cash and cash equivalents (14) (127) (89)

Cash and cash equivalents at the beginning of the year 1 117 1 244 (10)

Cash and cash equivalents at the end of the year 1 103 1 117 (1)

SUMMAR ISED CONSOL IDATED STATEMENT OF CASH F LOWS FOR THE YEAR ENDED 30 SEPTEMBER 2016



SA Taxi TCRS Group executive office Group

2016Audited

Rm

2015Audited

Rm

2016Audited

Rm

2015Audited

Rm

2016Audited

Rm

2015Audited

Rm

2016Audited

Rm

2015Audited

Rm

Condensed income statement for the year ended 30 September 2016

Net interest income 744 672 65 71 70 78 879 821

Impairment of loans and advances (206) (233) (3) – – – (209) (233)

Non-interest revenue 315 242 964 953 – – 1 279 1 195

Total operating costs (541) (445) (796) (845) (11) (5) (1 348) (1 295)

Non-operating profit – – – 14 – – – 14

Equity accounted earnings – – – (3) – – – (3)

Profit before tax 312 236 230 190 59 73 601 499

Headline earnings attributable to equity holders of the parent 249 208 168 134 41 51 458 393

Condensed statement of financial position at 30 September 2016

Assets

Cash and cash equivalents 761 594 72 57 443 518 1 276 1 169

Loans and advances 6 675 5 703 515 457 – – 7 190 6 160

Leased assets 40 – – – – – 40 –

Purchased book debts – – 728 561 – – 728 561

Other investments 477 481 – – – – 477 481

Other assets and receivables 924 750 364 299 92 283 1 380 1 332

Total assets 8 877 7 528 1 679 1 374 535 801 11 091 9 703

Liabilities

Bank overdrafts 173 44 – 8 – – 173 52

Interest-bearing liabilities 6 482 5 429 558 467 437 744 7 477 6 640

Group loans 913 1 019 230 166 (1 143) (1 185) – –

Other liabilities and payables 167 134 285 246 11 20 463 400

Total liabilities 7 735 6 626 1 073 887 (695) (421) 8 113 7 092

Total equity 1 142 902 606 487 1 230 1 222 2 978 2 611

SUMMAR ISED SEGMENT REPORT FOR THE YEAR ENDED 30 SEPTEMBER 2016



49

SA Taxi TCRS Group executive office Group

2016Audited

Rm

2015Audited

Rm

2016Audited

Rm

2015Audited

Rm

2016Audited

Rm

2015Audited

Rm

2016Audited

Rm

2015Audited

Rm

Condensed income statement for the year ended 30 September 2016

Net interest income 744 672 65 71 70 78 879 821

Impairment of loans and advances (206) (233) (3) – – – (209) (233)

Non-interest revenue 315 242 964 953 – – 1 279 1 195

Total operating costs (541) (445) (796) (845) (11) (5) (1 348) (1 295)

Non-operating profit – – – 14 – – – 14

Equity accounted earnings – – – (3) – – – (3)

Profit before tax 312 236 230 190 59 73 601 499

Headline earnings attributable to equity holders of the parent 249 208 168 134 41 51 458 393

Condensed statement of financial position at 30 September 2016

Assets

Cash and cash equivalents 761 594 72 57 443 518 1 276 1 169

Loans and advances 6 675 5 703 515 457 – – 7 190 6 160

Leased assets 40 – – – – – 40 –

Purchased book debts – – 728 561 – – 728 561

Other investments 477 481 – – – – 477 481

Other assets and receivables 924 750 364 299 92 283 1 380 1 332

Total assets 8 877 7 528 1 679 1 374 535 801 11 091 9 703

Liabilities

Bank overdrafts 173 44 – 8 – – 173 52

Interest-bearing liabilities 6 482 5 429 558 467 437 744 7 477 6 640

Group loans 913 1 019 230 166 (1 143) (1 185) – –

Other liabilities and payables 167 134 285 246 11 20 463 400

Total liabilities 7 735 6 626 1 073 887 (695) (421) 8 113 7 092

Total equity 1 142 902 606 487 1 230 1 222 2 978 2 611



The fair values of financial assets and liabilities have been disclosed below:

Carrying value2016

Rm

Fair value2016

Rm

Carrying value2015

Rm

Fair value2015

Rm

30 September

Assets

Loans and advances 7 190 7 191 6 160 6 157

Purchased book debts 728 728 561 561

Other loans receivable 35 35 257 257

Trade and other receivables* 413 413 429 429

Cash and cash equivalents 1 276 1 276 1 169 1 169

9 642 9 643 8 576 8 573

Liabilities

Interest-bearing liabilities 7 477 7 459 6 640 6 569

– Fixed rate liabilities 427 426 777 770

– Floating rate liabilities 7 050 7 033 5 863 5 799

Trade and other payables** 228 228 201 201

Bank overdrafts 173 173 52 52

7 878 7 860 6 893 6 822

Net exposure 1 764 1 783 1 821 1 889 * Prepayments are not financial assets and therefore have been excluded from trade and other receivables.** Revenue received in advance, leave pay accrual and deferred lease liability are not financial liabilities and therefore have been excluded from trade

and other payables.

FA I R VA LUE D ISCLOSURE FOR THE YEAR ENDED 30 SEPTEMBER 2016



51

LEVEL DISCLOSURES (Rm)

2016

Level 1 Level 2 Level 3 Total

2016 Financial assets at fair value through profit or loss

Entry-level vehicles – – 62 62

Other financial assets – – 158 158

Financial assets at fair value through other comprehensive income

Derivatives – 73 – 73

Investment in unlisted entity – – 477 477

Total – 73 697 770

2015

Level 1 Level 2 Level 3 Total

2015 Financial assets at fair value through profit or loss

Entry-level vehicles – – 120 120

Other financial assets – – 147 147

Financial assets at fair value through other comprehensive income

Derivatives – 108 – 108

Investment in unlisted entity – – 481 481

Total – 108 748 856



Reconciliation of Level 3 Fair Value Measurements of Financial Assets

2016

Fair value through

profit or loss

Fair valuethrough othercomprehensive

income Total

2016

Opening balance 267 343 610

Total gains or losses In profit or loss (83) – (83)

In other comprehensive income – 31 31

Other movements* 32 – 32

Closing balance of fair value measurement 216 374 590

Capital deployed to cell – 107 107

Closing balance of financial instrument 216 481 697

2015

Fair value through

profit or loss

Fair valuethrough other

comprehensiveincome Total

2015

Opening balance 358 238 596

Total gains or losses In profit or loss (12) – (12)

In other comprehensive income – 15 15

Purchases – 90 90

Other movements* (79) – (79)

Closing balance of fair value measurement 267 343 610

Capital deployed to cell – 138 138

Closing balance of financial instrument 267 481 748 * Other movements include charges on accounts less collections received and write-off's on entry-level vehicles as well as additions to other financial assets.

FA I R VA LUE D ISCLOSURE continued



53

Sensitivity analysis of valuations using unobservable inputsAs part of the group’s risk management processes, stress tests are applied on the significant unobservable parameters to generate a range of potentially possible alternative valuations. The financial instruments that most impact this sensitivity analysis are those with the more illiquid and/or structured portfolios. The stresses are applied independently and do not take account of any cross correlation between separate asset classes that would reduce the overall effect on the valuations. A significant parameter has been deemed to be one which may result in a change in the fair value asset or liability of more than 10%. This is demonstrated by the following sensitivity analysis which includes reasonable range of possible outcomes:

GROUPMovement in fair value given the 10% change in significant assumptions:

2016 2015

SA Taxi – loans and advances: entry-level vehicles10%

Favourable10%

Unfavourable10%

Favourable10%

Unfavourable

Significant unobservable input and description of assumption

Average probability of default 17 (35) 56 (11)

Average loss given write-off 38 (35) 55 (55)

Average collateral value 2 (2) 3 (3)

Discount rate: The rate used to discount projected future cash flows to present value 3 (3) 4 (4)

Average effective interest rate 3 (3) 4 (4)

2016 2015

SA Taxi – investment in unlisted entity10%

Favourable10%

Unfavourable10%

Favourable10%

Unfavourable


Premium per policy: average insurance premium per policy in a year 17 (17) 11 (11)

Gross loss ratio: Reported claims (excluding the movement in the claims that are incurred but not yet reported reserve) expressed as a percentage of gross written premium in a year 88 (88) 48 (48)

Mid-term insurance cancellations: Number of policies cancelled during a year expressed as a percentage of total policies insured at the beginning of a year 6 (6) 6 (6)


2016 2015

Transaction Capital Recoveries (previously MBD) – other financial assets

10% Favourable

10% Unfavourable

10% Favourable

10% Unfavourable


Cash flows: change in the expected revenue – (1) 4 (5)

Cash flows: Change in expected costs 1 (1) 1 (1)




GROUPDATA SHEETFOR THE YEAR ENDED 30 SEPTEMBER


GROUP DATA SHEET 2016

Year ended 30 September Movement

2016 2015 2016

TRANSACTION CAPITAL GROUPConsolidated income statement

Interest and other similar income Rm 1 688 1 504 12%

Interest and other similar expense Rm (809) (683) 18%


Impairment of loans and advances Rm (209) (233) (10%)

Risk-adjusted net interest income Rm 670 588 14%

Non-interest revenue Rm 1 279 1 195 7%

Total operating costs Rm (1 348) (1 295) 4%

Advertising, marketing and public relations Rm (11) (9) 22%

Amortisation of intangibles Rm (13) (7) 86%

Amortisation of purchased book debts Rm (112) (130) (14%)

Bank charges Rm (14) (12) 17%

Commissions paid Rm (17) (12) 42%

Communication costs Rm (56) (60) (7%)

Consulting fees Rm (23) (14) 64%

Cost of sale of goods Rm (40) (31) 29%

Depreciation Rm (22) (17) 29%

Employee expenses Rm (704) (671) 5%

Fees paid Rm (34) (30) 13%

Information technology Rm (29) (24) 21%

Audit fees Rm (11) (12) (8%)

Operating lease rentals – premises Rm (30) (39) (23%)

Risk management Rm (12) (11) 9%

Staff welfare Rm (12) (13) (8%)

Travel Rm (12) (13) (8%)

Input VAT disallowed Rm (30) (29) 3%

Other Rm (166) (161) 3%

Operating income Rm 601 488 23%

Non-operating profit Rm – 14 (100%)

Equity accounted earnings Rm – (3) (100%)

Profit before tax Rm 601 499 20%

Income tax expense Rm (138) (94) 47%

Profit for the year Rm 463 405 14%

Profit for the year attributable to:

Ordinary equity holders of the parent Rm 458 401 14%

Non-controlling equity holders Rm 5 4 25%

Headline earningsProfit attributable to ordinary equity holders Rm 458 401 14%

Adjustments for:

Profit on disposal of joint venture Rm – (8) (100%)


Number of shares m 571.9 568.1 1%

Weighted average number of shares in issue m 568.5 569.3 (0%)

DATA SHEET AT 30 SEPTEMBER 2016


GROUP DATA SHEET 2016 57


2016 2015 2016

TRANSACTION CAPITAL GROUP continuedConsolidated statement of financial positionAssets

Loans and advances Rm 7 190 6 160 17%

Leased assets Rm 40 – 100%


Property and equipment Rm 104 60 73%

Inventories Rm 201 21 857%

Goodwill Rm 200 197 2%

Intangible assets Rm 93 32 191%

Cash and cash equivalents Rm 1 276 1 169 9%

Other investments Rm 477 481 (1%)

Other assets Rm 782 1 022 (23%)

Total assets Rm 11 091 9 703 14%

Liabilities

Interest-bearing liabilities Rm 7 477 6 640 13%

Senior debt Rm 6 512 5 446 20%

Subordinated debt Rm 965 1 194 (19%)

Bank overdrafts Rm 173 52 233%

Other liabilities Rm 463 400 16%

Total liabilities Rm 8 113 7 092 14%

Equity

Equity attributable to ordinary equity holders of the parent Rm 2 944 2 581 14%

Non-controlling interest Rm 34 30 13%

Total equity Rm 2 978 2 611 14%

Total equity and liabilities Rm 11 091 9 703 14%

Shareholder statisticsBasic earnings per share cents 80.6 70.4 14%

Headline earnings per share cents 80.6 69.0 17%

Diluted basic earnings per share cents 80.0 69.8 15%

Net asset value per share cents 514.8 454.4 13%

Tangible net asset value per share cents 463.5 414.0 12%

Interim dividend per share cents 12.0 10.0 20%

Final dividend per share cents 18.0 12.0 50%

Total dividend per share cents 30.0 22.0 36%

Total dividend cover cents 2.7 3.1 (13%)




2016 2015 2016

TRANSACTION CAPITAL GROUP continuedCapital adequacy ratio

Equity Rm 2 978 2 611 14%

Subordinated debt Rm 965 1 194 (19%)

Total capital Rm 3 943 3 805 4%

Less: Goodwill Rm (200) (197) 2%

Total capital less goodwill Rm 3 743 3 608 4%

Total assets less goodwill and cash and cash equivalents Rm 9 615 8 337 15%

Capital adequacy ratio % 38.9 43.3

Equity % 28.9 29.0

Subordinated debt % 10.0 14.3

Performance indicators







Non-performing loans Rm 1 250 1 138 10%


Average assets Rm 10 422 9 135 14%

Average tangible assets Rm 10 076 8 830 14%

Average equity Rm 2 718 2 422 12%

Average tangible equity Rm 2 372 2 118 12%

Average gross loans and advances Rm 7 180 6 437 12%

Average interest-bearing liabilities Rm 7 142 6 367 12%

Total income Rm 2 967 2 699 10%



Non-interest revenue as a % of total income % 43.1 44.3


Effective tax rate % 23.0 18.8

Return on average assets (ROA) % 4.4 4.4

Return on average tangible assets (ROTA) % 4.6 4.6

Return on average equity (ROE) % 16.9 16.7

Return on average tangible equity (ROTE) % 19.3 19.1

EBITDA (Transaction Capital Recoveries and Principa) Rm 239 188 27%

Gearing times 3.8 3.8 0%

Return on total sales (ROS) % 15.6 15.0


Employees Number 3 260 3 913 (17%)




2016 2015 2016

SA TAXICondensed income statement

Interest and other similar income Rm 1 486 1 290 15%



Impairment of loans and advances Rm (206) (233) (12%)


Total operating costs Rm (541) (445) 22%



Profit after tax Rm 254 212 20%


Profit and headline earnings for the year attributable to:

Ordinary equity holders of the parent Rm 249 208 20%

Non-controlling equity holders Rm 5 4 25%

Other information

Depreciation Rm 12 7 71%

Amortisation of intangible assets Rm 6 3 100%

Statement of financial positionAssets

Cash and cash equivalents Rm 761 594 28%

Other investments Rm 477 481 (1%)

Inventories Rm 201 17 1 082%

Loans and advances Rm 6 675 5 703 17%



Goodwill and intangibles Rm 93 74 26%


Intangibles Rm 30 14 114%

Other assets Rm 559 626 (11%)


Liabilities

Bank overdrafts Rm 173 44 293%

Interest-bearing liabilities Rm 6 482 5 429 19%

Senior debt Rm 5 991 5 011 20%

Subordinated debt Rm 491 418 17%

Group loans Rm 913 1 019 (10%)


Total liabilities Rm 7 735 6 626 17%

Segment net assets Rm 1 142 902 27%




2016 2015 2016

SA TAXI continuedCapital adequacy

Equity Rm 1 142 902 27%

Group loans Rm 913 1 019 (10%)

Subordinated debt Rm 491 418 17%

Total capital Rm 2 546 2 339 9%

Less: Goodwill Rm (63) (60) 5%

Total capital less goodwill Rm 2 483 2 279 9%

Total assets less goodwill and cash and cash equivalents Rm 8 053 6 874 17%


Financial measures




Return on average tangible assets (ROTA) % 3.1 3.1

Gross yield on average gross loans and advances % 26.9 25.7


Return on average tangible equity (ROTE) % 30.7 36.0


Debt issued Rm 3 316 2 418 37%


Average tangible assets Rm 8 179 6 926 18%


Average equity Rm 996 750 33%

Average tangible equity Rm 827 592 40%

Average interest-bearing liabilities Rm 7 006 6 173 13%

Employees Number 840 627 34%

Operational measuresStatus

Total number of loans Number 26 352 25 033 5%



Net loans and advances Rm 6 675 5 703 17%


% Leases/Repossessions (Loans and advances, on value) % 95/5 96/4

% Premium/Entry-level (gross loans and advances, on value) % 99/1 98/2


Originations

Number of loans originated Number 6 866 6 005 14%

Value of loans originated Rm 2 409 1 931 25%

Average remaining loan term Months 39 40 (3%)

% New/existing client (on value) % 73/27 76/24

New vehicle originations Rm 1 819 1 375 32%

% Premium/Entry-level (new vehicle disbursements, on value) % 100/0 100/0




2016 2015 2016

SA TAXI continuedOperational measures continuedAverage origination value R 350 930 321 565 9%

Credit performance



Non-performing loans Rm 1 242 1 138 9%



Impairment provision % repossessions % 30.0 38.7

TRANSACTION CAPITAL RISK SERVICES (TCRS)Condensed income statementInterest and other similar income Rm 136 133 2%


Net interest income Rm 65 71 (8%)

Impairment of loans and advances Rm (3) – 100%


Total operating costs Rm (796) (845) (6%)

Equity accounted earnings Rm – (3) (100%)

Non-operating profit Rm – 14 (100%)



Profit after tax Rm 168 142 18%

Profit attributable to ordinary equity holders Rm 168 142 18%

Adjusted for:

Profit on disposal of joint venture Rm – (8) (100%)


EBITDA (Transaction Capital Recoveries and Principa) Rm 239 188 27%

Other information

Depreciation Rm 9 8 13%

Amortisation of intangible assets Rm 7 3 133%




2016 2015 2016

TRANSACTION CAPITAL RISK SERVICES continuedStatement of financial positionAssets

Cash and cash equivalents Rm 72 57 26%

Loans and advances Rm 515 457 13%



Goodwill and intangibles Rm 139 91 53%


Intangibles Rm 63 20 215%

Other assets Rm 195 185 5%


Liabilities

Bank overdrafts Rm – 8 (100%)

Interest-bearing liabilities Rm 558 467 19%

Senior debt Rm 558 467 19%

Group loans Rm 230 166 39%


Total liabilities Rm 1 073 887 21%

Segment net assets Rm 606 487 24%

Financial measures

Non-interest revenue net of amortisation Rm 852 823 4%




Return on average assets (ROA) excluding Transaction Capital Business Solutions % 15.0 13.0

Return on average equity (ROE) excluding Transaction Capital Business Solutions % 31.1 26.8



Return on sales (ROS) % 15.3 13.1


Average equity Rm 534 510 5%

Average interest-bearing liabilities Rm 701 705 (1%)

Employees Number 2 395 3 265 (27%)




2016 2015 2016

TRANSACTION CAPITAL RISK SERVICES continuedOperational measuresNumber of agency clients Number 83 81 2%

Number of direct staff Number 2 035 2 787 (27%)

Call centres Number 6 11 (45%)

Assets under management Rb 35.4 35.4 0%

Agency Rb 16.1 19.4 (17%)

Principal Rb 19.3 16.0 21%

Average book value of purchased book debts Rm 599 538 11%

Asset turnover ratio (ATO) % 71.1 71.7

Agency/Principal collections revenue split % 47/53 49/51

Estimated remaining collections (ERC) Rm 1 313 1 034 27%

Transaction Capital Business Solutions (formerly Rand Trust)Gross loans and advances Rm 497 433 15%

Impairment provision Rm (11) (11) 0%

Loans and advances Rm 486 422 15%

GROUP EXECUTIVE OFFICECondensed income statementNet interest income Rm 70 78 (10%)

Net operating costs Rm (11) (5) 120%

Profit before tax Rm 59 73 (19%)

Profit after tax Rm 41 51 (20%)

Headline earnings Rm 41 51 (20%)

Other informationDepreciation Rm 1 – 100%

Statement of financial positionAssets

Cash and cash equivalents Rm 443 518 (14%)

Property and equipment Rm 3 4 (25%)

Other assets Rm 89 279 (68%)

Total assets Rm 535 801 (33%)

Liabilities

Interest-bearing liabilities Rm 437 744 (41%)

Group loans Rm (1 143) (1 185) (4%)

Other liabilities Rm 11 20 (45%)

Total liabilities Rm (695) (421) 65%

Segment net assets Rm 1 230 1 222 1%

Employees Number 25 21 19%




2016 2015 2016

ENVIRONMENT

Estimated minibus taxi market Vehicles 200 000 200 000 0%

Estimated minibus taxi market – financed Vehicles 70 000 70 000 0%

Consumers with impaired records NCR % 40.2 45.0



PRO FORMA INFORMATIONThe following information is presented in order to facilitate the comparison of 2014, 2015 and 2016 financial information.The pro forma information presents the effects of the adoption of IFRS 9 for the year ended 30 September 2014, based on theassumption that the adoption of IFRS 9 was implemented on 1 October 2013. Refer to the SENS released on 24 November 2015 for full pro forma effect of early adoption of IFRS9.

The pro forma financial information has been reported on by Deloitte & Touche in terms of International Standard on Assurance Engagements 3420 – Assurance Engagements to Report on the compilation of Pro Forma Financial Information and their Reporting Accountants Report can be inspected at the registered office of the company.

Year ended 30 September 2016 Movement

2016 Audited

2015 Audited

2014Pro forma 2016 2015

Consolidated income statement

Headline earnings from continuing operations Rm 458 393 302 17% 30%

Net interest income Rm 879 821 725 7% 13%

Consolidated statement of financial position

Loans and advances Rm 7 190 6 160 5 540 17% 11%

Total assets Rm 11 091 9 703 8 945 14% 8%

Equity Rm 2 978 2 611 2 291 14% 14%

Shareholder statistics

Headline earnings per share from continuing operations cents 80.6 69.0 52.4 17% 32%

Net asset value per share cents 514.8 454.4 402.2 13% 13%

Tangible net asset value per share cents 463.8 414.0 365.2 12% 13%


Gross loans and advances Rm 7 687 6 713 6 089 15% 10%

Impairment provision Rm (497) (553) (549) (10%) 1%

Provision coverage % 6.5 8.2 9.0

Non-performing loan ratio % 16.3 17.0 18.8

Non-performing loan coverage % 39.8 48.6 47.9

Non-performing loans Rm 1 250 1 138 1 145 10% (1%)

Capital adequacy ratio % 38.9 43.3 45.4

Gearing times 3.8 3.8 3.9 0% (3%)

Net interest margin % 12.2 12.8 13.0

Total income Rm 2 967 2 699 2 458 10% 10%

Credit loss ratio % 2.9 3.6 4.2

Cost-to-income ratio % 62.5 64.2 67.8

Return on average assets (ROA) % 4.4 4.4 3.5

Return on average tangible assets (ROTA) % 4.6 4.6 3.7

Return on average equity (ROE) % 16.9 16.7 12.8

Return on average tangible equity (ROTE) % 19.3 19.1 14.7

Interim dividend per share cents 12.0 10.0 6.0 20% 67%

Final dividend per share cents 18.0 12.0 10.0 50% 20%

Total dividend per share cents 30.0 22.0 16.0 36% 38%

Total dividend cover times 2.7 3.1 3.3 (13%) (6%)



Year ended 30 September 2016 Movement

2016 Audited

2015 Audited

2014Pro forma 2016 2015

SA TAXICredit performance

Gross loans and advances Rm 7 151 6 238 5 592 15% 12%

Impairment provision Rm (476) (535) (526) (11%) 2%

Non-performing loan ratio % 17.4 18.2 20.5

Credit loss ratio % 3.1 3.9 4.4

Provision coverage % 6.7 8.6 9.4

Non-performing loan coverage % 38.3 47.0 45.9


Headline earnings Rm 254 212 175 20% 21%

Net interest margin % 11.1 11.3 11.3

Average cost of borrowing % 10.6 10.0 9.7


TRANSACTION CAPITAL RISK SERVICESPerformance indicators

Headline earnings Rm 168 134 88 25% 52%

Non-interest revenue Rm 964 953 861 1% 11%

Purchased book debts Rm 728 561 471 30% 19%


Services: EBITDA (Transaction Capital Recoveries and Principa) Rm 239 188 121 27% 55%


FORMULAE AND DEF IN IT IONS 67

ITEM DEFINITIONAsset turnover ratio Gross principal book revenue expressed as a percentage of average carrying value of

purchased book debts

Average equity attributable to ordinary equity holders of the parent

Sum of equity attributable to ordinary equity holders of the parent at the end of each month from September to September divided by 13

Average gross loans and advances Sum of gross loans and advances at the end of each month from September to September divided by 13

Average interest-bearing liabilities Sum of interest-bearing liabilities at the end of each month from September to September divided by 13

Average tangible assets Sum of tangible assets at the end of each month from September to September divided by 13. Tangible assets excludes investments fair valued through equity for accounting purposes

Average tangible equity attributable to ordinary equity holders of the parent

Sum of equity attributable to ordinary equity holders of the parent less goodwill, intangible assets and fair value movements through equity relating to investments at the end of each month from September to September divided by 13

Average total assets Sum of total assets at the end of each month from September to September divided by 13

Average cost of borrowing Interest expense expressed as a percentage of average interest-bearing liabilities

Capital adequacy ratio Total equity plus subordinated debt capital less goodwill expressed as a percentage of total assets less goodwill and cash and cash equivalents

Cost-to-income ratio Total operating costs expressed as a percentage of net interest income plus non-interest revenue

Credit loss ratio Impairment of loans and advances expressed as a percentage of average gross loans and advances

EBITDA Profit before net interest income, tax, depreciation and amortisation of intangible assets (specifically excluding amortisation of purchased book debts) for Transaction Capital Recoveries (MBD) and Principa only

Effective tax rate Income tax expense expressed as a percentage of profit before tax

Entry-level vehicles Vehicles brands: CAM, CMC, Jinbei, King Long, Polar Sun, Foton, Force Traveller, Peugeot

Estimated remaining collections Estimated undiscounted value of remaining gross cash collections of purchased book debts, estimated to be recovered over the next 96 months

Gearing Total assets divided by equity attributable to ordinary equity holders of the parent expressed in times

Gross loans and advances Gross loans and advances specifically exclude the value of the written-off book brought back on to the balance sheet

Gross yield on average gross loans and advances

Total income divided by average gross loans and advances

Gross yield on average assets Total income divided by average assets

FORMULAEAND DEF IN I T IONS


FORMULAE AND DEF IN IT IONS

ITEM DEFINITIONHeadline earnings Headline earnings is defined and calculated as per the guidance issued by the South

African Institute of Chartered Accountants (SAICA) in Circular 2/2013 of December 2013, currently being basic earnings attributable to ordinary shareholders adjusted for goodwill impairments, capital profits and losses and other non-headline items

Headline earnings from continuing operations

Headline earnings adjusted for non-headline items arising from discontinued operations as defined in SAICA Circular 2/2013

Headline earnings per share Headline earnings divided by weighted average number of ordinary shares in issue

Headline earnings per share from continuing operations

Headline earnings from continuing operations divided by weighted average number of ordinary shares in issue

Net asset value per share Equity attributable to ordinary equity holders of the parent divided by number of ordinary shares in issue

Net interest margin Net interest income as a percentage of average gross loans and advances

Non-performing loan coverage Impairment provision expressed as a percentage of non-performing loans

Non-performing loan ratio Non-performing loans expressed as a percentage of gross loans and advances

Non-performing loans (a) the balance outstanding of loans and advances with a contractual delinquency greater than three months including repossessed stock on hand (b) reduced by the balance of such outstanding loans and advances for which three cumulative qualifying payments have been received in the three month period preceding the measurement date

Normalised headline earnings Headline earnings adjusted for non-headline items arising from discontinued operations as defined in SAICA Circular 2/2013 and the cost of listing equity and debt instruments on an exchange

Normalised headline earnings per share

Normalised headline earnings divided by weighted average number of ordinary shares in issue

Premium vehicles Non-entry level vehicles

Provision coverage Impairment provision expressed as a percentage of gross loans and advances

Return on average assets Profit for the year expressed as a percentage of average total assets

Return on average tangible assets Profit for the year expressed as a percentage of average tangible assets

Return on average equity Profit for the year attributable to ordinary equity holders of the parent expressed as a percentage of average equity attributable to ordinary equity holders of the parent

Return on average tangible equity Profit for the year attributable to ordinary equity holders of the parent expressed as a percentage of average tangible equity attributable to ordinary equity holders of the parent

Return on total sales Profit for the year expressed as a percentage of total income

Structurally subordinated debt Senior debt issued by a holding company within the group

Subordinated debt Debt subordinated by agreement with the lender plus structurally subordinated debt

Tangible assets Total assets less goodwill and other intangible assets

Tangible net asset value per share Equity attributable to ordinary equity holders of the parent less goodwill and other intangible assets divided by number of ordinary shares in issue

Total income Interest and other similar income plus non-interest revenue

Weighted average number of ordinary shares in issue

The number of ordinary shares in issue at the beginning of the year increased by shares issued during the year, weighted on a time basis for the year during which they have participated in the income of the group excluding treasury shares

FINANCE HOUSE, 230 JAN SMUTS AVENUE, DUNKELD WEST, JOHANNESBURG, 2196

PO BOX 41888, CRAIGHALL, 2024, REPUBLIC OF SOUTH AFRICA

TEL: +27 (0) 11 049 6700 • FAX: +27 (0) 11 049 6899

WWW.TRANSACTIONCAPITAL.CO.ZA

Documents

TRANSACTION CAPITAL YEAR END RESULTS 2016 7 6 GROUP PORTFOLIO MIX 1. Attributable to the group, excluding minority interest 2. High yielding loan to Bayport repaid in Jan 2016 Headline