Namibia · Bidvest Namibia Limited is a publicly owned company listed on the Namibian Stock...
Transcript of Namibia · Bidvest Namibia Limited is a publicly owned company listed on the Namibian Stock...
Namibia
Annual Integrated Report 2017
Namibia
PERFORMANCE OVERVIEW
10 – 11 Chairman’s statement
12 – 15 Chief executive’s review
16 – 18 Corporate governance report
19 – 20 Risk committee report
21 – 22 Audit committee report
23 – 26 Remuneration committee report
27 – 29 Sustainability report
30 – 47 Operational reviews
48 – 50 Financial director’s review
51 Value added statement
52 – 53 Nine-year review
54 – 55 Segmental report
GROUP OVERVIEW
1 Who we are
3 Corporate social investment
4 – 5 Abridged group structure
6 – 7 Operational highlights
8 – 9 Directorate
What’s inside
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
59 Statement of directors’ responsibilities and approval
59 Declaration by company secretary
60 – 62 Independent auditor’s report
63 – 67 Directors’ report
68 – 77 Accounting policies
78 Statements of financial position
79 Statements of profit or loss and other comprehensive income
80 – 81 Statements of changes in equity
82 Statements of cash flows
83 – 114 Notes to the financial statements
115 Shareholders’ diary
116 Administration
For access on your mobile to the Bidvest
Namibia website, scan the QR code above.
About this report
Bidvest Namibia Limited is a publicly owned company listed on the Namibian Stock Exchange since 26 October 2009. This report
covers the year under review 1 July 2016 to 30 June 2017 and includes material issues up to board approval on 19 August 2017.
The report covers all operations. It provides a holistic but concise view of social, environmental and economic factors affecting
the ability of the business to create value over the short, medium and long term.
The report is aimed at a wide range of stakeholders, including, inter alia, shareholders, suppliers, employees, government and
providers of funding.
The integrated reporting approach and structure allows for comparability of financial and non-financial data. Any restatement of
comparable information has been noted as such. Materiality was applied to information gathered during the data collection, as
well as board and management interviews.
The following frameworks and reporting requirements were considered:
– Corporate Governance Code for Namibia (NamCode), based on Third Report of the King Commission on Corporate Governance
in South Africa (King III);
– Namibia Companies Act, No 28 of 2004;
– Namibian Stock Exchange Listings Requirements; and
– International Financial Reporting Standards.
Further information is available on our website www.bidvestnamibia.com.na
Who we are
Our philosophy
we subscribe to
in all business
dealings:
Excellence
Accountability Integrity
Innovation
Transparency
Bidvest Namibia is a group
of companies listed on the
Namibian Stock Exchange.
We believe in creating opportunities and growing
people. We understand that
people create wealth, and
that companies only report it.
Our focus areas for our people are employment equity, industrial relations, employee health
and safety, developing
Namibians and attracting
and retaining skilled
Namibians.
In a big business environment we run our
company with determination
and commitment evident in a small business heart.
We have a diverse portfolio
of businesses ranging from
automotive, fishing, freight and logistics, services,
trading and distribution,
which comprises well recognised brands within the Namibian
market.
Our automotive, fishing, freight and logistics, services, trading and
distribution divisions employ
3 481people, creating shareholder value we report on.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
Bidvest Namibia Annual Integrated Report 2017 01
Bidvest Namibia Annual Integrated Report 201702
Bidvest Namibia
Bidvest Namibia supports various local pillars of the
society, from education over health to sports and
other ad hoc projects.
Corporate social investment“To be able to help those who cannot help themselves creates a greater purpose to our being” – Sebby Kankondi, CEO
Graduation at
Promise Land
Over 50 children of “Promise
Land”, a pre-school for
underprivileged children,
graduated from the pre-school
and received school uniforms,
school bags, stationery, lunch
boxes and other school
accessories to aid them in this
new phase of their lives.
Fill this boot with hope
The Land Rover “Fill this boot with hope”
initiative was very successful. The community
was requested to donate tinned foods,
clothes, blankets, toys and toiletries. All items
were then distributed by Land Rover to the
outlying regions.
Pandula Trust
The Pandula Trust is a voluntary
Bidvest Namibia employee
initiative whereby our people have the opportunity to
donate directly from their salaries to a central pool.
Volunteers of the staff have formed a committee that
finds and allocates these funds to so-called “Angel
deeds” which are aimed at helping those in need in
our communities.
A box of necessities
Pandula Trust Angels delivered
boxes to coastal rural areas
during Christmas to those who
have nothing containing food and
toiletries to the value of N$1 500.
Over 150 boxes were delivered.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
Bidvest Namibia Annual Integrated Report 2017 03
Bidvest Namibia Limited abridged Group structure
BIDVEST NAMIBIA LIMITED
BIDVEST NAMIBIA INFORMATIONTECHNOLOGY
100%
BIDVEST NAMIBIA FISHERIES
HOLDINGS (BIDFISH)100%
BIDVEST NAMIBIAPROPERTY HOLDINGS
100%
AUTOMOTIVEDIVISION
FISHINGDIVISION
NAMSOV FISHING ENTERPRISES
69,55%
TWAFIKA FISHING ENTERPRISES
75,10%
NAMSOV INDUSTRIAL PROPERTIES
100%
TETELESTAI MARICULTURE
100%
CARAPAU FISHING
25%
COMET INVESTMENTS CAPITAL100%
PESCA FRESCA LDA47%
NAMIBIAN SEA PRODUCTS
100%
INDUSTRIA ALIMENTAR CARNES DE MOZAMBIQUE
LIMITADA40%
BIDVEST NAMIBIA AUTOMOTIVE
(trading as Novel Motor Company) 100%
DIROYAL MOTORS
100%
CARHEIMINVESTMENTS
100%
T&C PROPERTIESNAMIBIA
100%
ELZETDEVELOPMENT
100%
LENKOW100%
GLENRYCK SOUTH AFRICA
51%
UNITED FISHINGENTERPRISES
100%
ATLANTIC HARVESTERSOF NAMIBIA
100%
PROPERTYDIVISION
Bidvest Namibia Annual Integrated Report 201704
We remain alert to acquisitive
growth opportunities to diversify
our commercial interests.
BIDVEST NAMIBIA COMMERCIAL
HOLDINGS (BIDCOM)100%
BIDVEST NAMIBIAMANAGEMENT SERVICES
100%
FINANCIAL SERVICESDIVISION
FREIGHT AND LOGISTICS, MATERIAL HANDLING AND
MARINE SERVICES DIVISION
FOOD AND DISTRIBUTION DIVISION
COMMERCIAL AND INDUSTRIAL SERVICES
AND PRODUCTS DIVISION
NAMIBIA BUREAU DE CHANGE
49%
LÜDERITZ BAY SHIPPING& FORWARDING
100%
MANICA TRADING100%
MONJASANAMIBIA
57%
ORCA MARINE SERVICES
60%
WALVIS BAY AIRPORTSERVICES
100%
WALVIS BAY STEVEDORING COMPANY
55%
WOKER FREIGHT SERVICES
100%
BIDVEST NAMIBIA COMMERCIAL AND
INDUSTRIAL SERVICES AND PRODUCTS 100%
BIDVEST NAMIBIA STEINER
(division of Bidcom)
CECIL NURSE NAMIBIA(trading as CN Business
Furniture) 100%
BIDVEST PRESTIGE CLEANING
100%
KOLOK NAMIBIA 100%
MINOLCO (NAMIBIA)(trading as Konica Minolta)
100%
BIDVEST NAMIBIA PLUMBLINK
100%
RENNIES TRAVEL (NAMIBIA)
100%
VOLTEX (NAMIBIA) 100%
MANICAGROUP NAMIBIA
100%
LUBRICATIONSPECIALISTS
100%
TAEUBER & CORSSEN(SWA)100%
CATERPLUS NAMIBIA100%
MATADORENTERPRISES
100%
T&CTRADING
100%
WALTONS NAMIBIA100%
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
Bidvest Namibia Annual Integrated Report 2017 05
Operational highlights
2010 2012
Acquisition of Protrade into Taeuber & Corssen 100% – 1 March
Start-up of Rennies Transport – 1 December
2013
Acquisition of Taeuber & Corssen 100% – 1 December
20112009
Bidvest Namibia listing on the Namibian Stock Exchange – 26 October Namibia
Start-up of Steiner Namibia – 1 February
Revenue – decline to N$3 776,4 million
17 16 15 14 13
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000 3 776,5 3 858,6
3 534,83 703,5
3 294,2
Revenue (N$’million)
Trading profit – decline to N$92,5 million
0
100
200
300
400
500
600
700
92,5
294,9
409,7
501,3
601,5
Trading profit (N$’million)
17 16 15 14 13
Headline earnings per share – decline to 22,4 cents
0
20
40
60
80
100
120
140
160
22,4
86,2
103,2
116,0
129,5
(cents)Headline earnings per share
17 16 15 14 13
Bidvest Namibia Annual Integrated Report 201706
2014 2016
Start-up of Orca Marine – 1 January
2015
Acquisition of Novel Motor Company 100% – 31 July
Acquisition of the Glenryck Brand 100% – 1 August
Start-up of Plumblink Namibia – 1 April
2017
Acquisition Prestige Cleaning 100% – 1 June
Start-up Lubrication Specialists in Botswana – 30 June
Start-up of Monjasa Bunkering Services – 1 July
Buy-in Namibia Bureau de Change 49% – 30 June
Buy-in Industria Alimentar Cranes de Mozambique 40% – 30 June
Total assets– decline to N$3 086,9 million
0
500
1 000
1 500
2 000
2 500
3 000
3 500
3 086,9 3 160,03 024,6
2 764,5 2 778,6
(N$’million)Total assets
17 16 15 14 13
Net tangible asset value per share – increase to 737 cents
0
100
200
300
400
500
600
700
800
900
737 734769
688638
(cents)Net tangible asset value per share
17 16 15 14 13
Cash generated by operations – decline to N$185,1 million
0
100
200
300
400
500
600
700
185,1
388,2
531,7
413,8
585,6
Cash generated by operations(N$’million)
17 16 15 14 13
Start-up Glenryck SA 51% – 1 September
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
Bidvest Namibia Annual Integrated Report 2017 07
1. Sebulon Inotila Kankondi 51
Qualification: Post-graduate degree: Business
Administration (Unisa)
Appointed: 10 August 2007
Board committee memberships: Nomination,
acquisition and risk
Director of several Bidvest Namibia subsidiaries, Sebby rejoined Bidvest Namibia after he spent six years as the Managing Director of the Namibian Ports Authority. He was trained as a mechanical engineer and holds a degree in Business Administration.
He has also successfully completed UCT and Stellenbosch Business School Programmes in Marketing and Business Management and Leadership. He took part in more than three assignments in the Middle East, Norway and the USA exposing him to modern management practices in freight and logistics.
2. Lindsay Ralphs 61
Qualification: CA(SA)
Appointed: 3 March 2014
Board committee membership: Remuneration
(chairman)
Lindsay is chief executive of Bidvest South Africa and a director of various Bidvest subsidiaries. Lindsay joined Bidvest as operations director in 1992.
In 1994, he was appointed managing director of Steiner. Following the acquisition of Prestige, Bidserv was created. Lindsay became its chief executive. Lindsay was appointed CE of Bidvest South Africa in February 2011. Lindsay was appointed to the board of Adcock Ingram in 2014.
3. Theresa Weitz 40
Financial director
Qualification: CA(Nam), B Accounting (Hons)
(Stellenbosch)
Appointed: 18 August 2011
Board committee membership: Acquisition and risk
Director of several Bidvest Namibia subsidiaries, Theresa has 15 years’ managerial experience across various industries. She is a former group financial manager of the Ohlthaver & List group of companies.
Directorate
2.
CHIEF EXECUTIVE OFFICER NON-EXECUTIVE CHAIRMAN
RISKCOMMITTEE
AUDITCOMMITTEE
REMUNERATIONCOMMITTEE
ACQUISITIONCOMMITTEE
NOMINATIONCOMMITTEE
BOARD OFDIRECTORS
1.
FINANCIAL DIRECTOR
3.
Bidvest Namibia Annual Integrated Report 201708
4. Martin Kaali Shipanga 49
Qualification: BCom (Wits), Masters in Public Policy
and Administration
Appointed: 21 August 2009
Board committee membership: Audit and risk
(chairman)
Martin completed in-service training at De Beers prior to serving the City of Windhoek for 10 years, initially as deputy head of finance and then as deputy chief executive before becoming the city’s chief executive. In 2004, he became a member of the founding executive team at Nedbank Namibia and was the bank’s first indigenous managing director. Martin subsequently established SmartSwitch Namibia, a joint venture between Nampost and Net 1 Technologies.
He has served as a director of various public and private companies and currently sits on the boards of Zebra Holdings, Ebank and Mutual & Federal. He is chairman of the Frans Indongo Group. Martin is a full-time entrepreneur and manages a property portfolio. In addition, he is the founder of Mamma Fresh, Moola Mobile and Tusk Mobile & Electronics.
5. Jerome Davis 75
Qualification: CA(SA)
Appointed: 1 December 2015
Board committee membership: Risk and
acquisitions
Jerome grew up in Namibia and is currently a director of a number of companies in the public and private sectors, and also runs his own management consultancy.
He qualified as a Chartered Accountant at the age of 25, at which point he left private practice for the world of commerce and industry. He has been active in diverse industries ranging from fishing; motor dealerships and assembly; to electronics and logistics.
He returned to Namibia in 2011, when the late Harold Pupkewitz invited him to serve on the board of Pupkewitz Holdings. With the passing of Mr Harold Pupkewitz, Jerome led the Pupkewitz Group for a number of years as CEO.
6. Hans Peter Meijer 61
Qualification: BCompt, MBL
Appointed: 17 February 2017
Board committee membership: Audit
Peter joined the Bidvest SA corporate office in 1990, then in 1995 moved into a subsidiary divisional financial role as financial director of Steiner, appointed as financial director of the Bidserv division in 2001, and finally the Bidvest South Africa division in 2011. Peter serves on all Bidvest SA divisional boards and divisional audit committees, and was appointed to The Bidvest Group board as Group financial director in May 2016.
7. Hans-Harald Müseler 68
Qualification: CA(Nam)/(SA) MBA (Stellenbosch)
Post-graduate diploma: Compliance and Board
Governance (UJ)
Appointed: 10 August 2007
Board committee memberships: Audit (chairman),
remuneration and risk
Hans-Harald, a professional with 29 years’ experience as an accountant and auditor, retired as a partner in the assurance division of PricewaterhouseCoopers. He is an independent full-time non-executive director and trustee and serves on the boards of entities in the private and public sectors of Namibia, with audit committee responsibilities.
8. Martina Mokgatle-
Aukhumes 48
Appointed: 10 August 2007
A director of several boards in the fishing industry, Martina is a communication and public relations specialist. She has executive experience in the Ministries of Education, Regional and Local Government and Fisheries and Marine Resources and has held senior positions with Sea Harvest and Alexander Forbes Group Namibia. Martina is currently executive director of Naneni Investments and the Bonsai Fishing and Aquaculture Project.
9. Pieter Christiaan Steyn 69
Qualification: PMD, Harvard
Appointed: 17 January 2007
Board committee membership: Nomination and
acquisitions
Director of several Bidvest subsidiaries. Pieter has 38 years’ experience in the fishing, freight, logistics, terminals and travel industries.
4.
NON-EXECUTIVE DIRECTORS
5. 8.7.6. 9.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
Bidvest Namibia Annual Integrated Report 2017 09
Chairman’s statement
In what proved to be a challenging year, Bidvest
Namibia continued to make progress with the
strategy of growing the business base across a
more diversified group. These gains were made
despite a dramatic shift in national fortunes as
Namibia moved from strong GDP growth to
recession in a surprisingly short space of time.
Austerity measures were introduced by
government, projects went on hold and official
spending dried up. The cutbacks had wide-ranging
effects across the economy, but were successful in
reducing the country’s mounting budget deficit.
Bidvest Namibia was materially affected by
deteriorating economic conditions and our Group
experienced a disappointing 12 months. All
divisions failed to meet financial objectives. This
represents a significant setback and strenuous
efforts by managers and their teams will be
necessary to rebuild the momentum.
Strategic progressWe made no outright acquisitions in 2017, but
integration of the new Automotive division was
completed and made its first full-year contribution.
The new Plumblink operation rapidly established
itself within the Commercial and Industrial Services
and Products division and a second branch was
opened. Prestige, a cleaning services company,
was taken over from our South African counterparts
in June 2017. Namibian managers now have the
task of reinvigorating the Company and placing
operations on a more sustainable footing. In the
process, they will ensure continued employment
for more than 500 workers.
A significant concern is the continued fall in profits
at Bidfish, which can be attributed to various
external factors – among others lower market
prices, lower quota allocations, pressure on the
horse-mackerel and pilchard resources and higher
levies and taxes. We continued rightsizing this
operation in line with our quota allocations, which
resulted in the sale of MFV Namibian Star during
the current financial year.
Though our core fishing business faces continued
pressure, the division’s downstream diversification
planning is very much on track. Investment into
sales and distribution via a strategic stake in a
Mozambican operation met expectations and good
progress was made with the Glenryck brand
revitalisation.
Refocusing at Freight and Logistics proved timely
as Namibia – and our division – can no longer rely
on the oil and gas industry as a constant source of
substantial revenue. More flexible structures were
needed across a broader spread of activities. Our
divisional team had put these structures in place.
Our people worked hard to win new business in
tough markets while protecting market share.
Managers in all divisions sought efficiencies and
cut costs, but training investments were
maintained and staff numbers in core operations
were stable.
Earnings and dividendsRegrettably, trading profit for the 2017 year fell by
68,6% while revenue decreased by 2%.
As a result, headline earnings per share (HEPS)
declined by 74% to 22,4 cents per share (2016:
86,2 cents). At 23,9 cents (2016: 86,9 cents)
earnings per share (EPS) were down by 72,5%.
The Group’s board of directors declared a final
cash dividend of 6 cents per share. This brings the
total annual dividend to 10 cents per share (2016:
38 cents per share)
National visionIn many important respects, we share the same
objectives as the nation we serve. We wish to
achieve growth and create jobs. We view skills
constraints as a major obstacle to continued
progress and regard investment in training and
education as the best method of removing it.
We are supporters of the President’s Harambee
Prosperity Plan, a key component of which is the
upskilling of young Namibians.
The Group has therefore decided that over the next
three years it will commit sustained investment
to the Bidvest Namibia Youth Development
Programme. This supersedes another youth-
focused initiative, our three-year sponsorship of
the Bidvest Namibia Cup to provide support for
amateur soccer nationwide.
An investment in the new initiative of N$3 million
is envisaged.
“All assets must be effectively deployed
in every division if profit decline is
to be arrested and reversed.”
Lindsay Ralphs, non-executive chairman
ed
Bidvest Namibia Annual Integrated Report 201710
Vocational training centresGovernment plans to set up vocational training
centres in all regions. It is vital this initiative is
embraced by the private sector. Bidvest Namibia
therefore plans to provide financial support for one
or more VTC students per region.
AppreciationI extend my appreciation to the people of Bidvest
Namibia for all their hard work in challenging
circumstances. It can be frustrating when intense
effort is not reflected in financial results. However,
the hard work did not go unnoticed and I thank you
for it.
Senior members of the executive team faced
intense pressure and I also extend my thanks to
them. I am also indebted to the board of directors
for their guidance and insight during a difficult
12 months.
Of course, the progress of our business is
impossible without our customers and suppliers.
Their support was invaluable in 2017. We look
forward to strengthening these relationships in the
year to come.
FutureRapid improvement in trading conditions is unlikely
in the next 12 months.
Acquisitive growth is possible in tough times and
we will continue to look for possible acquisitions.
As always, we will focus on businesses with strong
management and the potential to complement our
own core activities.
Internally, continued focus will fall on cost control
and efficiencies. All assets must be effectively
deployed in every division if profit decline is to be
arrested and reversed.
Thankfully, our teams are highly motivated and
benefit from continued investment in training and
systems. They have a proven capacity for making
gains, even in the toughest conditions, and I wish
them every success in the year to come.
Lindsay Ralphs
Non-executive chairman
The programme has five pillars:
– Commercial Advancement Training Scheme
(CATS)
– Automotive academy
– Namibianisation of officer grades
– University partnerships
– Vocational Training Centre support.
CATSThe Group will step up its longstanding support of
this government-endorsed effort to complement
university study with work experience. Under the
scheme, the Namibian University of Science and
Technology (NUST) provides a theoretical base
while a private sector partner provides exposure to
the world of work.
We already have a proud record of CATS support.
Over the past nine years, various divisions have
given work experience to a total of 32 students
while paying for their NUST education. On
completion of their studies, our businesses
provided fulltime employment to all these students.
Automotive academyThis concept looks to build on the model developed
by our sister company in South Africa, where the
Revenue – decline to N$3,8 billion
McCarthy Academy has become the sector’s
foremost trainer of mechanics and auto
electricians.
The plan is to set up an academy dedicated to the
technical training of young people hoping for a
career in the automotive sector.
Close cooperation with the Namibian Training
Authority will be necessary to drive the plan
forward.
Namibianisation of officer gradesBidfish has made a major contribution to the
Namibianisation of officer grades within
the commercial fishing industry by sponsoring
the training of Namibian officer cadets at the
Russian naval academy. Ten marine engineers and
navigation officers have completed academy
courses. Seven now seek an even higher level of
accreditation.
University partnershipsThe Group will further entrench its relationships
with NUST and the University of Namibia (UNAM)
by contributing to the career development of young
Namibians.
Total annual dividend
of 10 cents per share
Progress made with growing a more
diversified group
Bidvest Namibia
youth development programme established
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
11Bidvest Namibia Annual Integrated Report 2017
Chief executive’s review
Macro-viewResults disappointed in 2017, but our people
didn’t. They faced challenges throughout the year
and sought efficiencies and savings in a
determined effort to secure profits even as
volumes tumbled and margin pressures increased.
It took hard work and resilience to maintain market
share in the face of increasingly tough competition.
By year-end, it was clear many of our teams had
held their own and increased their share of market
– a notable achievement.
Managers – some newly promoted or newly
appointed – were expected to maintain service
and quality standards, even as operational budgets
were cut and new spending was closely scrutinised
to ensure every investment added value to the
business.
Unfortunately, we failed to meet overall divisional
targets, but this was hardly a shock once the scale
of the economic challenge was realised and official
figures finally confirmed the national economy had
been in recession for some time.
The Namibian economy contracted by 1,7% for
each of the first two quarters of 2017 and also
showed a contraction for the second and third
quarter of 2016. A year earlier, the economy had
been growing by an annualised 5%.
As the scale of the challenge became clear,
government announced significant cuts to
spending. Austerity is never popular, but fiscal
controls were essential to rein in a fast growing
deficit. Government should be congratulated for
taking action when it did.
As a result, capital projects in the public sector
came to a halt. Even Namibian sports teams were
grounded as government support came to an end
and the Sports Ministry returned budgetary
allocations to the Treasury.
These constraints would have been difficult to
manage in any economy. In Namibia, where
government accounts for an estimated 58% of
gross national product, the impact was significant
and was felt across all our divisions.
At much the same time, interest rates rose half a
percent to 9,75%.
In these circumstances, consumers and
businesses found themselves implementing their
own cutbacks, with significant consequences for
our Group.
The challenge was particularly evident within our
Automotive business.
Financial snapshotAt N$3,8 billion (2016: N$3,9 billion), revenue was
down by 2,1%. Trading profit was significantly
lower at N$92,5 million (2016: N$294,9 million), a
decline of 68,6%.
Trading margin contracted to 2,4% (2016: 7,6%),
mainly of a result of pressure on the Fishing
division’s margin.
Cash generation was also under pressure
and dipped to N$185,1 million (2016:
N$388,2 million).
Despite these challenges, we maintain a robust
balance sheet and retain the capacity to fund
continued growth, whether organic or acquisitive.
Strategic responseAs recession deepened and divisional challenges
increased, Bidvest Namibia rededicated itself to
the strategic task of achieving sustained growth.
For us, growth is not something to be sought only
when all the economic indicators are in our favour.
Growth is our long-term goal and should remain
our core objective across market cycles.
We have a performance-based culture. If the
economy under-performs our divisions must out-
perform to ensure a fair profit. We can’t sit on our
hands and wait for the economic horizon to clear.
The principal driver of profit is the performance of
our people. They must have the right tools for the
job. Therefore, investment in systems and
infrastructure was maintained.
Capital expenditure in 2017 stood at
N$59,0 million (2016: N$120,7 million).
People also need the requisite knowledge and
skill-sets. For this reason, training continued.
Training investment for the year was N$6,3 million
(2016: N$6,8 million).
“Change is inevitable, without
change in our world, we
would stagnate.”
Sebulon Kankondi, chief executive officer
Bidvest Namibia Annual Integrated Report 201712
We remain one of Namibia’s largest employers
and at year-end the Group headcount stood at
3 481 (2016: 2 738).
Consolidation and diversificationConsolidation was a key feature of the year as the
new Automotive division bedded in and Plumblink
– a 2016 addition – got into its stride. However,
diversification and strategic balance remain a
strategic imperative.
The need for a broader base has been confirmed
by continuing challenges at Bidfish, previously the
biggest contributor to Group profit by a substantial
margin. Reductions in the biomass and low
ministerial quotas have resulted in much lower
revenues and profit, with little indication this
situation will change any time soon.
In the recent past, we not only acquired a vehicle
retailer, we introduced corporate hygiene services
to Namibia and specialist plumbing supplies.
PrestigeThe Group has acquired Prestige Cleaning
Services from The Bidvest Group towards the end
of the financial year, helping to preserve the jobs of
508 office cleaners.
The strategic justification is clear.
Office cleaning is a core component of the
outsourced services industry. While providing
cleaning solutions we can obtain insights into
demand for other outsourced services – potential
avenues for further growth into this space.
Furthermore, Prestige has relationships with
corporate clients across Namibia.
We see potential in Prestige as a business in its
own right and will give it the necessary attention
and investment as we look to put operations on a
sustainable footing.
New risksIn global terms, Namibia is a small market. It is
also some distance from major centres of
international business in East Asia, North America
and Europe. However, this is no defence against
cyber-attack by international criminals.
All businesses should be prepared for hacking of
their systems by highly sophisticated gangs. In
2017, one of our businesses was targeted. Its
automated telephone system was hacked,
enabling international calls to be routed through
Cost containmentCosts must be rigorously managed at all times, but
especially when trading conditions deteriorate.
Assets have to deliver the necessary return. If
envisaged rates of return are not possible, then the
asset should be sold.
This philosophy was applied at Bidfish and the
fishing vessel the Namibian Star, was sold when it
became apparent fleet utilisation levels would
remain depressed for some time to come.
To contain costs, our fishing business also made
the strategic decision to exit the secondary market
in fishing quotas when bidding goes too
high. Improved fleet utilisation is a priority, but not
at any price.
Similar thinking is being applied across our Group
as teams reduce expenses in line with new
commercial realities. Some costs are being cut
and some activities curtailed.
A business is either in good shape for marketplace
success or it’s not. All management teams are now
engaged in strenuous efforts to ensure their
operations are in good shape and the right size for
prevailing conditions.
Agility is also important if we are to maximise every
commercial opportunity in an increasingly
competitive environment.
Job pressuresThough business sustainability necessitates cost
reductions – including cuts to the salary bill –
every effort was made to avoid retrenchments.
Where possible, staff in downsized operations
were reassigned to new work. On other occasions,
non-replacement of staff led to the de facto
creation of leaner business units.
In some cases, selective recruitment beefed up
teams in areas where new opportunities are being
explored. This process will continue as many
divisions are keen to investigate growth potential,
either in coastal areas or in the north of the
country.
Staff numbers remained stable in most core
teams, though overall job numbers rose in the last
month of the year when we took over the Prestige
business and 508 office cleaners and associated
staff came on to our payroll.
All assets have
to deliver the necessary return
Cost needs to be
rigorously managedTrading profit declined
by 68,6% to
N$92,5 million
All divisions should
optimise every opportunity
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
13Bidvest Namibia Annual Integrated Report 2017
our switchboard. The net loss from this incident
amounted to N$1,4 million.
Improved cyber security measures have been put
in place.
Government cooperationWe prize efficiency and do everything we can to
avoid duplication of effort. Therefore, in the realm
of social investment we look to partner with
initiatives that are already in place and have the
structures necessary to deliver help where it is
needed the most. Often, this means we work in
tandem with government programmes.
Our recently announced Bidvest Namibia Youth
Development Programme (covered in depth in our
chairman’s report) achieves added effectiveness
by looking to collaborate with government
initiatives wherever possible.
For example, we will provide practical workplace
experience in conjunction with the Commercial
Advancement Training Scheme and the internship
programme run by the Namibian University of
Science and Technology and the University of
Namibia. We also stand ready to sponsor students
who are admitted to government’s new vocational
training centres.
Furthermore, our plans for an automotive academy
will entail ongoing cooperation with the Namibian
Training Authority and its Key Priority Skills Funding
initiative.
Of course, our efforts to train engineering and
navigation officers for commercial fishing vessels
dovetails nicely with government’s Namibianisation
strategy. High levels of accreditation entail
cooperation with international training
programmes, but at local level we work closely
with the Namibian Maritime and Fisheries Institute
to equip crew with additional skills.
In the field of artisan training, we also maintain
strong relationships with the Namibia Institute of
Mining and Technology.
At the same time, our empowerment and
upliftment partners at the Namsov Community
Trust (NCT) ensure cost-effectiveness by
channelling social investment into the development
programmes run by Namibia’s regional governors.
These investments make a difference in numerous
communities. At a time of austerity, continued
commitments like these are even more important
and at a recent Governors’ Forum the NCT’s
regional development effort was applauded as a
pillar of social transformation at grassroots level.
Small business supportWe are also “on the same page” with government
when it comes to SME development. As job
creators, small and medium-size enterprises make
a tremendous contribution to our economy.
However, their limited financial resources make
them vulnerable during an economic downturn.
Their ability to carry on is often dependent on their
access to funding. Even a small injection of
working capital can be the difference between
continued viability and shutting up shop.
Several years ago, we set up the Bidvest Namibia
Enterprise Development Fund for just this reason.
The fund channels small loans to small businesses,
thereby enabling them to buy materials, tools and
other equipment from Group subsidiaries.
The fund was designed to be self-sustaining. As
loans were repaid the fund was replenished,
enabling further loans to be advanced to new
borrowers. In tough trading conditions, we believe
the fund has a vital role to play and we plan to
continue this programme.
Our culture emphasises the need to build a sense
of partnership with suppliers and customers.
This philosophy came into sharp focus as the
recession took hold and severe cash flow
challenges impacted all businesses. Debtor’s
management became a key issue for us, but at the
same time teams in our divisions did all they could
to assist loyal customers. A balancing act on this
pattern may be necessary for some time to come.
Divisional snapshotBidfish had a disappointing year, with declines in
revenue and profit. The horse-mackerel resource
– the mainstay of the business – was under severe
pressure and no improvement was seen in quota
allocations by the Ministry of Fisheries. Market
prices were also depressed. Sardine fishing
experienced similar pressures and the canning
factory remained closed.
Our Automotive division also reported falling
volumes and profit. Government cutbacks were
just one challenge. Businesses held back on new
car purchases. So did consumers. Changes to the
National Credit Act also impacted sales. Efforts are
under way to rebalance the division and reduce the
dependence on new vehicle sales. Investment in
dealership upgrades and training continued.
Commercial and Industrial Services and Products
fared somewhat better, it was also negatively
impacted by the Namibian economy. Voltex
reduced losses but was severely affected by the
slow down in the construction industry. Minolco
had another good year. Prestige significantly
widened the service offering at year-end.
Food and Distribution disappointed. A loss was
reported. Increased tourist inflows were insufficient
to counteract the effects of austerity and consumer
cutbacks. Premium products in the brand basket
were impacted by down-trading. Promotional
activity was stepped up, but gains were short-
lived. Management were not able to get all the
planned improvements in efficiencies to fruition.
Chief executive’s review – continued
Bidvest Namibia has over the
past two years diversified into
automotive, corporate hygiene
service and specialised
plumbing supplies.
Bidvest Namibia Annual Integrated Report 201714
Freight and Logistics experienced a drop in
revenue, but management slowed the decline
in profits after vigorous efforts to rebalance the
business. For the last few years, the division
benefited from a buoyant oil and gas industry. As
offshore activities stalled, it has become necessary
to refocus resources. Business units are now
leaner and more adaptable. Regrettably, some jobs
were lost as stevedoring staff were cut.
AppreciationI thank all our people for their hard work in
extremely challenging business conditions. Results
don’t always reflect it, but our people did well to
maintain our marketplace position in the face of
intense competition. Our people, their supervisors
and managers did a good, solid job and I salute
them for it.
In addition, I welcome 508 newcomers from
Prestige to the Bidvest Namibia family. We’re
pleased to see them and look forward to working
together in the year ahead.
I also extend my thanks to our directors and
chairman for their support and strategic guidance.
Every year, they make a telling contribution to our
development and growth; never more so than
in 2017.
During the year under review, we also had good
reason to thank our loyal customers and suppliers.
We believe in partnerships and collaboration with
those we do business with. We thank these
partners for their contribution in a tough year and
look forward to more of the same in 2018.
FutureUnfortunately, it may be some time before we see
a return to buoyant economic conditions. Even so,
we look forward to growth in key areas of our
business while the full-year effect of recent cost-
containment measures will assist efforts to restore
profitability.
Fishing challenges will continue, but Bidfish now
has a more manageable cost base and is well
placed to halt the recent slide in profitability. For
the longer term, its diversification efforts remain on
track, with the promise of improved growth in
new markets.
Our freight business is also in better shape to
withstand recessionary pressures and develop
new areas of growth. Government, as well as our
division, is looking to a future that is not reliant on
healthy oil and gas revenues. It is also investing in
new areas, though Walvis Bay’s new government-
funded container terminal is not scheduled to open
until calendar 2018. As new opportunities occur,
Freight and Logistics will follow up strongly.
The Commercial and Industrial Services and
Products division is also in good shape to maximise
new opportunities. The major losses at Voltex are
in the past. Other parts of the business
demonstrated great resilience in 2017 and grew
market share. It is important to maintain this
momentum.
Automotive expects ongoing pressure on new
vehicle sales, but is better placed to seek growth in
workshop and parts business while exploring
opportunities in the used vehicle market.
Food and Distribution had a tough year, but new
systems are being put in place to drive considerable
improvements in efficiency, setting the scene for a
return to profitability.
All divisions face a similar challenge. They need to
optimise every opportunity while interrogating
every cost driver.
Sebulon Kankondi
Chief executive officer
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
15Bidvest Namibia Annual Integrated Report 2017
Corporate governance report
BOARD OF DIRECTORS
* Non-executive
EXECUTIVE COMMITTEE
Monthly
S KANKONDI(CEO)
T WEITZ(FD)
H FERIS
G HOUGH
T MBERIRUA
M SAMSON
T VAN ROOYEN(by invitation)
A VAN WYK(by invitation)
AUDIT COMMITTEE
Quarterly
H MÜSELER*(CHAIRMAN)
M SHIPANGA*
HP MEIJER*
INTERNALAUDIT
MEETINGS ATTENDED BY
EXCO AND AUDITORS
RISK COMMITTEE
Quarterly
M SHIPANGA*(CHAIRMAN)
J DAVIS*
H MÜSELER*
S KANKONDI
T WEITZ
H FERIS
G HOUGH
T MBERIRUA
M SAMSON
T VAN ROOYEN
ACQUISITIONS COMMITTEE
As needed
J DAVIS*
PC STEYN*
S KANKONDI
T WEITZ
+ RELEVANT DIVISIONAL MD
REMUNERATION COMMITTEE
As needed
S KANKONDI
L RALPHS*(CHAIRMAN)
T WEITZ
P STEYN*
H MÜSELER*
Meetings attended by:
A VAN WYK(by invitation)
ACQUISITIONS ABOVE N$5 MILLION
APPROVED BY BVN BOD
Bidvest Namibia Annual Integrated Report 201716
PhilosophyBidvest Namibia is committed to the highest level
of ethics, integrity and corporate governance and
embraces the NamCode Report. In alignment with
our South Africa-based parent, we also embrace
the principles established in South Africa’s King IV
Report.
Our directors regard good corporate governance
as pivotal to delivering sustainable growth in the
interest of all stakeholders. The board considers
corporate governance vitally important to the
success of our business and is unreservedly
committed to applying the principles necessary to
ensure that good governance is practised.
Corporate governance, which is ultimately the
responsibility of the board and its committees,
ensures that we conduct business in a responsible,
ethical and transparent manner. Senior
management, through the accountable and
transparent operation of our structures and
systems, helps to instil a culture of compliance.
Companies within the Bidvest Namibia Group
operate in a decentralised and incentivised
environment. In accordance with our corporate
governance policy, they adopt and implement
Bidvest Namibia’s policies, processes and
procedures with a view to maintaining sustainable
economic, social and environmental performance
in the interest of all stakeholders at every level
through the industries in which they operate.
Code of ethicsThe Company’s core values of accountability, open
communication and excellence are instilled via a
code of ethics applicable to all employees
throughout the Group. This code is adopted
annually. Employees behave ethically and honestly
under the leadership of the Bidvest Namibia
executive committee and board of directors. The
code sets out our business principles and provides
guidance to employees on how to apply them.
Bidvest Namibia acts with honesty, transparency,
fairness, responsibility and professional integrity in
its dealings with employees, shareholders,
customers, suppliers and society at large.
A fraud hotline through an independent third party
enables employees to report any perceived
irregular or unethical behaviour in a confidential
manner. Any irregularities are reported to the audit
committee. During the year under review, six
issues were reported which were investigated and
handled appropriately.
Jan Arnold resigned from the board effective
1 July 2016 taking an early retirement. Jerome
Davis was appointed to the board effective
1 December 2015.
The chairman is not considered an independent
director. The board believes the individuals on the
board make quality, independent judgements in
the best interests of the Company on all relevant
issues. The roles of chairman and CEO are
separate and clearly defined. No individual director
has unconstrained decision-making powers.
The board is governed by a board charter that sets
out the roles and responsibilities of the board. The
board is responsible and accountable for providing
effective and ethical leadership. Responsibilities
include addressing material and strategic issues,
directing the strategy and operations of the Group
to ensure the building of a sustainable business,
monitoring regulatory compliance and codes of
best practice, ensuring the communication of
adequate and timely information to stakeholders,
securing new acquisitions, monitoring operational
and investment performance, empowering
executive management, risk management and IT
governance and promoting good corporate
governance within Group subsidiaries.
An effectiveness appraisal of the board of directors
is conducted every two years through internal
evaluation. The development of directors and
induction of new directors are conducted
informally. The main issues highlighted by the
previous evaluation include improving public
perception, engaging key stakeholders and driving
growth through projects and opportunities.
Directors dealing in securities policy and declarations of interestThe policy on directors trading in shares accords
with NSX Listings Requirements governing
securities dealings by directors. The policy not only
covers Bidvest Namibia shares but other listed
investment securities in which Bidvest Namibia
has a material beneficial interest. Any Bidvest
Namibia share transactions entered into by our
directors require the prior approval of the CEO and
are notified on SENS.
Directors’ declarations of interests are disclosed at
quarterly board meetings and updated as and
when required.
Attendance at meetings
Members AUG NOV FEB MAR MAY
L Ralphs* (chairman)
SI Kankondi (CEO)
T Weitz (FD)
JD Davis*
HP Meijer* (appointed 17/2/2017)
M Mokgatle-Aukhumes*
H Müseler*
MK Shipanga*
PC Steyn*
* Non-executive director Present Apologies
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
17Bidvest Namibia Annual Integrated Report 2017
Legislative complianceThe board is ultimately responsible for overseeing
Group compliance with all applicable laws, non-
binding rules, codes, standards and regulations.
This responsibility is delegated to management,
which is additionally responsible for implementing
an effective legislative compliance framework and
associated processes. The board is informed of
compliance and any non-compliance through
proactive quarterly reporting. This reporting system
is monitored by the relevant compliance officers
and internal audit professionals.
Board committeesA wide array of structures, guidelines and auditing,
accounting and financial controls support rigorous
corporate governance within an ethical framework.
These structures are complemented by our
authority matrix, corporate values and transparent
systems of stakeholder communication. Structures
to assist the board in discharging its duties include
audit, risk, executive, remuneration, nomination
and acquisition committees. All committees,
excluding the executive committee, are chaired by
non-executive directors. Group board, risk, audit
and divisional board meetings of all operating
entities are held quarterly.
Each committee operates under a formal charter
that defines its powers and duties. These charters
are approved by the board.
Executive committeeThe committee, under the chairmanship of CEO
Sebulon Kankondi, meets regularly, usually once a
month. The committee is mandated and
responsible for implementing the strategies
approved by the Bidvest Namibia board of directors
and for managing the Group’s day-to-day affairs.
Corporate governance report – continued
Members SEP OCT NOV JAN MAR APRIL JUNE
SI Kankondi (CEO)
T Weitz (FD)
H Feris
G Hough
T Mberirua
R Raposo (resigned 30/9/2016) – – – – – –
MW Samson
W Schuckmann (resigned 21/4/2017) –
TJ van Rooyen (attendance by invitation)
A van Wyk (attendance by invitation) – – – – –
Present Apologies
Acquisitions committeeAny major acquisitions are referred to this committee for an in-principle decision on whether the acquisition should be investigated and pursued. Meetings are scheduled as
required. Depending on their magnitude, acquisitions are sanctioned by the executive committee and submitted to the board of directors for approval.
The acquisitions committee does not have formally scheduled meetings but meets as and when acquisitions are being considered. Members include Jerome Davis,
Sebulon Kankondi, Theresa Weitz, Piet Steyn and the relevant divisional MD. Acquisitions over N$5 million are approved by the Bidvest Namibia board of directors.
Bidvest Namibia Annual Integrated Report 201718
Risk committee report
The committee is governed by a charter approved
by the board of directors (board) under the
NamCode, the Corporate Governance Code for
Namibia, which is based on the King III Report on
Corporate Governance for South Africa. The
committee identifies and analyses risks to all
businesses and reports findings and proposed
mitigation measures to the audit committee. Risks
are managed at operational level.
The board holds ultimate risk management
responsibility. Our directors are responsible for
determining the Group’s risk appetite and delegate
this task to the risk committee.
This committee monitors threats, pursues
opportunities and ensures Group-wide risks are
identified and managed. Maintaining a strong risk
management culture in all businesses fosters the
Group-wide risk management process which
includes the identification of risks, assessing the
potential impact and likelihood of the risk
materialising, implementing cost-effective
mitigating actions and reporting on the results of
this process to the risk committee.
On behalf of the board, the risk committee sets
policies and ensures these policies and associated
controls to implement these policies function
effectively.
Risk committee meetings are held quarterly.
Members are mandated to apply the combined
assurance model Group-wide, ensuring a
coordinated approach to all assurance activities.
The chairman reports quarterly to the audit
committee.
To help address these risks, the Group has
developed a performance-based culture. Cost
management is rigorous and managers are
challenged to deliver performance improvements
in tough trading conditions. Furthermore, the
Group takes a conservative attitude to debt and
leverage, ensuring our businesses do not carry an
excessive debt burden.
Material risks for fishing businessesThe biggest potential risk facing our Fishing
division is “the perfect storm” of low market prices,
low catch rates, small catch sizes, low fleet
utilisation, low fishing quotas, high prices in the
secondary market for quotas, rising costs,
pressure on the biomass, growing foreign
competition, low consumer demand and adverse
currency markets. In many respects, this perfect
storm impacted our fishing operations in 2017.
Total mitigation of all potential threats is impossible
as fishing per se carries inherent risks. However,
impacts can be lessened by rigorous management
and prompt remedial action.
Sustainability demands ongoing profit. Therefore,
mitigation is supported at Bidvest Namibia by an
objective “what’s best for the business” approach.
In the fishing industry, specific action may include
the exit of the secondary market for quotas when
right-holders look to realise excessive gains on the
sale of their quotas. When low fleet utilisation
persists, vessels will be sold or laid up.
Consumer economy risksExposure to the risk of consumer belt-tightening
increased in 2016 with the acquisition of the Novel
Motor Company, now repositioned as our
Automotive division. The consumer’s propensity to
take on debt has significant influence on new
vehicle sales. As consumer confidence fell in 2017
so did the appetite for credit. New vehicle sales
quickly stalled.
These risks can best be managed by growing
emphasis on used vehicle sales while building up
the volumes generated by service business and
the sale of spare parts. As vehicle replacement
periods lengthen, so demand grows for vehicle
service and repair. Expansion of these aspects of
the business will therefore receive focused
management attention in the Automotive division.
Members AUG 2016 NOV 2016 FEB 2017 MAY 2017
M Shipanga (chairman)*
S Kankondi (CEO)
T Weitz (FD)
J Davis* (appointed November 2016)
H Müseler*
H Feris
G Hough
T Mberirua
R Raposo (resigned September 2016) – – –
M Samson
W Schuckmann (resigned April 2017) –
T van Rooyen
A van Wyk (attendance by invitation)
* Non-executive director Present Apologies
Group risk management processEvery business establishes risk rating criteria.
Criteria are formally reviewed annually and revised
as appropriate. Senior managers identify and
assess material business risks and mitigating
measures on a quarterly basis and report to
the risk committee, highlighting changes and
explaining the reasons for the change.
Typical focus areas include potential monetary
impacts, reputation management, systems and
processes, operational practices, legislation and its
interpretation, cybersecurity, the industrial
relations climate and people.
Business unit level risk matrices are then
consolidated into divisional and sub-divisional risk
matrices for reporting to quarterly risk committee
meetings.
In accordance with NamCode recommendations,
senior managers and executive directors of all
businesses convene annual risk review meetings
at which they interrogate risk rating criteria, key
risks, mitigating steps and risk management
effectiveness. The Group risk committee receives a
full report on these deliberations.
Strategic riskA diversified business like ours has a measure of
protection from depressed business conditions in
a specific sector, but is vulnerable should Namibia’s
macro-economy face pressure across the board.
The impact on revenues, costs and profits can then
be substantial, as we witnessed in the second half
of our 2017 year.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
19Bidvest Namibia Annual Integrated Report 2017
Group risks identifiedIn June 2017, the Group’s principal risks were:
Risk Mitigating actions
Financial performance pressure, specifically pressure on revenue and costs.
Macro-economic risks as the Group is represented across the national economy.
Fundamental fishing viability challenges when faced with low fish prices, low quotas, high quota purchase costs, adverse currency factors, low fleet utilisation and a fish resource under pressure.
Renewal of fishing rights as these are granted for a specific period only. As rights lapse, application for renewal must be made to government. Our rights have to be renewed in 2018.
Specific risks relate to low horse-mackerel selling prices as prices might drop to levels below our operating costs.
Intense management focus on performance and efficiency, constant review of business plans and practices while encouraging creative solution finding and new thinking by all management teams.
Rapid response to changing marketing conditions, relentless commitment to efficiency and optimum asset management to secure profit in unfavourable conditions.
Constant review of costs and profitability, with management empowered to make the best strategic decisions for the business, including the sale and/or laying up of vessels.
Bidfish is scrupulous in its adherence to all regulations and requirements. The renewal process is well understood by all parties. Bidfish liaises closely with government to keep abreast with renewal requirements.
Align fishing activities with times when the optimum size mix is most likely to be available.
Fishing resource risk: pressure on fish stock could increase (especially as Angola has begun fishing for horse-mackerel and this resource is shared).
Namibia’s Ministry of Fisheries and Marine Resources runs a replaced fisheries management programme based on scientific research.
Access to quotas. Cooperation with government via “growth at home”, Harambee, NEEEF and ministry’s quota allocation strategy, thereby retaining strong relationships.
Voltex’s potential for continued losses in a tough construction sector. Turnaround plan under way.
Manica’s exposure to knock-on effects when project work, port visits and freight volumes stagnate.
Prompt remedial action by management and implementation of cost savings.
Food and Distribution’s exposure to depressed spending in the retail economy. Focused management efforts to curtail costs while maintaining service levels.
Food and Distribution’s need for regular investment in quality solutions (eg ammonia cooling plant replacement at cold stores).
Refurbishment and replacement of cooling plant at Food and Distribution premises in Windhoek is imminent.
Loss of key skills/need for succession planning for critical positions. Attractive market-related packages, succession planning and transfer of skills.
Industrial action leading to disruption in services. Manage relationships with employees and unions.
Need for business continuity planning. Offsite backups are maintained for IT. Business units have been given guidance to enable them to document their business continuity measures.
Risk of cancellation of an OEM franchise agreement in vehicle retailing or loss of a brand principal in the FMCG sector.
Effectively manage relationships with OEMs and brand principals. Maintain geographical scale and quality standards, thereby making the Group the partner of choice for international brands.
Disputes with partners or associates in foreign jurisdictions (eg Angolan shareholder dispute).
A fair and ethical approach to deal-making, including international deals, to ensure lasting relationships, along with optimum utilisation of legal, commercial and other channels to protect our rights and realise anticipated returns.
Growing compliance pressures. Closeness to government and industry bodies to ensure early notification of regulatory change. Legal review of contracts, identification of all related laws and regulations for business units.
Unsuccessful acquisitions. Rigorous due diligence reviews of proposed acquisitions.
An effectiveness appraisal of the risk management process is performed annually by the Group internal audit function and providing assurance on risk mitigation actions are
key responsibilities of the internal audit function.
Signed on behalf of the committee by:
Martin Kaali Shipanga
Chairman
Risk committee report – continued
Bidvest Namibia Annual Integrated Report 201720
Audit committee report
The committee is governed by a charter approved by the board of directors (board) in terms of the NamCode of
Governance Principles for Namibia which is based on King III. The audit committee charter mandates members
to ensure effective and appropriate internal financial and operational controls on behalf of the board. The
committee assists the board in terms of the financial reporting processes, internal controls, risk management,
compliance with legislation and the internal and external audit processes.
The committee provides effective communication between directors, management and internal and external
auditors, reviews accounting policies and financial information issued to the public and recommends the
appointment of external auditors.
The committee is assessed annually through self-assessment.
The committee members are appointed by the board, consisting of a minimum of three non-executive directors
and chaired by an independent non-executive director. Meetings are held quarterly, attended by executive
committee members, senior management and internal and external auditors.
auditors of the Bidfish Group and KPMG as
component auditors of the newly acquired
associate Namibia Bureau De Change for the
financial year ended 30 June 2017;
– Approved the external audit engagement letter,
the audit plan and the budgeted audit fees
payable to the external auditors;
– Determined the nature and extent of all non-
audit services provided by the independent
auditors and pre-approved all non-audit
services undertaken;
– Obtained assurances from the independent
auditors that adequate accounting records
were being maintained; and
– Confirmed that no material irregularities had
been identified or reported by the independent
auditors under the Professional Accountants’
and Auditors’ Act.
Independence of external auditorsThe committee is satisfied that Deloitte & Touche,
PwC and KPMG are independent of the Group after
taking the following factors into account:
– Representations made by them to the
committee;
– The auditors do not, except as external auditors
or in rendering permitted non-audit services,
receive any remuneration or other benefit from
the Group;
– The auditors’ independence was not impaired
by any consultancy, advisory or other work
undertaken;
– The auditors’ independence was not prejudiced
as a result of any previous appointment as
auditors; and
– The criteria specified for independence by local
and international regulatory bodies.
Internal control and internal auditThe committee:
– Considered and recommended an internal audit
charter for approval by the board;
– Reviewed and approved the annual internal
audit plans and evaluate the independence,
effectiveness and performance of the internal
audit function;
– Considered the reports of the internal auditors
on the Group’s systems of internal control
including financial controls, business risk
management and maintenance of effective
internal control systems;
– Received assurances that proper accounting
records were maintained and that the systems
safeguarded the Group’s assets against
unauthorised use or disposal;
– Reviewed issues raised by internal audit and
the adequacy of corrective action taken by
management in response thereto;
Members AUG 2016 NOV 2016 FEB 2017 MAY 2017
H Müseler (chairman)
P Meijer (in attendance and formally
appointed 18 May 2017)
M Shipanga
Present Apologies
The chairman of the committee reports to the
board and to The Bidvest Group Limited audit
committee on the activities and the
recommendations made by the committee on a
quarterly basis.
PurposeThe purpose of the committee, which in certain
instances operates in conjunction with the risk
committee, is to:
– Assist the board in discharging its duties
relating to the safeguarding of assets, the
operation of adequate systems, control and
reporting processes, and the preparation of
accurate reporting and financial statements in
compliance with the applicable legal
requirements and accounting standards;
– Oversee the activities of, and to ensure co-
ordination between, the activities of internal and
external audit;
– Provide a forum for discussing financial,
enterprise-wide, market, regulatory, safety and
other risks and control issues; and to monitor
controls designed to minimise these risks;
– Oversee the Company’s annual integrated
report for recommendation to the board,
including the consolidated and separate
financial statements, as well as its interim
report and any other public reports or
announcements containing financial
information;
– Perform duties assigned to it under the
Companies Act and other legislation; and
– Annually review the committee’s work and
charter to make recommendations to the board
to ensure its effectiveness.
Duties carried outThe committee has performed its duties and
responsibilities during the financial year according
to its charter.
Financial statementsThe committee:
– Confirmed, based on management’s review,
that the interim and consolidated and separate
financial statements were prepared on the
going concern basis;
– Examined the interim and consolidated and
separate financial statements and other
financial information made public, prior to their
approval by the board;
– Considered accounting treatments, significant
or unusual transactions and critical accounting
estimates and judgements;
– Considered the appropriateness of accounting
policies and any changes made thereto;
– Reviewed the representation letters relating to
the consolidated and separate financial
statements;
– Considered any problems identified as well as
any legal and tax matters that could materially
affect the financial statements; and
– Met separately with management, external
audit and internal audit and satisfied themselves
that no material control weakness exists.
External auditThe committee:
– Nominated Deloitte & Touche for appointment
as the Group’s lead auditors and RH Mc Donald
as the independent auditor and designated
audit partner, with PwC as the component
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
21Bidvest Namibia Annual Integrated Report 2017
– Assessed the adequacy of the performance of
the internal audit function and found it
satisfactory; and
– Concluded that there were no material
breakdowns in internal control.
Risk management and legal requirementsThe committee:
– Reviewed the Group’s policies on risk
management, including information technology
risks and found them to be sound;
– Reviewed with management legal matters that
could have a material impact on the Group;
– Reviewed the adequacy and effectiveness of
the Group’s procedures to ensure compliance
with legal and regulatory responsibilities; and
– Considered reports provided by management,
internal assurance providers and the
independent auditors regarding compliance
with legal and regulatory requirements.
Combined assuranceThe committee reviewed the plans and reports of
the external and internal auditors and other
assurance providers including management, and
concluded that these were adequate to address all
significant financial risks facing the business.
Financial director and finance functionThe committee:
– Considered the appropriateness of the
experience and expertise of the group financial
director and concluded that these were
appropriate; and
– Considered the expertise, resources and
experience of the finance function and
concluded that these were appropriate.
Consolidated and separate financial statementsFollowing the review by the committee of the
consolidated and separate annual financial
statements of Bidvest Namibia Limited for the year
ended 30 June 2017, the committee is of the view
that, in all material respects, it complies with the
relevant provisions of the Companies Act and IFRS
and fairly presents the financial position at that
date and the results of its operations and cash
flows for the year. In conjunction with the risk
committee, the committee has also satisfied itself
as to the integrity of the remainder of the annual
integrated report.
Having achieved its objectives for the financial
year, the committee recommended the
consolidated and separate financial statements
and integrated annual report for the year ended
30 June 2017 for approval to the board.
Signed on behalf of the committee by:
Hans-Harald Müseler
Chairman
Audit committee report – continued
Bidvest Namibia Annual Integrated Report 201722
This committee, consisting of two non-executive
directors, reviews and approves the remuneration
and terms of employment of executive directors
and senior employees of Bidvest Namibia. The
committee establishes remuneration principles,
incentive scheme policies and recommends
emolument structures and levels to the board
chairman for his consideration and approval.
The Bidvest Namibia incentive scheme was
adopted and implemented in 2012. Qualifying
employees have to date received 3 492 500 share
options, while 81 employees benefit from the
scheme.
Members AUG OCT
H Müseler
L Ralphs (appointed
17 August 2017)
Present Apologies
The committee meets bi-annually or as required.
Meetings are attended by S Kankondi, T Weitz and
P Steyn.
Remuneration policy
A critical success factor of the Group is its ability to
attract, retain and motivate the entrepreneurial
talent required to achieve operational and strategic
objectives. Both short and long-term incentives are
used to this end.
Delivery-specific short-term incentives are viewed
as strong drivers of performance. As significant
portion of senior management’s reward is variable
and is determined by achievement of realistic
profit growth targets. Only when warranted by
exceptional circumstances, special bonuses might
be considered as additional awards.
Long-term incentives align the objectives of
management, shareholders and other stakeholders
for a sustainable period.
Role of benchmarking
Benchmarking and position in the market
The policy aims at positioning the Group as a
preferred employer. The Group believes that its
remuneration policy plays an essential, vital role in
realising business strategy and therefore should
be competitive in the markets in which the Group
operates.
Executive directors and members of
group executive committee members
Terms of service
The minimum terms and conditions applied to
Namibian executive directors and Group executive
committee members are governed by labour
legislation. The notice period for these directors is
between two and three months. In exceptional
situations of termination of the executive directors’
services, the remuneration committee (assisted by
independent labour law legal advisers) oversees
the settlement of terms.
Remuneration committee report
Executive directors are included in the Group’s
rotation plan whereby one-third of the aggregate
number of directors (excluding the CEO) or, if their
number is not three or a multiple thereof, then the
number nearest to but not less than one-third of
the aggregate number of directors (excluding the
CEO) shall retire from office. All directors (excluding
the CEO) should retire after a period of two years.
Executive directors are permitted to serve as
non-executive directors on two other boards with
the express permission of the remuneration
committee. Fees are retained by the director, but
annual leave should be taken for time spent on
other boards. The other board memberships
should not constitute a conflict of interest.
Elements of remuneration
The Group operates on a total cost-to-company
(CTC) philosophy whereby cash remuneration and
benefits (including a defined contribution
retirement fund and medical aid) form part of
employees’ fixed total CTC remuneration. Senior
management and executive directors also
participate in short-term incentives (in the form of
a performance bonus plan). A long-term incentive
plan, namely the Bidvest Namibia Share Incentive
Scheme (for senior management and executive
directors) is in place.
The different components of remuneration, their objectives, the policy which governs them and their link to the business strategy are summarised below.
Table 1: Summary of remuneration components for executive directors and Group executive committee members.
COMPONENT
OBJECTIVE
AND PRACTICE LINK TO BUSINESS STRATEGY POLICY
CHANGES
FOR 2017
Part 1 – Section 1 guaranteed pay (CTC)
Base package Attract and retain the
best talent.
Reviewed annually and
set on 1 July.
This component aligns with business
strategy as it takes into account internal
and external equity. Hereby, ensuring
competitiveness and rewarding
individuals fairly based on a similar
job in the market.
Level of skill and experience, scope of
responsibilities and competitiveness
of the total remuneration package are
taken into account when determining
CTC.
No changes
proposed.
Benefits Providing employees with
contractually agreed basic
benefits such as retirement
fund benefits (defined
contribution), medical aid,
risk benefits, and life and
disability insurance on a
CTC basis.
Benefits recognise the need for a holistic
approach to guaranteed package and
are part of the overall employee value
proposition offered by Bidvest Namibia.
The Company contributes towards
retirement benefits as per the rules
of its retirement funds. Medical aid
contributions depend on each
individual’s needs and the package
selection.
Risk and insurance benefits are
Company contributions, all of which form
part of total cost of employment.
No changes
to standard
employment
benefits.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
23Bidvest Namibia Annual Integrated Report 2017
COMPONENT
OBJECTIVE
AND PRACTICE LINK TO BUSINESS STRATEGY POLICY
CHANGES
FOR 2017
Part 1 – Section 2 short-term incentives
Short-term
incentive
To motivate and incentivise
delivery of performance
over the one-year operating
cycle.
Bonus levels and the
appropriateness of
measures and weightings
are reviewed annually to
ensure that these continue
to support Bidvest
Namibia’s strategy.
The annual bonus is paid in
cash in August/September
each year for Company
financial performance
during the previous
financial year.
Encourages growth in trading profit
targets, earnings per share and return on
equity for shareholders in a sustainable
manner over the short term.
Rewards executive directors for their
measurable contribution to the Group
based on predetermined metrics.
For the 2017 financial year, target and
stretch performance targets are set for
the following metrics:
– Company financial performance
– Trading profit targets
– Measured against prior year’s
performance and budgets.
Earning potentialAt target performance the earning
potential is 25% of guaranteed package.
Stretch earning potential is limited to
50% of guaranteed package and is
subject to exceptional performance.
Discretion of remuneration committeeThe remuneration committee has
discretion, when warranted by
exceptional circumstances and where
considerable value has been created for
shareholders and stakeholders of Bidvest
by specific key employees, to award
special bonuses or other ex gratia
payments to individuals.
In exercising this discretion the
remuneration committee must satisfy
itself that such payments are fair and
reasonable and are disclosed to
shareholders as required by
remuneration governance principles.
To combine the
Company
financial
performance
metrics with
strategic
metrics, such
as leadership,
to ensure
well-balanced
KPIs.
Part 1 – Section 3 long-term incentives
Long-term
incentive –
Bidvest
Namibia
Share
Incentive
Scheme
To motivate and incentivise
delivery of sustained
performance over the
long term.
Alignment of executives’ interests with
shareholders through options exercisable
to future delivery of equity.
Vesting of option instruments are subject
to retention in the Group.
Motivates long-term, sustainable
performance.
Award levels are set according to
best practice benchmarks and to
ensure support of Group business
strategy. Awards consist of share
options, subjected to continued
employment period for the duration
of the vesting periods of three years
(50% of the award) and four years
(75% of the award) and five years
(100% of the award) respectively.
No structural
changes are
anticipated
for 2017.
Remuneration committee report – continued
Further details on long-term incentive plansBidvest Namibia Share Incentive Scheme
At the 2012 AGM, shareholders approved a share
option scheme.
Bidvest long-term incentive plans and
dilution
In terms of the Bidvest long-term incentive plan
rules an overall limit of approximately 1% of the
issued shares of the Company has been imposed
when shares are allocated and issued in terms of
the share options. The total award that may be
allocated to any one individual may not exceed
10% of the total awards made in that year.
Non-executive directorsTerms of service
Non-executive directors are appointed by the
shareholders at the AGM. Interim board
appointments are permitted between AGMs.
Appointments are made in accordance with Group
policy. Interim appointees retire at the next AGM
when they may make themselves available for re-
election. They are included in the Group rotation
plan whereby one-third of the aggregate number
of directors or, if their number is not three or a
multiple thereof, then the number nearest to but
not less than one-third of the aggregate number of
directors shall retire from office; but may offer
themselves for re-election. As appropriate, the
board, through the nominations committee,
proposes their re-election to shareholders. There is
no limit on the number of times a non-executive
director may make him or herself available for re-
election.
Fees
Group policy is to pay competitive fees for the role
while recognising the required time commitment.
The fees comprise an attendance fee for scheduled
meetings, as tabulated in part 2 of this report.
No contractual arrangements are entered into
to compensate non-executive directors for the
loss of office.
Bidvest Namibia Annual Integrated Report 201724
Non-executive directors do not receive short-term
incentives nor do they participate in any long-term
incentive schemes, except where non-executive
directors previously held executive office, and they
remain entitled to unvested benefits arising from
their period of employment. The Group does not
provide retirement contributions to non-executive
directors.
Management proposes non-executive directors’
fees (based on independent advice) to shareholders
annually for shareholder vote.
Directors’ interests in contracts
All interest in contracts are declared at the
meetings and directors recuse themselves on
decisions where they may have a conflict of
interest. All transactions where directors have
private interest on are declared in the annual
financial statements under related-party balances
and transactions note.
Non-binding advisory vote
Shareholders are requested to cast an advisory
vote on the remuneration policy as summarised on
pages 23 and 24: section 1: Guaranteed pay
(CTC); section 2: Short-term incentives; section 3:
Long-term incentives; and any other policy matters
not contained in the aforementioned summary.
Implementation of remuneration policy1. Guaranteed pay – base pay and
benefitsGuaranteed pay increases for 2017 and 2018
In determining the CTC increases for executive
directors and Group executive committee
members, the remuneration committee considered
the average increases to general staff and also
used relevant market data.
Benchmarks were selected based on a number of
factors, including, but not limited to, Company size
and complexity of comparable listed companies by
reference to market capitalisation, turnover,
profitability, number of employees and sector.
Due to the state of the Namibian economy a
decision was taken at exco level that, with
effect from 1 July 2017, no annual cost of living
increases will be paid at a Group-wide level
which includes executive directors. This will be
reviewed with effect 1 January 2018.
2. Short-term incentives 2017
Short-term incentives for 2017 were based on
profit growth targets. As the Group did not achieve
the targets, no short-term incentives were accrued.
Summary of executive directors’ guaranteed pay and short-term incentives 2017
Director
Basic
remuneration
N$’000
Retirement/
medical
benefits
N$’000
Bonuses
accrued
leave paid
N$’000
Total
emoluments
N$’000
S Kankondi 2 732 493 – 3 216
T Weitz 1 398 338 – 1 736
2017 total 4 121 831 – 4 952
S Kankondi 2 748 319 – 3 067
T Weitz 1 419 237 – 1 656
J Arnold 2 373 1 196 3 344 6 913
2016 total 6 540 1 752 3 344 11 636
3. Long-term incentives
Disclosure of the value of long-term incentives
The tables below illustrate on an individual executive director level the details of long-term incentive participation.
Held in terms of the Bidvest Namibia Share Incentive Scheme
Details of the directors’ outstanding share options:
Share options at
30 June 2016
Share options granted
during the year Share options exercised
Share options at
30 June 2017
Director Number
Average
price
N$ Number
Average
price
N$ Number
Market
price
N$ Number
Average
price
N$
SI Kankondi 250 000 10,74 – – – – 250 000 10,74
T Weitz 125 000 10,74 – – – – 125 000 10,74
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
25Bidvest Namibia Annual Integrated Report 2017
4. Non-executive remunerationNon-executive directors’ fees paid
The remuneration paid to non-executive directors while in office of the Company during the year ended 30 June 2017 can be analysed as follows:
Director
2017
Directors’
fees
N$’000
2016
Directors’
fees
N$’000
P Steyn 606 288
M Mokgatle-Aukhumes 154 145
H Müseler 358 360
MK Shipanga 373 353
JD Davis 259 57
Proposed non-executive directors’ fees for 2017/2018
Basic
per annumPer
meeting
Chairman 180 391 –
Non-executive director 30 064 22 548
Audit committee chairman 112 725 22 548
Audit committee member 15 033 22 548
Remuneration committee chairman 60 131 22 548
Remuneration committee member – 22 548
Acquisitions committee chairman 45 099 15 033
Acquisitions committee member – 15 033
Risk committee chairman 60 131 22 548
Risk committee member – 22 548
Refer to ordinary resolution 3 on page 1 of the notice of annual general meeting for approval of the fees by shareholders in terms of section 66 of the Companies Act.
There is a 6% increase proposed for the non-executive directors’ fees for 2017/2018.
Signed on behalf of the remuneration committee
Lindsay Ralphs
Remuneration committee chairman
Remuneration committee report – continued
Bidvest Namibia Annual Integrated Report 201726
Corporatesocial
investment
People
EnvironmentStakeholders
Sustainability
Sustainability report
professional associations, regulators, official
departments and government.
We strive to communicate with them all. Entity-
related matters are addressed by individual
businesses. Wider issues are escalated to
divisional or Group level.
Stakeholder communication includes SENS
announcements, presentations to shareholders,
analysts and the business media, press releases,
profiles, articles in industry and national directories,
newsletters and community interaction.
EnvironmentAll divisions commit to sustainable environmental
practice, notably fuel and energy efficiency and
responsible waste management. Efficiencies here
generate cost savings and drive performance
improvements.
We have a strategic interest in national fish stocks
and our fishing businesses liaise closely with the
Ministry of Fisheries and Marine Resources. The
ministry’s total allowable catch (TAC) determination
and fishing quotas are material to our business.
Bidfish is therefore fully engaged in long-term fish
biomass management.
Our food and distribution businesses rigorously
monitor and control fuel usage and their cold
storage and air-conditioning systems. Food safety
is a priority.
Bidfish contributes significantly to food security.
Millions of Africans rely every day on our fish as a
source of affordable protein.
It is therefore essential that we maintain ongoing
cooperation on fish resource management with the
Ministry of Fisheries.
The TAC for horse-mackerel, pilchard and monk
fish is a key sustainability issue for our fishing
businesses.
In the 2017 calendar year, the horse-mackerel TAC
was 340 000mt (2016: 335 000mt). The pilchard
resource remained under pressure and the 2017
TAC was set at 14 000mt (2016: 14 000mt).
Bidfish helps manage the national fish resource
through its longstanding commitment to good
industry practice. The division honours all official
limits and practices.
Our crews focus on by-catch reduction. Onboard
controls exceed minimum legal requirements.
The numbers confirm our rigorous resource
management and scrupulous application of gear
restrictions, thereby keeping the harvesting of
juveniles to a minimum. What’s more, the fishing
techniques used by our midwater trawlers
minimise impacts on coral and the seabed.
Compliance with dumping and wastage guidelines
is rigorous.
Sustainability ethosSustainability is built into the business model at
Bidvest Namibia. We commit to the development of
sustainable businesses, the creation of sustainable
jobs and the delivery of sustainable shareholder
value, while protecting the wider environment.
An abiding strategic objective of our board of
directors (the board) and executive committee
(exco) is the maintenance of an unblemished
corporate reputation.
A key part of our mission is to develop a corporate
brand Namibians are proud to be part of.
Profit – a sustainability issue
Ongoing profit is a prerequisite for sustainable
business development. To this end, we are at pains
to entrench a performance-based culture across
all management structures and into the wider
workforce.
To achieve sustainable profit, costs must be
rigorously managed. Every asset must contribute
to our growth and our bottom line. If not, asset
disposal is indicated and appropriate action is
taken.
We encourage local initiative in the pursuit of both
savings and opportunities. The energy of the
people of Bidvest Namibia is the primary driver of
our performance and long-term growth.
Strategic growth helps drive diversification and
vice versa. Focus on a narrow operational base can
add to business risks. However, growth and
diversification carry their own challenges in
scenarios in which the Namibian economy as a
whole comes under pressure.
Representation in sectors across the Namibian
economy means that what’s good for Namibia is
generally good for our Group. Conversely, when the
broad economy suffers, these adverse conditions
may also impact Bidvest Namibia.
That said, underperformance by the wider
economy can never be an excuse for Group
underperformance. Which is why we emphasise
the need for outperformance by our teams in good
times and bad. This is a central feature of our
commitment to the development of a sustainable
business.
Business modelOur decentralised business model ensures local
involvement on entity level and our people’s buy-
in. Each individual business commits to sustainable
business practice. Local enthusiasm on entity level
is reflected in focused efforts in areas such as
energy efficiency, waste management and
recycling.
Smart business practice and environmental
practice go hand in hand. Our teams seek a win-
win outcome, whereby business efficiencies
accompany community and environmental gains.
StakeholdersStakeholders are not only our employees and
shareholders. They also include customers,
consumers, communities, suppliers, unions,
investors, industry bodies, interest groups,
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
27Bidvest Namibia Annual Integrated Report 2017
Sustainability report – continued
Other environmental factors Waste managementA culture of environmental awareness and responsible, eco-friendly behaviour is evident across Group businesses. Our employees take pride in achieving savings by applying the mantra of “reduce, recycle, reuse”.
At sea, the responsible treatment of waste material is standard working practice as waste is stored onboard for recycling when back in port.
2016 2017 % change
Litres
16 937 855 16 719 934
-1%
Water consumptionWater management was even more of a priority in 2017 as widespread drought resulted in water restrictions across Namibia.
Ships in our fleet are known for responsible water management while our land-based businesses made strenuous efforts to reduce consumption.
2016 2017 % change
Kilolitres
135 457 71 236
-47%
FuelGroup gasoline usage fell in 2017 to 499 395 litres (2016: 533 919 litres). Intermediate fuel oil usage was 16,1 million litres (2016: 15,8 million litres) while heavy fuel oil usage was 0,6 million litres (2016: 1,1 million litres). Diesel consumption of 4,4 million litres was logged (2016: 5,4 million litres).
Sluggish levels of economic activity contributed to lower usage. Further reductions in the size of the horse-mackerel fleet should contribute to further reductions in consumption in 2018.
Continual efforts to improve operational efficiency will also help to further contain fuel usage.
Our vehicle fleets benefit from proper maintenance programmes, regular replacement of vehicles and the implementation of vehicle tracking and driver monitoring to ensure acceptable fuel consumption levels and the safe and responsible use of the assets.
The Bidfish fishing fleet is also well maintained.
2016 2017 % change
Litres
5 971 261 4 873 352
-18%
Energy managementRising utility bills make energy costs an obvious target in our drive to improve operational efficiency. Wherever possible, our businesses maximise natural light and adopt energy-efficient lighting and air conditioning.
Optimum efficiency in the operation of cold storage systems is another priority.
2016 2017 % change
Kilowatt
4 960 368 4 336 307
-13%
Food safetyFood quality, freshness and safety remain a source of competitive advantage and are a priority for our people and managers.
Food is a highly regulated industry and our teams ensure rigorous compliance with safety standards.
International standards are maintained as our foodservice and FMCG businesses work closely with international brands. We ensure products are properly stored, expiry dates are respected and product integrity assured.
Compliance with product specifications laid down by brand principals is rigorous.
Modern warehouse management and product tracking systems ensure prompt stock rotation.
Rigorous stock turn and stock control help to prevent or reduce food waste. Any disposal of foodstuffs is carried out in line with local authority requirements and certifications.
The cold chain – where applicable – is maintained throughout the storage and distribution cycle.
All Bidfish vessels hold HACCP certification and safety certifications from the Department of Maritime Affairs and the Russian Maritime Register which covers the physical suitability of the vessels to conduct safe fishing operations.
As per law all fishermen have six-monthly health inspections and certificates declaring they are fit to work at sea.
Our people
2016 2017 % change
Number
2 738 3 481 27%
Performance is driven by our innovative and resourceful people. Constant improvement is the goal.
In the quest for higher productivity and motivation, businesses across the Group constantly examine new ways of improving recognition and staff communication.
Bidvest Namibia supports the aims of the Namibia Training Authority (NTA) and pays the government training levy introduced in 2015.
We are deeply committed to the development and training of the nation’s young people and in 2017 launched the Bidvest Namibia Youth Development Programme, an initiative characterised by close collaboration with government agencies.
A key element is our support of the two-year Commercial Advancement Training Scheme (CATS),
which gives young entrants to the job market practical workplace experience. Another component of the new Group initiative is our participation in the internship programme run by the Namibian University of Science and Technology and the University of Namibia.
The Group’s youth development programme also stands ready to sponsor students who plan to attend government’s new vocational training centres across Namibia.
Another crucial feature of the programme is a planned automotive academy for young people eager to embark on a career in the motor industry. Planning for this exciting development entails collaboration and consultation with the Namibian Training Authority and its Key Priority Skills Funding initiative.
The Bidvest Namibia Youth Development Programme now provides a comprehensive framework for the support of initiatives such as these.
Our Group remains one of the largest employers in the Namibian private sector and in 2017 employed 3 481 (2016: 2 738) staff members.
Employment equityBidvest Namibia complies with all employment equity legislation; specifically, the Affirmative Action Act. We are an equal opportunity employer and take pride in our efforts to train and develop Namibians for leadership roles in the Namibia economy. Workplace diversity is a strategic imperative for us.
We continue the practice of sharing information on our recruitment needs with the Ministry of Labour in line with the Employment Services Act.
In addition, we maintain our long-running commitment to non-discriminatory training and development, without regard for race, gender or disability.
Each decentralised business submits annual affirmative action plans and reports to the Employment Equity Commissioner and continues to offer development opportunities to those from designated groups.
Our Namibianisation programmes have helped to ensure that people from previously disadvantaged groups increasingly take responsible positions.
Black Namibians constitute the vast majority of employees. Men predominate, though women increasingly take on supervisory and managerial roles.
Employment of those with disabilities remains a priority.
Phased Namibianisation of officer grades on our fishing vessels continues.
Industrial relationsThere were no strikes during the review period – a reflection of the Group’s positive relationship with the trade unions. Local relationships between management and workers were also positive. Our decentralised business model keeps managers close to local issues.
HealthNo work-related fatalities were recorded. Group-wide, a total of 159 (2016: 67) lost-time incidents was logged.
Our businesses comply with all laws and standards governing worker health and safety. Appropriate
Bidvest Namibia Annual Integrated Report 201728
environmental controls are mandatory across the Group.
Scrupulous compliance with labour law is one reason our union relationships have been so positive for so many years.
We endeavour to create and maintain a safe and healthy workplace. We supply all necessary safety and protective equipment and engage in ongoing safety training.
We also institute regular awareness programmes to ensure our people know the relevant standards and procedures and their safety responsibilities.
HIV/Aids has been a focus area for many years. Group companies decide on appropriate interventions in each working environment.
Bidvest Namibia also partners with like-minded organisations and from time to time cooperates with third parties on health, safety and wellness issues.
SafetySome of our operations involve inherent safety risks, eg fishing on the high seas and logistic services in port and over long distances.
Bidfish assigns safety officers to all vessels. Larger vessels have full onboard health and safety committees. Regular firefighting, first-aid and safety courses are run. Officers take advanced courses and undergo personal survival training. Firefighting training and basic medical training are mandatory for navigation and engineering officers.
Officer training in radio communication is obligatory.
Regular fire drills are carried out on all vessels and emergency procedures are tested and reviewed. A regular health and fitness check-up by a medical practitioner is mandatory for seagoing crew.
Training and developmentOur purpose-built Walvis Bay Training and Development Centre is a key asset in our effort to continually develop our people. Use is also made of a satellite centre in Windhoek.
Several customised training courses were run in 2017 to support the strategy of retaining customers through enhanced service standards.
Up to class 5 for navigation and class 4 for engineering, Namsov makes use of training facilities at NAMFI (the Namibian Maritime and Fisheries Institute). Above that level, Bidfish conducts some officer training at the Cape Peninsular University of Technology (South Africa), in collaboration with NAMFI.
Namsov also invests annually in the SA-based training of one deck officer and one engineering student. Total spending for this programme until June 2017 was N$3,5 million, of which N$0,4 million was spent in 2017.
Namibianisation of seagoing engineering and navigation personnel at the highest level is driven by continued collaboration with the Russian naval academy in Kaliningrad.
The investment over several years has been considerable and by 2017 amounted to N$9,3 million. In 2017, N$0,5 million was spent as some of the officers continue with part-time studies in Kaliningrad to obtain higher levels of accreditation.
Government’s Commercial Advancement Training Scheme is supported by many Group companies.
In addition, our divisions equip our people with specific skill sets designed to foster their personal development and lead to increased job satisfaction. For example, in 2017 Freight and Logistics launched its Customer Service Movement, a vehicle for customer awareness training covering all elements of professional customer service and cross-selling.
Total spend on training across the Group amounted to N$6,3 million (2016: N$6,9 million).
2016 2017 % change
N$
6 870 670 6 328 441
-8%
Staff retentionStaff retention levels are generally high, reflecting our record as a responsible employer who pays market-related wages, offers quality training and fosters career development.
We focus on the identification of high-potential staff. Junior managers are alerted to opportunities for further development and given the training and work experience to equip them for a role in middle and, ultimately, senior management.
Succession planning is undertaken across the Group, providing further scope for ambitious go-getters who are keen to reach executive positions.
Appropriate remuneration fosters talent retention and an independent remuneration committee determines executive remuneration. The Group monitors pay levels in various industries to ensure remuneration at Bidvest Namibia remains attractive.
Unionised employees receive increases in line with wage agreements reached with the various trade unions.
Recruitment is aligned with the provisions of the Affirmative Action Act and the Employment Services Act. All positions are graded on the Patterson grading system.
We are a performance-minded business. We reward excellence, initiative and hard work. Performance is incentivised through bonuses, awards and payment for reaching and\or exceeding targets.
Corporate social investment
2016 2017 % change
CSI N$
15 761 670 23 802 594 51%
Our CSI in 2017 amounted to N$23,8 million (2016: N$15,8 million).
Group investment is complemented by individual contributions by the people of Bidvest Namibia and the employee-driven Pandula Trust.
The trust channels money to a wide range of community efforts, often after input from our people who are close to community needs.
Another source of community support is the Namsov Community Trust. The NCT is a 10% Namsov shareholder and vehicle for numerous upliftment efforts.
The NCT’s primary areas of intervention are regional development, employee programmes and general social investment.
During 2017 the following amounts were spent in the various categories:
Community development N$3,6 million
Education N$2,7 million
Health N$14 000
Natural resources N$467 000
Multiple interventionsIn cooperation with the office of the Deputy Prime Minister, continued support was given in 2017 to the Ondera model farm at Oshikoto, a key component of a wide-ranging San resettlement programme.
Initial focus is on plot cultivation and basic farming skills, but the intention is to encourage small-scale commercial farming. Support for horticulture is backed by provision of cattle and assistance with stock-rearing.
Official recognitionNCT successes are so meaningful they were recently highlighted in feedback to the Poverty Eradication Programme driven by President Hage Geingob.
Efforts to combat poverty are high on the agenda of the Governors’ Forum. Several regional governors at this gathering acknowledged the difference being made by the NCT.
It was praised in particular for its assistance with water supply to informal settlements, its support for a Penduke Trust-led aquaponics project and its financial backing for Aisha Training Academy.
Erongo governor Cleopas Mutjavikua listed the recipients of funds from Namsov’s contribution to regional development in his region and noted: “Namsov has been a key pillar in the social transformation of our people.”
Governor Festus Uitele of Omaheke described Namsov support for various projects, from assistance with vegetable and produce gardens, to poultry rearing, small business development and help for a local kindergarten.
Oshana governor Clemence Kashuupulwa, in his capacity as Governors’ Forum chairperson, said “the fishing giant has become a torch bearer of regional development”.
SME development The Group remains active in small business development. A Bidvest Namibia Enterprise Development Fund was set up some time ago. Loans from the fund (at attractive rates) provide short-term working capital for small businesses. In many cases, this ensures their continued participation in the economy. The fund demonstrates our support for entrepreneurship and assists in job creation.
Company initiativesContributions by the Group and NCT are complemented by initiatives at individual companies.
Manica, for one, devotes 1,5% of after-tax profit to CSI initiatives. The Company supports health and education initiatives, youth development, the environment, enterprise development and the Walvis Bay Sunshine Centre, a shelter for children with special needs and a haven for abused women and children. It also assists Swakopmund’s Mondesa Youth Organisation, another channel for bringing help to children with special needs.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
29Bidvest Namibia Annual Integrated Report 2017
Operational review – Bidvest Namibia Fisheries Holdings (Bidfish)
Gerrie HoughManaging director
Age: 45
Qualification: CA(SA), CA(Nam), CIS, MBL (Unisa)
Appointed: 1 December 2016
Gerrie, a qualified chartered accountant, attained his master’s
at the University of South Africa’s Business School in 2004.
Before being appointed as MD of Namsov, Gerrie attended to
the function of finance director of this division. He gained
extensive experience in the fishing industry, being the general
manager of finance and administration for the NovaNam
Limited group of companies, a primary operator in the
Namibian hake fishing industry, before moving to Bidvest.
Macro-factorsResults were extremely disappointing. Pressure
was severe on revenue, profit and cash flow as
a consequence of “headwinds” from several
directions.
The fish size mix remained under pressure,
competition intensified as fish volumes from
foreign sources rose in markets traditionally
served by the division, market prices remained
depressed in most categories and margins
suffered. Horse-mackerel prices (in USD terms) fell
to levels last seen in 2009.
Fishing for horse-mackerel remains the core
activity of the division.
Depressed fish prices are directly linked to falling
personal income levels and the introduction of
competitive protein products such as blue whiting
and chicken in markets across Africa. Economic
growth has stalled and families are exploring all
forms of cheap protein, buying less and buying
down.
In the past, frequent depreciation of the South
African rand and the linked Namibian dollar
provided a “windfall” once the proceeds of our fish
exports were repatriated into home currency. This
year a stronger rand ensured no such boost to our
bottom line.
Simultaneously, we saw a significant increase in
expenses as inflation rose. New taxes and levies
added to the cost of doing business while export
earnings were further squeezed late in the period
when an export levy was introduced. An additional
substantial cost arose when income taxes were
applied to foreign crew.
This series of developments had a severe impact
on results. The division suffered one of the most
challenging years in recent memory. Profit fell
substantially and some jobs were lost.
Strategic responseLow private sector quotas have become enduring
features of our market. Our traditional response
has been to maximise fleet utilisation for as long as
possible by buying additional quotas (purchasing
from government’s Fishcor and other right-
holders). This drives up operational costs as high
quota demand ensures that secondary market
prices are bid higher, year after year. This resulted
in vessels operating at or below the profit line.
Our view was that our modern fishing fleet was a
national asset that should be kept at optimum
capacity to support African food security. We also
felt it was important to protect fishing industry
jobs.
However, the pattern of recent years cannot be
ignored. Pressure on profit and margins rises every
year.
We must assure long-term business sustainability
in the face of this challenge. This can only be
achieved by aligning our asset base with probable
activity levels. This may result in vessels being sold
or laid up for a period.
It was therefore decided to sell the MFV Namibian
Star. Late in the period, we completed the sale of
this vessel from the Namsov fleet to a New Zealand
company. The proceeds bolster our 2017 bottom
line by an amount of N$9,7 million.
We have made a strategic decision to interrogate
all cost drivers and contain all expenses. One
consequence is that we will only enter the
secondary quota market at levels that appear
reasonable to us. Bidding up quota prices is
unsustainable in the long term. We do not wish to
add fuel to the fire.
QuotasIn the 2017 calendar year, a TAC of 340 000mt
was determined. Bidfish received 33 609mt from
this allocation and purchased another 13 000mt in
the secondary market (down from 41 637mt of
purchased quota in 2016).
The Ministry of Fisheries continued its practice
of announcing allocations at various times of the
year. In 2016, three announcements were made.
In 2017, allocations were notified in January
and June.
No new information was received on the progress
of the previously announced review of criteria for
right and quota allocations and the development of
a right and quota allocation scorecard to make
official processes more transparent and
predictable. The 2017 quota allocations were still
issued on a pro rata basis.
Bidvest Namibia Annual Integrated Report 201730
Revenue – decline to N$1 081,932 million
500,000
620,000
740,000
860,000
980,000
1 100,000
Revenue (N$’million)
1 081,932 1 089,247
2017
2016
Trading profit – decline to N$39,856 million
0
50,000
100,000
150,000
200,000
250,000
39,856
197,443
2017
2016
Trading profit (N$’million)
With little clarity and an uncertain planning horizon,
it became difficult to effectively allocate our own
resources and manage fleet activity. A stop-start
pattern became the norm – initial fishing for one’s
own quota, idle time, followed by fishing for
purchased quotas and more idle time.
Fleet downtime added to cost pressures, though
the contracting of a fishing research quota helped
to lift fleet utilisation levels.
CarapauCarapau Fishing, in which we have equal equity
with three other indigenous Namibian horse-
mackerel right-holders, also specialises in fishing
for horse-mackerel and was impacted by similar
challenges to those faced by Namsov. It
concentrated on expense containment in a difficult
year. Profit fell.
PilchardsPilchard operations were hard hit as the resource
remained under severe pressure, resulting in poor
catches and consequent pressure on margins. The
2016 pilchard TAC was announced at 14 000mt,
of which 4 800mt was contracted to the Group.
The research allocation of 4 000mt was purchased
to augment these volumes. As a result of the
pressure on the resource, the 2016 fishing season
began much later and the vessels spent more time
fishing for smaller catches. Only 1 725mt of the
4 880mt quota was landed.
The 2017 pilchard TAC was announced at
14 000mt of which 4 000mt is kept in reserve.
4 800mt was contracted to the Group.
To keep costs in check, cooperation with another
private-sector player was extended. Our focus was
offshore operations. Our collaborator focused
onshore. This meant our canning factory remained
closed for pilchard operations, though some
Sustainability
2016 2017 % change
Kilolitres
99 055 30 799
-69%
kW
2 722 760 1 617 788
-41%
Number
838 632
-25%
CSI N$
13 756 883 21 318 597 55%
Litres
4 088 533 3 070 881
-25%
N$
3 449 290 3 053 070
-11%
Litres
16 937 855 16 719 934
-1%
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
31Bidvest Namibia Annual Integrated Report 2017
Operational review – Bidvest Namibia Fisheries Holdings (Bidfish) – continued
horse-mackerel canning was undertaken to fulfil a
Zimbabwe-focused poverty eradication contract.
Despite stringent cost control, the pilchard
business recorded significant losses.
SardinellaPesca Fresca, the Angolan business specialising in
sardinella fishing and processing, maintained
pleasing progress and returned a profit.
Maintenance and investment were stepped up. To
ensure optimal efficiency, the jetty was enlarged
while after year-end, good progress was made on
the installation of a larger boiler, the upgrade of the
fishmeal discharge system and the upgrade of the
fishmeal plant. Skilled technical staff are being
employed in an effort to minimise unnecessary
delays caused by breakdowns in the factory,
fishmeal plant and on board the vessels.
One of the vessels is ageing, but is undergoing
major maintenance and repair to ensure a two-
vessel operation. Maintenance facilities in Angola
are limited. Full repair often means a vessel has to
be taken out of service and sent to Namibia,
lengthening downtime.
Further gains are targeted in the coming year,
though the business faces challenges in the form
of a devalued kwanza and high maintenance costs.
Even so, the Pesca Fresca turnaround strategy
remains on track.
OystersTetelestai Mariculture, the oyster-farming
business, made pleasing progress with efforts to
cut costs and stem the rate of loss.
Offshore operations have been shut down and
lagoon operations have been minimised. Offshore
oyster cultivation was bedevilled by worrying levels
of cadmium in the water and animals while sulphur
challenges contributed to high mortality rates at
the lagoon site.
Cultivation is now concentrated on the salt-pan
site near Walvis Bay. Mortality rates were cut and
cost efficiencies achieved.
Strategically, the decision was made to focus on
profitable business with existing customers rather
than invest in a larger operational base. The
business has been rightsized in line with this
strategy. A small loss was recorded.
GlenryckEfforts to revitalise the Glenryck brand made
encouraging progress. Market share gains in the
first year of trading exceeded expectations,
confirming the underlying strength of this pilchard
brand. Bidfish acquired the brand’s Africa rights
more than a year ago.
A new company, Glenryck South Africa, was
launched to support growth in this important
market. By year-end, operations in South Africa
and Mauritius were close to break-even point.
Equity investmentStrong progress was reported by Industria
Alimentar Carnes De Moçambique, the sales and
distribution company in which Bidfish took a 40%
equity stake in the previous period. The business,
based in Maputo, Mozambique, sells a wide range
of food products, including meat, chicken and fish.
The Company offers Bidfish companies an
important distribution channel into the Mozambican
market while its diversified range has strong
appeal for African consumers looking for affordable
sources of protein.
The firm continues to secure organic growth.
Operations are doing well. Cold store facilities
were commissioned in Beira.
Job pressuresThe effort to rightsize divisional operations in line
with current levels of activity is delivering
significant savings. Regrettably, the smaller base
has meant job losses.
Bidfish is a responsible employer and endeavoured
wherever possible to reduce the impact through
non-replacement of staff.
Reduction in the size of the Namsov fleet clearly
had implications for jobs, though the impact on
permanent staff was kept to a minimum. However,
temporary staff were not re-employed once their
contracts expired. Fifty temporary posts were
affected. Permanent employees were reallocated
to other vessels. Only four permanent jobs were
lost.
Lower activity levels at United Fishing Enterprises,
the pilchard business, and the prolonged closure
of its Walvis Bay canning factory resulted in the
retrenchment of 18 permanent staff while
650 temporary factory workers lost seasonal job
opportunities.
Three permanent sea-going staff lost their
positions as Tetelestai Mariculture scaled back its
operations.
TrainingDespite pressure on costs, the division continued
to invest in the development of its people. The
2017 training cost was N$2,446 million (2016:
N$3,793 million).
Skills training, career development and safety are
focus areas and we maintain close relationships
with the Namibian Maritime and Fisheries Institute,
the Cape Peninsular University of Technology and
the Russian naval academy.
We contribute significantly to the country’s
Namibianisation strategy by supporting the
development of Namibian naval officers.
The education and accreditation of properly trained
navigation and engineering officers is a long-term
commitment demanding substantial investment.
To date, we have funded the development of
10 officers. All took up responsible positions on
vessels in our fleet. Seven continue with part-time
studies at the naval academy in Kaliningrad to
further their studies and obtain higher levels of
accreditation.
We are proud of this investment and the strides
made by the young Namibians who take full
advantage of this programme.
Community commitmentBidfish and Namsov Community Trust continue to
contribute to the development of underresourced
communities across Namibia. We not only commit
to poverty alleviation, we provide funding to help
drive numerous grassroots initiatives.
Bidvest Namibia Annual Integrated Report 201732
The division and its developmental partners are
active in projects as diverse as training and
education for disadvantaged children, water
reticulation for informal settlements, food security
and the cultivation of backyard gardens, the
seeding of start-up businesses in marginalised
communities and assistance for the San.
FutureBidfish is fast positioning itself for a new future.
Fishing industry challenges are expected to persist
for some time to come. Resources and quotas will
almost certainly remain under pressure. Our task
is to create a new base for sustained growth by
controlling costs while ensuring our assets are
properly aligned with current business volumes
and the volumes we can reasonably expect in the
coming years.
Though profits were subdued and some costs
remained stubbornly high, our people put in a
resilient performance in 2017 as they optimised
the few opportunities that came their way.
The level of loss at loss-making operations has
been much reduced while profitable operations are
leaner and better able to respond to market shifts.
In the year to come, we plan to cut costs even
further while preparing the way for a return to
improved levels of profitability.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
33Bidvest Namibia Annual Integrated Report 2017
Macro-factorsThe economic climate in Namibia negatively
affected all entities in this division, except for
Minolco.
Drought had a severe impact on the construction
industry. Work halted at many sites. This had
knock-on effects at several businesses as
construction sector contractors are an important
customer category.
Government austerity measures affected volumes
while late payments by official departments
created cash flow pressures. Clearly, the pressure
was felt when directly serving public sector
customers. Additional indirect pressures occurred
in the business-to-business environment as many
of our private sector customers work on
government projects.
Strategic responseOur cost base came under intense scrutiny as
management teams looked for savings and
efficiencies. The back-to-basics strategy
championed in the previous period remained
in place.
Investment continued in growth, systems and
infrastructure, but a strong business case had to
be made before capital was committed. Staffing
levels were reviewed, though outright
retrenchments were minimised.
Strong emphasis was placed on sales and
customer service as growth became a function of
market share gains. Many of our businesses made
pleasing progress in highly competitive markets.
Debtors management became key as cash flow
constraints kept many customers under pressure.
The process became a balancing act as prudent
controls had to be maintained while extending
repayment periods for customers with solid
repayment records who had been hit by
government’s spending clampdown.
Security was stepped up after one of the entities
was targeted by cyber criminals. The Company’s
automated phone systems were hacked, enabling
criminals to route international calls through the
switchboard. This resulted in a N$1,4 million
negative impact on this year’s trading profit.
Strategic developmentLate in the period, we acquired Prestige Namibia
cleaning business. This entity was previously run
by the Services division of our parent company,
Bidvest South Africa. By taking over Prestige
Namibia we have kept 508 workers in employment,
taking our divisional staff complement to 992.
The realignment creates new opportunities in an
important area of the outsourced services industry.
Initial soundings among Prestige customers
confirm the operation’s profit potential.
WaltonsThe team put in another pleasing performance.
The new MD and his managers did well and
finished the year strongly. To maintain momentum,
it is necessary to constantly refresh the product
mix – a major challenge as the business stocks
10 000 different SKUs. The team did well to
achieve sales success in the face of sluggish
demand.
The Oshikango branch was closed. However, new
stores opened in Outapi and Tsumeb in the north
of the country. The flagship Windhoek store was
rebranded and relocated to larger premises. The
Keetmanshoop branch in south-central Namibia
was also revamped.
PlumblinkThe bathroom, kitchenware and plumbing supplies
business made its first full-year contribution to the
division. Pleasing progress was made as the start-
up moved close to break-even point on a monthly
basis.
Strong momentum was achieved by the initial
Windhoek store as sales staff demonstrated the
benefit of specialisation and much improved stock
availability. They rapidly created a firm customer
base among local plumbers who were previously
served by general suppliers of building materials.
A second Plumblink branch was opened in
Swakopmund and had a promising start. Growth
potential in northern Namibia is under scrutiny.
KolokThe business did well to achieve a measure of
sales growth in a difficult market. Margin pressure
was intense. Kolok faced challenges in the first
three quarters in the form of heavy discounting as
products came on to the market at below cost.
Cost efficiencies were achieved and staff numbers
fell. Staff training was stepped up and renewed
focus put on customer service to protect
market share.
Operational review – Bidvest Namibia Commercial and Industrial Services and Products
Theo MberiruaActing managing director of Bidvest Namibia Commercial
and Industrial Services and Products
Age: 54
Qualification: BSc (Mercy College, New York), MBA
(Accounting) (Baruch College of the City University of
New York)
Theo has held senior executive positions at several
major corporates, including Namibia Breweries, Lonrho,
Telecom and Standard Bank and has lectured on
business subjects in both the USA and Namibia. He
was a member of the Presidential Economic Advisory
Council. In addition, Theo is part of the executive team
at the Namibia Chamber of Commerce and Industry and
is a former chairperson of the SADC Banking
Association. He joined Bidcom as commercial and
business development director in April 2012.
Bidvest Namibia Annual Integrated Report 201734
A stable Namibian dollar meant there were no
windfall gains from currency movements.
Volumes improved in the final quarter as the
market showed signs of moving back to price
stability. New lines were being tested as the year
came to a close.
Minolco The team had another superb year as Minolco
emerged as the division’s star performer.
Longstanding emphasis on customer service and
technical training paid dividends as capital
spending on new office automation solutions was
cut by all customers. Leases on existing equipment
were extended and customer relationships
deepened as highly trained teams helped clients
get the most out of their existing capital investment.
Growth was achieved nationwide. Once again, high
levels of customer retention underpinned growth.
Training was stepped up. Personal development
was encouraged and assistance given to staff
looking to obtain their driver’s licence. Two interns
were given the opportunity to gain practical work
experience.
Rennies TravelOur travel business put in another strong
performance by maximising opportunities flowing
from higher tourist inflows. Previously, visitors from
the UK and Europe accounted for most tourist
volumes. Today, Namibia is becoming increasingly
popular with visitors from east and north America
as new national carriers enter our market.
It is also apparent that online bookings are no
longer making big inroads into volumes. Travellers
are again putting strong emphasis on personal
service. Our knowledgeable staff performed well in
this environment, growing volumes and profit.
Further investment was made in product and
customer service training.
Cecil NurseConstruction industry challenges impacted the
business. In effect, water shortages shut down the
sector. As no new buildings were being completed,
the office furniture project pipeline dried up,
putting an instant brake on Cecil Nurse volumes.
Profit was significantly reduced.
In this economic climate, the manufacturing arm
did well to avoid factory lay-offs.
The catalogue was improved and new products
introduced. Training continued as the business
looked to establish a firm base ahead of any uptick
in business activity.
Revenue – decline to N$473,665 million
Trading profit – decline to N$16,764 million
0
5,000
10,000
15,000
20,000
25,000
Trading profit (N$’million)
16,764
22,894
2017
2016
465,000
470,000
475,000
480,000
485,000
490,000
495,000
473,665
490,134
Revenue (N$’million)
2017
2016
Sustainability
2016 2017 % change
Kilolitres
7 268 8 286 14%
Litres
327 780 344 173 5%
kW
811 045 748 949
-8%
Number
420 974 132%
N$
488 683 735 308 50%
CSI N$
278 590 464 549 67%
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
35Bidvest Namibia Annual Integrated Report 2017
Operational review – Bidvest Namibia Commercial and Industrial Services and Products – continued
SteinerThe business made continued progress. Two years
of market education are beginning to pay off.
Steiner now has a solid customer base and
continued to grow volumes in its core business
(provision of corporate hygiene services) while
expanding its dust and pest control offering to
branches outside the Windhoek hub.
In the fourth quarter, a new branch opened in
Ongwediva in the north of Namibia.
Training was stepped up and job growth achieved.
Management was further strengthened. The team
plans to move into profit in the coming year.
VoltexA brake was applied to the previously steep rate of
losses. A completely new management team is
now in place.
Inventory levels were reviewed and stringent
controls introduced. Buying processes were
revamped. A new warehouse and stock control
system has been set up with the ability to anticipate
demand patterns and improve stock availability.
Training investment focused on customer service.
“Face time” with customers rose as the sales team
became increasingly proactive.
Unfortunately, the turnaround strategy rolled out
just as the national economy slowed and
construction came to a halt. Debtors management
became a growing challenge.
Fundamental changes have been made to the
business. The turnaround strategy will continue in
the coming period.
PrestigeTakeover was only effective from 1 June, but
management spent several months prior to that
familiarising themselves with the business. Though
Prestige Namibia has been loss-making for some
time, the business has nationwide reach and an
established book of business. At the time of
takeover this entity was incurring marginal losses
on a monthly basis.
The strategy is to create a sense of partnership
with customers. Many customers appreciate it is in
their interest that contracts are put on a sustainable
basis, ensuring quality office cleaning solutions at
fair rates. Renegotiation of loss-making contracts
is a priority.
New investment in equipment and uniforms will be
necessary as it is essential to build staff morale as
part of the effort to improve service quality and
grow the business. In the coming year,
management plans to get this entity on its way
back to profitability.
TrainingExpenses are rigorously managed, but training
was not affected and budgets were maintained
across the division. Training support for new
managers and supervisors was a priority.
Staff development is complemented by the
ongoing effort to improve workplace safety. No
significant safety incidents were reported.
CommunitySupport for community initiatives is built into
standard practice at business units within the
division. Collaboration with the Mister Sister mobile
health service continued at Cecil Nurse and Kolok.
This ensures basic health cover for lower paid
workers. Waltons launched a successful effort to
extend medical aid to employees, removing the
need for NGO interventions.
FutureTrading conditions show little sign of improvement.
However, the division is looking for further gains.
Most of the “pain” appears to be behind us at
Voltex. Kolok and Cecil Nurse are positioned for a
better 2018. Steiner is also well placed and
Plumblink is making promising progress. Waltons
and Rennies will look to keep up recent momentum
while star performer Minolco has good prospects
of continued growth. Prestige requires focused
attention, but represents a strategic opportunity.
We plan to put the business on a firm footing
in 2018.
Bidvest Namibia Annual Integrated Report 201736
Katima MuliloKatima Mulilo
Oshakati
OshikangoRundu
Tsumeb
Grootfontein
Otjiwarongo
Keetmanshoop
Namibia
Lüderitz
Walvis Bay
Swakopmund
OndangwaOngwediva
Windhoek
Gobabis
NAMIBIA
NamibiaBidvest Namibia Commercial and Industrial Services and Products
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
37Bidvest Namibia Annual Integrated Report 2017
Allan DuncanActing Managing Director of Bidvest Namibia Automotive
Franchise CEO – Jaguar, Land Rover, Ford – McCarthy Motor
Holdings
Age: 47
Qualification: NHDP Mechanical Engineering
Bidvest Executive Development Programme – Gordon
Institute of Business Science
Appointed: 1 October 2016
Alan has 27 years of experience in the automotive
industry, having spent some time in each area applicable
to the industry, from warranties to sales, from export
sales to key account management. His experience was
obtained at various original equipment manufacturers,
dealerships and brands until he found his home at
McCarthy Motor Holdings 10 years’ ago. He has been
the Franchise CEO for Jaguar, Land Rover, Ford &
Mazda for the last nine years.
Operational review – Bidvest Namibia Automotive
Macro-factorsDuring the financial year, the automotive industry
faced extreme pressure. Comparing year-to-date
new vehicle sales across the Namibian motor
industry between the end of June 2017 and the
end of June 2016, accumulated sales fell 24,41%.
New vehicle volumes in the first six calendar
months are also at the lowest level for this period
in the last five years.
Results were disappointing across all the division’s
franchises as the business experienced a double-
digit drop in both revenue and profit.
The impact of much reduced spending by
government departments, businesses and
consumers was compounded by legislative
changes that were material for all companies in
the credit retail sector.
Amendments to the National Credit Act (NCA),
effective from July 2016, made a minimum 10%
deposit on new car purchases mandatory, while
repayment periods were capped at a maximum of
54 months.
The amendments also banned the practice of
including residual values in purchase price and
credit offerings.
Interest rates also increased. The net effect was to
drive up monthly repayment levels, deterring new
vehicle buying.
Traditionally, when new vehicle sales stall, the pre-
owned market ticks higher. This creates another
opportunity to balance the business and efforts
were made to step up used vehicle sales. However,
longstanding challenges are evident in this
marketplace.
For many years, “grey” vehicle imports have been
a feature of Namibia’s used car market. Importers
bring in large volumes, affecting the ability of a
franchise to market its used vehicle stock. The
situation is further complicated by some South
African vehicle fleets that sell ageing stock directly
into Namibia when they defleet.
Despite these challenges, efforts are ongoing to
create a more compelling used vehicle sales
proposition. We also strengthened our
management team by the addition of a used car
specialist manager. The number of used car
salesmen was also increased.
We implemented a number of initiatives in an effort
to maximise sales. We increased our attendance at
marketing events and agricultural and tourism
expos across Namibia and put on displays in
shopping malls. We also secured additional
showroom space in the southern part of Windhoek.
We strengthened the focus on digital and social
media platforms. McCarthy South Africa has a
strong background in this area and is assisting us
as we seek a higher profile on platforms such as
Facebook and Twitter. McCarthy also assisted
during the installation and upgrade of the Namibian
Call-a-Car website.
Affordability challenges mounted when motor
manufacturers across all marques and vehicle
types announced significant price increases on all
new model introductions, more than negating the
effect of a more stable Namibian dollar.
Our new vehicle sales for the 12 months – the core
of our business – dropped to the lowest level in
five years.
Strategic responseOur dealerships in Windhoek and Walvis Bay sell
and support models from the Ford, Mazda,
LandRover and Jaguar ranges.
However, in the downturn experienced in
2016/2017, buyers did not simply amend their
purchase behaviour and “shop” the ranges by
moving down the affordability curve. In many
cases, they stopped buying altogether.
This does not represent a complete market exit,
however. In effect, purchasing is delayed and
vehicle replacement cycles are extended. This
creates potential for increased service and repair
work at our service centres. Owners can also be
expected to “renew and refurb” their ride by adding
new accessories and refreshing vehicle aesthetics.
This results in customisation opportunities in the
“aftermarket”.
Reliance on new vehicle sales can therefore be
reduced by optimising sales of labour, parts and
accessories. This received focused management
attention, supported by increased investment in
facilities and training.
Bidvest Namibia Annual Integrated Report 201738
At showroom level, marketing teams sought to
optimise all opportunities flowing from new vehicle
introductions.
At Jaguar LandRover, the first Jaguar SUV made its
debut, the new Jaguar XF came into our market
and the new F-type special vehicle was introduced.
The Ford Focus RS was launched along with the
Ford Everest SUV. However, much of the activity
centred on upgrades and facelifts rather than all
new models.
Significant cost increases were a feature of the
first half. They related to facility upgrades, rising
wages, increased staffing costs and training. As
the second half came to a close, new efficiencies
came through as management sought to better
align the cost base with a much changed market.
In the face of depressed trading conditions, teams
at all centres put in a robust performance. The
Jaguar LandRover dealership received recognition
in the form of a “Most Improved Dealer of the Year”
award from its brand principals. Ford teams were
recognised as the most successful in Namibia in
the parts sales category and came third in South
Africa in their dealership category.
Sales activityOur sales of new vehicles fell by 29,13% to
1 141 units (2016: 1 610 units). Used vehicle
sales held firm at the same level as last year,
with a dip of 1,49% to 265 units (2016: 269 units),
despite the decline in new vehicle volumes.
Stronger consumer interest in pre-owned stock
was especially evident toward the end of
the period.
New investmentA major revamp was completed at our Windhoek
Ford dealership. The upgrade included the new
and used vehicle showrooms, workshops and
customer service facilities. We also made changes
to service centre workflows, part of our effort to
drive ongoing efficiency and productivity
improvements.
Our facilities are now comparable to the mega
dealerships in South Africa, ensuring a comparable
brand experience when customers enter Ford
franchises.
Furthermore, we opened a satellite facility in the
southern part of Windhoek where we display the
same mix of vehicles as our main showroom. We
also have space for the display of commercial units
as we have secured the Ford commercial franchise
for Windhoek.
In March, a new offsite fitment centre was opened
to pursue opportunities in the automotive
accessories market. By the end of the fourth
quarter, it had moved into profit. Our Walvis Bay
premises were given a new corporate identity and
a facilities upgrade.
JobsCore staff remained stable. However, 20 new jobs
were created as we broadened our representation,
increased the focus on workshop quality and used
vehicle retailing and employed staff at our satellite
facility and fitment centre. Some management
teams were strengthened. A new dealer principal
was appointed in Walvis Bay and a new service
manager came on board.
TrainingTraining and retraining are continuous.
Our brand principals conduct regular customer
satisfaction surveys. For us, consistent
improvement across these scorecards is a
business imperative. This entails strategic
commitment to customer service and technical
training.
Dealership personnel are sent on regular courses
run at the South African training facilities provided
by our principals. Staff also participate in online
courses. Equipment and facilities have been
provided to enable classroom and workstation
training on this pattern.
Plans for significantly expanded in-house,
Namibia-based training are being drawn up.
McCarthy South Africa also provides opportunities
for some workshop staff to attend the McCarthy
training centre in South Africa. These initiatives are
supported by the Namibia Training Authority.
Safety training is another focus area.
A health and safety officer has been appointed and
makes daily safety checks at various operations.
An independent service provider was also
appointed during the year to run regular safety
audits. This will enable us to identify areas for
improvement. Targeted awareness initiatives and
training courses can then be run.
Community commitmentAll efforts in support of the wider community were
maintained. We continue to provide a Ford Ranger
4x4 to the national effort to combat rhino poaching.
Another sponsored vehicle is made available to the
Lady Pohamba Hospital. This enables rapid
response to accidents and other emergencies.
Various initiatives are undertaken by our
dealerships, including clothing, food and blanket
collection and distribution in support of
government’s national drive to combat poverty.
FutureWe cannot look for an uptick in the national
economy to drive improvements in our business as
no growth or low growth is expected for some
time. Therefore, our focus will be on efficiency
gains while looking to optimise every marketplace
opportunity. Priorities include improved inventory
control and steps to contain funding costs.
Efforts will be strengthened to achieve growth in
workshop volumes and productivity. Used vehicle
sales and returns and parts sales are areas of
focused management attention. This will lessen
the reliance on new vehicle sales and ensure our
cost absorption model is optimised for current
economic conditions.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
39Bidvest Namibia Annual Integrated Report 2017
Operational review – Bidvest Namibia Automotive – continued
Pressure is expected to remain on new vehicle
sales. A more stringent NCA creates challenges,
but our sales teams have now adapted to the new
reality and will vigorously pursue all opportunities
for growth. Replacement cycles cannot be
extended indefinitely. Our recently upgraded
facilities give us a strong platform from which to
serve customers as they re-enter the market.
The full-year contribution of our fitment centre and
anticipated volumes from our new satellite
operation in Windhoek will prove beneficial. The
beefed-up presence in the commercial vehicle
sector also improves the balance of our business.
Our focus in 2018 will be on stabilising the
revenue decline while seeking profit growth
through higher productivity and greater operational
efficiency.
Revenue – decline to N$701,012 million
Trading profit – decline to N$23,028 million
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
23,028
42,620
Trading profit (N$’million)
2017
2016
670,000
680,000
690,000
700,000
710,000
720,000
730,000
740,000
750,000
760,000
701,012
755,152
Revenue (N$’million)
2017
2016
Sustainability
2016 2017 % change
Kilolitres
2 555 9 239 262%
Litres
340 754 199 008
-42%
kW
422 393 590 800 40%
Number
234 247 6%
N$
540 868 591 600 9%
CSI N$
683 793 1 015 309 48%
Bidvest Namibia Annual Integrated Report 201740
Michael Wayne SamsonManaging director: Freight and Logistics
Age: 57
Qualification: BCom, Dip Acc, Management Development
and CA
Appointed: Mike joined Manica Group Namibia on
26 October 2015
Mike was financial director of Manica Zimbabwe and left in
1997. In 2006, Mike started a bottled water company in
South Africa which was subsequently sold. He was appointed
as the managing director of Nampak Cartons, Nigeria, from
2013 to 2015.
Macro-factorsAs a leading provider of freight, logistics and
marine services, the division is vulnerable to any
downturn in national and regional economic
activity. Lower retail sales, muted trading activity,
falling demand for African commodities and stalled
domestic investment in infrastructure and mining
all impact transit volumes and our business.
In 2017, all of these adverse factors were felt by
the national economy, with substantial knock-on
effects at Freight and Logistics.
It became apparent the moribund state of the
offshore gas and oil industry – in both Namibia and
Angola – represents the new reality. Buoyant oil
prices can no longer be relied on to provide a
welcome boost for Namibia’s national economy
and the division’s bottom line.
As a result, revenue was substantially down,
though the fall in profit was less severe than the
top-line decline as a result of stringent cost
management.
Strategic responseThe business benefited from early management
actions to cushion the impact of shifts in the
national economy.
In the previous period, it became clear the division
had to be rebalanced. During the oil boom, our
business had geared up to meet the growing
demands of the oil companies and associated
offshore exploration teams. Scaling down in the oil
and gas industry had to be matched by similar
right sizing at Freight and Logistics.
The goal was the creation of a leaner business
able to react quickly to every opportunity, whether
in oil and gas, distribution services or transit cargo.
Rebalancing work began in 2016 and gathered
pace in 2017 as trading conditions deteriorated
rapidly. By year-end, the division’s previous oil
industry bias had been corrected while savings
and efficiencies were being delivered across all
parts of the business. Leaner structures have now
been put in place.
Clear focus on four activities (marine services,
freight and logistics, cargo management, and
trading) had been established in 2016. This
framework was retained and proved its worth as
growth in market share was witnessed in several
sectors.
Service qualityCustomer service and client retention became key
as trading conditions worsened and competition
intensified.
There were no major project tenders during the
review period, though the term of the previously
won tender for short-haul logistics services and
warehouse storage for the Swakop uranium mine
was extended. We retained the business,
confirmation our client service focus is achieving
its objectives.
IT investment was maintained as our increasingly
sophisticated systems contribute to service quality
improvements.
Opportunistic mindsetAnother key aspect of divisional strategy is our
enhanced ability to react quickly to market
opportunities. Again, there are solid indications we
are achieving our objectives.
Work on renewable energy resources (wind farms
and solar energy installations) is ongoing in the
Lüderitz area. The division has no direct
responsibility for any of these projects, but has
been successful in delivering support services to
the project teams.
Marine servicesThe business was severely impacted by lack of
offshore activity by the oil industry and the fall-off
in port visits by bulk carriers as demand for African
commodities remained low.
Demand fell in all categories – ships agency and
husbandry services, chandeling, crew transfers,
launch service and ships’ repair. Management
worked to cut costs and create efficiencies.
Freight and logisticsTeams worked to align assets and staffing with a
reduced customer base. As a result of cost
containment and productivity improvements, the
trucking business remained profitable despite a
continued drop in revenue, largely attributable to a
significant fall in corridor business (traffic between
Namibia’s major urban centres and ports and other
southern African countries).
Operational review – Bidvest Namibia Freight and Logistics
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
41Bidvest Namibia Annual Integrated Report 2017
Operational review – Bidvest Namibia Freight and Logistics – continued
Cargo managementThe dramatic fall-off in ships visits to Namibian
ports had severe effects on our terminals business
and stevedoring services. Management and unions
worked on new structures to reduce fixed staffing
costs. This entailed a repositioning of permanent
stevedoring jobs and greater recourse to flexible
working arrangements.
The expected increase in grain volumes to support
drought relief work in Zimbabwe failed to
materialise.
However, by year-end, pleasing efficiency gains
and cost savings were being delivered.
TradingBunkering volumes were largely static, though the
business unit won the contract to meet the fuel
requirements of a major fishing fleet.
Activities relating to the supply of industrial,
automotive and marine lubricants achieved
pleasing growth. A Botswana branch was opened
and the product mix was widened when a new oil
brand was introduced to meet demand for an
affordable option to complement the existing range
of quality offerings.
Job pressuresPermanent staff numbers fell as there was no
automatic replacement of employees who left the
Company. Where possible, jobs were changed to a
more flexible variable cost staffing model.
Industrial relations remained positive. There were
no strikes and trade unions took a realistic view of
changing economic conditions as port activity
remained low for protracted periods.
TrainingWe maintained our training effort as our reshaped
business relies on knowledgeable people to deliver
a competitive advantage.
We embarked on a strong customer awareness
training initiative (our Customer Service Movement)
and employees across the division received
training on all key elements of professional
customer service and optimised cross-selling
across the Manica range of services.
Some of our activities carry an inherent level of risk
and safety training remained a focus area.
Revenue – decline to N$264,493 million
Trading profit – decline to N$11,658 million
11,550
11,600
11,650
11,700
11,750
11,800
11,850
11,900
11,658
11,873
Trading profit (N$’million)
2017
2016
240,000
250,000
260,000
270,000
280,000
290,000
300,000
310,000
320,000
264,493
309,862
Revenue (N$’million)
2017
2016
Sustainability
2016 2017 % change
Kilolitres
6 988 3 289
-53%
Litres
310 244 328 551 6%
kW
962 908 1 235 922 28%
Number
637 903 42%
N$
1 715 391 1 193 608
-30%
CSI N$
296 882 75 354
-75%
Bidvest Namibia Annual Integrated Report 201742
Maintaining a safe workplace is a business
imperative at the division. There were no major
accidents and we achieved a 27% fall in safety
incidents. We believe the reduction is largely the
result of safety awareness training and the in-
depth focus on specific themes each month.
Community commitmentThe division maintained its relationship with the
Namibian University of Science and Technology
(NUST) and the University of Namibia (UNAM). We
provide internships in logistics, finance and human
resources for students requiring practical work
experience to complement their tertiary education.
The division continues to devote 1,5% of after-tax
profits to health, education, the environment, youth
development, educational bursaries and sport.
Employee contributions to marginalised
communities, individually or through the Pandula
Trust, remain a feature of our business.
We remain members of the Walvis Bay Corridor
Group (WBCG) Health Helpdesk and continue to
drive HIV/Aids awareness and support training for
peer educators. We also provide premises for the
WBCG clinic.
Specific community interventions include the
provision of baby formula for babies at the Walvis
Bay state hospital and support for the Walvis Bay
Sunshine Centre, a haven for children with special
needs and their mothers. We also support the
Mondesa Youth Organisation in Swakopmund,
another initiative to assist special needs children.
FutureDepressed economic conditions can be expected
to continue for some time. We therefore believe
that container traffic and bulk cargoes will remain
at low levels. However, we are confident our
rebalanced business now has the nimble structure
necessary to maximise trading opportunities in a
cost-efficient manner.
Efficiency gains will continue to be sought.
Customer service levels show continued
improvement and customer retention has been
good in a highly competitive environment.
Any isolated losses have been contained and
expenses are expected to fall now restructuring
costs have been absorbed. We therefore look to
maintain overall levels of profitability while
preparing the way for renewed growth in the
medium and long term.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
43Bidvest Namibia Annual Integrated Report 2017
Operational review – Bidvest Namibia Food and Distribution
Macro-factorsConsumers felt the pressure as the economic
slowdown affected wages and employment.
Tourist inflows improved in some areas, providing
a measure of relief for some restaurants, hotels
and lodges. However, this sole highlight in the
hospitality sector could not offset the trading
challenges caused by the general downturn in the
domestic economy.
Pressures were felt across our business and
revenue fell in real terms. The division recorded
small growth of 2,9%.
The incidence of out-of-home eating fell as
Namibian consumers tightened their belts. Some
restaurants were severely affected and some
restaurant closures occurred.
No new store openings were seen across the quick
service restaurant chains. Swakopmund’s Platz am
Meer mall opened, but otherwise there were no
significant additions to retail infrastructure.
Downtrading became common and competition
intensified.
Strategic responseA key challenge affected premium ranges in our
brand basket. One range that in recent years had
achieved in excess of 20% annualised growth saw
growth slashed by more than half.
Consumers not only traded down, they blurred
category distinctions as they sought cheaper
alternatives. For instance, bubble bath foam from a
low-cost range was bought by some consumers
for, among other uses, washing dishes and
cleaning clothes, affecting sales of classic
dishwasher and washing powder brands.
The breadth of the division’s range provides a measure of recession proofing as we can respond to the call for affordable food and non-food lines when demand for premium products stalls. However, in the current recession, there were instances of consumers not only switching brands, but ceasing purchases altogether until major promotions rolled out.
The division stepped up promotional activities and achieved some short-term successes only to see volumes dip significantly once a sales drive came to an end.
The result was the erosion of margins.
Cost control and efficiencies had to become a focus point. Four trucks were removed from the vehicle fleet and not replaced as smarter scheduling and routing systems were introduced.
Efforts were taken to optimise inventory levels through the newly implemented system. Even so, customer claims increased and stock write-offs became significant. As the year progressed, management engaged in a balancing act, looking to cut stock-related costs while preserving customer service levels (stock-in-trade).
By year-end, some improvement in working capital management and cash flow was apparent. However, the efficiencies and the related stock issues still negatively affected the division’s bottom line. In the final quarter, dedicated supply chain focus demonstrated the potential for significant gains in efficiency and service quality. However, these benefits will only be reflected in the figures in the coming year.
Reviews were conducted to decide what management tools were needed to drive further efficiencies and to determine the best fit for various product ranges.
T&CThe FMCG distribution business maintained its
relationships with leading brands, including Nestlé,
Unilever, Hudson & Knight, SC Johnson, Beiersdorf,
Illovo and Lion Match, and introduced several new
lines as changing shopping patterns became
evident. These included yoghurts, energy drinks,
personal care products and carbonated soft drinks.
Some lines were discontinued as demand became
sluggish in several categories. Sales reporting
became more dynamic. Activity is tracked daily as
a service to customers, while providing data to
assist delivery and stockholding efficiency.
T&C received several “best distributor” awards
from brand principals, recognition of our extensive
footprint and quality commitment.
CaterplusOur foodservice supplier to the catering and
hospitality industries increased its ambient product
offering and introduced new speciality retail
products. Efforts gathered pace in the second half
to increase market share and better exploit
Caterplus’s position as the multi-temp leader with
Namibia’s most extensive footprint.
Stock control in the warehouses remained a
challenge and an area of focus. Further
improvements are targeted following investment
into an expiry and lot control system for the
warehouse. Efforts to significantly reduce food
waste were given priority.
JobsThe permanent headcount fell by 38 employees to
465 as a result of the strategy to cut costs and
increase productivity. Some positions were filled by
temporary employees in anticipation of further
efforts to reduce costs, especially in our supply
chain operations.
Henry Francois FerisManaging director: Food and Distribution
Age: 49
Qualification: BCom (Unam/Unisa) and BCom (Hons) (Unisa)
Henry has held senior positions in the financial, human
resource and general management disciplines at leading
Namibian corporates, including Standard Bank, Rossing
Uranium Mine, Namibia Breweries and Pick n Pay Namibia.
He was appointed as managing director since 2004 within the
Ohlthaver & List group of companies.
His managerial experience covers the financial, mining,
manufacturing, hospitality and retail industries. He also
possesses additional qualifications in the field of industrial
psychology.
Henry was a board member of Team Namibia (2015) and
chairman of Namibia’s Retail Charter (FMCG) task group. He
joined Bidvest Namibia in January 2015.
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Bidvest Namibia Annual Integrated Report 201744
TrainingTraining investment was maintained, with strong
emphasis on system training, customer service
and product training.
Food safety and awareness remain pivotal issues
for us. Staff are trained to ensure high standards of
hygiene and food packaging integrity while
adhering to all World Health Organisation protocols,
municipal regulations and the guidelines laid down
by brand principals.
Workplace safety is a continuing priority. No
workplace accidents involving personal injury were
recorded.
Community commitmentWe remain committed to environmental protection
and are making a strenuous effort to reduce “food
miles” and fuel usage through optimised vehicle
fleet utilisation.
FutureThe overriding aim is a return to solid profit,
irrespective of trading conditions, which may
remain difficult for some time. The challenge
therefore is to reduce waste, especially in stock-
related costs, reduce operational running costs
and improve our trade execution in terms of sales
and merchandising.
Volume growth may be difficult to achieve.
Therefore, the continuous search for good product
range additions remains a priority. We will strive to
optimise the top line and promotional activity will
be stepped up. Efforts to protect margins will be
intensified.
Renewed emphasis on expense management is
already evident. Efforts to align the cost base with
turnover growth will be a continuing feature of the
business.
Staffing, warehouse infrastructure and the vehicle
fleet will be reviewed as we look to create a more
agile business. Outsourcing options will be
investigated in certain parts of the business.
Investment will continue and was apparent at year-
end as new systems came on stream.
A new stock forecasting tool will make it possible
to anticipate the demands of our customers. Our
aim is to obviate lost sales through incomplete
order fulfilment – instead of perhaps meeting
85%+ of a late order it is hoped to meet it in full.
The ultimate objective is to maintain a 95% service
level to customers every month.
New systems make it possible to achieve a tight
stock control cycle. Significant reduction in stock
losses in the warehouses has been targeted and
was achieved in comparison to the previous year.
A newly installed vehicle control and planning
system is already achieving fleet utilisation
efficiencies through improved routing and
scheduling.
Better stock control, improved order fulfilment in
tandem with smart routing is intended to optimise
vehicle loads per “run”.
The previous manual system for vehicle
maintenance scheduling, licensing and fuel usage
has been phased out. A new automated system is
expected to deliver ongoing savings while giving
management “live” data day by day. Fuel supply
arrangements have also been renegotiated for
improved efficiencies.
Further efforts will be made to deepen the
partnership with customers. Simultaneously, even
closer partnership will be fostered with brand
principals as ongoing collaboration is necessary in
the current recession if premium positioning and
margins are to be protected while reducing stock-
related costs from customers.
A nimbler, more efficient division is a prerequisite if
a return to profit is to be achieved. We have the
strategy to achieve this objective. In 2018, we plan
to put it in place.
Trading loss(N$8,175 million)
(10,000)
(5,000)
0
5,000
10,000
15,000
20,000
25,000
(8,175)
19,546
Trading (loss)/profit (N$’million)
2017
2016
Revenue – increase to N$1 232,682 million
1 180,000
1 190,000
1 200,000
1 210,000
1 220,000
1 230,000
1 240,000
1 232,682
1 197,802
Revenue (N$’million)
2017
2016
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
45Bidvest Namibia Annual Integrated Report 2017
Operational review – Bidvest Namibia Food and Distribution – continued
NamibiaBidvest Namibia Food and Distribution
Namibia
Oshakati
OshikangoRundu
Tsumeb
Grootfontein
Otjiwarongo
Windhoek Gobabis
KeetmanshoopLüderitz
Walvis Bay
Swakopmund
OndangwaOngwediva
NAMIBIAKatima Mulilo
Namibia
Sustainability
2016 2017 % change
Kilolitres
19 504 19 443 0%
Litres
903 950 928 329 3%
kW
4 664 4 382
-6%
Number
496 565 14%
N$
417 653 413 245
-1%
CSI N$
593 044 628 261 6%
Bidvest Namibia Annual Integrated Report 201746
Operational review – Financial Services – Namibia Bureau de Change
Namibia Bureau de Change (NBDC)Bidvest Namibia bought 49% of NBDC effective
15 July 2015. The major shareholder is Bidvest
Bank who ensures, with its dedicated expertise,
that NBDC remains competitive and driven in the
market. NBDC is a specialist in foreign exchange
dealings therefore broadening Bidvest Namibia’s
footprint in the tourism industry. It has branches at
the Hosea Kutako International Airport, Windhoek
city centre, Walvis Bay and opened a new branch
in Swakopmund during the year.
Not only does NBDC cater for inbound tourists in
forex dealings but also for Namibians wanting to
go abroad with their unique World Traveller Card
which is internationally recognised.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
47Bidvest Namibia Annual Integrated Report 2017
Financial director’s review
OverviewBidvest Namibia experienced a very challenging
financial year. All divisions performed at lower
levels than in the previous period. Fishing division’s
profits were severely impacted by external market
pressures and environmental factors. All the other
divisions experienced pressure on revenue as a
result of Namibia’s recession.
Although the Fishing division’s revenue was almost
on par with the previous year, trading profit
declined by 79,8% to N$39,8 million for the year
under review.
Fishing for horse-mackerel is still the core activity
of the Fishing division and its revenue was
significantly impacted by continuing pressure on
the horse-mackerel resource. This resulted in
smaller fish sizes being landed while lower fish
tonnages were recorded per day. The average hard
currency price per ton declined and the exchange
rate strengthened, further compounding revenue
pressures.
In addition, costs increased significantly as a result
of higher quota purchase costs as less of the
division’s own quota allocation was available for
harvesting during our financial year – partly the
result of lower quota allocations being made
available to commercial operators in 2016 and
timing factors relating to the fishing of own versus
purchased quota in the second six months of that
year. Quotas are allocated per calendar year,
creating a mismatch with our reporting period.
Trading profit from the horse-mackerel division
declined by 72,5%. The decrease in gross profit
from horse-mackerel fishing is the main reason for
the fall in the Group’s overall gross profit margin
from 19,0% to 15,1%.
Another horse-mackerel vessel was sold during
the 2017 financial year for USD4,7 million. To
operate more efficiently, it has become essential to
streamline the division, aligning the size of the fleet
to own-quota availability.
The Namibian pilchard resource is also under
great strain and a very low quota allocation did not
justify the full operation of our cannery. Instead, we
pooled resources with another local cannery.
Unfortunately, losses were still made by our
pilchard operations. These losses absorbed a
substantial amount of profit from the horse-
mackerel operation.
Angola generated profits, but less than the
previous year as a result of increased vessel repair
costs. Oysters incurred losses for the financial
year, though the loss was inflated by a number of
once-off costs following the down-sizing of this
business.
Glenryck South Africa is a new addition to the
Fishing division. This entity was launched to
market the Glenryck brand that was acquired
during the previous period. Glenryck South Africa
acquires pilchards, cans them on contract and
then sells the canned product in South Africa,
Namibia and Mauritius. The business incurred
losses in the startup phase, but the brand is
growing well.
Automotive had a tough year and experienced a
steep fall in sales in the new vehicle market. The
decline was attributable to the downturn of the
Namibian economy and changes to the National
Credit Act that make the conditions for lending to
new vehicle buyers more onerous. As a result,
fewer consumers can fund a new vehicle purchase.
The focus has shifted to used vehicles, but sales of
pre-owned stock failed to offset the fall-off in the
new vehicle market. However, we have not lost
market share.
This division’s results cover the full 12 months in
the 2016-17 year, compared to the 11 months
covered in the previous year. The actual decline in
Automotive’s turnover was 15,6% year on year
while the division’s contribution to the Group’s
trading profit fell by 46% to N$23,0 million.
Freight and Logistics revenue declined by 14,6%
due to a stagnant oil and gas industry and the lack
of other project activity. As a result of cost savings
and the streamlining of the division, the trading
profit dropped by only 1,8% to N$11,7 million. The
division’s reduced size enables cost bases to be
rigorously controlled without impacting service
delivery to clients. However, the division is ready
for action should a large project appear on its
horizon. This division is well managed and
controlled and has proven that when times are
tough, one can streamline for a new norm.
“Our financial strategy
focuses on cost control, internal
efficiencies and optimising
synergies.”
Theresa Weitz, financial director
Bidvest Namibia Annual Integrated Report 201748
Financial positionBidvest Namibia’s balance sheet remains strong
and the Company has sufficient cash resources for
potential acquisitions.
Property, plant and equipment purchases totalled
N$59,0 million. Replacement capital expenditure
at all businesses was maintained.
Net working capital decreased by N$13,6 million.
This is a result of lower activity in Fishing and
Freight and Logistics. Provisions for doubtful
debtors and obsolete stock are adequate.
The Group remains focused on cost control,
working capital management and the generation
of acceptable returns on funds employed.
Significant focus is being directed at operations
where performance is below expectation.
Business risksThere is significant pressure on profitability in a
number of our businesses.
The Food and Distribution division’s revenue failed
to grow in line with expectation. The principal
challenge involved stock-related costs and internal
inefficiencies. The division recorded a trading loss
of N$8,2 million, which is a 141,8% decrease on
the prior year’s profit of N$19,5 million. However,
the previous year’s figures included the N$7 million
settlement received from Namibian Poultry
Industries.
Various initiatives have been implemented to
correct the inefficiencies that plagued the division
in 2016-17. These include software programmes
for better fleet management and more effective
re-ordering systems for improved stock control.
Unfortunately, a brand principal within the
perishables sector has given notice that their
distribution agreement will come to an end,
effective from 31 August 2017. This will result in a
loss of revenue of N$200 million per annum.
Restructuring of the relevant business unit has
already begun. Savings are also expected from
improved control of damaged items and better
management of stock expiry dates.
Most businesses in the Commercial and Industrial
Products and Services division performed well in
challenging circumstances. Revenue was down
on the prior year by 3,4% at N$473,7 million,
reflecting the recessionary state of the national
economy. Trading profit declined by 26,8% to
N$16,8 million. Minolco performed very well.
Voltex still generated losses despite management
interventions to turn the business around.
Plumblink, which only opened in Namibia last year,
performed in line with expectations and a new
branch was opened at the coast.
Bidvest Namibia Prestige Cleaning was acquired,
effective 1 June 2017, and a management team
was appointed from within the current Bidvest
Namibia pool of employees.
Namibia Bureau de Change remains a leading
foreign exchange transaction services provider
and widened its footprint with the opening of a
coastal branch.
Revenue decreased by 2%
to N$3,8 billion
Operating profit decreased by 66,2% to
N$98,9 million
Trading profit declined by
68,6% to N$92,5 million
Significant decline in Fishing
division’s operating profit, the result of multiple external
factors
All other divisions experienced
pressure on revenue
Management committed to
make structures leaner
All assets are measured on
return basis
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
49Bidvest Namibia Annual Integrated Report 2017
The Fishing division’s profitability is under strain,
and the business is being right-sized in line with
lower quota allocations while loss-making entities
are being scaled down.
Due to the recession in Namibia, revenue in our
commercial businesses remains under pressure.
Even revenue growth in line with inflation is far
from certain as consumers and businesses are
reducing their spending. Growth then becomes a
function of gains in market share. Lower sales
activity puts pressure on profitability and costs
need to be cut to keep expenses in line with
revenue. In the past financial year, we have been
able to successfully implement significant cost
savings at Freight and Logistics and we are
currently busy rightsizing business units and
containing costs in our other divisions. Efforts to
grow revenue through an increase in market share
are also a priority.
Challenging economic conditions also have the
effect of increasing credit risk. Bidvest Namibia is
therefore putting increased focus on debtor
management.
To bring greater balance to our overall business,
we continue to pursue acquisition opportunities or
look to start businesses that reflect the broad
spread of activities for which our holding company
is known in South Africa.
Currency risk is an integral part of business
operations at a Group with international exposure.
To balance such exposure, we ensure that assets
and liabilities in foreign currency are matched.
Bidvest Namibia’s decentralised and
entrepreneurial business model continues to prove
itself. Our head office structures remain lean. We
are a big business, but we have an entrepreneurial
spirit and a small business culture.
SustainabilityBidvest Namibia has always committed to
sustainable business practice and since inception
has behaved with a sense of responsibility to the
community, the environment and our people.
In the 2017 financial year, CSI spend increased
from N$15,8 million to N$23,8 million (including
disbursements by the Namsov Community Trust).
Namsov Community Trust is a 10% shareholder in
Namsov and lower dividends affected the level of
its CSI spend.
We are a responsible corporate citizen and
emphasise the need for accountability, fairness
and transparency in our dealings with all
stakeholders. In our view, strategy, sustainability
and risk are inseparable.
Voluntary announcementOn 18 August 2017, a voluntary announcement
was made, advising shareholders that the
Company has entered into discussions which, if
successfully concluded, may have a material effect
on the Group’s share price.
FutureThere is little indication of rapid recovery in
Namibia’s economic climate and within the market
segments in which Bidvest Namibia is active. Even
greater attention will therefore be given to
efficiency improvements. Management is
committed to making structures leaner and more
effective across all our businesses. All assets are
being thoroughly measured on a returns basis and,
where necessary, corrective action is being taken.
Theresa Weitz
Financial director
Financial director’s review – continued
Bidvest Namibia Annual Integrated Report 201750
Note
2017
N$’000
2016
N$’000
Revenue 3 776 448 3 858 596
Paid to suppliers for materials and services (2 983 764) (2 856 110)
Value added 792 684 1 002 486
Income from investments 4 38 426 38 058
Total wealth created 831 110 1 040 544
WEALTH DISTRIBUTION
Salaries, wages and other employment costs 1 597 977 595 728
Providers of capital
Dividends to shareholders 46 630 114 455
Dividends to non-controlling interest 72 981 50 354
Finance cost on borrowings 21 962 18 750
Central and local government 2 95 010 138 959
Total distributions 834 560 918 246
Reinvested in the Group to maintain and develop operations: (3 450) 122 298
Amortisation, depreciation and impairments 81 430 84 469
Deferred taxation (27 087) (32 477)
Undistributed profit for the year attributable to owners of the parent 3 980 69 767
Undistributed income attributable to non-controlling interest (61 773) 539
Total wealth distributed 831 110 1 040 544
Notes to the value added statement
1. Salaries, wages and other employment costs
Salaries, wages, overtime payments, commissions, bonuses and allowances 542 258 540 648
Employer contributions 55 719 55 080
597 977 595 728
2. Central and local governments
Current normal company taxation 84 413 120 725
Quota levies and royalty fees 7 450 15 402
Rates and taxes paid on properties 3 147 2 832
95 010 138 959
3. Additional amounts collected on behalf of central and local government
Value added tax collected on revenue 527 886 513 869
Customs and excise duties 48 181 37 361
Pay-as-you-earn deducted from remuneration paid 98 067 73 852
Non-resident shareholders’ tax deducted from dividends paid 1 233 3 054
675 367 628 136
4. Income from investments
Dividends received on other investments 4 007 2 175
Finance income 34 419 35 883
38 426 38 058
Value added statement
Wealth distribution 2017 (N$’million) Wealth distribution 2016 (N$’million)
598
120
9522
(3)
596165
139
122
19
Employees
Finance cost and borrowings
Central and local government
Reinvested in operations
Dividends to shareholders
and non-controlling interest
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
51Bidvest Namibia Annual Integrated Report 2017
Financial history 2017 2016 2015
Extract from financial statements (N$’000)
Revenue 3 776 448 3 858 596 3 534 769
Trading profit 92 521 294 887 409 655
Net finance income 12 457 17 133 27 111
Attributable profit 61 818 235 114 412 466
Shareholders’ interest 2 229 780 2 303 911 2 278 030
Total assets 3 086 850 3 160 024 3 024 579
Funds employed** 1 374 709 1 485 273 1 436 838
Cash generated by operations 185 067 388 187 531 746
Wealth created by trading operations* 831 110 1 040 544 1 215 976
Employee benefits and remuneration 597 977 595 728 577 896
Share statistics
Headline earning per share (cents) 22,4 86,2 103,2
Ordinary distribution per share (cents) 10,0 38,0 56,0
Distribution cover (times) 3 3 3
Distribution yield (%) 1 4 5
Earnings yield (%) 3 8 12
Net tangible asset value per share (cents) 737 734 769
Share price (cents)
High 10,49 10,51 13,28
Low 7,78 10,45 10,99
Closing (30 June) 7,86 10,50 10,99
Market capitalisation (N$’million) 1 665 951 2 225 507 2 329 363
Volumes traded (’000) 2 100 8 559 2 261
Volumes traded as % of weighted number of shares 1 4 1
Ratios and statistics
Return on total shareholders’ interest (%) 4 13 18
Return on average funds employed (%) 6 20 29
Trading profit margin (%) 2 8 12
Interest cover 5 14 15
Current asset ratio 2,7 2,8 3,6
Quick asset ratio 2,0 2,1 2,8
Number of employees 3 481 2 738 3 305
Revenue per employee (N$’000) 1 085 1 409 1 070
Value added per employee (N$’000) 239 380 368
Number of shares in issue (’000) 211 953 211 953 211 953
Number of weighted shares in issue (’000) 211 953 211 953 211 953
Exchange rate comparisons
Rand/US dollar
Closing rate 12,94 14,77 12,12
Average rate 13,55 14,39 11,41
* Value added statement only prepared from 2012 onwards.
** Funds employed – total assets excluding cash and cash equivalents, taxes (current and deferred) and goodwill less total liabilities excluding taxes (current and deferred).
Nine-year review
Bidvest Namibia Annual Integrated Report 201752
2014 2013 2012 2011 2010 2009
3 703 495 3 294 235 2 730 667 1 918 804 1 608 101 1 387 590
501 313 601 497 646 616 544 922 368 869 284 496
16 298 15 690 17 606 6 085 1 253 3 402
343 742 426 505 460 880 384 079 229 680 183 344
2 065 162 1 959 047 1 711 976 1 401 728 1 156 007 655 795
2 764 518 2 778 557 2 468 625 1 940 353 1 724 735 1 073 018
1 372 372 1 199 271 1 038 630 680 991 564 526 414 208
413 761 585 583 625 123 545 332 431 704 240 378
1 158 871 1 204 599 1 203 998 – – –
550 960 483 638 435 779 365 669 315 896 263 301
116,0 129,5 140,3 120,0 87,4 79,0
63,0 69,0 63,0 54,0 36,0 15,0
3 3 3 3 3 7
5 6 6 7 5 not listed yet
9 10 13 16 12 not listed yet
688 638 578 500 410 240
12,73 12,71 10,71 8,20 7,20 not listed yet
12,50 10,71 8,02 7,20 6,99 not listed yet
12,73 12,51 10,71 8,02 7,20 not listed yet
2 698 162 2 651 532 2 270 017 1 659 763 1 490 062 not listed yet
1 304 4 340 2 935 1 846 1 561 not listed yet
1 2 1 1 1 not listed yet
24 31 38 39 32 43
39 54 75 88 75 69
14 18 24 28 23 21
21 27 26 63 183 54
3,8 3,0 3,0 3,2 2,5 1,8
2,9 2,4 2,4 2,7 2,0 1,3
3 239 3 203 3 110 2 690 2 568 1 998
1 143 1 028 878 713 626 694
358 376 387 – – –
211 953 211 953 211 953 206 953 206 953 163 303
211 953 211 953 209 862 206 953 192 363 163 303
10,70 10,24 8,33 6,75 7,62 8,27
10,32 8,86 7,77 6,98 7,61 9,28
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
53Bidvest Namibia Annual Integrated Report 2017
The segment information for the reportable segments for the year ended 30 June 2017 is as follows:
TotalN$’000
Corporate Services
N$’000FishingN$’000
AutomotiveN$’000
Freight and Logistics
N$’000
Commercial and Industrial
Servicesand Products
N$’000
Food andDistribution
N$’000
30 June 2017Total segment revenue 3 951 918 78 151 1 083 727 701 915 376 076 479 331 1 232 718
Inter-segment revenue (175 470) (55 487) (1 795) (903) (111 583) (5 666) (36)
Revenue from external customers 3 776 448 22 664 1 081 932 701 012 264 493 473 665 1 232 682
EBITDA 180 365 13 195 93 118 25 480 15 872 32 549 151
Depreciation on property, plant and equipment (71 955) (3 553) (37 341) (2 380) (5 961) (14 455) (8 265)
Amortisation and impairment of intangibles (9 475) (168) (7 912) (72) (154) (976) (193)
Operating profit/(loss) 98 935 9 474 47 865 23 028 9 757 17 118 (8 307)
Share of profit of joint venture (82) – (82) – – – –
Share of profit of associates 7 834 935 6 899 – – – –
Finance income 34 419 1 869 28 679 899 972 1 145 855
Finance costs (21 962) (631) (2 890) (13 642) (792) (2 176) (1 831)
Profit/(loss) before tax 119 144 11 647 80 471 10 285 9 937 16 087 (9 283)
Total assets (excluding current and deferred taxation) 3 079 036 319 384 1 529 173 331 913 282 688 238 492 377 386
Total assets include:
Additions to property, plant and equipment, goodwill and intangible assets 60 501 11 538 16 244 3 397 2 124 19 466 7 732
Total liabilities (excluding current and deferred taxation) 717 087 14 230 164 658 166 343 109 755 107 092 155 009
Total assets include assets classified as held for sale of N$36,6 million relating to the fishing segment. No liabilities are associated with the asset held for sale.
Segmental reporting
Revenue per segment(N$’million)
Profit/(loss) before tax per segment(N$’million)
Corporate Services
Fishing
Automotive
Freight and Logistics
Commercial and Industrial
Services and Products
Food and Distribution
16
1 089
310
755
1 198
490
2016
80
10
10
(9) 12
16
2017
11
2
236
34
1723
2016
23
1 082
264
701
1 233
474
2017
Bidvest Namibia Annual Integrated Report 201754
The segment information for the reportable segments for the year ended 30 June 2016 is as follows:
TotalN$’000
Corporate ServicesN$’000
FishingN$’000
AutomotiveN$’000
Freight and Logistics
N$’000
Commercial and Industrial
Servicesand Products
N$’000
Food and Distribution
N$’000
30 June 2016Total segment revenue 3 999 175 65 330 1 093 352 756 460 390 674 495 265 1 198 094
Inter-segment revenue (140 579) (48 931) (4 105) (1 308) (80 812) (5 131) (292)
Revenue from external customers 3 858 596 16 399 1 089 247 755 152 309 862 490 134 1 197 802
EBITDA 375 598 4 223 246 860 44 144 19 087 33 625 27 659
Depreciation on property, plant and equipment (71 302) (3 713) (41 151) (1 464) (6 865) (9 983) (8 126)
Amortisation of intangibles (11 457) (192) (9 729) (65) (291) (789) (391)
Operating profit 292 839 318 195 980 42 615 11 931 22 853 19 142
Share of profit of joint venture 2 873 – 2 873 – – – –
Share of profit of associates 10 517 1 363 9 154 – – – –
Finance income 35 883 1 850 30 775 1 303 270 1 454 231
Finance costs (18 750) (1 088) (2 575) (10 250) (1 694) (995) (2 148)
Profit before tax 323 362 2 443 236 207 33 668 10 507 23 312 17 225
Total assets (excluding current and deferred taxation) 3 150 141 282 588 1 599 449 359 279 284 274 243 578 380 973
Total assets include:
Additions to property, plant and equipment, goodwill and intangible assets 272 982 13 715 83 888 130 650 9 003 20 008 15 718
Total liabilities (excluding current and deferred taxation) 676 390 14 143 112 078 179 076 111 039 106 887 153 167
Total assets include assets classified as held for sale of N$50,6 million relating to the fishing segment. No liabilities are associated with the asset held for sale.
Total assets (excluding current and deferred taxation)(N$’million)
Corporate Services
Fishing
Automotive
Freight and Logistics
Commercial and Industrial
Services and Products
Food and Distribution
283
359 1 599
244
381
284 2016
14
165
110166
155
1072017
14
112
111
179
153
107
2016
319
332 1 529
238
377
283 2017
Total liabilities (excluding current and deferred taxation)(N$’million)
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
55Bidvest Namibia Annual Integrated Report 2017
56 Bidvest Namibia Annual Integrated Report 2017
Corporate social investment
“Decentralisation, one of our business philosophies, includes
corporate social investment. Each entity contributes to
initiatives they can identify with, seeking harmony with
people, society and the environment. This creates a diverse
and country-wide spread of social responsibility.”
International expert training was
provided to a disabled student, aiding him to
obtain his Master’s degree in the field of Global
Logistics and Supply Chain Management, in
Hamburg, Germany. Salmon Kambunga will be
returning to Namibia after two years abroad and
plough back his expert knowledge into Manica.
Book prizes were handed to eight coastal
schools in Swakopmund, Walvis Bay and
Luderitz. The schools were specifically chosen
based on attendance of the staff’s children of
Manica.
“His House Hospice” was supported by teams of the Manica Group while attending their biathlon sports event. Manica also used the event to donate a
large amount.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
57Bidvest Namibia Annual Integrated Report 2017
Namsov Community Trust – a 10% shareholder of
our horse mackerel company
Namsov Fishing Enterprises
(Pty) Ltd, uses its dividends
received to help uplift a variety of
communities around Namibia. In an effort to erode
poverty across the nation, the NAMSOV Community
Trust has committed N$1,5 million per region, to be
rolled out in three financial years starting in 2015
as part of its corporate social responsibility. Many
projects were enabled during this generous
gesture, such as Water Supply Project in Moses/
Garoëb Constituency; Aquaponics Project for
Penduka Trust in Samora Machel Constituency;
Aisha Training Academy to name but a few. All
regions deployed the monies received in
educational activities, community development and
sports initiatives. Many lives were positively
affected.
rr
Community Trust
Waltons supports where they
deem fit donating from their line of
products, e.g. stationery,
information technology products
and many more. This year, their
mascot took part in the Private
School Swakopmund Big Walk
along the beach. The students were
thrilled to walk with this cheerful
companion.
HRG Rennies Travel Namibia supports initiatives identified by their employees that align themselves to its own principles such as, sports
initiatives, support of school events attended by its employee’s children. Annually a charity is chosen to be the benefactor of the SAGES
golf day which is also supported by Rennies.
An avid swimmer attempted the English Channel as the first Namibian to raise funds for the “Cancer Care Namibia Fund”, which aids
cancer patients in financing their treatments and medical expenses. Rennies supported this wonderful cause.
58 Bidvest Namibia Annual Integrated Report 2017
CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
59 Statement of directors’ responsibilities and approval
59 Declaration by company secretary
60 – 62 Independent auditor’s report
63 – 67 Directors’ report
68 – 77 Accounting policies
78 Statements of financial position
79 Statements of profit or loss and other comprehensive income
80 – 81 Statements of changes in equity
82 Statements of cash flows
83 – 114 Notes to the financial statements
115 Shareholders’ diary
116 Administration
Contents
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
59Bidvest Namibia Annual Integrated Report 2017
Statement of directors’ responsibilities and approvalfor the year ended 30 June 2017
The directors are required by the Companies Act of Namibia (Companies Act) to maintain adequate accounting records and are responsible for the content and integrity of
the annual financial statements and related financial information included in this report. It is their responsibility to ensure that the annual financial statements fairly present
the state of affairs of the Company and of Bidvest Namibia Limited and its subsidiaries (the Group) as at the end of the financial year and the results of their operations and
cash flows for the year then ended, in conformity with International Financial Reporting Standards (IFRS) and the Companies Act. The external auditors are engaged to express
an independent opinion on the annual financial statements.
The annual financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and are based upon appropriate accounting policies
consistently applied and supported by reasonable and prudent judgements and estimates.
The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the Company and by the Group and place
considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the directors set the standards for the internal
control aimed at reducing the risk of error or loss in a cost-effective manner. The standards include the proper delegation of responsibilities within an acceptable level of risk.
These controls are monitored throughout the Group and all employees are required to maintain the highest ethical standards in ensuring the Group’s business is conducted
in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the Group is on identifying, assessing, managing and monitoring all
known forms of risk across the Group. While operating risk cannot be fully eliminated, the Company and the Group endeavours to minimise it by ensuring that appropriate
infrastructure, controls, systems and ethical behaviour are applied and managed within predetermined procedures and constraints.
The directors are of the opinion, based on the information and explanations given by management, that the system of internal control provides reasonable assurance that
the financial records may be relied on for the preparation of the annual financial statements. However, any system of internal financial control can provide only reasonable,
and not absolute, assurance against material misstatements or loss.
The directors are satisfied that the Company and Group have access to adequate resources to continue in operational existence for the foreseeable future.
The external auditors, Deloitte & Touche, have audited the separate financial statements and consolidated annual financial statements, and their report is presented on
pages 60 to 62.
The Group annual financial statements and annual financial statements of the Company are set out on pages 68 to 114 which have been prepared on the going concern
basis, were approved by the board of directors and are hereby signed on its behalf:
Lindsay Ralphs Sebulon Kankondi
Chairman Chief executive officer
24 August 2017 24 August 2017
Declaration by company secretary
In my capacity as company secretary, I hereby confirm, that for the year ended 30 June 2017, the Company has lodged with the Registrar of Companies, all such returns as
are required in terms of this Act and that all such returns are true, correct and up to date.
Veryan Hocutt
Company secretary
24 August 2017
60 Bidvest Namibia Annual Integrated Report 2017
To the members of Bidvest Namibia LimitedOpinion
We have audited the consolidated and separate financial statements of Bidvest Namibia Limited and its subsidiaries (the Group) set out on pages 59 to 114, which comprise
the consolidated and separate statements of financial position as at 30 June 2017 and the consolidated and separate statements of profit or loss and other comprehensive
income, the consolidated and separate statements of changes in equity and the consolidated and separate statements of cash flows for the year then ended and notes to
the financial statements, including a summary of significant accounting policies and the directors’ report.
In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of the Group as at
30 June 2017 and their consolidated and separate financial performance and consolidated and separate cash flows for the year then ended in accordance with International
Financial Reporting Standards (IFRS) and the requirements of the Companies Act of Namibia.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the consolidated and separate Financial Statements section of our report. We are independent of the Group in accordance with the Public
Accountants’ and Auditors’ Act 1951 (as amended) (PAAB Act) and other independence requirements applicable to performing audits of financial statements in Namibia.
We have fulfilled our other ethical responsibilities in accordance with the PAAB Act code of ethics and in accordance with other ethical requirements applicable to performing
audits in Namibia. The PAAB Act code of ethics is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts
A and B). We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period.
These matters were addressed in the context of our audit of the consolidated financial statements as a whole and in forming our opinion thereon and we do not provide a
separate opinion on these matters.
Key audit matter (KAM) – Group How the matter was addressed in the audit
KAM 1: Assessment of the recoverable value of goodwill
Goodwill constitutes 8% of the Group’s total assets and
arises as a result of the acquisitive nature of the Group.
As disclosed in note 2, goodwill of N$244 million is
allocated to cash-generating units, identified according to
operating segments.
The directors conducted the annual impairment test to
assess the recoverable amount of goodwill in respect of
the 2017 financial year consistent with the Group’s policy.
This assessment is performed with reference to a value-in-
use calculation for each operating segment.
The determination of the recoverable amount of the cash-
generating unit is subjective as significant estimation and
key assumptions are required, in particular regarding
forecast future cash flows, future growth rates, the
discount rates applied and the determination of the level at
which impairments should be assessed. As such this has
been noted as a key audit matter.
Our audit work for goodwill included evaluating the design and implementation of key controls around the
impairment review process, evaluating the appropriateness of the cash-generating units to which goodwill
is allocated and challenging the key assumptions used in directors’ future cash flow forecasts with particular
focus on the growth rate and discount rate.
The growth rate used in the cash flow model has been independently assessed for each significant segment
by us with comparison to economic and industry forecasts as well as the condition of the local economy,
specifically the expected Gross Domestic Product growth rate and inflation rate to actual revenue growth.
The weighted average cost of capital (discount rate) has been assessed based on the funding capacity of
the Group and in comparison to data obtained independently taking into account the segment’s specific
operating markets.
Furthermore, we performed a sensitivity analysis on the key inputs to establish those assumptions to which
the valuation is highly sensitive. This was performed in order for us to determine the extent to which the key
assumptions needed to change in order to cause an impairment. We considered the likelihood of such
changes occurring and concluded that the key assumptions applied in the cash flow model were reasonable.
We verified the mathematical accuracy of the cash flow forecast and compared the inputs used in the cash
flow forecasts against historical performance and in comparison to budgeted amounts in respect of each
significant cash-generating unit. We concluded that inputs used in the cash flow forecast for these cash-
generating units are appropriate.
We evaluated the directors’ assessment of impairment indicators against current local economic conditions,
challenges in the local market, the Group’s historical performance, future budgets, as well as expected
future outlook.
Overall, we found the cash flow models, allocation of goodwill to operating segments, assumptions applied
in the goodwill impairment assessments and the determination of objective evidence of impairment to be
appropriate. We concur with the directors’ assessment that no material impairment was required.
The disclosure in relation to the impairment reviews, assumptions applied and goodwill were considered
appropriate.
Independent auditor’s report
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
61Bidvest Namibia Annual Integrated Report 2017
Key audit matter (KAM) – Group How the matter was addressed in the audit
KAM 2: Assessing the carrying value of the investment in associates
As reflected in note 4, the Group has a 40% shareholding
in an associate, Industria Alimentar Carnes de Moçambique
Limitada of N$67,2million.
The assessment of the recoverable amount of the
investment involves the directors’ judgement and estimates
around the inputs to the cash flow projections used and the
valuation of land and buildings. As a result, this has been
noted as a key audit matter.
We evaluated the key facts and judgements made in the directors’ assessment with relevant documentary
evidence and by taking into account future plans and budgets and assessing the reasonableness of the
assumptions used.
We assessed the estimates, judgements and assumptions made by the directors in accordance with the
requirements of IAS 36 Impairment of Assets.
Based on the fair value determined by the directors, it was concluded that no impairment of the carrying
value of the investment was required.
We are satisfied that the related disclosures are sufficient.
KAM 3: Fishing segment assets
The Fishing segment of the Group has typically been the
most significant contributor to the Group’s revenue and
profit in prior years.
This segment has been significantly adversely impacted by
severe external market and environmental factors as well
as a shortage of own quota allocations. The directors have
responded to these external factors noted which has
impacted on amounts and disclosures provided in the
consolidated financial statements.
Due to the judgement involved in the assessment of
residual values of vessels, recoverable amounts of
segment assets, determining the carrying value of non-
current assets held for sale, accounting for complex quota
purchase agreements and whether or not to raise deferred
tax assets on estimated tax losses incurred in certain
subsidiaries in the Fishing segment, this is considered to
be a key audit matter.
We considered the directors’ plans to respond to the adverse external factors noted.
The directors obtained independent valuations for the affected assets and determined that there was no
impairment necessary in the current financial year. The independent valuators and the valuations received
were critically evaluated against current market evidence available in respect of similar properties in
Walvis Bay.
The directors’ assessment of the residual values of the vessels and the estimates and judgements applied
in respect of setting the residual values were evaluated against prior experience and industry norms taking
into account the fair values at the end of the vessel’s useful life.
Independent expectations of the assumptions used by the directors in computing the recoverable amounts
of the assets were developed.
The relevant judgements and estimates applied by the directors in assessing the impact of any of the
impairment indicators were assessed and tested.
The assumptions and judgements applied by the directors in the assessment of the probability of future
taxable income in the loss making subsidiaries were evaluated when considering the implication on deferred
tax assets.
The estimates, assumptions and judgements applied by the directors in deciding to reflect the MFV Sunfish
as a non-current asset held for sale as required by IFRS 5 Non-Current Asset held for Sale and Discontinued
Operations were assessed against the factual evidence supported by appropriate board resolutions.
Contractual obligations in respect of quota purchase agreements entered into were assessed to determine
whether the terms and conditions of the contracts have been complied with and whether contractual
commitments and contingencies have been accounted for and disclosed appropriately.
We are satisfied with the accounting treatment, assessment of the asset balances, the recoverable amounts
of assets at year-end and the related disclosures in respect of the division as reflected in the statement of
financial position.
Separate financial statements
We have determined that there are no Key Audit Matters identified in respect of the separate financial statements of Bidvest Namibia Limited.
Other information
The directors are responsible for the other information. The other information included in the annual financial statements, comprises the statement of directors’ responsibilities
and approval and the declaration by the company secretary which is made available to us before the date of this report. The following other information included in the annual
integrated report: chairperson’s review, chief executive’s review, corporate governance report, risk committee report, audit committee report, remuneration committee report,
sustainability report, operational reviews, financial director’s review, value added statement and eight-year review is expected to be made available to us after the date of
this report. Other information does not include the consolidated and separate financial statements, the directors’ report, segmental report and our auditor’s report thereon.
Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express an audit opinion or any form of assurance
conclusion thereon.
In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information and, in doing so, consider whether the
other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated.
If, based on the work we have performed on the other information obtained prior to and after the date of this auditor’s report, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
62 Bidvest Namibia Annual Integrated Report 2017
Responsibilities of the directors for consolidated and separate financial statements
The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with International Financial
Reporting Standards and the requirements of the Companies Act of Namibia and for such internal control as the directors determine is necessary to enable the preparation
of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated and separate financial statements, the directors are responsible for assessing the Group’s and Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group
and/or Company, to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated and separate financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement,
whether due to fraud or error and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate
financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
– Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
– Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’s and the Company’s internal control.
– Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
– Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated and separate financial statements or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group and/or the Company to cease to continue as a going concern.
– Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures and whether the consolidated
and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
– Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the
consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our
audit opinion.
We communicate with the audit committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant
deficiencies in internal control that we identify during our audit.
We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence and communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence and, where applicable, related safeguards.
From the matters communicated with the audit committee, we determine those matters that were of most significance in the audit of the consolidated and separate financial
statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless laws or regulations preclude public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Deloitte & Touche
Registered Accountants and Auditors
Chartered Accountants (Namibia)
ICAN practice number: 9407
Per: Ramsay Mc Donald
Partner
PO Box 47
Windhoek, Namibia
25 August 2017
Partners: E Tjipuka (managing partner), RH Mc Donald, H de Bruin, J Cronjé, A Akayombokwa, AT Matenda, J Nghikevali, G Brand*, M Harrison*
* Director
Associate of Deloitte Africa, a Member of Deloitte Touche Tohmatsu Limited
Independent auditor’s report – continued
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
63Bidvest Namibia Annual Integrated Report 2017
Directors’ reportfor the year ended 30 June 2017
The directors have pleasure in presenting their annual report which forms part of the Group annual financial statements and annual financial statements of the Company for
the year ended 30 June 2017.
Nature of businessThe Company is the holding company of two main subsidiaries, Bidvest Namibia Fisheries Holdings (Proprietary) Limited (Bidfish) and Bidvest Namibia Commercial Holdings
(Proprietary) Limited (Bidcom).
Bidvest Namibia Management Services (Proprietary) Limited, Bidvest Namibia Property Holdings (Proprietary) Limited and Bidvest Namibia Information Technology
(Proprietary) Limited are also direct subsidiaries of the holding company. Bidvest Namibia Management Services (Proprietary) Limited and Bidvest Namibia Property Holdings
(Proprietary) Limited act solely as support companies for the Bidvest Namibia Group, Bidvest Namibia Information Technology (Proprietary) Limited acts mainly as a support
company for the Bidvest Namibia Group and also provides services to companies outside the Group. These companies receive administration income, receive rental income
from subsidiaries in the Group as well as directors’ fees, if applicable, from all underlying entities and incur related support, staff and administration expenses. Bidvest
Namibia Information Technology (Proprietary) Limited also receives income from companies outside the Group.
Bidvest Namibia Commercial Holdings (Proprietary) Limited (Bidcom) has operational arms including cleaning services, stationery and office furniture, electrical supplies, food
services, office solutions, printer consumables, freight management services, travel management services, vehicle dealership and foreign exchange services.
Bidvest Namibia Fisheries Holdings (Proprietary) Limited (Bidfish) has operational arms mainly in the fishing industry.
Results of operationsThe results of operations and state of affairs of the Group and the Company are fully set out in the attached consolidated and separate annual financial statements and do
not in our opinion require further comment.
Acquisition of subsidiary in the current yearThe Group acquired 100% shareholding in Bidvest Prestige Cleaning (Proprietary) Limited (Prestige) with effect 1 June 2017. Prestige was acquired from The Bidvest Group
Limited.
Going concernThe directors have satisfied themselves that no material uncertainty, that casts significant doubt about the ability of the Group and the Company to continue as a going
concern has been identified and they have a reasonable expectation that the Group and the Company have adequate financial resources to continue in operational existence
for the foreseeable future. Therefore, these financial statements have been prepared on a going concern basis.
Events after the end of the reporting periodThe Group through its subsidiary, Taeuber & Corssen SWA (Proprietary) Limited, lost a distribution agreement with Parmalat with effect from 31 August 2017.
Authorised and issued share capitalThere were no changes to the authorised and issued share capital during the year under review.
DividendsDividends amounting to N$46,6 million (2016: N$114,5 million) were declared and paid by the Company during the year under review.
Segmental analysisManagement has determined the operating segments based on the reports reviewed by the executive committee that are used to make strategic decisions. The committee
considers the business from a product perspective.
Segmental results include revenue and expenses directly relating to a business segment but excludes net finance charges and taxation which cannot be allocated to any
specific segment. Segmental trading profit is defined as operating profit excluding items of a capital nature and is the basis on which management’s performance
is assessed.
Segment operating assets and liabilities include property, plant and equipment, investments, inventories, trade and other receivables, trade and other payables and post-
retirement obligations, but excludes current taxation and deferred taxation. Intangible assets are allocated to the cash-generating unit in the segment to which they relate.
Fishing derives revenue from its horse-mackerel, monk and pilchard fishing rights in Namibia and Angola. The division also derives revenue from its Glenryck rights and
shares in profits from its distribution agreement in Mozambique.
Industrial and Commercial Products supplies electrical equipment and consumables, stationery, office equipment and furniture, printer consumables and hardware, travel,
foreign exchange and copier services, plumbing, sanitaryware, brassware and allied products and cleaning services.
Food and Distribution services supplies foods to the hospitality, wholesale and retail industries in Namibia.
Freight and Logistics provides ships agency, clearing and forwarding, stevedoring, container handling, general warehousing, airport services and fuel bunkering services.
Automotive supplies new and used motor vehicles, parts, accessories and after-sales service.
64 Bidvest Namibia Annual Integrated Report 2017
Corporate Services includes corporate services provided to the Group.
Sales between segments were carried out on terms and conditions as agreed between the parties. The revenue from external parties is measured in a manner consistent
with that in the statements of comprehensive income.
The executive committee assesses the performance of the operating segments based on a measure of adjusted EBITDA. This measurement basis excludes the effects of
non-recurring expenditure from the operating segments such as restructuring costs, legal expenses and goodwill impairments when the impairment is the result of an
isolated, non-recurring event. Since the strategic steering committee reviews adjusted EBITDA, the results of discontinued operations are not included in the measurement
of adjusted EBITDA.
The full segmental report is set out on pages 54 and 55.
Information about directors’ service contractsEach of the executive directors has a contract of appointment from Bidvest Namibia Limited, containing terms that are normal for such contracts.
Interest of directors and senior key personnel in share capitalThe interests, direct and indirect, of the directors and officers are as follows:
Ordinary shares
Beneficial Indirect
At 1 July 2016 17 901 926 110 000
Comprising:
Non-executive directors 201 100 110 000
Executive directors
SI Kankondi 1 377 200 –
Senior key personnel 16 323 626 –
At 30 June 2017 10 789 743 10 000
Comprising:
Non-executive directors 201 100 10 000
Executive directors
SI Kankondi 1 377 200 –
Senior key personnel 9 211 443 –
Directors’ interests in contracts
No material contracts in which the directors have an interest were entered into in the current year other than the transactions detailed in note 36 to the financial statements.
Shareholders’ spread
An analysis of holdings extracted from the register of ordinary shareholders at 30 June 2017 is listed below:
Number of
shareholders
Percentage of
share capital
(nearest 1%)
The Bidvest Group Limited 1 52%
Public:
Companies 20 8%
Trusts 5 0%
Individuals 518 1%
Pension and Provident Funds 50 25%
Non-public:
Directors 5 1%
Broad Based Economic Empowerment partner
Ovanhu Investments (Proprietary) Limited – related party 1 13%
600 100%
Directors’ report – continuedfor the year ended 30 June 2017
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
65Bidvest Namibia Annual Integrated Report 2017
Directors’ remunerationThe remuneration paid or accrued to directors while in office of the Company during the year ended 30 June 2017 can be analysed as follows:
Fees forservices
N$’000
Basic salary and allowances
N$’000
Bonusesaccrued
leave paidN$’000
Pension andmedical aid
contributionsN$’000
TotalN$’000
30 June 2017Executive directors
SI Kankondi – 2 723 – 493 3 216
T Weitz – 1 398 – 338 1 736
– 4 121 – 831 4 952
Non-executive directors
P Steyn 606 606
M Mokgatle-Aukhumes 154 154
H Müseler 358 358
MK Shipanga 373 373
JD Davis 259 259
1 750 1 750
30 June 2016Executive directors
SI Kankondi – 2 748 – 319 3 067
T Weitz – 1 419 – 237 1 656
J Arnold – 2 373 3 344 1 196 6 913
– 6 540 3 344 1 752 11 636
Non-executive directors
P Steyn 288 288
M Mokgatle-Aukhumes 145 145
H Müseler 360 360
MK Shipanga 353 353
JD Davis 57 57
B Eimbeck 69 69
1 272 1 272
Directors’ long-term incentivesNumber of
optionsAverage price
N$
Executive directors
SI Kankondi 250 000 10,74
T Weitz 125 000 10,74
375 000 10,74
These options were granted to directors on 23 May 2013 and 22 May 2015. Options vest in three tranches on the third, fourth and fifth years’ anniversaries respectively
from the grant date and expire within 10 years of their issue, or one month after the resignation of the director.
Directors’ share-based payment expense2017
N$’0002016
N$’000
SI Kankondi 123 170
J Arnold – 143
T Weitz 61 85
184 398
Major shareholdersAccording to the share register, the following are the only shareholders beneficially holding, directly or indirectly, in excess of 5% of the share capital at 30 June 2017:
Percentage holding
The Bidvest Group Limited 52%
Ovanhu Investments (Proprietary) Limited 13%
Government Institution Pension Fund 11%
66 Bidvest Namibia Annual Integrated Report 2017
Subsidiaries Principal subsidiary undertakings
Total comprehensive income/(loss)
Effective holding
%
Issued share capital
N$2017
N$’0002016
N$’000
The Bidvest Namibia Limited subsidiaries are all incorporated in Namibia, except for Comet Investments Capital Incorporated, a company registered in the British Virgin Islands, Frigocentre Limitada and Pesca Fresca Limitada which are registered in Angola and Glenryck South Africa (Proprietary) Limited a company registered in South Africa.
By the Company
Bidvest Namibia Commercial Holdings (Proprietary) Limited 100,00 100 10 814 38 901
Bidvest Namibia Fisheries Holdings (Proprietary) Limited 100,00 1 613 113 789 111 177
Bidvest Namibia Foreign Exchange (Proprietary) Limited 100,00 100 – –
Bidvest Namibia Information Technology (Proprietary) Limited 100,00 100 1 615 384
Bidvest Namibia Property Holdings (Proprietary) Limited 100,00 5 000 5 345 3 292
Bidvest Namibia Management Services (Proprietary) Limited 100,00 100 5 995 3 219
Through subsidiaries
Atlantic Harvesters of Namibia (Proprietary) Limited 69,55 300 4 764 4 924
Bidvest Namibia Automotive (Proprietary) Limited 100,00 1 000 (22) (49)
Bidvest Namibia Commercial and Industrial Services
and Products (Proprietary) Limited 100,00 200 405 (574)
Bidvest Namibia Plumblink (Proprietary) Limited 100,00 100 (2 469) (1 289)
Bidvest Prestige Cleaning (Proprietary) Limited 100,00 100 75 –
Carheim Investments (Proprietary) Limited 100,00 4 000 (1 204) 1 177
Caterplus Namibia (Proprietary) Limited 100,00 1 (12 130) (170)
Cecil Nurse (Namibia) (Proprietary) Limited 100,00 100 798 3 666
Comet Investments Capital Incorporated 69,55 762 1 285 4 852
Diroyal Motors (SWA) (Proprietary) Limited 100,00 4 000 6 518 23 102
Elzet Development (Proprietary) Limited 100,00 100 432 115
Frigocentre Limitada^^ 34,74 76 243 – –
Glenryck South Africa (Proprietary) Limited^^^^ 51,00 120 (1 467) –
GSA Trading Namibia (Proprietary) Limited^^^ 51,00 100 – –
Kolok (Namibia) (Proprietary) Limited 100,00 100 343 2 559
Lenkow (Proprietary) Limited 100,00 2 000 4 034 3 828
Lubrication Specialists (Proprietary) Limited 100,00 200 (953) (107)
Luderitz Bay Shipping & Forwarding (Proprietary) Limited 100,00 100 547 621
Manica Group Namibia (Proprietary) Limited 100,00 279 187 5 754 201
Matador Enterprises (Proprietary) Limited 100,00 1 000 (3 462) 17 179
Minolco (Namibia) (Proprietary) Limited 100,00 100 7 536 5 660
Monjasa Namibia (Proprietary) Limited 57,00 100 2 149 1 923
Mukorob Pelagic Processors (Proprietary) Limited 69,55 19 014 – 815
Namfish Pelagic Industries (Proprietary) Limited 69,55 100 – 1 874
Namibian Sea Products (Proprietary) Limited 69,55 46 997 005 (76) 8 552
Namsov Fishing Enterprises (Proprietary) Limited 69,55 100 000 52 888 194 284
Namsov Industrial Properties (Proprietary) Limited 69,55 1 000 160 201
Ocean Fresh (Proprietary) Limited 69,55 2 – –
Orca Marine (Proprietary) Limited 60,00 100 397 (106)
Pesca Fresca Limitada* 34,08 152 486 – –
Rennies Travel (Namibia) (Proprietary) Limited 100,00 1 000 5 167 4 840
Sarusas Development Corporation (Proprietary) Limited 69,55 1 000 207 (311)
Starting Right Investments Two Zero Five (Proprietary) Limited 69,55 100 2 412 2 301
Taeuber & Corssen SWA (Proprietary) Limited 100,00 6 000 000 (276) (10 960)
T&C Properties Namibia (Proprietary) Limited 100,00 8 000 7 564 6 562
T&C Trading (Proprietary) Limited 100,00 4 000 508 2 248
Tetelestai Mariculture (Proprietary) Limited 69,55 100 (4 431) 2 298
Trachurus Fishing (Proprietary) Limited^ 69,55 60 524 15 238 (7 792)
Twafika Fishing Enterprises (Proprietary) Limited 52,23 1 000 (64) 591
United Fishing Enterprises (Proprietary) Limited 69,55 4 000 (31 475) (21 156)
Voltex (Namibia) (Proprietary) Limited 100,00 100 (10 347) (12 848)
Waltons Namibia (Proprietary) Limited 100,00 6 4 774 8 233
Walvis Bay Stevedoring Company (Proprietary) Limited 55,00 100 (5 043) (2 014)
Walvis Bay Airport Services (Proprietary) Limited 100,00 5 000 (583) (135)
Woker Freight Services (Proprietary) Limited 100,00 28 636 1 508 5 608
Directors’ report – continuedfor the year ended 30 June 2017
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
67Bidvest Namibia Annual Integrated Report 2017
Total comprehensive
income/(loss)
Effective holding
%
Issued share capital
N$2017
N$’0002016
N$’000
Associates
Carapau Fishing (Proprietary) Limited 17,39 4 000 9 667 30 137
Industria Alimentar Carnes De Moçambique Limitada 27,82 117 834 328 11 206 2 021
Namibia Bureau de Change (Proprietary) Limited 49,00 500 000 1 907 2 781
Joint venture
!OE#GAB Fishing Enterprises (Proprietary) Limited 34,78 100 – –
* The Group has de facto control as a result of the management agreement between Comet Investment Capital Incorporated and Pesca Fresca Limitada.^ The Group has a direct shareholding of 84% in Trachurus Fishing (Proprietary) Limited.^^ The Group has a direct shareholding of 99% in Frigocentre Limitada through its de facto control of Pesca Fresca Limitada.^^^ The company’s name was changed from Shelfco Investments One Five Three (Proprietary) Limited.^^^^ The company is managed by Simply Pesche (Proprietary) Limited through a management agreement.
Holding companyThe Company is a subsidiary of The Bidvest Group Limited, a company registered in the Republic of South Africa and listed on the Johannesburg Stock Exchange (JSE).
Directors and secretaryThe following persons were directors of the Company during the year and up to the report signing date:
Date appointed /resigned Nationality
SI Kankondi (Chief executive) Appointed: 10 August 2007 Namibian
M Mokgatle-Aukhumes Appointed: 10 August 2007 Namibian
HH Müseler Appointed: 10 August 2007 Namibian
PC Steyn Appointed: 17 January 2007 South African
MK Shipanga Appointed: 21 August 2009 Namibian
T Weitz (Financial director) Appointed: 18 August 2011 Namibian
LP Ralphs (Chairman) Appointed: 26 February 2014 South African
JD Davis Appointed: 1 December 2015 South African
HP Meijer Appointed: 17 February 2017 South African
The company secretary is V Hocutt whose business and postal addresses are:
Business address Postal address
1 Ballot Street PO Box 6964
Windhoek Ausspannplatz
Namibia Windhoek
Namibia
Auditors
Deloitte & Touche will continue in office in accordance with section 278(2) of the Companies Act of Namibia.
Approval of annual financial statementsThe annual financial statements were approved by the board of directors and authorised for issue on 24 August 2017.
68 Bidvest Namibia Annual Integrated Report 2017
1. Summary of significant accounting policies The principal accounting policies applied in the preparation of these separate and consolidated financial statements are set out below. These accounting policies
have been consistently applied to all years presented, unless otherwise stated.
2. Basis of preparation The consolidated and separate financial statements of Bidvest Namibia Limited have been prepared in accordance with, and comply with International Financial
Reporting Standards (IFRS), adopted by the International Accounting Standards Board (IASB) and interpretations issued by the International Financial Reporting
Interpretations Committee (IFRIC) of the IASB, Financial Pronouncements as issued by the Financial Reporting Standards Council and the Companies Act of
Namibia, 2004. The financial statements are prepared in accordance with the going concern principle under the historical cost basis, except for biological assets
and financial instruments, which are stated at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets.
It is important to note that this financial information has been prepared in accordance with IFRS that are effective 30 June 2017. Standards and interpretations
that are not yet effective and will be adopted in future years as they become effective for the Group are listed in note 41. The directors and management have not
yet assessed the implications of standards and interpretations that are not yet effective.
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application
of policies and reported amounts of assets and liabilities, income and expenses. Although estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the circumstances (the results of which form the basis of making the judgements about carrying
values of assets and liabilities that are not readily apparent from other sources), the actual outcome may differ from these estimates in note 38.
The financial statements are presented in Namibia dollar (N$), which is the Group’s functional currency. All financial information has been rounded to the nearest
thousand unless stated otherwise.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate
is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
3. New and revised accounting standards The Group adopted the following amendments to standards with an initial application date of 1 July 2016:
IFRS 7 Financial Instruments: Disclosures – Amendments resulting from Annual Improvements 2012 – 2014 Cycle
IFRS 7 was amended to clarify when servicing arrangements are in the scope of its disclosure requirements on continuing involvement in transferred financial
assets in cases when they are derecognised in their entirety.
The Group did not transfer any financial asset during the current financial year. Future transfers will be treated based on the amended standard.
IFRS 11 Joint Arrangements – Amendments regarding the accounting for acquisitions of an interest in a joint operation
The amendments require business combination accounting to be applied to acquisitions of interests in joint operations that constitute a business combination.
The Group did not acquire any interest in joint operations. Future acquisitions will be treated based on the amended standard.
IFRS 12 and IFRS 10 Consolidated Financial Statements – Amendments regarding the application of the consolidation exception
IASB issued Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS 28). Clarity was given on how to account for
investment entities.
The Group does not have investment entities, as a result the amendment had no impact.
IAS 1 Amendments resulting from the disclosure initiative
It has been made explicit that companies should disaggregate line items on the statement of financial position and in the statement of profit or loss and other
comprehensive income if this provides helpful information to users and those line items specified by IAS 1 on the statement of financial position can be aggregated
if they are immaterial.
The adoption of the changes to this statement has had no impact on the Group. No adjustment has been made to the results for the year ended 30 June 2017.
IAS 16 Property, plant and equipment – Amendments bringing bearer plants into the scope of IAS 16
Bearer plants are now in the scope of IAS 16 Property, Plant and Equipment for measurement and disclosure purposes.
The amendment had no impact on the Group.
IAS 19 Employee Benefits – Amendments resulting from Annual Improvements 2012 – 2014 Cycle
IAS was amended to clarify that high-quality corporate bonds or government bonds used in determining the discount rate should be issued in the same currency
in which benefits are to be paid.
The amendment had no material impact on the Group.
Accounting policiesfor the year ended 30 June 2017
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
69Bidvest Namibia Annual Integrated Report 2017
3. New and revised accounting standards (continued) IAS 27 Separate Financial Statements
Amendments reinstating the equity method as an accounting option for investments in subsidiaries, joint ventures and associates in an entity’s separate financial
statements.
The amendment had no impact on the Group.
IAS 38 Intangible Assets
The amendment introduces a rebuttable presumption that the use of revenue-based amortisation methods for intangible assets is inappropriate.
The amendment had no impact on the Group.
4. Consolidation(a) Business combinations
The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the
acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain
on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity
securities. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally
recognised in profit or loss.
Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of
a financial instrument is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration
is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.
(b) Subsidiaries
Subsidiaries are all entities (including special purpose entities) controlled by the Group. The Group controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The term Group refers to
the consolidated results of Bidvest Namibia Limited and all its subsidiaries.
Inter-company transactions, balances and unrealised gains of transactions between Group companies are eliminated. Unrealised losses are also eliminated
but considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency
with the policies adopted by the Group.
The investment in subsidiaries are recognised at cost less accumulated impairment in the separate financial statements of the Company.
(c) Non-controlling interests
Non-controlling interests are measured at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition. Changes in the Group’s
interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
(d) Interest in equity-accounted investees
The Group’s interests in equity-accounted investees comprise interests in associates and a joint venture.
Associates are all entities over which the Group has significant influence but not control or joint control, generally accompanying a shareholding of between
20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost.
The Group’s investment in associates includes goodwill identified on acquisition, net of any accumulated impairment loss.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement and have rights to the net assets of the joint arrangement.
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous
consent of the parties sharing control.
The Group’s share of its equity-accounted investees’ post-acquisition profits or losses are recognised in the statement of comprehensive income, and its
share of post-acquisition movements in reserves are recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying
amount of the investment. When the Group’s share of losses in an equity-accounted investee equals or exceeds its interest in the equity-accounted investee,
including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
equity-accounted investee.
The Group determines at each reporting date whether there is any objective evidence that the investment in equity-accounted investee is impaired. If this is
the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the equity-accounted investee and its carrying
value and recognises the amount in profit or loss.
Unrealised gains on transactions between the Group and its equity-accounted investees are eliminated to the extent of the Group’s interest in the equity-
accounted investees. Unrealised losses are also eliminated in the same way as unrealised gains, unless the transaction provides evidence of an impairment
of the asset transferred. Accounting policies of equity-accounted investees have been changed where necessary to ensure consistency with the policies
adopted by the Group. Dilution gains and losses arising in investments in equity-accounted investees are recognised in either profit or loss or other
comprehensive income.
The Group has elected to eliminate unrealised gains or losses resulting from transactions between the Group and its equity-accounted investees against the
underlying assets.
70 Bidvest Namibia Annual Integrated Report 2017
5. Segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision
maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive committee that
makes strategic decisions.
The reportable segments of the Group have been identified based on the nature of the businesses. This basis is representative of the internal structure for
management purposes.
“Segmental operating profit” includes revenue and expenses directly relating to a business segment but exclude net finance charges and taxation which cannot
be allocated to any specific segment.
“Segmental trading profit” is defined as operating profit excluding items of a capital nature and is the basis on which management’s performance is assessed.
Segment operating assets and liabilities include property, plant and equipment, investments, inventories, trade and other receivables, trade and other payables,
banking assets and liabilities, insurance funds and post-retirement obligations but excludes current taxation and deferred taxation. Intangible assets are allocated
to the cash-generating unit in the segment to which they relate. The segment report is included in the directors’ report.
6. Translation of foreign currencies(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which
the entity operates (Namibia dollar). The consolidated financial statements are presented in Namibia dollar (N$), which is the Group’s functional and
presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using exchange rates prevailing at the dates of the transactions. Foreign currency
gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in profit or loss, except when deferred in equity as qualifying cash flow hedges and qualifying net
investment hedges.
Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale are analysed between translation differences
resulting from changes in the amortised cost of the security, and other changes in the carrying amount of the security. Translation differences related to
changes in amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in other comprehensive income.
Translation differences on non-monetary financial assets and liabilities are reported as part of the fair value gain or loss. Translation differences on non-
monetary financial assets and liabilities such as equities held at fair value through profit and loss are recognised in profit or loss as part of the fair value gain
or loss. Translation differences on non-monetary financial assets such as equities classified as available for sale are included in the available-for-sale reserve
in other comprehensive income.
(c) Group companies
The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the
presentation currency as follows:
(i) Assets and liabilities: each statement of financial position balance presented is translated at the closing rate at the date of that statement of
financial position;
(ii) Income and expenses: each statement of comprehensive income presented is translated at average exchange rates (unless this average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at
the rate on the date of the transactions); and
(iii) All resulting exchange differences are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in foreign operation and of borrowings and other instruments designated
as hedges of such investments, are taken to other comprehensive income. When a foreign operation is partially disposed of such that control, significant influence
or joint control is lost or sold in its entirety, exchange differences that were recorded in other comprehensive income are recognised in the profit or loss as part of
the gain or loss on the sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the
closing rate.
Accounting policies – continuedfor the year ended 30 June 2017
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
71Bidvest Namibia Annual Integrated Report 2017
7. Property, plant and equipment All property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment losses. Historical cost includes
expenditure that is directly attributable to the acquisition of the items. Cost may also include transfers from equity of any gains/(losses) on qualifying cash flow
hedges of foreign currency purchases of property, plant and equipment.
Subsequent costs are included in the carrying amount of the asset or are recognised as a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.
Depreciation is calculated on the straight-line method to write off the cost of each asset to its residual value over its estimated useful life as follows:
Item Useful life
Buildings 48 – 84 years
Plant and machinery 3 – 20 years
Office furniture, fittings and equipment 3 – 10 years
Motor vehicles 4 years
Fishing vessels dry docking and fishing equipment 3 – 10 years
Computer equipment 3 years
Fishing vessels 25 – 55 years
Rental assets in field 3 years
Depreciation is generally recognised in profit or loss.
Land is not depreciated as it is deemed to have an indefinite life.
Refits of fishing vessels which relate to separate components are capitalised when incurred, and amortised over their useful lives.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the
relevant lease.
The residual values and useful lives of the assets are reviewed, and adjusted if appropriate on a prospective basis, at each financial year-end. The residual value
of an item of property, plant and equipment is the amount it estimates it would receive currently for the asset if the asset were already of the age and in the
condition expected at the end of its useful life. Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items of property, plant and equipment.
Repairs and maintenance are generally charged to expenses during the financial period in which they are incurred. However, major renovations are capitalised and
included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the
existing asset will flow to the Group. Major renovations are depreciated over the remaining useful life of the related asset. All other repairs and maintenance are
charged to profit or loss during the financial period in which they are incurred.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are recognised within profit or loss.
8. Intangible assets(a) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary/
associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in “intangible assets”. Goodwill on acquisition of associates is included
in “investments in associates” and is tested for impairment as part of the overall balance. Separately recognised goodwill is tested annually for impairment
and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include
the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-generating units or groups of cash-
generating units that are expected to benefit from the business combination in which the goodwill arose identified according to operating segment. The
recoverable amount of cash-generating units to which goodwill is allocated is estimated annually on 31 March each year.
(b) Trademarks and licences and fishing quota rights
Acquired trademarks and licences are shown at historical cost. Fishing quota rights, trademarks and other intangible assets have a finite useful life and are
carried at cost less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of the intangible assets over their
estimated useful lives (5 to 20 years). An intangible asset is recognised when it is probable that the expected future economic benefits that are attributable
to the asset will flow to the entity and the cost of the asset can be measured reliably.
72 Bidvest Namibia Annual Integrated Report 2017
Accounting policies – continuedfor the year ended 30 June 2017
8. Intangible assets (continued)(c) Computer software
Costs associated with maintaining computer software programs are recognised as an expense as incurred. Development costs that are directly attributable
to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets when the required criteria
are met. Directly attributable costs that are capitalised as part of the software product include the software development employee costs and an appropriate
portion of relevant overheads. Other development expenditures that do not meet these criteria are recognised as an expense as incurred. Development costs
previously recognised as an expense are not recognised as an asset in a subsequent period.
Computer software development costs that are recognised as assets are amortised over their estimated useful lives which does not exceed seven years.
The amount related to the amortisation of intangible assets is included under administration expense in the profit or loss.
9. Financial instruments9.1 Financial assets
9.1.1 Classification
The Group classifies its financial assets as subsequently measured at either amortised cost or at fair value through profit or loss on the basis of both the entity’s
business model for managing financial assets and the contractual cash flow characteristics of the financial asset. Financial assets are measured at amortised cost
if both of the following conditions are met: the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows;
and the contractual term of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding. If a measurement or recognition inconsistency is eliminated or significantly reduced by designating a financial asset as measured at fair value through
profit or loss, the Group has the discretion to elect this option at the financial asset’s initial recognition. Classification is not based on an instrument-by-instrument
approach, but is determined at a higher level of aggregation.
This classification is determined at initial recognition of a financial asset. At this point, the Group may make an irrevocable election to present in profit or loss
subsequent changes in fair value of an investment in an equity instrument that is not held for trading.
Trade and other receivables are classified as financial assets at amortised cost.
9.1.2 Recognition and measurement
Initial measurement Regular purchases and sales of financial assets are recognised on the trade date, the date on which the Group commits to purchase or sell the asset. Investments
are initially recognised at fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the
acquisition of the financial asset. Financial assets carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed
in profit or loss.
Derecognition Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred
substantially all risks and rewards of ownership.
Subsequent measurement Financial assets at fair value are subsequently carried at fair value. Financial assets at amortised cost are carried at amortised cost using the effective
interest method.
Realised and unrealised gains or losses arising from changes in the fair value of a financial asset that is measured at fair value and is not part of a hedging
relationship shall be recognised in profit or loss within “realised gains/(losses) on financial assets” or “unrealised gains/(losses) on financial assets” in the period
in which they arise, unless the financial asset is an investment in an equity instrument and the entity has elected to present gains and losses on that investment
in other comprehensive income.
Gains or losses on a financial asset that is measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when the
financial asset is derecognised, impaired or reclassified, and through the amortisation process.
Dividend income from financial assets at fair value and financial assets at amortised cost is recognised in profit or loss as part of investment income when the
Group’s right to receive payments is established. Interest on financial assets at fair value and financial assets at amortised cost calculated using the effective
interest rate method is recognised in profit or loss as part of investment income.
9.2 Financial liabilities
9.2.1 Classification
The Group classifies its financial liabilities as at fair value through profit or loss or as financial liabilities at amortised cost. The Group has the option to classify the
financial liability as at fair value through profit or loss if it is held for trading or if the prerequisites in IAS 39 par 9(b) are met and it is designated upon initial
recognition at fair value through profit or loss.
Trade and other payables are classified as financial liabilities at amortised cost.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
73Bidvest Namibia Annual Integrated Report 2017
9. Financial instruments (continued)9.2.2 Recognition and measurement
Initial measurement Financial liabilities are recognised when the Group becomes a party to the contractual provisions of the instrument. They are initially recognised at fair value plus,
in the case of financial liabilities not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the liability. Financial
liabilities carried at fair value through profit or loss are initially recognised at fair value and transaction costs are expensed in profit or loss.
Derecognition Financial liabilities are derecognised when they are extinguished – the obligation specified in the contract is discharged or cancelled or expires. The difference
between the carrying amount of the financial liability derecognised and consideration paid/payable is recognised in profit or loss.
Subsequent measurement Financial liabilities at amortised cost are carried at amortised cost using the effective interest method. Financial liabilities at fair value are subsequently carried at
fair value, unless the exceptions in IAS 39 par 47 apply.
Gains or losses on a financial liability that is measured at amortised cost and is not part of a hedging relationship shall be recognised in profit or loss when the
financial liability is derecognised, impaired or reclassified, and through the amortisation process.
Realised and unrealised gains or losses arising from changes in the fair value of a financial liability that is measured at fair value and is not part of a hedging
relationship shall be recognised in profit or loss within “realised gains/(losses)” on financial liabilities or “unrealised gains/(losses) on financial liabilities” in the
period in which they arise.
10. Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the
recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.
11. Impairment of financial assets The Company and the Group assesses at each financial year-end whether there is objective evidence that a financial asset or a group of financial assets is
impaired. A financial asset or group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result
of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future
cash flows of the financial asset or group of financial assets that can be reliably estimated.
The criteria that the Company and the Group uses to determine that there is objective evidence of an impairment loss include:
– significant financial difficulty of the issuer or obligor;
– a breach of contract, such as a default or delinquency in interest or principal payments;
– the Company, for economic or legal reasons relating to the borrower/debtor’s financial difficulty, granting to the borrower/debtor a concession that the lender
would not otherwise consider;
– it becomes probable that the borrower/debtor will enter bankruptcy or other financial reorganisation;
– the disappearance of an active market for that financial asset because of financial difficulties; or
– observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition
of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio, including: adverse changes in the payment
status of borrowers in the portfolio; and national or local economic conditions that correlate with defaults on the assets in the portfolio.
The Company first assesses whether objective evidence of impairment exists.
(a) Assets carried at amortised cost
The amount of the loss is measured as the difference between the carrying amount of the asset and the present value of estimated future cash flows
(excluding future credit losses that have not been incurred) discounted at the original effective interest rate of the financial asset. The carrying amount of the
financial asset is reduced and the amount of the loss is recognised in profit or loss. If the financial asset has a variable interest rate, the discount rate for
measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the Company may measure
impairment on the basis of an instrument’s fair value using an observable market price.
Receivables with a short duration are not discounted.
(b) Equity instruments for which the entity has elected to present gains and losses in other comprehensive income
In the case of equity instruments for which the entity has elected to present gains and losses in other comprehensive income, a significant or prolonged
decline in the fair value of the instrument below its cost is also evidence that the assets are impaired. If any such evidence exists, the cumulative loss –
measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in
profit or loss – is removed from equity and recognised in profit or loss.
(c) Reversals of impairment
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment
was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in profit or
loss, unless the investment is an equity instrument and the entity has elected to present gains and losses on that investment in other comprehensive income,
in which case impairment losses recognised in profit or loss on equity instruments are reversed through other comprehensive income.
74 Bidvest Namibia Annual Integrated Report 2017
Accounting policies – continuedfor the year ended 30 June 2017
12. Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined on either the first-in, first-out (FIFO) method or average costs basis. The cost
of the finished goods comprises raw materials, direct labour, other direct cost and related production overheads, but excludes borrowing costs. Net realisable value
is the estimate of the selling price in the ordinary course of business, less the cost of completion and selling expenses.
13. Biological assets Biological assets consist of oysters.
Biological assets are stated at fair value less estimated point-of-sale cost. The fair value of oysters is determined using the present value of expected net cash
flows from the oysters, discounted using a pre-tax market determined rate. Fair value changes are recognised in profit or loss. All expenses incurred in establishing
and maintaining the assets are recognised in profit or loss. All costs incurred in acquiring biological assets are capitalised. Finance charges are not capitalised.
14. Trade and other receivables Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one
year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for
impairment.
15. Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three
months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position.
16. Impairment of non-financial assets Assets that have an indefinite useful life, for example goodwill, are not subject to amortisation and are tested annually for impairment. Assets that are subject to
amortisation or depreciation are reviewed for impairment at each reporting date. An impairment loss is recognised for the amount by which the carrying amount
of the asset exceeds its recoverable amount. The recoverable amount is the higher of the fair value less cost to sell of the asset and its value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels at which there are separately identifiable cash flows (cash-generating units). Non-
financial assets other than goodwill that have suffered an impairment are reviewed for possible reversal of the impairment at each reporting date. Impairment
losses and reversal of impairment losses are recognised in profit or loss. Reversal of an impairment loss is recognised to the extent that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or a cash-generating unit.
17. Non-current assets held-for-sale Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through continuing
use are classified as held-for-sale and are carried at the lower of carrying value and fair value less cost to sell. Immediately before classification as assets held-
for-sale, the measurement of the assets (and all assets and liabilities in a disposal group) is determined in accordance with applicable IFRS. Then, on initial
classification as assets held-for-sale, non-current assets and disposal groups are recognised at the lower of the carrying amounts and fair value less costs to sell.
Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on a pro rata basis, except that no loss is allocated
to inventories, financial assets, deferred tax assets, and employee benefit assets, which continue to be measured in accordance with the Group’s accounting
policies. Impairment losses on initial classification as held-for-sale and subsequent gains or losses on remeasurement are recognised in the profit or loss. Gains
are not recognised in excess of any cumulative impairment loss.
A discontinued operation results from the sale or abandonment of an operation that represents a separate major line of business or geographical area of operations
and of which the assets, net profit or loss and activities can be distinguished physically, operationally and for financial reporting purposes. A subsidiary acquired
exclusively with the view to resale is also classified as a discontinued operation. Classification as a discontinued operation occurs upon disposal or when the
operation meets the criteria to be classified as held-for-sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of
profit or loss and other comprehensive income is restated as if the operation had been discontinued from the start of the comparative period.
18. Share capital and equity An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.
Ordinary shares and non-redeemable preference shares with discretionary dividends are classified as equity. Other shares, including mandatory redeemable
preference shares, are classified as liabilities.
Incremental cost directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Where any Group company purchases the Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental
costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders until the shares are cancelled or reissued. Where such ordinary
shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is
included in equity attributable to the Company’s equity holders.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
75Bidvest Namibia Annual Integrated Report 2017
19. Current and deferred income tax The tax expense for the year comprises current and deferred tax. Tax is recognised in the profit or loss, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the financial year-end in the countries where the
Company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate on the basis of amounts expected to be paid
to the tax authorities.
Deferred income tax is recognised in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements. However, the deferred income tax is not recognised if it arises from initial recognition of an asset or
liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income
tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the financial year-end and are expected to apply when the related
deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can
be utilised.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the
temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.
20. Trade and other payables Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are
classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
21. Provisions and contingent liabilities Provisions are recognised when the Group has a legal or constructive obligation as a result of past events, for which it is probable that an outflow of economic
benefits will occur, and where a reliable estimate can be made of the amount of the obligation. Where the effect of discounting is material, provisions are
discounted. The discount rate used is a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific
to the liability.
A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan and the restructuring has either commenced or
has been announced publicly. Future operating costs are not provided for.
The Group discloses a contingent liability when:
– it has a possible obligation arising from past events, the existence of which will be confirmed only by occurrence or non-occurrence of one or more uncertain
future events not wholly within the control of the entity; or
– it is not probable that an outflow of resources would be required to settle an obligation; or
– the amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities are not recognised as a liability.
22. Borrowings Borrowings are recognised initially at the fair value of the proceeds received, net of transaction costs incurred. Borrowings are subsequently stated at amortised
cost; any difference between proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using
the effective interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the
year-end.
23. Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Group’s and Company’s
activities and includes net billings, commission related to clearing and forwarding transactions, fees earned for services rendered and payments received in
exchange for goods. Revenue is shown net of value added tax, returns, rebates and discounts and after eliminating sales within the Group.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when
specific criteria have been met, for each of the Group’s activities as described below. The amount of revenue is not considered to be reliably measured until all
contingencies relating to the sales, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement and there is no
continuing involvement of management.
Where the Group acts as an agent and is remunerated on a commission basis, only net commission income, and not the value of the business handled, is included
in revenue.
76 Bidvest Namibia Annual Integrated Report 2017
Accounting policies – continuedfor the year ended 30 June 2017
23. Revenue recognition (continued) Revenue is recognised as follows:
(i) Sale of goods
Revenue from the sale of goods is recognised when significant risks and rewards of ownership of the goods are transferred to the buyer.
(ii) Rendering of services
Revenue arising from rendering of services is based on the stage of completion determined by reference to services performed to date as a percentage of
total services to be performed.
(iii) Interest income
Interest income is recognised on a time proportion basis using the effective interest rate method. When a receivable is impaired, the Group reduces the
carrying amount to its recoverable amount, being the estimated future cash flows discounted at the original effective interest rate of the instrument, and
continues unwinding the discount as interest income. Interest income on impaired loans is recognised using the original effective interest rate.
(iv) Rental income
Rental income is recognised over the period of the lease on a straight-line basis.
(v) Dividend income
Dividends are recognised when the right to receive payment is established.
(vi) Commissions and fees earned
Where the Company acts as an agent and is remunerated on a commission basis, only net commission income and not the value of the business handled, is
included in revenue.
24. Finance charges Finance charges comprise interest payable on borrowings calculated using the effective interest rate method. The interest expense component of finance lease
payments is recognised in profit or loss using the effective interest rate method.
Finance charges directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period
of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use
or sale.
25. Leases Leases that transfer substantially all the risks and rewards of ownership of the underlying asset to the Group are classified as finance leases. Assets acquired in
terms of finance leases are capitalised at the lower of fair value of the respective assets and the present value of the minimum lease payments at inception of the
lease, and depreciated over the estimated useful life of the asset. The capital element of future obligations under the leases is included as a liability in the statement
of financial position. Lease payments are allocated using the effective interest rate method to determine the lease finance cost, which is charged against income
over the lease period, and the capital repayment, which reduces the liability to the lessor.
Assets effectively disposed of under finance leases are treated as receivables, and are presented at amount equal to the net investment in the lease. Lease receipts
are apportioned between capital and finance income portions using the interest rate implicit in each lease.
Leases where the lessor retains the risks and rewards of ownership of the underlying asset are classified as operating leases. Operating leases, which have a fixed
determinable escalation, are charged against income on a straight-line basis. Leases with contingent escalations are expensed as and when incurred.
26. Employee benefits Short-term employee benefits
The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid vacation leave, bonuses, and non-monetary
benefits such as medical care), are recognised in the period in which the service is rendered and are not discounted. The expected cost of compensated absences
is recognised as an expense as the employees render services that increase their entitlement or, in the case of non-accumulating absences, when the absences
occur. The expected cost of profit-sharing and bonus payments is recognised as an expense when there is a legal or constructive obligation to make such payments
as a result of past performance.
Profit-sharing and bonus plans
The Group recognises a liability and an expense for bonuses and profit-sharing, based on a formula that takes into consideration the profit attributable to the
Group’s shareholders after certain adjustments. The Group recognises an accrual where contractually obliged or where there is past practice that has created a
constructive obligation.
Defined contribution plans
Payments to defined contribution retirement benefit plans are charged as an expense as they fall due.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
77Bidvest Namibia Annual Integrated Report 2017
26. Employee benefits (continued) Other post-employment obligations
Certain companies in the Group provide post-retirement healthcare defined benefits to their retirees. The entitlement to these benefits is usually conditional on the
employee remaining in service up to retirement age and is applicable to employees employed prior to 31 December 1998. The expected costs of these benefits
are accrued over the period of employment. The post-retirement value shown is the proportion of the total accrued liability as at the valuation date, assuming that
the liability accrues uniformly over the member’s working lifetime, where the total accrued liability is calculated as the discounted value of the expected benefits
that become payable after retirement based on the assumptions regarding the expected increase in medical aid premiums and the expected number of debts and
withdrawals. The cost is actuarially determined. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged
to other comprehensive income. The obligations are valued annually by independent actuaries.
The Group’s obligation for post-retirement medical aid benefits to past and current employees is actuarially determined and provided for in full. The movement is
recognised through other comprehensive income.
Statutory termination obligations
The statutory termination obligations are classified as a defined benefit and are payable on death, retrenchment and at retirement at age of 65. Severance pay
payable upon retirement at age of 65, as per the Labour Act, is applicable to the Group, as the employees have a normal retirement age of 65 in some of the
entities. The obligation for severance benefits is calculated in respect of all employees that qualify in terms of the Labour Act, and is provided for in full. The cost
of providing the benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each reporting period. The
movement for the year is recognised in profit or loss when it is incurred.
27. Dividends to shareholders Dividends to shareholders are accounted for once they have been approved by the board of directors.
28. Share-based payments The Bidvest Namibia Share Incentive Scheme grants options to acquire shares in the Company to executive directors and management. The fair value of options
granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during
which the employees become unconditionally entitled to the options. The fair value of the options is measured using the Black-Scholes-Merton model, taking into
account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share
options that vest. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision
of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to
the equity-settled employee benefits reserve.
29. BEE ownership transaction Equity instruments issued to a BEE partner at less than fair value are accounted for as share-based payments.
The difference between the fair value of the equity instruments issued and the consideration received is accounted for as an expense in profit or loss at the date
the goods and services are received, with a corresponding increase in equity. No service or other conditions exist for BEE partners. A restriction on the BEE partner
to transfer the equity instrument subsequent to its vesting is not treated as a vesting condition, but is factored into the fair value determination of the instrument.
The fair value is measured using the Monte Carlo option pricing valuation model. The valuation technique is consistent with generally acceptable valuation
methodologies for pricing financial instruments, and incorporates all factors and assumptions that knowledgeable willing participants would consider in setting the
price of the equity instrument.
30. Headline earnings per share The Group presents headline earnings per share in accordance with the SAICA circular 2 of 2015.
78 Bidvest Namibia Annual Integrated Report 2017
Statements of financial positionat 30 June
Group Company
Notes
2017
N$’000
2016
N$’000
2017
N$’000
2016
N$’000
ASSETS
Non-current assets
Property, plant and equipment 1 790 606 864 213 – –
Intangible assets 2 37 574 47 685 – –
Goodwill 2 244 254 244 311 – –
Investment in subsidiaries 3 – – 363 377 363 377
Investment in joint venture 4 – – – –
Investment in associates 4 90 228 83 374 – –
Other financial assets 6 – 12 714 – 12 714
Deferred tax assets 13 1 772 7 956 – –
Trade and other receivables 9 36 203 55 445 – –
1 200 637 1 315 698 363 377 376 091
Current assets
Inventories 7 528 233 486 560 – –
Biological assets 8 2 705 3 413 – –
Short-term portion of lease receivables 5 34 608 – –
Other financial assets 6 12 714 – 12 714
Trade and other receivables 9 556 946 557 088 477 401 514 198
Current tax assets 25 6 042 1 927 – –
Cash and cash equivalents 10 742 986 744 167 36 917 7 153
1 849 660 1 793 763 527 032 521 351
Assets classified as held for sale 11 36 553 50 563 – –
1 886 213 1 844 326 527 032 521 351
Total assets 3 086 850 3 160 024 890 409 897 442
EQUITY AND LIABILITIES
Capital and reserves attributable to equity holders
Share capital 12 2 120 2 120 2 120 2 120
Share premium 12 660 272 660 272 660 272 660 272
Other reserves 45 026 52 946 16 988 16 988
Retained earnings 1 137 488 1 133 355 210 948 217 980
1 844 906 1 848 693 890 328 897 360
Non-controlling interest in equity 3 384 874 455 218 – –
Total equity 2 229 780 2 303 911 890 328 897 360
Non-current liabilities
Deferred tax liabilities 13 137 857 170 946 – –
Post-employment obligations 14 16 956 16 036 – –
Borrowings 16 10 230 17 398 – –
Operating lease liability 30 1 444 1 070 – –
166 487 205 450 – –
Current liabilities
Trade and other payables 15 459 200 409 092 45 36
Borrowings 16 229 223 232 186 – –
Short-term portion of finance lease liability 31 34 608 – –
Current tax payable 25 2 126 8 777 36 46
690 583 650 663 81 82
Total liabilities 857 070 856 113 81 82
Total equity and liabilities 3 086 850 3 160 024 890 409 897 442
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
79Bidvest Namibia Annual Integrated Report 2017
Group Company
Notes
2017
N$’000
2016
N$’000
2017
N$’000
2016
N$’000
Revenue 18 3 776 448 3 858 596 39 254 158 818
Cost of sales 18 (3 204 399) (3 127 135) – –
Gross profit 572 049 731 461 39 254 158 818
Administration expenses (485 416) (451 642) (432) (841)
Other income 19 12 302 13 020 – –
Operating profit 21 98 935 292 839 38 822 157 977
Finance income 22 34 419 35 883 1 139 1 437
Finance costs 23 (21 962) (18 750) – –
Share of (loss)/profit of a joint venture 4 (82) 2 873 – –
Share of profit of associates 4 7 834 10 517 – –
Profit before income tax 119 144 323 362 39 961 159 414
Income tax expense 25 (57 326) (88 248) (363) (458)
Profit for the year 61 818 235 114 39 598 158 956
Other comprehensive income
Items that will not be reclassified to profit or loss
Actuarial gains/(losses) on post-employment obligations 14 153 (212) – –
Items that are or may be reclassified subsequently to profit or loss
Movement on translation of foreign subsidiary (16 851) 24 198 – –
Total comprehensive income for the year 45 120 259 100 39 598 158 956
Profit attributable to:
Equity holders of the Company 50 610 184 222 39 598 158 956
Non-controlling interest 11 208 50 892 – –
61 818 235 114 39 598 158 956
Comprehensive income attributable to:
Equity holders of the Company 42 483 195 867 39 598 158 956
Non-controlling interest 2 637 63 233 – –
45 120 259 100 39 598 158 956
Basic earnings per share (cents) 28 23,88 86,92
Statements of profit or loss and other comprehensive incomefor the year ended 30 June
80 Bidvest Namibia Annual Integrated Report 2017
Statements of changes in equityfor the year ended 30 June
Share
capital
N$’000
Share
premium
N$’000
Retained
earnings
N$’000
Group
Balance at 1 July 2015 2 120 660 272 1 074 061
Comprehensive income
Profit for the year – – 184 222
Other comprehensive income for the year – – (212)
Total comprehensive income – – 184 010
Transactions with equity holders
Employee share option scheme – value of employee services – – –
Acquisition of non-controlling without a change in control (10 261)
Dividends declared and paid – – (114 455)
Total transactions with equity holders – – (124 716)
Balance at 30 June 2016 2 120 660 272 1 133 355
Comprehensive income
Profit for the year – – 50 610
Other comprehensive income for the year – – 153
Total comprehensive income – – 50 763
Transactions with equity holders
Employee share option scheme – value of employee services – – –
Dividends declared and paid – – (46 630)
Total transactions with equity holders – – (46 630)
Balance at 30 June 2017 2 120 660 272 1 137 488
Share
capital
N$’000
Share
premium
N$’000
Retained
earnings
N$’000
Company
Balance at 1 July 2015 2 120 660 272 173 479
Comprehensive income
Profit for the year – – 158 956
Total comprehensive income – – 158 956
Transactions with equity holders
Dividend declared and paid – – (114 455)
Total transactions with equity holders – – (114 455)
Balance at 30 June 2016 2 120 660 272 217 980
Comprehensive income
Profit for the year – – 39 598
Total comprehensive income – – 39 598
Transactions with equity holders
Dividend declared and paid – – (46 630)
Total transactions with equity holders – – (46 630)
Balance at 30 June 2017 2 120 660 272 210 948
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
81Bidvest Namibia Annual Integrated Report 2017
Attributable to equity holders of the parent
Foreign
currency
translation
reserve
N$’000
Share-
based
payment
reserve
N$’000
BEE
share-based
payment
reserve
N$’000
Total
N$’000
Non-
controlling
interest
in equity
N$’000
Total
equity
N$’000
19 909 2 200 16 988 1 775 550 502 480 2 278 030
– – – 184 222 50 892 235 114
11 857 – – 11 645 12 341 23 986
11 857 – – 195 867 63 233 259 100
– 1 992 – 1 992 – 1 992
(10 261) (60 141) (70 402)
– – – (114 455) (50 354) (164 809)
– 1 992 – (122 724) (110 495) (233 219)
31 766 4 192 16 988 1 848 693 455 218 2 303 911
– – – 50 610 11 208 61 818
(8 280) – – (8 127) (8 571) (16 698)
(8 280) – – 42 483 2 637 45 120
– 360 – 360 – 360
– – – (46 630) (72 981) (119 611)
– 360 – (46 270) (72 981) (119 251)
23 486 4 552 16 988 1 844 906 384 874 2 229 780
Attributable to equity holders of the parent
BEE
share-based
payment
reserve
N$’000
Total
N$’000
16 988 852 859
– 158 956
– 158 956
– (114 455)
– (114 455)
16 988 897 360
– 39 598
– 39 598
– (46 630)
– (46 630)
16 988 890 328
82 Bidvest Namibia Annual Integrated Report 2017
Statements of cash flowsfor the year ended 30 June
Group Company
Notes
2017
N$’000
2016
N$’000
2017
N$’000
2016
N$’000
Cash flows from operating activities
Cash receipts from customers 3 780 160 3 896 969 – –
Cash paid to suppliers and employees (3 595 093) (3 508 782) (401) (837)
Cash generated/(absorbed) by operations 32 185 067 388 187 (401) (837)
Finance income 22 34 419 35 883 1 139 1 437
Finance costs (excluding post-retirement medical obligation) 23 (20 746) (17 671) – –
Dividends received 19 4 007 2 175 39 254 158 818
Dividends paid to equity holders 29 (46 630) (114 455) (46 630) (114 455)
Dividends paid to non-controlling interest (72 981) (50 354) – –
Income tax paid 33 (95 296) (108 914) (373) (432)
Net cash (outflow)/inflow from operating activities (12 160) 134 851 (7 011) 44 531
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired 39 – (205 334) – –
Acquisition of equity-accounted investees 4 – (70 467) – –
Intangible assets acquired 2 (1 488) (25 211) – –
Property, plant and equipment acquired 1 (58 550) (120 669) – –
Proceeds on disposal of property, plant and equipment 68 556 8 032 – –
Net cash inflow/(outflow) from investing activities 8 518 (413 649) – –
Cash flows from financing activities
Borrowings (repaid)/raised 16 (12 751) 24 015 – –
Repayments from/(loans to) related parties 9 19 474 44 219 36 775 (234 877)
Acquisition of non-controlling interest – (14 372) – –
Net cash inflow/(outflow) from financing activities 6 723 53 862 36 775 (234 877)
Net increase/(decrease) in cash and cash equivalents 3 081 (224 936) 29 764 (190 346)
Foreign exchange differences 35 (6 882) 6 973 – –
Cash and cash equivalents
Balance at the beginning of the year 673 070 891 033 7 153 197 499
Cash and cash equivalents
Balance at the end of the year 10 669 269 673 070 36 917 7 153
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
83Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statementsfor the year ended 30 June
Land and
buildings
N$’000
Fishing
vessels
N$’000
Other
assets
N$’000
Total
N$’000
1. Property, plant and equipment
1.1 Group
30 June 2017
Opening net book amount 378 722 254 380 231 111 864 213
Acquisition through a business combination (note 39) – – 862 862
Exchange differences (6 107) (3 982) (3 223) (13 312)
Additions 20 727 2 142 36 144 59 013
Disposals (456) (1 043) (10 163) (11 662)
Depreciation (13 509) (386) (58 060) (71 955)
Reclassified as held-for-sale – (36 553) – (36 553)
Transfers 190 – (190) –
Closing net book amount 379 567 214 558 196 481 790 606
Cost 425 461 263 615 472 409 1 161 485
Accumulated depreciation (45 894) (49 057) (275 928) (370 879)
Closing net book amount 379 567 214 558 196 481 790 606
Group
30 June 2016
Opening net book amount 273 335 338 415 216 918 828 668
Acquisition through a business combination 69 000 – 3 107 72 107
Exchange differences 8 071 (1 560) 5 915 12 426
Additions 34 931 7 552 78 186 120 669
Disposals (999) (34 616) (12 177) (47 792)
Depreciation (10 255) (4 848) (56 199) (71 302)
Reclassified as held-for-sale – (50 563) – (50 563)
Transfers 4 639 – (4 639) –
Closing net book amount 378 722 254 380 231 111 864 213
Cost 413 502 313 932 480 885 1 208 319
Accumulated depreciation (34 780) (59 552) (249 774) (344 106)
Closing net book amount 378 722 254 380 231 111 864 213
1.2 Land and buildings
A register of land and buildings is available for inspection at the registered office of the Company by members or their duly authorised representatives.
The property in Lenkow (Proprietary) Limited has been bonded in favour of Ford Finance South Africa for the amount of N$6,0 million by registering a mortgage
bond over Erf 52. The property has a carrying value of N$83,5 million.
A fishing vessel with a carrying value of N$33,9 million has been pledged as security on a loan from Banco Fomento de Angola.
Leasehold improvement payable to Oryx Properties Limited is secured by a leasehold property with a carrying value of N$3,3 million.
84 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
Plant and
machinery
N$’000
Vehicles
N$’000
Office furniture/
equipment
and computer
equipment
N$’000
Total
N$’000
1. Property, plant and equipment (continued)
1.3 Other assets consist of:
Group
30 June 2017
Opening net book amount 165 055 35 299 30 757 231 111
Acquisition through a business combination (note 39) 428 272 162 862
Exchange differences (2 699) (371) (153) (3 223)
Additions 12 620 9 530 13 994 36 144
Disposals (8 666) (1 292) (205) (10 163)
Depreciation charge for the year (39 689) (8 795) (9 576) (58 060)
Transfers – – (190) (190)
Closing net book amount 127 049 34 643 34 789 196 481
Cost 293 186 87 267 91 956 472 409
Accumulated depreciation (166 137) (52 624) (57 167) (275 928)
Closing net book amount 127 049 34 643 34 789 196 481
Group
30 June 2016
Opening net book amount 154 921 33 399 28 598 216 918
Acquisition through a business combination 2 152 – 955 3 107
Exchange differences 5 111 629 175 5 915
Additions 52 453 11 512 14 221 78 186
Disposals (10 302) (1 431) (444) (12 177)
Depreciation charge for the year (39 298) (8 810) (8 091) (56 199)
Transfers 18 – (4 657) (4 639)
Closing net book amount 165 055 35 299 30 757 231 111
Cost 317 056 83 125 80 704 480 885
Accumulated depreciation (152 001) (47 826) (49 947) (249 774)
Closing net book amount 165 055 35 299 30 757 231 111
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
85Bidvest Namibia Annual Integrated Report 2017
Goodwill
N$’000
Computer
software,
trademarks
and warehouse
development
N$’000
Fishing
rights
N$’000
Total
N$’000
2. Intangible assets
2.1 Group
30 June 2017
Opening net book amount 244 311 25 939 21 746 291 996
Impairment (57) – – (57)
Exchange differences – – (2 181) (2 181)
Additions – 1 488 – 1 488
Amortisation – (4 080) (5 338) (9 418)
Closing net book amount 244 254 23 347 14 227 281 828
Cost 246 020 39 396 76 641 362 057
Impairment (1 766) – (168) (1 934)
Accumulated amortisation – (16 049) (62 246) (78 295)
Closing net book amount 244 254 23 347 14 227 281 828
Group
30 June 2016
Opening net book amount 118 918 4 437 23 284 146 639
Impairment (1 709) – – (1 709)
Acquisition through a business combination 127 102 214 – 127 316
Disposals – – (390) (390)
Exchange differences – – 4 677 4 677
Additions – 25 211 – 25 211
Amortisation – (3 923) (5 825) (9 748)
Closing net book amount 244 311 25 939 21 746 291 996
Cost 246 020 37 905 84 524 368 449
Impairment (1 709) – (168) (1 877)
Accumulated amortisation – (11 966) (62 610) (74 576)
Closing net book amount 244 311 25 939 21 746 291 996
86 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
Group Company
2017
N$’0002016
N$’000
2017
N$’0002016
N$’000
2. Intangible assets (continued)
2.2 Goodwill allocation
Goodwill is allocated to the Group’s cash-generating units (CGUs) identified
according to the operating segment. An operating segment-level summary
of the goodwill allocation is presented below:
Fishing 19 886 19 886 – –
Freight and Logistics 40 228 40 228 – –
Food and Distribution 49 881 49 913 – –
Commercial Industrial and Products 5 448 5 473 – –
Properties 6 163 6 163 – –
Automotive 122 648 122 648 – –
244 254 244 311 – –
2.3 Goodwill impairment tests
The recoverable amount of a CGU is determined based on value-in-use
calculations. The carrying amounts of the fishing, freight and logistics, food
and distribution, commercial industrial and products, properties and
automotive divisions were determined to be lower than their recoverable
amounts of N$2 billion, N$175 million, N$384 million, N$114 million,
N$90 million and N$249 million respectively. These calculations use pre-tax
cash flow projections based on budgets approved by management covering a
four-year period. In determining the rates used, management have taken into
account industry specific risks and the economic outlook. Cash flows beyond
the four-year period are extrapolated using the growth rates stated below:
All segments
Growth rate 4% – 8% 6% – 8%
Growth in perpetuity after forecast period 4% – 8% 6% – 8%
Internal rate of return (WACC)/discount rate 11% 11%
3. Investment in subsidiaries
Unlisted share investment
Bidvest Namibia Fisheries Holdings (Proprietary) Limited 359 363 359 363
Bidvest Namibia Foreign Exchange (Proprietary) Limited – –
Bidvest Namibia Commercial Holdings (Proprietary) Limited – –
Bidvest Namibia Management Services (Proprietary) Limited – –
Bidvest Namibia Information Technology (Proprietary) Limited – –
Bidvest Namibia Property Holdings (Proprietary) Limited 4 014 4 014
363 377 363 377
The carrying amounts of subsidiaries are shown net of impairment losses. For more information on the subsidiary undertakings refer to the directors’ report.
Refer to the directors’ report for the full segmental report.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
87Bidvest Namibia Annual Integrated Report 2017
3. Investment in subsidiaries (continued)
Composition of the Group
Place of
incorporation
and operation
Number of wholly owned
subsidiaries
Segments 2017 2016
Fishing Walvis Bay 13 13
Freight and Logistics Walvis Bay 5 5
Services Windhoek 4 3
Industrial and Commercial Products Windhoek 6 5
Food and Distribution Windhoek 4 4
Automotive Windhoek 3 3
Corporate Services Windhoek 8 8
Number of non-wholly
owned subsidiaries
Segments 2017 2016
Fishing Walvis Bay 5 4
Freight and logistics Walvis Bay 3 3
Proportion of non-controlling
interests
Comprehensive income/(loss)
allocated to non-controlling
interests
Accumulated non-controlling
interests
2017 2016
2017
N$’000
2016
N$’000
2017
N$’000
2016
N$’000
Details of non-wholly owned subsidiaries that have material non-controlling interests
Name of subsidiary
Namsov Fishing Enterprises (Proprietary) Limited 30,45% 30,45% 10 768 53 795 333 172 371 125
Glenryck South Africa (Proprietary) Limited 49,00% 0,00% (719) – (719) –
Pesca Fresca Limitada 51,00% 51,00% 1 337 5 050 47 503 77 472
Trachurus Fishing (Proprietary) Limited 0,00% 0,00% – (7 974) – –
Twafika Fishing Enterprises (Proprietary) Limited 24,90% 24,90% (16) 147 (54) 817
Walvis Bay Stevedoring Company (Proprietary)
Limited 45,00% 45,00% (1 246) (911) 3 432 4 678
Monjasa Namibia (Proprietary) Limited 36,44% 36,44% 924 827 1 367 1 222
Orca Marine (Proprietary) Limited 40,00% 40,00% 160 (42) 63 (96)
Oshivelelwa Trading Enterprises (Proprietary)
Limited 50,00% 50,00% – – – –
11 208 50 892 384 764 455 218
The Group has de facto control over Pesca Fresca Limitada, incorporated in Angola, as a result of the management agreement.
88 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
Proportion of ownership interest
2017 2016 2017 2016
4. Investment in joint venture and associates
Joint venture
!OE#GAB Fishing Enterprises (Proprietary) Limited 50% 50%
N$’000 N$’000 N$’000 N$’000
The Group’s share of (loss)/profit (82) 2 873 – –
Carrying amount of the Group’s interest in joint venture – – – –
Proportion of ownership interest
2017 2016 2017 2016
Associates
Carapau Fishing (Proprietary) Limited 25% 25%
Namibia Bureau de Change (Proprietary) Limited 49% 49%
Industria Alimentar Carnes Moçambique Limitada 40% 40%
N$’000 N$’000 N$’000 N$’000
Share of profit
Carapau Fishing (Proprietary) Limited 2 417 8 346 – –
Namibia Bureau de Change (Proprietary) Limited 935 1 363 – –
Industria Alimentar Carnes Moçambique Limitada 4 482 808 – –
The Group’s share of profit 7 834 10 517 – –
Investment in associates
Carapau Fishing (Proprietary) Limited 13 154 10 736 – –
Namibia Bureau de Change (Proprietary) Limited 9 794 9 840 – –
Industria Alimentar Carnes Moçambique Limitada 67 280 62 798 – –
Carrying amount of the Group’s interest in associates 90 228 83 374 – –
Reconciliation of movement in associates
Opening balance 83 374 3 203 – –
Acquired during the year – 70 467 – –
Share of current year profit 7 834 10 517 – –
Dividend received (980) – – –
Elimination of unrealised (profit)/loss – (813) – –
Carrying amount of the Group’s interest in associates 90 228 83 374 – –
All associates and the joint venture, with the exception of Namibia Bureau de Change (Proprietary) Limited, are involved in activities related to the fishing division.
Namibia Bureau de Change (Proprietary) Limited is involved in financial service activities.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
89Bidvest Namibia Annual Integrated Report 2017
Total
N$’000
Carapau
Fishing
(Proprietary)
Limited
N$’000
Namibia
Bureau
de Change
(Proprietary)
Limited
N$’000
Industria
Alimentar
Carnes
Moçambique
Limitada
N$’000
4. Investment in joint venture and associates (continued)
Summarised financial information of the associates are set out below:
30 June 2017
Current assets 138 477 54 600 12 258 71 619
Non-current assets 249 482 126 659 967 121 856
Current liabilities 136 853 62 212 1 127 73 514
Non-current liabilities 61 461 61 432 29 –
Revenue 680 691 230 645 10 349 439 697
Profit for the year 22 781 9 667 1 908 11 206
Other comprehensive income for the year – – – –
Total comprehensive income for the year 22 781 9 667 1 908 11 206
Summarised financial information of the associates are set out below:
30 June 2016
Current assets 226 220 39 028 12 420 174 772
Non-current assets 261 310 138 832 567 121 911
Current liabilities 218 162 54 006 808 163 348
Non-current liabilities 76 838 75 906 16 916
Revenue 385 519 236 682 10 365 138 472
Profit for the year 34 939 30 137 2 781 2 021
Other comprehensive income for the year – – – –
Total comprehensive income for the year 34 939 30 137 2 781 2 021
The above financial information has been equity accounted in the Group’s results. The joint venture is not material to the Group and therefore no disclosure was
made thereof. Industria Alimentar Carnes Moçambique Limitada’s functional currency is Mozambique Metical.
90 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
5. Finance lease receivables
Gross finance lease receivable
– within one year 34 619 – –
Amounts receivable under finance leases 34 619 – –
Less: Unearned finance income – (11) – –
Present value of finance lease receivables 34 608 – –
Current assets 34 608 – –
34 608 – –
Minolco (Namibia) (Proprietary) Limited signed an agreement with Standard Bank Namibia Limited to cede the rights relating to rental agreements signed between Minolco (Namibia) (Proprietary) Limited and customers to Standard Bank Namibia Limited while maintaining the service obligations related thereto. The average lease period is less than one year and the average effective borrowing rate is the prime interest rate.
6. Other financial assets
Non-current other financial assets
Loan to other entity (i) – 12 714 – 12 714
Current other financial assets
Loan to other entity (i) 12 714 – 12 714 –
(i) The loan was provided to the Namibia Procurement Fund and carries interest at fixed rate of 5,5% and is repayable as a single bullet payment on 30 September 2017. The fair value of the loan is N$12,5 million (2016: N$11,5 million) at the Namibian prime rate of 10,75% (2016: 10,75%).
7. Inventories
Finished goods 314 299 302 456 – –
Raw material 6 416 – – –
New vehicles 70 739 74 159 – –
Used vehicles 26 399 16 346 – –
Demonstration vehicles 22 772 15 540 – –
Parts and accessories 99 173 90 022 – –
539 798 498 523 – –
Less: Provision for obsolete inventory (11 565) (11 963) – –
528 233 486 560 – –
Carrying value of inventory at net realisable value (included above) 14 217 10 625 – –
The cost of inventories recognised as an expense during the year was N$2,4 billion (2016: N$2,4 billion). Financial interest registered over the vehicles to secure the floor plan liabilities.
8. Biological assets
Opening balance 3 413 4 064 – –
Value changes caused by
Birth and growth of animals 9 898 9 493 – –
Increase due to purchases 1 249 2 408 – –
Mortalities (4 854) (4 887) – –
Samples/donations (10) (21) – –
(Loss)/profit due change in fair value (167) 538 – –
Decrease due to sales (6 824) (8 182) – –
Oysters 2 705 3 413 – –
Current 2 705 3 413 – –
Biological asset consists of oysters.
The Group is exposed to a number of risks relating to its growing of oysters arising from environmental and climatic changes, toxic algae blooms and other
contamination of water space. The Group has extensive processes in place to monitor and mitigate these risks.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
91Bidvest Namibia Annual Integrated Report 2017
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
9. Trade and other receivables
Trade receivables – third parties 384 660 374 560 – –
Trade receivables – related parties (note 36) 13 011 14 772 – –
Less: Allowance for impairment (15 189) (19 233) – –
Trade receivable 382 482 370 099 – –
Related-party loans (note 36) 66 418 83 708 477 398 514 173
Other receivables 87 805 87 438 3 25
Less: Allowance for impairment (24 758) (26 132) – –
Financial instruments trade and other receivables 511 947 515 113 477 401 514 198
Prepayments 25 467 54 312 – –
Receiver of Revenue – VAT 55 735 43 108 – –
Non-financial instruments trade and other receivables 81 202 97 420 – –
593 149 612 533 477 401 514 198
Non-current assets 36 203 55 445 – –
Current assets 556 946 557 088 477 401 514 198
593 149 612 533 477 401 514 198
Trade receivables are provided for based on estimated irrecoverable amounts
from the sale of goods or rendering of services, determined by reference to
past default experience.
Included in the Group’s trade receivables balance are debtors with a carrying
amount of N$102,9 million (2016: N$66,4 million) which were past due at the
reporting date but not impaired. The Group has not provided for these as there
has not been a significant change in credit quality.
The ageing of amounts past due but not impaired is as follows:
Past due 0 – 30 days 57 830 47 529 – –
Past due 31 – 90 days 29 653 13 647 – –
Past due 91 – 180 days 9 214 1 879 – –
Past due 181 + days 6 243 3 387 – –
102 940 66 442 – –
Movement in the Group’s allowance for impairment of trade receivables
are as follows:
Balance at the beginning of the year (19 233) (11 170) – –
Net provisions raised during the year (107) (5 277) – –
Bad debts written off during the year 3 818 2 072 – –
Exchange difference 550 (771) – –
Assumed through a business combination (217) (4 087) – –
(15 189) (19 233) – –
In determining the recoverability of a trade receivable, the Group considers any change in the credit quality of the trade receivable from the date credit was initially
granted up to the reporting date.
Trade receivables amounting to N$11,5 million (2016: N$26 113) were placed under liquidation during the year.
At 30 June 2017 the carrying amounts of accounts receivable approximate their fair values due to the short-term maturities of these assets.
Another receivable amounting to N$13,6 million (2016: N$13,6 million) was reflected as a receivable from Merit Investments (Proprietary) Limited at year-end
relating to facilitation fees paid in respect of the quota purchased from the Namibia Fish Consumption Promotion Trust. Management have provided for this
receivable as they regard it as doubtful. In addition other receivables include an amount of N$11,2 million (2016: N$12,5 million), which has been fully provided
for, relating to amounts owed by RJ Industrial for assets removed by the interim management of Pesca Fresca Limitada during prior years in which they had
assumed the role of management of that company.
92 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
Group Company
2017
N$’0002016
N$’000
2017
N$’0002016
N$’000
10. Cash and cash equivalents
For the purposes of the statement of cash flows the year-end cash
and cash equivalents comprise the following:
Bank and cash balances 705 290 717 355 620 7 153
Money market funds
Bank Windhoek Corporate Fund 19 497 14 862 18 167 –
Old Mutual Unit Trust Corporate Fund 18 130 – 18 130 –
IJG Securities EMH Prescient Unit Trust Fund 69 11 950 – –
742 986 744 167 36 917 7 153
Bank overdraft (note 16) (73 717) (71 097) – –
Cash and cash equivalents 669 269 673 070 36 917 7 153
Bank overdraft facilities amounting to N$280,7 million (2016:
N$254,0 million) are secured by suretyships given by the Group (37.1(c)
for detail on the overdraft facilities).
The money market funds can be converted to cash within a notice
period of 24 hours.
At 30 June 2017, the carrying amounts of cash and cash equivalents
approximate the fair values due to its short-term maturities.
11. Asset classified as held-for-sale
Fishing vessel 36 553 50 563 – –
The Group disposed of a fishing vessel, MFV Namibian Star, during
the current financial period which was classified as held-for-sale for the
first time in the 2016 financial period, a profit of N$9,7 million was
recognised on the sale of the vessel. The Group intends to dispose of
a fishing vessel within the fishing segment, MFV Sunfish, in the next
12 months. The fishing vessel is being sold as the Group does not
have a sufficient fishing quota. No impairment loss was recognised
on reclassification of the fishing vessel as the directors
expect that the fair value less costs to sell to be higher than the
carrying amount. No liabilities are associated with the asset
held-for-sale.
12. Share capital, premium and reserves
Share capital
Authorised share capital
540 000 000 ordinary shares of N$ 0,01 each 5 400 5 400 5 400 5 400
Issued share capital
Number of shares issued 2 120 2 120 2 120 2 120
Balance at beginning of year 2 120 2 120 2 120 2 120
Shares issued during the year – – – –
Issued share capital 2 120 2 120 2 120 2 120
The unissued ordinary shares are under the control of the directors
until the next annual general meeting.
Share premium
Opening balance 660 272 660 272 660 272 660 272
Issued during the year – – – –
Closing balance 660 272 660 272 660 272 660 272
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
93Bidvest Namibia Annual Integrated Report 2017
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
13. Deferred tax assets/(liabilities)
Deferred taxation assets 1 772 7 956 – –
Deferred taxation liabilities (137 857) (170 946) – –
(136 085) (162 990) – –
Movement in deferred tax balances:
Opening balance (162 990) (192 410) – –
Change in rate – Namibian rate change – 5 965 – –
Acquisition through a business combination (182) (2 678) – –
Per statement of comprehensive income (temporary differences) (note 25) 27 061 27 177 – –
Exchange rate difference – 22 – –
Prior period adjustment 26 (666) – –
Recognised directly in equity – (400) – –
Closing balance (136 085) (162 990) – –
AssetsN$’000
LiabilitiesN$’000
NetN$’000
Tax effect of temporary differences – 2017
Capital allowances on property, plant and equipment (191) (165 081) (165 272)
Capital allowances on intangible assets (5) (589) (594)
Computed tax losses 1 336 33 963 35 299
Trade and other receivables (86) (2 394) (2 480)
Trade, other payables and provisions 17 2 850 2 867
Staff-related allowances and liabilities 662 3 421 4 083
Inventory related – (13 943) (13 943)
Operating lease liabilities 39 614 653
Unrealised foreign exchange difference – 3 320 3 320
Other – (18) (18)
Net temporary differences subject to deferred tax 1 772 (137 857) (136 085)
Tax effect of temporary differences – 2016
Capital allowances on property, plant and equipment (4 521) (181 740) (186 261)
Capital allowances on intangible assets (5) (692) (697)
Computed tax losses 11 996 34 103 46 099
Trade and other receivables (737) (11 906) (12 643)
Trade, other payables and provisions 16 958 974
Staff-related allowances and liabilities 1 265 4 906 6 171
Inventory related (86) (14 645) (14 731)
Operating lease liabilities 28 469 497
Unrealised foreign exchange difference – (2 453) (2 453)
Other – 54 54
Net temporary differences subject to deferred tax 7 956 (170 946) (162 990)
Deferred income taxes are calculated on all temporary differences under the liability method using a tax rate of 32% (2016: 32%).
Deferred income tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the related tax benefit through future taxable profits is
probable. Management has performed projections to support future taxable profits. The Group did not recognise deferred income tax assets of N$36,0 million
(2016: N$12,3 million) in respect of losses amounting to N$112,5 million (2016: N$38,4 million). The assessed losses do not expire, they can be carried forward
indefinitely, unless the respective companies cease trading for two consecutive years.
94 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
14. Post-employment obligations
Total liability recognised in the statement of financial position:
Post-retirement medical benefit obligation 13 841 13 447 – –
Statutory severance benefits 3 115 2 589 – –
16 956 16 036 – –
14.1 Post-retirement medical benefit obligation
Opening balance 13 447 12 800 – –
Imputed interest costs 1 216 1 079 – –
Payments to medical aid in respect of retired employees (829) (785) – –
Actuarial (gains)/losses (153) 212 – –
Current service cost 160 141 – –
Actuarially determined present value of total obligation 13 841 13 447 – –
Certain companies in the Group provide post-retirement medical benefit
subsidies to certain retired employees and are responsible for provision of
post-retirement medical benefit subsidies to a limited number of current
employees.
The Group’s policy is to perform a valuation every second year. The last
valuation was done during June 2016 by Towers Watson, independent
actuaries.
The post-retirement value shown is the proportion of the total accrued liability
as at the valuation date, assuming that the liability accrues uniformly over the
member’s working lifetime, where the total accrued liability is calculated as the
discounted value of the expected benefits that become payable after retirement
based on the assumptions regarding the expected increase in medical aid
premiums and the expected number of deaths and withdrawals. The following
key actuarial assumptions were used:
Discount rate 9,60% 9,60% – –
Healthcare cost inflation 7,00% 7,00% – –
Mortality rate:
Mortality before retirement has been based on the SA 85-90 mortality table and on the PA(90) ultimate mortality table adjusted less one year of age for post-
retirement medical benefits.
The post-retirement medical benefit obligation is based on the assumption that the required contributions to the medical aid scheme will increase at a faster rate
than the normal inflation rate. The discount rate and the healthcare cost inflation assumptions should be considered in relation to each other.
The sensitivity of the liability is illustrated on the assumption of a 1% increase/decrease in the healthcare cost and consumer price inflation compared to the
valuation assumptions keeping the investment return assumption constant:
2017 2016
N$’000
% change
in liability N$’000
% change
in liability
Sensitivity – Group
Base liability as at 30 June 2017 13 841 13 447
Discount rate +1% 12 480 (10) 12 125 (10)
Discount rate -1% 15 479 12 15 038 12
Medical subsidy inflation rate +1% 15 492 12 15 051 12
Medical subsidy inflation rate -1% 12 447 (10) 12 093 (10)
Post-retirement mortality PA(90) – 3 years 14 353 4 13 944 4
Post-retirement mortality PA(90) – 1 years 13 335 (4) 12 955 (4)
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
95Bidvest Namibia Annual Integrated Report 2017
Group Company
2017 2016 2017 2016
14. Post-employment obligations (continued)
14.1 Post-retirement medical benefit obligation (continued)
Current employees 11 12
Retirees 30 30
Total number of beneficiaries 41 42
This benefit is available to all employees employed prior to
31 December 1998 for Manica Group Namibia (Proprietary) Limited and
its subsidiaries and Rennies Travel (Namibia) (Proprietary) Limited. The benefit
is available to all employees employed prior to 2004 by Taeuber & Corssen
SWA (Proprietary) Limited and its subsidiaries, except for those to whom
the liability has been paid out in cash.
N$’000 N$’000 N$’000 N$’000
14.2 Statutory severance benefits
Liability recognised in statement of financial position:
Defined benefit obligation 3 115 2 589 – –
Changes in the present value of the defined statutory severance benefit
Opening defined benefit obligation 2 589 3 020 – –
Total expense – as shown below 1 061 (152) – –
Benefit payments (535) (279) – –
Closing defined benefit obligation 3 115 2 589 – –
The amounts recognised in the statement of comprehensive income are
as follows:
Interest cost 137 187 – –
Actuarial loss (2 198) (3 206) – –
Current service cost 3 122 2 867 – –
1 061 (152) – –
The principal actuarial assumptions used for accounting purposes are:
Discount rate 9,89% 10,50% n/a n/a
Salary increase rate 6,50% 6,10% n/a n/a
N$’000 N$’000 N$’000 N$’000
15. Trade and other payables
Trade payables – third parties 335 567 270 988 – –
Trade payables – related parties (note 36) 11 336 12 657 – –
Accruals 46 025 49 954 – –
Unpresented cheques 3 090 2 339 45 36
Contingent consideration – 5 499 – –
Customer deposits 12 410 4 993 – –
Financial instruments trade and other payables 408 428 346 430 45 36
Accruals – employee liabilities 41 559 52 181 – –
Receiver of Revenue – VAT 9 213 10 481 – –
Non-financial instruments trade and other payables 50 772 62 662 – –
459 200 409 092 45 36
At 30 June 2017, the carrying amounts of accounts payable approximate their fair values due to the short-term maturities of these liabilities.
96 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
16. Borrowings
Bank overdraft (note 10) 73 717 71 097 – –
Floor plan liabilities (i) 148 186 152 812 – –
Secure bank loan (ii) 12 927 20 739 – –
Finance lease liabilities (iii) 3 634 3 947 – –
Other 989 989 – –
239 453 249 584 – –
Non-current assets 10 230 17 398 – –
Current assets 229 223 232 186 – –
239 453 249 584 – –
(i) The floor plans were provided by Ford Financial Services South Africa
(Proprietary) Limited, First National Bank of Namibia Limited and Bank
Windhoek Limited. The floor plans carry interest at: Ford Financial
Services South Africa (Proprietary) Limited (South African prime plus 2%),
First National Bank of Namibia Limited (Namibian prime less 0,75%) and
Bank Windhoek Limited (Namibian prime less 0,5%). The floor plans are
repayable within 12 months. The floor plan with Ford Financial Services
South Africa (Proprietary) Limited is secured by a property in Lenkow
(Proprietary) Limited to an amount of N$6 million and N$50 million is
secured by a surety given by Bidvest Namibia Limited. A financial interest
is registered over vehicles inventory as security for the floor plan liability.
(ii) The loan was provided by Banco Fomento de Angola and carries interest
at a fixed rate of 11,00% and is repayable over four years. The loan is
secured by a fishing vessel, MFV St Padarn, which has a book value
of N$33,9 million. The fair value of the loan is N$12,9 million at the
Namibian prime rate of 10,75%.
(iii) Capitalised finance lease liabilities carry interest at the Namibian prime
rate of 10,75% and have repayment terms of between three and seven
years. The capitalised finance lease liabilities are secured by a leasehold
property with a carrying amount of N$3,3 million.
17. Contingencies and commitments
Capital commitments
The following commitments were entered into in respect of capital
expenditure at year-end:
Approved by directors and contracted 16 214 8 416 – –
Approved by directors but not yet contracted 82 398 65 076 – –
The committed expenditure relates to property, plant and equipment
and will be financed by available resources and bank facilities.
Commitment to provide loans – 7 458 – 7 458
Contingent liabilities
In 2016, Walvis Bay Stevedoring (Proprietary) Limited won its arbitration case which relates to the 64 employees that were retrenched in the 2014 financial year.
The union has appealed against the ruling and there is uncertainty whether the arbitration case will result in a favourable outcome. The total exposure to reinstate
the affected employees is N$19,8 million.
Rennies Travel (Namibia) (Proprietary) Limited issued travel related vouchers of N$1,9 million in favour of its customers for services to be rendered subsequent to
the reporting date. This results in a maximum exposure of N$1,9 million in favour of its service providers. The customers were not invoiced for these vouchers at
the reporting date.
Namsov Fishing Enterprises (Proprietary) Limited is defending a legal case brought by a former employee. If the defence against the case is unsuccessful, then
cost claimed by the former employee could amount to N$18 million.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
97Bidvest Namibia Annual Integrated Report 2017
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
17. Contingencies and commitments (continued)
Guarantees by third parties
Guarantee facilities have been arranged for the Group with Standard Bank
Namibia Limited and First National Bank Namibia Limited to a maximum
exposure of: 98 335 70 982 289 455 232 360
Guarantees in favour of:
Customs and Excise 64 383 60 283 – –
Maersk (Proprietary) Limited 650 650 – –
Erongo Regional Electricity Distributor 148 148 – –
Philip Morris South Africa (Proprietary) Limited – 3 100 – –
Namibian Ports Authority 5 100 6 300 – –
Suretyships for bank overdrafts 26 070 – 289 455 232 360
Other 1 984 501 – –
98 335 70 982 289 455 232 360
Most of the facilities above have been secured by interlinking suretyships
provided by the Group and its subsidiaries restricted to the amount of the limit
allocated to each subsidiary. The bank overdrafts at the reporting date
amounted to N$73,7 million (2016: N$71,1 million) (note 16). The security
for the floor plan liabilities provided by the Company at the reporting date
amounted to N$148,2 million (2016: N$152,8 million).
The Group has issued letters of support to third parties for various subsidiaries
in the Group amounting to N$38,5 million.
18. Revenue
Sale of goods 3 411 569 3 554 954 – –
Rendering of services 310 441 249 810 – –
Dividend income – subsidiaries – – 38 000 157 880
Dividend income – local – – 1 254 938
Commissions and fees earned 54 438 53 832 – –
3 776 448 3 858 596 39 254 158 818
Revenue is derived as follows:
Revenue including disbursements 4 232 823 4 275 949 39 254 158 818
Disbursements on behalf of principals and clients (456 375) (417 353) – –
3 776 448 3 858 596 39 254 158 818
Related cost of sales:
Sale of goods 3 003 415 2 929 966 – –
Rendering of services 179 982 176 979 – –
Commissions and fees earned 21 002 20 190 – –
3 204 399 3 127 135 – –
19. Other income
Profit on disposal of property, plant and equipment 6 331 218 – –
Dividend income – local 4 007 2 175 – –
Other 1 964 10 627 – –
12 302 13 020 – –
20. BEE share-based payment reserve
The BEE ownership transaction charge is recognised as the difference of the
net value of the consideration received and the net value of shares issued 16 988 16 988 16 988 16 988
During the 2010 financial year the Bidvest Group Limited concluded agreements with the BEE partners to facilitate the acquisition of an effective interest of 15,46%
in Bidvest Namibia Limited. The BEE groups are Endeni Investments (Proprietary) Limited (0,66%) and Ovanhu Investments (Proprietary) Limited (14,80%).
The transaction was valued at N$207 360 000 and was financed by the issue of N$170 969 834 A class and N$42 742 460 B class preference shares and a loan
from Bid Industrial Holdings (Proprietary) Limited. The fair value recognised at the grant date was N$16 987 708 and was determined using the Monte Carlo
simulation.
98 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
21. Operating profitOperating profit from continuing operations is stated after charging:
Auditors’ remuneration
Audit fees 7 687 7 719 – –
Other services 665 336 – –
8 352 8 055 – –
Share-based payments 360 1 992 – –
Depreciation and impairment of property, plant and equipment 71 955 71 302 – –
Amortisation and impairment of intangible assets 9 475 11 457 – –
Statutory severance benefits – current service cost 3 122 2 867 – –
Non-executive directors’ compensation
Attendance fees 1 750 1 272 – 407
Operating lease charges
Premises 25 956 20 015 – –
Equipment and vehicles 8 660 8 070 – –
34 616 28 085 – –
Foreign exchange losses/(gains)
Realised 3 068 (2 269) – –
Unrealised 14 109 (2 876) – –
17 177 (5 145) – –
Expenses by nature
Administrative fees 4 099 3 528 – –
Auditor’s remuneration 8 352 8 055 – –
Bad debts written off 3 818 2 072 – –
Inventory, materials and consumables 2 430 355 2 375 922 – –
Depreciation, amortisation and impairments 81 430 84 469 – –
Non-executive directors’ attendance fees 1 750 1 272 – 407
Employee salaries and related benefits 597 977 595 728 – –
Foreign exchange gains 17 177 (5 145) – –
Fuel and lubricants for fishing vessels 120 947 111 878 – –
Operating lease charges 34 616 28 085 – –
Other expenses 201 424 238 535 432 434
Port-related costs, cold storage costs 52 575 51 591 – –
Quota-related fees 135 115 82 608 – –
Royalties paid 180 180 – –
Total cost of sales and administration expenses by nature 3 689 815 3 578 777 432 841
22. Finance incomeInterest income – bank 23 198 22 461 387 672
Interest income – related party 8 607 11 489 62 73
Interest income – other 2 614 1 933 690 692
34 419 35 883 1 139 1 437
Interest income is derived from loans and receivables at amortised cost.
23. Finance costsCash items
Interest expense – bank overdraft 5 710 6 210 – –
Interest expense – floor plan 13 612 10 239 – –
Interest expense – other 1 424 1 222 – –
20 746 17 671 – –
Interest expense is derived from financial liabilities at amortised cost.
Non-cash item
Interest expense – post-retirement medical obligation 1 216 1 079 – –
21 962 18 750 – –
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
99Bidvest Namibia Annual Integrated Report 2017
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
24. Staff and retirement benefit costs
Salaries and wages paid to employees 567 133 565 509 – –
Employer contributions to retirement benefits of current employees 30 844 30 219 – –
597 977 595 728 – –
At 30 June 2017 approximately 3 481 (2016: 2 738) staff members
were employed by the Group.
25. Income tax
Namibian normal tax
Current income tax – current year 82 332 120 725 363 458
– prior year (103) – – –
82 229 120 725 363 458
Deferred income tax – current year (27 061) (27 177) – –
– change in rate – (5 965) – –
– prior year (26) 665 – –
(27 087) (32 477) – –
Non-Namibian tax
Foreign withholding taxes 2 184 – – –
57 326 88 248 363 458
Reconciliation of the tax expense
Reconciliation between applicable tax charge and the profit before tax:
Profit before tax 119 144 323 362 39 961 159 414
Tax at the applicable tax rate of 32% (2016: 32%) 38 126 103 476 12 788 51 012
Exempt income (8 893) (20 034) (12 561) (50 822)
Change in tax rate – (5 965) – –
Prior period adjustment (129) 665 – –
Non-deductible expenses 374 1 523 136 137
Lower foreign tax rates 77 – – –
Withholding tax on foreign income 2 184 – – –
Deferred tax asset not raised 25 587 8 583 – –
57 326 88 248 363 328
Income tax assets and liabilities
Current tax assets
Tax refunds receivable 6 042 1 927 – –
Current tax liabilities
Income tax payable 2 126 8 777 36 46
26. Retirement benefit information
Retirement fund
The total value of contributions to the Bidvest Namibia Limited Retirement
Fund during the year amounted to:
Members’ contributions 15 277 15 612 – –
Employer’s contributions 30 844 30 219 – –
46 121 45 831 – –
This is a defined contribution plan fund and is regulated by the Pension Fund
Act. The fund is valued actuarially on an annual basis. The fund was last
valued at 30 June 2016 and its assets were found to exceed its actuarially
calculated liabilities.
Medical aid funds
The total value of company contributions during the year 22 767 22 677 – –
100 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
27. Share-based payments
The Bidvest Namibia Share Incentive Scheme grants options to executive directors and senior employees of the Group to acquire shares in the Company. The share
option scheme has been classified as an equity-settled scheme and therefore an equity-settled share-based payment reserve has been recognised.
Each employee’s share option converts into one ordinary share of the Company on exercise. No amounts are paid or payable by the recipient on receipt of the
option. The options carry no rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.
The Bidvest Namibia remuneration committee recommends the number of options to be granted during a financial year and provides guidelines which include the
individual’s performance and the individual’s ability to influence Bidvest Namibia’s results. The Group Chief Executive Officer and Group Financial Director then
propose the number of options to be allocated to the various employees, subject to approval by the board of directors.
Number Grant date Expiry date
Exercise
price
(N$)
Fair value
at grant
date
(N$)
Option series
1. Granted on 23 May 2013 2 015 000 23 May 2013 22 May 2023 11,30 12,55
2. Granted on 22 May 2015 1 477 500 22 May 2015 21 May 2025 9,90 10,99
The average share price of Bidvest Namibia Limited during the year was N$9,20 (2016: N$10,50).
Options vest in three tranches on the third, fourth and fifth year’s anniversaries respectively from the initial grant date. Options lapse upon the termination of an
option holder’s employment in the Group.
Options granted were priced using the Black-Scholes-Merton model. Expected volatility is based on the historical share price volatility.
Inputs to the model: Option series
1 2
Grant date share price N$12,55 N$10,99
Exercise price N$11,30 N$ 9,90
Expected volatility 45% 30%
Option life 5 – 10 years 5 – 10 years
Dividend yield 5,04% 5,00%
Risk-free interest rate 6,00 – 6,75% 8,00 – 8,93%
Reconciliation of movements in share options during the year:
2017 2016
Number
Average
price
(N$) Number
Average
price
(N$)
Option series 1
Beginning of the year 1 461 000 11,30 1 576 000 11,30
Granted during the year – –
Resignations (302 000) (115 000)
End of year 1 159 000 1 461 000
Option series 2
Beginning of the year 1 327 500 9,90 1 477 500 9,90
Granted during the year – –
Resignations (222 000) (150 000)
End of year 1 105 500 1 327 500
2017
N$’0002016
N$’000
Equity-settled share-based payment reserve
Balance at the beginning of the year 4 192 2 200
Share-based payment expense recognised relating to share options 1 325 2 180
Resignations (965) (188)
Balance at the end of year 4 552 4 192
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
101Bidvest Namibia Annual Integrated Report 2017
Group Company
2017’000
2016’000
2017’000
2016’000
28. Earnings per shareWeighted average number of shares
Weighted average number of shares in issue for basic earnings per share and headline earnings per share: 211 953 211 953 – –
No adjustments to the weighted average number of shares were considered necessary as outstanding staff share options do not have a dilutive effect.
N$’000 N$’000 N$’000 N$’000
Attributable earnings
Basic earnings per share are based on profit attributable to equity holders of the Company. 50 610 184 222 – –
Basic earnings per share (cents) 23,88 86,92 – –
Headline earnings
Profit attributable to equity holders of the Company 50 610 184 222 – –
Profit on the disposal of property, plant and equipment (4 300) (1 023) – –
Bargain purchase (140) – – –
Impairment of intangible assets 57 2 267 – –
Non-controlling interest in equity 1 262 (2 850) – –
47 489 182 616 – –
Headline earnings per share (cents) 22,41 86,16 – –
No unissued shares have a dilutive effect.
29. DividendsAn interim dividend for the year amounting to N$8,5 million (2016: N$42,4 million) was declared and paid to shareholders registered on 10 March 2017. This amounted to an interim dividend paid of 4,0 cents per share, based on ordinary shares in issue of 211 953 002.
A final dividend amounting to N$12,7 million (2016: N$38,2 million) was declared payable to shareholders registered on 1 September 2017, payable on 22 September 2017. This amounts to a final dividend payable of 6,0 cents per share, based on ordinary shares in issue of 211 953 002.
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
30. Operating leasesThe Group has entered into various operating lease agreements in respect of premises.
Leases which have fixed determinable escalations are charged to profit or loss on a straight-line basis and liabilities are raised for the difference between the actual lease expense and the charge recognised in profit or loss. The liabilities are classified based on the timing of the reversal which will occur when the actual cash flow exceeds the income statement amounts.
Operating lease liability 1 828 1 580 – –
Less: Current portion included in trade and other payables (384) (510) – –
Non-current portion 1 444 1 070 – –
Operating lease commitments
At year-end, the Group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows:
Land and buildings
Due within one year 20 467 24 650 – –
Due between one year and five years 36 244 28 952 – –
Due thereafter 1 804 3 414 – –
58 515 57 016 – –
Equipment
Due within one year 629 2 073 – –
Due between one year and five years 95 4 044 – –
724 6 117 – –
Exposure 59 239 63 133 – –
102 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
31. Finance lease liability
Minimum lease payments due
Due within one year 34 619 – –
34 619 – –
Less: Future finance charges – (11) – –
Present value of minimum lease payments 34 608 – –
Current liabilities 34 608 – –
34 608 – –
Minolco (Namibia) (Proprietary) Limited signed an agreement with Standard
Bank Namibia Limited to cede the rights relating to rental agreements signed
between Minolco (Namibia) (Proprietary) Limited and customers to Standard
Bank Namibia Limited while maintaining the service obligations related thereto.
The average lease period is less than one year and the average effective
borrowing rate is the prime interest rate.
32. Cash generated/(absorbed) by operations
Profit before income tax 119 144 323 362 39 961 159 414
Adjustments for:
Depreciation and impairment on property, plant and equipment 71 955 71 302 – –
Amortisation and impairment of intangible assets 9 475 11 457 – –
Share-based payments reserve 360 1 992 – –
Profit on disposal of property, plant and equipment (6 331) (218) – –
Adjustment of intangible assets – 558 – –
Finance income (34 419) (35 883) (1 139) (1 437)
Dividends received (4 007) (2 175) (39 254) (158 818)
Finance costs (excluding retirement medical obligation) 20 746 17 671 – –
Bargain purchase (140) – – –
Increase/(decrease) in statutory severance obligation 526 (431) – –
(Decrease) in post-retirement medical obligation (669) (644) – –
Interest on post-retirement medical obligation 1 216 1 079 – –
Movement in associates (6 854) (10 517) – –
Movement in joint venture 82 (2 873) – –
Increase in lease charges for straight-lining of leases 374 220 – –
Changes in working capital (excluding the effects of business acquisitions and disposals and exchange rate differences):
(Increase)/decrease inventories (43 635) 100 455 – –
Decrease biological assets 708 651 – –
Decrease/(increase) trade and other receivables 3 712 38 373 22 (5)
Increase/(decrease) trade and other payables 52 824 (126 192) 9 9
185 067 388 187 (401) (837)
33. Income tax paid
Balance receivable/(due) at the beginning of the year (6 850) 6 321 (46) (20)
Current tax for the year (82 229) (120 725) (363) (458)
Withholding tax on foreign income (2 184) – – –
Assumed in a business combination (117) (1 360) – –
Balance due/(receivable) at the end of the year (3 916) 6 850 36 46
(95 296) (108 914) (373) (432)
34. Non-cash flow movement
Proceeds on disposal of property, plant and equipment – 56 030 – –
Capitalised leased asset 463 – – –
463 56 030 – –
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
103Bidvest Namibia Annual Integrated Report 2017
Group
2017N$’000
2016N$’000
35. Effects of exchange rate fluctuations on cash and cash equivalents – Group
Property, plant and equipment 13 311 (12 426)
Intangibles 2 181 (4 677)
Movement in foreign currency translation reserve (8 316) 11 857
Minority shareholders (8 571) 12 341
Net borrowings (1 182) (1 029)
Trade and other receivables (550) (4 926)
Inventories 1 990 (2 151)
Trade and other payables (5 745) 7 984
(6 882) 6 973
36. Related-party balances and transactions
Relationships
During the year the Group, in the ordinary course of business, entered into various sale and purchase transactions with its holding company and all other
related parties.
The transactions occurred under terms that are negotiated between the parties.
The following parties are included as related parties:
The Company is controlled by The Bidvest Group Limited, a company registered in the Republic of South Africa and listed on the JSE Limited. All its subsidiaries,
associates and joint ventures are considered to be related parties. Please refer to the directors’ report for a list of subsidiaries, associates and joint ventures.
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
The following persons are included as key management:
SI Kankondi
M Samson
GS Hough
T Weitz
T Mberirua
H Feris
W Schuckmann
Non-executive directors’ compensation
Attendance fees 1 750 1 272 – –
Executive directors and key management compensation
Salaries and other short-term employee benefits 16 250 20 894 – –
Receivable from related parties
Loans to related parties
Bidvest Namibia Commercial Holdings (Proprietary) Limited – (i) – – 317 148 335 404
Bidvest Namibia Management Services (Proprietary) Limited – (i) – – 10 734 24 753
Bidvest Namibia Property Holdings (Proprietary) Limited – (i) – – 144 995 148 995
Bidvest Namibia Information Technology (Proprietary) Limited – (i) – – 4 521 5 021
Carapau Fishing (Proprietary) Limited – (iv) 66 418 83 708 – –
66 418 83 708 477 398 514 173
Non-current asset 36 203 55 445 – –
Current asset 30 215 28 263 – –
66 418 83 708 – –
The Group has provided a loan to Carapau Fishing (Proprietary) Limited, an associate company, in which it holds a 25% interest. The loan carries interest at the
Namibian prime rate of 10,75% and is repayable over 60 months and is secured by a marine bond over a fishing vessel owned by the associate company that has
a carrying amount of N$151,3 million.
104 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
36. Related-party balances and transactions (continued)
Trade receivables
Alimentar Carnes De Moçambique Limitada – (iv) – 7 448 – –
Bidvest Car Rental (Namibia) (Proprietary) Limited – (ii) 155 15 – –
Bidvest Paperplus (Proprietary) Limited – (ii) – 11 – –
Carapau Fishing (Proprietary) Limited – (iv) 11 442 6 560 – –
CaterPlus (Proprietary) Limited – (ii) 453 – – –
Express Air Services (Namibia) (Proprietary) Limited – (ii) – 93 – –
Manica Africa (Proprietary) Limited – (ii) 166 3 – –
Minolco (Proprietary) Limited – (ii) 50 146 – –
Namibia Bureau de Change (Proprietary) Limited – (iv) 13 139 – –
Pureau Fresh Water Company (Proprietary) Limited – (ii) – 2 – –
Royalserve Cleaning (Proprietary) Limited – (ii) – 154 – –
Safcor Freight (Proprietary) Limited – (ii) 9 196 – –
Solid State Power (Proprietary) Limited – (ii) 723 5 – –
13 011 14 772 – –
Payable to related parties
Trade payables
Bid Corporate Services (Proprietary) Limited – (ii) 162 126 – –
Bid Information Exchange (Proprietary) Limited – (ii) – 1 387 – –
BidOffice Furniture Manufacturing (Proprietary) Limited – (ii) 262 85 – –
Bidserv Industrial Products (Proprietary) Limited – (ii) – 18 – –
Bidvest Bakery Solutions (Proprietary) Limited – (ii) – 170 – –
Bidvest Car Rental (Namibia) (Proprietary) Limited – (ii) 77 99 – –
Bidvest Paperplus (Proprietary) Limited – (ii) – 147 – –
Blue Marine Frozen Foods (Proprietary) Limited – (ii) 1 425 2 070 – –
Carapau Fishing (Proprietary) Limited – (iv) 1 429 – – –
Cecil Nurse (Proprietary) Limited – (ii) 386 362 – –
Express Freight (Namibia) (Proprietary) Limited – (ii) – 1 – –
G Fox Swaziland (Proprietary) Limited – (ii) 39 – – –
Hortors Stationery (Proprietary) Limited – (ii) 41 45 – –
Kolok (Proprietary) Limited – (ii) 3 593 1 072 – –
Lithotech Sales Cape (Proprietary) Limited – (ii) 47 33 – –
Lithotech Listing and Logistics (Proprietary) Limited – (ii) 121 165 – –
Minolco (Proprietary) Limited – (ii) 1 012 – – –
Plumblink (South Africa) (Proprietary) Limited – (ii) 516 202 – –
Pureau Fresh Water Company (Proprietary) Limited – (ii) – –
Rennies Travel (Proprietary) Limited – (ii) 49 –
Royalserve Cleaning (Proprietary) Limited – (ii) – 41
Silveray Statmark Company (Proprietary) Limited – (ii) 354 1 282 – –
Sea World (Proprietary) Limited – (ii) – 575 – –
Seating (Proprietary) Limited – (ii) 375 550 – –
Steiner Hygiene (Proprietary) Limited – (ii) 261 344 – –
Voltex (Proprietary) Limited – (ii) 756 3 421 – –
Waltons (Proprietary) Limited – (ii) 431 462 – –
11 336 12 657 – –
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
105Bidvest Namibia Annual Integrated Report 2017
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
36. Related-party balances and transactions (continued)
Sales to related parties
Alimentar Carnes De Moçambique Limitada – (iv) 138 555 70 578 – –
Bidvest Car Rental (Namibia) (Proprietary) Limited – (ii) 273 252 – –
Bidvest Food Services (Proprietary) Limited – (ii) 1 786 426 – –
Bidvest Paperplus (Proprietary) Limited – (ii) 10 10 – –
Manica Africa (Proprietary) Limited – (ii) 346 241 – –
Patleys (Proprietary) Limited – (ii) – 14 900 – –
Royalserve Cleaning (Proprietary) Limited – (ii) 2 006 1 399 – –
Safcor Freight (Proprietary) Limited – (ii) 688 1 142 – –
Solid State Power (Proprietary) Limited – (ii) – 4 – –
Minolco (Proprietary) Limited – (ii) 25 3 – –
Carapau Fishing (Proprietary) Limited – (iv) 5 450 2 256 – –
Foreal Investments (Proprietary) Limited – (iii) 1 905 2 792 – –
151 044 94 003 – –
Finance income
Carapau Fishing (Proprietary) Limited – (iv) 8 607 11 489 – –
Purchases from related parties
Bidvest Afcom (Proprietary) Limited – (ii) 207 1 460 – –
Bid Information Exchange (Proprietary) Limited – (ii) – 11 – –
Bidoffice Furniture Manufacturing (Proprietary) Limited – (ii) 4 090 3 213 – –
Bidserv Industrial Products (Proprietary) Limited – (ii) – 183 – –
Bidvest Bakery Solutions (Proprietary) Limited – (ii) 1 226 3 358 – –
Bidvest Car Rental (Namibia) (Proprietary) Limited – (ii) 6 181 5 621 – –
Bidvest Paperplus (Proprietary) Limited – (ii) – 190 – –
Blue Marine Frozen Foods (Proprietary) Limited – (ii) 18 314 19 338 – –
Carapau Fishing (Proprietary) Limited – (iv) 12 517 8 423 – –
Cecil Nurse (Proprietary) Limited – (ii) 5 306 4 903 – –
Crown National (Proprietary) Limited – (ii) 25 – – –
Dauphin Office Seating S.A. (Proprietary) Limited – (ii) 46 552 – –
G Fox Swaziland (Proprietary) Limited – (ii) 196 – – –
Hortors Stationery (Proprietary) Limited – (ii) 1 492 791 – –
Kolok (Proprietary) Limited – (ii) 54 683 94 303 – –
Lithotech Listing and Logistics (Proprietary) Limited – (ii) 804 1 054 – –
Lithotech Sales Cape (Proprietary) Limited – (ii) 231 211 – –
Minolco (Proprietary) Limited – (ii) 21 236 27 063 – –
Namibia Bureau de Change (Proprietary) Limited – (iv) – 661 – –
Plumblink (South Africa) (Proprietary) Limited – (ii) 4 519 2 087 – –
Royalserve Cleaning (Proprietary) Limited – (ii) 70 35 – –
Sea World (Proprietary) Limited – (ii) 10 600 7 502 – –
Seating (Proprietary) Limited – (ii) 4 012 3 679 – –
Silveray Statmark Company (Proprietary) Limited – (ii) 10 385 7 288 – –
South African Diaries (Proprietary) Limited – (ii) – 55 – –
Steiner Hygiene (Proprietary) Limited – (ii) 1 952 2 199 – –
Voltex (Proprietary) Limited – (ii) 12 047 12 581 – –
Waltons (Proprietary) Limited – (ii) 8 483 12 508 – –
178 622 219 269 – –
106 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
36. Related-party balances and transactions (continued)Administration and royalty fees paid to related parties
Bid Corporate Services (Proprietary) Limited (royalties) – (ii) 290 267 – –
Bid Corporate Services (Proprietary) Limited (fees) – (ii) 960 880 – –
McCarthy Limited – (ii) 338 – – –
Waltons (Proprietary) Limited – (ii) 486 489 – –
Cecil Nurse (Proprietary) Limited – (ii) 1 386 1 307 – –
Minolco (Proprietary) Limited – (ii) 819 765 – –
4 279 3 708 – –
Administration fees received from related parties
Carapau Fishing (Proprietary) Limited – (iv) 11 260 11 984 – –
Quota rental fees paid to related parties
Spoto Fishing (Proprietary) Limited 14 210 13 887 – –
The Group paid quota rental fees to the above mentioned company. M Shipanga is a director of Spoto Fishing (Proprietary) Limited. S Kankondi, M Mokgatle-Aukhumes and M Shipanga hold indirect shareholdings in Spoto Fishing (Proprietary) Limited. These transactions occurred under terms that are market related.
(i) Direct subsidiary
(ii) Fellow subsidiary of the Group
(iii) M Shipanga is a director and shareholder in Foreal Investments (Proprietary) Limited and Oshivelelwa (Proprietary) Limited.
(iv) An associate of the Group.
Related-party transactions were carried out on terms and conditions as agreed between the parties.
37. Financial risk management37.1 Financial risk factors
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.
The financial risk management function is carried out by local management at a subsidiary level.
(a) Market risk
(i) Foreign exchange riskCurrency risk is created due to the influence of exchange rate fluctuations. The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar, euro, Angolan kwanza and Mozambique metical. Foreign exchange risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not the Group’s functional currency. The Group has a policy to consider the need to take out cover on outstanding foreign currency transactions on an ad hoc basis, as and when such transactions occur. Upon the final decision and discretion of management, cover is then taken out from time to time.
At 30 June 2017, if the currency had weakened/strengthened by 10% against the US dollar, euro and Angolan kwanza with all other variables held constant, post-tax profit for the year would not have been materially impacted. This can be seen in the analysis of foreign currency financial instruments at year-end:
Eurodenominated
’000
US dollardenominated
’000
Angola kwanzadenominated
’000Totals in
N$’000
Group
As at 30 June 2017
Other borrowings – – (174 444) (12 927)
Trade and other receivables 700 856 – 19 822
Cash and cash equivalents 5 4 250 1 327 355 180 111
Trade and other payables (27) (4 246) – (18 544)
678 860 1 152 911 168 462
Equivalent in N$ 9 792 46 574 112 096 168 462
Group
As at 30 June 2016
Other borrowings – – (248 889) (20 740)
Trade and other receivables 270 3 147 – 39 547
Cash and cash equivalents 323 2 617 835 894 138 548
Trade and other payables – (2 518) – (14 772)
593 3 246 587 005 142 583
Equivalent in N$ 9 223 58 919 74 441 142 583
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
107Bidvest Namibia Annual Integrated Report 2017
37. Financial risk management (continued)37.1 Financial risk factors (continued)
(a) Market risk (continued)
(ii) Price riskThe Group is not exposed to any significant commodity price risk or equity securities price risk.
(iii) Interest rate riskThe Group’s significant interest-bearing assets are cash and cash equivalents and loans granted. The Group also has significant interest-bearing
borrowings. The Group’s interest rate risk arises mainly from cash invested in current and call accounts, loans granted, from its bank overdraft
and borrowings.
The Group’s trade and other receivables and trade and other payables do not expose the Group to any significant interest rate risks due to their short-
term non-interest nature.
The table below provides the interest rates for monetary financial instruments at year-end:
Group Company
2017%
2016%
2017%
2016%
Cash and cash equivalents 3,76 5,39 6,78 4,17
Bank overdraft 8,75 8,75 – –
Other financial assets 5,50 5,50 – –
Floor plan liabilities 10,25 – 11,50 10,25 – 11,50 – –
Secure bank loan 11,00 11,00 – –
Cash flow sensitivity analysis for floating interest rate bearing instruments.
A change of 100 basis points in interest rates at the reporting date would have increased or (decreased) accumulated losses and surplus by the
amounts shown below. This analysis assumes that all other variables remain constant. The analysis was performed on the same basis for 2016.
Group Company
Effect on profit and equity Effect on profit and equity
2017N$’000
2016N$’000
2017N$’000
2016N$’000
Cash and cash equivalents 7 430 7 442 369 72
Floor plan liabilities 1 482 1 528 – –
Other financial assets 127 127 127 127
Secure bank loan 129 207 – –
108 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
37. Financial risk management (continued)37.1 Financial risk factors (continued)
(b) Credit risk
Credit risk arises from cash and cash equivalents, deposits with banks and financial institutions, as well as credit exposures to customers and committed
transactions. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history. The
Group has policies that limit the amount of credit risk exposure to any one financial institution, and cash transactions are limited to high credit quality financial
institutions. The Group’s credit risk relating to its loan to related party is mitigated as the loan to the associate company is secured by a marine bond over a
fishing vessel owned by the associate company. Bidvest Namibia Limited issued suretyships of N$289,5 million to commercial banks to secure overdraft
facilities of its subsidiaries.
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:
Group Company
Carrying amount Carrying amount
2017N$’000
2016N$’000
2017N$’000
2016N$’000
Trade receivables 382 482 370 099 – –
Related-party loans 66 418 83 708 477 398 514 173
Other financial assets 12 714 12 714 12 714 12 714
Other receivables 63 047 61 306 3 25
Trade and other receivables 524 661 527 827 490 115 526 912
Cash and cash equivalents 742 986 744 167 36 917 7 153
1 267 647 1 271 994 527 032 534 065
The ageing of the components of trade receivables at year-end was:
Gross2017
N$’000
Impairment2017
N$’000
Gross2016
N$’000
Impairment2016
N$’000
Group
Trade debtors
Not past due 279 715 (174) 303 698 (40)
Past due 1 – 30 days 57 916 (86) 48 301 (772)
Past due 31 – 90 days 29 855 (201) 14 012 (365)
Past due 91 – 180 days 10 930 (1 715) 5 088 (3 210)
Past due more than 180 days 19 255 (13 013) 18 233 (14 846)
397 671 (15 189) 389 332 (19 233)
Company
Trade debtors
Not past due – – – –
Other debtors
Not past due 3 – 25 –
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
109Bidvest Namibia Annual Integrated Report 2017
37. Financial risk management (continued)37.1 Financial risk factors (continued)
(b) Credit risk (continued)
Credit quality of financial assets
The Group has not renegotiated the terms of receivables and has collaterals or guarantees as security for all significant debtors. The Group limits its exposure
to credit risk by investing in high-quality creditworthy counterparties. Given these high credit ratings, the directors do not expect any counterparty to fail to
meet its obligations. The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if
available) or to historical information about counterparty default rates.
The Group only banks with high credit quality financial institutions. The Group has bank accounts with First National Bank of Namibia Limited, Standard Bank
Namibia Limited, Nedbank Namibia Limited and Bank Windhoek Limited.
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
Counterparties without external credit ratings net of provision for
impairment:
Other financial assets 12 714 12 714 – –
Other receivables 63 047 61 306 3 20
Loan to related party 66 418 83 708 – –
Angolan banks 125 023 95 181 – –
Trade receivables 382 482 370 099 – –
649 684 623 008 3 20
Counterparties with strong external credit ratings:
Cash and cash equivalents and money market funds
Cash on hand 1 018 1 162 – –
Old Mutual Corporate Fund 18 130 – 18 130 –
Bank Windhoek Corporate Fund 19 497 14 862 18 167 –
IJG Securities EMH Prescient Unit Trust Fund 69 11 950 – –
First National Bank of Namibia Limited 28 236 41 605 – –
Nedbank Namibia Limited 7 783 26 620 – –
Standard Bank Namibia Limited 512 240 519 369 620 7 113
Bank Windhoek Limited 30 990 33 418 – 40
617 963 648 986 36 917 7 153
The Group’s standard credit terms are cash on or before delivery, 0 and 30 days from statement date. The average credit period on sales of goods of the
Group is 30 days (2016: 38 days). In some instances interest is charged on overdue accounts at prime plus 2% on the outstanding balance. Some sales are
insured by a credit guarantee cover. Included in the past due trade and other receivables are balances totalling N$79,2 million (2016: N$66,2 million) with
no collateral, none of which in its own right is material to the Group.
The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the directors believe that there is no further credit
provision required in excess of the allowance for doubtful debts.
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and availability of funding through an adequate amount of committed credit facilities.
Due to the dynamic nature of the business, the Group aims at maintaining flexibility in funding by keeping committed credit lines available.
110 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
37. Financial risk management (continued)
37.1 Financial risk factors (continued)
(c) Liquidity risk (continued)
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the
contractual maturity date.
Less than
1 year
N$’000
Between 1
and 2 years
N$’000
Between 2
and 5 years
N$’000
Over
5 years
N$’000
Interest
adjustment
N$’000
Total
N$’000
Group
As at 30 June 2017
Bank overdraft 73 717 – – – – 73 717
Borrowings 159 903 5 695 1 784 198 (1 844) 165 736
Trade and other payables 408 428 – – – – 408 428
642 048 5 695 1 784 198 (1 844) 647 881
Group
As at 30 June 2016
Bank overdraft 71 097 – – – – 71 097
Borrowings 162 648 8 226 18 981 792 (12 160) 178 487
Trade and other payables 346 430 – – – – 346 430
580 175 8 226 18 981 792 (12 160) 596 014
Company
As at 30 June 2017
Trade and other payables 45 – – – – 45
As at 30 June 2016
Trade and other payables 36 – – – – 36
The average credit period on the purchase of certain goods from major creditors is current to 90 days. No interest is charged on the trade payables for the
first 30 to 90 days from the date of the invoice. Thereafter, interest is charged at varying rates ranging from nil to 30% per annum on the outstanding balance.
The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through committed credit
facilities with the Group’s bankers. The credit facilities of the Group are reviewed annually and consist of the following unsecured and secured bank
overdraft facilities:
Group Company
2017N$’000
2016N$’000
2017N$’000
2016N$’000
Unsecured bank overdraft facilities, reviewed annually and payable
on demand
Standard Bank Namibia Limited 225 200 198 500 – –
First National Bank of Namibia Limited 55 000 55 000 – –
Bank Windhoek Limited 500 500 – –
280 700 254 000 – –
Secured bank overdraft facilities, reviewed annually and payable
on demand
Nedbank Namibia Limited – 8 500 – –
– 8 500 – –
37.2 Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and
benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the
Group may adjust the amount of dividends paid to shareholders.
The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings
(including “current and non-current borrowings” as shown in the consolidated statement of financial position) less cash and cash equivalents. Total capital is
calculated as equity as shown in the consolidated statement of financial position plus net debt. The Group’s capital exceeds its net debt and thus the capital risk
is assessed as low.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
111Bidvest Namibia Annual Integrated Report 2017
37. Financial risk management (continued)
Loans and
receivables at
amortised
cost
N$’000
Financial
liabilities at
amortised
cost
N$’000
Total
N$’000
37.3 Financial instruments per category
Group
As at 30 June 2017
Financial assets
Trade and other receivables 445 529 – 445 529
Related-party loans 66 418 – 66 418
Other financial assets 12 714 – 12 714
Cash and cash equivalents 742 986 – 742 986
Financial liabilities
Bank overdraft – (73 717) (73 717)
Borrowings – (165 736) (165 736)
Trade and other payables – (408 428) (408 428)
Total financial instruments 1 267 647 (647 881) 619 766
Group
As at 30 June 2016
Financial assets
Trade and other receivables 431 405 – 431 405
Related-party loans 83 708 – 83 708
Other financial assets 12 714 – 12 714
Cash and cash equivalents 744 167 – 744 167
Financial liabilities
Bank overdraft – (71 097) (71 097)
Borrowings – (178 487) (178 487)
Trade and other payables – (346 430) (346 430)
Total financial instruments 1 271 994 (596 014) 675 980
Company
As at 30 June 2017
Financial assets
Trade and other receivables 477 401 – 477 401
Other financial assets 12 714 – 12 714
Cash and cash equivalents 36 917 – 36 917
Financial liabilities
Trade and other payables – (45) (45)
Total financial instruments 527 032 (45) 526 987
Company
As at 30 June 2016
Financial assets
Trade and other receivables 514 198 – 514 198
Other financial assets 12 714 – 12 714
Cash and cash equivalents 7 153 – 7 153
Financial liabilities
Trade and other payables – (36) (36)
Total financial instruments 534 065 (36) 534 029
112 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
37. Financial risk management (continued)
37.4 Fair value measurements
(a) Valuation
In terms of IFRS, the Group is required to measure certain assets and liabilities at fair value. The Group has established control frameworks and processes
to independently validate its valuation techniques and inputs used to determine its fair value measurements.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date, ie an exit price. Fair value is therefore a market-based measurement and when measuring fair value the Group uses the
assumptions that market participants would use when pricing an asset or liability under current market conditions, including assumptions about risk. When
determining fair value it is presumed that the entity is a going concern and the fair value is therefore not an amount that represents a forced transaction,
involuntary liquidation or a distressed sale.
Fair value measurements are determined by the Group on both a recurring and non-recurring basis.
Recurring fair value measurements Recurring fair value measurements are those for assets and liabilities that IFRS requires or permits to be recognised at fair value and are recognised in the
statement of financial position at reporting date. This includes financial assets, financial liabilities and non-financial assets that the Group measures at fair
value at the end of each reporting period.
Financial instrumentsWhen determining the fair value of a financial instrument, where the financial instrument has a bid or ask price (for example in a dealer market), the Group
uses the price within the bid-ask spread that is most representative of fair value in the circumstances. Although not a requirement, the Group uses the bid
price for financial assets or the ask/offer price for financial liabilities where this best represents fair value.
When determining the fair value of a financial liability or the Group’s own equity instruments the quoted price for the transfer of an identical or similar liability
or own equity instrument is used. Where this is not available, and an identical item is held by another party as an asset, the fair value of the liability or own
equity instrument is measured using the quoted price in an active market of the identical item, if that price is available, or using observable inputs (such as
the quoted price in an inactive market for the identical item) or using another valuation technique.
Where the Group has any financial liability with a demand feature the fair value is not less than the amount payable on demand, discounted from the first
date that the amount could be required to be paid where the time value of money is significant.
Non-financial assetsWhen determining the fair value of a non-financial asset, a market participant’s ability to generate economic benefits by using the assets in its highest and
best use or by selling it to another market participant that would use the asset in its highest and best use, is taken into account. This includes the use of the
asset that is physically possible, legally permissible and financially feasible.
Non-recurring fair value measurements Non-recurring fair value measurements are those triggered by particular circumstances and include the classification of assets and liabilities as non-current
assets or disposal groups held for sale under IFRS 5 where fair value less costs to sell is the recoverable amount, IFRS 3 business combinations where assets
and liabilities are measured at fair value at acquisition date, and IAS 36 impairments of assets where fair value less costs to sell is the recoverable amount.
These fair value measurements are determined on a case by case basis as they occur within each reporting period.
Other fair value measurementsOther fair value measurements include assets and liabilities not measured at fair value but for which fair value disclosures are required under another IFRS
eg financial instruments at amortised cost. The fair value for these items is determined by using observable quoted market prices where these are available
or in accordance with generally acceptable pricing models such as a discounted cash flow analysis. For all other financial instruments at amortised cost the
carrying value is equal to or a reasonable approximation of the fair value.
(b) Fair value hierarchy and measurements
The Group classifies assets and liabilities measured at fair value using a fair value hierarchy that reflects whether observable or unobservable inputs are
used in determining the fair value of the item. If this information is not available, fair value is measured using another valuation technique that maximises the
use of relevant observable inputs and minimises the use of unobservable inputs. The valuation techniques employed by the Group include, inter alia, quoted
prices for similar assets or liabilities in an active market, quoted prices for the same asset or liability in an inactive market, adjusted prices from recent arm’s
length transactions, option-pricing models, and discounted cash flow techniques.
Level 1Fair value is determined using unadjusted quoted prices in active markets for identical assets or liabilities where this is readily available and the price
represents actual and regularly occurring market transactions. An active market is one in which transactions occur with sufficient volume and frequency to
provide pricing information on an ongoing basis.
Level 2Fair value is determined using inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly such as quoted prices
for similar items in an active market or for an identical item in an inactive market, or valuation models using observable inputs or inputs derived from
observable market data.
Level 3 Fair value is determined using a valuation technique and significant inputs that are not based on observable market data (ie unobservable inputs) such as
an entity’s own assumptions about what market participants would assume in pricing assets and liabilities.
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
113Bidvest Namibia Annual Integrated Report 2017
37. Financial risk management (continued)
37.4 Fair value measurements (continued)
(b) Fair value hierarchy and measurements (continued)
The table below sets out the valuation techniques applied by the Group for recurring fair value measurements of assets and liabilities categorised as Level 1 and Level 3 in the fair value hierarchy:
Instrument
Fair
value
hierarchy
level
Valuation
technique
Description of valuation technique and
main assumptions
Observable
inputs
Significant
unobservable
inputs of
Level 3 items
Financial assets and liabilities not measured at fair value but for which fair value is disclosed
Level 3 Discounted
cash flows
The future cash flows are discounted using a
market related interest rate
Market interest
rates
Credit inputs
Biological assets Level 1 Market prices Fair value less estimated point of sale costs Market prices Not applicable
Assets held for sale Level 1 Market prices Fair value based on willing buyer and willing
seller basis
Market prices Not applicable
During the year there were no changes in the valuation techniques used by the Group.
38. Critical accounting estimates and judgements
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results.
The preparation of the Group’s financial statements necessitates the use of estimates, assumptions and judgements. These estimates and assumptions affect the
reported amounts of assets and liabilities at the reporting date as well as affecting the reported income and expenses for the year. Although estimates are based
on management’s best knowledge and judgement of current facts as at the reporting date, the actual outcome may differ from these estimates.
Estimated recoverable amount of certain cash-generating units
The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy. The recoverable amounts of cash-generating
units have been determined based on value-in-use calculations. These calculations require the use of estimates. Assumptions used are referred to under note 2.3.
Fishing vessels
The residual values of fishing vessels are based on valuations performed by independent external valuators. Revaluations are made with sufficient regularity to
ensure that the carrying amounts do not differ materially from the revalued amounts. The residual values are calculated using management’s best estimates and
using the exchange rates at the reporting date.
Deferred taxation assets
Deferred taxation assets are recognised to the extent that it is probable that taxable income will be available against which they can be utilised. Management
estimates that there will be sufficient taxable profit in the future against which to utilise the deferred tax asset.
Contingent liabilities
Contingent liabilities are raised based on management’s assessment of whether a possible obligation exists whose existence will be confirmed by the occurrence
or non-occurrence of one or more uncertain events. Contingent liabilities which could not previously be recognised as liabilities due to the uncertainty surrounding
the amount or the outcome of the event, are recognised as liabilities as soon as there is certainty that the outcome of an event will not be in favour of the Group
or as soon as the amount can be measured reliably. Proceeds received from the Group’s insurers as compensation for an unfavourable outcome of a contingent
event are accounted for separately from the liability arising from the contingent event.
Asset lives and residual values
Property, plant and equipment is depreciated over its useful life taking into account residual values, where appropriate. The actual lives of the assets and residual
values are assessed annually and may vary depending on a number of factors. In reassessing asset lives, factors such as technological innovation, product life
cycles and maintenance programmes are taken into account. Residual value assessments consider issues such as future market conditions, the remaining life of
the asset and projected disposal values.
Investment in associate
Industria Alimentar Carnes Moçambique Limitada has been adversely impacted by the depreciation of the local Mozambique currency and as result, at year-end
the Group share of the net asset value of the Company was less than the carrying value of the investment at year-end by N$19 million. The fair value determined
using the cash flow projections of the operating activities and the fair value of the land and buildings of the associate was compared to the carrying value, based
on this, management is confident that the net asset value will improve therefore no impairment of the investment was deemed necessary.
114 Bidvest Namibia Annual Integrated Report 2017
Notes to the financial statements – continuedfor the year ended 30 June
39. Acquisition of subsidiary
The Group acquired 100% of the shares of Bidvest Prestige Cleaning (Proprietary) Limited (Prestige) therefore obtaining control of the company with effect 1 June
2017. Prestige was acquired from The Bidvest Group. Prestige is a company operating in Namibia. Taking control of Prestige will enable the management of Bidvest
Namibia to take over the decision-making of the company.
Identifiable assets acquired and liabilities assumed
The following table summarises the acquisition date fair value of assets and liabilities acquired.
N$’000
Property, plant and equipment 862
Inventories 31
Trade and other receivables 971
Cash and cash equivalents 1 604
Total assets 3 468
Deferred tax liabilities 182
Taxation 117
Trade and other payables 3 029
Total liabilities 3 328
Total identifiable net assets acquired 140
Bargain purchase
Negative goodwill arising from the acquisition has been recognised as follows.
Consideration transferred –
Fair value of identifiable net assets (140)
Bargain purchase (140)
The bargain purchase gain has been included in administration expenses.
40. Events after the end of the reporting period
The Group through its subsidiary, Taeuber & Corssen SWA (Proprietary) Limited, lost a distribution agreement with Parmalat with effect from 31 August 2017.
41. Standards and amendments issued
At the date of authorisation of these annual financial statements, the following standards were in issue but not yet effective, and were not early adopted. The Group
intends to adopt these standards when they become effective. Management has not yet assessed the impact of these new and revised standards and interpretations
on the Group.
New/Revised International Financial Reporting Standards
Effective for annual
periods beginning
on or after
IFRS 9 Financial Instruments – Finalised version, incorporating requirements for classification and measurement, impairment,
general hedge accounting and derecognition.
1 January 2018
IFRS 15 Clarifications to IFRS 15 1 January 2018
IFRS 16 Amendments as the result of the first comprehensive review 1 January 2019
IAS 12 Amendments regarding the recognition of deferred tax assets for unrealised losses 1 January 2017
IFRS 10
and IAS 28
Sale or contribution of assets between an investor and its associate or joint venture To be determined
GROUP OVERVIEW
PERFORMANCE OVERVIEW
CONSOLIDATED AND SEPARATE FINANCIAL
STATEMENTS
115Bidvest Namibia Annual Integrated Report 2017
Shareholders’ diary
Financial year-end 30 June
Annual general meeting November
Reports and accounts
Interim report for the half year ending 31 December February/March
Announcement and annual results August/September
Annual report September/October
Distributions
Interim distribution March
Final distribution September
116 Bidvest Namibia Annual Integrated Report 2017
Administration
Bidvest Namibia LimitedIncorporated in the Republic of Namibia
Registration number: 89/271
Share code: BVN
ISIN code: NA000A0Q5TN0
Company secretary Ms Veryan Hocutt
Registered address1 Ballot Street, Windhoek
(PO Box 6964, Ausspannplatz, Windhoek, Namibia)
Telephone: +264 (61) 417 450
Facsimile: +264 (61) 229 920
Sponsor and corporate adviserPSG Konsult (Namibia)
Member of the Namibian Stock Exchange
Registration Number 98/528
5 Conradie Street
Windhoek, Namibia
(PO Box 196, Windhoek, Namibia)
Telephone: +264 (61) 378 900
Facsimile: +264 (61) 378 901
Commercial bankersStandard Bank Namibia Limited
Registration Number 78/01799
Standard Bank Centre, Post Street Mall
Windhoek, Namibia
(PO Box 3327, Windhoek, Namibia)
Telephone: +264 (61) 294 9111
Facsimile: +264 (61) 294 2555
Transfer secretariesTransfer Secretaries (Proprietary) Limited
Registration number 93/713
4 Robert Mugabe Avenue, Windhoek
Windhoek, Namibia
(PO Box 2401, Windhoek, Namibia)
Telephone: +264 (61) 227 647
Facsimile: +264 (61) 248 531
Legal practitionersH.D. Bossau & Co
15th Floor, Frans Indongo Gardens
19 Dr Frans Indongo Street
Windhoek, Namibia
(PO Box 1975, Windhoek, Namibia)
Telephone: +264 (61) 370 850
Facsimile: +264 (61) 370 855
Koep & Partners
33 Schanzen Road
Windhoek, Namibia
(PO Box 3516, Windhoek, Namibia)
Telephone: +264 (61) 382 800
Facsimile: +264 (61) 382 888
Auditors Deloitte & Touche
Registered Accountants and Auditors
ICAN practice number 9407
Deloitte Building, Maerua Mall Complex
Jan Jonker Road
Windhoek, Namibia
(PO Box 47, Windhoek, Namibia)
Telephone: +264 (61) 285 5000
Facsimile: +264 (61) 285 5050
Websitewww.bidvestnamibia.com.na
Email: [email protected]
Ethics lineFree call: 0800 28 68 82
Cellular free call: 081 91 847
Email: [email protected]
www.bidvestnamibia.com.na
Namibia