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Report of the independent auditors To the members of African Bank Investments Limited INTRODUCTION We have audited the annual financial statements and group annual financial statements set out on pages 91 to 131 for the year ended September 2003. These annual financial statements are the responsibility of the company’s directors. Our responsibility is to express an opinion on the financial statements based on our audit. SCOPE We conducted our audit in accordance with statements of South African Generally Accepted Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An audit includes: • Examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; • Assessing the accounting principles used and significant estimates made by management; and • Evaluating the overall financial statements presentation. OPINION In our opinion the financial statements fairly present the financial position of the company and the group as at 30 September 2003, and the results of their operations and cash flow information for the year then ended in conformity with South African Statements of Generally Accepted Accounting Practice and in the manner required by the Companies Act. Deloitte & Touche Chartered Accountants (SA) Registered Accountants and Auditors Johannesburg 5 December 2003 African Bank Investments Limited 90
Directors’ report 30 September 2003 The directors present their report together with the audited annual financial statements for the twelve months ended 30 September 2003. NATURE OF BUSINESS ABIL is a holding company to subsidiaries involved in the provision and underwriting of unsecured term finance. ABIL’s subsidiaries include African Bank Limited (“African Bank”), the market leader in the provision of unsecured term finance to the formally employed mass market who have traditionally been under-serviced in their credit needs, The Standard General Insurance Company Limited (“Stangen”), which provides life assurance products to the African Bank client base and Theta Investments (Pty) Limited (“Theta“), which has been ABIL’s private equity operation and new business incubator. Theta is currently undergoing a restructuring, with the major operating businesses being divisionalised into African Bank, and the remaining businesses that were either unsuccessful or failed to achieve critical mass being sold or closed down. This process will result in Theta becoming dormant and its capital base being injected into African Bank. The major part of this process has been completed and the remainder is expected to be finalised early in the 2004 financial year. SHARE CAPITAL At 30 September 2003, the issued share capital totalled 497 155 564 (2002: 497 155 564) shares of 2,5 cents each representing R12,4 million (2002: R12,4 million). ABIL SHARES HELD BY SUBSIDIARY COMPANIES The ABIL Employee Share Trust held 2 945 286 ABIL shares at the year-end with an original cost of R23,9 million. Stangen held 20 000 000 ABIL shares at the year-end with an original cost of R124,7 million. POST-BALANCE SHEET EVENT The only significant post-balance sheet event since the group’s financial year-end on 30 September 2003 was the declaration of a final dividend for the 2003 financial year of 31 cents per ordinary share and a special dividend of 100 cents per ordinary share. MAJOR CAPITAL EXPENDITURES The group made total additions to its fixed assets of R82,6 million during the past financial year, with R58,5 million being spent on computer systems and related software. REGULATORY APPROVAL As at the date of this directors’ report, the following regulatory approvals from the South African Reserve Bank were still outstanding: • Application in terms of section 54 to transfer the business conducted by The African Bank Development Finance division of African Bank to African Contractor Finance Corporation, a wholly owned subsidiary of Theta Investments. The group financial results will not require adjustment should this approval not be obtained. • Section 52 applications in terms of which African Contractor Finance Corporation acquires 100% of Dedela Securities (Pty) Limited. DIVIDENDS 91 2003 2002 cents cents Ordinary dividends Interim, paid on 17 June 2003 to shareholders registered on 14 June 2003 25,0 12,0 Final, payable on 15 December 2003 to shareholders registered on 12 December 2003 31,0 18,0 56,0 30,0 Special dividend Payable on 15 December 2003 to shareholders registered on 12 December 2003 100,0 – African Bank Investments Limited
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African Bank Investments Limited AN
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2,5 2,0 1,5 1,0 0,5 0 JSE statistic
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Five-year history Four-year compoun
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Features 35 30 25 20 15 10 5 0 Head
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Focus and strategy The focus of the
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Profile African Bank Investments Li
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1994 Formation of investment trust
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Performance against key objectives
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Short to medium-term objectives OBJ
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African Bank Investments Limited We
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Letter to stakeholders ABIL believe
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Incwadi eya kwabanezabelo iqhutshiw
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Currency adjusted group balance she
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Management discussion Overview Key
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12 months ended 12 months ended 30
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Capital adequacy model Non-performi
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8 000 7 000 6 000 5 000 4 000 3 000
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Sales analysis - number and average
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excluding the Saambou PLB acquisiti
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The improved credit conditions are
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ook and the written-off book. To th
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Statement of average balances Weigh
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Divisional reports Operationally, A
Page 57 and 58: collection strike rates, which has
Page 59 and 60: ABIL also expanded its portfolio to
Page 61 and 62: Collections business unit. Its most
Page 63 and 64: Issue arising Corrective action req
Page 65 and 66: Skills and experience of the board
Page 67 and 68: Corporate governance continued regu
Page 69 and 70: from the committee responsible for
Page 71 and 72: that the risk policies and strategi
Page 73: Table 1: Remuneration and fees Serv
Page 76 and 77: Risk review ABIL views risk as an i
Page 79 and 80: Risk review continued Undesirable r
Page 81 and 82: Top ten risks Mitigating factors Ri
Page 83 and 84: Credit risk African Bank Retail Cre
Page 85 and 86: on a regular basis to ensure proper
Page 87 and 88: Social commitment Given the nature
Page 89 and 90: Embarking on a journey The process
Page 91 and 92: The progress The corporate social c
Page 93 and 94: Shareholders’ information Number
Page 95 and 96: agreements, to ensure that the mate
Page 97 and 98: The interest rate charged is determ
Page 99 and 100: Continued effort and focus will go
Page 101 and 102: services of the best employees. The
Page 103 and 104: The African Bank Foundation accepts
Page 105 and 106: Index to global reporting initiativ
Page 107: Directors’ responsibility The dir
Page 111 and 112: INTEREST OF THE DIRECTORS IN THE SH
Page 113 and 114: n4 The strike prices of the share o
Page 115 and 116: Income statement for the year ended
Page 117 and 118: Cash flow statement for the year en
Page 119 and 120: Equity accounted income, which is i
Page 121 and 122: 1.9 Revenue recognition Interest in
Page 123 and 124: Group Company 2003 2002 2003 2002 R
Page 129 and 130: 111 Group 2003 2002 R000 R000 12. L
Page 135 and 136: 117 Group 2003 2002 R000 R000 25. R
Page 139 and 140: One to Four to Beyond Non-interest
Page 141 and 142: One to Four to Beyond Up to one thr
Page 143 and 144: 125 Group 2003 2002 R000 R000 37. O
Page 145 and 146: Appendix B Investments in associate
Page 147 and 148: Appendix D Segmental advances and p
Page 149 and 150: Appendix F Group structure and prof
Page 151 and 152: 3.4.4 ensure that a comprehensive s
Page 153 and 154: 7.4.3 All directors are required to
Page 155 and 156: 6.3 any general payment shall be ma
Page 157 and 158: 13.6 Any repurchases shall comply w
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DIRECTORS’ CURRICULUM VITAES Anto
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6. Isinqumo esejwayelekile esinguno
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12.9.1 kuyokwenziwa ngokulandela uM
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16. Ukuvota nezithunywa Bonke abani
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Form of proxy AFRICAN BANK INVESTME
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Ifomu yokuqoka isithunywa esizokume
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Members of the ABIL board ASHLEY SE
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RAMANI NAIDOO (41) BA LLB Non-execu
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Corporate information COMPANY REGIS
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GRAPHICOR 30006
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